Covid-19 Impact on Taxation & Regulation in India

By Karan Gupta | 6 min read

What's in the page

CORONAVIRUS 2019 - NCov

Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus. Most people infected with the COVID-19 virus will experience mild to moderate respiratory illness and recover without requiring special treatment.  Older people, and those with underlying medical problems like cardiovascular disease, diabetes, chronic respiratory disease, and cancer are more likely to develop serious illness.

Relief Measures by Finance Ministry

Insolvency & Bankruptcy code

Threshold for default

Taxation

  1. Tax returns for financial year 2018-19 can be filed by June.
  2. No extension of penalty on delayed deposit of TDS (tax deducted at source). However, the penalty has been halved to 9% from 18% currently.
  3. The Finance Minister also announced a relaxation in the interest rate applicable on delayed income tax returns (ITRs) to 9 per cent from the existing 12 per cent.
  4. The last date of filing returns for the months of March, April, and May 2020, including composition scheme, extended to June 30.
  5. Extending tax dispute resolution scheme “Vivad Se Vishwas” by three months, to June 30, FM said those availing the scheme will not be required to pay 10 per cent interest on principal as mandated under existing rules.

Regulatory

  1. The deadline for linking Aadhaar with PAN (Permanent Account Number) has been extended to 30 June 2020.
  2. For companies with turnover less than Rs 5 crore, no late fees , penalties, and interest on deferred payment. For companies with turnover over Rs 5 crore, there will be an interest of 9%, down from 18% currently.
  3. Applicability of auditors’ report order (CARO) was supposed to be in force from financial year ending March 2020, that has now been delayed by a year.
  4. For the year financial year 2020, independent directors will not be held for violation if they haven’t held even one meeting.
  5. For newly incorporated companies, the requirement to  file declarations for commencement of business within 6 months has been extended to 12 months now.

21-Day Lockdown by Prime Minister

Stay at home

Every state, district, village in India is under lockdown from midnight (March 25). There will be a complete bar on people from stepping outsides their homes, PM Modi said. He even folded his hands to emphasise his request to citizens to adhere to the call.

Significance of 21-day lockdown

PM Modi explained why he imposed a 21-day lockdown. The PM stated, “It took 67 days for the first lakh people to be infected from coronavirus. It only took 11 days for the next 1 lakh to be infected. Even more scary is the fact that it took only four days for the figure to rise to 3 lakhs”.

Social distancing

Social distancing is the only way to combat novel coronavirus. Social distancing is not only for infected people but for every citizen, including the Prime Minister.

Economic cost

PM Modi said the decision will have an economic cost but saving people’s lives is of paramount interest to his government. He stated, “If we don’t handle these 21 days well, then our country, your family will go backward by 21 years”.

Rs 15,000 crore announcement

PM Modi announced Rs 15,000 crore stimulus to fight COVID-19 to strengthen the health infrastructure of the country. This includes testing facilities related to coronavirus, personal protective equipment, isolation beds, ICU beds and ventilators. The number of other necessary equipment will be increased rapidly.

Avoid rumours

PM Modi appealed to all citizens to avoid believing in rumours or fake news. He also advised people to not take any medicines without consulting doctors.

Steps taken by us to combat Coronavirus

  1. Routinely cleaned work surfaces such as doorknobs keyboards, and tabletops, before opening office doors for employees.
  2. Provided alcohol based sanitizing gel, tissues, and disposable cleaning wipes throughout the office so as to make them accessible to all employees.
  3. To prevent spread of virus and overcrowding at a single place, we organised our employees to our different offices while bringing infrastructure at par through locations.
  4. Put up posters through all our office locations asking employees to take care of self-hygiene while regularly circulating updates by ICMR, Health Ministry and WHO.
  5. Asked our employees to wear a mask and latex gloves when handling documents and encouraged video conferences instead of meeting clients in person with clients.
  6. Provided the facility of working from home to each and every personnel of our firm during the time of quarantine, while being regularly connected using project management and video chat tools.

Precautions to be taken by you

Stay at home, Stay safe, Stay healthy!

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