Welcome to the high-level summary of Covid-19 related actions by the Indian Government. The details and links below have been split between “Tax Filings Affected”, “Government Employee Wages Benefits Programs” and “Government Loan and Support Programs”; and are simply extracts from the more detailed information available on the websites of the Indian Praxity Participant firms’ websites, links to which are available at the bottom of this page. Praxity Participant Firms in India are Mazars, Nangia & Co LLP, Plante & Moran, Seshachalam & Co., and ShineWing CPA.
Tax Filing Affected
Income Tax Measures
- The last date for filing Income Tax Return for FY 2018-19 (AY 2019-20) has been extended from 31 March 2020 to 30 June 2020.
- Due dates for issue of notice, intimation, notification, approval order, sanction order, filing of appeal, filing of statements, applications, reports, any other documents and time limit for completion of proceedings by the authority and any compliance by the taxpayer under the Income Tax Act, Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT Law, Equalization Levy law, Vivad Se Vishwas law, where the time limit is expiring between 20 March 2020 to 29 June 2020 shall be extended to 30 June 2020.
- Reduced interest rate at 9% per annum instead of 12% / 18% per annum (i.e. 0.75% per month instead of 1% / 1.5 % per month) will be charged for delayed payments of advance tax, self-assessment tax, regular tax, TDS, TCS, equalization levy, STT, CTT made between 20 March 2020 and 30 June 2020. Further, no late fee/penalty would be charged for delay relating to this period. However, deposit timelines are not extended.
- All investments /saving instruments for claiming rebates /deductions /exemptions /investments for roll over benefit of capital gains under Income Tax Act can now be made up to 30 June 2020 instead of 31 March 2020.
- Aadhaar PAN linking date has also been extended from 31 March 2020 to 30 June 2020.
- The timeline for settlement of tax disputes under the Vivad Se Vishwas scheme without any payment of additional charge of 10% has been extended to 30 June 2020 from 31 March 2020.
- An ordinance called The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 has been issued on 31.03.2020 announcing several relaxations
- Business commencement date for approved units in Special Economic Zones extended till June 30, 2020 from March 31, 2020
- Contribution towards PM CARES fund made eligible for income tax benefits for corporates and considered as a part of corporate social responsibility related spends
Goods and Services Tax
- For dealers having aggregate annual turnover less than ₹ 5 Crores, last date of filing GSTR-3B due in March, April and May 2020 (i.e returns for supplies made in the months of February, March and April 2020) has been extended till last week of June 2020 in staggered manner (State-Wise specific dates will be notified by CBIC in due course).
- For dealers having aggregate annual turnover of ₹ 5 Crores and above, no late fee & penalty shall be levied where the returns due in March, April and May 2020 (i.e returns for supplies made in the months of February, March and April 2020) are filed till 30 June 2020.
- Due date for opting composition scheme for existing registered persons is extended up to 30 June 2020;
- Date for filing of annual returns for FY 2018-19 due on 31 March 2020 has been extended till 30 June 2020;
- Composition dealers can make the tax payments for the quarter ending 31 March 2020 and file their returns for 2019-20 by last week of June 2020 in staggered manner (State-Wise specific dates will be notified by CBIC in due course).
- Due date for issue of notice, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents and the 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.
- Central Board of Indirect Taxes and Customs (CBIC) vide its notification has extended the due date for filing of Form GSTR-4 for Financial Year 2019-20 from 15th July,2020 to 31st August,2020. Form GSTR-4 is an Annual GST Return that has to be filed by all registered taxpayers who have opted for composition scheme or were under composition scheme under GST, for any period during a financial year, starting from 1st April,2019. Unlike a normal taxpayer who needs to furnish 3 monthly returns, a dealer opting for the composition scheme is required to furnish only 1 return which is Form GSTR 4 once in a year by 30th of April, following a financial year or as extended by government from time to time. It is to be noted that Form GSTR 4 can be filed only if, all applicable quarterly statements in Form CMP 08 of that financial year, have been filed. Form GSTR-4, once filed, cannot be revised. Finance Act, 2019 (Part 2) section 100 states that interest on GST liability shall be payable on that portion of tax liability, which is paid in cash and shall be effective from 01.09.2020. MOF in a press release stated that no recoveries shall be made by Centre or State Dept for past period and decision taken in 39th council minutes shall be considered for relief to tax payers.
- Amendment in Section 50 of CGST Act Limiting Applicability on Net Cash Liability- Big relief granted to taxpayers in levy of interest on delayed payment of GST under section 50 of CGST Act, 2017 by including a provision to section stating that such interest shall be levied on only the portion of the tax which is paid by debiting the E-Cash Ledger.
