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We have analysed various recent amendments\notifications and following are the highlights for your reference:

 

A] Income Tax:                           

 

1.Extension of various due dates announced amid uncertainties surrounding Covid-19:

 

Income Tax Authorities have decided to further extend due dates for certain compliances:

 

2. Deduction of TDS on Salary ~ as per old or new regime of income tax:

 

An Individual or Hindu Undivided Family (HUF), having income other than income from business or profession, may exercise its option to be tax under the new regime of income tax from financial year 2020-21. As the option is to be exercised at the time of filing return of income, the deductors being employers would not know which regime an employee will opt for. To avoid such confusion, income tax department has come out with the following clarifications:

 

3. Abeyance of clauses in tax audit report:

 

Reporting of clause 30C pertaining to General Anti-Avoidance Rules (GAAR) and clause 44 relating to Goods and Service Tax (GST) compliance in tax audit report was earlier kept in abeyance till 31st March, 2020. In view of the situation due to the outbreak of Covid-19 pandemic, these reporting has been further kept in abeyance till 31st March, 2021.

 

4. Clarification with respect to uncertainty surrounding residential status of individuals due to outbreak of covid-19:

 

There were a number of individuals who had come on a visit to India during the previous year 2019-20 for a particular duration with the intension of leaving India before the end of the previous year for maintaining their status as non-resident or not ordinary resident in India. However, due to outbreak of Covid-19, declaration of lockdown and suspension of international flights, their stay in India was prolonged. In this regard, income tax department has come out with the following clarifications to determine the residential status:

 

5. Generating instant PAN through Aadhar based e-KYC:

 

Government of India has launched a facility for instant allotment of PAN for those applicants who have a valid Aadhar number and also a mobile number registered with Aadhar. The allotment process is paperless and an electronic PAN will be issued to the applicants. The whole process is free of cost.

 

6. Relief to applicants of lower TDS deduction certificate:

Due to the outbreak of Covid-19 pandemic, there is severe disruption in normal working of income tax department. To reduce the hardships faced by tax payers following relief has been granted to applicants of lower TDS deduction certificates:

 

B] MSME:

 

1.   New Definition of MSME:

 

The definition of Micro manufacturing and services units was increased to Rs. 1 Crore of investment and Rs. 5 Crore of turnover. The limit of small unit was increased to Rs. 10 Crore of investment and Rs 50 Crore of turnover. Similarly, the limit of medium unit was increased to Rs. 20 Crore of investment and Rs. 100 Crore of turnover. The Government of India on 01.06.2020 decided for further upward revision of the MSME Definition. For medium Enterprises, now it will be Rs. 50 Crore of investment and Rs. 250 Crore of turnover.


2.   Exports not to be counted in turnover criteria of MSME:

Exports will not be counted in turnover for any enterprises whether micro, small or medium. The provision of excluding the exports from counting of turnover will encourage the MSMEs to export more and more without fearing to lose the benefits of a MSME unit. This is expected to exponentially add to exports from the country leading to more growth and economic activity and creation of jobs.


3.   Handholding mechanism named “Champions” to assist new MSMEs:

Handholding mechanism named "Champions" in place to assist MSMEs-new entrepreneurs. Interested Enterprises/People can take benefit of this mechanism and can also put their queries or complaints. The same will be attended to with utmost promptness.

 

C] Corporate Law:

 

1.    New classification of company to whom Secretarial Audit and Appointment of CS will be applicable:

 

Following companies will now be required to appoint a Company Secretary:

 

·         Listed Companies;

·         Unlisted Public Companies having Paid-up Share capital of Rs. 10.00 crores;

·         Private Companies having paid-up Share capital of Rs. 10.00 crores

 

Further, authorities have made Secretarial Audit mandatory requirement for following types of companies:

·         Every Listed Company;

·         Unlisted Public Companies;

·         Companies having a paid-up share capital of fifty crore rupees or more;

·         Companies having a turnover of two hundred fifty crore rupees or more;

·         Companies having outstanding loans or borrowings from banks or public financial institutions of one hundred crore rupees or more.

 

2.    Relaxation of time for filing forms related to creation or modification of charges:

 

The Central Government has decided to introduce a Scheme, namely "Scheme for relaxation of time for filing forms related to creation or modification of charges for the purpose of condoning the delay in filing certain forms related to creation/ modification of charges. The scheme shall be applicable in respect of the form by a company or a charge holder, where the date of creation / modification of charge (a) is before 01.03.2020, but the timeline for filing such form had not expired as on 01.03.2020, or (b) falls on any date between 01.03.2020to 30.09.2020(both dates inclusive).

 

3.    Extension of time for holding Extra Ordinary General Meetings:

 

The Ministry has provided clarification on passing of ordinary and special resolutions by companies by holding extraordinary general meeting through video conferencing (VC) or other audio-visual means (OAVM) till 30th June 2020. The matter has been examined by Ministry and it has been decided to allow companies to conduct their EGMs through VC or OAVM or transact items through postal ballot till 30th September 2020.

