NEW DELHI: Finance Minister Nirmala Sitharaman on Tuesday announced a slew of measures providing compliance relief for individuals and businesses, while promising a larger package soon.
Among the measures announced are extension of deadline to file income tax returns to June 30, reduction of interest rate to 9% from 18% on delayed tax payments and TDS deposit. This will help ease the burden of compliance for individuals and businesses struggling to meet the March 31 deadline amid a lockdown.
To help individuals who have been asked to stay at home, the government decided that no charges will be levied for withdrawing cash from any other bank’s ATM by debit cardholders for the next three months.
This, the finance minister explained, is being done to stop people from travelling long distances to get the cash they need during this period. Sensing a delay in salary and payments, the government also ordered that the minimum balance fee levied by banks be waived for this period.
Besides, trade finance consumers will now have reduced bank charges for digital trade transactions. “The PMO itself is monitoring the economy. Today we came up with compliance issues. Soon we shall come with a financial package as well,” she said. To help MSMEs that have missed loan repayments, the default threshold has been raised from Rs 1 lakh to Rs 1 crore, to prevent insolvency proceedings against them.
Deadline to file GST returns shifted to June
AMONG other measures, the deadline to file returns on Goods and Services Tax (GST) for March, April and May has also been extended to end of June, in line with the industry demand. The penalty for delay in filing GST and the interest on it has also been waived for small firms that have less than Rs 5 crore turnover.
The government has also decided to help out companies by declaing that no additional charges would be levied for late filing of returns, statements, etc, under the Companies Act during the period between April 1 and September 30. In another major announcement, companies have been given the leeway to hold board meetings without the presence of independent directors, as well as a relaxation on holding board meetings mandated every 60 days for the next two quarters.
The finance minister also decided that customs clearance would work 24X7 till June 30, keeping in view the long queues of consignments kept in quarantine at India’s ports and airports. The loan default threshold for companies under the Insolvency and Bankruptcy Code (IBC) has also been steeply raised from Rs 1 lakh to Rs 1 crore, with assurance that it will be further relaxed, if the situation fails to improve. “This will, by and large, prevent triggering of insolvency proceedings against MSMEs,” said Sitharaman.
Dr Sangita Reddy, president of The Federation of Indian Chambers of Commerce and Industry, said that the Indian industry “welcomed the relief measures announced by the finance minister with respect to the tax and statutory compliances amid the lockdown imposed to contain Covid-19.” “Waiver of penalty, late fee and interest on GST will also help industry cope up with the huge cash crunch, and thus, tide through these tough times,” CII Director General Chandrajit Banerjee said.