The Central Board of Income Tax has ordered a 25% reduction in the rate of income tax deducted at source (TDS) and tax collection at source (TCS) from 14 May to 31 March in order to give some relief to the taxpayers during the lockdown tenure.

This reduction is applicable for 23 specified payments where TDS is levied at rates ranging between 20% and 1% and 11 payments where TCS is applicable.

This reduced rate of TDS will apply to the specified list of payments including dividend, payment to contractors and sub-contractors, insurance commission, brokerage, rent for machinery and immovable property and professional fee. Here is the comprehensive table of existing and new reduced rates issued by the Income Tax department.

Finance Minister Nirmala Sitharaman in her press conferences proposed several steps to infuse liquidity in the system and provide more funds at the disposal of individuals and companies.

Among several measures, Rs. 50,000 crore of liquidity is being introduced by reducing the TDS and TCS rates for certain payments by non-individuals.

The FM said that the rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts will be reduced by 25 per cent of the existing rates.