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News & Knowledge

India: Measures, fiscal relaxations and the way forward

15th April 2020

MSI's Mumbai member Chokshi Group provides an update on the measures that were introduced by the Indian government to provide support to businesses and individuals during the Covid-19 crisis.

STATUTORY OBLIGATIONS

Direct tax

  • Financial Year has not been extended till 30th June, 2020.
  • Due date to file Income Tax Returns for AY 2019-20 (FY 2018-19) which were due on 31st March, 2020 are now extended to 30th June, 2020.
  • Tax Amnesty Scheme to resolve tax issues extended to 30th June, 2020 without additional tax liability.
  • Due dates for issue of notice, intimation, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents and time limit for completion of proceedings by the authority and any compliance by the taxpayer under 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 wherein the due dates fell between 20th March, 2020 to 29th June, 2020, extended to 30th June 2020
  • Investments in tax saving instruments or investments for roll over benefit of capital gains for the AY 2020-21 (FY 2019-20) can be now be made upto 30th June, 2020 in order to be eligible to claim the said deduction.
  • Mandatory linking of PAN with Aadhar extended to 30th June, 2020
  • No extension of time limit for payment of any taxes. However, where the said taxes are paid by 30th June, 2020, the reduced rate of interest @ 9% p.a. would be levied in place of 12% / 18% as applicable. No late fee / penalty would be charged for any delay during the said period.
  • Commencement of SEZ operations which were due by 31st March, 2020, extended to 30th June, 2020.
  • Interest on housing loan accrued till 31st March, 2020 but paid upto 30th June, 2020, would be eligible for tax deduction for AY 2020-21 (FY 2019-20).
  • Validity of NIL/Lower Rate Certificate issued during FY 2019-20, would be considered valid for the period 01st April, 2020 to 30th June 2020. In case of any deviation in details such as TAN of the deductee or the rate of TDS applicable or where no certificate was issued in FY 2019-20, a fresh application through email is required to be made.

 

Indirect tax

  • Filing of GST returns has been extended to 30th June, 2020
  • Interest for delay in payment of GST, where turnover is exceeding INR 50 million, would be chargeable @ 9% upto 30th June, 2020 & thereafter at regular rates from the due date of the return
  • Tax Amnesty Scheme (Sabka Vishwas-Legacy Dispute Resolution) Scheme, 2019) to settle old disputes of service tax regime extended from 31st March, 2020 to 30th June, 2020.
  • Issuance of notices under all indirect tax laws, any action to be taken by any authority which are due between 20th March, 2020 to 29th June, 2020 extended to 30th June, 2020
  • Due date for filing various returns under the Composition scheme extended from 30th June, 2020 to 7th July, 2020 / 15th July, 2020 as applicable.
  • Specified dates notified for filing GSTR-3B for the months from February, 2020, to May 2020.
  • Interest for delay in filing GST-3B in case where aggregate turnover exceeds INR 50 million would be 9% p.a. from 4th April, 2020 until the specified date and thereafter at regular rate of 18% p.a.
  • No late fees would be levied if GSTR-1 is filed by 30th June, 2020.
  • Due date to file Input Service Distributor, Tax Collected at Source, Tax Deducted at Source returns extended to 30th June, 2020.
  • ITC restriction in accordance with Rule 36(4) shall not apply to ITC availed in GSTR-3B for the period from February 2020 to August 2020 subject to the condition that the restriction shall be applied and adjusted cumulatively for the above period in the return to be filed for the month of September, 2020.
  • Validity of E-way bills expiring between 20th March, 2020 to 15th April, 2020 extended to 30th April, 2020.

 

Corporate affairs

  • No additional fees to be charged for late filing any document, return, statement etc. during the moratorium period from 01st April, 2020 to 30th September, 2020.
  • The interval between two Board Meetings extended from 120 days to 180 days upto 30th September, 2020.
  • The revised Companies (Auditor’s Report) Order, 2020 deferred by one year to be made applicable from FY 2020-21.
  • Non-holding of at least one meeting by the Independent Directors during FY 2019-20 would not be considered as non-compliance.
  • The mandate to create a Deposit reserve of 20% of deposits maturing during the financial year 2020-21 before 30th April, 2020 extended to 30th June, 2020.
  • The mandate to invest 15% of the amount of debentures maturing during a particular year in specified instruments before 30th April, 2020 extended to 30th June, 2020.
  • Filing of declaration for Commencement of Business extended from 6 months to 12 months of incorporation.
  • Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, shall not be treated as a non-compliance.
  • Board Meetings through Video Conferencing can be held till 30th June, 2020 for approval of financials, director’s report, restructuring proposals etc.
  • Spending of CSR Funds for COVID – 19 shall be eligible for CSR activity.

