TDS, TCS rates cut by 25%, Income Tax return deadline extended to November 30 – FM

Daijiworld Media Network – New Delhi (SHP)

New Delhi, May 13: Union Finance Minister Nirmala Sitharaman addressed a press conference at 4 pm to announce details about the economic package of Rs 20 lac crore.

In addition Sitharaman also stated that she would be conducting regular pressers starting from Wednesday, May 13. “Beginning today, I shall come with this entire team before you to put out details of PM’s vision. We will come with tranches beginning today. We have responsibility towards poor, needy, migrant and divyang (differently-abled),” Sitharaman said.

The package which was announced on Tuesday by Prime Minister Narendra Modi accounts to 10 per cent of India’s GDP has been announced to make the country self-reliant post the COVID-19 scenario.

The ‘Atmanirbhar Bharat Abhiyan’ will play an important role in shaping the Indian economy in the future, she said. The FM highlighted that as much as Rs 8.04 lac crore additional liquidity has been injected into the system by the RBI through various measures in February, March and April. Adding to this Rs 1.7 lac crore of the first fiscal relief package was announced by the Centre on March 26.

FM Sitharaman pointed out the Direct Benefit Transfer based on Jan Dhan Yojana account; PM Awas Yojana; Ujjwala Yojana; Swacch Bharat Abhiyan; PM Fasal Bima Yojana; PM Kisan Yojana, schemes to recall the success of Modi government.

Focus has been placed on ease of doing business, ease of compliance, and regulation, the finance minister said. She added that India will look to build brands at the local level and then take them to the global level. This would make India self-reliant instead of making the country an isolationist.

The Finance Minister made it clear that the stimulus package will come in various parts for different industries.

“Today’s tranche has 14 different measures. Six of these are for MSMEs, two are for EPF, two for NBFCs and MFIs, one to discoms, one to contractors, one real estate, three tax measures,” Sitharaman said. 

The Finance Minister announced that Rs 3 lac crore will be made available for collateral free loan for those MSME units which have Rs 25 crore outstanding loan payments or Rs 100 crore turnover. These loans will be avaialable with a 4-year tenure and a moratorium of 12 months. Over 45 lac MSMEs are to be benefited by this move.

The government will be redefining MSMEs for their advantage so that they can grow in size and get benefits. Investment limit which defined MSMEs increased to Rs 1 crore. Additional criteria being brought in is turnover size. The differentiation between manufacturing and service MSMEs will be categorised similarly, said the FM.

Finance Minister Nirmala Sitharaman announced a corpus of Rs 10,000 crore through mother-fund and daughter-fund framework.

“For MSMEs which require handholding, a Rs 50,000 crore ‘fund of funds’ through ‘mother fund – daughter fund’ framework is being created, to expand their capacity and to get listed on markets which they choose,” Sitharaman said.

Further, she announced that global tenders would be disallowed in government procurement of up to Rs 200 crores. This would be to prevent unfair competition by foreign companies crippling the India MSMEs and other companies.

The FM also announced measures under PM Garib Kalyan Yojna for another three months. This means that the government will pay the employer’s share for firms with 100 staff, earning less than Rs 15,000, till August. Nearly 6.5 lac etablishments are expected to benefit from this. This should provide Rs 6,750 crore liquidity.

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 a liquidity support of Rs 6750 crores. #AatmaNirbharBharatAbhiyan pic.twitter.com/VSysfvk4KU

— PIB India #StayHome #StaySafe (@PIB_India) May 13, 2020

Finance Minister Nirmala Sitharaman announced that the statutory PF contribution is being reduced from 12 per cent to 10 per cent. So, for the next three months, employers need to pay only 10 per cent towards their PF. This is being done to increase the take-home salary for employees. 

Following the pandemic, the DISCOMs were one of the sectors impacted. Keeping in mind the earnings of the Power Distribution Companies, the government has announced provisions for loans against state guarantees. Over Rs 90,000 crore liquidity is injected into DISCOMs. It will be exclusively done for the sole reason of clearing the dues owed of the power generation companies.

In order to provide relief to contractors, the finance ministry announced the extension of up to 6 months by all central agencies like Railways, Ministry of Road Transport and Highways, Central Public Works departments. This will cover construction work and goods and services contracts, completion of works and intermediate milestones, and also concessional period in PPP contracts. To facilitate greater liquidity, government agencies will partially release bank guarantees to the extent of the completed contract so that cash flow improves.

The government further announced to infuse Rs 50,000 crore liquidity by reducing rates of TDS, for non-salaried specified payments made to residents, and rates of tax collection at source for specified receipts, by 25 per cent of the existing rates.

Due date of all IT Return filings extended from July 31 to November 30. The last date for Vivad se Vishwas one-time tax settlement scheme has also been extended till December 31, Sitharaman announced.