In a relief to taxpayers, the government on Wednesday extended the deadline for filing of all income tax returns for 2019-20 fiscal till November 30, 2020.
Announcing a slew of relief measures for the coronavirus-hit economy, Finance Minister Nirmala Sitharaman also slashed TDS (tax deducted at source)/TCS (Tax collected at source) rates for non-salary payments to residents by 25 per cent.
"From tomorrow till March 31, 2021, the TDS/TCS rates have been reduced by 25 per cent of the existing rate... This shall also apply to all payments for contracts, interest, rent, dividend, commission or brokerage.. all of these will be eligible for 25 per cent rate reduction.
"This reduction would release nearly Rs 50,000 crore in the hands of the people who would have otherwise paid it as TDS," Sitharaman said.
Also, the Vivad Se Vishwas scheme for direct tax dispute resolution has been extended by six months till December 31, 2020.
Sitharaman further said the income tax department will fast track processing of pending refunds to charitable trusts, LLPs, non-corporate businesses and proprietorship firms, among others.
Also, assessments getting time-barred on September 30 have been extended till December 31, 2020 and those getting time-barred on March 31, 2021 have been extended till September 30, 2021.
She also said the income tax department has already cleared Rs 18,000 crore worth of refunds where the quantum due was up to Rs 5 lakh.
Nangia Andersen LLP Director Sandeep Jhunjhunwala said "the reduction of TDS and TCS rates on non-salaried payments by 25 percent will set free additional cash in the hands of the vendors, and help increase liquidity in the economy."
"This relief could be enjoyed by all businesses and would play a pivotal role in increasing cash flows as the beneficial rates would be available till the end of the current financial year.
"This coupled with release of pending refunds to all non-corporate tax payers would fast track the revival of business and enterprises," he added.