The FM announced the economic relief package on the 13th of May 2020 to fight the COVID-19 crisis. In her announcement dated 13/05/2020, the Finance Minister announced various Direct Tax Changes. The objective of the relief measures is to form an "Aatma Nirbhar Bharat". To fulfill the objective the FM announced various relief measures to be given to the MSMEs.
In her speech, the FM announced the extension of the due date to file the Income Tax Return and Tax Audit for the Financial Year 2019-20 and reduction in the TDS and TCS rates by 25% for the period 14/05/2020 to 31/03/2021. Here are the major direct tax changes that were announced by the Finance Minister:
1. Reduction in TDS and TCS rates by 25% for the period 14/05/2020 to 31/03/2021
The TDS and TCS rates have been reduced by 25% of the existing rates. In order to provide more funds at the disposal of the taxpayers amidst the economic crisis arising out of COVID-19, the rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents has been reduced by 25% for the period from 14th May 2020 to 31st March 2021.
2. The due date for all Income Tax Returns for FY 2019-2020 extended
The due date for all Income Tax Returns for FY 2019-2020 extended from 31/07/2020 and 31/10/2020 to Nov 30, 2020.
3. The due date for Tax Audit for FY 2019-20 extended
The due date for Tax Audit for the Financial Year 19-20 has been extended from the 30/09/2020 to 31/10/2020.
4. Other Direct Tax Measures:
(i) The period for Vivad se Vishwas Scheme has been extended to the 31st December 2020.
(ii) The date for assessments getting barred on 30th September 2020 will be extended to the 31st December 2020 and assessments getting barred on 31st March 2021 will be extended to the 30th of September 2021.
(iii) All pending refunds to charitable trusts and non-corporate business & profession including LLP, partnership, proprietorship, and co-operatives will be issued by the government immediately.
Other than direct tax changes the government also announced amendments in the PF Regulation Rules and change in the definition of MSMEs.
Also Read:
Revised TDS/TCS Rate Chart by the Income Tax Department for the period 14/05/2020 to 31/03/2021
Relief measures given to MSMEs in the economic package and revision in the PF regulations
CAclubindia
