New Delhi: Finance Minister Nirmala Sitharaman Tuesday announced a slew of measures to provide compliance relief to businesses, taxpayers and the common man while promising a comprehensive economic package “sooner rather than later” amid a widening coronavirus outbreak in the country.
The minister also assured that the government and the financial sector regulators are in touch thrice a day, monitoring the developments in the financial sector.
Announcing the measures through a video conference, Sitharaman extended most of the tax return filing deadlines to 30 June from the existing 31 March while providing relief through lower interest levy.
The government also announced a waiver of all charges for withdrawal of cash from automated teller machines or ATMs of any bank as well as doing away with the requirement of maintaining minimum average balance till 30 June.
Sitharaman said the government may also consider suspending some provisions of the Insolvency and Bankruptcy Code (IBC) for six months if the public health situation does not improve by 30 April. This will effectively mean that neither financial institutions nor other operational creditors can initiate insolvency proceedings against the defaulting firm.
Majority of the private sector firms have implemented a work from home policy at the behest of the government as it makes efforts to prevent India’s transition to the deadly stage 3 of the coronavirus pandemic.
The measures announced Tuesday are aimed at reducing the burden on businesses and taxpayers.
The spread of the virus has brought economic activity in the country to a halt prompting many stakeholders to demand a comprehensive economic relief package.
“We are close to coming up with an economic package that will be announced sooner rather than later,” said Sitharaman, assuring that the government is looking in comprehensive detail steps that can be taken across sectors.
On queries about allowing delay in equated monthly payments or EMI payments, classification of accounts as NPAs or announcement of a universal basic income, the finance minister said the government is in consultation with the Reserve Bank of India and the banks, and will come back on other measures soon.
A multi-layered task force is working and nearing a conclusion on the actions being considered, Sitharaman said.
Fine print of compliance relaxations
The relief has been provided across income tax returns and goods and services tax returns filing.
The government has extended the filing of GST returns due in March, April and May till 30 June. Income tax return filings due on 31 March have also been extended.
Taxpayers have also been given time to make investments in saving instruments till 30 June from the earlier 31 March for claiming tax relief.
The government has also extended the ‘Vivaad Se Vishwas’ scheme till 30 June. Initially, there were two deadlines — 31 March and 30 June. The earlier deadline would’ve resulted in a 10-percentage points lower tax rate.
Further, companies have also been provided relief from compliance under the Companies Act including waiver of late fee filing and other requirements.
Companies will also not be charged any additional fees late filing between 1 April and 30 September with respect to any document, return or statement. The mandatory requirement of holding meetings of the Board of the companies has also been extended.
Due to the emerging financial distress faced by most companies on account of the large-scale economic distress, under the IBC, the government has also announced raising the threshold of default to Rs 1 crore from the existing threshold of Rs 1 lakh, the government said.
“This will by and large prevent triggering of insolvency proceedings against MSMEs,” said Nirmala Sitharaman.