Extends Deadlines and Eases Business Rules Amid Lockdown (Updated)

Govt is ready to amend the regulation of EPF due to this pandemic so that workers can draw up to 75 percent non-refundable advance from credit in PF account or 3 months salary, whichever is lower,” said Sitharaman in her announcement.

Thursday, 26 March 2020: Union Finance Minister Nirmala Sitharaman announces INR 1.7 Lakh Crore package to help the poor tackle the difficulties stemming from the Covid-19 outbreak and lockdown. As a part of this relief fund, the Government has agreed (amongst other things) to bear the EPF contributions of both the employer and employee (24%) for the coming 3 months. However, only those companies that have less than 100 employees, with at least 90% earning less than INR 15,000 are eligible. This move stands to benefit 4.8 crore employees. 

The Union Finance Minister Nirmala Sitharaman on Tuesday announced a relief package for businesses, big and small, that have been hit hard by the Novel Coronavirus. 

Now into the second day of the 21-day long lockdown ordered by the Central Government of India to curb the spread of the virus, most businesses have shut their offices and plants. With no end to the virus, crashing markets, and the threat of global recession looming large, the finances of businesses are heading towards a major catastrophe.

To cope with the pandemic fallout and to address the concerns of businesses and its workers, the FM in her conference, announced economic measures for tax-payers and businesses. What’s more, she also said that an INR 1.7 lakh crore economic package is being readied to help the poor and businesses.

Here are the key highlights of the relief package.

1. GST

• Deadline for filing returns under the composition scheme extended to June 30, 2020
• No penalties, interest, or late fee for businesses with turnover less than INR 5 Crore
• Deadline for March, April, and May GST returns filing extended to June 30, 2020
• No late fee or penalty for companies for the first 15 days with more than INR 5 Crore turnover. However, the interest to be charged at a reduced rate of 9%

2. Income Tax

• Deadline for filing Income Tax Return for FY 2018-19 extended to 30th June 2020
• The interest for delayed payments made till 30th June reduced from 12% to 9%
• Interest rate brought down from 18% to 9% for late TDS deposits
• Dues date for all compliances under the Income Tax Act, Benami Transaction Act, Wealth Tax Act, Vivaad se Vishwaas, Black Money Act, etc. have been extended to 30th June 2020
• The last date for linking of Aadhaar & PAN is now extended to June 30 from March 31
• Without an additional payment of 10%, the Vivaad se Vishwaas scheme is now extended to June 30

3. For Businesses-related matters

• Moratorium issued from 01-04-2020 to 30-09-2020 for MCA-21 registry with no additional fees for late filing
• 60 days relaxation for the next two quarters for mandatory board meetings
• Companies (Auditor’s Report) Order, 2020 (Caro 2020) now applicable from FY 2020-21
• Not a violation for any company director with minimum residency less than 182 days
• 6 more months for newly incorporated companies to file commencement of business report
• Deadline for the investment of 15% of maturing debentures extended from 30th April to 30th June

4. Insolvency and Bankruptcy Code, 2016 (IBC)

• Default threshold raised from INR 1 lakh to INR 1 Crore to prevent triggering of insolvency proceedings for MSMEs
• FM to observe; if the situation persists after 30th April, SEctions 7,9,10 of the IBC to be suspended to prevent businesses from entering insolvency proceedings

5. Customs and Central Excise

• Sabka Vishwas Scheme with zero interest extended to 30th June 2020
• Customs Clearance declared an essential service and to remain functional 24×7 up to 30th June 2020

Apart from the above, the economic relief also offers relaxation under financial services such as reduction of digital charges for trade transactions and withdrawal of cash at any ATM without drawing additional charges.