1. RS. 3 LAKH CRORES COLLATERAL-FREE AUTOMATIC LOANS FOR BUSINESS, MSMES

Business/MSMEs have been badly hit due to Covid-19 need addition funding to meet operational liabilities built up, buy raw material and restart business, therefore, in this regard, the Govt. has proposed Rs. 3 lakh crores Collateral-free Automatic Loans for Business, including MSMEs.

An emergency credit line has been allowed to business/MSMEs from banks and NBFCs up to 20% of their entire outstanding credit as on 29.2.2020

Eligibility

Borrowers having outstanding up to Rs. 25 Crores and turnover of Rs. 100 crores are eligible to take benefit.

Tenure

The tenure of the loan would be 4 years with moratorium of 12 months on Principal repayment. 100% credit guarantee

There will be 100% credit guarantee cover to Banks and NBFCs on principal and interest. Validity

This scheme can be availed till Oct 31, 2020 No fresh collateral

It has been clearly specified that there would not be any guarantee fee or fresh collateral requirement for availing benefit under the scheme.

2.RS. 20,000 CRORES SUBORDINATE DEBT FOR STRESSED    MSMES

With a viewto aidthefunctioning MSMEs that are NPAorare stressed, the Govt. hasproposed provision of Rs. 20,000 crores as subordinate debt, around two lakh MSMEs would benefit from the scheme. Under the scheme promoters of the MSME will be given debt by banks which will then be infused by promoter as equity in the unit

3.RS.50,000 CRORES EQUITY INFUSION FOR MSMES THROUGH FUNDS OF FUNDS

In orderto addressthe issue of severe shortage ofequityin MSMEs during these toughtime, The Govt. hasproposedto setup Funds of Funds(FoF) with corpusof Rs. 10,000. The corpuswould provide equity funds for MSMEs with growth potential and viability. The FoF will be operated though Mother Fund and few Daughter funds. The fund structure will help leverage Rs. 50,000 cr. Of funds at daughterfundslevel. Thisstepwouldhelp toexpand MSMEsize as wellascapacityand will also encourage listing of MSMEs on main board of stock exchanges.

4.AMENDMENT TO DEFINITION OF MSME

The Govt. has announced revised definition of MSMEs whereby the investment limit is proposed to be revised upwards, additionalcriteria of turnover would also be introduced. Thenewdefinition also eliminates the distinction between the manufacturing sector and services sector as againstthe existing criteria

As per revised definition, a company can be classified as Micro if investment is up to Rs 1 crore, turnover up to Rs 5 crore.

A company can be classified as Small if investment is up to Rs 10 crore, turnover up to Rs 50 crore. A company can be classified as Small if investment is up to Rs 20 crore, turnover up to Rs 100 crore.

The amendment in definition will accommodate more units under the MSMEs segment which would further enable them to avail special perks available to MSMEs. On one hand more units will be included under ambit of MSME and on other side the existing units would not fear of losing the status of MSME due to increase in Investment limits.

 5.GOVT. EXPANDS SCOPE FOR GLOBAL TENDERS FOR MSMES

In order to protect the MSMEs from unfair competition from foreign companies, the Govt. has decided to take a majorstep towards Self-reliant India bydisallowing Government procurement tenders up 200 crores for foreign Companies, this step would give major boost to medium enterprises in India which faces tough competition at hands of foreign players.

6.OTHER MEASURES FOR MSMES

In order to curb the marketing and liquidity problems, Govt. aims to promote e- market linkage for MSMEs which would act as a replacement for trade fairs and exhibitions. The Finance Minister also made major announcement that MSMEs receivable from Govt. and CPSEs shall be released in 45 days.

 7.EMPLOYEES PROVIDENT FUND (EPF) SUPPORT FOR     BUSINESS AND WORKERS

Inordertoincreasetakeawaysalaryfortheemployee, andtosupportbusinesses, the Govt. had proposed underthe Pradhan Mantri Garib Kalyan Package (PMGKP), a payment of 12% ofemployer and 12% of employee contribution was made into eligible EPF accounts for month of Mar, Apr, and May now this has been proposed to further extend for next three months of Jun, July and August for wage earner below Rs. 15000 p.m. and business having less than 100 workers.

