Capital gains reinvestment cap prevents cross fiscal splitting to inflate exemption, clarifying aggregation across consecutive financial years.
Amendment to section 54EC clarifies that investments in long-term specified assets out of capital gains from transfers of one or more original assets must be aggregated across the financial year of transfer and the subsequent financial year for the purpose of the statutory cap on exemptible reinvestment, thereby preventing taxpayers from splitting investments across years to exceed the annual limit; effective 1 April 2015 and applicable to assessment year 2015-16 onward.

Capital gains exemption limited to investment in one residential house in India for rollover relief under sections 54 and 54F.
The Finance (No. 2) Bill, 2014 amends the capital gains rollover relief to provide that exemption is available only when the reinvestment is made in one residential house situated in India, applying the territorial and single house restriction to both the residential house transfer and non residential transfer apportionment provisions; the amendments operate prospectively from the 2015-16 assessment year.

Cost Inflation Index definition updated to reference CPI (Urban), altering the indexation basis for capital gains computation.
The amendment replaces the discontinued CPI for urban non-manual employees with the Consumer Price Index (Urban) as the CPI series to be used when the Central Government notifies the Cost Inflation Index, retaining the prior requirement to have regard to seventy-five percent of the average rise in the CPI (Urban) for the immediately preceding year; the change is effective from 1 April 2016 and applies to assessment year 2016-17 and thereafter.

Capital gains timing for compensation under interim court orders clarified; taxable in the year of the final order.
The amendment provides that compensation received pursuant to an interim order of a court, Tribunal or other authority in cases of compulsory acquisition shall be deemed to be income chargeable under the head Capital gains in the previous year in which the final order of such court, Tribunal or other authority is made; the amendment takes effect from 1st April, 2015 and applies to the assessment year 2015 16 and subsequent years.

Speculative transaction classification clarified: trading in commodity derivatives in recognised associations chargeable to commodities transaction tax is excluded.
The amendment provides that eligible transactions in trading commodity derivatives carried out in a recognised association and chargeable to commodities transaction tax shall not be regarded as speculative transactions, formalising the link between the exclusion from speculative transaction treatment and liability to commodities transaction tax and applying retrospectively to the relevant assessment years.

Non-resident-to-non-resident transfers of government securities outside India excluded from capital gains when settled via an intermediary.
Transfers of Government securities that carry periodic interest, effected outside India by a non-resident to another non-resident through an intermediary dealing in securities settlement, will not be treated as a transfer for capital gains purposes, thereby facilitating listing and trading of such securities outside India; the amendment is prospective and applies to assessment years from the stated effective date.

Income Computation and Disclosure Standards govern taxable income computation; noncompliance permits assessment under section 144.
The Central Government may notify Income Computation and Disclosure Standards to be followed for computation of taxable income and disclosure of information for any class of assesses or any class of income; those standards govern taxable income computation and do not require maintenance of books of account on their basis. If income is not computed in accordance with the notified standards, the assessing authority may determine income using the assessment mechanism applicable to cases where computations are not in compliance with the standards.

Presumptive taxation for goods carriages adopts a uniform monthly presumptive income, simplifying calculation and addressing erosion.
Presumptive taxation for businesses plying, hiring or leasing goods carriages removes the distinction between heavy goods vehicles and other vehicles and replaces differing monthly presumptive amounts with a uniform specified monthly presumptive income for all goods carriages, aiming to simplify the section 44AE regime and address inflationary erosion of prior amounts.

TDS correction statements permitted to clarify filings and limitation periods extended to align assessments with reassessment rules.
Proposed amendments expressly allow deductors to file correction statements and provide for their processing; remove the two year bar on deeming a payer as assessee in default where TDS statements were filed; extend by one year the limitation for deeming defaults where no TDS statement was filed to align with reassessment rules; and designate the Assessing Officer as the authority to levy penalties for failure to furnish or for furnishing incorrect TDS/TCS statements.

TDS compliance: extended payment window for non-resident withholders and capped disallowance for resident payments.
The proposal allows deduction for payments to non-residents if tax deducted is paid on or before the due date for filing returns under section 139(1). For resident payments under section 40(a)(ia), disallowance for non-deduction or non-payment of TDS is to be limited to 30% of the expenditure claimed. The disallowance is also to be extended to all payments subject to deduction under Chapter XVII-B to strengthen TDS compliance.

