The move is expected to give a liquidity support of₹50,000 crore to people and businesses.
The minister also extended the due date for income tax return filings to 30 November and tax audit from 30 September to 31 October.
Sitharaman said that the decision to cut TDS and TCS will be effective from 14 May till 31 March 2021. “It shall apply to all payments for contract, professional fees, interest payments, rent, dividend, commission and brokerage,” Sitharaman explained.
This measure, the minister said, will release nearly ₹50,000 crore in the hands of the people who otherwise would have paid these amounts.
TDS and TCS provisions are made applicable to various transactions in order to keep a tab on the transactions in the economy and to ensure tax compliance.
The minister also said that all pending refunds to charitable trusts and non-corporate businesses and professions including proprietorships, partnerships, limited liability partnerships (LLPs) and cooperatives will be issued immediately.