The Centre, on Friday, eased the provisions of the Income Tax Act, 1961 in relation to the tax deducted at source (TDS) on payment of interest by a Scheduled Bank to a member of a Scheduled Tribe (ST).
The Union Finance Ministry said in its order, "no tax deduction of tax shall be made on the following payment under section 194A of the Act, namely payment in the nature of interest, other than interest on securities, made by a Scheduled Bank (hereinafter the 'payer') located in a specified area to a member of Scheduled Tribe (hereinafter the 'receiver') residing in any specified area as referred to in s.10 of the Act."
Additionally, the order stated that the payer satisfies itself that the receiver is a member of a Scheduled Tribe residing in any specified area and that the payment is accruing or arising to the receiver as referred to in section 10(26) of the Act, during the previous year relevant for the assessment year in which the payment is made, by obtaining necessary documentary evidence in support of this argument. The amount paid or the total of payments made during the preceding year must not exceed twenty lakh rupees, according to the order.
For the period from 14 May 2020 to 31 March 2021, the Union government announced a 25% reduction in the rate of Tax Deduction at Source (TDS) for non-salaried specified payments. The reduction was also announced for Tax Collection at Source (TCS) for specific receipts.
According to a press release by the Central Board of Direct Taxes (CBDT), TDS rates for the non-salaried specified payments made to residents have been reduced by 25% for the period from 14 May 2020 to 14 May 2021, in order to provide more funds at the taxpayers' disposal to deal with the economic situation that stemmed out of the COVID-19 pandemic.
In a separate development, CBDT extended the deadline for informing the Income-tax Department of the Aadhaar number and linking the PAN with it to March 31, 2022.
CBDT said in a press statement that the deadline for completing penalty proceedings under the Act has been extended from 30 September 2021, to 31 March 2022. The time limit for the Adjudicating Authority to issue a notice and pass an order under the Prohibition of Benami Property Transactions Act, 1988 has also been extended until 31 March 2022.