Yesterday Finance Minister Nirmala Sitharaman announced many measures to fight the economy due to COVID 19 under the Atmanirbhar Bharat. Let us see what are the five major benefits for individuals.
There are many economical measures were announced. However, in this post, I am concentrating on major points that will benefit individuals.
Atmanirbhar Bharat – 5 Benefits for Individuals
In many ways these benefits were accounced. But implementing the same is the biggest task for the Government.
1. Deadline for filing FY 2019-20 Income Tax Return has been extended
The deadline for filing FY 2019-20 Income Tax Return has been extended from 31st July 2020 to 30th Nov 2020. This I think benefits to many as its postponing your tax payment from the last date of 31st July 2020 to 30th November 2020. Big relief to those who have to pay the tax from their own pocket while filing the IT Returns.
Similarly, the tax audit due date will be extended to 31 October 2020. Also, the date for making payment without additional amount under the “Vivad Se Vishwas” scheme will be extended to 31 December 2020.
2. Reduction in TDS (Tax Deduction at Source) and TCS (Tax Collected at Source)
The TDS rates for all non-salaried payments to residents and tax collected at the source rate will be reduced by 25% of the specified rates for the remaining period of FY 20-21. This will provide liquidity to the tune of Rs 50,000 Crore.
I have already written a post on this. You can refer for the latest TDS rates at “Latest TDS Rate Chart for FY 2020-21 (AY 2021-22) – Effective from 14th May 2020“.
Do remember few things here:-
- Slashing TDS or TCS will not reduce your tax outgo. You have to pay the applicable tax at the time of filing the ITR. You are just postponing your tax payment during this TDS or TCS process. Hence, it is not a rejoicing point for many individuals. AVOIDING OR POSTPONING YOUR TDS/TCS IS NOT AVOIDING TAX.
- There is no change in TDS rates for Salaried.
- This reduction in TDS rates will not be applicable to NRIs.
3. EPF Contribution by Government
Under the PM Garib Kalyan Yojana, earlier the Government announced that it will contribute both employer and employee contribution for the months of March, April, and May. It is now extended by another 3 months for salary months of June, July, and August 2020.
It is not that all employees are eligible for this beenfit. There are certain conditions to it. They are as below.
# You must be a member of EPF.
# Your salary (Basic+DA) must be less than Rs.15,000.
# Your company must be employed up to 100 employees.
# Under such total employees, 90% or more than such employees earning monthly salary of less than Rs.15,000 (Basic+DA).
# This Scheme will be valid for wage months- March, 2020, April, 2020 and May 2020. Now it is extented for the months of June, July and August 2020.
# Your UAN should be seeded with Aadhaar Card.
# Your EPF and EPS contributions are at least from last 6 months i.e September 2019 to February 2020.
# EPF members who are not EPS members due to completion of 58 years shall be eligible provided other conditions are fulfilled and the contribution from Central Govt. will be credited to his EPF account.
# Even the exempted eshtablishments are also eligible for this (provided, they are fulfilling above eligibility).
# If you are Aadhaar is not seeded with UAN, an Online e-KYC facility is available to the member on EPFO Portal as well on UMANG mobile App to self-validate their UAN with Aadhaar without any intervention by Employer. This is in addition to Online Aadhaar validation in member’s UAN by the employer. Since the validation is Online, the seeding of Aadhaar in UAN can be completed now also.
Refer the FAQs in this regard at EPFO Website.
I have written a detailed post on how to avail this benefit. Refer the same at “EPF Subscriber – Govt credit 3 months contribution to EPF account.
4. EPF Contribution reduced for Employers and Employees for 3 months
Statutory PF contribution of both employer and employee reduced to 10% each from the existing 12% each for all establishments covered by EPFO for the next 3 months.
If you not falling under the eligibility of what I have explained in the above point 3, and if your EPF contribution is statutory EPF contribution, then instead of regular 12% contribution from both employer and employee, now it reduced to 10%.
Assume that your salary (Basic+DA) is Rs.15,000. Earlier you used to contribute Rs.1800 and your employer also used to contribute Rs.1,800 (from both ends 12% of Basic+DA). From now onwards, for the next three months, it is at the rate of 10%. Hence, your EPF deduction will be Rs.1,500 and it saves your Rs.300 contribution. The same way from the employer contribution.
Hence, your take home will increase to Rs.300.
5. Tax Relief for Business and Professionals
The pending income tax refunds to charitable trusts and non-corporate businesses and professions including proprietorship, partnership, and LLPs and cooperatives shall be issued immediately.
Conclusion:-If you noticed all the above 5 benefits, you realized that even though they are not so big game changer but gives you certain small relief. Let us hope for the betterment of our future in fighting against the Corona Virus.
Refer our latest posts:-
- How to change nominee in NPS online?
- Asset Allocation of Multi-Cap Funds – SEBIs new categorization and Rationalization Rule
- List of Income Tax Deductions FY 2020-21 – Under New / Old Tax Regime
- Whether Banking and PSU Debt Funds are SAFE?
- State Bank Of India 9.95% (SBIN-N5) Bond Call Option – What if the Bank exercised in 2021?
- Your EDUCATION is the least required eligibility for investing!