The Finance Minister Nirmala Sitharaman announced a slew of relief measures for small businesses affected by the CoronaVirus, just a few hours ago.
Amidst the national lockdown, the Government, backed by Nirmala Sitharaman, introduced statutory and regulatory compliances to help businesses deal with the pandemic.
The Finance Ministry has come up with a series of measures regarding statutory and regulatory compliance. #FinanceMinister #IndiaFightsCorona #Financial #SMEs
— Instamojo (@instamojo) March 24, 2020
Tax Filing Deadline Extension:
The Last Date to file belated Income Tax Return for all businesses for the FY 2018-19 is extended from Mar 31st to June 30th 2020.
The deadline for GST returns filing for March, April and May is now June 30th, 2020.
The Last date to link PAN card and Aadhar to, has been extended from March 31st to June 30th.
Prevention of insolvency proceedings
The Finance Minister increased the insolvency threshold of default to Rs. 1 Crore from the existing Rs. 1 Lakh. This regulation is to prevent any insolvency proceedings for MSMEs.
Insolvency and Bankruptcy Code: The existing threshold of ₹1 lakh hiked to ₹1 crore. This is done to protect MSMEs.#FinanceMinister #IndiaFightsCorona #Financial #MSMEs
— Instamojo (@instamojo) March 24, 2020
Also, the Government is considering a suspension of Section 7, 9 and 10 of the Insolvency and Bankruptcy Code. This helps prevent insolvency proceedings for companies.
Zero Charges
Bank account holders do not have to maintain a minimum monthly balance. The Government will do away with non-maintenance charges for 3 months.
For 3 months from today, all ATM withdrawals are also free, for all banks, including debit card withdrawals.
For late payments
- The interest rate on late payments is 9%. (previous rate -12%)
- Interest on delayed deposit for TDS is 9% (previous rate – 18%)
- Companies with a turnover of less than Rs 5 crore, do not have to pay interest or a late fee penalty.
- New interest at 9% for companies with a turnover of more than Rs 5 crore, but no late fee penalty.
- The payment date for ‘Sabka Vishwas’ scheme, which settles the dispute in the indirect tax regime, is extended till June 30, 2020.
Also read: Government loan schemes to help your business during the Coronavirus COVID-19 epidemic
Corporate Relief Schemes
- The Government is relaxing board meetings for a period of 60 (till next two quarters).
- Company directors need not comply with the minimum residency requirement.
- Independent directors do not need to hold any meetings in FY20. It will not be a violation.
- Besides this, the FM said all regulators and RBI and MoF are working together to monitor the development of the financial market.
For newly incorporated companies: 6 more months to file commencement of business report.#FinanceMinister #IndiaFightsCorona #Financial #SMEs
— Instamojo (@instamojo) March 24, 2020
Indian Monetary Committee Meeting On Current Financial Environment
On Friday, the Monetary Policy Committee decided to hold its meeting a day early to undertake a careful evaluation of the current financial conditions for the country.
Here were some of the key takeaways that would affect small businesses:
- The government announced a sizeable reduction to 4% in the policy repo rate and for maintaining the accommodative stance of monetary policy as long as necessary to revive growth
- Exemption on incremental credit disbursed by banks between January 31 – July 31, 2020, on retail loans for automobiles, housing and loans to the MSME sector from the maintenance of cash reserve ratio (CRR).
- The Government states that GDP growth shows signs of slowing down further due to the slowdown of the supply chain. However, the slump in international crude prices could spell good news for India.
Regulations and Relief Measures from Banks:
- Expand liquidity in the system to ensure that financial markets and institutions function normally in the face of COVID-19 related dislocations
- Easier flow of credit for those affected by the pandemic.
- Repayment pressures reduced and improved access to working capital efforts are in place to ease financial stress caused by COVID-19.
- Endeavour to improve the functioning of markets in view of the high volatility experienced with the onset and spread of the pandemic.
Working capital and term loans:
As on Mar 1, 2020:
- All banks and lending institutions are permitted to allow a moratorium of three months on payment of instalments in respect of all term loans.
- Lending institutions are permitted to allow a deferment of three months on payment of interest on working capital.
- The accumulated interest for the period can be paid after the expiry of the deferment period.
- This move will not result in asset classification downgrade.
- Lending institutions recalculate drawing power by reducing margins or by reassessing the working capital cycle for working capital loan borrowers.
These rules will also not hammier the credit history of the companies involved.
We will keep you posted on all the Government and bank updates to help your business during the coronavirus pandemic.
Meanwhile, you can use Instamojo to collect your online payments. Our NEFT services are 24*7.