Extension of various time limits under direct tax & benami laws – 24 June 2020 In view of the challenges faced by taxpayers in meeting the statutory & regulatory compliance requirements across sectors due to the outbreak of COVID-19, the Government brought the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 on 31 March 2020 which, inter alia, extended various time limits. In order to provide further relief to the taxpayers for making various compliances, the Government has issued a Notification on 24 June 2020, the salient features of which are as under:
- The time for filing of original as well as revised Income Tax Returns for the FY 2018-19 (AY 2019-20) has been extended to 31 July 2020.
- Due date for Income Tax Returns for the FY 2019-20 (AY 2020-21) has been extended to 30 November 2020. Hence, the Income Tax Returns which are required to be filed by 31 July 2020 and 31 October 2020 can be filed upto 30 November 2020. Consequently, the date for furnishing tax audit report has also been extended to 31 October 2020.
- In order to provide relief to small and middle class taxpayers, the date for payment of self-assessment tax in the case of a taxpayer whose self assessment tax liability is upto Rs. 1 lakh has also been extended to 30 November 2020. However, it is clarified that there will be no extension of date for the payment of self-assessment tax for the taxpayers having self-assessment tax liability exceeding INR 1 lakh. In this case, the whole of the self-assessment tax shall be payable by the due dates specified in the Income-tax Act, 1961 and delayed payment would attract interest under section 234A of the Income Tax Act.
- The date for making various investment/ payment for claiming deduction under Chapter-VIA-B of the Income Tax Act has also been further extended to 31 July 2020.
- 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 Income Tax Act has also been further extended to 30 September 2020. Therefore, the investment/ construction/ purchase made up to 30 September 2020 shall be eligible for claiming deduction from capital gains.
- The date for commencement of operation for the SEZ units for claiming deduction under section 10AA of the Income Tax Act has also been further extended to 30 September 2020 for the units which received necessary approval by 31 March 2020.
- The furnishing of the TDS/ TCS statements and issuance of TDS/ TCS certificates being the prerequisite for enabling the taxpayers to prepare their return of income for FY 2019-20, the date for furnishing of TDS/ TCS statements and issuance of TDS/ TCS certificates pertaining to the FY 2019-20 has been extended to 31 July 2020 and 15 August 2020 respectively.
- The date for passing of order or issuance of notice by the authorities and various compliances under various Direct Taxes & Benami Law which are required to be passed/ issued/ made by 31 December 2020 has been extended to 31 March 2021. Consequently, the date for linking of Aadhaar with Permanent Account Number (PAN) would also be extended to 31 March 2021.
- The reduced rate of interest of 9% for delayed payments of taxes, levies etc. specified in the Ordinance shall not be applicable for the payments made after 30 June 2020.
- Deferment of the implementation of new procedure for approval/ registration/ notification of certain entities u/s 10(23C), 12AA, 35 and 80G of the Income Tax Act has already been announced vide Press Release dated 8 May 2020 from 1 June 2020 to 1 October 2020. It is clarified that the old procedure i.e. pre-amended procedure shall continue to apply during the period from 1 June 2020 to 30 September 2020.
Relief in Late fees for delayed in filing of FORM GSTR-4
- Relaxation in late fees has been provided to taxpayers who were under Composition Scheme for any period till Mar’19 and failed to file FORM GSTR-4.
- This relaxation is available only if taxpayers file GSTR-4 for FY 17-18 & 18-19, between Sept 22, 2020 & Oct 31, 2020.
- No late fee if tax liability is NIL and in case there is tax liability then late fee shall be Rs. 500(Rs.250 CGST/SGST tax head each) per return. Relief in Late fees for delayed in filing of FORM GSTR-10
- Relaxation in late fees has been provided to taxpayers who failed to file FORM GSTR-10 i.e. final return by due date.
- Relaxation is available only if return has been filed between Sept 22, 2020 & Dec 31, 2020.
