How Do Economic Measures Announced By FM Nirmala Sitharaman Help During COVID-19?

Let’s look at the announcements FM Nirmala Sitharaman made yesterday, and see if the economy will get any relief in this time of slowdown because of the unprecedented conditions.

As the country goes into complete lockdown to battle the exponential spread of deadly Corona virus, the Finance Minister Nirmala Sitharaman announced today a slew of economic measures to provide some relief to the industry as well as common people.

I have quickly listed the gist of the measures themselves first, followed by a short discussion on how these may help – so please read through to the bottom.

For tax returns

Those who have not filed their income tax returns for the last financial year i.e. 2018-19 can now do so till June 30, 2020. Earlier this deadline was March 31, 2010. The penalty on delayed filing would now be 9% instead of 12%.

For delayed filing of TDS the interest rate is reduced to 9% from 18%.

Aadhar and PAN linking deadline is extended to June 30 from March 31.

Last date for Vivad Se Vishwas scheme also extended to June 30. Additional amount of 10% will no longer be required to be paid. The Direct Tax Vivad Se Vishwas Bill 2020 was tabled on February 5 in the parliament and its key objective is to collect taxes and minimise litigation. It offers a complete waiver on interest and penalty to the taxpayers who pay their disputed taxes on or before March 31, 2020.

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All compliances under Income Tax Act, Wealth Tax Act, Benami Transaction Act, Black Money Act, Vivaad se Vishwaas, have been extended to June 30, 2020

For Financial Services

All ATM withdrawals for the next three months will be free of charges, irrespective of the bank. This will help reduce avoidable crowding at bank branches and ease urgent withdrawals.

Minimum balance requirements waived off. State Bank of India has already done away with penalties for not maintaining a minimum balance in bank accounts.

For GST

GST return deadline for March, April, May extended to June 30.

Companies with turnover up to Rs 5 crore will not have to pay interest, penalty or late fee for filing delayed returns. Those with turnover above 5 crores will, however, be required to pay interest at 9%.

For Companies

Mandatory requirement of holding a Board meeting is put off by sixty days for the next two quarters.

A moratorium is being issued regarding the MCA21 registry from April 1 till Sep 30. No additional fees will be levied for late filing.

Insolvency and Bankruptcy Code

Threshold for default under Insolvency and Bankruptcy Code (IBC) raised by ten times to to Rs 1 crore. Currently, the threshold of triggering insolvency cases stands at Rs 1 lakh.

Sec 7, 9, 10 of the IBC will be suspended for a period of six months if this situation continues beyond April.

For Customs

Deadline for Sabka Vishwaas scheme for indirect taxes has been extended to June 30,2020. No interest will be levied.

Customs clearance, till June 30, will be done 24/7.

How do these measures help?

General economy

These measures may seem irrelevant and unrequired at the moment given that life will be mostly at a standstill during these 21 days of absolute lockdown (except essential services which will continue to be functional).

But normal life will exist even after the severity of the pandemic slowly diminishes. We will still need money for the basic necessities and medicines, to pay our taxes and bills, rent and EMIs, for businesses to be run, and hence it is essential that the government takes adequate corrective measures at the right moment.

How women’s lives will be affected

It may also seem irrelevant to talk about how this pandemic is affecting women because after all this deadly virus doesn’t differentiate between genders but come to think of it, the impact of this total shutdown is greater on women.

Schools and offices are shut down for days now meaning that women are not only working FROM home but working more AT home too, sharing the larger part of household chores without any house helps.

Many women have micro businesses, some of which they run from home. Some of them are even sole earners supporting their families. Their work not only makes them financially independent but also raises their status within the family and society. But with restricted movement and limited purchasing power, their work will also suffer. Hence, it is a matter of concern how this pandemic and resultant loss of business and jobs, are going to impact women in the near future.

An early measure will help

As the Finance Minister said in her address, an economic package was to be announced sooner than later, and it is hoped that the Task Force will announce more such relief measures soon to prevent the economy from crashing completely.

Let’s gear up ourselves to collectively fight out the evil virus. As the PM exhorted in his speech, let’s do our part by staying indoors, staying safe. Let’s stay positive even in these trying times and spread only positive vibes.

Stay home and stay safe, folks.

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