Tag: INCOME TAX

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Direct Tax relaxations for tackling COVID-19

Various relaxations have been announced in the Income Tax Act, 1961 (“IT Act”) to provide some relief to businesses in the current situation. The relaxations proposed by the Finance Minister on 24th March 2020 have been given effect by way of Ordinance promulgated by the President on 31st March 2020. Central Board of Direct Taxes (“CBDT”) has also provided some relaxations by an order u/s 119 of the IT Act. These relaxations have been discussed below.

A. Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020

1. Time limits for compliance or completion of certain actions[1] under the specified acts[2] (as defined in the Ordinance) whose time limits fall during the period from 20th March 2020 to 29th June 2020[3] has been extended to 30th June 2020[4]. Certain actions whose time limit has been extended are as follows:


1.1. Completion of any proceedings or passing of any order or issuance of any notice, intimation, notification, sanction or approval or such other action by any authority, commission or tribunal under the provisions of the specified act;


1.2. Filing of an appeal, reply or application or furnishing of any report, document, return, statement or such other record under the provisions of the specified Act;


1.3. The following specific actions under the IT Act:


1.3.1. Making of investment, deposit, payment, acquisition, purchase or construction or any such other action for the purposes of claiming any deduction, exemption or allowance under the following provisions:


¾ Sections 54 to 54GB of the IT Act;


¾ Chapter VI-A of the IT Act under the heading “B – Deductions in respect of certain payments”; and


¾ Such other provisions of the IT Act as the Central Government may notify.


1.3.2. Beginning of manufacture or production of articles or thins or providing any services referred to in section 10AA of the IT Act, in a case where the letter of approval has been issued on or before 31st March 2020 in accordance with the provisions of Special Economic Zones Act, 2005 (“SEZ Act”).


Accordingly, the date of the following compliances under the IT Act, as listed in Table-I, has been extended:

 

Table – I
S. No. Relevant sections under the IT Act Compliance
  i.  Section 139(4) Filing of belated return for the Assessment Year (“AY”) 2019-20
  ii.   Section 139(5) Filing of revised return for the AY 2019-20
  iii.   Section 143(1) Sending an intimation after processing of return of income (ITR), if the return is filed:  a) During Financial Year (“FY”) 2018-19 under section 139;  b) During FY 2018-19 in response to a notice issued under section 142(1)
  iv.   Section 149 Time-limit to issue a reassessment notice for the:  a) AY 2015-16 if escaped income is less than Rs. 1 lakh;  b) AY 2013-14 if escaped income is more than Rs. 1 lakh  c) AY 2003-04 if escaped income is related to any asset (including financial interest in any entity) located outside India  d) AY 2013-14, to a person who has been treated as an agent of a non-resident under section 163
  v.   Section 200 Furnishing of TDS Statement:  a) For the fourth quarter of the FY 2019-20  b) For the months of February, March and April 2020   
  vi.   Section 203 Issue of TDS certificate:
a) In respect tax deducted from the salary paid during the FY 2019-20;
b) In respect of tax deducted from payments other than salary for the quarter ending March 31, 2020;
c) In respect of tax deducted under section 194-IA/194-IB/194M during the month of March, 2020 and April, 2020;
  vii.   Section 206C a) Furnishing of TCS Statement for fourth quarter of the FY 2019-20  b) Issue of TCS certificate for the fourth quarter of the FY 2019-20
  viii.   Section 200A & Section 206CB Due date to send the intimation for processing of statement of TDS/TCS filed during the FY 2018-19
  ix.   Section 139A Application for allotment of PAN of non-individual resident person, which enters into a financial transaction of Rs. 2.5 lakhs or more during FY 2019-20 and hasn’t been allotted any PAN
   x.   Section 139AA Linking of Aadhaar number and PAN
   xi.   Section 139AA PAN to be treated as inoperative due to non-linking it with Aadhaar number
  xii.   Section 10AA Commencement of operation by the SEZ units for claiming deduction under section 10AA where necessary approval has been received under the provisions of SEZ Act on or before March 31, 2020
  xiii.   Section 54 to 54GB Making Investments or completing construction / purchase for claiming deduction from capital gains arising during the FY 2019-20.
   xiv.   Chapter VIA (Part B) Making various investments or payments (Section 80C to 80GGC) for the FY 2019-20 such as Section 80C (LIC, PPF, NSC etc.), 80D (Medical claim), 80G (Donations), etc.
  xv.   Section 285BA

