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Income Tax returns extended to 30 November 2020, other key measures announced by FinMin

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Following Narendra Modi’s 8 PM announcement of Rs 20 Lakh crore, the Finance Minister of India, Nirmala Sitharaman addressed the media on 13th May. The FinMin specified allocation of the liquidity announced by the PM by breaking down specific sectors.

Extending the Atmanirbharta

One of the key areas that were discussed was the ideals of #AtmanirbharBharatAbhiyan that PM Modi spoke about. “PM laid out a comprehensive vision, and that vision was laid out after wide consultations with several sections of the society. Essentially this is to spurt growth and to build a very self-reliant India and that is why this whole initiative is called #AtmanirbharBharatAbhiyan, says Finance Minister Nirmala Sitharaman.

Sitharaman reiterated the five pillars of Atmanirbhar Bharat, which is economy, infrastructure, system, demography and demand. Extending the narrative of self-reliance, she said, “global tenders to be disallowed in Government procurement up to Rs 200 crores. This will make self-reliant India, will also then be able to serve ‘Make in India’. However, she dismissed talks of India heading for a closed economy. “Atmanirbhar (self-reliant) India does not mean India is to be an isolationist country”, said the Finance Minister.

She stated that the vision will be put forwarded in the coming days in its totality.

In terms of the MSME sector, the FinMin announced

  1. Collateral free automatic loans to MSMEs worth Rs3 Lakh Crore. These have 4-year tenor, valid up to October 31st, 2020
  2. This will enable 45 lakh MSME units to resume business activity and also safeguard jobs
  3. Definition of MSMEs has been revised, investment limit to be revised upwards, additional criteria of turnover also being introduced
  4. Govt of India and Central Public Sector Enterprises will honour every MSME receivable in the next 45 days
  5. In a major initiative, we announce Rs 3 lakh crores collateral-free automatic loans for businesses, including SMEs. Borrowers with up Rs 25Cr outstanding and Rs100 Cr turnover are eligible
  6. The government to provide stressed MSMEs with equity support; the Government will facilitate the provision of Rs. 20,000 Crores as subordinate debt
  7. Rs 50,000 cr. equity infusion for MSMEs through Fund of Funds; to be operated through a Mother Fund and few daughter funds; this will help to expand MSME size as well as capacity: Finance Minister Nirmala Sitharaman

EPF concerns

To ease financial stress as businesses get back to work, Government decides to continue EPF support for business & workers for 3 more months providing a liquidity relief of Rs 2,500 crores: FM Nirmala Sitharaman

In order to provide more take home salary for employees and to give relief to employers in payment of PF, EPF contribution is being reduced for businesses & workers for 3 months, amounting to liquidity support of Rs 6750 crores: FM

Liquidity measures

The government announces Rs 45,000 crore liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs

Government launches a Rs 30,000 crore Special Liquidity Scheme for non-banking financial companies, microfinance companies, housing finance companies

RS 90,000 crore liquidity injection for Power Distribution Companies (DISCOMs)

Tax measures

TDS/TCS rates to be reduced by 25% till March 31, 2021

Due date for Income Tax returns for the year 2019-2020 now being extended from 31st July and 31 Oct to 30 November 2020

Other measures

In a major relief to contractors, all Central agencies to provide an extension of up to 6 months, without cost to contractor, to obligations like completion of work covering construction and goods and services contracts

Ministry of Housing to advise States/UTs &their Regulatory Authorities to extend registration&completion date suo-moto by 6mnts for all registered projects expiring on or after 25Mar,2020 without individual applications.Treat COVID-19 as an event of ‘Force Majeure’ under RERA

We shall not forget that we do have a responsibility towards the poor, needy, the migrants workers, divyang and the aged of the country : Finance Minister Nirmala Sitharaman

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