- Maximum late fee payable is Rs.500 (Rs 250 each for CGST & SGST) Amendment of ITR and Other Forms for AY 2020-21 CBDT in line with the new taxation regime, has made certain amendments to the Rules vide its notification no 82/2020 dated 01.10.2020, to be applied w.e.f income tax return, tax audit and Form 3 CEB to be filed on or after 01.10.2020. Under new tax regime companies have option to exercise lower income tax rates of 15% / 22% (subject to certain conditions) against prevailing income tax rate of 25 or 30% as applicable (excluding surcharge) Below are the highlights of changes as per notification: Capping of Depreciation allowance u/s 32(1)(ii) to 40% ITR schedule amended and the depreciation allowance u/s 32(1)(ii) shall be restricted to 40 per cent where Domestic company or individual or co-operative society has opted for lower income tax rate regime. Relaxation in respect of unabsorbed depreciation attributable to provisions u/s 32(1)(iia) In cases where an assessee has opted for new income tax regime of lower rate and there exists an unabsorbed additional depreciation in accordance with provisions u/s 32(1)(iia), then relaxation has been provided, wherein instead of lapsing such unabsorbed additional depreciation assessee can increase the opening written down value of the block of asset as on 01.04.2019 by such amount. Earlier, the entire unabsorbed additional depreciation u/s 32(1)(iia) was disallowed while computing the total income of the assessee. ITR Schedule has been amended suitably to enable taxpayer to record such adjustment.
Changes in Form 3CD and Form 3CEB Following changes in Form 3CD has been made;
- Option given to assessee under Clause 8a, to intimate his acceptance of new tax regime u/s 115BA/115BAA/115BAB.
- Clause 18(ca) and 18(cb) amended to include the adjustment in Depreciation Schedule for opening written down value as on 01.04.2019.
- Clause 32(a) amended to include the details of brought forward losses or allowances which are disallowed due to opting new tax regime. Following changes in Form 3CEB has been made
- Clause 22 with respect to Specified Domestic transactions with relatives defined u/s 40A(2)(b) is omitted.
- Subsequent clauses re-numbered.
- New clause 24 inserted wherein assessee has to report specified domestic transaction(s) with its associated enterprise referred to in sub-section (6) of section 115BAB which has resulted in more than ordinary profits expected to arise in such business.
Forms introduced to exercise the new taxation regime for individual & Co-operative society Form 10-IE for individual new tax regime and Form 10-IF for co-operative society new tax regime are introduced to capture information for the assessee for opting new taxation regime. Form 10-IC and 10-ID are already notified for companies opting concessional rate of 22% and 15% respectively
The Companies Act, 2013 ('Companies Act') and Limited Liability Partnership ('LLP') Act, 2008 Relaxation on levy of additional filing fees No additional fees shall be levied up to July 31, 2021, for delayed filing of e-forms by companies/LLPs (other than reforms CHG-1, CHG-4, and CHG-9) which were/would be due for filing between April 1, 2021, to May 31, 2021. For such delayed filings up to July 31, 2021, only normal filing fees shall be payable. The requisite changes, in the MCA21 system, are being made to give effect to the above relaxation. Extension of the gap between two board meetings The gap between two board meetings may extend to 180 days during quarters - April to July 2021 and July to September 2021 instead of the existing requirement of 120 days gap. Therefore, an additional period of 60 days has been granted by the MCA to companies with respect to the requisite interval between two board meetings for the first two quarters of FY 2021-22. Clarifications on Corporate Social Responsibility (‘CSR’) Expenditure The expenditure incurred by the companies (engaged in research and development activity of new vaccine, drugs, and medical devices in their normal course of business) to undertake research and development activity of new vaccine, drugs and medical devices related to COVID-19 may be considered as CSR expenditure for financial years 2020-21, 2021-22 and 2022-23. This is subject to certain conditions such as the requirement of collaboration with specified organizations and disclosure of same in Annual Report. Spending of CSR funds for ‘creating health infrastructure for COVID care’, ‘establishment of medical oxygen generation and storage plants’, ‘manufacturing and supply of Oxygen concentrators, ventilators, cylinders and other medical equipment for countering COVID-19’ or similar such activities are eligible CSR activities under item nos. (i) and (xii) of Schedule VII of the Companies Act, 2013 relating to the promotion of health care, including preventive health care, and, disaster management respectively. Scheme for relaxation of time for filing forms related to creation or modification of charges Applicability of the Scheme: Where the date of creation/modification of charge:
- Is before April 1, 2021, but the timeline for filing such form has not expired under section 77 of the Companies Act as of April 1, 2021, or
- Falls on any date between April 1, 2021, till May 31, 2021
Relaxation of time and Fees: The period beginning from April 1, 2021, till May 31, 2021, shall not be reckoned for the purpose of counting the number of days within which the aforementioned forms need to be filed under section 77 or section 78 of the Companies Act. Accordingly, relaxation towards the applicable fees shall be granted for the said period.
