The
Government of India (GOI) is proactively taking various steps to ease the tax
compliance burden for taxpayers during COVID-19 disruption period. So far, the
GOI has taken following steps on direct tax reliefs:
1.
Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance
2020 promulgated on 31 March 2020 to extend timelines for various compliances,
reduce rate of interest and waive penalties and prosecution for delay during
COVID-19 disruption period [1].
2.
Orders issued for interim reliefs in respect of lower withholding
certificate application for tax year 2020-21, disposal of pending applications
over e-mail for tax year 2019-20 and interim relief for furnishing nil
withholding declarations in Form 15G/Form 15H for tax year 2020-21[2].
As a
further measure to ease liquidity constraints faced by taxpayers, the GOI has,
vide Press Release dated 8 April 2020 announced that that all pending refunds under the Income-tax law amounting up to
INR0.5 million shall be issued immediately. As per the Press Release, this
direction will benefit approximately 1.4 million taxpayers. The GOI has also
decided to issue all pending Goods and Service Tax and Custom refunds which
would provide benefit to around 0.1 million business entities, including micro,
small and medium sized businesses. As per the Press Release, the total refund
granted might be approximately INR180 billion.
Comments
The
expeditious release of tax refunds is a positive move on the part of the GOI
which may ease liquidity constraints faced by taxpayers due to amounts stuck in
tax refunds and enable businesses to pay salaries to their employees during the
current challenging period.
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