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Latest Key Announcements made by FM Nirmala Sitharaman in the Press Conference

Recently, on Friday, August 23rd, 2019, the Finance Minister Nirmala Sitharaman^[1] holds a press conference to announce certain measures going to be taken by the Government to give a boost to the securities market and economy. Read Highlights Announcements by FM Nirmala Sitharaman.

Key Highlights Announced by the Government

Some of the key highlights announced by the Government are as follows:

1. The relief to the Foreign Portfolio Investment from the enhanced surcharge,
2. A relief to the eligible start-ups and investors from angel tax.
3. De-criminalization of CSR violations.
4. The Finance Minister has also announced that in upcoming days, two more sets of new announcements shall come up.

Key Highlights Announcements by FM Nirmala Sitharaman

1.Withdrawal of the provision of enhanced surcharge on FPIs in respect of Capital Gain

After a clamor by the FPI on the increased surcharge, The Finance Minister has announced –

The withdrawal of provision to levy a surcharge on the tax payable by the FPI and Domestic investors on short-term capital gains and long-term capital gains from the sale of equity shares, equity-oriented funds and units of business trust.

Where As the foreign and domestic investors shall continue to be liable to pay the increased surcharge in respect of other income, i.e., interest, dividend, etc. In other words, the enhance surcharge on domestic investors and FPIs have been rolled back and pre-budget position has been restored.

The decision taken by the finance minister will be applicable from the current financial year.

2. The provisions of Section 56(2)(vii)(b) i.e. Angel Tax shall not be applicable to the recognized start-ups

The start-ups were facing difficulties for getting relief from the revenue officers and they have been continuously pleading to the Department. To provide relief Finance Minister has announced the provisions that the angel tax shall not apply to the recognized start-ups and the investors.

Applicability – It is applicable in respect of present as well as all pending proceedings as well.

3. De-Criminalization of CSR Violations

In case a company fails to comply with CSR requirement, the provisions of the CSR as provided under section 135 (7) of the companies Act, 2013 will be implied which provides for –

Penal Provisions –

• Fine ranging from Rs. 50,000/- to Rs. 25,00,000/- can be imposed on the company.
• Further, every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to 3 years or fine ranging from Rs. 50,000 to Rs. 5,00,000.

There is no intention of the Government to go on prosecution route for CSR violations and thus, The Finance Minister in its press conference has clearly said that the CSR violations shall be treated as the civil matter. This announcement from the Finance Minister would give much relief to the business in complying with the CSR requirement without fear of criminal prosecution and harassment.

Also, Read: Budget 2019: Hike in the Tax Exemption Limit.

4. To set-up, a dedicated cell to address the problem of Start-up

A start-up facing issues related to Income Tax can address the problem to new division/cell under the member of CBDT and can approach the cell for quick resolutions of the problem.

5. Removal of Compliance Difficulties

The Finance Minister has given assurance that the Government shall take further measures to make GST compliance easier. The Finance Minister has announced to meet GSTN officials to remove glitches in GST filing process and make it taxpayers friendly.

6. Disposal of Notices

All the Income-tax notices issued to the taxpayer with effect from 01-10-2019 shall be disposed of within three months from the date of reply by the taxpayer and all the old notices shall be decided by 01-10-2019.

7. Additional Depreciation

The Finance Minister has decided to charge depreciation of 30% by allowing additional depreciation of 15%, i.e.taking it to 30%, on all vehicles purchased till 31-03-2020.

8. For NBFCs Aadhar Based KYC shall be permitted

To avoid the repeated procedure, The NBFCs shall be permitted to use Aadhaar authenticated bank KYCwith the consent of the Aadhaar Number holder. Using e-KYC based on Aadhaar authentication will also enable banks for easier onboarding of customers by opening instant bank accounts through the OTP mode.

Simplified Aadhaar based KYC also been proposed for opening a Demat account.

9. More liquidity for NBFCs and strengthening the Banks and MSME Sector

In order to boost the economy and strengthen the NBFCs/Banks/MSMEs various announcement has been made by the Finance Minister-

·      For Banks and MSMEs releasing Rs 70,000 crore of capital upfront for bank capitalization.

·      NHB funding increased from Rs 20,000 crore to Rs 30,000 crore.

10. Refunds of GST shall be processed within 60 days

In order to simplify the GST and to meet out the glitches in the GST system, all pending GST refunds due to MSMEs shall be paid in 30 days. Further, all refunds payable to MSMEs shall be paid within 60 Days.

Conclusion

The Finance Minister has announced the above-mentioned key measures taking into consideration the economic slow-down and a major dip in the GDP growth rate. To boost the economy and the GDP rate, the Finance Minister will soon come up front to help the homebuyers and the government is already working on it. Additionally, the orders, notices, summons, letters, etc. of the Income Tax to be sent only through a centralized system. It will have a computer-generated unique ID Number.

Also, Read: Budget 2019: Key Highlights of Interim Budget at a Glance.