FINANCE (NO. 2) ACT, 1998

Tax reform expands and rationalises income tax exemptions, deductions and compliance, altering rates and procedural rules.

The Finance (No. 1998) Act revises the income tax rate structure including higher individual exemption threshold; redesignates income tax authorities and amends definitions; rationalises exemptions by omitting outdated provisions and conditioning institutional exemptions on financing, prescribed receipts or approval; extends and targets sectoral incentives and tax holidays; introduces depreciation on specified intangible assets and revised depreciation rules for the power sector; inserts a Site Restoration Fund regime for petroleum and natural gas undertakings with audit and utilisation constraints; permits carry forward of loss from house property; tightens deductibility rules for unexplained expenditure; expands PAN/GIR quoting and filing obligations; and reforms appellate procedure, fees and timelines while creating a scheme for voluntary settlement of tax arrears.