 Furnishing of Statement of Financial Transactions (SFT) for the FY 2019-20
  xvi.   Section 3 of Direct Tax Vivad se Vishwas Act, 2020 Non-payment of additional 10% payment of disputed tax

2. In case where any due date specified in, or prescribed or notified under, the specified act for payment of any amount towards tax or levy falls during the period from 20th March 2020 to 29th June 2020[5] and such amount has not been paid within such date but has been paid on or before 30th June 2020[6], the following relaxation has been provided:


2.1. Interest shall be charged only @ 0.75% per month in respect of such amount for the ‘period of delay’[7]; and


2.2. No interest shall be levied and no prosecution shall be sanctioned in respect of such amount for the ‘period of delay’.


Accordingly, interest shall be charged @ 0.75% per month for the following amounts, as listed in Table-II, if they are not paid within the due date but have been paid on or before 30th June 2020:

Table – II
  S. No. Relevant sections under the IT Act Amounts
  i.              234B Payment of advance tax for FY 2019-20
  ii.              234C Payment of first installment of advance tax for the FY 2020-21
  iii.              201 Deposit of tax deducted during the month of  March, April and May, 2020
  iv.              206C Deposit of tax collected during the month of March, April and May, 2020
  v.              Section 170 of Finance Act, 2016 Deposit of equalization levy deducted during the month of March, April and May, 2020 in respect of payment made to a non-resident for online advertisement services
  vi.              Section 104 of  Finance (No. 2) Act, 2004 Deposit of Securities Transaction tax (STT) collected during the month of March, April and May, 2020
  vii.              Section 123 of Finance Act, 2013 Deposit of Commodities Transaction tax (CTT) collected during the month of March, April and May, 2020
  viii.              115-O and 115R Payment of Dividend Distribution Tax (DDT) in respect of dividend declared, distributed or paid by any domestic or mutual fund (which is payable between 20-03-2020 and 31-03-2020)
  ix.              115QA Payment of additional income-tax in respect of buy-back of shares by the company (which is payable between 20-03-2020 and 29-06-2020)

3. The Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND) has been included 80G, thereby making donations to this fund by taxpayers eligible for deduction in computation of the total income.

B. CBDT’s order u/s 119 of the IT Act
CBDT has issued following directions:

Directions with respect to following applications are provided in Table-III:


1.1. Applications of payees u/s 195 and 197 of the IT Act for lower or nil rate of deduction of TDS[8] for FY 2020-21; and


1.2. Applications of buyers/ licensees/ lessees u/s 206C (9) of the IT Act for lower or nil rate of collection of TCS[9] for FY 2020-21.

Table – III
Cases Particulars Direction
Case I a) Taxpayer has filed such application on the TRACES Portal for FY 2020-21;  b) The application is pending for disposal; and  c) Such taxpayer has been issued such certificate for FY 2019-20 Such certificate would be applicable till 30th June 2020 of the FY 2020-21 or disposal of their applications by the Assessing Officer (“AO”) whichever is earlier, in respect of the transactions and the deductor or collector for whom the certificate was issued for FY 2019-20. 
Case II a) Taxpayer could not file such application on the TRACES Portal for FY 2020-21;  b) But such taxpayer has been issued such certificate for FY 2019-20 Such certificate will be applicable till 30th June 2020 of the FY 2020-21. However, such taxpayer will need to apply to the TDS/TCS AO as per the prescribed procedure[1] as soon as normalcy is restored or 30th June 2020, whichever is earlier
Case III a) Taxpayer has not filed such application on the TRACES Portal for FY 2020-21; and  b) Such taxpayer hasn’t been issued such certificate for FY 2019-20 A modified procedure for application and consequent handling by the TDS/TCS Assessing Officer has been laid down[2].  The certificate shall be issued up to 30th June 2020 or earlier date as specified by AO.
Case IV a) Payments to Non-residents (including foreign companies) having Permanent Establishment in India; and  b) Such payment is not covered in Case I and II above Tax on payments made will be deducted @ 10% including surcharge and cess, on such payments till 30th June 2020 of F.Y. 2020-21, or disposal of their applications, whichever is earlier. 

2. Direction[12] with respect to following applications are provided in Table-IV:


2.1. applications of payees u/s 195 and 197 of the IT Act for lower or nil rate of deduction of TDS for FY 2019-20; and


2.2. applications of buyers/ licensees/ lessees u/s 206C (9) of the IT Act for lower or nil rate of collection of TCS for FY 2019-20.

