Covid -19 has come out with several severe impacts on the world economy. Our country has also been a sufferer of the same. Revenue of several states as well as of the Central govt. by way of tax collections has gone down drastically and whereas on the other side the expenses have not gone down in the same proportion. The PM announced a mega package of Rs.20.00 lakh crore for the revival of economy on Tuesday and the Finmin has made some important announcements in this context, which may be called the first part of the package. The important announcements which are likely to cast their impact on a middle class or the mid segment business houses are as follows:
MSME segment:
Most Importantly Definition of MSMEs has been revised with an aim to give coverage to more of the units under the scheme. The new definition for MSME units is as follows:
Micro units with investment upto Rs 1 cr, turnover up to Rs 5 crore,
Small units with investment upto Rs 10 crore, turnover up to Rs 50 crore
Medium units with investment upto till Rs 20 cr, turnover up to Rs 100 crore.
Collateral free loans for MSMEs amounting to Rs 3 lakh crores which will benefit 45 lakh units so that they can resume work and save jobs.
A debt provision of Rs 20,000 cr. has been announced for 2 lakh stressed and NPA classified MSMEs.
Rs 50,000 crore equity infusion through Mother fund-Daughter fund for MSMEs and a fund of funds with corpus of Rs 10,000 crore will be set up to help these units expand capacity and help them list on Markets if they choose.
To encourage the local contractors no Global tenders will be allowed for government contracts involving an amount up to Rs 200 crore.
Low deduction of TDS and TCS
TDS shall be deducted at 25% reduced, however the less deducted amount shall have to be paid at the time of filling of returns.
Due dates for filling of Returns
- Due date of all IT Return filings extended from July 31 to November 30.
- Vivaad se Vishwas scheme extended till December 31,2020.
- Date of assessments getting barred as on Sep 30, 2020 extended to December 31, 2020.
- Date of assessments getting barred as on March 31, 2021 extended to September 30, 2021.
EPF-Contribution
EPF contribution for EPF compliant establishments will be paid by Govt. of India for another 3 months till August and will benefit more than 72 lakh employees, which shall result in a liquidity relief of ₹2,500 crore for these establishments. Statutory EPF contribution for all organisations and their employees covered by EPFO has been reduced to 10% from 12% earlier. This will further infuse Rs 6,750 cr liquidity into these organisations.
Apart from these important measures certain other relief measures have also been announced for NBFCs, HFIs and Real estate sector.
Sanjeev Kumar Khanna (Financial Mentor)