Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020-Overview
Various relief measures were announced by Finance Minister Smt. Nirmala Sitharaman on 24th March, 2020 and to give effect to that relief measures Government of India notifies Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 on 31.03.2020. These relief measures are related to Income Tax return filings, GST compliance, PAN-Aadhar linkage and other statutory and regulatory issues.
India’s economic growth could take a hit of up to half a percentage point in FY21 because of the disruptions caused by the Covid-19 outbreak, early estimates by the government suggest. But independent economists see a deeper cut of up to one percentage point.
There will be a hit of 0.3-0.5% on the GDP in the next fiscal year,” said one of the officials aware of the estimate. Growth in the first two quarters of the next fiscal could be as low as 4-4.5%,” another official added.
The economy is forecast to grow 5% in current fiscal, the slowest in 11 years. The Economic Survey had forecast 6-6.5% rise in FY21, but Covid-19 has hurt recovery prospects.
Finance Minister to help the nation’s poor tackle the financial difficulties arising from Covid-19 outbreak. The package includes a mix of food security and direct cash transfer benefits which shield poor families during the lockdown. It’s a very well-defined package, reinforcing government’s intent that no one should be deprived of basic facilities in today’s stressed times.
Keeping in view the challenges faced by taxpayers in meeting the compliance requirements under such conditions, the Union Finance Minister had announced several relief measures relating to statutory and regulatory compliance matters across sectors in view of COVID-19 outbreak on 24.03.2020 vide a press release.
Recent FM Press Release Details in which Relaxation in the field of Taxation, Finance and Law been announced-
|24.03.2020||FM relaxes Tax & Regulatory Compliance in view of COVID-19 outbreak|
|26.03.2020||Finance Minister announces Rs 1.70 Lakh Crore relief package|
|31.03.2020||FM Releases Ordinance on relaxation Provided on 24th March 2020|
Specific Act means:
1. The Wealth Tax Act, 1957;
2. The Income Tax Act, 1961;
4. Chapter VII of the Finance (No.2)Act, 2004
5. Chapter VII of the Finance Act, 2013
7. Chapter VIII of the Finance Act, 2016; or
Some of the important features and time limits which get extended by this Ordinance are as under:-
Direct Taxes & Benami:
1. Extension of last date of filing of original as well as revised income-tax returns for the FY 2018-19 (AY 2019-20) to 30th June, 2020.
2. Extension of Aadhaar-PAN linking date to 30th June, 2020.
3. The date for making various investment/payment for claiming deduction under Chapter-VIA-B of IT Act which includes Section 80C (LIC, PPF, NSC etc.), 80D (Mediclaim), 80G (Donations), etc. has been extended to 30th June, 2020. Hence the investment/payment can be made up to 30.06.2020 for claiming the deduction under these sections for FY 2019-20.
4. The date for making investment/construction/purchase for claiming roll over benefit/deduction in respect of capital gains under sections 54 to 54GB of the IT Act has also been extended to 30th June 2020. Therefore, the investment/ construction/ purchase made up to 30.06.2020 shall be eligible for claiming deduction from capital gains arising during FY 2019-20.
5. The date for commencement of operation for the SEZ units for claiming deduction under deduction 10AA of the IT Act has also extended to 30.06.2020 for the units which received necessary approval by 31.03.2020.
6. The date for passing of order or issuance of notice by the authorities under various direct taxes& Benami Law has also been extended to 30.06.2020.
7. It has provided that reduced rate of interest of 9% shall be charged for non-payment of Income-tax (e.g. advance tax, TDS, TCS) Equalization Levy, Securities Transaction Tax (STT), Commodities Transaction Tax (CTT) which are due for payment 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, the date has also been extended up to 30.06.2020. Hence, declaration and payment under the Scheme can be made up to 30.06.2020 without additional payment.
1. Last date of furnishing of the Central Excise returns due in March, April and May 2020 has been extended to 30th June, 2020.
2. Wherever the last date for filing of appeal, refund applications etc., under the Central Excise Act, 1944 and rules made thereunder is from 20th March 2020 to 29th June 2020, the same has been extended to 30th June 2020.
3. Wherever the last date for filing of appeal, refund applications etc., under the Customs Act, 1962 and rules made thereunder is from 20th March 2020 to 29th June 2020, the same has been extended to 30th June 2020.
4. Wherever the last date for filing of appeal etc., relating to Service Tax is from 20th March 2020 to 29th June 2020, the same has been extended to 30th June 2020
5. The date for making payment to avail of the benefit under Sabka Vishwas Legal Dispute Resolution Scheme 2019 has been extended to 30th June 2020 thus giving more time to taxpayers to get their disputes resolved.
In addition to the extension of time limits under the Taxation and Benami Acts as above, an enabling section has got inserted in the CGST Act, 2017 empowering the 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
Keeping in mind the need for having a dedicated national fund with the primary objective of dealing with any kind of emergency or distress situation, like posed by the COVID-19 (Coronavirus) pandemic, and to provide relief to the affected, a public charitable trust under the name of ‘Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund’ has been set up.
A special fund “Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND)” has been set up for providing relief to the persons affected from the outbreak of Corona virus. The Ordinance also amended the provisions of the Income-tax Act to provide the same tax treatment to PM CARES Fund as available to Prime Minister National Relief Fund. Therefore, the donation made to the PM CARES Fund shall be eligible for 100% deduction under section 80G of the IT Act. Further, the 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, the donation made up to 30.06.2020 shall also be eligible for deduction from income of FY 2019-20. Hence, any person including corporate 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.
The ministry of corporate affairs has clarified that company’s contributions to the PM CARES Fund over and above the minimum prescribed corporate social responsibility (CSR) spends can be offset against their CSR obligations of subsequent years.
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THE AUTHOR – CS Deepak Seth (Associate Partner at Helpinghands Professionals LLP) and can be reached at firstname.lastname@example.org or 9910248911.