The World Health Organization (WHO) first declared COVID-19 a world health emergency in January 2020. Since then, the whole of the world is suffering from the worst of the economic crisis caused by the pandemic COVID-19. The disease has spread to more than 200 countries worldwide and has disturbed the political, social, economic, religious and financial structures of the countries. Apart from saving the human lives, the biggest challenge which all the nations are facing at present is the revival of their economies which has been adversely effected by the virus. It is said that the effect of this pandemic will have longer effect on the economies than that of the 1929 great depression that started in USA. In order to reduce the impact of the COVID-19 crisis on its citizens, all the countries are announcing fiscal, monetary and various stimulus packages to provide a support to their citizens and thereby revival of their economy.
In India, the Government has been actively responding and monitoring the situation since January 2020. The Finance Ministry of the government has been keeping a close watch on the situation and has taken various majors to ensure ease of doing of business in this crisis. As a part of its relief measures, the Government has extended various dates of regulatory and statutory compliances to provide support to its taxpayers.
In order to provide more funds at the disposal of the taxpayers for dealing with the economic situation arising out of COVID-19 pandemic, the government has further announced the reduction of rates of Tax Deduction at Source (TDS) & Tax Collected at Source (TCS) by 25% for the FY 2020-21 w.e.f. 14.05.2020.
TDS rates chart applicable for the FY 2020-21
| S. No | Section No. | Nature of Payment | Rate of TDS (1st April 2020 to 13th May 2020) | Rate of TDS (14th May 2020 to 31st March 2021) |
| 1 | 193 | Interest on Securities | 10% | 7.5% |
| 2 | 194 | Dividend | 10% | 7.5% |
| 3 | 194A | Interest other than interest on securities | 10% | 7.5% |
| 4 | 194C | Payment of contractors and sub-contractors | 1% (individual/HUF) 2% (Others) | 0.75% (individual/HUF) 1.5% (Others) |
| 5 | 194D | Insurance Commission | 5% | 3.75% |
| 6 | 194DA | Payment in respect of life insurance policy | 5% | 3.75% |
| 7 | 194EE | Payments in respect of deposits under National Savings Scheme | 10% | 7.5% |
| 8 | 194F | Payments on account of re-purchase of Units by Mutual Funds or UTI | 20% | 15% |
| 9 | 194G | Commission, prize etc. on sale of lottery tickets | 5% | 3.75% |
| 10 | 194H | Commission or brokerage | 5% | 3.75% |
| 11 | 194-I(a) | Rent for plant and machinery | 2% | 1.5% |
| 12 | 194-I(b) | Rent for immovable property | 10% | 7.5% |
| 13 | 194-IA | Payment for acquisition of immovable property | 1% | 0.75% |
| 14 | 194-IB | Payment of rent by individual or HUF | 5% | 3.75% |
| 15 | 194-IC | Payment for Joint Development Agreements | 10% | 7.5% |
| 16 | 194J | Fee for Professional or Technical Services (FTS), Royalty, etc | 2% (FTS, certain royalties, call centre) 10% (others) | 1.5% (FTS, certain royalties, call centre) 7.5% (others) |
| 17 | 194K | Payment of dividend by Mutual Funds | 10% | 7.5% |
| 18 | 194LA | Payment of Compensation on acquisition of immovable property | 10% | 7.5% |
| 19 | 194LBA(1) | Payment of income by Business trust | 10% | 7.5% |
| 20 | 194LBB(i) | Payment of income by Investment fund | 10% | 7.5% |
| 21 | 194LBC(1) | Income by securitisation trust | 25% (Individual/ HUF) 30% (Others) | 18.75% (Individual/ HUF) 22.5% (Others) |
| 22 | 194M | Payment to commission, brokerage etc. by Individual and HUF | 5% | 3.75% |
| 23 | 194-O | TDS on e-commerce participants | 1% (w.e.f. 1.10.2020) | 0.75% |
TDS rates chart applicable for the FY 2020-21
| S. No | Section No. | Nature of Receipt | Rate of TCS (1st April 2020 to 13th May 2020) | Rate of TCS (14th May 2020 to 31st March 2021) |
| 1 | 206C(1) | (a) Sale of Tendu Leaves | 5% | 3.75% |
| (b) Sale of Timber obtained under a forest lease | 2.50% | 1.875% | ||
| (c) Sale of timber obtained by any other mode | 2.50% | 1.875% | ||
| (d) Sale of any other forest produce not being timber/tendu leaves | 2.50% | 1.875% | ||
| (e) Sale of scrap | 1% | 0.75% | ||
| (f) Sale of Minerals, being coal or lignite or iron ore | 1% | 0.75% | ||
| 2 | 206C(1C) | (a) Grant of license, lease, etc. of Parking lot | 2% | 1.50% |
| (b) Grant of license, lease, etc. of Toll Plaza | 2% | 1.50% | ||
| (c) Grant of license, lease, etc. of Minning and Quarrying | 2% | 1.50% | ||
| 3 | 206C(1F) | Sale of motor vehicle above Rs. 10 lakhs | 1% | 0.75% |
| 4 | 206C(1H) | Sale of any other goods | 0.1% (w.e.f 01.10.2020) | 0.75% |
Note: In cases where the tax is required to be deducted or collected at higher rate due to non-furnishing of PAN/Aadhaar, the existing rate of 20% shall prevail.
