There will be a Rs. 50,000 crore equity infusion for MSMEs through Fund of Funds (FoF). The FoF will be operated through a Mother Fund and a few daughter funds. The fund structure will help leverage Rs. 50,000 crore of funds at the daughter funds level.
A new definition of MSMEs has been announced as low threshold in earlier definition created a fear amongst MSMEs of graduating out of the benefits offered and thus killing the urge to grow. In the new classification, investment and annual turnover will be the composite criteria determining the category of the enterprise.
Global tenders will be disallowed in government procurement tenders up to Rs. 200 crore. This is a step towards Self-Reliant India (Atmanirbhar Bharat) and will support Make in India. It will also enable MSMEs to increase their business.
In order to provide more funds at the disposal of taxpayers, the rates of TDS for non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates. This will release liquidity of Rs. 50,000 crore into the system.
Due date of all income tax return for FY 2019-20 will be extended from July 31, 2020 and October 31, 2020 to November 30, 2020 and tax audit from September 30, 2020 to October 31, 2020.