In a press conference on Tuesday, Finance Minister Nirmala Sitharaman made key announcements amidst coronavirus crisis that has wrought havoc on the economic mood of the country. Here are the key highlights:
Income Tax Returns
In a big relief to direct taxpayers, the Finance Minister extended the last date for filing personal income tax for FY 2018-2019 to June 30, 2020. Moreover, the interest rate levied on delayed payments have also been reduced to 9% from 12%.
The last date for the income tax return for the financial year 18-19 is extended to 30th June 2020. For delayed payments interest rate has been reduced from 12% to 9%: Union Finance Minister Nirmala Sitharaman pic.twitter.com/Q3OHoh86SZ— ANI (@ANI) March 24, 2020
The deadline for linking Aadhar and Pan Card has also been extended from March 31, 2020, to June 30, 2020.
Aadhaar-Pan linking date extended to June 30 from March 31, says FM— Press Trust of India (@PTI_News) March 24, 2020
GST Deadline and Penalties
The Central Government has extended the deadline for filing Goods and Services Tax (GST) returns for March, April and May 2020 to 30 June 2020. For companies with annual turnover less than ₹5 crores, no interest/late fee/penalty will be charged. For businesses with higher turnover than 5 crores, only the interest amount will be charged. Late fee and penalty have been waived.
Insolvency and Bankruptcy Code (IBC)
The default limit for Insolvency & Bankruptcy Code has been enhanced from Rs 1 lakh to Rs 1 crore. If the situation continues beyond April, the government will protect companies from being forced into insolvency by suspending IBC Sections 7, 9 and 10 for 6 months.
Threshold of default extended to Rs 1 cr from existing Rs 1 lakh now to prevent insolvency proceedings against MSMEs: FM— Press Trust of India (@PTI_News) March 24, 2020
The delayed deposit of Tax deducted at Source (TDS) will now incur interest of 9% instead of 18%.
Reduced interest of 9 pc, instead of 18 pc, will be charged for delayed deposit of TDS: FM— Press Trust of India (@PTI_News) March 24, 2020
In a bid to provide relief to the importers and exporters, customs clearance has now been deemed as an essential service that will continue its operations 24/7 until June 30, 2020.
Relief for imports/exporters: Customs clearance now an essential service, till June 30th, 2020 it will be working 24/7.— ANI (@ANI) March 24, 2020
The Minimum Balance that needs to be maintained in bank accounts to avoid fees has been waived. Debit cardholders can now withdraw cash from any ATM, free of charge for a period of 3 months.
There shall not be any minimum balance requirement fee (in bank accounts): Union Finance Minister Nirmala Sitharaman https://t.co/olSYTYRpMv— ANI (@ANI) March 24, 2020
Effect on the Stock Market
The market has shown positive response following the key announcements made by Nirmala Sitharaman to provide relief to India’s distressed economy. The Sensex has soared 1183.74 points to 27,164.98 while Nifty has climbed 314.55 points to 7,924.80 points.
Sensex up by 1183.74 points at 27,164.98; Nifty climbs 314.55 at 7,924.80. https://t.co/Ka2TxeasKQ— ANI (@ANI) March 24, 2020
Apart from these, the finance minister also stated that the government is readying an economic package to revive the situation and an announcement in this regard will be made soon.
At a time when the coronavirus pandemic has infected about 500 people in India and 3.8 lacs worldwide, the global economy has been under immense pressure. The story of India is no different. Lockdown in almost all states of India to contain the outbreak of COVID-19 has led to a broken supply chain and reduced economic activities. These slew of measures are expected to boost the economic morale in such challenging times.