MSME Sector Will Find Relief In FM’s Stimulus, But, More Can Be Still Done

While FM Sitharaman announced the allocation of funds to relief packages for vulnerable sections of society, more can still be done on various fronts.

By Tanvi Loond

After Prime Minister Modi’s announcement of India’s second stimulus package on May 12, 2020 at a headline figure of a whopping Rs. 20 lakh crores ($0.27 trillion), Finance Minister Nirmala Sitharaman’s speech was eagerly awaited by all. While FM Sitharaman announced the allocation of funds to relief packages for vulnerable sections of society, daily wage workers, healthcare infrastructure, government departments and small businesses, more can still be done on various fronts such as salary subsidization. Meanwhile, the announcements made so far are targeted at job retention schemes, SME loan guarantees, direct cash handouts and of course, healthcare. Here’s a quick glimpse of how India’s relief package will be allocated to help the MSME sector grapple with the devastating impact of this global pandemic.

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TDS/TCS rate reduction

This will benefit businesses / individuals who receive payments for contract, professional fees, interest, rent, dividend, commission, brokerage, etc. This reduction shall be applicable for the remaining part of the FY2020-21 i.e. from 13th May 2020 to 31 st March, 2021. In order to provide more funds at the disposal of the taxpayers, the rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates.

Source: Financial Express

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