TaxTMI 
TaxTMI 
Notes on clauses - Income tax
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....4-15. Rates for deduction of tax at source during the financial year 2015-16 from income other than "Salaries" Part II of the First Schedule to the Bill specifies the rates at which income-tax is to be deducted at source during the financial year 2015-16 from income other than "Salaries". The rates are the same, as those specified in Part II of the First Schedule to the Finance (No.2) Act, 2014 for the purposes of deduction of income tax at source during the financial year 2014-15 except that in case of payment of royalty and fees for technical services in case of agreements made on or after the 1st day of March, 1976, tax shall now be deducted at source at the rate of ten per cent. as against the earlier rate of twenty-five per cent. The amount of tax so deducted shall be increased by a surcharge in the case of- (i) every non-resident (other than a company) at the rate of twelve per cent. where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds one crore rupees; (ii) every company other than a domestic company at the rate of two per cent. where the income or the aggregate of income paid or likely to be paid and subject t....
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....hose specified for assessment year 2015-16. The surcharge in cases of co-operative societies, having income above one crore rupees shall be levied at the rate of twelve per cent. Marginal relief will be provided. Paragraph C of this Part specifies the rate of income-tax in the case of every firm. In such cases, the rate of tax will continue to be the same as that specified for assessment year 2015-16. The surcharge in cases of firms, having income above one crore rupees shall be levied at the rate of twelve per cent. Marginal relief will be provided. Paragraph D of this Part specifies the rate of income-tax in the case of every local authority. In such cases, the rate of tax will continue to be the same as that specified for the assessment year 2015-16. The surcharge in cases of local authorities, having income above one crore rupees shall be levied at the rate of twelve per cent. Marginal relief will be provided. Paragraph E of this Part specifies the rates of income-tax in the case of companies. In the case of companies, the rate of tax will continue to be the same as that specified for assessment year 2015-16. Surcharge in the case of domestic companies having total ....
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....ll include "yoga" as a separate category on the lines of education and medical relief. It is further proposed to amend the said clause (15) to provide that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless-- (i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and (ii) the aggregate receipts from such activity or activities during the previous year, do not exceed twenty per cent. of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year. It is also proposed to amend clause (37A) of the said section to provide that for the purposes of deduction of tax under section 194LBA, the "rates in force", in relation to an assessment year or financial year shall mean the r....
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....n any previous year, if-- (i) it is an Indian company; or (ii) during that year, the control and management of its affairs is situated wholly in India. It is proposed to amend the said clause (3) to provide that a company shall be said to be resident in India, in any previous year, if-- (a) it is an Indian company; or (b) its place of effective management, at any time in that year, is in India. It is also proposed to insert an Explanation to clarify the expression "place of effective management" to mean a place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole are, in substance made. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to assessment year 2016-17 and subsequent assessment years. Clause 5 of the Bill seeks to amend section 9 of the Income tax Act relating to income deemed to accrue or arise in India. Clause (i) of sub-section (1) of the aforesaid section provides a set of circumstances in which income accruing or arising, directly or indirectly, is taxable in India. Explanation 5 to the said clause provides that an asset or capital a....
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....head office or any permanent establishment or any other part of such nonresident outside India shall be deemed to accrue or arise in India and shall be chargeable to tax in addition to any income attributable to the permanent establishment in India and the permanent establishment in India shall be deemed to be a person separate and independent of the non-resident person of which it is a permanent establishment and the provisions of the Act relating to computation of total income, determination of tax and collection and recovery shall apply accordingly. It is further proposed to provide that "permanent establishment" shall have the same meaning assigned to it in clause (iiia) of section 92F. These amendments will take effect from 1st April, 2016 and accordingly apply in relation to the assessment year 2016-17 and subsequent years. Clause 6 of the Bill seeks to insert a new section 9A in the Income-tax Act relating to certain activities not to constitute business connection in India. Clause (i) of sub-section (1) of section 9 provides a set of circumstances in which income is deemed to accrue or arise in India, directly or indirectly, and is taxable in India. Sub-secti....
