CBDT notifies new 26AS. Now it will provide much more information than just TDS deduction details

Nature of information in new 26AS

(i) Information relating to tax deducted or collected at source
(ii) Information relating to specified financial transaction
(iii) Information relating to payment of taxes
(iv) Information relating to demand and refund
(v) Information relating to pending proceedings
(vi) Information relating to completed proceedings

As you are aware that as a part of the Covid-19 relief measures, the Finance Minister recently announced a package of Rs. 3 lac crore for extending credit guarantee for additional working capital loans to Business Enterprises including MSMEs. Operational guidelines and FAQs in this regard have been issued, which are attached herewith for your reference. 
Please find below salient features of the same:

  1. The scheme shall be called as ‘Emergency Credit Line Guarantee Scheme’ and the loan facility shall be called ‘Guaranteed Emergency Credit Line’.
  2. Under the scheme, National Credit Guarantee Trustee Company Ltd (NCGTC) shall provide 100% Guarantee coverage for the emergency credit line being offered by Banks and NBFCs to the Business Enterprises and MSMEs.
  3. The benefit under this scheme is available to all Business Enterprises including MSMEs having any kind of loan outstanding from Banks and NBFCs. Any borrower, who doesn’t want to avail emergency credit line under the scheme, can opt out of the scheme.
  4. The amount of emergency credit line available to a borrower shall be upto 20% of loan outstanding at Feb 29, 2020 from all the lenders put together.
  5. The borrower should not have overall loan outstanding of more than Rs. 25 cr at Feb 29, 2020 from Banks and NBFCs. The borrower should not have turnover of more than Rs. 100 cr for FY2019-20. If the accounts for FY2019-20 are not audited/finalized, the borrower may declare the turnover to the lending institution.  
  6. The borrower should not have any overdue exceeding 60 days (including SMA2 or NPA) in any of the loan facilities at Feb 29, 2020.
  7. Interest rate shall be capped at 9.25% for loan from Banks and at 14% for loans from NBFCs.
  8. The emergency credit line shall be in the nature of a working capital term loan for a period of four years with principal moratorium of one year. In other words, the borrowers would be required to pay only interest on this facility for first year.
  9. There shall not be requirement of any additional collateral security for the emergency line of credit. However, the Bank or NBFC can create charge on the assets financed under the Scheme within 3 months from the date of disbursal.   


In view of the extension of lockdown and continuing disruption on account of COVID-19, all commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, All-India Financial Institutions, and Non-banking Financial Companies (including housing finance companies) (“lending institutions”) are permitted to extend the moratorium by another three months i.e. from June 1, 2020 to August 31, 2020 on payment of all instalments in respect of term loans (including agricultural term loans, retail and crop loans). Accordingly, the repayment schedule for such loans as also the residual tenor, will be shifted across the board. Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period.

In respect of working capital facilities sanctioned in the form of cash credit/overdraft (“CC/OD”), lending institutions are permitted to allow a deferment of another three months, from June 1, 2020 to August 31, 2020, on recovery of interest applied in respect of all such facilities. Lending institutions are permitted, at their discretion, to convert the accumulated interest for the deferment period up to August 31, 2020, into a funded interest term loan (FITL) which shall be repayable not later than March 31, 2021.
(ii) Easing of Working Capital Financing

In respect of working capital facilities sanctioned in the form of CC/OD to borrowers facing stress on account of the economic fallout of the pandemic, lending institutions may, as a one-time measure,
(i) recalculate the ‘drawing power’ by reducing the margins till August 31, 2020. However, in all such cases where such a temporary enhancement in drawing power is considered, the margins shall be restored to the original levels by March 31, 2021; and/or,
(ii) review the working capital sanctioned limits upto March 31, 2021, based on a reassessment of the working capital cycle.

CBDT gives wholesalers relief on electronic payment norms

Delhi : The Central Board of Direct Taxes (CBDT) has pruned the list of electronic payments methods wholesalers can offer, in a bid to make payment options more relevant to a business’ customer base. CBDT said in a circular that wholesalers need not offer certain electronic payment methods, such as debit cards powered by RuPay, unified payments interface (UPI) and UPI quick response code, which are generally used by retail customers. They were made compulsory for businesses in 2019 with the aim of promoting a less-cash economy. The move to exempt wholesalers from compulsorily offering these payment options is based on industry suggestions that these modes are more suitable for retail transactions and usually have a maximum payment limit per transaction, or per day, which do not apply to wholesalers, who receive payments through other electronic modes such as real-time gross settlement.

