Parliament of India (Lokh Sabha & Rajya Sabha) passed the Taxation and other laws (Relaxation and Amendment of certain provisions) bill, 2020 on 23 September 2020. Amendment bill replaces the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 that was promulgated on 31 March 2020. The new bill 2020 will make few changes to direct and indirect tax laws including  the Income Tax Act, 1961 (IT Act 1961), Finance Acts, the Customs Act, 1962, and the Prohibition of Benami Property Transactions Act, 1988 (BPT Act 1988).  Bill was passed in Parliament’s Upper House (Rajya Sabha) through voice vote.

Provisions of the Bill 2020

  1. The New bill extends the deadlines for filing returns and to link PAN (Permanent Account N​umber) and Aadhaar.
  2. Bill has a provision of tax benefits to donations made to PM CARES fund (Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund ) by providing 100 % deduction.
  3. Bill also amends Income Tax Act 1961 to provide the same treatment to the PM CARES fund as that to the PM National Relief Fund (PMNRF).
  4. New Bill also amends the Central Goods and Services Tax Act (CGST), 2017 in order to allow the central govt to notify an extension to the time limits for various GST-related compliances and actions.

Issues with PM CARES Fund

  1. Transparency: Auditing of the PM CARES funds and its spending of the fund will be done by an independent auditors and not the Comptroller Audit General (CAG). Thus, the PM CARES fund lacks transparency over its spending and auditing. This is the transparency issue around PM-CARES fund
  • CSR Funding issue : The funds allows corporates to contribute to the corporate social responsibility fund which goes against The Section 135 of Companies Act 2013. The section makes it mandatory to spend the corporate social responsibility (CSR) Funds for the development of the respective local community in the areas where the corporate is located.

Provisions of Taxation and Other Laws Bill 2020 Provisions of Taxation and Other Laws Bill 2020