The measures, announced as part of government’s Rs 20 lakh crore economic stimulus package, aims to increase cash in hand and ease the liquidity pressure faced by people due to the ongoing nationwide lockdown to combat the spread of the deadly coronavirus pandemic.
Here are the key announcements made by finance minister Nirmala Sitharaman:
* Extension of due date for filing tax returns
Due date for filing of all income tax returns for the financial year 2019-20 has been extended from July 31 and October 30, 2020 to November 30, 2020.
Further, all date of assessments getting time-barred on September 30, 2020 has been extended to December 31, 2020 and those getting barred on March 31, 2021 has been extended till September 30, 2021.
* Reduction in TDS/TCS rate for non-salary payments
The rates of tax deducted at source (TDS) for non-salaried specified payments made to residents and rates of tax collection at source (TCS) for the specified receipts has been reduced by 25% of the existing rates. This shall apply to all types of transactions including payment for contract, professional fees, interest, rent, dividend, commission, brokerage, etc. shall be eligible for this reduced rate of TDS.
“This reduction would release nearly Rs 50,000 crore in the hands of the people who would have otherwise paid it as TDS,” Sitharaman said.
The reduction shall be applicable for the remaining part of the financial 2020-21, that is, from May 14, 2020 to March 31, 2021.
* EPF support for business, workers
For all companies, the statutory obligation to pay 12 per cent of basic salary as employer’s share to employee provident fund (EPF) contribution has been reduced to 10 per cent to boost their liquidity. This scheme will provide liquidity up to Rs 6,750 crore to employers and employees over three months.
Under Pradhan Mantri Garib Kalyan Package (PMGKP), payment of 12 per cent of employer and 12 per cent employee contributions was made into EPF accounts of eligible establishments, providing salaries for the month of March, April and May 2020. This support has been extended by another 3 months to June, July and August 2020.
* Fast track processing of pending funds
The income tax department will fast track processing of pending refunds to charitable trusts, LLPs, non-corporate businesses and proprietorship firms, among others.
Sitharaman also said that the income tax department has already cleared Rs 18,000 crore worth of refunds where the quantum due was up to Rs 5 lakh.
* Vivad se Vishwas Scheme payment
The Vivad Se Vishwas scheme for direct tax dispute resolution has been extended by six months till December 31, 2020.
In Video:FM Sitharaman on Centre’s Rs 20 lakh crore economic package: Key points