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....s proposed to amend the aforesaid section by inserting a new clause (11A) so as to provide that any payment from an account opened in accordance with the Sukanya Samriddhi Account Rules, 2014 made under the Government Savings Bank Act, 1873, shall not be included in the total income of the assessee. The existing provisions of clause (23C) of the said section provide for exemption from tax in respect of the income of certain charitable funds or institutions like the Prime Minister's National Relief Fund; the Prime Minister's Fund (Promotion of Folk Art); the Prime Minister's Aid to Students Fund; the National Foundation for Communal Harmony etc. It is proposed to amend the aforesaid clause by inserting two new sub-clauses (iiiaa) and (iiiaaa) so as to exempt income received by any person on behalf of the Swachh Bharat Kosh, set up by the Central Government and to exempt income received by any person on behalf of the Clean Ganga Fund, set up by the Central Government. These amendments will take effect retrospectively from 1st of April, 2015 and accordingly apply in realtion to assessment year 2015-16 and subsequent assessment years. It is also proposed to insert a new cla....
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....nsideration of exchange of shares of a special purpose vehicle and on which securities transaction tax has been paid shall not be included in the total income of the sponsor. These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent assessment years. Clause 8 of the Bill seeks to amend section 11 of the Income tax Act relating to income from property held for charitable or religious purposes. Sub-section (2) of the aforesaid section provides that where eighty-five per cent. of the income is not applied, or is not deemed to have been applied, to charitable or religious purposes in India during the previous year but is accumulated or set apart, for application to such purposes in India, then, such income accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income. However, the said exemption is subject to fulfilment of the following conditions that : (i) such person specifies by notice in writing in Form 10, prescribed for such purpose, providing details of the purpose for which the income is being accumulated or set apart an....
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....red and installed after the 31st day of March, 2005 by an assessee engaged in the business of manufacture or production of any article or thing or in the business of generation or generation and distribution of power, is allowed as deduction as further depreciation. It is proposed to insert a proviso in clause (iia) of sub-section (1) of the aforesaid section to provide that where an assessee, sets up an undertaking or enterprise for manufacture or production of any article or thing, on or after the 1st day of April, 2015 in any backward area notified by the Central Government in this behalf, in the State of Andhra Pradesh or in the State of Telangana, and acquires and installs any new machinery or plant (other than ships and aircraft) for the purposes of the said undertaking or enterprise during the period beginning on the 1st day of April, 2015 and ending before the 1st day of April, 2020 in the said backward area, then, the provisions of clause (iia) shall have effect as if for the words "twenty per cent.", the words "thirty-five per cent." had been substituted: Consequentially, it is proposed to insert the reference of newly inserted proviso in clause (iia) in the second ....
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....g before the 1st day of April, 2020 in the said backward area, then, there shall be allowed a deduction of a sum equal to fifteen per cent. of the actual cost of such new asset for the assessment year relevant to the previous year in which such new asset is installed. The proposed sub-section (2) of the aforesaid section provides that if any new asset acquired and installed by the assessee is sold or otherwise transferred, except in connection with the amalgamation or demerger or re-organisation of business referred to in clause (xiii) or clause (xiiib) or clause (xiv) of section 47, within a period of five years from the date of its installation, the amount of deduction allowed under sub-section (1) in respect of such new asset shall be deemed to be the income of the assessee chargeable under the head "Profits and gains of business or profession" of the previous year in which such new asset is sold or otherwise transferred, in addition to taxability of gains, arising on account of transfer of such new asset. The proposed sub-section (3) of the aforesaid section provides that in case the new asset is sold or otherwise transferred in connection with the amalgamation or demerge....
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.... the prescribed authority for cooperation in such research and development facility and for audit of the accounts maintained for that facility. It is proposed to amend clause (3) of sub-section (2AB) of the said section to provide that no company shall be entitled for deduction under clause (1) of the said sub-section (2AB) unless it enters into an agreement with the prescribed authority for cooperation in such research and development facility and fulfils conditions with regard to maintenance and audit of accounts and furnishing of report, as may be prescribed. The existing provisions contained in clause (4) of sub-section (2AB) of the said section 35 further provides that the prescribed authority shall submit its report in relation to the approval of the research and development facility to the Principal Director General or Director General. It is proposed to insert the reference of Principal Chief Commissioner or Chief Commissioner in the said clause so as to enable the prescribed authority to submit its report to the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General. These amendments will take effect from 1st April, 20....
