Commodity Transaction Tax on options in commodity futures: sale taxed payable by seller, exercise taxed payable by purchaser.
Options in commodity futures are included in the definition of taxable commodities transactions; sale of an option will attract Commodity Transaction Tax payable by the seller, and where an option is exercised the purchaser will be liable to pay tax. Valuation provisions are amended to include the value of options. These amendments take effect from 1 April 2018 and apply to the assessment year 2018-2019 and subsequent years.

New scrutiny assessment scheme centralises assessment powers and permits notified exemptions and parliamentary laying of notifications.
Section 143 is amended to introduce a new scheme for scrutiny assessment enabling the Central Government, by notification, to prescribe team-based, interface-free assessments and to direct that assessment provisions may not apply or may apply with specified exceptions, modifications or adaptations; notifications under these powers must be laid before each House of Parliament and the amendments take effect from the commencement date specified in the measure.

Carry forward and set off of losses allowed where insolvency resolution plan under IBC preserves loss claims despite ownership change.
Relaxation is proposed to permit carry forward and set off of losses despite change in beneficial ownership where an insolvency resolution plan is approved under the Insolvency and Bankruptcy Code, 2016, subject to hearing the jurisdictional Principal Commissioner or Commissioner. It is also proposed that returns during the resolution process be verified by the insolvency professional appointed by the Adjudicating Authority. Both amendments are to take effect from 1 April 2018 and apply to assessments and returns from that date.

Minimum alternate tax relief: admitted corporate insolvency applicants may deduct accumulated losses and depreciation when computing book profits.
Amendment permits a company whose corporate insolvency resolution application has been admitted to reduce book profit under section 115JB by the aggregate of unabsorbed depreciation and loss brought forward (loss excluding unabsorbed depreciation) for MAT computation, effective 1 April 2018. A clarificatory amendment deems section 115JB inapplicable to a foreign company whose total income comprises solely profits from businesses taxed under specified presumptive provisions and offered at the prescribed rates, effective retrospectively from 1 April 2001.

Tax exemption for royalty and fees for technical services removes withholding obligation on payments made by NTRO.
Income to non-resident persons (other than companies) by way of royalty or fees for technical services from or to NTRO is proposed to be tax-exempt, removing NTRO's obligation to withhold tax at source on such payments and altering the withholding and assessment treatment for those receipts.

Tax exemption for foreign companies on sale of leftover crude extended to terminations per agreement, effective from assessment year 2019-20.
Exemption permits a foreign company to receive untaxed income from sale of leftover crude stock where storage and sale arise from an agreement or arrangement entered into or approved by the Central Government and are notified; amendment extends that exemption to sales following termination of the agreement in accordance with its terms.

Non-speculative treatment of agricultural commodity derivatives restores non-speculative classification for exchange-traded trades even without commodity tax.
Agricultural commodity derivatives were treated as speculative because the proviso excluding exchange-traded derivatives from the speculative definition required levy of commodity transaction tax, from which agricultural derivatives are exempt. The proposed amendment provides that trading in agricultural commodity derivatives on a registered stock exchange or association will be treated as non-speculative even if not chargeable to commodity transaction tax, altering their income-tax classification prospectively.

Employment generation incentive extended to footwear and leather, with carry forward eligibility for employees meeting minimum service later.
The proposal extends the existing 150 day employment minimum concession under section 80-JJAA from the apparel sector to include footwear and leather industries, allowing those employers to claim the additional 30% deduction on emoluments for new employees. It also permits claiming the additional deduction where a new employee works less than the minimum period in the first year but subsequently meets the minimum service requirement. The amendment is effective from 1 April 2019 and applies to the assessment year beginning thereafter.

Tax neutrality for IFSC trades: certain non-resident transactions not treated as transfer when paid in foreign currency.
Section 47 is amended so that certain transactions by a non-resident on a recognized stock exchange in an IFSC-covering bonds and Global Depository Receipts, rupee denominated bonds of Indian companies, and derivatives-will not be regarded as a transfer if consideration is paid or payable in foreign currency. Section 115JC is amended to charge Alternate Minimum Tax at nine percent for a unit located in an IFSC, with consequential amendment to section 115JF; both amendments take effect from 1 April 2019 and apply to assessment year 2019 20 onward.

Startup tax deduction extension broadens eligibility and redefines qualifying businesses, enhancing access to incentives.
Availability of deduction under Section 80-IAC is extended and qualifying conditions modified: an eligible start-up may claim the deduction for three consecutive assessment years within a specified post incorporation window, subject to a turnover ceiling assessed across seven previous years commencing from the start up's date of incorporation, and subject to engagement in qualifying business activity (innovation, development or improvement of products, processes or services, or scalable business models with high potential for employment generation or wealth creation). The amendments apply from the start of the fiscal year and to the relevant assessment year and onward.

