Replacing the earlier Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020, promulgated in March, the government introduced the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020 in Lok Sabha on Friday. More amendments have been now introduced in the Bill including a proposal to extend faceless assessment scheme for power of calling of information, revision and effect of orders, and faceless inquiry or valuation.
The Bill proposes to amend the Income-tax Act, the Central Goods and Services Tax (CGST) Act, the Direct Tax Vivad se Vishwas Act and the Finance Act, 2020, enabling changes for the PM CARES Fund, registration of trusts along with provisions to extend various time limits for compliances for taxpayers, reduction in interest, waiver of penalty and prosecution for delay in payment of some taxes during the post-pandemic period.
The Bill provides for deduction for donations made to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND) and exemption to its income. The donation made to the PM CARES Fund shall be eligible for 100 per cent deduction under section 80G of the I-T Act, while, the limit on deduction of 10 per cent of gross income will not be applicable for donation made to the Fund.
It also incorporates the recently announced Faceless Assessment Scheme, 2019 allowing the central government to notify schemes for faceless processes and tax deduction or collection at source for certain transactions at three-fourth rate during May 14 to March 31 next year.
The Bill also proposes to amend the direct tax dispute resolution scheme, Vivad se Viswas, extending the payment date without additional amount to December 31. The Finance Act, 2020 is also proposed to be amended for a cap of surcharge at 15 per cent on dividend income of foreign portfolio investors.
A new Section 168A is proposed to be introduced through the Bill in the CGST Act for extension of the time-limit specified or prescribed in respect of actions which cannot be completed or complied with due to force majeure. The new definition of force majeure includes war, epidemic, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature.
Through the Bill, the government has proposed to introduce faceless assessment of income escaping assessment, faceless rectification, amendments and issuance of notice or intimation besides faceless collection and recovery of tax, faceless revision and effect of orders, faceless approval or registration.
The legislation also proposes faceless inquiry or valuation and faceless collection of information. The schemes will introduce a team-based exercise of powers by the tax authorities.
The Bill also proposes to formulate a scheme for ‘faceless jurisdiction of income-tax authorities’ which would “impart greater efficiency, transparency and accountability”. At present, the faceless scheme is already implemented for scrutiny assessment and would be extended to appeal cases beginning September 25.
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