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....ies and Exchange Board of India Act, 1992. Provided, the consolidation is of two or more schemes of equity oriented fund or of two or more schemes of a fund other than equity oriented fund. It is further proposed to define the terms "consolidating scheme", "consolidated scheme", "equity oriented fund" and "mutual fund". These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent years. Clause 14 of the Bill seeks to amend section 49 of the Income tax Act relating to cost with reference to certain modes of acquisition. The existing provisions contained in sub-section (1) of the aforesaid section provide that where the capital asset became the property of the assessee under certain situations the cost of acquisition of the asset shall be deemed to be cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be. It is proposed to amend sub-clause (e) of clause (iii) of said sub-section (1) so as to include the transfer referred to in clause (vib) of section ....
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....ill seeks to amend section 80CCD of the Income-tax Act relating to deduction in respect of contribution to pension scheme of Central Government. The existing provisions contained in sub-section (1) of section 80CCD, inter alia, provides that in the case of an individual, employed by the Central Government on or after 1st January, 2004, or being an individual employed by any other employer or any other assessee being an individual who has in the previous year paid or deposited any amount in his account under a pension scheme notified or as may be notified by the Central Government, a deduction of such amount not exceeding ten per cent. of his salary is allowed. It is proposed to omit sub-section (1A) and insert a new subsection (1B) so as to provide that an assessee referred to in subsection (1), shall, be allowed an additional deduction in computation of his total income, of the whole of the amount paid or deposited in the previous year in his account under a pension scheme notified or as may be notified by the Central Government, which shall not exceed fifty thousand rupees. It is also propose to provide that no deduction under this sub-section shall be allowed in respect of....
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....eduction in respect of the parents is also proposed to be not more than thirty thousand rupees. These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent years. Clause 19 of the Bill seeks to amend section 80DD of the Income-tax Act relating to deduction in respect of maintenance including medical treatment of a dependant who is a person with disability. The existing provisions of section 80DD, inter alia, provide for a deduction to an individual or HUF, who is a resident in India, who has incurred only (a) expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or (b) any amount paid to LIC or any other insurer in respect of a scheme for the maintenance of a disabled dependant. The aforesaid section provides for a deduction of fifty thousand rupees if the dependant is suffering from disability and one lakh rupees if the dependant is suffering from severe disability. It is proposed to amend said section so as to raise the limit of deduction in respect of a dependant with disability from fifty thousand rupe....
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....tion to the assessment year 2016- 17 and subsequent assessment years. Clause 21 of the Bill, seeks to amend section 80G of the Income-tax Act relating to deduction in respect of donations to certain funds, charitable institutions, etc. Under the existing provisions of the aforesaid section, an assessee is allowed a deduction from his total income in respect of donations made by him to certain funds and charitable institutions. The deduction is allowed at the rate of hundred per cent. of the amount of donations made to certain funds and institutions formed for a social purpose of national importance, like the Prime Ministers' National Relief Fund, National Foundation for Communal Harmony etc. It is proposed to amend sub-section (1) and sub-section (2) of the said section so as to provide for a deduction of hundred per cent. in respect of the sum donated by an assessee to the Swachh Bharat Kosh set up by the Central Government, other than the sum spent by such assessee in pursuance of Corporate Social Responsibility under sub-section (5) of section 135 of the Companies Act, 2013. It is further proposed to amend sub-section (1) and sub-section (2) of the said section so as....
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....ory, in the previous year, for three assessment years including the assessment year relevant to the previous year in which such employment is provided. It is further proposed to amend clause (a) of sub-section (2) so as to provide that no deduction under sub-section (1) shall be allowed, if the factory is acquired by the assessee by way of transfer from any other person or as a result of any business reorganisation. It is also proposed to amend clause (i) of the said Explanation so as to provide "additional wages" to mean the wages paid to the new regular workmen in excess of fifty workmen employed during the previous year. These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent years. Clause 23 of the Bill, seeks to amend section 80U of the Income-tax Act relating to deduction in case of a person with disability. The existing provisions of section 80U, inter alia, provide for a deduction to an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability. The section provides for a deduction of fifty t....
