Provisions of Taxation and Other Laws (Relaxation and Amendment of Certain provisions) Bill

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

Provisions of the Bill

  1. The bill  extends the deadlines for filing returns and to link PAN and Aadhaar.
  2. It has a provision of tax benefits to donations made to PM CARES fund by providing 100 % deduction.
  3. The bill also amends Income Tax Act to provide the same treatment to the PM CARES fund as that to the PM National Relief Fund.
  4. It also amends the Central Goods and Services Tax Act, 2017 in order to allow the central government 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 funds and its spending of the fund will be done by an independent auditors and not the Comptroller Audit General. Thus, the fund lacks transparency over its spending and auditing. This is the transparency issue around PM-CARES fund
  • CSR Funding issue : The PM CARES funds allows corporates to contribute to the corporate social responsibility (CSR) fund which goes against The Section 135 of Companies Act. The section makes it mandatory to spend the CSR Funds for the development of the respective local community in the areas where the corporate is located.