TaxTMI 
TaxTMI 
Notes on clauses-Income Tax
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....cial cases during the financial year 2016- 2017. Rates for deduction of tax at source during the financial year 2017-2018 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 2017-2018 from income other than "Salaries". The rates are the same, as those specified in Part II of the First Schedule to the Finance Act, 2016 for the purposes of deduction of income tax at source during the financial year 2016-2017. The amount of tax so deducted shall be increased by a surcharge in the case of- (i) every non-resident being an individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act,- (a) at the rate of ten per cent. of such tax, where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds fifty lakh rupees but does not exceed one crore rupees; (b) at the rate of fifteen per cent. of such tax, where the income or the aggregate of income pai....
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....during the previous year:- Up to ₹ 5,00,000 Nil ₹ 5,00,001 to ₹ 10,00,000 20 per cent. Above ₹ 10,00,000 30 per cent. The surcharge in cases of persons referred to in this paragraph, having total income above fifty lakh but not above one crore rupees, shall be levied at the rate of ten per cent. In cases of persons referred to in this paragraph, having total income above one crore rupees, surcharge shall be levied at the rate of fifteen per cent. Marginal relief will be provided. Paragraph B of this Part specifies the rates of income-tax in the case of every co-operative society. In such cases, the rates of tax will continue to be the same as those specified for assessment year 2017-2018. 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 2017-2018. The surcharge in cases of firms, having income above one crore rupees shall be levied at the rate of twelv....
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....ases of persons not resident in India and companies other than domestic company. Clause 3 of the Bill seeks to amend section 2 of the Incometax Act relating to definitions. The existing provisions contained in clause (42A) of the said section defines the expression "short-term capital asset" to be a capital asset held by an assessee for not more than thirty-six months immediately preceding the date of its transfer. Further Explanation 1 of the said clause provides for determining the period for which the capital asset is held by the assessee. It is proposed to amend the third proviso to the said clause so as to provide that in the case of an immovable property being land or building or both, the aforesaid period of holding shall be less than twenty-four months for it to be treated as short term capital asset. It is also proposed to insert a new sub-clause (hf) in Clause (i) of Explanation 1 of the said clause so as to provide that in the case of a capital asset being equity shares in a company, which becomes the property of the assessee in consideration of a transfer referred to in clause (xb) of section 47, there shall be included the period for which the preference ....
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....r being an eligible investment fund. Clause (j) of the said sub-section and the proviso provides that the monthly average of the corpus of the fund shall not be less than one hundred crore rupees except where the fund has been established or incorporated in the previous year, in which case, the corpus of fund shall not be less than one hundred crore rupees at the end of such previous year. It is proposed to insert another proviso to clause (j) of the said sub-section so as to provide that the provisions of the said clause shall not be applicable to a fund which has been wound up in the previous year. This amendment will take effect retrospectively from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-2017 and subsequent years. Clause 6 of the Bill seeks to amend section 10 of the Income-tax Act relating to incomes not included in total income. The existing provisions contained in the said section provide that in computing the total income of a previous year of any person, certain categories of income shall not be included in total income. Further, sub-clause (ii) of clause (4) of the said section refers to any income of an individual by way ....
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....hich sub-clause (iiihf) of clause (a) of sub-section (2) of section 80G relating to deduction in any sum paid to the Chief Minister's and Lieutenant Governor's Relief Fund came into force, and will, accordingly, apply in relation to assessment year 1998-1999 and subsequent years. Clause (23C) of said section provides that donations made by entities referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) to any trust or institution registered under section 12AA, except those made out of accumulated income, is considered as application of income for the purposes of its objects. It is also proposed to insert a new proviso in the said clause (23C) so as to provide restriction in respect of any amount credited or paid out of income, being voluntary contributions with specific direction that they shall form part of the corpus, to any trust or institution registered under section 12AA by not treating the said contribution of amount as application of income to the objects of such entities. This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. It is also....
