Refurbishment of Tax Measures in Times of COVID-19

 COVID-19 has indeed thrown the world economy in chaos. Due to this, there is a drastic decline in the Indian economy, India has lifted more than 250 million people from extreme poverty between 2005 and 2017, but now this distressed situation of COVID-19 could generate additional poverty in the country.

Due to the nation-wide lockdown, there is a drastic drop in labor force participation, and considering the present situation, there are a few relaxations given to the tax payers in the country. This relaxation is given to the citizens of the country because due to COVID-19, various problems have been occurred to the people in this country, and keeping those issues in the head, the government has given few dilutions in the rules of tax paying annually.

The Finance Minister Nirmala Sitharaman has extended tax deadlines up to 30th November 2020, an extension is also given to file a tax audit report which can be filed by 31st October 2020. Even the deadline to file an application for settlement of disputes of tax from which a waiver for penalty could be obtained, has extended up to 31st December 2020.

OECD (Organization for Economic Cooperation and Development) has raised an issue that due to this relaxation in the tax measures, it can affect the contracts between cross-countries treaty related to taxes and that might affect the cross-border workers who are stranded in the contracted country.

As there is an economic slowdown, a lot of companies face challenges due to various reasons. Through finance act, there was a new tax rate introduced for new manufacturing units which set up their businesses after October 1st 2020, where they get an option to pay a tax of 15% which is inclusive of surcharge, which will be going up to 17.1%.

This new tax rate will definitely attract a lot of companies because of large domestic markets, which could make India a regional manufacturing hub in the forthcoming days which could lead to the expansion of the export business.