In a bid to counter the negative impact of COVID-19 on the nation’s economy, indistries as well as the common man and taxpayers, the government has announced several relief measures to help them out.
The said measures essentially included EMI moratorium, EPF withdrawal, extension of deadline for paying insurance premiums, and extension of due dates for most income tax-related compliances, among others.
The Income Tax Department has extended many income tax-related compliance deadlines for individuals to June 30, 2020. The government has also extended some small savings schemes and investment-related deadlines until June 30, 2020. These deadlines have been extended to help taxpayers and the common man.
Here we are taking a look at some of the relief measures provided by the government for the common man and taxpayers:
1. EMI moratorium: The RBI has recently instructed all Indian banks and Indian financial institutions to provide their borrowers, account holders and credit cardholders a moratorium for 3 months on payment of all term loan installments and credit card dues.
With this, borrowers, account holders, and credit cardholders can hold on to their payments which are falling due between March 1, 2020, and May 31, 2020. It includes all principal and interest payments, EMIs, credit card dues, and bullet repayments.
Keep in mind that the interest for this period will continue to accrue on the outstanding portion of loans and credit card dues during the 3-month moratorium period.
2. EPF withdrawal: Over 6 crore subscribers of EPFO have been allowed by the Labour Ministry to make an advance withdrawal from their PF accounts. The withdrawal amount can not exceed the account holder’s 3 months basic pay and dearness allowance, or up to 75 per cent of the amount standing to the account holder’s credit in the EPF account, whichever is less.
For instance, if your basic salary is Rs 45,000 per month, and the balance in your EPF account on March 31, 2020, is Rs 8 lakh, you will be able to withdraw Rs 1.35 lakh. On the other hand, if your basic monthly salary amounts to Rs 52,000, and the balance in your PF account is Rs 2 lakh, you will be able to withdraw Rs 1.5 lakh.
3. Insurance premium: The deadline for paying health and third party motor insurance premiums was extended by the finance ministry. The extension will be for policyholders whose insurance premium is due for renewal during the lockdown, 25 March to 14 April. Policyholders who have not paid by then and are unable to pay during that time, such payments can be made by 21 April. Note that with the relaxation, policyholders will continue to benefit from the policy despite a delay in premium payment, till 21 April in this case.
4. Deposit of PPF, SSY, RD: For mandatory minimum deposit in Public Provident Fund (PPF), Sukanya Samriddhi Account (SSA) and RDs (recurring deposits) for FY 2019-2020, the government has extended the deadline till June 30. This was done due to the coronavirus lockdown, and to safeguard interests of small savings depositors during such a pandemic.
Therefore, depositors who have not deposited their savings in PPF and SSA due to the lockdown can now do so till June 30. Even though no revival fee or penalty will be charged form the depositors of PPF, SSA or RD accounts who failed to make the mandatory minimum deposit till March 31, the interest will be calculated from the actual date of deposits.
5. Filing belated ITR: The deadline for filing belated income tax return has also been extended from March 31, 2020, to June 30, 2020. Failure of filing ITR can lead to prosecution and levy of fines according to the Income Tax Department. Earlier (without the extension in deadline) taxpayers failing to file belated ITR would have lost the opportunity completely unless the IT department specifically asked them to do so.
6. Filing revised ITR: Similarly, the deadline to file revised ITR was also March 31, 2020. For individuals who need to correct their income details in their tax return can do it till June 30. Providing incorrect income details which were not reported earlier in the tax return could lead to consequences for misreporting of income if the tax department discovers it later.
7. Tax-savings for FY 2019-20: Individuals who are yet to complete their tax savings, the government has provided relief to them, wherein individuals can complete their investments in tax-saving instruments by June 30, 2020, which had to be done by March 31, 2020, earlier.
8. Vivad se Vishwas: The deadline was extended from March 31, 2020, to June 30, 2020, for settling tax disputes under the scheme without paying any interest and penalty. With the extension of the deadline, taxpayers will not have to pay any penalty and interest and be able to settle tax disputes by the new deadline.
The scheme is for settling the tax dispute between individuals and the tax department and offers a complete waiver of interest and penalty to the taxpayers with a full and final settlement of the dispute. Earlier (without the extension in deadline) individuals would have had to pay an extra 10 per cent of the disputed tax amount, if he/she opted to settle their tax dispute after March 31, 2020.
9. NPS: For making voluntary contributions to Tier 1 Accounts of the National Pension System, the date has been extended from March-end 2020 to June 30, 2020.
10. PAN-Aadhaar: The deadline to link PAN with Aadhaar was earlier March 31, 2020, which was also extended to June 30, 2020. For those who are yet to link their PAN with Aadhaar, can do so till 30 June as not linking PAN with Aadhaar will make the PAN invalid, according to the current income tax laws.