Government Employee Wages Benefits Programs
Pradhan Mantri Garib Kalyan Yojana: Finance Minister announced ₹1.70 Lakh Crore (USD 223 Billion) relief package under Pradhan Mantri Garib Kalyan Yojana for the poor to help them fight the battle against Corona Virus.
- Insurance cover of ₹50 Lakh (USD 65,500) per health worker fighting COVID-19 to be provided under Insurance Scheme
- 80 crore poor people will get 5 kg wheat or rice and 1 kg of preferred pulses for free every month for the next three months.
- 20 crore women Jan Dhan account holders to get ₹500 (USD 6.5) per month for next three months
- Increase in MNREGA wage to ₹202 (USD 2.6) a day from ₹182 (USD 2.4) to benefit 13.62 crore families
- An ex-gratia of ₹1,000 (USD 13.1) to 3 crore poor senior citizen, poor widows and poor disabled
- Government to front-load ₹2,000 (USD 26) paid to farmers in first week of April under existing PM Kisan Yojana to benefit 8.7 crore farmers
- Central Government has given orders to State Governments to use Building and Construction Workers Welfare Fund to provide relief to Construction Workers
The Employee Provident Fund Government pays EPF contribution
- The EPF contribution comes from both the employer and the employee at 12% each. The employer’s contribution is divided between the Employee’s Pension Scheme (EPS) paying 8.33% and the Employee’s Provident Fund (EPF) paying 3.67% to a total of 12%. In light of the COVID-19 pandemic, the government has offered to pay both parts of the EPF contribution for the next three months. This is for establishments which have 100 employees or less and in which 90% of those employees are earning less than Rs.15,000/month.
Easier to withdraw your EPF corpus
- The current situation is creating a need for some employees to withdraw their EPF corpus. In response, the government will relax the EPF withdrawal rules to give employees easier access to their money. The Employee Provident Fund Office has now introduced a Pandemic Advance, in which employees can withdraw up to 75% of the amount in their EPF account, or 3 months’ basic salary and dearness allowance, whichever is less.
Employee State Insurance Corporation ESIC relaxes deadlines
- The Govt. of India has relaxed the ESIC contribution deadline by 30 days for all employers and employees. This means the ESI contributions for the months of February 2020 and March 2020 can be filed and paid up to April 15, 2020 and May 15, 2020 instead of March 15, 2020 and April 15, 2020 respectively.
Government Loan and Support Programs
Relaxation of Solvency & Bankruptcy Code
- The existing threshold of default of Rs. 1 lakh under Section 4 of the IBC 2016 has been raised to Rs. 1 crore to prevent triggering of insolvency cases against SMEs/ MSMEs.
- It has been further clarified that in case the present pandemic situation continues beyond 30 April, 2020, then the ministry might consider the suspension of the provisions of Section 7, Section 9 and Section 10 of the IBC 2016 for a period of six months.
RBI Stimulus Package:
Auctioning Targeted Long-Term Repo Operations (TLTROs)
- In order to mitigate the effects of large sell-offs and resultant working capital constraints, the Reserve Bank will auction targeted term repos of up to three years for a total amount of up to INR 1 lakh crore, at a floating rate linked to the policy repo rate. Auction of the first tranche of INR 25,000 crore was held March 27, 2020, following which subsequent TLTRO auctions will be announced.
Cutting down on the Cash Reserve Ratio (CRR)
- As a one-time measure to help banks overcome the COVID-19 upheaval, the CRR has been cut by 100 basis points to 3% of net demand and time liabilities (NDTL). This will release primary liquidity of about INR 1.37 lakh crore into the banking system, which shall be available for a period of one year ending on March 26, 2021.
- The minimum daily CRR balance maintenance has been slid down to 80% (from the original 90%), being available up to June 26, 2020.
- Considering the current situations, the RBI has decided to further extend the relaxation of maintenance of minimum CRR of 80% for a further period of three months. i.e. upto 25 September 2020.
Relaxing Borrowings under the Marginal Standing Facility
- Under the marginal standing facility (MSF), banks can borrow overnight by dipping up to 2% into the Statutory Liquidity Ratio (SLR). This limit has been increased to 3% of SLR with immediate effect, being available up to June 30, 2020.
- After reviewing the same, the RBI has decided to extend this enhanced limit till 30 September 2020.
- These measures under the three-pronged approach will inject total liquidity of INR 3.74 lakh crore into the system.
Extending Payment on Term Loans
- All commercial banks, co-operative banks, all-India Financial Institutions, and NBFCs are permitted to allow a moratorium of three months on the payment of installments, with respect to all term loans outstanding as in March 2020.
