COVID-19: Direct Tax implications

In light of the ongoing COVID-19 crisis, the government has recently announced a slew of tax and regulatory relief measures to provide a compliance breather to businesses. However, businesses still need to remain vigilant to minimise the possible impact of COVID-19 on their people and operations.

Here’s how you can HALT and proactively review your direct tax action plan:

Tax payments

• Proactively evaluate how you will make pay necessary taxes given your current cash flow situation

Direct tax disputes

• Take stock of pending disputes and decide whether or not to opt for the Vivad se Vishwas Scheme

Extended stay

• Reassess your tax liabilities in different jurisdictions due to unforeseen travel restrictions, unplanned stays and change in residential status for employees and key personnel

Overseas operations

• Stay updated on tax relief measures announced in overseas jurisdictions to assess tax liabilities

Disruption of normal business

• Tax implications due to borrowing of funds from Indian/ overseas group entities

Investments

• Valuations at which any investment/ disinvestment or hive offs are made to be carefully evaluated

Compliances

• Evaluate compliances required to be undertaken in the next 2-3 months and make necessary arrangements

Relief measures

• Track relief measures announced by the Central/ State governments as well as tax implications arising out of relief provided under other laws