Announcement by Finance Minister on 13 May 2020

Announcement by Finance Minister on 13th May 2020

The fine print of PM’s Atmanirbhar Bharat Abhiyan Economic Stimulus Package to make India Self Reliant was announced by Union Finance Minister, Nirmala Seetharaman on 13th May 2020 which will come to immediate effect from 14th May 2020.  

Lockdown Remedies

 

1. MSME: 

  • Collateral Free Automatic Loan for MSME. Those MSME having Loan up to 25cr and turnover up to 100cr will be covered in this scheme. 100% Central Govt Guaranteed. It will help 40 Lac Units. This loan will be for 4 Yrs with a Moratorium of 12 Months. 45 Lakh MSME Units will get benefit from It. A total of 3 Lakh Cr Loans will be given under this scheme.
  • 20000Cr will be infused as Subordinate Debt for stressed MSME. 2 Lakh SME will get benefit from this. Govt will provide 4000 cr to CGTSME Trust.
  • There is a Fund of Fund to be created. Rs 50000cr will be infused as equity to standard MSME. Will help them to expand their capacities.
  • The definition of MSME changed. Investment Limit which defines a SME is changed. Now Turnover criteria are also introduced. Different between manufacturing and service SME is removed. Micro Units- Investment limit increased to 1Cr from 20Lakh. And Turnover can be up to 5Cr. Other changes are also done. For Medium Enterprise the limit increased to 10 Cr Investment and turnover 50Cr. 20Cr and 100Cr
  • Then vs Now

Definition of MSME

 

  • Tenders up to 200Cr relating to Govt procurement will not be Global Tenders any more. MSME will get benefit out of it
  • E-Market Linkage will be Provided to all MSME due to less possibility of Trade fares. All Central Govt outstanding will be cleared within 45 Days by Govt Help of all MSME.

2. EPF Support

EPF Payment was paid by Govt for Mar, April, and May now Extended by another 3 Months covering June, July, August. 12%+12% will be paid by Govt of India.

Contribution reduced from 12% to 10% for those organizations having more than 100 employees is done now. For state PSUs, govt will continue to pay 12%, while govt staff pays 10%.

3. Non-Banking Financial Companies (NBFCs), housing finance companies (HFCs) and microfinance institutions (MFIs)

A special 30000cr Liquidity window will be given. Govt will buy debt papers of these institutions even if investment grade. These will be fully guaranteed by govt of India.

To Give 45000cr Liquidity will be given to NBFC. First 20% Loss will be born by the Govt of India. Even unrated papers will get money under this scheme.

4. Distribution Companies (Discom)

Discom not able to pay the power generation companies. 90000cr Special fund created to pay all outstanding of Power Generation Companies. PFC and REC will give this money

5. Contractors

6 Month extension will be given to all Govt contractors of Railways, Roads, Other departments. Govt Agencies will partially release Bank Guarantees to the extent of work completed. A Big Step.

6. Real estate

Covid19 can be treated as an act of God. Using the Force Major Clause the project registration will be extended by 6 Month automatically. Completion dates of existing projects to be extended automatically by 6 Months by Govt authorities.

7.  Tax-Related

Non-Salaried TDS and TCS rates will be reduced by 25% from existing rates. This will be effective from tomorrow and will remain till 31-03-2021.

All Pending Refunds will be issued immediately to all even above 5 Lakhs. For AY 2020-21 the ITR Dates extended to 30th Nov 2020, And Tax Audit Date extended to 31st October 2020.

Click the below link for New TDS rate for FY 2020-21 applicable from 14th May 2020

New TDS Rate W.E.F 14th May 2020

New TCS Rate W.E.F 14th May 2020

8. Dates extended

  • Due date of all, IT Return filings extended from July 31, 2020, to November 30, 2020
  • Vivaad se Vishwas scheme extended till December 31, 2020
  • Date of assessments getting barred as on Sep 30, 2020, extended to December 31, 2020
  • Date of assessments getting barred as on March 31, 2021, extended to September 30, 2021

Let all Sector’s Kick-Start the economy and mark a tremendous pick up to revamp the broken economy.

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