By Ritu Shaktawat, Tax Partner, Khaitan & Co, Mumbai, India
The Indian government, during a 24 March press conference, announced statutory and regulatory compliance measures in response to the COVID-19 outbreak, including a relaxation of the timelines for tax compliance and a reduction in interest rates for delayed tax payments.
The government said that these announcements would be codified through legal circulars and legislative amendments in due course.
India’s tax year is 1 April to 31 March tax year and, therefore, some compliance obligations fall due on or around 31 March.
According to the new announcements, the limitation period for revising the tax return filed for the year April 2018 – March 2019 and for filing a delayed return for that year has been extended from 31 March 2020 to 30 June 2020.
The 30 June 2020 due date will also apply to the payment of the settlement amount under the new tax dispute resolution scheme. Under the scheme, any delay beyond 31 March was to attract payment of an additional 10% of the disputed tax amount, which has been done away with for payments by 30 June 2020.
The government also extended dues date for issuance of any notice, intimation, notification, approval or sanction order; filing of an appeal, furnishing of return, statements, applications, reports or any other documents; completion of proceedings by the relevant authority; and any compliance by the taxpayer including investment in saving instruments or investments for rollover benefit of capital gains under the tax laws, to 30 June 2020 where any of these is falling due between 20 March and 29 June 2020.
Further, for delayed payments of taxes made between 20 March 2020 and 30 June 2020, reduced interest rate at 9% will be charged for instead of 12%/ 18% per annum chargeable otherwise, i.e., the interest rate for delayed deposits between this period would be 0.75% per month instead of 1 or 1.5 % per month applicable.
Such delayed payments would not attract any late fee or penalty for the defined period.
The extension of the due date for various compliances to 30 June 2020 does create some hope that the situation is expected to improve in the next two to three months.
With these steps and broader economic and public interest related decisions, India joins countries around the globe that are monitoring and responding to the situation by announcing relief packages.
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