Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020: Benefits in the Covid-19 period
In midst of the Covid-19 pandemic where the entire globe is facing huge depression, the Minister of Finance Ms. Nirmala Sitharaman presented the Taxation and Other laws (Relaxation and Amendment of Certain Provisions) Bill, 2020 within the Lok Sabha. This bill provides compliance relief to all or any of the taxpayers of the country. The said (Relaxation and Amendment of Certain Provisions) Bill, 2020 will replace the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 which was promulgated on March 21st, 2020.
An overview
The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020 will extend compliance-related timelines for taxpayers while offering relief to foreign investors. The bill will further amend the Tax Act, 1961, Central Goods and Services Tax Act, 2017, Finance Act 2019, and the Finance Act, 2020. This Bill also brings some amendments in tax rules to increase the investment. The Minister of Finance Ms. Nirmala Sitharaman supposed “the decree was essential to submit numerous obedience bounds underneath GST and tax Act throughout the Covid-19 eras”. She further stated that the donations made by the person in PM Cares Fund are getting to be eligible for 100% deduction within the taxable income.
The bill aims at providing relaxation associated with compliance by extending the deadline and waiving penalties about certain specified laws.
These laws include the tax Act, 1961 (IT Act), some Finance Acts, the Central Excise Act, 1944, the Customs Act, 1962, and therefore the Prohibition of Benami Property Transactions Act, 1988. The legislation provides these relaxations insight into the spread of the coronavirus pandemic in India. The bill proposes an amendment within the IT Act to supply that donations made by an individual to the PM care Fund are going to be eligible for 100 percent deduction within the taxable income.
Key Amendments
The Minister of Finance announced a faceless appeal while presenting the Union Budget 2020. The foremost objective behind this appeal is to eradicate any physical interface between the taxpayers and thus the tax authorities. The CBDT has issued a notification to bring the faceless assessment scheme under section 143(3A). The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020 proposes that the said scheme is getting to be incorporated under the tax Act effective from April 2021.
In respect of the challenges faced by the taxpayers because of the outbreak of Covid-19 the govt. brought the Taxation and thus the opposite Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020 which causes the extension of various deadlines.
The Taxation and thus the opposite Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020 proposes that delay within the payment of any tax won't be held liable either for prosecution or penalty. The speed of interest payable for the delay won't exceed 0.75% per month.
The Assessment And Additional Rules (Relaxation and Amendment Of Sure Provisions) Beak, 2020 suggests that any contribution complete by the countries to the Prime Minister’s Countries Help and Respite in Emergency Situation Fund are going to be there for 100% deduction under section 80G of the Act. Further, the limit on the deduction of 10% of gross total income wouldn't apply to such donations. It further explains that an amount just like the donations made by a private to the Fund is often deducted from his income by calculating the whole income under the IT Act.
The Taxation And Other Laws (Relaxation And Amendment Of Certain Provisions) Bill,2020 further proposes to amend the tax Vivid Se Vishwas Act, 2020 for the due payment of an additional amount to 31st December 2020. The bill also proposes to empower the Central Government to notify dates concerning the filing of declaration and making of the payment.
The speed of surcharge levied on dividend income has been capped at 15% further reducing the dividend rate to 23.92% against the erstwhile rate of 28.5%.
7. Reduction of TDS/TCS rates
CBDT, vide its handout dated May 13, 2020, reduced the rates for a tax write-off at Source (TDS) and Tax Collected at Source (TCS) by 25% for specified payments made to residents during the amount from 14-05--2020 to 31-03-2021. it had been then stated that necessary legislative amendments are going to be made in due course.
The Act has made the legislative amendments to scale back the TDS/TCS rates within the Tax Act with retrospective effect from 14th May 2020. The reduction in TDS/TCS rates has now been codified within the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.
Conclusion
When the earth is facing such a huge depression because of the pandemic the changes are proposed by the govt. within the Taxation and Other Laws (Relaxation And Amendment Of Certain Provisions) Bill, 2020 must be welcomed. These amendments will help the taxpayers of our country to stay to the compliance requirement.
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