ParliamentTaxation and Other Laws (Relief and Amendment in Some Provisions) Bill, 2020(Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020). Also, 25 per cent discount is being given for TDS till next year, which will continue till March 31, 2021.
What type of payment or income can be applied to TDS
The 25 discounts offered in TDS will apply to all types of payments. This includes commissions, brokerages or any other type of payment. Finance Minister Nirmala Sitharaman said during a debate in Parliament that it would put Rs 50,000 crore of liquidity in the hands of the people. Also, those who have not yet received an income tax refund will be paid soon. Let’s say that TDS is deducted on different sources of income, including salary, interest earned on investment or commission. The purpose of introducing TDS was to deduct tax on the source of income only. The government collects taxes through TDS deducted on the source of income of the people. Note that if you invest in debt mutual funds, you do not have to pay any TDS on the income generated from it. Also if you are an Immigrant Indian (NRI) you will have to pay TDS on the income generated from this fund. The person or organization making the payment will be responsible for paying the TDS. For this, the deducted TDS needs to be credited to the government account.
An employee may also ask the company not to deduct TDS
The TDS deductor is required to issue a certificate stating how much tax he deducted and credited to the government. The person receiving the payment can claim the TDS of the tax paid to him. However, this claim is intended to be made in that financial year. If a person’s income is within the limits of income tax exemption in a financial year, he cannot ask the employer to deduct TDS by filling up Form 15G or Form-15H. It may be mentioned that under Section 192 of the Income Tax Act, the government collects tax as TDS every year from those who get salary.
The company calculates TDS in this way for one financial year
According to the tax law, the rate of TDS on salary income depends on the income tax slab of the employee. The organization calculates the tax payment at the average rate of income tax. The average rate can be deducted by dividing the total tax payment by the employee’s total income. The total tax payable by the employee is calculated to deduct the tax from the salary. For this, the investment made by him in the tax saving scheme is also taken into consideration. It is calculated on the basis of the employee’s salary and tax saving investment at the beginning of the financial year.
How TDS is calculated on changing jobs in a financial year
During a financial year, an employee can leave one company and join another. In that he will get salary from two different institutions within one financial year. It will now be the responsibility of a new organization to calculate the average rate of income tax for deducting TDS. As a result the employee will have to submit Form-12B to the new company. This form will contain the details of the salary received from the previous company. It will also show how much TDS the previous company has cut. The new company will calculate the TDS for the remaining financial year only on the basis of this form.
A 25 per cent reduction in TDS deductions will thus affect celery
The economic crisis has hit the people due to the crisis of Koro and the lockdown. In view of this, the government has reduced the TDS deduction by 25 per cent till March 31, 2021. For example, if you used to deduct 10 per cent TDS till now, only 7.5 per cent tax will be deducted on the source of income, which means that your take home salary will now increase by 2.5 per cent. The government enacted the ordinance on May 13, for which it introduced an amendment bill in Parliament, which has been approved by both parliaments. At the same time, the government has extended the deadline for filing income tax returns for the financial year 2019-20 to 30 November 2020.