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....alf. It is also proposed to insert a new clause (48B) in the said section so as to provide for exemption of any income accruing or arising to a foreign company on account of sale of leftover stock of crude oil, if any, from the facility in India after the expiry of the agreement or the arrangement referred to in clause (48A), subject to such conditions as may be notified by the Central Government in this behalf. These amendments will take effect, from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 7 of the Bill seeks to amend section 10AA of the Income-tax Act relating to special provisions in respect of newly established Units in Special Economic Zones. Under the existing provisions of the said section, deduction for fifteen consecutive years is provided from the total income of an assessee in respect of profits and gains from his Unit operating in Special Economic Zone which are engaged in manufacturing or production of articles or things or providing any services, subject to fulfilment of the conditions mentioned in that section. It is proposed to insert a new Explanation after sub-section (1) of the sa....
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.... said section so as to provide that the person in receipt of the income shall furnish the return of income referred to in sub-section (4A) of section 139 within the time allowed under that section. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to assessment year 2018-2019 and subsequent years. Clause 10 of the Bill seeks to amend section 12AA of the Income-tax Act relating to procedure for registration. It is proposed to amend sub-sections (1) and (2) of the said section so as to give reference of newly inserted clause (ab) in section 12A . The proposed amendment is consequential in nature. This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to assessment year 2018- 2019 and subsequent years. Clause 11 of the Bill seeks to amend section 13A of the Income-tax Act relating to special provision relating to incomes of political parties. Section 13A of the Income-tax Act, inter alia, provides that any income of a political party which is chargeable under the head "Income from house property" or" Income from other sources" or "Capital gains" or any income by wa....
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.... Bill seeks to amend section 35AD of the Income-tax Act relating to deduction in respect of expenditure on specified business. The existing provisions of the said section provides that deduction in respect of the whole of any expenditure of capital nature incurred, wholly and exclusively, for the purposes of any specified business carried on during the previous year in which such expenditure is incurred, is allowed to an assessee. Clause (f) of sub-section (8) of the said section provides for exclusion of any expenditure incurred on the acquisition of any land or goodwill or financial instrument from the purview of expenditure of capital nature accordingly, not be allowed as deduction. It is proposed to amend the said clause (f) so as to provide that any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account, exceeds ten thousand rupees, no deduction shall be allowed in respect of such expenditure also. This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relatio....
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....sections (3A) and (4) of the said section. It is also proposed to amend the proviso to clause (a) of sub-section (2) which is consequential to the amendments proposed in section 92BA. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-20l9 and subsequent years. Clause 16 of the Bill seeks to amend section 43 of the Income-tax Act relating to definitions of certain terms relevant to income from profits and gains of business or profession. Clause (1) of the said section provides for the definition of "actual cost" for the purposes of claiming depreciation under section 32 of the Act. It is proposed to insert a proviso before Explanation 1 of clause (1) of said section so as to provide that where the assessee incurs any expenditure for acquisition of any asset in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account, exceeds ten thousand rupees, such expenditure shall be ignored for the purposes of determination of actual cost.....
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....rest income in relation to certain categories of bad or doubtful debts received by certain institutions or banks or corporations or companies, as referred to in the Explanation to the said section, shall be chargeable to tax in the previous year in which it is credited to its profit and loss account for that year or actually received, whichever is earlier. It is proposed to amend the said section so as to provide that the interest income in relation to certain categories of bad or doubtful debts received by a co-operative bank other than a primary agricultural credit society or a primary cooperative agricultural and rural development bank shall also be chargeable to tax in the previous year in which it is credited to its profit and loss account for that year or actually received, whichever is earlier. It is further proposed to include the definitions of the expressions "co-operative bank", "primary agricultural credit society" and "primary co-operative agricultural and rural development bank" in the said section. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subse....
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....n accordance with the provisions of sub-section (1) of section 44AD and his total sales, turnover or gross receipts, as the case may be, in business does not exceed two crore rupees in such previous year. This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-2018 and subsequent years. Clause 21 of the Bill seeks to amend section 44AD of the Income-tax Act relating to special provision for computing profits and gains of business on presumptive basis. The provisions contained in the said section (as amended by the Finance Act, 2016), provides that notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, having total turnover or gross receipts not exceeding two crore rupees, a sum equal to eight per cent. of the total turnover or gross receipts of the assesse in the previous year on account of such business, or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head "profits and ....
