AKGVG Tax Updates

Dear Reader,
FINMIN outlined that the India’s massive Rs 20 lakh crore fiscal stimulus declared by Prime Minister Narendra Modi shall be announced in tranches. The 1st tranche included relief measures for MSMEs, NBFCs, MFIs, discoms, contractors, real estate sector, and tax measures whereas 2nd tranche included relief measures for migrant workers, shishu loan within mudra, street vendors, housing sector, employment for tribals and small farmers.
Date: 15.05.2020
  Reliefs to MSME:
S. No. Description

New Definition of MSMEs:

Composite Criteria: investment and annual turnover
Classification Micro Small Medium
Manufacturing & Services Investment
< Rs. 1 cr. and Turnover < Rs.5 cr.
< Rs. 10 cr. and Turnover < Rs.50 cr.
< Rs. 20 cr. and Turnover < Rs.100 cr.

For meeting fund requirements for operational liabilities built up, buy raw material and restart business Emergency Working Capital Facility for Businesses, including MSMEs has been provided.  Salient features of the scheme:

  • Emergency Credit Line to Businesses/MSMEs from Banks and NBFCs up to 20% of entire outstanding credit as on 29.2.2020.
  • Borrowers with up to Rs. 25 crore outstanding and Rs. 100 crore turnover eligible
  • Loans to have 4 year tenor with moratorium of 12 months on Principal repayment
  • Interest to be capped
  • 100% credit guarantee cover to Banks and NBFCs on principal and interest
  • Scheme can be availed till 31st Oct 2020
  • No guarantee fee.
  • No fresh collateral.
3. Global tenders will be disallowed in Government procurement tenders upto Rs 200 crores. Necessary amendments of General Financial Rules will be effected.
4. Stressed MSMEs to get subordinate debt.

Other supportive measures:

  • MSME receivables from Gov and CPSEs to be released in 45 days
  • E-market linkage for MSMEs to be promoted.
  Income Tax
S. No. Description

Extension of due dates:

Description Extended Due Date
Due date of all Income Tax Returns for Assessment Year 2020-21 30.11.2020
Tax audit due date 31.10.2020
Date for making payment without additional amount under the “Vivad Se Vishwas” scheme 31.12.2020
Due date for completion of assessments which are time-barring on 30.09.2020 31.12.2020
Due date for completion of assessments which are time-barring on 31.03.2021 30.09.2020

Reduction in Rates of ‘Tax Deduction at Source (TDS)’ and ‘Tax Collected at Source (TCS)’: The TDS rates for all non-salaried payment to residents, and tax collected at source rate will be reduced by 25 percent of the specified rates for the remaining period of FY 20-21.

3. Pending income tax refunds to charitable trusts and non-corporate businesses and professions including proprietorship, partnership and LLPs and cooperatives to be issued immediately.
  Employment Laws:
S. No. Description

Employee Provident Fund (EPF) Act:

  • Employees Provident Fund Support for business and organised workers extended for another 3 months for salary months of June, July and August 2020.
  • EPF Contribution to be reduced for Employers and Employees for 3 months to 10% from 12% for all establishments covered by EPFO for next 3 months
  Reliefs to Real Sector:
  • COVID-19 to be treated as an event of ‘Force Majeure’ under RERA.
  • Registration and completion date extended suo-moto by 6 months for all registered projects expiring on or after 25th March, 2020 without individual applications.
  • Regulatory Authorities may extend this for another period of upto 3 months, if needed.
  • Issuance of fresh ‘Project Registration Certificates’ automatically with revised timelines.
  • Extended timelines for various statuary compliances under RERA concurrently.
We trust you will find this Journal informative as well as useful.
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Disclaimer: This insight is meant for informational purpose only and should not be considered as an advice or opinion, or otherwise, whatsoever. AKGVG & Associates does not intend to advertise its services through this insight. AKGVG & Associates is not responsible for any error or omission in this insight or for any action taken based on its contents.

Best Regards!
Knowledge Updates Team
AKGVG & Associates
(Chartered Accountants)

Tel: +91 9811118031, 9818330516,
Telefax:+91 11 49037920
Website: https://www.akgvg.com