Tax deduction for Farm Producer Companies extended to qualifying entities with specified turnover for a limited term.
The provision extends the deduction under Section 80P to Farm Producer Companies whose gross total income includes income from marketing members' agricultural produce, supplying agricultural implements/seeds/livestock to members, or processing members' produce. The deduction is available to FPCs subject to a turnover cap and is granted for a specified limited five-year period beginning in the financial year 2018-19, with effect from the fiscal year starting 1 April 2019 for subsequent assessment years.

Interest deduction for senior citizens expanded, with higher TDS threshold; standard salary deduction introduced, replacing certain allowances.
A new deduction specifically for senior citizens will cover interest on deposits and displace the existing savings account interest deduction for them while the threshold for withholding tax on interest paid to senior citizens is raised. Separately, a standard deduction for salary income is introduced up to a prescribed limit or the salary amount, and exemptions for transport allowance (with an exception for differently abled persons) and medical reimbursement are withdrawn.

Enhanced medical deduction for senior citizens: deductible limit increased for specified diseases, effective from the next assessment year.
An amendment increases the monetary ceiling under the Section 80DDB deduction for medical treatment of specified diseases, equalising the deductible limit for senior citizens and very senior citizens and applying to the assessment year commencing after the effective fiscal date; existing eligibility criteria and documentation requirements continue to govern claims.

Health insurance deduction for senior citizens increased; single premium policies permitted pro rata deduction under amended rules.
Amendment increases the health insurance deduction for senior citizens, covering annual premiums and preventive health check ups, and allows medical expenditure for very senior citizens. Single premium multi year health policies qualify for deduction on a pro rata basis for the years of cover, subject to the prescribed monetary limit. These changes take effect from 1 April 2019 and apply to the assessment year commencing thereafter.

Presumptive income for heavy goods vehicles revised to tonnage-based deemed earnings per month replacing flat per-vehicle rate.
The proposal amends Section 44AE to treat heavy goods vehicles (above 12 tonnes GVW) under a tonnage-based deeming rule: deemed income equals a specified amount per ton of gross or unladen weight per month or part thereof, or the amount actually claimed, whichever is higher; non-heavy vehicles remain taxed under the existing per-vehicle presumptive rate, with the amendment effective from 1 April 2019.

Taxation of compensation expanded to include payments for contract termination or modification as business or employment income.
The proposal amends section 28 to tax any compensation received or receivable, whether revenue or capital, for termination or modification of contracts relating to business as business income, and provides that compensation for termination or modification of employment contracts shall be taxable under section 56.

Significant economic presence creates business connection for tax purposes, enabling source-country taxation of income from digital transactions.
The proposal treats significant economic presence as a business connection where a non-resident carries out transactions in goods, services or property (including downloads) exceeding a prescribed revenue threshold, or systematically and continuously solicits business or interacts with a prescribed number of users in India through digital means; only income attributable to such transactions or activities shall be deemed to accrue or arise in India, irrespective of the non-resident's physical presence or residence, with thresholds to be prescribed after stakeholder consultation.

Business connection scope expanded to include agents who habitually conclude contracts or play principal roles, broadening PE exposure.
The Budget proposes amending the domestic definition of business connection to align with MLI modified DAPE and anti fragmentation rules by including business activities carried out through a person who habitually concludes contracts or habitually plays the principal role leading to their conclusion by the non resident; applicable contracts are those in the non resident's name, for transfer or use of the non resident's property, or for provision of services by the non resident, with the amendment effective from the stated implementation date and applying to the corresponding assessment year onward.

Restriction on cash application of income requires exempt entities to follow TDS and disallowance rules, curbing untraced receipts.
Specified disallowance and payment-tracing provisions applicable in computing business income are to apply mutatis mutandis for determining application of income by charitable/religious entities and entities exempt under the specified exemption clause, thereby restricting cash application, reinforcing TDS compliance, and creating an audit trail for verification of application of income.

Long-term capital gains tax for foreign institutional investors applies above the exemption threshold after withdrawal of the exemption.
Withdrawal of the statutory exemption makes long-term capital gains on equity shares, equity-oriented fund units and business trust units taxable for foreign institutional investors; the FII tax provision is amended so gains are taxed only to the extent they exceed the applicable exempt threshold, with the amendment operative from the stated assessment year onward.