Compliance Relief Measures announced by Mrs. Nirmala Sitharaman dated 13th May,2020

Our Finance Minister-Mrs. Nirmala Sitharaman addressed a Press Meet on 13th May, 2020 to enumerate measures with regards to the Relief Package announced by our Hon'ble PM Mr. Narendra Modi to help India fight the economic damage done by the outbreak of COVID-19.

A slew of measures were announced for granting collateral free credit facilities to MSMEs (Micro,Small and Medium Enterprises) and NBFCs (Non Banking Finance Corporations) for reviving the slumped businesses. MSMEs and NBFCs were promised a total credit of 3-4 lac crores with GOI (Government of India) backing the guarantees. The scheme can be availed till 31st October,2020.

For business compliance and self employed professionals as well , several measures were listed out as below:

• Rates of TDS/TCS in respect of non salaried payments shall be reduced by 25% from 14.05.2020 to 31.03.2021 (as per the below table) except the following:

1. Where a resident person does not furnish his PAN or Aadhaar and tax is deductible at a higher rate u/s 206AA or 206CC, as the case may be.
2. Where sum is payable to a non resident person.
3. Where sum is payable in the nature of lottery income, purchase of immovable property etc.
4. Where tax is deducted on salary u/s 192 and Provident Fund u/s 192A of the Income Tax Act.

S. No	Section of the Income -tax Act	Nature of Payment	Existing Rate of TDS	Reduced rate from 14/05/2020 to     31/03/2021
1	193	Interest on Securities	10%	7.5%
2	194	Dividend	10%	7.5%
3	194A	Interest other than interest on securities	10%	7.5%
4	194C	Payment of Contractors and sub- contractors	1% (individual/HU F) 2% (others)	0.75% (individual/H UF) 1.5% (others)
5	194D	Insurance Commission	5%	3.75%
6	194DA	Payment in respect of life insurance policy	5%	3.75%
7	194EE	Payments in respect of deposits under National Savings Scheme	10%	7.5%
8	194F	Payments on account of re-purchase of Units by Mutual Funds or UTI	20%	15%
9	194G	Commission, prize etc., on sale of lottery tickets	5%	3.75%
10	194H	Commission or	5%	3.75%

		brokerage
11	194-I(a)	Rent for plant and machinery	2%	1.5%
12	194-I(b)	Rent for immovable property	10%	7.5%
13	194-IA	Payment for acquisition of immovable property	1%	0.75%
14	194-IB	Payment of rent by individual or HUF	5%	3.75%
15	194-IC	Payment for Joint Development Agreements	10%	7.5%
16	194J	Fee for Professional or Technical Services (FTS), Royalty, etc.	2% (FTS, certain royalties, call centre) 10% (others)	1.5% (FTS, certain royalties, call centre) 7.5% (others)
17	194K	Payment of dividend by Mutual Funds	10%	7.5%
18	194LA	Payment of Compensation on acquisition of immovable property	10%	7.5%
19	194LBA(1)	Payment of income by Business trust	10%	7.5%
20	194LBB(i)	Payment of income by Investment fund	10%	7.5%
21	194LBC(1)	Income by securitisation trust	25% (Individual/HU F) 30% (Others)	18.75% (Individual/H UF) 22.5% (Others)
22	194M	Payment to commission, brokerage etc. by Individual and HUF	5%	3.75%
23	194-O	TDS on e-commerce participants	1% (w.e.f. 1.10.2020)	0.75%

                 Rates of TCS have also been reduced by 25% for the following receipts:

S. No	Section of the Income- tax Act	Nature of Receipts	Existing Rate of TCS	Reduced rate from 14/05/2020 to     31/03/2021
1	206C(1)	Sale of
		(a) Tendu Leaves	5%	3.75%
		(b)Timber obtained under a forest lease	2.5%	1.875%
		(c) timber obtained by any other mode	2.5%	1.875%
		(d) Any other forest produce not being timber/tendu leaves	2.5%	1.875%
		(e) scrap	1%	0.75%
		(f) Minerals, being coal or lignite or iron ore	1%	0.75%
2	206C(1C)	Grant of license, lease, etc. of (a) Parking lot	2%	1.5%
		(b) Toll Plaza	2%	1.5%
		(c) Mining and quarrying	2%	1.5%
3	206C(1F)	Sale of motor vehicle above 10 lakhs	1%	0.75%
4	206C(1H)	Sale of any other goods	0.1% (w.e.f 01.10.2020)	0.075%

    By reducing the TDS and TCS rates, the government wants to ensure more liquidity in the hands of recipient amidst the downturn.

   

• Due date of all Income Tax returns for the FY 2019-20 will be extended from 31st July,2020 and 31st October,2020 to 30th November,2020.
• Due date for Tax Audit assessees will be extended from 30th September,2020 to 30th October,2020.
• The last date for opting for "Vivad se Vishwas" scheme without paying additonal 10% of the disputed tax shall be extended to 31st December,2020.
• Due date for completion of Assessments shall be extended from 30th September,2020 to 31st December,2020 and Assessments which are getting time barred as on 31st March,2021 shall be extended to 30th September,2021.
• All pending refunds to charitable trusts and non corporate assessees shall be released soon.
• EPF contribution support for businesses(having not more than 100 workers) and workers having a basic salary of upto Rs.15000/- extended by 3 more months i.e. June, July and August 2020.
• EPF contributions for businesses and workers not covered above shall be reduced to 10% instead of existing 12% for both employer and employee.

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