Income Tax Update: The new fiscal year has started on 1 April. In the new year, new rates of income tax have also come into force. Along with this, the concession on TDS (Tax Deducted at Source, TDS) and TCS (Tax Collected at Source, TCS) in the package of 20 lakh crore announced by the government last year has also ended.
Now the old rates of TDS and TCS ie actual rates have come into force. That is, if someone gets more than Rs 40,000 interest on deposits in bank FDs from 1 April 2021 to 31 March 2022, then banks will deduct TDS at the rate of 10 percent instead of 7.5 percent. Increased TDS rates will be applicable on payment for contracts, professional fees, interest, rent, dividend, commission, brokerage, etc.
In May 2020, the central government had cut the TCS rate for TDS and specified receipts in the case of non-salaried payments for the remaining fiscal year 2020-21. This cut was 25 percent and was part of the 20 lakh crore rupees economic package announced by Prime Minister Narendra Modi. Save more money in the hands of taxpayers, so the rate of TDS for non-salarised specified payment to residents and TCS for specified receipts was reduced by 25%. These reduced rates were applicable from 14 May 2020 to 31 March 2021.
Income Tax Update: Now tax will have to be paid at higher rates for these works
TDS on payment for the purchase of immovable property increased from 0.75 percent to 1 percent. TDS on the payment of personal rent or rent by HUF was 3.75 percent, now it will be 5 percent. In the case of deposits under the National Savings Scheme, the TDS on payments has increased from 7.5 percent to 10 percent. The TDS on payment for life insurance policy increased from 3.75 percent to 5 percent. TDS on dividend, interest, and real estate rent increased from 7.5 percent to 10 percent.
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TDS on ecommerce partners increased from 0.75 per cent to 1 per cent. TDS on payment of professional fees increased from 1.5 per cent to 2 per cent. TDS on repurchase of units by mutual funds increased from 15 per cent to 20 per cent. The TDS on Insurance Commission and Brokerage increased from 3.75 per cent to 5 per cent. TDS on payment of dividend by mutual funds increased from 7.5 per cent to 10 per cent. TCS rose from 0.75 per cent to 1 per cent on motor vehicle sales of more than Rs 10 lakh. TCS has also increased sales of tendu leaves, scrap, timber, forest produce and minerals such as coal, lignite or iron ore.
