Half hearted tax benefits, Half Hearted Date Relaxation by the Government


Half hearted tax benefits, Half Hearted Date Relaxation by the Government

On the one side the Government has extended the date for all the compliance falling due in between 20th March 2020 to 29th June 2020 to 30th June 2020.

But on the other side, the intended benefit is denied by the Government. A diplomatic approach indeed!

Date extension, is it really going to confer the benefit to the taxpayers and business house of the country?

The date is extended for compliance but not whole heatedly.

The way changes have been carried out will be make the benefit impossible to achieve in numerous situations. The dates are extended for compliances and not for payment.

Effectively, the persons would be required to make the

  1. Payment of TDS
  2. Payment of GST
  3. Payment of Income Tax (who have failed to make the payment of advance tax and so would be liable for payment of TDS U/s 234A & 234B) and many more like this.

The payment date has not been extended by the relaxation notifications of the Government. Only benefit that is conferred is by way of relaxation in the rate of interest for delay in the payment of taxes.

The question remains, when the person is not able to open the shops, ensures cash flow by way of sales, book debts recovery and when the person and all its staff are not able to join the work place, how a person can make a payment of taxes?

Ideally, relaxation should have been there from tax payment obligations as well.   Simply extending the date of compliances without extending the dates would not be serving the real intended purpose.  The real benefit would be there only if the Government extends the due date of payment of TDS, Income Tax, GST also.

Another important issue which the businesses houses are facing is with regard to “full payment of salary” as appealed by the Government. How can a business houses pay full salary when they themselves are struggling to survive. It is worth mentioning here that the Government itself has refused to pay the salary to the Government employee by reducing the amount of their DA/TA etc.  Now, even those employees who could work are not working because the Government has ensured their salary without work also. There are cases where the employee is living adjacent to their work places and stopped working because “free lunch” is assured by the Government. Who will be benefited by this? The market news suggest that the employer will be refusing the salary to their employee or will be restricting it to 50% for the second months and 25% for subsequent months if the lock down is extended.

“Free Salary without work” would really have been possible if

  1. Whole hearted Relaxation from payment of taxes would have been offered to the business houses
  2. Some relaxation from the electricity bill would have been provided to the business houses.
  3. Interest to the extent of around 50% would have been offered to the business houses.

It may be worth mentioning here that the benefit above are not the direct benefit to the industries and business houses but the indirect benefit to the labour, staff, and economy only.

The amount already flows to the Government by way of taxes when the economy is back on the track and the business houses survive. By killing the business houses, no one could make money.



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