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....ection (1) of the said section provides that the provisions of the aforesaid section shall not be applicable in respect of any income arising from transfer of units of a business trust which were acquired by the assessee in exchange of the shares of a special purpose vehicle. It is proposed to omit the said second proviso to provide that the provisions of the said section shall now be applicable in respect of any income arising from transfer of units of a business trust which were acquired by the assessee in exchange of the shares of a special purpose vehicle. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. Clause 27 of the Bill seeks to amend section 115A of the Income-tax Act relating to tax on dividends, royalty and technical service fees in the case of foreign companies. The existing provisions of the aforesaid section provide for determination of tax in case of a non-resident taxpayer where the total income includes any income by way of Royalty and Fees for technical services received by such non-resident from Government or an Indian concern after the 31st ....
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.... year relevant to the assessment year commencing on or after the 1st April, 2012, is less than eighteen and one-half per cent. of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee for the relevant previous year shall be eighteen and one-half per cent. of its book profit. It is proposed to insert new clause (fa) in Explanation 1 so as to provide that the book profit shall be increased by the amount or amounts of expenditure relatable to, income, being share of income of an assessee on which no tax is payable in accordance with the provisions of section 86. It is further proposed to insert new clause (iic) in Explanation 1 so as to provide that the amount of income, being the share of income of an assessee on which no income-tax is payable in accordance with the provisions of section 86, if any such amount is credited to the profit and loss account, shall be reduced from the book profit. It is also proposed to insert a new clause (fb) in Explanation 1 so as to provide that the book profit shall be increased by the amount or amounts of expenditure relatable to income from transactions in securities, (o....
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....ear 2016-17 and subsequent years. Clause 31 of the Bill seeks to amend section 115UA of the Income-tax Act relating to tax on income of unit holder and business trust. It is proposed to amend the aforesaid section to provide that the distributed income or any part thereof, received by a unit holder from the business trust, being a real estate investment trust, which is in the nature of income by way of renting or leasing or letting out any real estate asset owned directly by such business trust, shall be deemed to be income of such unit holder and shall be charged to tax. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. Clause 32 of the Bill seeks to insert a new Chapter XII-FB consisting of a new section 115UB in the Income-tax Act relating to tax on income of investment funds and income received from such funds. Sub-section (1) of the proposed new section seeks to provide that any income accruing or arising to, or received by, a person, being a unit holder of an investment fund, out of investments made in the investment fund shall be chargeable to income-tax....
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....d verified in such manner, giving details of the nature of the income paid or credited during the previous year and such other relevant details as may be prescribed. Explanation 1 to the proposed new section seeks to define certain terms such as "investment fund", "trust" and "unit". Further, Explanation 2 to the proposed new section clarifies that if any income has been included in total income on accrual basis in case of a person, the same shall not be included in total income when such income is actually received by the person. This amendment will take effect from 1st April, 2016 and accordingly apply in relation to the assessment year 2016-17 and subsequent years. Clause 33 of the Bill seeks to amend section 132B of the Income-tax Act relating to application of seized or requisitioned assets. The existing provisions contained in the aforesaid section provides that the assets seized under section 132 or requisitioned under section 132A may be adjusted against the amount of existing liability under the Income-tax Act, the Wealth-tax Act, etc., and the amount of liability determined on completion of assessment. It is proposed to amend the said section to provide ....
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....proposing to issue such notice is also relevant to decide whose sanction is required. It is proposed to amend the said section so as to provide that no notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. It is further proposed that in any other case, no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice. This amendment will take effect from 1st day of June, 2015. Clause 36 of the Bill seeks to amend section 153C of the Income-tax Act relating to assessment of income of any other person. The existing provisions contained in section 153C provide that in the course of an assessment proceeding, in the case of a person in whose case search action under secti....
