THE MINISTER OF FINANCE (SHRI P. CHIDAMBARAM) Moving the motion for consideration of the Bill said:

Post the Budget presentation and post the Finance Bill introduction, we had discussions with stakeholders, Members of Parliaments, State Governments, industry, business, trade unions and we have come up with a certain number of amendments. Some of the amendments are of vital interest to the Members of this House. Let me begin by dealing with amendment which is of great interest to all of you. There was an apprehension that wealth tax was being imposed on agricultural land. Let me make it absolutely clear that the policy of the UPA Government is not to impose wealth tax. A misapprehension arose following certain judgements of the Punjab and Haryana High Court. Therefore, in order to make matters so clear and place it beyond doubt, I have introduced an official amendment which makes it abundantly clear that urban land does not include agricultural land which is recorded as such in the Government records and which is used for agriculture. There is no intention to change the law and a close reading of the law will show that no change has been made. But in order to allay the apprehension, I will move an amendment. The amendment was drafted yesterday. I have got the assent of the President to move the amendment and I am moving the amendment today. Therefore, all apprehensions must be put to rest.

Some other amendments are being moved.

We are moving an amendment in order to attract investments in rupee denominated long-term infrastructure bonds. I propose to amend Section 194 LC so that foreign currency routed through designated accounts of a non-resident for investment in such bonds is deemed to be borrowed in foreign currency.

It is proposed to withdraw this amendment in order to insert a new Section 194 LD for providing a 5 per cent rate of tax on interest payment during the period beginning 1 st June, 2013 and ending on 31^st May, 2015 to foreign institutional investors and qualified foreign investors on investments in Government securities and rupee denominated Government corporate bonds.

Under the existing provisions of 206 1(d) of the Income Tax Act, there is a rate of 1 per cent levied on cash sale of bullion or jewelry. There was an exclusion in the parenthesis of that clause. That exclusion was giving opportunity for misuse. That exclusion is now being withdrawn.

There is an amendment to 206 AA carving out an exception so that the PAN requirement and consequently higher with holding tax of 20 per cent does not apply to interest payment of non-residents in respect of long-term infrastructure bonds referred to in Section 194 LC. These amendments will attract more investments. Proposal to have a tax deducted at source at one per cent on transfer of immovable property other than agricultural land remains.

Section 153 and 153 (b) are proposed to remove certain anomalies created by language in the Finance Act of 2012. Now that we are putting a Commodities Transaction Tax on commodities other than agricultural commodities, trading in commodity derivatives will no longer be considered as a speculative transaction.

Chairman of the Central Excise and Customs Appellate Tribunal, CECAT, can be either a High Court Judge or a Senior Vice President or one of the Vice Presidents. If necessary we can impose a higher import duty from 30 per cent to 70 per cent on import of cashew kernels to protect domestic industry. I am exempting the period 1-7-2012 to 1-10-2012 from the service tax for the Railways. Most important amendment is the amendment that is making it abundantly clear that there was never any intention to impose wealth tax on agricultural land.

Wealth tax clarified: agricultural land excluded, preventing unintended taxation and preserving existing exemption under finance amendment. Clarifies that agricultural land recorded and used as such is excluded from urban land for wealth tax purposes, with a declaratory amendment to dispel uncertainty. Introduces measures to attract foreign investment into rupee denominated long term infrastructure bonds by deeming certain foreign currency flows as borrowings and providing a concessional withholding tax regime for specified foreign investors; carves out PAN withholding exceptions for interest on qualifying bonds; tightens withholding on cash bullion and jewellery sales; retains one percent TDS on immovable property transfers excluding agricultural land; and reclassifies commodity derivatives for speculative treatment under a commodities transaction tax.