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Government of India
Department of Revenue
Ministry of Finance
Central Board of Direct Taxes
New Delhi, 15th October, 2020
PRESS RELEASE
Income Tax Department carries out searches in Delhi, NCR and Haryana
The Income Tax Department has carried out a search and seizure action on 14.10.2020 in the case of a leading advocate practicing in the field of commercial arbitration and alternate dispute resolution. He was suspected to be receiving substantial amounts in cash from his clients, to settle their disputes. During the search 38 premises spread over Delhi, NCR and Haryana have been covered.
During the search, cash of Rs. 5.5 crore has been seized, while 10 lockers have been placed under restraint. Incriminating documents of unaccounted cash transactions and investments made by the assessee over several years have been found. Substantial digital data reflecting unaccounted transactions of the assessee and his associates, who are financers and builders, has also been recovered.
In one case, the assessee had received Rs. 117 crore from a client in cash, whereas he had shown only Rs. 21 crore in his records, which was received through cheque. In another case, he received more than Rs. 100 crore in cash from an infrastructure and engineering company for its arbitration proceedings with a public sector company.
The unaccounted cash received, has been invested by the assessee in purchase of residential and commercial properties and in taking over of trusts engaged in running of schools. Evidences recovered indicate investment of more than Rs. 100 crore in cash in several properties in posh areas in the last two years. The assessee and his associates have also purchased several schools and properties, for which also more than Rs. 100 crore was paid in cash. He has also taken accommodation entries worth several crores.
Further investigations are in progress.
(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT
Ministry of Finance
Ministry of Finance statement on misinterpretation of LTC stimulus and its benefits
Dated: 13 OCT 2020
A report has appeared in the Economic Times Markets (ETMarkets.com) which gives the impression that the LTC voucher scheme for Government employees may not be attractive. Unfortunately, the piece which it relies on has a serious factual error in its understanding of how Government LTC works. It is based on the erroneous assumption that leave travel money can be retained by paying income tax without travelling. The key assumption in the report claims:
"They would be better off paying taxes on the LTC amount availed instead."
The Government LTC is quite different from Leave Travel Allowance in the corporate sector. A person claiming LTC is not eligible unless he actually travels; if he fails to travel the amount is deducted from his pay and he may be liable for disciplinary action. He does not have the option of keeping the money and paying income tax. Under the government system, the employee had only two choices:
1)Travel and spend (and the incidentals like hotel, food,etc. are to be incurred by him) or
2) Forgo the entitlement if not claimed within the date. Now a third option of "spend on something other than travel" has been given. In the current Covid environment, travel carries serious perceived health risks.
The assumption in the report that employees would otherwise not pay GST when they purchase something from their money and are only incurring it because of the scheme is surprising. Everybody pays GST on their consumption unless they choose to buy without bills in black, a practice the Government obviously does not condone and which hopeful the ET does not want to encourage.
Incidentally, the entitlements under the scheme have been worked out at full cost (i.e. including the GST element in fares).
Surprisingly, the same piece relied on acknowledges that : "the central government employees are least impacted in terms of savings due to lockdown and no salary loss". It is precisely for this reason that they are in a position to boost their own spending on goods or services of their own choice, using the LTC money as effectively a steep discount to reduce the cost of whatever they choose to buy. Rhetorical questions based on erroneous factual assumptions on Government rules, based on corporate sector practices, do not enrich the debate.
RM/KMN
(Release ID: 1664165)
Ministry of Finance
Finance Minister announces measures of Rs 73,000 crore to stimulate consumer spending before end of this Financial Year in fight against COVID-19
Cash payment and leave encashment in lieu of one LTC during 2018-21 according to entitlement
Special Festival Advance Scheme revived as a one-time measure for both Gazetted and non-Gazetted employees
Special interest free 50-year loans to States for capital expenditure for Rs. 12,000 crore
Additional budget of Rs. 25,000 crore, in addition to Rs. 4.13 lakh crore given in Union Budget 2020, is being provided for Capital Expenditure
Dated: 12 OCT 2020
Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman here today announced measures of Rs 73,000 crore to stimulate consumer spending in the economy in an effort to fight the slowdown due to COVID-19 pandemic following lockdown. Union Minister of State for Finance & Corporate Affairs Shri Anurag Singh Thakur, Finance Secretary Dr Ajay Bhushan Pandey, Department of Financial Services Secretary Shri Debashish Panda and Department of Economic Affairs Secretary Shri Tarun Bajaj were also present during the announcement of stimulus package.
While announcing the demand stimulus package, Smt. Sitharaman said, “Indications are that savings of government and organised sector employees have increased and we want to incentivise such people to boost demand for the benefit of the less fortunate.” The Finance Minister further said that if demand goes up based on the stimulus measures announced today, it will have an impact on those people who have been affected by COVID-19 and are desperately looking for demand to keep their business going.