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....reasonable opportunity of being heard to collector in accordance with the provision of said subsection. It is also proposed to amend sub-section (5) of the aforesaid section to insert the reference of "collector" in addition to assessee or deductor, so as to enable issue of refund to the collector in accordance with the provisions of said sub-section. It is also proposed to amend sub-section (6) of the aforesaid section to insert the reference of "collector" in addition to assessee or deductor, so as to enable service of notice of demand on the collector in accordance with the provisions of said sub-section. It is also proposed to amend sub-section (8) of the aforesaid section to insert the reference of "collector" in addition to assessee or deductor so as to provide that where an application for amendment under the aforesaid section is filed by the collector, the income-tax authority shall pass an order within the time specified therein. These amendments will take effect from 1st June, 2015. Clause 38 of the Bill seeks to amend section 156 of the Income tax Act relating to notice of demand. The existing provisions contained in the proviso to the aforesaid section....
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....on( 2) or sub section(2A) of section 253. Sub-section (3) of the proposed new section seeks to provide that where the order of the Commissioner (Appeals) referred to in sub-section(1) is not in conformity with the final decision on the question of law in the other case, the Commissioner or Principal Commissioner may direct the Assessing Officer to appeal to the Appellate Tribunal against such order and, save as otherwise provided in this section, all other provisions of Part B of chapter XX shall apply accordingly. Sub-section (4) of the proposed new section seeks to provide that every appeal under sub-section (3) shall be filed within sixty days of the date on which the order of the Supreme Court in the other case is communicated to the Commissioner or Principal Commissioner. This amendmend will take effect from 1st June, 2015. Clause 40 of the Bill seeks to amend section 192 of the Income tax Act relating to salary. Under the existing provisions contained in sub-section (1) of the aforesaid section, any person responsible for paying any income chargeable under the head "Salaries" shall, at the time of payment, deduct income-tax on the amount payable at the average ....
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....ntained in the proviso to clause (i) of sub-section (3) of the aforesaid section, income credited or paid in respect of time deposits with a banking company or cooperative society or deposits with a public company, as the case may be, shall be computed with reference to the branch of the banking company or co-operative society or public company, as the case may be. It is proposed to insert a proviso after the existing proviso to the said clause (i) of sub-section (3) of the aforesaid section so as to provide that the amount referred to in the first proviso shall be computed with reference to the income credited or paid by the banking company or the co-operative society or the public company, as the case may be, where such banking company or the co-operative society or the public company has adopted core banking solutions. The existing provisions of clause (v) of sub-section (3) of the aforesaid section provide that the provisions of sub-section (1) of the aforesaid section shall not apply to income credited or paid by a co-operative society to a member thereof or to any other cooperative society. It is proposed to amend the said sub-clause so as to provide that the provisi....
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....to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum. It is proposed to amend sub-section (6) of the said section so as to provide that no deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, where such contractor owns ten or less than ten goods carriages at any time during the previous year and furnishes a declaration to that effect along with his Permanent Account Number, to the person paying or crediting such sum. This amendment will take effect from 1st June, 2015. Clause 44 of the Bill seeks to amend section 194-I of the Income-tax Act relating to rent. The aforesaid section provides for deduction of tax at source on payment of any income by way of rent to a resident. It is proposed to amend the said section by inserting a proviso that no deduction shall be made under the section where the income by way of rent is credited or paid to a business trust, being ....
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....se 47 of the Bill, seeks to amend section 194LD of the Income-tax Act relating to Income by way of interest on certain bonds and Government securities. Under the existing provisions contained in sub-section (2) of the aforesaid section, the interest income eligible for lower withholding tax rate of five per cent. as provided in sub-section (1) has been specified to be the interest payable on or after the 1st day of June, 2013 but before the 1st day of June, 2015. It is proposed to amend aforesaid sub-section (2) to provide that the concessional rate of five per cent. withholding tax on interest payment in respect of investments in Government securities and rupee denominated corporate bonds shall now be available on interest payable before the 1st day of July, 2017. This amendment will take effect from 1st June, 2015. Clause 48 of the Bill seeks to amend section 195 of the Income tax Act relating to other sums. The existing provisions contained in sub-section (6) of the aforesaid section provide that the person referred to in sub-section (1) shall furnish the information relating to payment of any sum in such form and manner as may be prescribed by the Board. It is....