Table – IV
Particulars Direction
a) Taxpayer has filed such application on the TRACES Portal for FY 2019-20; and  b) The application is pending for disposal;  The taxpayer shall intimate the pendency of such application for FY 2019-20 vide an email addressed to the AO along with the required documents and evidences in filing of such application at the TRACES Portal. The AO shall dispose of such application by 27th April 2020 and communicate to the taxpayer regarding the issuance/rejection of the certificate. Such certificate shall be applicable only for the amounts credited/debited during the FY 2019-20 after the date of making such application but remained unpaid till the date of issuance of such certificate by the AO.

3. Direction with respect to submission of Form 15G and 15H to banks, other institutions etc. by some eligible persons for FY 2020-21 is provided in Table-V:

Table – V
Particulars Direction
a) Taxpayer has not submitted Form 15G and 15H to bank and other institutions for FY 2020-21; and  b) Taxpayer had submitted Form 15G and 15H to such bank and other institutions for FY 2019-20. Such Form 15G and 15H will be valid[13] up to 30th June 2020 for FY 2020-21. 

4. Direction with respect to ‘residency’ for individuals u/s 6 of the IT Act


4.1. For FY 2019-20:

Table – VI
Cases Particulars Direction
Case I a) The ‘individual’ has come to India on a visit before 22nd March 2020; and  b)The ‘individual’ has been unable to leave India on or before 31st March 2020. The individual’s period of stay from 22nd March 2020 to 31st March 2020 shall not been taken into account in determination of his residential status u/s 6 of the IT Act.
Case II a) The ‘individual’ has come to India on a visit before 22nd March 2020;
b)The ‘individual’ has been quarantined in India due to Covid-19 on or after 1st March 2020; and
c) The ‘individual’ has either
     – departed on an evacuation flight on or before 31st March 2020, or     – been unable to leave India on or before 31st March 2020.		 The individual’s period of stay from the beginning of his quarantine to his date of departure or 31st March 2020, as the case may be, shall not been taken into account in determination of his residential status u/s 6 of the IT Act.
Case III a) The ‘individual’ has come to India on a visit before 22nd March 2020; and
d) The ‘individual’ has departed on an evacuation flight on or before 31st March 2020		 The individual’s period of stay from 22nd March 2020 to his date of departure shall not been taken into account in determination of his residential status u/s 6 of the IT Act.

4.2. For FY 2020-21:


The CBDT, in its press release, has provided that a circular shall be issued for excluding the period of stay of the ‘individual’ upto the date of normalization of international flight operations in India after the normalization thereof.

C. CBDT’s Interim Action Plan for First Quarter of FY 2020-21


The following directions, among others, have been issued by the CBDT to Income Tax Officers under the Interim Action Plan for the first quarter (April 2020 to June 2020) of the FY 2020-21:

  1. At the outset, it has been directed that no communication with the taxpayer having an “adverse effect” is to be done during this first quarter until the issuance of fresh guidelines by the CBDT.
  2. It has been directed to identify and be prepared for issuance of notice u/s 148 for ‘income escaping assessment’ by 30th June 2020. These notices will be issued to the taxpayers on receiving a fresh communication from the CBDT in this regard.
  3. It has been directed to be prepared for disposal of applications by the taxpayers u/s 154 (rectification of mistake).
  4. It has been directed to check all the pending demands for removal of all the duplicate demands.
  5. It has been directed to dispose of all the applications u/s 12AA or 80G of the IT Act (charitable trusts) for grant of registrations received up to 31st March 2020.
  6. It has further been directed to upload the manual orders u/s 147 (income escaping assessment) and 263 (revision of order prejudicial to revenue) of the IT Act.

[1] These actions do not include payment of any amount towards tax or levy whose due date falls during the period from 20th March 2020 to 29th June 2020 or such other date as the central government may specify by notification. This means that there has been no extension in the due date for payment of such amounts.


[2] It is defined as: (a) Wealth Tax Act, 1957; (b) The Income tax Act, 1961; (c) The Prohibition of Benami Property Transaction Act; (d) Chapter VII of the Finance (No.2) Act, 2004 (Securities Transaction Tax);

(e) Chapter VII of the Finance Act, 2013 (Commodities Transaction Tax);

(f) The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015; (g) Chapter VIII of the Finance Act 2016 (Equalization Levy); and (h) The Direct Tax Vivad Se Vishwas Act, 2020.