MSMEs to get loans at 9.25% under Centre’s Rs 3-trillion package  

Delhi : The Union Cabinet on Wednesday approved additional funding of up to Rs 3 trillion at a concessional rate of 9.25 per cent through the Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector hit hard by the coronavirus crisis. The ECLGS was the second-biggest component of Rs 21 trillion comprehensive package announced by Finance Minister Nirmala Sitharaman last week. Under the scheme, 100 per cent guarantee coverage will be provided by National Credit Guarantee Trustee Company (NCGTC)for additional funding of up to Rs 3 trillion to eligible MSMEs and interested mudra borrowers, in the form of a guaranteed emergency credit line (GECL) facility, an official statement said. For this purpose, a corpus of Rs 41,600 crore shall be provided by the Government of India spread over the current and the next three financial years, it said. The Cabinet, headed by Prime Minister Narendra Modi, also approved that the scheme would be applicable to all loans sanctioned under GECL Facility during the period from the date of announcement of the scheme to October 31 or till an amount of Rs 3 trillion crore is sanctioned under the GECL, whichever is earlier.

WhatsApp allowed for GST ,Excise related virtual hearing


RBI may extend moratorium on repayment of loans: Report

Delhi : With the government extending the nationwide lockdown up to May 31, the Reserve Bank of India (RBI) is likely to extend the moratorium on repayment of loans for three more months, according to an SBI research report. On Sunday, the National Disaster Management Authority (NDMA), the nodal department, announced lockdown 4.0 till May 31 to check the spread of the novel coronavirus. The lockdown was first announced by Prime Minister Narendra Modi on March 24 for 21 days in a bid to combat the COVID-19 pandemic. It was first extended till May 3 and again till May 17. In March, RBI had allowed a three-month moratorium on payment of all term loans due between March 1, 2020 and May 31, 2020. “With the lockdown now extended up to May 31, we expect RBI to extend the moratorium by three months more,” SBI’s research report- Ecowrap said. The report said the moratorium for three more months will imply that companies need not pay till August 31, 2020, and this means that there is almost minimal possibility of companies being able to service their interest liabilities then in September. Failing to repay the interest liabilities will mean the account might be classified as non-performing loans as per the RBI norms.


Govt withdraws order to firms to pay full wages during lockdown

Delhi : The government has withdrawn its order directing companies and commercial units to pay full wages to workers even when they are not in operation during the COVID-19-induced nationwide lockdown, which began on March 25. The lockdown, imposed to prevent the spread of the novel coronavirus, entered its fourth phase on Monday. The government’s move is expected to bring relief to a large number of industries and companies which were unable to pay full wages to their employees. While issuing guidelines for the lockdown’s fourth phase, Union Home Secretary Ajay Bhalla’s order on Sunday said, “Whereas, save as otherwise provided in the guidelines annexed to this order, all orders issued by National Executive Committee (NEC) under Section 10(2)(1) of the Disaster Management Act, 2005, shall cease to have effect from 18.05.2020.” Sunday’s guidelines mentioned six sets of standard operating protocols, mostly related to movement of people, which will continue to remain in force.


Govt notifies cut in EPF contribution to 10% for May, June, July

Delhi : Labour ministry, on Monday, notified lower rates of provident fund contribution at 10%, thus increasing the take home salary of 4.3 crore provident fund subscribers and giving relief to 6.5 lakh establishments. The existing rate of contribution by both employee and employer is 12%. The move, which comes days after finance minister Nirmala Sitharaman announced the reduction in PF rates for three months as part of the government’s Rs 20 lakh crore stimulus package, will infuse Rs 6,750 crore liquidity into the system. Thai would be applicable on May-June-July salary period. This would be applicable to all establishments covered under the Employees Provident Fund Organisation including the exempted establishments. However, government which is the employer in the case of the central public sector enterprises and state public sector will continue to pay 12% as its share. Even establishments covered under the earlier announced Rs 1.7 lakh crore Pradhan Mantri Garib Kalyan Yojana will not be covered under the said notification.


GST Officials seek Directors Remuneration Information


Finance Minister announces new horizons of growth; structural reforms across Eight Sectors paving way for Aatma Nirbhar Bharat


Not furnishing PAN or Aadhaar? You won’t get this latest benefit announced by Modi govt

Delhi : Not furnishing PAN/Aadhaar for income tax purposes? The benefit of latest reduction in the rates of tax deducted at source and tax collected at source will not apply to those not furnishing PAN or Aadhaar. In view of the COVID-19 pandemic, the Central government has reduced rates of TDS and TCS on various transactions by 25 per cent. However, it won’t apply to those who have to pay higher tax on account of not furnishing the PAN or Aadhaar numbers.


Relief for Taxpayers! ITR filing deadline for FY19-20 extended to November 30

By: Priyadarshini Maji

Updated: May 13, 2020 8:12:50 PM

The FM, announced various direct tax related measures for taxpayers. This was announced by Finance Minister Nirmala Sitharaman today while sharing the details of the stimulus package announced by PM Narendra Modi to revive the economy on Tuesday.


