Nirmala Sitharaman: TDS rates cut by 25 per cent, income tax return deadline extended
Finance Minister Nirmala Sitharaman on Wednesday addressed a press conference to declare the details of a Rs 20 lakh crore economic relief package to relax the disturbing effect of coronavirus outbreak. In an address, the Finance Minister declared that TDS will be cut by 25 per cent whereas date for Income Tax returns is also extended.
While explaining the package, the Finance Minister said, “Today's part has 14 different measures. Six of these are for MSMEs (Ministry of Micro, Small and Medium Enterprises), two are for EPF, three tax measures, two for NBFCs (Non-Bank Financial Institution) and MFIs (Micro-Financial Institution), one to Distribution Company (DISCOM), one to contractors and one real estate.”
RS 3 LAKH CRORE LOAN FOR MSMES
The Ministry of Finance also announced Rs 3 lakh crore collateral-free automatic loan for MSMEs which have Rs 25 crore outstanding loan payments or Rs 100 crore income. These loans will be available with a four-year tenancy and a moratorium of 12 months. Thus, the move is expected to benefit 45 lakh units.
"The definition of MSMEs is being changed for their advantage so that they can harvest in size and receive aids. Investment limit which defined MSMEs have been revised as well as extra criteria being brought in is the size of turnover- the earlier difference between manufacturing and service MSMEs will be categorised likewise," said Sitharaman.
“Global tenders will be disallowed in government tenders up to Rs 200 crore because many MSMEs have faced struggle from foreign companies. Necessary adjustments of General Financial Rules will be effected. This will also help MSMEs to increase their trades,” FM added.
The government also decided to range the previous measures declared under PM Garib Kalyan Yojna for another three months. Government will pay the employer's share for firms with 100 staff, receiving less than Rs 15,000. Nearly 3.6 lakh establishments are likely to benefit from this. This should provide Rs 2,500 crore liquidity. Also, the PF contribution is being reduced from 12 per cent to 10 per cent as a result, for the next three months, employers need to pay only 10 per cent of their PF.
NBFCs and DISCOMS
Government will launch a Rs 30,000 crore liquidity scheme. Under this investment will be made in primary as well as secondary market transactions in investment-grade debt paper of NBFCs. Talking about the NBFCs and DISCOMS, the Finance Minister said, “First 20 per cent of loss will be borne by the government of India and this scheme will result in liquidity worth Rs 45,000 crore.” “DISCOM payables companies is close to Rs 94,000 crore,” she added.
BIG RELIEF FOR CONTRACTORS
In a relief to contractors, the ministry declared an extension of up to 6 months to be given by all central agencies such as Ministry of Road Transport and Highways, Railways and Central Public Works Dept. To facilitate good liquidity, government agencies will release bank guarantees to the extent of the finished contract.
Before announcing the details of the economic package, the Finance Minister revisited past schemes aimed at self-reliance, from PM Garib Kalyan Scheme to Insolvency and Bankruptcy Code and GST reforms.
REDUCE RATE OF TDS
TDS rates are reduced by 25 per cent. This is applicable on all payments: rent, interest, brokerage, supply and more. This reduction will issue Rs 50,000 crore in the hands of people.
INCOME TAX RETURNS DATE EXTENDED
The Ministry of Finance said, all pending refunds of a charitable trust, non-profit business, cooperatives, shall be issued immediately.
On the other side, the due date of all IT returns for financial year of 2019-20 from July 31, 2020 and October 31, 2020, will be extended till November 31.
It also added that tax audits extended till October 31, 2020, whereas assessments getting barred as of September 2020 is prolonged till December 2020.
She also listed five pillars of an 'Atma-Nirbhar Bharat' naming economy, infrastructure, system, demography and demand.
(With inputs from IANS)