In a normal scenario we have Operating profit in our financials which is denoted with EBITA (Earnings before Interest, Taxes, Depreciation/ Amortization) . But this year, we may have a new concept – EBITADAC (Earnings before Interest, Taxes, Depreciation/ Amortization and Corona Virus. All provisions/ significant expenses made in the FY 2019-20 and FY 2020-21  to give effect to the current and future impacts of Covid 19 will have to be booked under the head “ Extraordinary Items”. Whether Salaries paid to Employees during the lockdown period would constitute extraordinary expenses as there is no benefit received from the employee during this period needs to be deliberated.

1) There is no Extension of the Financial year for FY 2019-20. The financial period ends on 31.03.2020.

2) Due dates where time limit is expiring between 20th March 2020 to 29th June 2020 is extended to 30th June 2020 or such other date after 30th June 2020 as may be prescribed by CG for

    • Issue of notice, intimation, notification, sanction or approval, Passing of order, completion of proceedings by authority
    • Filing of appeal, reply, furnishing of return, statements, applications, reports, any other documents or
    • any compliance by taxpayer including investment, deposit, payment, construction or such other action for benefit under IT Act, WT Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT Law, Equalization Levy law, Vivad Se Vishwas law

Investment/payment made under Chapter-VIA- “B- Deduction wrt certain payments” like S. 80C (LIC, PPF, NSC etc.), 80D (Mediclaim), 80G (Donations), etc. upto 30.06.2020 can be claimed for deduction in FY 2019-20.

Investment / construction / purchase made upto 30.06.2020, for claiming roll over benefit/deduction wrt capital gains U/s. 54 to 54GB, shall be eligible for claiming deduction from CG arising during FY 2019-20.

Commencement date of operation for SEZ units claiming deduction U/s. 10AA extended to 30.06.2020 for units which received necessary approval by 31.03.2020.

Above benefit not extended to other fixed assets for claim of Depreciation benefit U/s.32.For Instance you purchase a car in June 2020, you cannot claim depreciation for the same in FY 2019-20.

3) Donation made to PM CARES Fund eligible for 100% deduction U/s. 80G without limit on deduction of 10% of gross income

  • 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 persons affected from Covid-19.
  • Any person incl. corporates paying concessional tax on income under new regime can make donation to PM CARES Fund upto 30.06.2020 and can claim deduction u/s 80G against income of FY 2019-20.
DeductionsU/s.80 to companies opting concessional tax U/s.115BAA / 115BAB
Section Particulars FY 2019-20 FY 2020-21
80G Donations Available Not Available
80GGA Donations to scientific reseach and rural developments Available Not Available
80GGB Donation to political parties Available Not Available
80JJA Donation wrt new employees Available Available
80M Donation wrt intercorporate dividends NA Available
* Under Section 115BBA of the Income tax Act, domestic companies has the option to pay 22% tax from FY 2019-20 onwards, subject to foregoing certain deductions / exemptions and set off benefits.
** Under Section 115BAB of the income Tax Act, Manufacturing companies has the option to pay 15% tax from FY 2019-20 onwards, subject to foregoing certain deductions / exemptions and set off benefits.

 4) Last date for belated / Revised ITR filing U/s.139(4)/(5) for FY 18-19 extended from 31st March, 2020 to 30th June,2020.

5) Reduced interest @ 9% instead of 12/18% PA for non-payment of Income Tax / levy (Advance tax, self-assessment tax, regular tax, TDS, TCS) equalization levy, STT, CTT due for payment from 20th March 2020 and 29th June 2020, if they are paid by 30th June 2020. No penalty/prosecution shall be initiated for these non-payments. The due dates for TDS /Advance tax payment has not been extended. Only the Interest rates have been reduced.

6) Aadhaar-PAN linking date extended from 31st March, 2020 to 30th June, 2020.

7) Declaration & payment under Vivad se Vishwas scheme can be made up to 30.06.2020 without 10% additional payment.

8) If a person had submitted valid Forms 15G & 15H to Banks or other institutions for FY 2019-20, then these Forms would be valid upto June30,2020. [Earlierduedate30th April2020]

9) Order u/s 119 of IT Act on issue of certificates for lower rate / Nil deduction / collection of TDS or TCS u/s 195, 197 & 206C (9) (dtd 31.03.2020)

The applications filed by the payees u/s 195 and 197 of the Act for lower or nil rate of deduction of TDS and applications by buyers/licensees/lessees u/s 206C (9) of the Act for lower or nil rate of collection of TCS for F.Y. 2020-21 have not been attended in a timely manner by the TDS/TCS Assessing officers causing hardship to tax payers. Considering the constraints of the Field Officers in disposing of the applications for lower or nil rate of TDS/TCS and to mitigate hardships of payees and buyers/licensees/lessees, the CBDT has issued directions/clarifications by exercise of its powers u/s 119 of the Act.

Sl No In case an Assessee Validity
1 Who has filed application for lower/ nil deduction of TDS/TCS for FY 20-21
a. And whose application is pending for disposal
AND
b. has been issued certificate for FY 2019-20
Certificates are valid for FY20-21 till 30th June2020 or till disposal of applications by AO, whichever is Earlier
2 Who could not apply for issue of lower or nil deduction of TDS/TCS for the FY 20-21,
But were having the certificate for FY19-20
Certificates valid till 30th June 2020 for FY20-21. However, Assessee to apply for lower/Nil deduction vide an e-mail addressed to AO (manner prescribed), as soon as normalcy is restored or 30/06/2020, whichever is earlier
3 Who has not applied for issue of lower or nil deduction of TDS/TCS,
AND
Is also not having such certificate for FY19-20
Applicants to apply for lower/Nil deduction vide an email addressed to AO(manner prescribed).
4 On payments to Non-Residents including foreign companies having PE in India
AND
Not covered by 1&2 above.
TDS to be made @10% including Surcharge and Cess, on such payments
till 30th Jun 2020 or disposal of their applications Whichever is earlier.

Manner prescribed for applying for lower deduction through e-mail

E-mail shall contain following information

1. Duly filled in Form13

2. Documents/info. Required to be uploaded on TDS-CPC website while filing Form13

3. Projected Balance Sheet & P&L account for FY2020-21

4. Provisional Balance Sheet & P&L account of FY 2019-20

5. Balance Sheet & Profit & Loss account of FY2018-19

6. Form 26AS for FY2019-20 & 2018-19

7. ITR pertaining to FY 2018-19

Certificates shall be issued up to 30th Jun 2020 or any other date (earlier than 30th Jun 2020) as specified by AO.

AO shall communicate issuance of certificate vide mail to Applicant who in turn shall share it with the deductor/collector.

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Name: Priya C V
Qualification: CA in Practice
Company: Priya C V and Associates
Location: BENGALURU, Karnataka, IN
Member Since: 08 Apr 2020 | Total Posts: 4

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