Tax neutral transfers: exclusion of wholly owned subsidiary-holding company transfers from income scope under section 56, effective prospectively.
The amendment excludes transfers between a wholly owned subsidiary and its holding company from the scope of the income inclusion provision, so that transfers recognised as tax neutral under existing transfer provisions but previously not excluded from income treatment will now be excluded, thereby facilitating transactions of money or property between related companies and applying prospectively to transactions made on or after the effective date.

Conversion of inventory into capital asset treated as taxable business income; fair market value deemed consideration and acquisition cost.
Any profit or gain arising from conversion of inventory into, or treatment as, a capital asset shall be charged as business income, with the fair market value of the inventory on the date of conversion deemed to be the full value of consideration; that fair market value will be the cost of acquisition for computing subsequent capital gains and the period of holding of the capital asset will be reckoned from the date of conversion.

Variation threshold for stamp duty versus sale consideration: minor variations exempted from adjustment, limiting duplicate taxation.
Where taxability of immovable property transactions is determined by reference to the higher of sale consideration and stamp duty value for capital gains, business profits and other income, no upward valuation adjustment will be made if the divergence between stamp duty value and sale consideration does not exceed a prescribed small threshold of the sale consideration.

Timely filing requirement for Chapter VIA deductions: claims barred unless the income tax return is filed by the due date.
The proposal makes timely filing of the return of income a universal eligibility condition for all deductions under the heading "C. - Deductions in respect of certain incomes" in Chapter VIA, so that such deductions will not be admissible unless the return is filed by the due date prescribed under the tax law.

Extension of NPS withdrawal exemption now covers non-employee subscribers, equalising tax treatment and applying prospectively.
Amendment extends the existing 40% exemption on National Pension System withdrawals-previously limited to employee contributors-to all subscribers, thereby equalising tax treatment on account closure or opting out by making the exemption available to non employee subscribers as well; the change is prospective and applies from the specified fiscal year to subsequent assessment years.

Taxation option for domestic manufacturers limited to business income, while incomes under scheduled rates remain separately taxed, with retrospective effect.
The amendment clarifies that the concessional taxation option under Section 115BA is confined to income arising from manufacture, production, research or distribution carried on by the domestic company; amounts subject to separate scheduled rates continue to be taxed under those schedules. The clarification is given retrospective effect from 1 April 2017 and applies to assessment year 2017-18 onward.

Country-by-Country reporting deadline extended for resident and constituent entities, clarifying filing obligations and agreement scope.
Amendments extend the CbCR filing period to twelve months from the end of the reporting accounting year for parent entities and AREs resident in India and for constituent entities resident in India with non resident parents where the overseas parent has no filing obligation; AREs resident abroad will follow their jurisdictional due date. "Agreement" is defined to include specified exchange instruments and Central Government notified exchange agreements, and "reporting accounting year" is defined as the accounting year reflected in the CbCR. The changes are clarificatory and apply retrospectively.

Adjustment based on third party tax statements barred in return processing for returns furnished after commencement, altering section 143(1) treatment.
The amendment adds a proviso to sub clause (vi) of clause (a) of sub section (1) of section 143 to prohibit adjustments during processing of a return based on income appearing in third party statements (Form 26AS, Form 16A, Form 16) for any return furnished on or after the assessment year commencing 1 April 2018; the change narrows prima facie adjustment powers and applies from the 2018 2019 assessment year onward.

Long-term capital gains taxation introduced: concessional tax for listed equity and equity fund transfers after commencement.
The Finance Bill, 2018 proposes to tax long-term capital gains from listed equity shares, equity-oriented fund units, and business trust units on transfers made on or after 1 April 2018, subject to a threshold and STT conditions. Cost of acquisition for assets held on or before 31 January 2018 may be the actual cost or the fair market value as of that date under specified rules; indexation is disallowed. Gains accrued up to 31 January 2018 remain exempt by virtue of the deemed FMV-based cost rules.

Penalty approval authority expanded to include senior supervisory approval; investigating officers may initiate penalties only with prior senior approval.
The amendments expand the approval framework for penalty orders under the Act by vesting additional supervisory approval power in a higher-level officer and expressly including investigating officers with concurrent assessing jurisdiction within the approval clause, clarifying that such investigating officers may initiate penalty proceedings only with prior approval from an appropriate senior officer. They also widen authority to issue instructions for instituting criminal proceedings by adding senior oversight officers and amend the provision's marginal heading accordingly.

Prosecution for failure to furnish return: companies excluded from small-tax exemption, tightening liability effective from April 2018.
Section 276CC penalises willful failure to furnish income-tax returns. A proviso exempts persons from prosecution where tax payable after credits does not exceed a small threshold. To prevent abuse by shell companies and entities holding benami property, the proviso is proposed to be amended so that it will not apply to a company, removing the de minimis exemption for companies, with the amendment taking effect from 1 April 2018.

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.