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....without the production of a challan, the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person by whatever name called, who is responsible for crediting such sum or tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed. This amendment will take effect from 1st June, 2015. Clause 51 of the Bill seeks to amend section 200A of the Income-tax Act relating to processing of statements of tax deducted at source. The existing provisions contained in sub-section (1) of the aforesaid section provide that statement of tax deduction at source or a correction statement made under section 200 shall be processed in the manner specified therein. It is proposed to amend sub-section (1) of the said section to provide that statement of tax deduction at source or correction statement made under section 200 shall be processed and sum deductible under Chapter XVII shall be computed after also tak....
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....r person, by whatever name called, who is responsible for crediting such tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed. The existing provisions contained in the proviso to sub-section (3) of the said section provide that any person collecting tax on or after 1st April, 2005 in accordance with the provisions of the said section shall, after paying the tax collected to the credit of the Central Government within the prescribed time, prepare such statements for such period as may be prescribed and deliver or cause to be delivered to the prescribed authority, or to the person authorised by such authority, such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed. It is proposed to insert sub-section (3B) in the said section so as to provide that the person referred to in proviso to sub-section (3) may also deliver to the prescribed authority under the said provi....
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....of section 245D for any assessment year, the amount of total income disclosed in the application under sub-section (1) of section 245C is increased, the assessee shall be liable to pay simple interest at the rate of one per cent. for every month or part of a month comprised in the period commencing on the 1st day of April of such assessment year and ending on the date of such order, on the amount by which the tax on the total income determined on the basis of such order exceeds the tax on the total income disclosed in the application filed under sub-section (1) of section 245C. The existing provisions contained in sub-section (3) of the said section provides that where the total income is increased on reassessment under section 147 or section 153A, the assessee shall be liable for interest at the rate of one per cent. on the amount of the increase in total income for the period commencing from the date of determination of total income under sub-section (1) of section 143 or on regular assessment and ending on the date of reassessment under section 147 or section 153A. It is proposed to amend sub-section (3) of the said section so as to provide that the period for which the in....
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....levant assessment year in case where no assessment is made. This amendment will take effect from 1st June, 2015. Clause 58 of the Bill seeks to amend section 245D of the Income-tax Act relating to procedure on receipt of an application under section 245C. The existing provision contained in sub-section (6B) of section 245D of the Income-tax Act provides that the Settlement Commission may, at any time within a period of six months from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (4). It is proposed to amend the said sub-section (6B) to provide that the Settlement Commission may, with a view to rectify any mistake apparent from the record, amend any order passed by it under sub-section (4)-- (a) at any time within a period of six months from the end of month in which the order was passed; (b) on an application made by the Principal Commissioner or Commissioner before the end of the period of six months from the end of the month in which such application was made. This amendment will take effect from 1st June, 2015. Clause 59 of the Bill seeks to amend section 245H of the ....
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....entitled to apply for settlement before the Settlement Commission. It is proposed to amend section 245K of the Income-tax Act to provide that any person related to the person who is barred on subsequent application for settlement also cannot make any application subsequently before the Settlement Commission. The expression "related person" with respect to a person has also been clarified to mean,: -- (i) where such person is an individual, any company in which such person holds more than fifty per cent. of the shares or voting power at any time, or any firm or association of person or body of individual in which such person is entitled to more than fifty per cent. of the profits at any time, or any Hindu undivided family in which such person is a karta; (ii) where such person is a company, any individual who held more than fifty per cent. of the shares or voting power in such company at any time before the date of application before the Settlement Commission by such person; (iii) where such person is a firm or association of person or body of individual, any individual who was entitled to more than fifty per cent. of the profits in such firm, association of person....
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.... that a single member Bench may dispose of a case where the total income as computed by the Assessing Officer does not exceed fifteen lakh rupees. This amendment will take effect from 1st June, 2015. Clause 65 of the Bill seeks to amend section 263 of the Income tax Act relating to revision of orders prejudicial to revenue. The existing provisions contained in sub-section (1) of section 263 provide that if the Principal Commissioner or Commissioner considers that any order passed by the assessing officer is erroneous in so far as it is prejudicial to the interest of revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made an enquiry, as he deems necessary, pass an order modifying the assessment made by the assessing officer or cancelling the assessment and directing fresh assessment. It is proposed to amend sub-section (1) of the aforesaid section to insert an Explanation so as to provide that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner,-- (a) the order is p....
