Vistra India Update 400

INCOME TAX

1.    Clarification In respect of prescribed electronic modes under section 269SU of the Income Tax Act, 1961 - 

The CBDT had notified ‘Debit card powered by RuPay’ and ‘UPI’ notified as prescribed mode of payments for the purpose of section 269SU. Considering the maximum payment limit prescribed under these modes, which are aren’t relevant for B2B businesses, the CBDT has clarified that Sec. 269SU shall not be applicable in case of person having only B2B transactions and at least 95% of business receipts shall be in any mode other than cash.

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2.    CBDT notifies new Form 26AS, Widen Its Scope To Include Info. Received Under DTAA  / Treaty  

The CBDT has notified new Rule 114-I which prescribes uploading of annual information statement in Form 26AS in the registered account of assessee. A new Form 26AS has been notified for reporting of information related to TDS/TCS, specified financial statements, payment of taxes, demand & refund, pending & completed proceedings & any info. in relation to sub-rule(2) of 114-I which includes info. received under agreement referred to in section 90 or 90A.

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3.    CBDT notifies New ITR Forms for FY 2019-20 

The Central Board of Direct Taxes (CBDT) has notified the new Income Tax Return (ITR) forms for FY 2019-20/ AY 2020-21 (i.e. ITR 1 Sahaj, 2, 3, 4 Sugam, 5, 6, 7 and ITR-V), vide Income-Tax (12th Amendment) Rules, 2020, in line with the amendments made by the Finance Act, 2019.

Further, in the new ITR forms, a new Schedule DI has been inserted to seek details of the investment, deposit and payments made during the extended period till June 2020 for claiming deduction under Chapter VI-A or for rollover of investment in the Financial Year 2019-20.

Here are some details of the new forms:

ITR 1 Sahaj: This form is for individuals being a resident (other than not ordinarily resident) having total income upto Rs 50 lakh, having Income from salaries, one house property, other sources (Interest etc.), and agricultural income up to Rs 5000 (Not for an individual who is either a director in a company or has invested in unlisted equity shares).

ITR 2: This form is for individuals and HUFs not having income from profits and gains of business or profession.

ITR 3: For individuals and HUFs having income from profits and gains of business or profession.

ITR 4: Sugam: For individuals, HUFs and Firms (other than LLP) being a resident having a total income upto Rs 50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE.

ITR 5: For persons other than (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7

ITR 6: For Companies other than companies claiming exemption under section 11.

ITR 7: For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only.

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4.    Instant PAN through Aadhaar based e-KYC

In line with the announcement made in the Union Budget, Hon’ble Union Finance Minister Smt. Nirmala Sitharaman formally launched the facility for instant allotment of PAN (on near to real time basis) today on 28th May, 2020. This facility is now available for those PAN applicants who possess a valid Aadhaar number and have a mobile number registered with Aadhaar. The allotment process is paperless and an electronic PAN (e-PAN) is issued to the applicants free of cost.

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RBI AND FEMA

5.    COVID 19 regulatory package

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 NBFCs (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.

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CUSTOMS

6.    Publishing of rate of exchange for conversion of the foreign currency

The Central Board of Excise and Customs (CBEC) vide Notification No. 46/2020 - Customs (N.T.) notified the rate of exchange for conversion of the foreign currency into Indian currency or vice versa for Export and Import of goods, with effect from 22nd May 2020.

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LABOUR LAWS

7.    Employee Provident Fund Organization (EPFO) reduces provident fund contribution rate to 10% from 12% for the month of May 20, June 20 and July 20 
Due to the Covid-19 situation, first tranche of the economic stimulus package under the theme - ”Self-Reliant India” was announced by the Finance Minister. As part of the package, the finance minister announced that the rate of provident fund (PF) contribution will be reduced to 10% from the existing 12% of basic salary for the month of May 20, June 20 and July 20. In continuance of the same, the Ministry of Labour and Employment, Government of India issued a notification no. 1513 dated 18 May 2020 to notify the reduced rates of 10% with respect to the PF contribution. 

• The notification is applicable to all establishments other than enterprises owned by central government, state government and public sector enterprises and other establishments owned by, or under the control of the Central or State Government, as the case may be, in respect of wages payable by it for the month of May 20, June 20 and July 20.
• The reduced rate of provident fund contribution will be mandatory for both employer and employee; and, would be applicable to all the employees 
• This notification shall not be applicable to the establishments eligible for relief under the Pradhan Mantri Garib Kalyan Yojna guidelines issued by the EPFO. 
• Hence, for the establishments registered under the Act other than Government enterprises/establishments and establishments already seeking relief under the Pradhan Mantri Garib Kalyan Yojna, the provident fund contribution which shall be paid by the employer to the provident fund shall be 10(ten) per cent and the employee's contributions shall be equal to the contribution payable by the employer in respect of wages payable to employees for the months of May, June, July 2020

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8.    Frequently asked questions (FAQ) released by Employee Provident Fund Organization (EPFO) on reduction of provident fund contribution rate to 10% from 12% for the month of May 20, June 20 and July 20 

EPFO in its notification No.1513 dated 18 May 2020 had reduced the statutory rate of provident fund contribution to 10% from 12%. EPFO has released Frequently Asked Questions (FAQ) on 19 May 2020 to bring more clarity on the notification:

• The reduction in rate of provident fund contribution from 12% to 10% is for wage months May, June and July 2020 for all class of establishments covered under the Provident Fund Act.  
• The reduced rate is not applicable for establishments like central and state public sector enterprises or any other establishment owned or controlled by or under control of the central government or state government. These establishments shall continue to contribute @ 12% of monthly pay.
• The reduced rate is also not applicable for Pradhan Mantri Garib Kalyan Yojana (PMGKY) beneficiaries since the entire employee’s and employer’s contribution is to be contributed by the central government for specified period.
• Reduction in rate of provident fund contribution from 12% to 10% of monthly pay is intended to help employer and employee to tide over the immediate liquidity crisis to some extent due to COVID-19 situation.
• The reduced rate of contribution at 10% is minimum rate of contribution during the month of May, June and July 2020. The employer and employee can contribute at higher rate also.

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9.    One-Time Relaxation given for Employees State Insurance (ESI) contributions for the period October 2019 to March 2020
Employees State Insurance Corporation(ESIC) vide circular No.P-11/12/Misc/1/2019(M)-Rev. II dated 18 May 2020 has given one time opportunity to those employers who did not file ESI contribution for the period October 2019 to March 2020 within  the 42 days after end of contribution period up to  11 June 2020. 

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10.    Process outlined by Employees Provident Fund Organization (EPFO) to claim provident fund advances due to COVID-19 situation
Employees Provident Fund Organization (EPFO) has outlined the process to facilitate members for claiming Provident Fund advances in their portal. Refer to the link http://unifiedportal-mem.epfIndia.gov.in  for details. The process is given below:

    Members to log in http://unifiedportal-mem.epfIndia.gov.in   
    Go to online services and click on claim tab
    Enter your bank account number and verify
    Click on “Proceed for online claim”
    Select provident Fund(PF) advance(Form 31) from the drop down menu
    Select purpose as “outbreak of Pandemic(COVID-19)” from the drop down menu
    Enter the amount required and upload the scanned copy of cheque and enter your address
    Click and get “Aadhaar OTP”
    Enter the OTP received on Aadhaar linked mobile
    Your claim is submitted