TDS Cut Won't Apply To Salaries

Govt clarifies 25% reduction is only for non-salaried payments

- Dipak Mondal

REVENUE secretary Ajay Bhushan Pandey on Thursday clarified that the 25 per cent reduction in the rate of tax deducted at source (TDS) will not apply to salaries as the TDS rate on salaries is arrived at on the basis of an employee's tax slab after accounting for tax-saving investments and expenses.

The government has decided to reduce the rates of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) by 25 per cent of their existing rates as part of the stimulus package. The move will release Rs 50,000 crore of additional liquidity in the system.