The Finance Minister stressed on the idea that today’s solution should not cause tomorrow’s problem. Smt. Sitharaman said that the Government does not want to burden the common citizen with future inflation and also not put the Government debt on an unsustainable path.
The proposals presented today by the Finance Minister are designed to stimulate spending in a fiscally prudent manner as some of the proposals are for advancing or front-loading of expenditure with offsetting changes later while others are directly linked to increase in GDP. The present announcement by Smt. Sitharaman highlights the active intervention by the Government of India to combat economic slowdown created by COVID-19. The details are as follows: -
A. CONSUMER SPENDING
i. Leave Travel Concession (LTC) Cash Voucher Scheme
While announcing the scheme, the Finance Minister said, “The biggest incentive for employees to avail the LTC Cash Voucher Scheme is that in a four-year block ending in 2021, the LTC not availed will lapse, instead, this will encourage employees to avail of this facility to buy goods which can help their families.”
Central Government employees get LTC in a block of 4 years in which air or rail fare, as per pay scale/entitlement, is reimbursed and in addition, Leave encashment of 10 days (pay + DA) is paid. But due to COVID-19, employees are not in a position to avail of LTC in the current block of 2018-21.
Therefore, the Government has decided to give cash payment in lieu of one LTC during 2018-21, in which:
Full payment on Leave encashment and
Payment of fare in 3 flat-rate slabs depending on class of entitlement
Fare payment will be tax free
An employee, opting for this scheme, will be required to buy goods / services worth 3 times the fare and 1 time the leave encashment before 31st March 2021.
The scheme also requires that money must be spent on goods attracting GST of 12% or more from a GST registered vendor through digital mode. The employee is required to produce GST invoice to avail the benefit.
If Central Government employees opt for it, cost will be around Rs. 5,675 crore. Employees of Public Sector Banks (PSBs) and Public Sector Undertakings (PSUs) will also be allowed this facility and the estimated cost for them will be Rs. 1,900 crore. The tax concession will be allowed for State Government/Private Sector too, for employees who currently are entitled to LTC, subject to following the guidelines of the Central Government scheme. The demand infusion in the economy by Central Government and Central PSE/PSB employees is estimated to be Rs. 19,000 crore approx. The demand infusion by State Government employees will be Rs. 9,000 crore. It is expected that it will generate additional consumer demand of Rs. 28,000 crore.
ii. Special Festival Advance Scheme
A Special Festival Advance Scheme for non-gazetted employees, as well as for gazetted employees too, is being revived as a one-time measure to stimulate demand. All Central Government employees can now get an interest-free advance of Rs. 10,000, to be spent by 31st March, 2021 on the choice of festival of the employee. The interest-free advance is recoverable from the employee in maximum 10 instalments.
The employees will get pre-loaded RuPay Card of the advance value. The Government will bear Bank charges of the card. Disbursal of advance through RuPay card ensures digital mode of payment, resulting in tax revenue and encouraging honest businesses.
The one-time disbursement of Special Festival Advance Scheme (SFAS) is expected to amount to Rs. 4,000 crore; and if the SFAS given by all State Governments, another tranche of Rs. 8,000 crore is expected to be disbursed.
B. CAPITAL EXPENDITURE
i. Special Assistance to the States:
While announcing measures related to Capital Expenditure, Smt. Sitharaman said that money spent on infrastructure and asset creation has a multiplier effect on the economy. It not only improves current GDP but also future GDP. The Government wants to give a new thrust to Capital Expenditure of both States and Centre.
Giving a new thrust on Capital Expenditure, Smt. Sitharaman said that money spent on infrastructure and asset creation has a multiplier effect on the economy. It not only improves current GDP but also future GDP. The Government wants to give a new thrust to Capital Expenditure of both States and Centre. Smt. Sitharaman said that the Central Government is issuing a special interest-free 50-year loan to States of Rs. 12,000 crore Capital Expenditure. The Scheme consists of 3 Parts.
Part - 1 of the scheme provides for:
Rs. 200 crore each for 8 North East states (Rs. 1,600 crore)
Rs. 450 crore each Uttarakhand, Himachal Pradesh (Rs. 900 crore)
Part - 2 of the scheme provides for:
Rs. 7,500 crore for remaining states, as per 15th Finance Commission devolution.
The Finance Minister said that both Part 1 and Part 2 of interest-free loans given to States are to be spent by 31st March, 2021 and 50% will be given initially, the remaining 50% will be given upon utilization of first 50%. Unutilised funds will be reallocated by the Central Government.
Under Part - 3 of Rs. 12,000 crore interest-free loans to states, Rs. 2,000 crore will be given to those states which fulfill at least 3 out of 4 reforms spelled out in Aatma Nirbhar Bharat Package (ANBP) vide Department of Expenditure’s Letter F.No. 40(06)/PF-S/17-18 Vol. V dated 17th May 2020. Rs 2,000 crore is over and above other borrowing ceilings.
