@ Amit Poswal | Sr Journalist
New Delhi. Union Finance Minister Nirmala Sitharaman has announced a few measures to help businesses. Which includes micro, small and medium enterprises. This package has been brought to recover the economic from impact of the coronavirus pandemic. This was a part of the Rs 20 lakh crore stimulus package announced by Prime Minister Narendra Mod.
In a bid to provide support to the struggling MSME sector, the government announced collateral-free automatic loans worth Rs 3 lakh crore. It also changed the definition of MSMEs by revising upwards the investment limit and bringing in an additional criteria of turnover size of the company. Further, it said it would no longer allow global tenders for government procurement of up to Rs 200 crore.
For taxpayers, the government reduced the rates of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) by 25 per cent, with effect from May 14, 2020 to March 21, 2021. It has extended the date for filing income tax returns to November 30, 2020 and tax audit to October 31, 2020. The EPF contribution was also reduced for businesses and workers for three months to 10 per cent from 12 per cent.
Here’s taking a quick look at the top announcements:
- TDS, TCS rate for non-salaried payments for period up to March 31, 2021 has cut by 25%. The move will release Rs 50,000 crore.
- Due date for Income Tax returns for the year 2019-2020 has now being extended from 31st July and 31 October to 30 November 2020.
- In order to provide more take home salary for employees and to give relief to employers in payment of Provident Fund, Employees’ Provident Fund Organisation (EPF) contribution is being reduced for businesses and workers for 3 months, amounting to liquidity support of Rs 6,750 crores, the finance minister announced.
- To ease financial stress as businesses get back to work amid the coronavirus crisis, the government has decides to continue EPF support for business and workers for 3 more months providing a liquidity relief of Rs 2,500 crores.
- Rs 50,000 crore equity infusion for MSMEs through Fund of Funds; to be operated through a Mother Fund and few daughter funds; this will help to expand MSME size as well as capacity.
- Global tenders to be disallowed in government procurement up to Rs 200 crores. “This will make self-reliant India, will also then be able to serve ‘Make in India’ cause,” she said.
- The finance minister announced that the due date for all income tax returns has been extended to November 30..
- “Definition of MSMEs has been revised, investment limit to be revised upwards, additional criteria of turnover also being introduced,” the finance minister stated.
- In a major relief to contractors, all central government agencies to provide an extension of up to 6 months, without cost to contractor, to obligations like completion of work covering construction and goods and services contracts.
- The finance minister also announced Rs 90,000 crore liquidity injection for Power Distribution Companies (DISCOMs).