ACA Sarita Laddha
Relaxation in Statutory and Compliance matters
Finance Minister Announced below relaxations in Statutory and Compliance matters on 13th May, 2021 to support fight against COVID-19
Direct Tax Related Relaxation
TDS/TCS: Rs 50,000 crores liquidity through TDS/TCS rate reduction
In order to provide more funds at the disposal of the taxpayers, the rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates.
Payment for contract, professional fees, interest, rent, dividend, commission, brokerage, etc. shall be eligible for this reduced rate of TDS.
This reduction shall be applicable for the remaining part of the FY 2020-21 i.e. from 14th March, 2020 to 31st March, 2021.
By reducing the rate of TDS/TCS, the Govt. helps taxpayers to have more liquidity in their hands. In this difficult time, this announcement will benefit self-employed, professionals and senior citizens earning interest income or rental income. It does not provide any relief to the salaried persons.
However, it should be noted that the relaxation in the rate of TDS/TCS will not have any impact on the ultimate tax liability of a taxpayer. Thus, any deficit in tax liability, due to reduced rate of TDS/TCS, should be payable through advance-tax instalments. Any short-fall in the deposit of advance-tax will attract interest under section 234B and 234C. The first instalment of advance-tax is due on 15 June 2020. A taxpayer should re-calculate his advance-tax liability to be deposited next month to avoid any payment of interest.
Income Tax Refund
All pending refunds to charitable trusts and noncorporate businesses & professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately.
Due Date of Income Tax Returns
Due date of all income-tax return for FY 2019-20 will be extended from 31st July, 2020 & 31st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31st October,2020.
Extension of Date of Assessments
Date of assessments getting barred on 30th September,2020 extended to 31st December,2020 and those getting barred on 31st March,2021 will be extended to 30th September,2021
Extension of Date of Payment of Vivad se Vishwas Scheme
Period of Vivad se Vishwas Scheme for making payment without additional amount will be extended to 31st December,2020.
Indirect Tax Related Relaxations
- Extending due date of GST
- Extending filing GST returns to end of June 2020.
- Custom Clearence
- 24*7 custom clearance till 30th June, 2020
PF Related Relaxations
Employees Provident Fund Support for business and organised workers
The scheme introduced as part of PMGKP under which Government of India contributes 12% of salary each on behalf of both employer and employee to EPF will be extended by another 3 months for salary months of June, July and August 2020. 24% of monthly wages to be credited into their PF accounts for next three months for wage-earners below Rs 15,000 p.m. in businesses having less than 100 workers
EPF Contribution to be reduced for Employers and Employees for 3 months
Statutory PF contribution of both employer and employee reduced to 10% each from existing 12% each for all establishments covered by EPFO for next 3 months. However, for PSU entities – it shall be 12% employer and 10% employee.
This scheme will be applicable for workers who are not eligible for 24% EPF support under PM Garib Kalyan Package and its extension.
Other Relaxations
Definition of MSME will be revised by raising the Investment limit. An additional criteria of turnover also being introduced. The distinction between manufacturing and service sector will also be eliminated.
Mandatory Board meetings extended by 60 days till 30 September.
Allowing Extraordinary General Meetings through Video Conference with e voting/simplified voting facility.
Allowing payment before 15 May, 2020 for Motor Vehicle and Health Insurance Policies.
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