Deferring Interest on Working Capital Facilities
- Lending institutions are permitted to allow a three-month interest deferment, with respect to all working capital facilities sanctioned in the form of cash credit/overdraft, which are outstanding as in March 2020. The accumulated interest for the period will be paid after the expiry of the deferment period.
Deferring Last Tranche of the Capital Conservation Buffer (CCB)
- The implementation of the last tranche – 0.625% of the CCB – has been further deferred from March 31, 2020 to September 30, 2020. A host of other measures – on the lines of relaxing regulatory restrictions and opening new security markets – have also been penned down on the table, on both a short- and medium-term time horizon.
Companies Fresh Start Scheme
- To incentivize compliance and reduce compliance burden in the wake of COVID-19, the MCA has introduced the ‘Companies Fresh Start Scheme, 2020’ and revised the ‘LLP Settlement Scheme, 2020’. The USP of both the schemes is to provide a one-time waiver of additional filing fees for delayed filings by the companies or LLPs with the Registrar of Companies during the currency of the Schemes i.e. during the period 1 April 2020 to 30 September 2020.
- Apart from giving longer timelines for corporates to comply with various filing requirements under the Companies Act, 2013 and LLP, Act 2008, both schemes also reduce the related financial burden, especially for those with long standing defaults and thereby provides an opportunity to make a ‘fresh start’.
Aatmnirbhar Bharat Covid-19 has caused massive macroeconomic disruption in India during the last couple of months. To minimize the impact of pandemic on Indian economy, Prime Minister Narendra Modi announced INR 20 Lakh Crores financial package based on five pillars, with an aim to make India self-reliant (Aatmnirbhar). India’s self-reliance will be based on 5 pillars- economy, infrastructure, technology driven system, vibrant demography, and demand. Overall stimulus package worth Rs 20,97,053 crore was announced by Finance Minister Nirmala in five tranches. The package includes a series of financial measures for agriculture, migrant workers & poor, MSMEs and core sectors aimed to provide relief to the most vulnerable sections of the society reeling under the impact of corona crisis.
- Earlier Measures INR 9,94,403 cr. Focus on Health Sector and RMI measures such as reduction in Policy lending rate & Cash reserve ratio, Loan moratorium, etc.
- Tranche 1 – INR 5,94,550 cr. Focus on MSMEs, EPF support, NBFCs/HFC/MFIs, DISCOMS, Real Estate and Tax Measures
- Tranche 2 – INR 3,10,000 cr. Focus on Migrant workers, poor, street vendors, small farmers and middle-income group
- Tranche 3 – INR 1,50,000 cr. Focus on Agriculture sector and Allied activities.
- Tranche 4 & 5 – INR 48,100 cr. Focus on key sectors such as Coal, Minerals, Space, Education, Health, Public Sector Enterprises
Scheme for relaxation of time for filing forms related to creation or modification of charges under the companies act, 2013 – 17 june 2020 The MCA has introduced a Scheme namely ‘Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013’. The purpose of this Scheme is to condone the delay in filing certain forms related to creation/modification of charges. The Scheme provides guidance with respect to the following:
- Applicability of the Scheme
- Time period for applicability of the Scheme
- Applicable fees
- For which cases the Scheme is not applicable. The ICAI has also issued FAQs on the aforesaid Scheme. For Scheme, click here. For ICAI’s FAQs, click here
- The government has decided to enhance the WMA- a temporary facility to meet revenue mismatches- limits to states and union territories ahead of the recommendations of a committee it constituted for the purpose. "It has been decided to increase WMA limit by 30 percent from the existing limit for all States/UTs to enable the State Governments to tide over the situation arising from the outbreak of the COVID-19 pandemic.
- The Reserve Bank of India (RBI) has extended realization period of export proceeds. The time period for realization and repatriation of export proceeds for exports made up to or on July 31, 2020, has been extended to 15 months from the date of export.
- Reverse repo rate is being reduced by 25 bps from 4 per cent to 3.75 per cent under Liquidity adjustment facility (LAF).
- 3-months EMI moratorium on term loans outstanding as on March 1, 2020
- 24X7 Custom clearance till end of June 30, 2020
- Foreign Trade Policy due to expire on March 31, 2020 extended till March 31, 2021
- RBI has injected 3.2 per cent of GDP into the economy to tackle liquidity situation.
Links to Our Member Firms
Further Covid-19 advice
The information contained herein on Covid-19 government measures within the G8, consists solely of information that can be found on the websites of one or more Praxity Participant firms, and has not been written, modified or verified by Praxity, it’s staff, officers or directors.