Tax Deduction (TDS) rates reduced by 25%

As per the announcement made by Honourable Finance Minister, Nirmalaji, the TDS rates for the Financial year 2020-21 have been reduced by 25 % across the Board. It seems that the reduction in TDS rates is not applicable to the Salaried Class. The detailed notification will be issued later by the Central Board of Direct Taxes. This will ensure some more liquidity in the hands of tax payers.

However, while this may be good news for those who generally end up with tax refunds at the end of the year, it may not be good news for those who additionally have to pay advance taxes and self assessment taxes because there has been no mention of interest waiver under Section 234 B and 234C.

Article by CA Bhavesh Savla