Coronavirus impact: FM offers relief measures, says bigger steps to follow

Finance Minister Nirmala Sitharaman on Tuesday extended the deadline for filing tax returns by three months beyond March 31. She also announced a slew of regulatory and compliance measures across sectors to alleviate the hardships being faced by various businesses. This comes as the country enters into an unprecedented lockdown due to the COVID-19 pandemic.

The finance minister also announced removal of charges for three months for debit card holders withdrawing cash from ATMs of other banks and waived the minimum balance fees.

The mandatory requirement of holding meetings of the board of the companies was extended by 60 days till the next two quarters, while applicability of Companies (Auditor’s Report) Order, 2020, has been deferred by a year.

It will now be put in place from 2020-2021 instead of from 2019-2020 notified earlier.

In a media briefing held through a video conference, Sitharaman also said that a larger economic package will be announced soon.

The finance minister said the Centre was deliberating upon the suggestions from stakeholders, including provision of a targeted income support scheme and deferment of loan payments for individuals and companies.

She said that a COVID-19 Economic Response Task Force had been set up constituting ministers, members of Parliament, industrialists, economists and experts. It had been divided into sub-groups to deal with various issues.

“We are close to coming out with an economic package which will be announced sooner or later,” Sitharaman said.

The minister said the last date for income tax returns for FY19 has been extended to June 30, and for delayed payments till that time, the interest rate has been reduced to 9 per cent from 12 per cent.

“This is a relief for many ordinary resident taxpayers who need to file revised tax returns in order to claim foreign tax credit (FTC) based on their overseas tax returns,” said Alok Agrawal, Partner, Deloitte India.

The move has automatically extend timelines for all statutory obligations like concluding time-barring assessments, issue of tax notice, intimations, processing of returns, completion of set-aside assessments penalty proceedings, reopening assessment and so on.

Further, the deadline for proceedings under Wealth Tax Act, Benami Property Act, Black Money Act, Securities Transaction Tax and Commodity Transaction Act, where the time limit expires between March 20 and June 29, has been also extended to June 30.

The mandatory linking of Aadhaar cards with PAN cards, and the direct tax Vivad Se Vishwas scheme has also been extended to June 30. The earlier criteria in Vivad Se Vishwas, of not paying a 10 per cent additional amount till March 31, was extended to June 30.

“For delayed payments of advance tax, self-assessment tax, regular tax, TDS and equalisation levy, among others, made between March 20 and June 30, the interest rate has been reduced to 9 per cent from 12-18 per cent earlier. No late fee and penalty shall be charged for delay relating to this period,” she said.

Deferring the deadline for availing full benefits of the Vivad Se Vishwas scheme evoked positive response from tax experts.

"This will give enough time and opportunity to tax payers to take benefit of the scheme to mitigate litigation,” said Vikram Doshi, partner, tax & regulatory, PwC India.

The move will certainly encourage businesses to address pending litigation in the extended period, said Abhishek Rastogi, partner at Khaitan & Co.

Sitharaman also said that those having aggregate annual turnover of less than Rs 5 crore can file GST returns for March-May by the last week of June, and no interest, late fee, or penalty will be charged. For the others, a reduced interest rate of 9 per cent will be levied.

Addressing the media, the minister remained non-committal on the impact of the COVID-19 lockdown on economic growth, the Centre’s tax and divestment revenues and whether the government had estimated the size of economic losses due to the shutdown.

“There have been suggestions from people on a universal basic income, on deferring EMIs for individuals and loans for companies. We are deliberating on these issues. You will hear something soon,” she said.

(With inputs from Shrimi Choudhary, Dilasha Seth & Ruchika Chitravanshi)