[3] The Central Government can extend this time period by a notification.

[4] The Central Government can further extend this date of completion or compliance period by notification. In this regard, the Central Government can specify different dates for completion or compliance of different actions for the purpose of this extension.


[5] The Central Government can extend this time period by a notification


[6] The Central Government can further extend this date for payment of such amount for the purposes of this relaxation.


[7] It means the period between the due date and the date on which the amount has been paid.


[8] Tax Deduction at Source.


[9] Tax Collection at Source.


[10] As laid down in Case III.

[11] Annexure to “Order u/s 119 of The Income Tax Act, 1961 on issue of certificates for lower/nil deduction/collection of TDS or TCS u/s 195, 197 and 206C (9)” dated 31st March 2020 (F.NO.275/25/2020-IT(8))

[12] This direction has been issued to alleviate the hardship caused to the payees and buyers/ licensees/ lessees who have raised invoices in FY 2019-20 but have not received the payment for the same since they were not able to intimate the rate of deduction/collection on such amount to the payer and seller/ licensor/ lessor due to pendency of such application.

[13] The payer, who will not deduct tax on the basis of such extended validity of forms, shall be required to report details of such payments/credits in the TDS statement for the quarter ending 30th June 202 in accordance with the provisions of the prescribed rules.

Recent Legal and Regulatory Changes Impacting Debt Transactions

In March 2020, there have been several changes in the Indian legal and regulatory landscape that will have an impact on debt transactions. Many of these changes have been precipitated due to the nationwide lock-down imposed as a result of COVID-19. The key changes are summarised below.

1. Insolvency regime

  • Increase in default threshold: The threshold for initiating the corporate insolvency resolution process (“CIRP”) under section 4 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) has been increased from Rs. 100,000 to Rs. 10,000,000. This move will benefit various companies, especially medium and small enterprises, who may be unable to repay their debts in a timely manner and be forced into insolvency due to COVID-19.

  • Extension of CIRP timelines: The period of lockdown (i.e. March 24, 2020 to April 15, 2020) in relation to COVID-19 will be excluded for the purpose of calculating the 330-day period for completion of the CIRP. This will be applicable for all cases where the CIRP has been initiated and pending before any bench of the National Company Law Tribunal (“NCLT”) or in appeal before the National Company Law Appellate Tribunal (“NCLAT”).

  • Extension of timelines due to lockdown: The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”) were amended to provide that if any activity in relation to the CIRP cannot be completed during the lockdown period imposed by the Government due to COVID-19, then such lockdown period will not be counted for the purposes of any timeline within which such activity has to be completed under the CIRP Regulations. This will provide a breather to many resolution professionals who were struggling to complete certain activities given the nationwide lockdown.

  • Priority financing: The Central Government has sponsored the Special Window for Affordable and Middle-Income Housing Investment Fund I for providing priority debt financing for completion of stalled housing projects that are in the affordable and middle-income housing sector. Any debt availed from such fund will be treated as “interim financing” under the IBC and will receive priority in repayment under the CIRP or liquidation of the corporate debtor.

  • Special GST process: Corporate debtors undergoing CIRP have to obtain a new GST registration in each state and union territory where they are carrying on business. The same must be obtained within 30 days of appointment of the interim resolution professional or resolution professional. Where any CIRP is ongoing on March 21, 2020 (the date of the notification), then the new registration has to be obtained within 30 days of such notification. The process set out in the notification has to be followed for filing returns and availing input tax credit.

  • Applicability to Jammu & Kashmir: The application of the IBC has been extended to the Union Territory of Jammu and Kashmir with effect from March 18, 2020 pursuant to the Jammu and Kashmir Reorganisation (Adaptation of Central Laws) Order, 2020.

  • December 2019 Ordinance codified by an IBC amendment: Various amendments that were introduced to the IBC pursuant to an ordinance in December 2019 were codified pursuant to a formal amendment to the IBC on March 13, 2020. These amendments are effective from December 28, 2019 (the date of the ordinance). The key changes brought about pursuant to the ordinance and this amendment include the following:

    (i) Restrictions on governmental authorities and regulators from suspending or terminating any license, quota, concession, clearance or similar right granted to the corporate debtor;(ii) No interruption of supply of goods and services to the corporate debtor which are critical to preserve the value and manage the operations of the corporate debtor

    (iii) Protection to the corporate debtor its assets from offences committed prior to the CIRP period by the erstwhile management and promoters of the corporate debtor; and

    (iv) Minimum number or percentage of applicants required to initiate CIRP proceedings by certain classes of creditors.

