Tax on insurance payment, dividend, rent cut by 25%

New Delhi, May 14

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Following Finance Minister Nirmala Sitharaman’s announcement of a reduction in the rate of tax deducted at source (TDS) and tax collected at source (TCS) for non-salaried payments, the Central Board of Direct Taxes (CBDT) notified revised rates that will be applicable from May 14, 2020, to March 31, 2021.

Announcing a slew of measures to help companies and taxpayers tide over hardships caused by coronavirus lockdown, Sitharaman had on Wednesday stated that the reduction in TDS/TCS rate would release about Rs 50,000 crore in the hands of people.

In the notification, the CBDT said while TCS on sale of the motor vehicle above Rs 10 lakh has been cut to 0.75% from 1% earlier, TDS on 23 items has been reduced.

The CBDT said TDS on payment for life insurance policy has been reduced to 3.75% from 5%, while that on dividend and interest as well as rent for immovable property has been cut to 7.5% from 10% earlier.

The 1% TDS charged on payment made for the acquisition of immovable property has now been reduced to 0.75%. Payment of rent by individual or HUF has been cut to 3.75% from 5% earlier.

TDS on e-commerce participants has also been reduced to 0.75% from 1%.

Similarly, tax on professional fee has been reduced to 1.5% from 2%. — PTI