Vipin Sanger

The Covid-19 outbreak has compelled businesses to transcend from traditional to digital models of work. With business models evolving on account of mass digitization, the complexities from a regulatory and taxation standpoint have only amplified. The advent and access to technology have enabled businesses to carry on business-as-usual with minimal physical presence. Unsurprisingly, India has the second-largest online users in the world, with over 560 million internet users, and hence, from the viewpoint of its tax revenue base, digital businesses could not be overlooked. However, as is the case in other jurisdictions, Indian tax laws were suited for conventional business models such as brick and mortar stores and thus in dire need of an overhaul. Recent Amendments To ensure that value created digitally is appropriately taxed; two significant amendments were introduced in Indian taxation laws in the recent past – The “Equalization Levy” – a tax aimed at foreign digital...

The reduction in TDS/TCS is expected to boost cash flows by ~50,000 crore, the finance minister said on Wednesday while announcing the move as part of an economic package. The government’s move to reduce the rates of tax deduction at source (TDS) and tax collection at source (TCS) by 25% will benefit investors and professionals by putting more cash in their hands. While this doesn’t bring down the tax liability of taxpayers, it leaves more money with them during the course of the financial year. Individuals will still have to pay their tax liability -- every quarter, or annually. The reduction in TDS/TCS is expected to boost cash flows by ~50,000 crore, the finance minister said on 13th May, 2020 while announcing the move as part of an economic package aimed at reviving an economy roiled by the Covid-19 pandemic and the lockdown enforced to combat it. Usually, the payee deducts TDS or TCS on behalf of the receiver and deposits it with the government. TDS and TCS are met...

Investors in dividend plans of equity mutual funds will benefit from the 25% cut in the rates for tax deducted at source (TDS) announced by finance minister Nirmala Sitharaman on 13th May 2020. Tax experts said mutual funds are currently required to deduct a 10% TDS on dividends paid to unit holders. For the remainder of FY 2021 this will come down to 7.5%. The lower rates will come into effect from May 14 and include deductions on dividend, interest, professional fees and brokerage. Investors who route money through alternative investment funds (AIFs), real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), too would get the benefit of the lower TDS rate, say experts. REITs and InvITs are taxed in the same manner as debt instruments. The government had made dividends taxable in the hands of investors in the budget for FY 2021. “The unit holders will get the benefit of reduction of TDS on the dividend declared by mutual funds. This benef...

In order to enhance liquidity in the hands of taxpayers, FM announced a reduction in the rate of tax deducted at source (TDS) for non-salaried specified payments made to residents by 25%. The coronavirus crisis has impacted lives severely. Several employees have been fired and many have witnessed salary reduction. In order to offer some relief to taxpayers amid such situation, Finance Minister Nirmala Sitharaman recently announced a slew of direct tax measures. FM said in her press conference, "We think this measure will release liquidity of Rs 50,000 crore who otherwise would have paid the tax." 5 Income Tax relaxations that you need to know: 1. TDS rate cut: In order to enhance liquidity in the hands of taxpayers, FM announced a reduction in the rate of tax deducted at source (TDS) for non-salaried specified payments made to residents by 25%.  2. TCS rate cut: In order to provide more funds at the disposal of the taxpayers, the rates of Tax Collection at ...

As per the Central Board of Direct Taxes (CBDT), the benefit of lower TDS and TCS rate can only be availed by resident individuals and is not available to non-resident Indian (NRI) taxpayers. Finance Minister Sithdraman in her press conference on Wednesday announced several measures for MSMEs, NBFCs and taxpayers. She unveiled details of the Rs 20 lakh crore economic package. In order to enhance liquidity in the hands of taxpayers, FM announced a reduction in the rate of tax deducted at source (TDS) and tax collection at source (TCS) by 25%.  However, there are some categories of taxpayers who will not be avail to avail the benefit of this cut: As per the existing rules, TDS rates differ based on whether or not the taxpayer has furnished the Permanent Account Number (PAN) or Aadhaar to the deductor.  Taxpayers who fail to furnish their PAN or Aadhaar, 20% or higher TDS can be charged. CBDT Press Release: Reduction in rate of Tax Deduction at Source (TDS) & ...

On 13th May 2020, the government has announced, "Due date for all income tax return for individuals for the Financial Year (FY) 2019-20 (Assessment Year 2020-21) will be extended from July 31 2020 and 31 October 31, 2020 to November 30, 2020 and tax audit from Sept ember 30, 2020 to 31st October 2020." The government has announced that the income tax return (ITR) filing deadline for Financial Year (FY) 2019-20 (Assessment Year 2020-21) has been extended to November 30, 2020 from July 31, 2020. "Due date for all income-tax return for individual taxpayers for the Financial Year (FY) 2019-20 (Assessment Year 2020-21) will be extended from July 31 2020 and 31 October 31, 2020 to November 30, 2020 and tax audit from September 30, 2020 to 31st October 2020". This was a part of the Rs 20 lakh crore relief package due COVID-19 lockdown. Along with the extension of the ITR filing deadline, there were other direct tax-related relief measures announced. The e...