COVID-19 Outbreak: Relief Measures Announced by the Finance Ministry of India

Updated: 18-05-2020 07:58:45 AM

Finance Minister Nirmala Sitharaman announced several measures being implemented by the Government of India in view of the Coronavirus disease outbreak. Read this article to know what relief measures were announced in the areas of Income Tax, GST, Customs and Central Excise, Corporate Affairs, Insolvency and Bankruptcy Code (IBC), Fisheries, Banking Sector and Commerce.  

Income Tax Relief Measures

• Last date for filing of all ITR for FY 2019-20 has been extended from 31st July, 2020 and 31st October, 2020 to 30th November, 2020. 
• Last date for tax audit for FY 2019-20 has also been extended from 30th September, 2020 to 31st October, 2020.
• All pending income tax refunds up to Rs. 5 lakh will be issued immediately, as per announcements made on 13th May, 2020. This will benefit around 14 lakh taxpayers.
• It should be noted that the pending refunds to tax payers other than individuals such as charitable trusts and non-corporate businesses & professions including proprietorship, partnership, LLP and Co-operatives will also be issued immediately.
• “Special Refund and Drawback Disposal Drive” will be implemented for the pending refund and drawback claims.
• The above measures in total are expected to amount to Rs. 18,000 crore.
• Last date for late filing of ITR for FY 2018-19 has been extended from 31st March, 2020 to 30th June, 2020.
• Last date for Aadhar-PAN linking has also been extended from 31st March, 2020 to 30th June, 2020.
• The date for making tax-saving investments and payments under Chapter-VIA-B of the Income Tax Act has been extended to 30th June, 2020. Thus, now you can invest in instruments like LIC, NSC and PPF (u/s 80C) and make payments for mediclaim (u/s 80D), donations (u/s 80G), etc to claim tax benefits for FY 2019-20 till 30th June, 2020. Also Read: Impact of Tax Saving Investment Extension for FY 2019-20
• The date for claiming tax benefit under Sections 54 to 54GB of the Income Tax Act has also been extended to 30th June, 2020. Thus, investments/ construction/ purchase made up to this date are now eligible to claim roll over benefit/ deduction from capital gains made during FY 2019-20.
• Similarly, the date for starting of operation for the SEZ units to claim tax benefit u/s 10AA has been extended to 30th June, 2020. Please note that this is only valid for the units which received the necessary approval by 31st March, 2020.
• No additional 10% amount will be charged in Vivad se Vishwas Scheme, if declaration and payment are made by 30th June, 2020.
• Due dates for almost all compliance matters expiring between 20th March, 2020 to 29th June, 2020 under Income Tax Act, Wealth Tax Act, CTT Law, STT Law, Equalization Levy Law, Prohibition of Banami Property Transaction Act, Black Money Act and Vivad se Vishwas Act have been extended to 30th June, 2020.
• Interest rate for delayed payments of advance tax, self assessment tax, TDS, regular tax, TCS, STT, CTT and equalization levy made between 20th March, 2020 and 30th June, 2020 have been reduced to 9% from 12%/18% per annum. Moreover, no late fee/ penalty will be charged for delay in this period. 

Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) Relief Measures 

The following relief measures were announced with respect to TDS and TCS as a part of the special economic package announced in view of the COVID-19 outbreak:

• TDS rates for all non-salaried payments, such as contracts, professional fees, interest, rent, dividend, commission, brokerage, etc. and Tax Collected at Source (TCS ) rates for the specified receipts have been reduced by 25% of the existing rates.
• The new rates will be applicable for the remaining part of FY 2020-21, i.e., from 14th May, 2020 to 31st March, 2021.
• These measures are expected to provide liquidity release of Rs. 50,000 crore

Goods & Services Tax (GST) Relief Measures

• Last date to file GSTR-3B for the months of March, April and May 2020 has been extended till the last week of June, 2020. However, the following should be kept in mind:
• No interest, late fee or penalty will be charged if your aggregate turnover is less than Rs. 5 crore.
• However interest will charged at a reduced rate of 9% per annum (earlier 18%) from 15 days after the due date, if your aggregate turnover is more than Rs. 5 crore. Please note that no late fee or penalty will be charged in this case as well.  
• Last date to opt for Composition Scheme has been extended till the last week of June, 2020.
• Last date for making payments for the quarter ending on 31st march, 2020 and that for filing returns for the FY 2019-20 for Composition dealers have been extended till the last week of June, 2020.
• Last date to file Annual GST Returns (GSTR-9, GSTR-9A, GSTR-9C) has been extended from 31st March, 2020 till the last week of June, 2020.
• Time limit for any compliance under the GST laws, where the time limit is expiring between 20th March, 2020 to 29th June, 2020 has been extended to 30th June, 2020 to 30th June, 2020.
• As per the special and comprehensive economic package announced on 13th May, 2020, the last date to make payment without additional amount under the “Vivad se Vishwas Scheme” has been further extended to 31st December, 2020.
• Last date to make payment under Sabka Vishwas Scheme has been extended to 30th June, 2020. Please note that no interest will be charged for this period, if the payment is made by 30th June. 

