As a copy editor with experience in SEO, let`s talk about the threshold limit for TDS on contractors in FY 2021-22.
Firstly, what is TDS?
TDS (Tax Deducted at Source) is a means of collecting tax on income, dividends, or asset sales. TDS is usually deducted by the payer or employer before making payment to the recipient or contractor.
Now, coming back to the threshold limit for TDS on contractors in FY 2021-22, the Indian government has recently made some changes that you should be aware of.
Here are some key updates:
1. The threshold limit for TDS on contractors has been revised to Rs 50 lakh.
Previously, the threshold limit for TDS on contractors was Rs 30 lakh. With the revised threshold limit of Rs 50 lakh, small contractors will benefit from reduced compliance burdens.
2. The new limit is applicable from 1st April 2021.
If you are a contractor, it is important to note that the new threshold limit for TDS on contractors is applicable from 1st April 2021. This means that any payments made to contractors after this date should be subject to TDS only if the payment exceeds Rs 50 lakh.
3. Contractors can apply for a lower TDS rate.
If the contractor has a lower tax liability, they can apply for a lower TDS rate by submitting Form 13 to the Income Tax Department. This form can be submitted online and is applicable for both resident and non-resident contractors.
In conclusion, the revised threshold limit for TDS on contractors in FY 2021-22 is set at Rs 50 lakh. This is good news for small contractors who will benefit from reduced compliance burdens. However, it is important to note that the new limit is applicable from 1st April 2021 and contractors can apply for a lower TDS rate by submitting Form 13 to the Income Tax Department. As a contractor, it is imperative to stay updated with government regulations and comply with the necessary procedures to avoid any penalties or fines.