 

2. Moratorium permitted by the Reserve Bank of India (“RBI”)

On March 27, 2020, the RBI announced certain regulatory measures to ease the burden of debt servicing brought about by disruptions on account of COVID-19. The measures were aimed at ensuring continuity of viable businesses. One of the measures was to provide a moratorium to borrowers.

  • Moratorium on Term loans: The RBI permitted all commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and non-banking financial companies (including housing finance companies) (“lending institutions”) to grant a moratorium in respect of term loans (including agricultural term loans, retail and crop loans), of three months on payment of all “instalments” falling due between March 1, 2020 and May 31, 2020. The “instalments” will include (i) principal and/or interest components, (ii) bullet repayments, (iii) equated monthly instalments, and (iv) credit card dues. The repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period. However, interest will continue to accrue on the outstanding portion of the term loans during the moratorium period. It is noteworthy that the moratorium related provisions are not applicable to foreign lenders, foreign portfolio investors (“FPIs”), mutual funds or alternative investment funds that have extended any debt to Indian borrowers.

  • Deferment of interest on Working capital facilities: In relation to working capital facilities sanctioned in the form of cash credit/overdraft (“CC/OD”), lending institutions have been permitted by RBI to defer the recovery of interest applied in respect of all such facilities during the period from March 1, 2020 upto May 31, 2020 (“deferment”). The accumulated accrued interest will be recovered immediately after the completion of this period.

  • Recalculation of Drawing power: Lending institutions can also recalculate the drawing power of borrowers facing stress due to COVID-19 in relation to CC/OD facilities sanctioned to them. The recalculation can be by reducing the margins and/or by reassessing the working capital cycle. This relief is available in respect of all such changes effected up to May 31, 2020 and contingent on the lending institutions being satisfied that the change is necessitated due to a fallout of COVID-19.

  • Asset classification: Any moratorium / deferment / recalculation of drawing power will not be treated as a concession or change in terms and conditions of loan agreements due to financial difficulty of the borrower under the RBI (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 dated June 7, 2019. Therefore, such measure itself will not result in a downgrade of asset classification. The asset classification of term loans which are granted any relief mentioned above will be determined based on the revised due dates and the revised repayment schedule. Further, for working capital facilities where relief is provided, the special mention account status and the out of order status will be evaluated considering the application of accumulated interest immediately after the completion of the deferment period as well as the revised terms.

  • No adverse impact on credit history: Any rescheduling of payments, including interest, will not qualify as a default for the purposes of supervisory reporting and reporting to credit information companies (“CICs”) by the lending institutions. CICs shall ensure that the actions taken by lending institutions pursuant to the above announcements do not adversely impact the credit history of the beneficiaries.

  • Board approved policy: The board of each lending institution must frame appropriate policies to deal with the above measures. The policies must set out objective criteria for considering the abovementioned reliefs and must also be made available in the public domain.

 

 

3. Increased corporate bond limits

The RBI has increased the limit for FPI investment in corporate bonds to 15% of the outstanding stock for the financial year April 1, 2020 to March 31, 2021. The revised limits for FPI investment in corporate bonds are as follows:

FPI Investment limit in corporate bonds for FY 2020-2021 Rs. (crores)
Current limit 3,17,000
Revised limit: April 1, 2020 to September 2020 429,244
Revised limit: October 2020 to March 2021 541,488

 

4. Time periods for creating reserves extended

  • Under the Companies Act, 2013, certain type of companies that have issued secured debentures are required to invest at least 15% of the value of debentures maturing in the next financial year into certain prescribed form of investments by April 30. The timeline to make such prescribed investments has now been extended to June 30 for this financial year.

  • Under the Companies Act, companies which have accepted deposits from the public or its members have to deposit an amount equal to 20% of the deposits maturing in the following financial year in a separate deposit repayment reserve account with a scheduled bank. Such deposit has to be made by April 30 each year. The timeline for this deposit has now been extended to June 30 for this financial year.

