WHAT IS TDS?
TDS stands for Tax deductible at source. According to the Income Tax Act, a person or a company is liable to pay a tax that will be deductible at the time of payment, considering the amount of payment exceeds a certain limit set by the Income Tax department.
The person or the company that has to make the payment after deducting the prescribed rate of interest (Tax Deductible at Source) is called a deductor and the person or company receiving the payment is called the deducted.
TDS RATES CHANGES DURING THE PANDEMIC-
- TDS and TCS rates were lowered by the government during the pandemic. In the month of May 2020, the government had given a lot of relaxation to the general public in various forms. And this was another step the government had taken to help the public cope with such an unusual situation.
- TDS and TCS rates for interest income, dividend income, rent payments, and other non-salary payments were lowered by 25% in the month of May 2020.
- The Tax Deductible at Source (TDS) rates were lowered and applicable from May 2020 to March 2021. This was very essential as the economic state of the people was very much hampered due to the covid-19.
TDS RATES ARE APPLICABLE FROM 1ST APRIL 2021-
As the situation of the covid-19 is slowly coming under control, the government is now taking various measures to bring the country back to its original working methods. Hence, from April 2021, the government had changed its TDS and TCs rates back to their original charging rates.