The COVID-19 pandemic has left the global economy in shambles, and everything from jobs to the markets have taken a massive blow. However, the initiatives of governments around the world have helped bring back some stability to the economy, including that of the Indian government. In March 2020, Indian Finance Minister Nirmala Sitharaman announced certain measures focusing on income tax, EPF, GST, commerce etc. We have compiled some decisions taken in the best interest of taxpayers in this article.
EPF or Employee’s Provident Fund is a type of collective fund in which an employee, as well as an employer, contribute a certain percentage of income towards a retirement corpus. You can withdraw this retirement corpus either as a lump sum or in the form of a monthly pension post-retirement.
In a time riddled with uncertainty, employees were worried about salaries and EPF contributions. However, the Indian government had come up with a relief measure to help all eligible members of the EPFO-
1. The government had announced that it would take care of all EPF contributions till August 2020 of employees earning Rs. 15,000 or less. The government had initially announced that it would contribute 12% as employer contributions, which was later reduced to 10% for all establishments under EPFO. However, the Central Public Sector Enterprises (CPSEs) and state public sector undertakings (PSUs) would continue to contribute 12%.
2. The pandemic has forced some people to turn towards their retirement corpora to help them tide through certain financial emergencies. As a result of this, the government had made withdrawals of EPF of up to seventy-five percent or three months worth of salary plus dearness allowance easier. This facility is known as Pandemic Advance.
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SIC or Employee State Insurance Corporation is a type of social security scheme meant for Indian employees. This scheme protects employees against any health-related contingencies that may arise in the course of their employment.
ESIC announced measures to relax the ESIC contribution deadline by thirty days for employers and employees. All contributions that had to be filed in March and April 2020 by employees can now be filed in April and May 2020.
The government has extended the deadline for filing income tax returns from March 2020 to November 2020 for the year 2019/20. The same deadline extension applies for linking PAN card with Aadhar card. Income Tax Act, Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT Law, Equalization Levy law, or Vivad Se Vishwas law, which had an expiration date between 20th March 2020 and 29th June has now been repealed, with the deadline now extended to 30th June 2020.
In addition to this, in case there is a delay in payment of advance tax, self-assessment tax, TDS, TCS, etc., the interest rate has been reduced to 9% from an earlier 12% and 18%, and the late fee/penalty during this period has been waived off. The government has reduced the TDS and TCS rates by 25% for a period up to March 2021.
Financial Services like banks-
ATM-cum-debit card holders can now withdraw cash without having to pay additional fees. Bank account holders can also maintain a zero bank balance without having to pay a penalty on non-maintenance.
The deadlines for investing money to claim deductions under sections 80C, 80D, and 80G have been extended by the government to June 30, 2020, for the financial year 2019/20.
The deadlines for investments, purchases, or construction to claim deduction on capital gains or to claim rollover benefits have been extended to 30th June. The deadline to commence operations for SEZ units to claim deductions under section 10AA has been extended to 30th June.
PM cares fund-
Any donations made to the PM cares fund are completely deductible under Section 80G of the income tax act. Business owners have been provided with relief measures, such as collateral-free loans to restart operations or to repay any outstanding loans. Only business owners with a turnover of Rs. 100 crores and up to Rs. 25 crore outstanding can avail of these loans without collateral.
Six-month extension to contractors to fulfill obligations such as completion of construction, goods and services related work. Power distribution companies have received a Rs. 90,000 crore liquidity injection.