 

 

5. Certain relaxations under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”)

  • Financial information: Companies that propose to issue non-convertible debentures, non-convertible preference shares or commercial paper which are to be listed can now provide audited financial information for the period ending September 30, 2019 for all issuances upto May 31, 2020 (instead of issuances upto March 31, 2020).

  • Extension of timelines for filings/disclosures: Timelines for certain filings and disclosures that need to be made in relation to listed non-convertible debentures, non-convertible preference shares or commercial paper have been extended. These include the following: (i) The timeline for initial disclosures for large corporates have been extended by 45 days upto June 30, 2020; (ii) The timeline for annual disclosures for large corporates have been extended by 60 days upto June 30, 2020; (iii) The timeline for declaration of half-yearly financial results has been extended by 45 days to June 30, 2020; and (iv) The timeline for declaration of annual financial results has been extended by 30 days to June 30, 2020.

 

 

6. Encumbrances on units of Real Estate Investment Trusts (“REITs”)

  • Creation of encumbrance: On March 23, 2020, the Securities and Exchange Board of India (“SEBI”) has, by way of a circular, permitted sponsors and sponsor group entities holding any units under the SEBI (Real Estate Investment Trusts) Regulations, 2014 (“REIT Regulations”) during the mandatory holding period to create an encumbrance on such units. The encumbrance will include a pledge, lien, negative lien, non-disposal undertaking etc. or any other covenant, transaction, condition or arrangement in the nature of encumbrance. Any agreement in relation to the encumbrance shall include the conditions for creation and invocation of encumbrance under the SEBI circular.
  • Invocation of encumbrance: Any encumbrance cannot be invoked during the holding period prescribed under the REIT Regulations unless the following conditions are fulfilled: (i) the person(s) invoking the encumbrance (whether directly or through any trustee or agent acting on its behalf) shall get itself or its nominee to become re-designated sponsor upon compliance with the terms and conditions for re-designation of sponsor as specified under REIT Regulations; however this condition is not applicable in case the person invoking the encumbrance is already a member of the sponsor group; and (ii) the re-designated sponsor has to fulfil the obligations specified for sponsor under REIT Regulations.
  • Disclosures of encumbrance to the REIT manager: The sponsor(s) and sponsor group entity creating any encumbrance on the REIT units held by them has to provide details of the encumbrance to the manager of the REIT within two working days from the date of creation of such encumbrance in a prescribed format. Further, they must also notify the manager of any change in the above information pursuant to release or invocation of encumbrance, or in any other manner, within two working days from the date of such event.
  • Disclosures to stock exchanges: Within two working days from the receipt of encumbrance related details mentioned above, the REIT must disclose such information to every stock exchange where units of the REIT are listed. The disclosure has to be in a prescribed format.

 

 

7. Encumbrances on units of Infrastructure Investment Trusts (“INVITs”)

  • Creation of encumbrance: On March 23, 2020, the SEBI has, by way of a circular, permitted sponsors and sponsor group entities holding any units under the SEBI (Infrastructure Investment Trusts) Regulations, 2014 (“INVIT Regulations”) during the mandatory holding period to create an encumbrance on such units. The encumbrance will include a pledge, lien, negative lien, non-disposal undertaking etc. or any other covenant, transaction, condition or arrangement in the nature of encumbrance. Any agreement in relation to the encumbrance shall include the conditions for creation and invocation of encumbrance under the SEBI circular.

  • Invocation of encumbrance: Any encumbrance cannot be invoked during the holding period prescribed under the INVIT Regulatio

  • Disclosures of encumbrance to the INVIT manager: The sponsors creating any encumbrance on the INVIT units held by them has to provide details of the encumbrance to the manager of the INVIT within two working days from the date of creation of such encumbrance in a prescribed format. Further, they must also notify the manager of any change in the above information pursuant to release or invocation of encumbrance, or in any other manner, within two working days from the date of such event.

  • Disclosures to stock exchanges: Within two working days from the receipt of encumbrance related details mentioned above, the INVIT must disclose such information to every stock exchange where units of the INVIT are listed. The disclosure has to be in a prescribed format.

 

 

8. Extension of amendments to stamp duty on Debentures

  • Pursuant to certain amendments that were made to the stamp duty law, the stamp duty rate on the debentures was modified from a maximum of 0.25% or Rs. 25 lacs, whichever was lower, to an ad valorem rate of 0.005% of the value of the debentures. These new stamp duty rates were to come into effect from April 1, 2020. However, they are now proposed to come into effect from July 1, 2020.

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