COVID-19 Relief Package: Income Tax Relaxations



Introduction:


Due to the serious economic and social effect of COVID-19 on small businessmen and the poorer section of society, the government of India is trying hard from the last few weeks, to bring a consequential amelioration in the economy. In apropos, as a part of the COVID-19 relief package there are various income tax relaxation provided. The Finance Minister, Nirmala Sitharaman, announced relief in the income tax, for boosting the country's economy.

A major relief in this context is that, the due date for filing, income tax returns for the FY 2019-20, has been extended from 31st July, 2020 to 30th November, 2020. With respect to this, the deadlines for tax audit, has also been altered to 31st October 2020, which was previously 30th September 2020.


Relaxations under Income Tax:


TDS rates revised- The TDS rates have been revised between 15th may 2020 and 31st March 2020, by government's notification. There has been a reduction in the interest on securities dividend, commission, brokerage, dividend by mutual funds,etc. of 7.5% which was earlier 10%. The payments made by Hindu undivided family or other corporate body to the contractors and subcontractors the TDS rates for the same has been decreased to 0.75% for contractors and 1.5% for subcontractors. The TDS on payment for acquisition of immovable property on E-Commerce participants has also been reduced. Earlier it was 1% and now it has been reduced to 0.75%.


Extensions- The due dates for applications, reports, filing of appeal approval order issue of notice furnishing of returns written statement, etc including the investments in savings instruments or rollover benefit of capital gains, wealth tax, benami property, black money, STT law, CTT law, equalisation levy law, Vivaad se Vishwas Law where the time limit was expiring on 20 May have been extended till 30th June 2020. The date of assessments which were getting barred on 30th September 2020 shall now be extended to 31st December 2020. With respect to which the assessment which will be getting bad on 31st March 2021 will be extended till the end of September 2021. The date for linking Aadhar-Pan, which was mandatory, is also extended from 31st March 2020, to 30th June 2020. The Vivad se Vishwas Scheme, which is a settlement scheme for tax disputes between individuals and the tax department and offers waiver of interest and penalty to taxpayers with a full and final settlement has been given an extended deadline for payments (without additional charge upto 10%), that were otherwise to be made by 31st March 2020[1]. No additional 10% amount to be paid, if payments are done by 30th June 2020.[2]

Other Reliefs in TDS/TCS-

The applicants, who are taxpayers and have filed for Nil deduction or lower deduction of withholding tax, whether TDS or TCS on the portal (TRACES) for the financial year 2020-21, and the applicants whose applications are pending for disposal and they have been issued such certificate for FY 2019-20, then in such a case certificate for financial year 2019-20, will be applicable till 30th June 2020 for the financial year 2020-21 or disposal of taxpayers application by Assessing officers, whichever is earlier, with regard to the transaction and the deductor/collector, if any for whom the certificate was issued for the year 2019-20.

But in the cases where the tax payer could not apply for Nil deduction certificate of TDS TCS or issue of lower rate in the portal(TRACES) for the year 2020-21, although they have certificate for the year 2019-20 , then that certificate will be applicable till 30th june 20-20 for the year 2020-21. With respect to this they need to apply by giving details of the transactions and that deductor/collector to the TDS/TCS Assessing officer, at the earliest. It must be as soon as the situation with normal or 30th June 2020, whichever of the dates is earlier.[3]

The interest rates to be charged, has been reduced to 9% from that of 12 or 18% per annum for the delay in payment of self assessment tax, regular tax, advance tax, stt, ctt, equalisation levy, which are made in 20 March 2020 to 30 June 2020. There will be e no penalty or no late fees that will be charged for delay in this period.[4]


CONCLUSION:

The drastic change in the income tax regulations has bought a relief for taxpayers. In the state of fight from a global pandemic, India has somehow found its ways to pass through the economic crisis. The new improvements has bought relaxations for the corporate sector as well as the small and medium enterprises. Not only this, the government of india, has also bought dynamics in the indirect tax reforms such as GST returns filings, etc. The extension of dates and change in the rates has lessen the burden on the small businessman and taxpayers. While addressing the press conference through video conferencing here today, Smt. Sitharaman announced much-needed relief measures in areas of Income Tax, GST, Customs &Central Excise, Corporate Affairs, Insolvency &Bankruptcy Code (IBC) Fisheries, Banking Sector and Commerce.[5]



[1] https://www.incometaxindiaefiling.gov.in/ [2] https://www.roedl.com/insights/covid-19 [3] Ibid. 2 [4] https://www.incometaxindiaefiling.gov.in/ [5] Ibid 4

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