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....is sub-section, shall apply for the determination of the full value of consideration received or accruing as a result of such transfer. It is also proposed to define the expressions "competent authority", "specified agreement" and "stamp duty value". This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 23 of the Bill seeks to amend section 47 of the Income-tax Act relating to transactions not regarded as transfer. The said section provides that certain transfers of capital assets are not chargeable to tax under section 45 of the Act. Further, under the existing provisions of clause (x) of the said section, any transfer by way of conversion of bonds or debentures, debenture-stock or deposit certificates in any form, of a company into shares or debentures of that company is not regarded as transfer. It is proposed to insert a new clause (viiaa) in section 47 so as to provide that any transfer made outside India of a capital asset being rupee denominated bond of Indian company issued outside India, by a non-resident to another non-resident shall no....
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....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 (vic) of section 47 also within the purview of the said sub-section (1). It is further proposed to insert a new sub-section (2AE) in the said section so as to provide that where the capital asset, being equity share of a company, became the property of the assessee in consideration of a transfer as referred to in clause (xb) of section 47, the cost of acquisition of the asset shall be deemed to be the cost of the preference share in relation to which such asset is acquired by the assessee. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. It is also proposed to insert a new sub-section (2AF)so as to provide that where the capital asset, being a unit or units in a consolidated plan of a mutual fund scheme, became the property of the assessee in consideration of a transfer referred to in clause (xix) of section 47, the cost of acquisition ....
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.... the asset which has been taken into account for computation of accreted income as on the specified date referred to in sub-section (2) of section 115TD. The proposed amendment is consequential in nature. This amendment will take effect retrospectively from 1st June, 2016. Clause 26 of the Bill seeks to insert a new section 50CA in the Income-tax Act relating to special provision for full value of consideration for transfer of share other than quoted share. It is proposed to provide that in case of transfer of shares of a company other than quoted share, the fair market value of such shares determined in the prescribed manner shall be deemed to be the full value of consideration for the purpose of computing income chargeable to tax as capital gains. It is also proposed to define the term "quoted share". This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 27 of the Bill seeks to amend section 54EC of the Income-tax Act relating to capital gain not to be charged on investment in certain bonds. The existing provisions contained in clause (ba) of subsection (3) of the said se....
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....des for the taxability of receipt of shares of a closely held company by a firm or a closely held company for without or inadequate consideration, if the fair market value of shares exceeds fifty thousand rupees. However, the taxability under clause (vii) and clause (viia) of sub-section (2) of the said section is subject to certain specified exceptions. It is proposed to insert a new clause (x) in sub-section (2) of the said section so as to expand the scope of the provisions of the said section to all categories of assessees so that the assets received without or inadequate consideration may be brought to the tax. Further, the existing exception contained in the said section is proposed to be rationalised by including certain additional exceptions consequently, it is proposed to sun set clauses (vii) and (viia) of sub-section (2) of the said section. This amendment will take effect from 1st April, 2017. Clause 30 of the Bill seeks to amend section 58 of the Income-tax Act relating to amounts not deductible. The provisions of the said section specify the amounts which are not deductible in computing the income from other sources. It is proposed to amend sub-section (1A) of th....
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....ares carrying voting power on the last day of the year or years in which the loss was incurred, being the loss incurred during the period of seven years beginning from the year in which such company is incorporated, continue to hold those shares on the last day of such previous year. It is also proposed to provide that the provisions of this section shall not apply to a case where a change in the voting power and shareholding, as aforesaid, takes place in a previous year consequent upon the death of a shareholder or on account of transfer of shares by way of gift to any relative of the shareholder making such gift. It is also proposed to provide that nothing contained in this section shall apply to any change in the shareholding of an Indian company which is a subsidiary of a foreign company as a result of amalgamation or demerger of a foreign company subject to the condition that fifty-one per cent. shareholders of the amalgamating or demerged foreign company continue to be the shareholders of the amalgamated or the resulting foreign company. This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subseq....