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.... amount of such loan or deposit or specified advance is twenty thousand rupees or more. It is further proposed to define "specified advance" as any sum of money received, as an advance or otherwise, in relation to transfer of an immovable property and becomes repayable if the negotiations do not result in transfer of such immovable property. These amendments will take effect from 1st June, 2015. Clause 68 of the Bill seeks to amend section 271 of the Income tax Act relating to failure to furnish returns, comply with notices, concealment of income, etc. The existing provisions contained in clause (iii) of sub-section (1) of the aforesaid section provide that if a person has concealed the particulars of his income or furnished inaccurate particulars of such income such person shall pay by way of penalty a sum of one hundred per cent. to three hundred per cent. of tax sought to be evaded. Explanation 4 to aforesaid sub-section provides for the meaning of the expression amount of tax sought to be evaded. It is proposed to provide that the amount of tax sought to be evaded shall be determined in accordance with the following formula- (A - B) + (C - D) &n....
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....der section 148. These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to assessment year 2016-17 and subsequent years. Clause 69 of the Bill seeks to amend section 271D of the Income-tax relating to penalty for failure to comply with the provisions of section 269SS. The existing provision contained in section 271D of the Income tax Act provides that if a person accepts any loan or deposit in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so accepted. It is proposed to amend section 271D of the Income-tax Act to provide that if a person accepts any loan or deposit or specified sum referred to in section 269SS in contravention of the provisions of that section, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified sum so accepted. This amendment will take effect from 1st June, 2015. Clause 70 of the Bill seeks to amend section 271E of the Income-tax relating to penalty for failure to comply with the provisions of section 269T. The existing provision contained in section 2....
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....ubsequent years. Clause 73 of the Bill seeks to insert a new section 271-I in the Income-tax Act relating to penalty for failure to furnish information or for furnishing inaccurate information under section 195. It is proposed to insert a new section 271-I so as to provide that if a person, who is required to furnish information under subsection (6) of section 195, fails to furnish such information; or furnishes inaccurate information, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of one lakh rupees. This amendment will take effect from 1st June, 2015. Clause 74 of the Bill seeks to amend section 272A of the Income-tax Act relating to penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc. The proposed amendment seeks to insert a new clause (m) in sub-section (2) of the aforesaid section to provide that if any person fails to deliver or cause to be delivered a statement within the time as may be prescribed under sub-section (2A) of section 200 or sub-section (3A) of section 206C, then, such person shall pay, by way of penalty, a sum of one hundred rupees for ....
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.... take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent years. Clause 77 of the Bill seeks to amend section 288 of the Income tax Act relating to appearance by authorised representative. The existing Explanation below sub-section (2) of aforesaid section provides that in the aforesaid section, "accountant" means a chartered accountant within the meaning of the Chartered Accountants Act, 1949, and includes, in relation to any State, any person who by virtue of the provisions of sub-section (2) of section 226 of the Companies Act, 1956, is entitled to be appointed to act as an auditor of companies registered in that State. It is proposed to substitute the said Explanation so as to provide that the expression "accountant" means a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 who holds a valid certificate of practice under sub-section (1) of section 6 of that Act. It is further proposed to provide that the accountant shall not include the following persons (except for the purposes of representing an assessee under sub-section (1))- (a) in c....
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....on for a period of ten years from the date of conviction. It is also proposed to insert an Explanation at the end of the said section so as to provide that the expression "relative" in relation to an individual means (a) spouse of the individual; (b) brother or sister of the individual; (c) brother or sister of the spouse of the individual; (d) any lineal ascendant or descendant of the individual; (e) any lineal ascendant or descendant of the spouse of the individual; (f) spouse of a person referred to in clause (b), clause (c), clause (d) or clause (e); (g) any lineal descendant of a brother or sister of either the individual or of the spouse of the individual. These amendments will take effect from 1st June, 2015. Clause 78 of the Bill seeks to amend section 295 of the Income tax Act relating to power to make rules. The existing provisions contained in sub-section (1) of the aforesaid section provide that the Board may make rules for the whole or any part of India for carrying out the purposes of this Act. Sub-section (2) of the said section specifies the matters in respect of which such rules may be provided. It is proposed to amend the said sub-section (2) so as ....