 

Securities and Exchange Board of India

  • Deadline on filing of statements and returns by listed companies on certificate on share transfer facility, Statement of investor complaints, secretarial compliance report, corporate governance report, share holding pattern, financial results have been extended by 3 weeks to 6 weeks respectively.
  • The time limit for holding AGM by top 100 companies extended by one month to 30th September 2020.
  • Relaxation in the Maximum interval between meetings of board/ audit committee of 120 days relaxed during the period December 2019 and June 2020. However the mandate to hold four meetings a year has to be complied with.
  • Last date for Conduct of meetings of Nomination and remuneration committee, Stakeholders relationship committee, Risk Management committee is extended to 30th June 2020.
  • Exemption from requirement of publication of advertisement in the news paper as required under regulation 47 for all events scheduled till 15th May, 2020.

 

Mutual Funds :The deadline of filing of statements and returns on half-yearly unaudited financial results, disclosure of commission paid to distributors, disclosure of investor compliance, implementation of certain policy initiatives have been extended by 4 weeks to 5 weeks respectively.

 

REIT and InvIT : Regulatory filing and compliance for REIT and InvIT for the period ending March 31, 2020 have been extended by one month over and above the time line prescribed under SEBI.

 

Substantial Acquisition of Shares and Takeovers (SAST): Filing disclosures in terms of regulations 30(1), 30(2), and 31(4) of the SAST regulation extended up to 1st June, 2020

 

Insolvency Bankruptcy Code

  • Monetary threshold for default for filing an application for Initiation of Corporate Insolvency Resolution Process increased from INR 1 Lakh to INR 10 million.
  • Likely additional reliefs expected post 30th April 2020

Foreign Trade Policy

The validity of the Foreign Trade Policy issued in 2015 has been extended upto 31st March, 2021

Labour Laws

Due date to deposit ESI Contribution for the month of February, 2020 & March 2020 extended to 15th May, 2020.

Financial services

  • Debit cards can be used in any ATM
  • Minimum balance charges waived
  • Bank charges for digital transactions reduced
  • 3 months moratorium on instalment payment/ repayment of loans (March – May 2020). However interest will accrue during this period
  • CC/ OD interest recovery delayed for the months of March 2020 to May 2020, wherein the same will be recovered post 31st May 2020
  • Relaxation related to calculation of drawing power in CC/OD accounts during this period

Donations

PM CARES FUND

  • Donation to this fund is eligible for 100% deduction under Income Tax Act, 1961
  • Donations made upto 30th June 2020 will be eligible for deduction u/s 80G of the Income Tax Act,1961 in FY 2019 -20
  • Deductions will be allowed to persons / organisations who are claiming concessional rate of income tax
  • Donation will be classified as CSR expenditure
  • Additional contribution over and above CSR limit can be adjusted against future CSR liability.

Welfare Measures

The Government of India announced the INR 1.70 Lakh Crore relief package under the Pradhan Mantri Garib Kalyan Yojna (PMGKY) for the poor people. Key highlights of the package are as under;

  • The Scheme will be valid for the period March 2020 to May 2020
  • The Government of India will pay the Provident Fund dues (Employer + Employee’s Share) for all organisations employing upto 100 employees wherein 90% earn salary upto INR 15,000/- for 3 months
  • Non-refundable withdrawal from Provident Fund permitted upto 3 months of the employee’s salary or 75% of member’s accrual whichever is lower.
  • KYC for withdrawals relaxed.
  • Insurance cover of INR 5 million for all health workers involved in COVID-19 related healthcare services
  • 80 crore poor people to get 5 kg rice/wheat and 1 kg pulses free every month for next 3 months over and above, their regular 5kg quota
  • 20 crore women Jan Dhan account holders to get INR 500/- p.m. for next 3 months
  • Wages of Employees employed under Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA) increased from INR 182 per day to INR 202 per day. benefitting approx. 13.67 crore people.
  • Ex-gratia of INR 1000 p.m. will be paid to poor senior citizens, widows and disabled for next 3 months.
  • INR 2000 payable to farmers as benefit will be paid in April itself. This will benefit 8.7 crore farmers

About Chokshi Group - Mumbai

Part of the Chokshi Group, Adarsha Consulting is a professional services firm founded with the goal of providing start ups and mid-market firms with a superior alternative to building and maintaining an in-house accounting, compliance and consulting function.

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