India has seen four phases of lockdown already, and is currently rolling out the first phase of Unlock1 even as the worst hit areas of the country continue to execute Lockdown 5.0. Central government, state governments as well as private entities have announced support packages, grants and relief measures to ease the financial stress that is burdening a large section of Indian citizens. Let’s take a look at fiscal relief announced by the government of India as Covid-19 ravages the economy in the country and around the world.
Prior to the Economic Stimulus Package
Before PM Narendra Modi announced the Aatma Nirbhar Bharat Abhiyaan on 12 May, India’s Finance Minister, Nirmala Sitharaman, on 24 March had announced a slew of relief measures for taxpayers and businesses in response to the coronavirus pandemic. These tax measures were declared when India still had under 1000 reported cases on Covid-19 only – right before the country was plunged into its first nationwide lockdown.
Details of Fiscal Relief Measures
Here’s a comprehensive list highlighting of all the fiscal relief measures announced for taxpayers and businesses in India so far:
1. Income Tax Return Filing Deadline Extended
The deadline for filing income tax returns for the 2018-2019 tax year has been postponed from 31 March 2020 to 30 June 2020. The due date of all income-tax returns for the financial year 2019-2020 is extended from 31 July 2020 to 30 November 2020.
2. GST Returns Deadline Extended
Amongst a range of measures announced for companies, one was extending the date for filing of goods and services tax (GST) returns for the months of March, April and May to June 30th.
3. Rate of Interest on ITRs Reduced
Certain tax payments made by 30 June will be entitled to a reduced rate of interest as well as a waiver of late-filing penalty. The rate of interest on the delayed income tax returns (ITRs) has been brought down from 12 percent to 9 percent.
4. Immediate Grant of Refund
The government has declared directives to issue all pending eligible refunds under both the GST as well as Customs Law by 30 April 2020. This was announced in particular to provide some immediate relief to non-corporate businesses as well as charitable trusts.
5. Tax Dispute Resolution Scheme
The ‘Vivad Se Vishwas’ tax dispute resolution scheme which was announced by the FM last year, has been extended by three more months until 30 June. The 10 percent interest mandated under the scheme has also been waived off for those availing it.
6. Relaxation of Board Meeting Rules
According to the FM’s announcement, if companies are unable to hold a board meeting for the next two quarters, then it will not be considered a violation.
7. Penalty Fee Waived for Delayed Returned
Businesses with a turnover of less than 5 Crores are exempted from interest, penalty or late fees for filing delayed returns.
8. Free of Charge ATM Withdrawals
Easing some burden for debit card holders, the government has announced relaxation for three months to withdraw cash from the ATM of any bank free of charge.
9. Minimum Balance Requirement Waived
Customers will not face any penalty if they fail to maintain a certain minimum balance in their bank accounts.
10. Deadline to Link Aadhaar to PAN Extended
It is mandatory to link your Aadhaar number to your PAN card. The deadline to do so has been extended from 31 March to 30 June.