Deadlines for tax returns deferred— and other tax reliefs announced by Nirmala Sitharaman
- Finance Minister
Nirmala Sitharamanannounced that income taxpayers will not have to file their tax returns for another three months in view of the ongoing coronavirus pandemic in India.
- The filing of tax returns will be deferred until 30 November 2020.
- Other tax measures announced include reduced TDS and TCS rates, issuing of tax refunds, and deferring tax assessments.
“The due date of the all
For corporates, tax audits will be extended from 30 September 2020 to 31 October 2020.
“Assessment time gets barred with a certain date — we are conscious of it, we have taken cognizance of it,” said Sitharaman. Tax assessments getting barred on 30 September 2020 will also be extended to 31 December 2020. For those getting barred on 31 March 2021, will be extended to 30 September 2020.
Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) rate reduced
“It’s a measure to help people not to worry about how they’re going to do their compliance, will they be able to file their returns or not,” said Sitharaman. "We have now, from tomorrow, till 31 March 2021 reduced TDS/TCS rates by 25%," she added. This shall apply to all payments — contracts, professional fees, interest, rent, dividend, commission or brokerage.
“The 25% reduction in TDS rates would ensure that the professionals, landlords, and other beneficiaries would have more cash in hand and that extra liquidity may find its way into the economy in form of increased consumption,” said Atul Pandey, a partner at Khaitan & Co.
“It will provide much needed relief to taxpayers facing a significant cash crunch,” added Himanshu Parekh, the Partner and Head of Corporate and International Tax at KPMG in India.
Pending refunds to be released
All pending refunds to charitable trusts and non-corporate businesses & professionals — including proprietorships, partnerships, LLP and cooperatives — will be issued immediately.
“Many of these can be very small, many of these in cooperative sectors, many are MSMEs, all their refunds will be given immediately. They will get their due money, that’s their money, back in their hands,” said Sitharaman. She added that the government has already refunded in the aid of ₹5 lakhs or lesser, which benefitted nearly 14 lakh people.
“The announcement about the release of pending refunds in the case of non-corporates is a very welcome measure. In the same breadth, refunds of corporates should also be released since they are also facing huge liquidity constraints,” said Parekh from KPMG.
Period of Vivaad se Vishwas Scheme for making payments without additional amount will be extended to 31 December 2020.
Finance Minister Nirmala Sitharaman reveals the details of Modi's ₹20 lakh crore stimulus package
Finance Minister Nirmala Sitharaman announces six measures for the MSME sector