The Finance Bill, 2020 (“Bill”) was presented as the Union Budget on February 1, 2020 (“Budget”) and then introduced in the Lower House of Parliament (Lok Sabha) – it was finally passed on March 23, 2020 with certain key amendments (“Amendment”). Interestingly, this was passed without any discussions in Parliament and received the presidential assent on March 27. Accordingly, the same will come into effect from April 1, 2020 (“Finance Act”).
The Finance Act needs to be seen in light of the ongoing COVID-19 pandemic being played out in India. As India undergoes a 21-day lockdown, post passing of the Amendment, the government is undertaking pro-active measures by way of press conferences to address the pressing needs of the society. To begin with, the government announced an extension of various statutory compliances for taxpayers (discussed below). Next, the Finance Minister (“FM”) announced a COVID-19 relief package for the poor, which primarily covers food security and direct cash transfers to them. Lastly, on March 27, Reserve Bank of India (“RBI”) Governor, Shaktikanta Das slashed the key lending rate by 75 basis points in an emergency move, to counter the economic fallout of the said lockdown. The RBI also permitted all commercial banks and lending institutions to allow a 3-month moratorium on loans. “Banks should do all they can to keep credit flowing,” Mr Das said.