What’s in it for you? COVID-19 Economic Packages for Businesses and Individuals

Last updated on 30-03-2020 3.30PM

For an Individual

Measures announced by RBI

• These measures are applicable to all types of banks, financial institutions and NBFC’s
• No charges of non-maintenance of minimum balance shall be levied
• No charges for use of other banks ATM’s for cash withdrawal

Rescheduling of Payments – Loans

• 3-month extension to pay the EMI’s that fall between 01.03.2020 to 31.05.2020
• This includes all loans ( For Ex. Home Loans, Personal Loans, Car Loans, Educational loans, etc )
• This also includes all credit card dues
• However, interest shall continue to accumulate on the unpaid principal, as per the loan account rate of interest. Such accumulated interest shall be recovered immediately after the completion of this period
• No Late fee shall be charged

Classification of NPA / CIBIL Score

• No Loan/Credit card account shall be considered as defaulted for not servicing their EMI’s during this period
• Effectively all of your dues / EMI’s can be deferred until 31.05.2020 without any late fees

Our Take : If you receive your salary as scheduled, continue making the EMI payments. Avoid NOT not paying to credit card as credit cards charge very high interest (between 28% to 52%). At the least, pay whatever you can

Please click here for the circular/notification.

Measures announced by Income Tax Department

• Income tax returns for the FY 2018-2019, whose original due date was 31.07.2019 was supposed to be closed by 31.03.2020. This has been extended to 30.06.2020. However, there is no waiver of interest us 234A, B & C and late filing for late filing fee u/s 234E and waiver of various penal provisions under the Income-tax Act
• Vivaad Se Vishwas Scheme, 2020 whose closing date was 31.03.2020 has been extended to 30.06.2020
• Any due date which falls between 20.03.2020 to 29.06.2020 will be revised to 30.06.2020 including investments to be made under Section 80C, etc.
• Aadhaar – PAN Linking deadline moved to 30.06.2020
• A reduced interest rate of 9% (instead of 12% or 18% as applicable) for Deposit of Advance Tax, Self Assessment Tax, TDS, TCS, etc between 20.03.2020 to 30.06.2020

Please click here for the circular/notification.

For a Business

Measures announced by RBI

These measures are applicable to all types of banks, financial institutions and NBFC’s

Rescheduling of Payments – Loans

• 3-month extension to pay the EMI’s that fall between 01.03.2020 to 31.05.2020
• This includes all types of loans such as Term Loans, Business Loans, Crop Loans, Agri Loans, etc.
• However, interest shall continue to accumulate on the unpaid principal, as per the loan account rate of interest. Such accumulated interest shall be recovered immediately after the completion of this period
• On CC/OD accounts, banks have been given instructions to review the limit of CC/OD and increase the same if appropriate, to manage economic impact due to lockdown
• The interest payable on CC/OD accounts shall also be given a deferment period until 31.05.2020.
• No Late fee shall be charged

Classification of NPA / CIBIL Score

• No Loan account shall be considered as defaulted for not servicing their EMI’s/Interest during this period
• Any actions such as review of margin limits on CC/OD accounts, additional working capital loans or enhanced capital will be due to the economic condition and shall not be considered as Asset Classification Downgrade.
• Effectively all of your dues / EMI’s can be deferred until 31.05.2020 without any late fees. Also, it is to be examined the ground level implementation of additional working capital loans to the needy.

Please click here for the circular/notification. 

Measures announced for Direct Taxes

• Income tax returns for the FY 2018-2019, whose original due date was 31.07.2019 was supposed to be closed by 31.03.2020. This has been extended to 30.06.2020. However, there is no waiver of interest us 234A, B & C and late filing for late filing fee u/s 234E and waiver of various penal provisions under the Income-tax Act.
• Vivaad Se Vishwas Scheme, 2020 whose closing date was 31.03.2020 has been extended to 30.06.2020
• Any due date which falls between 20.03.2020 to 29.06.2020 will be revised to 30.06.2020 such as response to notices/intimations/appeal, etc.
• A reduced interest rate of 9% (instead of 12% or 18% as applicable) for Deposit of Advance Tax, Self Assessment Tax, TDS, TCS, etc between 20.03.2020 to 30.06.2020

Please click here for the circular/notification.

Measures announced for Indirect Tax (GST)

• For aggregate annual turnover less than 5Cr, The due date for GSTR 3B for March, April and May 2020 is revised to 30.06.2020 without any interest, late fee or penalty
• Opting in for composition scheme for FY 2020-2021, whose earlier due date was 31.03.2020, revised due date is Last week of June 2020
• Delayed GST payment made between 20.03.2020 and 30.06.2020, interest will now be at 9% instead of 18% & no late fee/penalty shall be charged
• GST Annual returns for FY 18-19 due date is now revised from 31.03.2020 to Last week of June 2020
• The extended Payment date under Sabka Vishwas Legacy Dispute Resolution scheme is 30.06.2020 without any additional interest.

Please click here for the circular/notification.

Measures announced by Ministry of Corporate Affairs

• No additional fees shall be charged for late filing of any MCA document/return/statement between the moratorium period of 01.04.2020 to 30.09.2020
• Per Section 173 of the Companies Act, 2013 the requirement to hold board meetings stands extended by a period of 60 days till the next 2 quarters.
• The Companies (Auditor’s Report) Order, 2020 shall be made applicable from FY 2020-2021 instead of FY 2019-2020
• Per Section 73(2)(a) of Companies Act, 2013, a requirement for reserves of 20% of deposits maturing in FY 2020-2021 shall be allowed to be complied with, until 30.06.2020
• Per Section 18 of Companies (Share Capital & Debentures) Rules, 2014, to invest or deposit 15% of maturing debentures, shall be allowed to be complied with, until 30.06.2020
• Per Section 10A, for filing a declaration of Commencement of Business for newly incorporated companies, an additional time of 180 days in addition to the current 180 days is granted.
• Per Section 149 of the Companies Act, 2013, every company should have at least 1 director in India for 182 days is now deferred to FY 2020-2021
• Expenses done by a company for prevention of COVID-19 is eligible for CSR (Corporate Social Responsibility) deduction

Please click here for the circular/notification.

Measures announced for Employees Provident Fund

• The government to reimburse the EPF dues ( employer + employee share of 24%) to the employer if an employer has (1) 90% of employees earning < 15,000 and (2) Companies having < 100 employees. Official notification/circular is awaited as of now.
• EPFO has amended the EPFO act to allow up to 75% PF share or 3 months basic wage, whichever is lower, qualifying as Non-Refundable PF advance. This is applicable to any epidemic/pandemic as notified by the government. See the notification here. 

We shall keep this updated.