COVID-19 Effect: Tax Compliance Extended, Recent Updates from FM

The pandemic COVID-19 has led to an eruption in the Indian economy. With all Schools, hospitals, malls, cinemas shut, it is expected to recline the economic situation to a financial crisis. Addressing the government efforts to eradicate the effect of COVID-19 on the economy with non-functioning and complete lockdown, the Union Finance Minister Nirmala Sitharaman asserted a need for relaxation in the compliance norms of taxation, creating pressure on businesses and taxpayers with deadlines coming closure within the lockdown.

The Finance Minister proposed to extend the last date of filing Income Tax Return for the financial year 2018-19 and took several other measures burdening on Indian citizens.

Here are the key takeaways from the Finance Minister’s recent announcements for relaxation in compliance norms for taxation.

Income Tax 

1. Extension in ITR due date:

A relief by FM through extension in Income Tax Return filing for FY 2018-19 from 31st March 2020 to 30th June 2020 has been proposed.

2. Extension to Aadhaar Pan linking deadline: 

The earlier revealed deadline for Aadhaar Pan linking by all taxpayers was 31st March 2020, which now due to the lockdown of the country has been shifted to 30th June 2020.

3. Reduction in Penal Interest: 

For delayed payment of self-assessment tax, advance tax, regular tax, tax deducted at source(TDS), tax collected at source (TCS), equalization levy, STT, CTT which was to be made between 20th March 2020 and 30th June 2020, reduction in the penal interest 9% than from 12%/18% charged earlier has been proposed.

No late fee or penalty in addition to the above shall be levied for delayed payments for the above purposes for the period between 20th March 2020 and 30th June 2020.

4. Extension in dispute calls under the Vivad se Vishwas scheme. 

The Vivad se Vishwas scheme for resolution in tax dispute has been extended till 30th June 2020.

No additional charge of 10% would be levied on disputed tax amount realized under Vivad se Vishwas scheme for up to 30th June 2020.

5. Extension in other law proceedings:
For case laws, notices, intimations, approval orders, notifications, sanction orders, appeals, furnishing of return statements, applications, reports or other documents required/issued for completion of proceedings by any authority or compliances by taxpayers including investment in saving instruments or investments for capital gain benefits under Income Tax or other benefits under wealth tax act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT law, equalization levy law or any other tax law where the time limit expiring or for any proceedings is there between 20th March 2020 and to 29th June 2020, all have been extended to30th June 2020.

Goods and Service Tax (GST) 

Easing pressure of Indirect tax norms in the pandemic crisis, Finance Minister Nirmala Sitharaman proposed for:

1. Extension in GST filing due dates:

The due date for filing GSTR 3B for March, April and May 2020 has been extended till the last week of June 2020, for all taxpayers having aggregate turnover up to Rs 5 crore. Also, In between the period, no late fee or penalty will be charged. The due date for filing GST annual returns for financial year 18-19 which was due on 31st March 2020 has been extended to last week of June 2020.

2. Reduction in Late fee, Penalties & Interest :

For any delayed payment or tax chargeable/payable for the period between 20th March 2020 and 29th June 2020, a reduced rate of 9% will be charged instead of 18% if payment is made before 30th June 2020. No late fee or penalty under GST will be charged in addition to this for the aforesaid period. FM has also prescribed for a shift of timeline for all penalty notices, notifications approval orders, sanction orders, appeals, returns, statements, applications, reports or other documents specified for the time limit or expiring in between the period or on any date between 20th March 2020 to 29th June 2020 to 30th June 2020.

3. Sabka Vishwas Scheme benefits :

Payment for taxes for penalties under Sabka Vishwas Scheme for indirect tax disputes all has been extended till 30th June 2020 and no penalty or interest, in addition, will be charged till 30th June 2020.

4. Support from Custom Authorities:

FM has assured for 24/7 custom clearance clearances till 30th June 2020.
All decisions, notices, notifications, approval orders, sanction orders, appeals, reports, documents where any time limit for any compliance as prescribed under the Customs Act or any other allied laws for the period between 20 March 2020 to 29 June all has been extended to 30th June 2020.

5. Composition Scheme Extension :

Taxpayers will be able to opt for composition scheme till the last week of June 2020. Also, an extension to their returns as composition taxpayers pending for the quarter till 31st March has been given an extension till the last week of June 2020.

Financial Policies 

To provide access to adequate supplies during the pandemic period, FM also relaxed policies for easy cash flows:

Announcing all the above prepositions, the Finance Minister also mitigated to form an economic package for the economy and set up a separate task force to look at economic measures to further help people facing economic hardships due to the COVID-19 pandemic.

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