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Thursday, January 21, 2021

New deadline for tax returns, insolvency threshold raised: Top announcements by Nirmala Sitharaman

In a relief for small and medium enterprises, Nirmala Sitharaman raised the threshold that would trigger insolvency proceedings to Rs 1 crore from current Rs 1 lakh.

By: Express Web Desk | New Delhi | Updated: March 24, 2020 6:09:42 pm
Nirmala Sitharaman on Yes Bank crisis Finance Minister Nirmala Sitharaman is heading the COVID-19 Economic Response Task Force. (File)

Union Finance Minister Nirmala Sitharaman extended the last date for filing income tax returns for FY19 to June 30 while assuring that the government would soon come out with an economic package amid businesses and commercial activities taking a hit due to the ongoing coronavirus crisis.

“The last date for filing income tax returns for the financial year 18-19 is extended to June 30, 2020. For delayed payments interest rate has been reduced from 12 per cent to 9 per cent,” Nirmala Sitharaman, who is heading the “COVID-19 Economic Response Task Force”, said at a press conference in New Delhi.

To mitigate the slowing of demand, the Finance Minister also waived minimum bank charges for savings bank accounts. “Debit card holders who withdraw cash from any bank’s ATM can do it free of charge for the next 3 months,” Sitharaman said. FOLLOW LIVE UPDATES

Govt extends GST filing deadline

In a breather to businesses and traders unable to meet deadlines due to coronavirus outbreak, Sitharaman also extended the last date for filing March, April, May 2020 GST returns and composition returns to June 30.

The Finance Minister also announced that on late filing of GST returns, no late fee, penalty or interest would be charged for companies with turnover of up to Rs 5 crore.

“For companies with more than Rs 5 crore turnover, no late fee and penalty will be charged on GST return filed by 15 days. A reduced interest rate of 9 per cent will be charged,” she said.

The government has also extended the last date for linking PAN with Aadhaar to June 30 from March 31. Sitharaman said the Vivad se Vishwas tax dispute resolution scheme had been extended by three months to June 30. Those availing the scheme by the extended deadline will not have to pay 10 per cent interest on the principal amount.

Explained

What is Vivad Se Vishwas scheme

On March 14, the Parliament approved the Direct Tax Vivad Se Vishwas Bill, which will provide an opportunity to taxpayers to end pending disputes by paying the tax amount, with interests and penalties waived off. However, disputes related to wealth tax, commodity transaction tax, securities transaction tax and equalisation levy are not covered. Net direct tax collections contracted by 3.5 per cent to 8.13 lakh crore during April-February period of the current fiscal, while indirect tax collections grew by just 3.8 per cent to 8.75 lakh crore.

Govt raises insolvency threshold to Rs 1 crore

In a relief for small and medium enterprises, Sitharaman raised the threshold that would trigger insolvency proceedings to Rs 1 crore from current Rs 1 lakh. The Insolvency and Bankruptcy Code is a platform for resolution of troubled corporate entities.

“The government will consider suspending Sections 7, 9, 10 of the Insolvency and Bankruptcy Code (IBC) for six months if the current economic situation continues beyond April,” Sitharaman said.

In Financial Year 2018-19, scheduled commercial banks in India recovered a total of Rs 70,819 crore under IBC, compared to Rs 4,926 crore recovered in FY 2017-18, according to an RBI report.

Shutdowns weigh heavy on sentiment, Sensex tanks 13% in biggest daily crash The relief measures come in the wake of the BSE benchmark index of 30 stocks losing over 30 per cent in less than 10 weeks. (Express photo)

Relief for newly incorporated companies

Additionally, the government relaxed company provisions, including that of mandatory holding of board meeting and filing of return by newly incorporated companies.

“For newly incorporated companies there is a requirement to file declaration for the commencement of business within 6 months of incorporation. Now we are giving them an additional time of 6 more months,” Sitharaman said.

Sitharaman also put customs clearance under “essential service” till June 30. “It will be working 24/7,” Sitharaman said in a major breather for importers and exporters.

Measures come amid slowing growth

The relief measures come in the wake of the BSE benchmark index of 30 stocks losing over 30 per cent, and the rupee depreciating almost six per cent vis-a-vis the US dollar in less than 10 weeks.

“The government is working on an economic package to deal with the hardships caused by the lockdown to control the coronavirus crisis and the same will be announced soon,” Sitharaman said.

Since the coronavirus outbreak, Goldman Sachs revised down global growth to 2 per cent from 3 per cent and India’s GDP growth estimate for 2020-21 to 5.2 per cent from 5.8 per cent. S&P Global Ratings too said India will slow down to 5.2 per cent in 2020 compared with its earlier forecast of 5.7 per cent.

In the past week, Sitharaman has held a series of meetings with Aviation, Tourism, Animal Husbandry and MSME Ministries to assess the economic impact of coronavirus on a wide range of sectors and to prepare the government’s response to alleviate the stress caused to the economy due to disruption of economy activity.

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