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Ordinance promulgated to give effect to relief measures announced by Finance Minister

Ministry of Finance recently introduced an Ordinance on March 31, 2020 to bring into effect compliance relief measures for taxpayers in the wake of COVID-9 that were announced by the Finance Minister on March 24, 2020. Salient features of the Ordinance are as follows:

Direct Taxes & Benami:

S.No. Particulars Extension/ Relief
1. Last date of filing original and revised income-tax returns for FY 2018-19 June 30, 2020
2. Aadhaar-PAN linking date June 30, 2020
3. Making investment/payment for claiming deduction under Chapter-VIA-B of Income Tax Act (IT Act) June 30, 2020
4. Making investment/construction/purchase for claiming roll over benefit/deduction in respect of capital gains u/s 54 to 54GB June 30, 2020
5. Commencement of operation by SEZ units for claiming deduction u/s 10AA June 30, 2020 for units which received approval by March 31, 2020
6. Passing order/issuance of notice  under various direct taxes & Benami Law June 30, 2020
7. Reduced rate of interest of 9% to be charged for non-payment of Income-tax (e.g. advance tax, TDS, TCS), Equalization Levy, STT, CTT which are due from 20.03.2020 to 29.06.2020 if they are paid by 30.06.2020. Further, no penalty/ prosecution shall be initiated for these non-payments.
8. Under Vivad se Vishwas Scheme, declaration and payment can be made up to 30.06.2020 without additional payment.

Indirect Taxes:

S.No. Particulars Extension/ Relief
1. Central Excise returns due in March, April and May 2020 June 30, 2020
2. Filing appeal, refund applications etc., under the Central Excise Act/ Customs Act/Service Tax  and rules made thereunder due from 20th March 2020 to 29th June 2020 June 30, 2020
3. Making payment to avail benefit under Sabka Vishwas Legal Dispute Resolution Scheme 2019 June 30, 2020
4. An enabling section inserted in the CGST Act, 2017 empowering Government to extend due dates for various compliances inter-alia including statement of outward supplies, filing refund claims, filing appeals, etc. specified, prescribed or notified under the Act, on recommendations of the GST Council.

PM CARES Fund

Donation made to PM CARES Fund will be eligible for 100% deduction u/s 80G of IT Act. Further, limit on deduction of 10% of gross income shall also not be applicable for donation made to PM CARES Fund. As the date for claiming deduction u/s 80G under IT Act has been extended up to 30.06.2020, donations made till 30.06.2020 shall also be eligible for deduction from income of FY 2019-20. Hence, any person paying concessional tax on income of FY 2020-21 under new regime can make donation to PM CARES Fund up to 30.06.2020 and can claim deduction u/s 80G against income of FY 2019-20 and shall also not lose his eligibility to pay tax in concessional taxation regime for income of FY 2020-21.

Overall Comments:

The relief measures announced are a welcome move. We appreciate the intent of the government to provide businesses with the much needed flexibility due to disruption. Extension of sunset clause by 3 months for units approved before March 31, 2020 is in line with NASSCOM’s recommendation to Ministry of Finance. With the global lockdown including India, there is a complete restriction on the movement of people and goods other than essential services. As a result, shipments for IT infrastructure were delayed and planned travel was postponed. As a result, the industry’s ability to set up IT-ITES operations by March 31, 2020 was severely impacted. This will remove hardships faced by such units.

Copy of the Press Release is attached for your reference.


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