Last updated: April 22nd, 2020 8:39 PM

Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020

Due to the COVID-19 outbreak, the Finance Minister announced various relief measures vide Press Release dated 24th March 2020. To give effect to the said announcements, the Government implemented Taxation and other Laws (Relaxation of Certain Provisions) Ordinance 2020 [hereinafter referred to as an ‘ordinance’] on 31st March 2020. The key amendments covered under taxation law 2020 are highlighted in the present article.

Extension of the time limit and Relaxation of Interest and Penalty

Before understanding the extension and relaxation provisions, it is essential to list the ‘Specified Act’ to which the same is applicable:

1. The Income Tax Act, 1961.
2. The Direct Tax Vivad Se Vishwas Act, 2020.
3. The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
4. The Wealth Tax Act, 1957.
5. The Prohibition of Benami Property Transactions Act, 1988
6. Chapter VII - Finance (No. 2) Act, 2004.
7. Chapter VII - Finance Act, 2013.
8. Chapter VII - Finance Act, 2016.

Any time limit specified, prescribed or notified under the above ‘Specified Act,’ which falls during the period 20th March 2020 till 29th June 2020, has been extended to 30th June 2020 or such other notified date. Such extended date is applicable for the completion or compliance of the following:

1. Filing of any return, document, report, statement or any other record.
2. Completion of any of the proceedings or passing of any orders.
3. Issuance of any intimation; notice; notification, sanction or approval or such other actions.
4. Filing of any appeal, application or reply.
5. Making investment, deposit, or payment for claiming deduction under Chapter VI-A.
6. Making of investment or acquisition or construction for claiming exemption under section 54 to section 54G.
7. Commencement of production or manufacturing of articles or things or provision of any service as per section 10AA.
8. Relaxation of Interest and Penalty

Any tax dues payable under the ‘Specified Act’ should be paid within the due dates prescribed under the ‘Specified Act.’ However, the following relaxation of interest and penalty has been provided to the due dates falling within the period 20th March 2020 to 29th June 2020:

• The rate of interest for such delay shall not exceed 0.75% per month or part thereof.
• No penalty or prosecution shall be levied/sanction in respect of such delay.

Key Amendments to the Income Tax Act, 1961

The Income Tax provisions of section 10(23C)(i) and section 80G(2) have been amended to include Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (i.e., PM CARES Fund). Accordingly, all the income or contribution earned by the PM CARES Fund is exempted from the Income Tax. Importantly, every person donating the amount to the PM CARES fund shall be eligible for a 100% deduction under section 80G.

Key Amendments to the Direct Tax Vivad Se Vishwas Act

The benefit of the ‘Vivad Se Vishwas Scheme’ can be availed without making any additional payment of 10% of the disputed amount till 30th June 2020.

Key Amendments to the Central Goods and Service Tax Act, 2017

New section 168A inserted into the Act. Provisions of newly added section 168A state as under:

• Section 168A empowers the Central Government to extend the time limit under special circumstances.
• The special circumstances under which the extension of the time limit is possible are epidemic, flood, war, drought, cyclone, fire, earthquake or any other calamity caused by nature or otherwise

Key Amendments to the Finance (No. 2) Act, 2019

• Chapter V of the Finance (No. 2) Act, 2019 covers the Sabka Vishwas Dispute Resolution Scheme, 2019
• The Act mandates the committee to issue the statement within 60 days of the receipt of the declaration. However, as per amendment vide the ordinance, the committee is allowed to issue the statement by 31st May 2020.
• The Act mandates the applicant to pay the amount determined by the committee within 30 days of the issue of statement. However, as per amendment vide the ordinance, the applicant is now allowed to make the payment by 30th June 2020.