Focus: GS-III Indian Economy
Why in news?
- Deadlines for filing income tax and GST returns have been extended to June 30, as part of a slew of relaxations of financial year-end compliance announced by Finance Minister Nirmala Sitharaman on 24th March 2020.
- The changes had been prompted by the shutdown of large parts of the country in a bid to control the spread of the COVID-19 viral infection, so that taxpayers were not forced to endanger their health in a bid to meet compliance requirements.
What are the other Changes?
- Bank account holders would not be charged extra for using a debit card to withdraw money from the ATMs of other banks for the next three months, and charges for not meeting minimum balance requirements would also be waived.
- Bank charges for digital transactions were also being reduced.
- Income tax returns for the financial year 2018-19 can now be filed until June 30, with the interest rate on delayed payments reduced to 9% from 12%.
- The last date for linking Aadhaar with PAN has also been extended from March 31 to June 30.
- Other taxpayer compliance deadlines, including for investment in savings instruments or for roll-over benefit of capital gains, under the Income Tax Act and other laws have also been extended.
- The deadline for filing GST returns for March, April and May, as well as for opting for the composition scheme, has been extended to June 30 for smaller companies — with less than ₹5 crore aggregate annual turnover — without any interest, late fee or penalty being charged.
- For bigger companies, only interest would be charged at the reduced rate of 9%.
- The date for filing annual GST returns for 2018-19 has also been extended to the last week of June.
- Deadlines for the Vivaad se Vishwas and Sabka Vishwas schemes for defaulting taxpayers are also being extended.
- The Centre has also decided to raise the threshold of default under Section 4 of the Insolvency and Bankruptcy Code, 2016, from ₹1 lakh to ₹1 crore in order to prevent triggering of insolvency proceedings against MSMEs.
- Statutory corporate requirements are also being relaxed at this time, including filings in the MCA-21 registry, mandatory board meetings, residency requirements for independent directors and deposit reserve requirements.
What the Government had to say?
- The Government will continue to watch the situation and if it improves, there is no reason to worry.
- However, if the current situation continues beyond April 30 the Government may consider suspending Sections 7, 9, 10 of the IBC for a period of 6 months to stop companies at large from being forced into insolvency proceedings in such force majeure cases of default.
- Customs clearance operations would run around the clock, all seven days of the week, till the end of June.
- For fisheries imports, the validity of sanitary permits were being extended, while other requirements were being relaxed.
- MCA21 is an e-Governance initiative of Ministry of Company Affairs (MCA), Government of India.
- It enables an easy and secure access of the MCA services to the corporate entities, professionals and citizens of India.
- It Enables the business community to register a company and file statutory documents quickly and easily.
- It Provides easy access of public documents
- It Helps to Provide faster and effective resolution of public grievances
- It also Helps in easy registration and verification of charges
- It Ensures proactive and effective compliance with relevant laws and corporate governance
- It Also Enables the MCA employees to deliver best of breed services