Registration-linked exemption relief prevents reopening earlier assessments when a trust's registration is subsequently granted, subject to conditions.
Amendment grants registration-linked retrospective relief: where a trust or institution is later granted registration, the benefit of tax exemptions applies to income from trust property in earlier assessment years pending on the date of registration, provided the objects and activities in those years match those on which registration was granted; reopening of assessments for preceding years is barred solely for lack of prior registration. Relief excludes cases where registration was refused or a granted registration was cancelled.

Penalty authority for transfer pricing documents expanded to include Transfer Pricing Officers, altering levy jurisdiction.
The Finance (No. 2) Bill, 2014 proposes amending section 271G to add the Transfer Pricing Officer, as defined in section 92CA, to the authorities competent to levy the penalty under section 271G where a person entering into an international or specified domestic transaction fails to furnish documents or information required by subsection (3) of section 92D; this amendment takes effect from 1st October, 2014.

Definition of international transaction expanded to deem certain third party dealings as between associated enterprises regardless of counterparty residency.
The amendment treats a transaction entered into by an enterprise with a non associated person as an international transaction between associated enterprises where there is a prior agreement between that other person and the associated enterprise or where the terms are determined in substance between them, provided either the enterprise or the associated enterprise or both are non resident; the residency of the unrelated person is immaterial.

Cancellation of registration: expanded grounds let authorities revoke trust registration where income benefits private interests or prohibited investments occur.
The amendment empowers the Principal Commissioner or Commissioner to cancel registration of a trust or institution under section 12AA where activities result in income not enuring for the general public, benefit a particular religious community or caste (where impermissible), apply income or property for specified persons' benefit, or invest in prohibited modes, unless the trust proves a reasonable cause for those activities.

Restriction on overlapping tax exemptions: registered charitable trusts barred from general exemptions; depreciation excluded when capital counted as application.
Where a trust or institution is registered for the special exemption regime for income from property held under trust, it cannot claim alternate exemptions under the general exemption provisions; entities approved under the approval-based exemption are similarly barred from other general exemptions. Additionally, income applied to acquire a capital asset that has been treated as application for charitable purposes shall not be reduced by any deduction or allowance, including depreciation, thereby preventing double benefit from application and subsequent notional deductions.

Verification of returns: amendment permits manuscript or electronic verification by specified persons under the return provisions.
Amendment permits verification of income-tax returns either by handwritten signature or by electronic means, while retaining verification by the persons specified in the Act and aligning the verification requirement with the manner prescribed in the return provisions; the amendment has a specified commencement.

Tax deduction at source on non-exempt life insurance payouts, with an exemption threshold to ease compliance for small payees.
A proposed amendment would require tax deduction at source on sums paid under life insurance policies, including bonuses, that are not exempt under the life-insurance exemption. The proposal includes an exemption from deduction for aggregate annual payments below a prescribed threshold to reduce compliance for smaller recipients and identifies an effective commencement date in the legislative proposal.

Capital asset characterisation: securities held by compliant foreign portfolio investors treated as capital assets, making transfers capital gains.
The Bill provides that securities acquired by foreign portfolio investors in accordance with applicable securities regulations shall be treated as capital assets, so that income arising from their transfer by such investors is characterised as capital gain rather than business income; the amendment applies prospectively from the implementation date and to subsequent assessment years.

Roll back mechanism in APA extends ALP methodology to prior years subject to conditions and procedures.
The Bill introduces a roll back mechanism to the APA scheme: an APA, subject to prescribed conditions, procedure and manner, may provide that its method for determining ALP, or the ALP itself, apply to international transactions concluded in a limited number of prior years preceding the period covered by the APA, aiming to reduce transfer pricing litigation.

Concessional tax on foreign dividends extended to continue lower rate for repatriated earnings in future assessment years.
Amendment extends the concessional taxation under Section 115BBD so that gross dividends received by an Indian company from specified foreign companies continue to be taxed at the lower rate of 15% for financial year 2014 15 and subsequent years, effective 1 April 2015 and applying to assessment year 2015 16 onward.