The Finance Minister of India, on March 24th, 2020, addressed the public with a vivid plan regarding statutory and regulatory compliances. But there are a lot of confusions amongst the taxpayers regarding the announcements.

Let us first understand scope of the announcement and then clear the confusions through FAQs.

INCOME TAX

  • Belated Tax Returns or Revised Returns for FY 2018-19 (earlier due date was 31st March,2020) can be filed till June 30th.
  • TDS Payment has to be made on time but interest rate on delayed payment has been reduced to 9% from 18% till June 30th
  • The deadline for linking Aadhaar with PAN has been extended to June 30th.
  • Interest rate on delayed payment of income tax for FY 2018-19 has been reduced to 9 % from 12%
  • ‘Vivad se Vishwas Scheme’ has been extended to June 30th. No need to pay the extra 10% till the extended time.
  • Due Dates for Issue of Notice, Approval order, Filing of appeal, Furnishing of Returns, Return Statement, Applications, Reports, any other document or compliance, including investment in    Savings instruments or investment for Roll Over benefit of Capital Gains, Wealth Tax, Benami Property, Black Money, STT Law, CTT Law, Equalization Levy Law, where the time limit was expiring March 20 shall all be extended to June 30th,2020.

GST

  • Last Date for March, April , May and Composition Returns have been extended to 30th June,2020
  • For GSTIN Holders with turnover of Rs 5 Crore or lower, no late fees, penalties and interest on deferred payment.
  • For GSTIN Holders with turnover over Rs 5 Crores, there will be no late fees but the interest rate on deferred payment will be 9 % instead of 18%.
  • Last date for opting composition scheme extended to June 30th, 2020.

INSOLVENCY AND BANKRUPTCY CODE

  • Threshold for default under the IBC code has been raised by 100 times to Rs 1 Crore.
  • This will indeed aid to stop the triggering of insolvency proceedings against micro, small and medium enterprises.
  • If situation continues, then the ministry can consider suspending 7, 9 and 10 of the Insolvency Act to prevent companies from entering bankruptcy

COMPANY LAW MATTERS

  • MCA registry: moratorium issued from 1st April to 30th September 2020.
  • No additional fees for late filing.
  • The mandatory requirements for holding meetings of Board of Directors relaxed by 60 Days.
  • Applicability of the Companies Auditor’s Report Order 2020 will be made applicable from FY 2020-2021 instead of 2019-2020.
  • If independent directors have not been able to hold even one meeting, the same shall not be a violation.
  • For Newly incorporated companies: requirement to file Certificate of Commencement within 6 months of incorporation- additional time of 6 months extended for them.
  • Company director who does not comply with minimum residency requirement of 182 days u/s 149, would not be treated as a violation.
  • Requirement to create a deposit reserve of 20% till April 30th has been moved to June 30th.
  • Deadline to Invest 15% debentures maturing in a year in specified instruments has been moved from April 30th to June 30th.

DEPARTMENT OF FISHERIES

1. All Sanitary Permits (SIPs) for import of SPF Shrimp Broodstock and other Agriculture inputs expiring between 01.03.2020 to 15.04.2020 extended by 3 months

2. Delay upto 1 month in arrival of consignments to be condoned.

3. Rebooking of quarantine cubicles for cancelled consignments in Aquatic Quarantine Facility (AQF) Chennai without additional booking charges

4. The verification of documents and grant of NOC for Quarantine would be relaxed from 7 days to 3 days

OTHER FINANCIAL RELIEF

  • Debit Card Holders withdrawing cash, can do it free of charge for the upcoming three months.
  • No fee will be charged for not having minimum balance in savings account.
  • Bank Charges will be reduced for digital transactions for trade and finance consumers.

FAQs on Date Extension / Financial Year Ending Date Extension -31st March or 30th June, 2020-Clearing confusion

Q1. Has the Financial Year Ending moved to 30th June from 31st March, 2020?

Ans: No!! Only the due dates for the above mentioned compliances have been extended.

The financial year 19-20 is still from April 1st,2019 to March 31st, 2020

Q2. Has there been a waiver of late fees u/s 234F for belated return filed till June 30th, 2020

Ans: The belated return for FY 2018-19 should have been filed till March 30th but the due date has been extended till June 30th,2020 without a waiver in late fees.

This means that you still need to file the return with a payment of late fees.

Q3. Can be claim deduction u/s 80C for FY 2019-20 by making Investment in LIC etc till 30.06.2020?

Ans: Yes, even if we make payment for LIC, PPF, NSC till 30.06.2020, we can claim its    deduction u/s 80C for FY 2019-20

Also, the same applies for Mediclaim u/s 80D and NPS (National Pension Scheme) u/s 80CCD (1B)

Q4. Can we claim deduction of the investments or expenses  for FY 2019-20 which fall due and are paid between April –June 2020 ?

Ans: Suppose, we have a LIC premium due in April, 2020 and the same has been paid. Whether the above deduction be taken for FY 2019-20 or FY 2020-21?

The premium due in FY 2020-21 shall be claimed as deduction in the same year even if paid between April-June

In short, the payment of the premium falling due till 31.03.2020 will be claimed for FY 2019-20 if paid till 30.06.2020

Q5. What about the income earned or loss incurred in April– June 2020?

Ans: The extension is only for specific investments or compliances. The Financial Year closing is still on 31.03.2020.

Therefore, the income or loss with respect to April—June 2020 will be dealt in FY 2020-21 and not FY 2019-20.

Q6.Whether the PPF / NPS Account opened after 31St March 2020 but before 30th June 2020 will be eligible for deduction?

Ans: Even if  account opened after March 2020 but before June 2020 will be eligible for deduction u/s 80C for FY 2019-20.

P.S. Deduction of NPS (National Pension Scheme) u/s 80CCD(1B) is limited to Rs 50,000 which is over and above 80C deduction of Rs 1,50,000

Author Bio

Qualification: CA in Practice
Company: SIMRAN & COMPANY
Location: SILIGURI, West Bengal, IN
Member Since: 12 Mar 2020 | Total Posts: 6
CA by profession and also a CS qualified, fields of expertise are taxation, financial structuring of businesses, company matters, income tax and ROC filing. View Full Profile

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4 Comments

  1. ANIL VIJAY KUMAT says:

    Can I invest now in PPF for the new fin.year I.e.2020-21.If I deposit amount in PPF on 02.05.2020 will it be eligible for claim for FY 2020-21.

  2. LAXMAN MADHAV PUTHRAN says:

    Is there any late fees or Interest applicable for Professional Tax payment Maharashtra not paid for mar & apr due to covid19 pandemic

  3. simransaria says:

    Last dates for GST returns falling in the month of March, April and May have been extended to 30Th June,2020
    Therefore,GST Returns of Feb, March and April have been extended instead of March April and May.
    Kindly Note the same.
    Thanks

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