The Finance Minister, Smt. Nirmala Sitharaman has introduced the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020 in the Lok Sabha. The bill seeks to amend various sections of the Income-tax Act.
The bill will replace the ordinance which was promulgated in March this year to provide relaxations related to compliance by extending the time limit and waiving penalty in relation to certain specified laws.
These laws include the Income Tax Act, 1961 (IT Act), some Finance Acts, the Central Excise Act, 1944, the Customs Act, 1962, and the Prohibition of Benami Property Transactions Act, 1988. The ordinance which was brought earlier also extended the deadline for filing declaration and due amount under the Vivad Se Vishwas Scheme.
The bill provides these relaxations in view of spread of the coronavirus pandemic in India. The bill proposes amendment in the IT Act to provide that donations made by a person to the PM CARES Fund will be eligible for 100 per cent deduction in the taxable income.
Speaking about the bill, the Finance Minister asserted that the government is committed to protect the rights of the State governments and has never intended any delay in rolling out GST payments. Ruling out claims of undue retrospective benefits being doled out through Vivad se Vishwas Scheme, Ms. Sitharaman said that it is only a dispute resolution mechanism to reduce the excessive burden of litigation and may not be seen as an amnesty scheme.
Mr. Thakur added that even the Supreme Court in its recent judgement ruled out transferring of funds from PMCARES to National Disaster Relief Fund citing that all the donations to it are voluntary. The opposition including Congress and TMC members created uproar and demanded apology after Mr. Thakur’s remarks on Prime Minister’s National Relief Fund and Nehru-Gandhi family which resulted in successive adjournments of the lower house. The house resumed later after the minister said that he did not intend to hurt anyone’s sentiment while presenting facts over the matter.
In view of stakeholders’ representations received after enactment of the Finance Act, 2020, and due to need for further rationalisation of some provisions of certain Acts, further amendments are considered necessary to be incorporated in the proposed Bill replacing the Ordinance.
The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020 which seeks to replace the said Ordinance, inter alia, provides for extension of various time limits for completion or compliance of actions under the specified Acts and reduction in interest, waiver of penalty and prosecution for delay in payment of certain taxes or levies during the specified period.
The Bill proposes amendments to the Income-tax Act, 1961 which , inter alia, include providing of tax incentive for Category-III Alternative Investment Funds located in the International Financial Services Centre (IFSC) to encourage relocation of foreign funds to the IFSC, deferment of new procedure of registration and approval of certain entities introduced through the Finance Act, 2020, incorporation of Faceless Assessment Scheme, 2019 therein, empowering the Central Government to notify schemes for faceless processes under certain provisions by eliminating physical interface to the extent technologically feasible and to provide deduction or collection at source in respect of certain transactions at three-fourth’s rate for the period from 14th May, 2020 to 31st March, 2021.
Giving relief to taxpayers following the COVID-19 outbreak, the government had through the ordinance extended the deadline for filing of income tax returns for 2018-19 fiscal till September 30 and linking biometric Aadhaar with PAN till March 31, 2021.
Also, the due date for filing income tax return for 2019-20 has been extended to November 30, 2020 and the date for furnishing tax audit report has also been extended to October 31, 2020.
Also, the time limit for making various investments for claiming deductions under the I-T Act, including section 80C (LIC, PPF, NSC etc), 80D (mediclaim), 80G (donations) for 2019-20 was extended till July 31, 2020.Promoted
Further, the date for passing of order or issuance of notice by authorities and various compliances under direct tax and benami transaction laws, which are required to be passed/ issued by December 31, 2020, has been extended to March 31, 2021.