 

4.    Extension of time for registration of Independent Directors:

 

Ministry has further extended the last date for one-time registration of details of Independent Directors to ID Data Bank for further 3 months i.e. the last date for the same has now been extended to 30th September, 2020.

 

D] Goods and Service Tax:

 

1.   Waiver of late filing fees for Goods and Service Tax Returns:

 

Goods and Service Tax (GST) authorities have come up with relief for tax payers by waiving off/reducing the late filing fees for filing GST returns. Following are the benefits granted to tax payers:

 

·         Tax payers who have no tax liability but have not filed GST returns for the period July 2017 to January 2020, there shall be no late filing fees at all for filing the returns till 30th September, 2020. Further, tax payers having tax liability, the maximum late filing fee for non-filing of returns for the same period is Rs. 500 per return.

·         For tax payers whose aggregate turnover is up to Rs. 5 crore, the rate of interest for late furnishing of GST returns for Feb, Mar and April 2020, beyond July 6, 2020 has been reduced from 18% to 9%.

·         For tax payers whoseaggregate turnover is up to Rs. 5 crore will be provided a waiver of late fees and interest if they file the GST returns for the supplies affected in months of May, June and July 2020, by September 2020.

 

2.   Relief towards restoration of cancelled GST registrations:

 

Taxpayers whose GST registrations were cancelled till 12th June, 2020 and they could not get the registrations restored in time have been given an opportunity to apply for revocation of cancelled registrations up to 30th September, 2020.

 

3.   Extension of due date for filing GST Annual Return and GST Audit:

 

The due date for filing GST Annual Return and GST Audit for FY 2018-19 has been extended to 30th September, 2020.

 

4.  Waiver/reduction in rate of interest and late fee for delay in filing of GST returns for various months in different states:

 

GST Authorities have waived/reduced the rate of interest and late fee in case of delay in filing of GST returns for various months in different states of India.

 

Sr. No.

Class of Registered Persons

Tax Period

Rate of Interest

Condition for Waiver of Late Fees

1

Taxpayers having an aggregate turnover of more than rupees 5 crores in the preceding financial year

February, March & April 2020

Nil for first 15 days from the due date, and 9 percent thereafter till 24th day of June, 2020

If return is furnished on or before 24th of June, 2020

2

Taxpayers having an aggregate turnover of up to rupees 5 crores in the preceding financial year, whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep

February 2020

Nil till the 30th day of June, 2020, and 9 per cent thereafter till the 30th day of September, 2020

If return is furnished on or before 30th of June, 2020

March 2020

Nil till the 3rd day of July, 2020, and 9 per cent thereafter till the 30th day of September, 2020

If return is furnished on or before 3rd of July, 2020

April 2020

Nil till the 6th day of July, 2020, and 9 per cent thereafter till the 30th day of September, 2020

If return is furnished on or before 6th of July, 2020

May 2020

Nil till the 12th day of September, 2020, and 9 per cent thereafter till the 30th day of September, 2020

If return is furnished on or before 12th of September, 2020

June 2020

Nil till the 23rd day of September, 2020, and 9 per cent thereafter till the 30th day of September, 2020

If return is furnished on or before 23rd of September, 2020

July 2020

Nil till the 27th day of September, 2020, and 9 per cent thereafter till the 30th day of September, 2020

If return is furnished on or before 27th of September, 2020

3

Taxpayers having an aggregate turnover of up to rupees 5 crores in the preceding financial year, whose principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi

February 2020

Nil till the 30th day of June, 2020, and 9 per cent thereafter till the 30th day of September, 2020

If return is furnished on or before 30th of June, 2020

March 2020

Nil till the 5th day of July, 2020, and 9 per cent thereafter till the 30th day of September, 2020

If return is furnished on or before 5th of July, 2020

April 2020

Nil till the 9th day of July, 2020, and 9 per cent thereafter till the 30th day of September, 2020

If return is furnished on or before 9th of July, 2020

May 2020

Nil till the 15th day of September, 2020, and 9 per cent thereafter till the 30th day of September, 2020

If return is furnished on or before 15th of September, 2020

June 2020

Nil till the 25th day of September, 2020, and 9 per cent thereafter till the 30th day of September, 2020

If return is furnished on or before 25th of September, 2020

July 2020

Nil till the 29th day of September, 2020, and 9 per cent thereafter till the 30th day of September, 2020

If return is furnished on or before 29th of September, 2020

 

 

Disclaimer:

 

The above note is subject to further study and clarifications.

 

This note does not form an opinion from our end and before taking any decision based on above, it is recommended to consult our experts on the subject.

 

Kamdar, Desai & Patel will not be liable for any damages (including, without limitation, damages for loss of business projects, or loss of profits) arising in contract, tort or otherwise from the use of or inability to use this article, or any of its contents, or from any action taken (or refrained from being taken) as a result of using this article or any such contents.