Addressing the liquidity issue of many MSMEs, the government has decided to reduce the rates of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) by how much percent of their existing rates?

2020

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	15%
B	20%
C	30%
D	25%

Explanation:

Detailed explanation-1: -The tax deduction rate (TDS) for the purchase of goods is 0.1% of the sum exceeding Rs. 50 lakhs. The tax collection rate (TCS) for the sale of goods is 0.1% of the sale sum exceeding Rs. 50 lakhs.

Detailed explanation-2: -The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government.

Detailed explanation-3: -TDS amount is the tax deducted by an individual or company while making a payment. In comparison, TCS amount is the tax collected by the seller during the time of sale.

Detailed explanation-4: -the person making payment is required to deduct tax at source (TDS) at prescribe rate. Payer is known as deductor and the payee, who receives the net payment is called the deductee. TCS is Tax Collected at Source by seller from buyers at the time of selling some prescribed goods.

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