Customs and Excise

• Last date to file Central Excise returns due for the months of March, April and May has been extended to 30th June, 2020.
• Last date to file any refund applications, appeals, etc under the Central Excise Act, where it was expiring between 20th March, 2020 to 29th June, 2020 has been extended to 30th June, 2020. 
• Similarly, the last date to file appeal, etc with respect to Service Tax has been extended to 30th June, 2020.
• 24×7 Customs clearance will be available till the end of 30th June, 2020.
• Time limit for any compliance under the Customs Act and other allied laws, where the time limit was expiring between 20th March, 2020 to 29th June, 2020 has been extended to 30th June, 2020. 

Financial Services Relief Measures 

• Relaxation has been announced for a period of 3 months.
• You can withdraw cash from any other banks’ ATM for free till June, 2020.
• No minimum balance fee will be charged.
• Bank charges for digital trade transactions have been reduced for all trade finance consumers.

Corporate Affairs Relief Measures

• Additional fees will not be charged for late filing of any return, document, etc. in the MCA-21 Registry during the period starting from 1st April, 2020 to 30th September, 2020.
• Time period to hold Board Meeting as per Companies Act, 2013 has been extended from 120 days to 180 days for the next 2 quarters till 30th September.
• Companies (Auditor’s Report) Order, 2020 will be applicable from FY 2020-21 instead of FY 2019-20. 
• It is mandatory for Independent Directors of a company to hold at least one meeting without Non-independent Directors and members of the Management. However, if such a meeting could not be held in FY 2019-20, it will not be considered a violation. 
• Last date to create a Deposit reserve of 20% deposits maturing during the FY 2020-21 has been extended from 30th April, 2020 to 30th June, 2020.
• Similarly, last date to invest 15% of debentures in notified instruments has been extended from 30th April, 2020 to 30th June, 2020.
• A period of 1 year (earlier 6 months) will be allowed to the newly incorporated companies to file a declaration for the commencement of business.
• It is no more mandatory for a director of a company in India to have a residency in India for a minimum of 182 days.

Insolvency and Bankruptcy Code (IBC) Relief Measures

The threshold limit of default under Insolvency and Bankruptcy Code (IBC), 2016 has been raised from Rs. 1 lakh to Rs. 1 crore. This has been done in view of large scale economic distress caused due to COVID-19 outbreak. It is expected to prevent insolvency proceedings against MSMEs.

Moreover the FM mentioned that if the current situation continues beyond 30th April, then Sections 7, 9 and 10 of the IBC will be suspended for a period of 6 months to further prevent companies from insolvency proceedings. 

Department of Fisheries Relief Measures

• Validity of all Sanitary Permits (SIPs) for import of SPF Shrimp Broodstockand other Agriculture inputs expiring between 1st March, 2020 to 15th April, 2020 has been extended by 3 months.
• Delay of up to 1 month in arrival of consignments will be allowed.
• Quarantine cubicles for canceled consignments in Aquatic Quarantine Facility (AQF) will be allowed without any additional charges. 
• Document verification and NOC grant for Quarantine will be relaxed from 7 days to 3 days.

Department of Commerce Relief Measures

Due date for various compliance procedures with respect to the Department of Commerce will be extended. However, detailed notifications with respect to these changes are yet to be issued by the Ministry.     

PM CARES Fund

• In the view of COVID-19 pandemic, a special fund called “Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund)” has been started to help the affected persons. 
• The Income Tax Act has been accordingly modified to provide same tax treatment to PM CARES Fund as to Prime Minister National Relief Fund. 
• Thus, all the contribution made to PM CARES Fund is eligible for 100% tax deduction u/s 80G of the Income Tax Act. It should be noted that the deduction limit of 10% of gross income will not be applicable in this case.
• The donation made to this Fund till 30th June, 2020 will be eligible for tax deduction from income of FY 2019-20.
• Hence, individuals and corporates who have opted for the new Income Tax Regime for FY 2020-21 can donate to the PM CARES Fund and claim deduction u/s 80G for their income of FY 2019-2020 without losing their eligibility to pay concessional tax for FY 2020-21.