The Indian government is taking effective measures to combat COVID 19. Since it is a contagious disease, it is swiftly spreading from person-to-person and in turn, afflicting over 500 people as per the current count. To lessen its impact, locking down of the country and informing preventive measures to the masses are some of the steps taken by the country’s government. Amidst this mayhem, business corporations had to cease their regular operations, and asked employees to work from home. Many of these companies have also cut off redundant job profiles and laid off employees as they could not make profits in the present month as well as in the offing.
While businesses are facing a tough time, the Indian government has come forward to support the country’s economy. In the recent announcement, Finance Minister of India, Nirmala Sitharaman proclaimed a slew of actions to avert the economic crash.
Reliefs for Business Corporations Amid Pandemic
The government apprehends problems that businesses, especially MSMEs are facing in disease outbreak. Consequently, they have relaxed a series of norms for the enterprises, reported Business Insider.
- The government has extended the date for tax returns of fiscal 2018-19 to June 30. However, it has not increased the penalty on deferred TDS (tax deducted at source) deposit. Instead, it has halved the penalty from 18 per cent to 9 per cent.
- All infusions for rollover benefits of capital gains through various acts—Equalisation Levy law, Prohibition of Benami Property Transfer Act, Black Money Act, Wealth Tax Act, Income Tax Act, Securities Transaction Tax Law and ‘vivaad se vishwaas’ law—have now extended to the cessation of June i.e. 30 June.
- The government has also extended the last date of filing returns from March, April, and May 2020 to June 30.
- The companies, which have less than INR 5 crore turnover, will not have to pay the penalty for delayed payment. On the other hand, the firms, which have over INR 5 turnover, will also not have to pay the penalty but will have to bear an interest of 9 per cent trimmed down from 18 per cent.
- The government has termed customs clearance as an essential service and consequently, it will operate relentlessly.
- The government has made amends in the MCA-21 registry as well. Under this registry, Moratorium that is issued from April 1 to September 30. No additional amount will be charged from the companies for late filings. Further, the customary requirements for holding meetings of the Board of Directors is exempted for 60 days.
- The government has also delayed auditors’ report order, which was earlier to be implemented from fiscal March 2020, by a year.
- In the fiscal 2020, independent directors will not breach a law if they could not hold a single meeting. The newly formed companies, which have to file declarations for business commencement within 6 months, have been given more time of 6 months.
- Earlier on, there was a need to create a reserve of 20 per cent of deposits maturing the coming fiscal year by April, which has now been delayed to June.
- Accordingly, the government had asked to invest 15 per cent of the sum from maturing debentures during the coming fiscal year by April. This has been also delayed till June.
- To bring relief to micro, small, and medium enterprises (MSMEs), the center has increased the “threshold for default” by 100 times to INR 1 crore. It has been done to cease insolvency proceedings against MSMEs. If the economic situation does not improve by April 30, the government may consider suspending various ordinances—Section 7, Section 9 and Section 10 of the bankruptcy law for a six months period.
- The central government has increased import permit by three months if an entrepreneur’s sanitary permit is expiring by April 1 and April 15, 2020.
- For trade and finance consumers, bank charges will be trimmed down for digital transactions.
Financial Package for Dealing with Coronavirus Outbreak Deferred
In the cited announcement, the Indian masses were anticipating a financial package to lessen challenges surfaced by the disease outbreak. Similar to other nations, the government vowed to formulate such a package to assist the COVID-hit economy. However, the Finance Minister did not proclaim any financial package in the conference.
“We, both the government and the regulator, SEBI, are monitoring the stock market thrice a day. Various sub-groups of the task force on economy, as well as outsiders, have made suggestions and we will soon come with an announcement,” Sitharaman said in the conference, reported by the cited media agency.