Ever get that sinking feeling when a tax notice for a past year lands in your inbox? Suddenly, you're digging through old files, trying to make sense of rules that have long since changed.
You'll learn about the two-tiered rate system, see…
You'll learn about the two-tiered rate system, see clear comparison charts, and get actionable advice for what to do if you suspect an error. This isn't just a list of rates; it's your roadmap to confidently closing the books on that uniquely complex year.Why FY 2020-21 Was a One-Off Year for TDS
To understand the tax rules of FY 2020-21, you have to remember the global context.
Based on our experience helping clients untangle these…
Based on our experience helping clients untangle these records, misinterpreting this timeline is the single biggest cause of compliance issues from that period.The Critical Timeline You MUST Know
Everything hinges on one specific date: May 14, 2020. Any payment made or credited before this date used the standard TDS rates.
The table below provides a clear breakdown of…
The table below provides a clear breakdown of the most common TDS sections, showing the standard rate, the reduced rate, and the threshold limits. Bookmark this section—it's the cheat sheet you've been looking for.Note: These rates apply to payments made to resident individuals/HUFs.
The good news is that you can fix…
The good news is that you can fix it by filing a TDS correction statement.Ignoring it is not an option. The Income Tax Department's systems will automatically flag a mismatch between the TDS you deposited and the amount you should have deposited, leading to a demand notice for the shortfall, plus interest.Here’s a simplified process for correcting an error from FY 2020-21:
Identify the Discrepancy: First, pinpoint the exact transactions with the incorrect TDS rate.
File the Correction: Validate the file and submit…
File the Correction: Validate the file and submit the correction statement. Once it's processed, your records will be updated, and the demand notice should be nullified.
The law is crystal clear: if the person…
The law is crystal clear: if the person or entity you're paying (the deductee) does not provide a valid Permanent Account Number (PAN), you must deduct TDS at a much higher rate. ⚠️ Watch Out
If no PAN is provided, TDS must be deducted at 20% (or the rate specified in the Act, whichever is higher).
As a payee, you can log in to…
As a payee, you can log in to the tax portal and view your Form 26AS for AY 2021-22. It shows all the tax that has been deducted and deposited in your name.
❓ Frequently Asked Questions Why are we still…
❓ Frequently Asked Questions
Why are we still talking about FY 2020-21 rates in 2026? Tax records have a long life.
The Financial Year is when you earn the…
The Financial Year is when you earn the income (e.g., April 1, 2020, to March 31, 2021). The Assessment Year is the following year when that income is 'assessed' for tax (e.g., April 1, 2021, to March 31, 2022).