Lok Sabha approves bill to extend relief from compliance under various tax laws

Our Bureau New Delhi | Updated on September 19, 2020 Published on September 19, 2020

Finance Minister, Nirmala Sitharaman

The Lok Sabha on Saturday approved the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill.

This bill will replace ordinance giving relief from compliance under various tax laws by extending dates for filing return or paying tax. One of key provisions is related with tax exemptions for contributions made on PM Cares.

Finance Minister Nirmala Sitharaman while responding to over 3 hours discussion with participation of 21 members made it clear that various changes are meant to give relief from penalty and prosecution. Also, change in CGST Act will not have any effect on compensation issue, she said while adding that apart from provisions of ordinance, some new changes has been prescribed just to boost investment.

The changes say income from securities or capital gains arising from their transfer shall be taxed at 20 per cent for FIIs and 10 per cent for specified funds. There will be capping of surcharge for FIIs at 15 per cent. The new provision will entail due date for payment without additional payment under Vivad se Vishwas to be extended till December 30.

With the help of changes approved SEZ units that were unable to commence business before March 31, 2020 can commence operations before March 31, 2021 and claim the tax holiday subject to satisfying the other conditions. Faceless Assessment Scheme will now cover Transfer pricing proceedings, DRP, appeal to ITAT. “Various provisions related with Faceless Assessment Scheme have been included in the scheme to make transparent,” she said.

I-T returns filing

The due date to file the income tax returns for FY 2019-20 is November 30, 2020. Accordingly, the due date to file all other related forms and reports (such as Transfer pricing report, tax audit report, etc) is October 30, 2020. However, since the statement of objects states relaxation of filing timelines and keeping in mind MCA extension of AGM due date, filing dates should be seen as March 31, 2021. Experts feel this is ambiguous at this stage.

The bill prescribes interest for delay in payment of income-tax (e.g. advance tax, TDS, TCS), Equalization Levy, Securities Transaction Tax (STT), Commodities Transaction Tax (CTT) due for payment from March 20 and June 29 to be charged at reduced rate of 9 per cent per annum, if the payment is paid by June 30. Further, no penalty/ prosecution will be initiated for these non-payments.

The donation made to the PM CARES Fund to be eligible for 100 per cent deduction u/s 80G of the Act. The income of the said Fund has also been made exempt.

The date for passing of order or issuance of notice by the authorities and various compliances under various direct taxes and Benami Law which are required to be passed/issued/made by December 31 2020 has been extended to March 31, 2021.

The date for linking of Aadhaar with PAN has also been extended to March 31, 2021.

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Published on September 19, 2020
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