Getting loans for MSMEs made easier: FM Sitharaman announces Rs 3 lakh crore collateral free loans

By: FE Online

Published: May 13, 2020 6:28:23 PM

Credit and Finance for MSMEs: To help out stressed MSMEs in dire times, the government will also take burden of Rs 20,000 crore subordinate debt, benefiting 2 lakh such businesses.


Following measures were announced today:-

  1. Rs 3 lakh crore Emergency Working Capital Facility for Businesses, including MSMEs

To provide relief to the business, additional working capital finance of 20% of the outstanding credit as on 29 February 2020, in the form of a Term Loan at a concessional rate of interest will be provided. This will be available to units with upto Rs 25 crore outstanding and turnover of up to Rs 100 crore whose accounts are standard. The units will not have to provide any guarantee or collateral of their own. The amount will be 100% guaranteed by the Government of India providing a total liquidity of Rs. 3.0 lakh crores to more than 45 lakh MSMEs.

  1. Rs 20,000 crore Subordinate Debt for Stressed MSMEs

Provision made for Rs. 20,000 cr subordinate debt for two lakh MSMEs which are NPA or are stressed. Government will support them with Rs. 4,000 Cr. to Credit Guarantee Trust for Micro and Small enterprises (CGTMSE). Banks are expected to provide the subordinate-debt to promoters of such MSMEs equal to 15% of his existing stake in the unit subject to a maximum of Rs 75 lakhs.

  1. Rs 50,000 crores equity infusion through MSME Fund of Funds

Govt will set up a Fund of Funds with a corpus of Rs 10,000 crore that will provide equity funding support for MSMEs. The Fund of Funds shall be operated through a Mother and a few Daughter funds. It is expected that with leverage of 1:4 at the level of daughter funds, the Fund of Funds will be able to mobilise equity of about Rs 50,000 crores.

  1. New definition of MSME

Definition of MSME will be revised by raising the Investment limit. An additional criteria of turnover also being introduced. The distinction between manufacturing and service sector will also be eliminated.

  1. Other Measures for MSME

e-market linkage for MSMEs will be promoted to act as a replacement for trade fairs and exhibitions. MSME receivables from Government and CPSEs will be released in 45 days

  1. No Global tenders for Government tenders of up to Rs 200 crores.

General Financial Rules (GFR) of the Government will be amended to disallow global tender enquiries in procurement of Goods and Services of value of less than Rs 200 crores

  1. Employees Provident Fund Support for business and organised workers

The scheme introduced as part of PMGKP under which Government of India contributes 12% of salary each on behalf of both employer and employee to EPF will be extended by another 3 months for salary months of June, July and August 2020. Total benefits accrued is about Rs 2500 crores to 72.22 lakh employees.

  1. EPF Contribution to be reduced for Employers and Employees for 3 months

Statutory PF contribution of both employer and employee reduced to 10% each from existing 12% each for all establishments covered by EPFO for next 3 months. This will provide liquidity of about Rs.2250 Crore per month.

  1. Rs 30,000 crores Special Liquidity Scheme for NBFC/HFC/MFIs

Government will launch Rs 30,000 crore Special Liquidity Scheme, liquidity being provided by RBI. Investment will be made in primary and secondary market transactions in investment grade debt paper of NBFCs, HFCs and MFIs. This will be 100 percent guaranteed by the Government of India.

  1. Rs 45,000 crores Partial credit guarantee Scheme 2.0 for Liabilities of NBFCs/MFIs

Existing Partial Credit Guarantee scheme is being revamped and now will be extended to cover the borrowings of lower rated NBFCs, HFCs and other Micro Finance Institutions (MFIs). Government of India will provide 20 percent first loss sovereign guarantee to Public Sector Banks.

  1. Rs 90,000 crore Liquidity Injection for DISCOMs

Power Finance Corporation and Rural Electrification Corporation will infuse liquidity in the DISCOMS to the extent of Rs 90000 crores in two equal instalments. This amount will be used by DISCOMS to pay their dues to Transmission and Generation companies. Further, CPSE GENCOs will give a rebate to DISCOMS on the condition that the same is passed on to the final consumers as a relief towards their fixed charges.

  1. Relief to Contractors

All central agencies like Railways, Ministry of Road Transport and Highways and CPWD will give extension of up to 6 months for completion of contractual obligations, including in respect of EPC and concession agreements

  1. Relief to Real Estate Projects

State Governments are being advised to invoke the Force Majeure clause under RERA. The registration and completion date for all registered projects will be extended up to 6 months and may be further extended by another 3 months based on the State’s situation. Various statutory compliances under RERA will also be extended concurrently.

  1. Tax Relief to Business

The pending income tax refunds to charitable trusts and non-corporate businesses and professions including proprietorship, partnership and LLPs and cooperatives shall be issued immediately.

