Relaxations announced by Finance Ministry

COVID-19 has caused unprecedented challenges resulting into uncertainty in the economy. On account of COVID-19, Relaxations announced by Finance Ministry of India in context of several important relief measures taken by the Government of India (GOI)

This relaxations provides certain relief measures in financial and regulatory compliances for the individuals and Companies to ease the compliance burden and avoid legal consequences and penalty.

Relaxations announced by Finance Ministry are as below:

1. Relaxation provided to Banking Sector

– All the debit cardholders are allowed to withdraw cash for free from any other banks’ ATM for 3 months;

– No minimum balance fee will be charged/ deducted by the banks if minimum balance is not maintained by the account holders;

– To encourage the digital transactions and to stop the spread of Corona virus through the currency notes the Ministry has reduced bank charges for digital trade transactions for all trade finance consumers.

2. Amendment in the Indian Stamp (Collection of Stamp-Duty through Stock Exchanges, Clearing Corporations and Depositories) Rules, 2019

The Indian Stamp (Collection of Stamp-Duty through Stock Exchanges, Clearing Corporations and Depositories) Rules, 2019 pertains to regulate the liability of instruments of transaction in stock exchanges and depositories to duty.

This rule was earlier notified to be implemented from 1st April, 2020. However, due to the prevailing situation, it has been decided that the date of implementation will now be postponed to 1st July 2020.

3. PM CARES Fund

A special fund “Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND)” has been set up for providing relief to the persons affected from the outbreak of Corona virus.

The Ordinance also amended the provisions of the Income-tax Act to provide the same tax treatment to PM CARES Fund as available to Prime Minister National Relief Fund. Therefore, the donation made to the PM CARES Fund shall be eligible for 100% deduction under section 80G of the IT Act. Further, the limit on deduction of 10% of gross income shall also not be applicable for donation made to PM CARES Fund.

As the date for claiming deduction u/s 80G under IT Act has been extended up to 30.06.2020, the donation made up to 30.06.2020 shall also be eligible for deduction from income of FY 2019-20.

Also Amendment has been made to consider the contribution made to PM CARES Fund as CSR activities under the Companies Act, 2013.

4. Centralised system of stamp duty on all financial transactions:

In order to put in place an efficient mechanism for collection of Stamp Duty on Security Market Instruments transactions through Stock Exchanges or Clearing Corporation authorized by Stock Exchanges Depositories an amendment has been made to the Stamp Act, 1899 vide Finance Bill, 2019, to introduce a centralised system of stamp duty with a unified rate for all financial securities transactions. The said changes were to become effective from January 9, 2020 which later were deferred to 1st April, 2020 vide notification dated 8th January, 2020. However, due to the covid-19 outbreak, the same has been further extended and will be effective from 1st July 2020. (Refer notification dated 30th March, 2020)

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