COVID-19 and Income Tax announcements
In wake of the global pandemic the Indian government has imposed nation wide lock down, due to which the activities have come at a stand still.
The government is putting it's best efforts to provide stimulus to the economy in such a situation to largely help organisations and individuals, the government has made the following announcements in relation to the Income Tax laws
Extension for furnishing delayed/revised return
The due date for furnishing a delayed/revised return of income for FY 2018-19 has been extended from 31st March 2020 to 30th June 2020.
Issue of Due Income Tax Refunds
In order to provide immediate relief to business entities and individuals, the Government has decided to immediately issue all pending refunds up to Rs. 5 lakhs.
Lower Interest on non payment/Late payment
The rate of interest for non payment/late payment of income tax, withholding tax, tax collected at source, Equalization Levy, Securities Transaction Tax, etc. which are due for payment between the period 20th March 2020 and 29th June 2020, has been reduced from 12%/18% p.a. as applicable, to 9% p.a. and in case of non-payment of such tax, the department would not initiate penalty proceedings.
Validity of Lower Tax Deduction certificates
The validity of certificates for lower withholding of taxes issued for FY 2019-20 has been extended to 30th June 2020 for those taxpayers whose applications for FY 2020-21 are pending for disposal with the tax office, provided such taxpayers had received a certificate for FY 2019-20. Further, those taxpayers which had received the certificate for FY 2019-20 and could not apply for the certificate for FY 2020-21 shall be granted the extension provided they submit their application by email to the tax office, as per the procedure specified in this regard. Further, directions have been issued that in case of payments made to non-residents having a Permanent Establishment in India and which neither have a certificate for FY 2019-20 nor have applied for a certificate for FY 2020-21, tax shall be withheld at a flat rate of 10% till 30th June 2020.
PM CARES Fund
The government has set up a dedicated fund viz. Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund’ (‘PM CARES Fund’) to provide relief to people affected by COVID -19 . The donations made to this fund will be eligible for 100% deduction in FY 2019-20 made upto 30th June 2020
Extension to make eligible Investments
Due to the nationwide lock down imposed the cash flows have been affected bearing that in mind the government has provided relief by extending the due dates for making eligible investments for tax break for FY 2019-20 from 31st March 2020 to 30th June 2020. This means that tax payers can pay life insurance and mediclaim premiums, contribution to pension funds, donations, investments in eligible exemption schemes in respect of capital gains, etc up till 30th June 2020. You can learn more about such deductions here.
Relaxation for Vivad se Vishwas Scheme
The government introduced it's “tax amnesty scheme”, Vivad se Vishwas to reduce tax litigations where in the last day for such scheme was 31st March 2020 which now stands extended to 30th June 2020 and the additional 10% tax which was earlier payable for tax payments made on it after 1st April 2020 is now applicable to tax payments made on or after 1st July 2020.
Relaxation for SEZs
Special Economic Zones units which have obtained the necessary approvals on or before 31st March 2020 the due date of commencement of operations for such units eligible tax exemptions stands to be extended till 30th June 2020.
Extension to issue notices , approvals etc Various due dates pertaining to issue of notices, intimations, orders, appeals and completion of proceedings by the tax authorities have been extended to 30th June 2020.