Following are the features of this Scheme:
It can be used for new or ongoing capital projects needing funds and / or settling contractors’/ suppliers’ bills on such projects
CAPEX to be spent by 31st March 2021
This funding will be over and above all other additional borrowing ceilings given to states
Bullet repayment after 50 years, no servicing required for 50 years
ii. Enhanced Budget Provisions:
The Finance Minister said that additional budget of Rs. 25,000 crore, in addition to Rs. 4.13 lakh crore given in Union Budget 2020, is being provided for Capital Expenditure on roads, defence, water supply, urban development and domestically produced capital equipment.
To allow smooth conducting of Government business, allocations will be made in forthcoming Revised Estimate discussions of Ministry of Finance with concerned ministries.
It may be recalled that a package of Rs 1.70 lakh crore under Pradhan Mantri Garib Kalyan Package (PMGKP) was announced on 26th March, 2020 and the Aatma Nirbhar Bharat Package (ANBP), a Special economic and comprehensive package of Rs 20 lakh crore - equivalent to 10% of India’s GDP – was announced on 12th May, 2020 by Hon’ble Prime Minister Shri Narendra Modi. He gave a clarion call for आत्मनिर्भर भारत अभियान or Self-Reliant India Movement and also outlined five pillars of Aatmanirbhar Bharat – Economy, Infrastructure, System, Vibrant Demography and Demand.
****
RM/KMN
(Release ID: 1663722)
F. No. 225/150/2020-ITA-II
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
North Block, ITA-II Division
New Delhi, the 30th September 2020
Order under Section 119(2)(a) of the Income-tax Act, 1961
1. The date for furnishing of Income-tax returns under section 139 of the Income-tax Act, 1961 ('Act') for the Assessment Year 2019-20 was 31st March, 2020. However, on consideration of difficulties being faced by the taxpayers due to COVID-19 pandemic, the said date was initially extended to 30th June, 2020 and subsequently to 31st July, 2020 and 30th September, 2020 vide the Taxation and other laws (Relaxations of certain provisions), Ordinance dated 31.03.2020, Notification No.35/2020 dated 24.06.2020 and Notification No.56/2020 dated 29.07.2020 respectively.
2. In this context, on further consideration of genuine difficulties being faced by the taxpayers due to the outbreak of COVID- 19 pandemic, the Central Board of Direct Taxes (CBDT), in exercise of powers conferred under section of the Act, hereby, further extends the date for furnishing of belated and revised returns for the Assessment Year 2019-20 under sub-section (4) and (5) of section 139 of the Act respectively, from 30th September, 2020 to 30th November 2020.
(Rajarajeswari R.)
Under Secretary to the Government of India
F.No. 225/126/2020/ITA-II
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes (ITA-II division)
North Block, New Delhi, the 30th September, 2020
To
All Pr. Chief-Commissioners of Income-tax / Chief-Commissioner of Income-Tax
All Pr. Director-Generals of Income tax/ Director-Generals of Income-tax.
Madam/ Sir
Subject: Extension of time limit for compulsory selection of returns for Complete Scrutiny during the Financial Year 2020-21 - regarding
Kindly refer to Board's letter dated 17.09.2020 regarding Guidelines for compulsory selection of returns for Complete Scrutiny during the Financial Year 2020-21.
2. Vide the said letter, the following time limits were prescribed for completion of certain actions:
a) Selection of cases for compulsory scrutiny on the basis of the prescribed parameters shall be completed by 301h September 2020.
b) The Survey Cases with impounded materials have to be transferred to the Central Charges under section 127 of the Income-tax Act,1961 (Act) within 15 days of issue of notice u/s 143(2) of the Act.
c) Search cases u/s 153C of the Act, If lying outside the Central Charges, have to be transferred to the Central Charges u/s 127 of the Act within 15 days of issue of notice u/s 243(2) of the Act.
3. Considering the difficulties faced by the field formation due to COVID-19 pandemic and PAN migration related issues, this matter has been reconsidered and It has been decided to extend the date for selection of cases for Compulsory Scrutiny on the basis of prescribed parameters, as communicated vide Board's letter dated 17.09.2020, from 30th September,2020 to 31st October,2020.
4. It is clarified that even though the new statutory time limit as per the Taxation and other laws (Relaxations and amendment of certain provisions) Act, 2020 for selection of cases for Compulsory Scrutiny on the basis of prescribed parameters was extended to 31st March,2021, still for the purpose of timely allocation of cases to NeAC, the above time limit will have to be strictly adhered to, otherwise, the allocation of cases to NeAC will get considerably delayed.
5. Further, for the same reasons as above In pare 4, the cases covered under the scenarios mentioned in Para 2 (b) and 2(c) of this letter shall be transferred to the Central Charges by issue of orders u/s 127 of the Act, immediately after service of notice u/s 143(2) of the Act.
6. These instructions may be brought to the notice of all concerned for necessary compliance.
7. This issue with the approval of Chairman (CBDT).
(Rajarajeswari R.)
Under Secretary - ITA.II, CBDT.