Finance minister Nirmala Sitharaman on Tuesday announced a relief package for businesses, easing tax compliance and bankruptcy rules in a bid to help companies and workers cope with the fallout of the coronavirus pandemic. An economic package is also being readied, she said.
Sitharaman waived late fee, interest and penalty on delayed tax payments, gave extra time for various statutory compliances and raised the threshold of payment defaults to trigger bankruptcy proceedings from ₹1 lakh to ₹1 crore.
Apart from the compliance relief covering eight areas that was being announced, she assured that “an economic package" was very close to being announced, amid a demand for stimulus measures.
The due date extensions and waiver of late fee, penalties and interest are for compliance requirements relating to income tax, the goods and services tax (GST), customs and central excise, compliance and regulations related to the Companies Act, Insolvency and Bankruptcy Code (IBC), the fisheries department, banks and commerce.
“We are very close to announcing an economic package, which will be announced sooner than later," said the minister.
The announcement comes amid attempts by the Narendra Modi administration to control a growing number of Covid-19 cases while mitigating the potential impact of the crisis on the nation’s economy and people’s livelihoods. Several companies have announced factory closures and a nationwide lockdown threatens to disrupt the livelihoods of workers in the unorganized sector.
Sitharaman gave people three more months for filing income-tax (I-T) returns for FY19 as well as for linking their Permanent Account Numbers (PAN) with Aadhaar unique identity numbers.
In a relief to the common man, debit cardholders will now be able to make any number of cash withdrawals from ATMs of any bank for three months, without being charged for them.
Currently, savings account holders are allowed a minimum of five free transactions a month. In case of transactions at other banks’ ATMs, customers are allowed a minimum of three free transactions a month in metro cities and five in non-metros. Customers can be charged for transactions at ATMs beyond the number of free transactions, a charge that is capped at ₹20 per transaction plus taxes.
On Tuesday, the government also waived the minimum (account) balance fee and reduced bank charges for digital trade transactions for all trade finance consumers.
In case of delayed deposit of tax deducted at source (TDS), interest has been halved to 9% for payments deposited by 30 June 2020. The minister also said assessees could sign up for the direct tax dispute settlement scheme Vivad se Vishwas till 30 June without the additional 10% charge, an option that was earlier available till end of March. The payment due date without interest under the indirect tax dispute settlement scheme Sabka Vishwas was also extended to the end of June.
Sitharaman said that interest rate applicable on various delayed payments has been lowered to 9% from 12% or 18% otherwise applicable. This covers payment of advance tax, self-assessment tax, regular tax, TDS, tax collected at source, equalization levy, securities and commodities transaction tax made between 20 March and 30 June.
The due dates for various actions like filing of appeals, furnishing of returns, investing in savings instruments or investments for rollover benefit of capital gains tax under various laws administered by the revenue department were also extended to 30 June.