8.REDUCTION IN EPF CONTRIBUTION FOR NEXT 3 MONTHS

The Statutory PF contribution for both employee and Employer has been reduced from 12% to 10% for all establishments covered by EPFO. For Govt. undertaking the contribution shall remain at 12%

9.SPECIAL LIQUIDITY SCHEME FOR NBFCS, HOUSING FINANCE COS. AND MICRO FINANCE INSTITUTIONS

In order to deal in testing times, the Finance Ministry has come up with a special scheme of worth Rs. 30,000 crore for non-banking finance companies (NBFCs), housing finance companies (HFCs) and micro-financeinstitutions(MFIs). The investmentswill be made inboth primaryand secondary market transactions in investment grade debt paper of these institutions.

In addition to that, the Government has also announced Rs 45,000 crore partial credit guarantee scheme for NBFCs and 20% of loss will be borne by the Guarantor, i.e., GoI.

10. EXTENSION OF REGISTRATION AND COMPLETION DATE OF REAL ESTATE PROJECTS

There is need of the hour to provide aid to the struggling real estate sectors, as they are unable to complete their project on time due to situation arising from deadly virus around the corner.

Therefore, the Govt. has decided to extend the registration protocol and completion date of project which are covered under RERA by 6 months for all registered projects expiring on or after March 25, 2020 without individualapplications.

This measure will indeed de-stress real estate developers and ensure completion of projects so that home buyers are able to get delivery of their booked house with new timelines.

11.ONE TIME MONEY INFUSION FOR DISCOMS

In order to deal contingences and unprecedented cash inflow problem facing by the

DISCOMS, the Govt. hasdecidedtoinfuseliquidityof Rs. 90,000 croreagainstreceivables. However, the loans to be given against state guarantee forexclusive purpose of discharging liabilities of Discoms to Gencos.

L I ST OF DI R E C T – TAX M E A S U R E S

A N N O U N C E D BY THE F I N A N C E M I N I S T E R

1.LIST OF ANNOUNCEMENTS

The Finance Minister has also announced several relief under the Income-tax Act, which are given below:

i. Therates of TDS/TCSinrespect of specifiedpayments/receipts shallbereduced by 25%. This concessionintherate shallbeavailable forthetaxdeducted or collectedbetween 14-05- 2020 till 31-03-2021. This relief shall not be available to a salaried and non-resident taxpayer.

The tentative rates of TDS and TCS are specified in the below table.

ii. All pending refunds to charitable trust and non-corporate businesses and professions shall be released

iii. Due date of all Income-tax return for the Financial Year 2019-20 will be extended from July 31, 2020 and October       31, 2020 to November 30,2020

iv. The due date for tax audit under section 44AB shall be extended from September 30, 2020 to October 31, 2020

v. The last date for opting Vivad se Vishwas Scheme without paying additional 10% of the disputed tax shall be                 extended till December 31, 2020

vi. Due date of 30-09-2020 for completion of assessments shall be extended to 31-12-2020. Where assessments are          getting barred on 31-03-2021, it shall be extended to 30-09-2021.

By reducing the rate of TDS/TCS, the Govt. helps taxpayers to have more liquidity in their hands. In this difficult time, this announcement will benefit self-employed, professionals and senior citizens earning interest incomeorrentalincome. It does not provide anyrelief tothe salaried persons. However, it should be noted that the relaxation in the rate of TDS/TCS will not have any impact on the ultimatetaxliabilityof ataxpayer. Thus, anydeficitintaxliability, due toreducedrateof TDS/TCS, should be payable through advance-tax instalments. Any short-fall in the deposit of advance-tax will attract interest under section 234B and 234C. The first instalment of advance-tax is due on 15 June 2020. A taxpayer should re-calculate his advance-tax liability to be deposited next month to avoid any payment of interest.

 2. TENTATIVE RATES OF TDS

3.TENTATIVE RATES OF TCS

Note: It should be noted the rate of TDS/TCS shall be the same in the following situations:

1. Where tax is deductible from salary or provident fund under Section 192 or Section 192A respectively
2. Where tax is deductible from any sum not being in the nature of payment for a contract, professionalfees, interest, rent, dividend, commission, Thus, noconcessionin therate of TDSfromthesumpayablein the natureof lotteryincome, considerationforthe purchase of immovable property, etc.
3. Where the sum is paid or payable to a non-resident person
4. Where a resident person does not furnish his PAN or Aadhaar and the tax is deductible at a higher rate under Section 206AA or Section 206CC, as the case may be.