Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 GS: 3 "EMPOWER IAS"

In news:

• The Government of India promulgated the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020. It was done to bring into effect various tax compliance related measures announced in the wake of COVID-19 pandemic.

 

More from the news:

• Time limits related to direct and indirect tax filings, passing of order or issuance of notice by tax authorities have been extended to June 30. 
• Taxpayers can also avail the Sabka Vishwas Legal Dispute Resolution Scheme 2019 till June 30, giving more time to settle their indirect tax disputes.
• Donations made to PM Cares fund will be 100% exempted of the income tax. 
• The limit on deduction of 10% of gross income shall also not be applicable for such donations.

 

 

Key highlights:

• The Ordinance brings into effect various tax compliance related measures announced on March 24, 2020 in the wake of COVID-19 pandemic.
• The government has extended the deadline for filing income tax, last dates for making investments in instruments such as National Savings Certificates, Public Provident Fund for claiming income tax benefits, etc.
• The last date for linking PAN with biometric ID Aadhaar has been extended by three months to June 30.
• The Ordinance has also amended the provisions of the Income-tax Act to provide the same tax treatment to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES Fund) as available to the Prime Minister’s National Relief Fund (PMNRF).
• The donation made to the PM-CARES Fund shall be eligible for 100% deduction under section 80G of the I-T Act.
• The government has set up the PM-CARES Fund to deal with any kind of emergency or distress situation like posed by the COVID -19 Pandemic.   
• PMNRF was instituted in 1948 by then Prime Minister Jawaharlal Nehru, to assist displaced persons from Pakistan.
• The fund is currently used primarily to tackle natural calamities like floods, cyclones and earthquakes.
• The fund is also used to help with medical treatment like kidney transplantation, cancer treatment and acid attack.

 

 

Sabka Vishwas Legal Dispute Resolution Scheme :

• Sabka Vishwas is a legacy dispute resolution scheme notified by Government for closing pending disputes relating to legacy Service Tax and Central Excise cases. It is to be operationalized from 1st September 2019.
• The two main components of the Scheme are dispute resolution and amnesty.
   
  1. The dispute resolution component is aimed at liquidating the legacy cases of Central Excise and Service Tax that are subsumed in GST and are pending in litigation at various forums.
  2. The amnesty component of the Scheme offers an opportunity to the taxpayers to pay the outstanding tax and be free of any other consequences under the law.

 

• ​​​​​​​The most attractive aspect of the Scheme is that it provides substantial relief in the tax dues for all categories of cases as well as full waiver of interest, fine, penalty. In all these cases, there would be no other liability of interest, fine or penalty. There is also a complete amnesty from prosecution.
• The objective of the Scheme: is to free the large number of small taxpayers of their pending disputes with the tax administration.

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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.

 

Ordinance Ordinance is a decree or law promulgated by a state or national government without the consent of the legislature. Article 123 of the Constitution of India grants the President certain law-making powers to promulgate ordinances when either of the two Houses of Parliament is not in session. The fundamental reason for bestowing the executive with the power to issue ordinance according to Pandit H N Kunzru (involved in framing the Indian Constitution), was “to deal with situations where an emergency in the country necessitated urgent action.” There are three limitations with regard to the ordinance making power of the executive. They are:   The President can only promulgate an ordinance when either of the two Houses of Parliament is not in session. The President cannot promulgate an ordinance unless he is satisfied that there are circumstances that require taking ‘immediate action’. Ordinances must be approved by Parliament within six weeks of reassembling or they shall cease to operate. They will also cease to operate in case resolutions disapproving the ordinance are passed by both the Houses.