The Indian government has offered several relaxations under the Income Tax Act and other direct tax laws to assuage taxpayers amid the coronavirus pandemic. The government extended deadlines to file income tax returns and due dates under several direct tax statutes as well as reduced penalties, among others. The Finance Minister has announced the following relaxations under Income Tax, GST, Customs and Companies Act.
- Taxpayers can file Income Tax Returns for FY 2018-19 up to 30 June 2020 (extended from 31 March 2020)
- There is no extension for deposit of TDS. For March 2020, it will be 30 April 2020. For delayed payments of advanced tax, self-assessment tax, regular tax, TDS, TCS, equalization levy, STT, CTT made between 20 March 2020 and 30 June 2020, reduced interest rate at 9% instead of 12% / 18% per annum (i.e. 0.75% per month instead of 1/1.5 percent per month) will be charged for this period. No late fee/penalty shall be charged for delay relating to this period.
- Vivaad Se Vishwaas, the dispute resolution scheme, has been extended to 30 June without the additional 10% levy.
- Tax-saving investments for FY 2019-20 allowed till 30 June 2020.
- Aadhaar-PAN linking date to be extended from 31 March 2020 to 30 June 2020.
- Due dates for issue of notice, intimation, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents and time limit for completion of proceedings by the authority and any compliance by the taxpayer including investment in saving instruments or investments for roll over benefit of capital gains under Income Tax Act, Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT Law, Equalization Levy law where the time limit is expiring between 20 March 2020 to 29 June 2020 shall be extended to 30 June 2020.
- On an overall basis, all due dates for 31 March 2020 have been extended to 30 June 2020
- Last date for filing GSTR-3B in March, April and May 2020 will be extended till 30 June 2020 for those having aggregate annual turnover less than Rs. 5 Crore. No interest, late fee, and penalty to be charged.
- For any delayed payment made between 20 March 2020 to 30 June 2020 reduced rate of interest @9 % per annum (current interest rate is 18 % per annum) will be charged. No late fee and penalty to be charged, if complied before till 30th June 2020.
- Date for opting for composition scheme is extended till 30 June 2020. Further, the last date for making payments for the quarter ending 31 March 2020 and filing of return for 2019-20 by the composition dealers will be extended till 30 June 2020.
- Date for filing GST annual returns of FY 18-19, which is due on 31 March 2020 is extended till 30 June 2020.
- Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents, time limit for any compliance under the GST laws where the time limit is expiring between 20 March 2020 to 29 June 2020 shall be extended to 30 June 2020.
- Payment date under Sabka Vishwas Scheme shall be extended to 30 June, 2020. No interest for this period shall be charged if paid by 30 June, 2020.
- No additional fees shall be charged for late filing during a moratorium period from 01 April to 30 September 2020, in respect of any document, return, statement etc., required to be filed in the MCA-21 Registry, irrespective of its due date, which will not only reduce the compliance burden, including financial burden of companies/ LLPs at large, but also enable long-standing non-compliant companies/ LLPs to make a 'fresh start'.
- The mandatory requirement of holding meetings of the Board of the companies within prescribed interval provided in the Companies Act (120 days), 2013, shall be extended by a period of 60 days till next two quarters i.e., till 30 September.
- Applicability of Companies (Auditor’s Report) Order, 2020 shall be made applicable from the financial year 2020-2021 instead of from 2019-2020 notified earlier.
- As per Schedule 4 to the Companies Act, 2013, Independent Directors are required to hold at least one meeting without the attendance of Non-independent directors and members of For the year 2019-20, if the Independent Directors of a company have not been able to hold even one meeting, the same shall not be viewed as a violation.
- Requirement to create a Deposit reserve of 20% of deposits maturing during the financial year 2020-21 before 30 April 2020 shall be allowed to be complied with till 30 June 2020.
- Requirement to invest 15% of debentures maturing during a particular year in specified instruments before 30 April 2020, may be done so before 30 June 2020.
- Newly incorporated companies are required to file a declaration for Commencement of Business within 6 months of incorporation. An additional time of 6 more months shall be allowed.
- Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under Section 149 of the Companies Act, shall not be treated as a default.
- Due to the emerging financial distress faced by most companies on account of the large-scale economic distress caused by COVID-19, it has been decided to raise the threshold of default under section 4 of the IBC 2016 to Rs 1 crore (from the existing threshold of Rs 1 lakh). This will by and large prevent triggering of insolvency proceedings against MSMEs. If the current situation continues beyond 30th of April 2020, we may consider suspending section 7, 9 and 10 of the IBC 2016 for a period of 6 months so as to stop companies at large from being forced into insolvency proceedings in such force majeure causes of default.
Department of Commerce
Extension of timelines for various compliance and procedures will be given. Detailed notifications will be issued by Ministry of Commerce.
- 24X7 Custom clearance till end of 30 June 2020.
- Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing applications, reports, any other documents etc., time limit for any compliance under the Customs Act and other allied Laws where the time limit is expiring between 20 March 2020 to 29 June 2020 shall be extended to 30 June 2020.
Relaxations for 3 months:
- Debit cardholders to withdraw cash for free from any other banks’ ATM for 3 months
- Waiver of minimum balance fee
- Reduced bank charges for digital trade transactions for all trade finance consumers
It is to be noted that there is no extension in the financial year.
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