  1. Tax related measures
  • Reduction in Rates of ‘Tax Deduction at Source’ and ‘Tax Collected at Source” – The TDS rates for all non-salaried payment to residents, and tax collected at source rate will be reduced by 25 percent of the specified rates for the remaining period of FY 20-21.This will provided liquidity to the tune of Rs 50,000 Crore.
  • The due date of all Income Tax Returns for Assessment Year 2020-21 will be extended to 30 November, 2020.  Similarly, tax audit due date will be extended to 31 October 2020.
  • The date for making payment without additional amount under the “Vivad Se Vishwas” scheme will be extended to 31 December, 2020.

Govt plans tax holiday for new investments amid Covid-19 outbreak  

Delhi : India’s trade ministry is proposing a tax holiday for companies bringing new investments as the government explores measures to support the economy amid the coronavirus pandemic, according to people familiar with the matter. The proposal to give a 10-year full tax exemption to companies making new investment upwards of $500 million is being evaluated by the finance ministry, said the people, who asked not to be identified citing rules. The plan requires companies to start operations within three years from June 1, and will cover sectors including medical devices, electronics, telecom equipment and capital goods, they said. Another variant of the programme will be to provide a four-year tax holiday to companies that invest $100 million or more in labour-intensive sectors such as textiles, food processing, leather, and footwear. A lower corporate tax rate of 10 per cent is proposed for the next six years, the people said. The proposal has to be approved by the finance ministry and, so far, it hasn’t taken a decision.


PM Modi announcement , Lockdown 4 and more…


No GST on full-time directors’ salary: AAR  

Delhi : The controversy on whether remuneration paid to directors of a company is subject to the goods and services tax (GST) has been put to rest by a recent decision of the Authority for Advance Rulings (AAR), Karnataka bench. Anil Kumar Agrawal, who had received salary as a director from a private company, had approached the bench. In its order dated May 4, the AAR bench has clarified that if the director is an employee of the company, there will be no incidence of GST. However, if the director is a non-executive director (that is, a nominated director), and provides his or her services to the company, then the remuneration paid is subject to GST. In such cases, the ‘reverse-charge’ mechanism will apply and it is the company (recipient of the services) who will pay the GST.


Workers refusing to rejoin factories post lockdown may face pay cuts, disciplinary action  

Delhi : Factories and other establishments in some states may be allowed to cut salaries and initiate disciplinary action against workers who don’t report back to work within a stipulated period once the Covid-19 lockdown is lifted. Labour department officials in states such as Gujarat, Madhya Pradesh, Karnataka and Uttar Pradesh told ET that issuing such an advisory to factories in their states is being considered at the top levels to bring workers back. Gujarat, Madhya Pradesh and Uttar Pradesh have loosened labour laws that will allow companies to hire and fire workers more easily as part of measures to make conditions for companies easier in order to resume economic activity. “While an internal discussion is being held on these lines, a final decision will be taken if the lockdown is not extended beyond May 17,” said a top official in Gujarat’s labour department.


Taxmen are using the lockdown to build stronger cases against defaulters  

Maharashtra : The government has asked its tax officers to start collecting and analysing data on all major tax disputes as they are unable to hit the ground due to Covid19 pandemic. The Central Board of Direct Taxes (CBDT) has asked the tax officers to not issue any notices for now but collect data that will help settle half the pending litigation. In a note to the tax officers CBDT said that identifying issues in all major tax issues would be crucial during next three months. Many suspect that due to the increased ground work by the revenue department the tax demands may become more in-depth and lead to more companies paying up. “There is a major shift in the approach of the government wherein the emphasis is more towards qualitative rather than quantitative measures. The focus is more on identification and strong preparation of cases which are worth picking up for reassessment, said Rahul Garg, partner, Asire Consulting.


MSMEs may get working capital boost with ‘overdraft guarantee’ 

  Delhi : The Modi government is likely to announce the much-awaited stimulus package with focus on micro, small and medium enterprises (MSMEs) in the next couple of days. Multiple sources confirmed that the package will be composite. “On the one hand, it will have guaranteed higher working-capital limit for MSMEs, while on the other, more reform programmes will be initiated to attract investment and ease the way for doing business,” a source said. The package comes as the third phase of the lockdown is set to end on May 17. Despite several relaxations during this phase, industries, especially MSMEs, are having a tough time. According to sources, the broad contours of the package was finalised in the meeting called by Prime Minister Narendra Modi on May 2, which was attended by senior ministers and bureaucrats. While details of the package are being worked out, work is in progress for any legislative change through ordinances. Discussions have been held with the Reserve Bank of India for monetary action, sources said. In fact, to mobilise additional resources, the government, in consultation with the RBI, has decided to raise the total borrowings to Rs.12-lakh crore from the budgeted ?7.8-lakh crore during the current fiscal.

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