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....e said section till the assessment year commencing on the 1st day of April, 2019, if he is otherwise eligible to claim the deduction in accordance with the other provisions of this section. This amendment will take effect, from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 35 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 contained in sub-section (5D) of the said section, no deduction is allowed in respect of donation of any sum exceeding ten thousand rupees unless such sum is paid by any mode other than cash. It is proposed to amend the said sub-section so as to provide that no deduction is allowed in respect of donation of any sum exceeding two thousand rupees unless such sum is paid by any mode other than cash. This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 36 of the Bill seeks to amend section 80-IAC of the Income-tax Act relating to special provision in res....
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....ea" as provided in the Real Estate (Regulation and Development) Act, 2016. These amendments will take effect, from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 38 of the Bill seeks to amend section 87A of the Income-tax Act relating to rebate of income-tax in case of certain individuals. The existing provisions contained in the said section provide that an assessee, being an individual resident in India, whose total income does not exceed five hundred thousand rupees, shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deductions under Chapter VIII) on his total income with which he is chargeable for any assessment year, of an amount equal to one hundred per cent. of such income-tax or an amount of five thousand rupees, whichever is less. It is proposed to amend the said section so as to provide that the deduction under the said section shall be allowed to an assessee, being an individual resident in India, whose total income does not exceed three hundred fifty thousand rupees, upto hundred percent. of income chargeable for any assessment year or two thousand f....
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.... or avoidance of income-tax or recovery of income-tax. It is further provided that any term used but not defined in Income-tax Act or in the agreement referred to in sub-section (1) of the said section shall have the meaning assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf, unless the context otherwise requires, provided the same is not inconsistent with the provisions of Income-tax Act or the said agreement. It is proposed to provide that where any term used in an agreement entered into under sub-section (1) of the said section is defined under the said agreement, the said term shall have the same meaning as assigned to it in the agreement; and where the term is not defined in the said agreement, but is defined in the Income-tax Act, it shall have the same meaning as assigned to it in the said Act and any Explanation to it by the Central Government. This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 41 of the Bill seeks to amend section 92BA of the Income-tax Act relating to meaning of specified domestic transaction. ....
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....rovisions of this section shall not apply to such assessees in whose case the primary adjustment is made in respect of an assessment year commencing on or before 1st April, 2016. It is also proposed to define the term "associate enterprise", "arm's length price", "excess money", "primary adjustment" and "secondary adjustment". These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 43 of the Bill seeks to insert a new section 94B in the Income-tax Act relating to limitation on interest deduction in certain cases. Sub-section (1) of the said section seeks to provide that where an Indian company, or a permanent establishment of a foreign company in India being the borrower, pays interest or similar consideration exceeding one crore rupees which is deductible in computing income chargeable under the head "Profits and gains of business or profession" in respect of any debt issued by a non-resident, being an associated enterprise of such borrower, interest shall not be deductible in computation of income under the said ....
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....ompanies. Under the existing provisions of section 115BBDA, in case of an assessee, being an individual, Hindu undivided family or a firm, resident in India, tax is charged at the rate of ten per cent. on income by way of dividend exceeding ten lakh rupees. It is proposed to amend the said section so as to provide that this section shall be applicable to all resident persons other than a domestic company, a fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 or a trust or institution registered under section 12AA of the Income-tax Act. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 45 of the Bill seeks to insert a new section 115BBG in the Income-tax Act relating to tax on income from transfer of carbon credits. The proposed new section 115BBG seeks to provide that in case of an assessee whose total income includes any income by way of transfer of carbon credits, the income-tax pa....
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....vy of tax on certain companies on the basis of book profit which is determined after making certain adjustments to the net profit disclosed in the profit and loss account prepared in accordance with the provisions of the Companies Act, 1956. It is proposed to amend the section so as to align the provisions of section 115JB for the company preparing financial statements in accordance with the provisions of Indian Accounting Standards and to update the provisions of the Companies Act,1956 referred in the said section in accordance with the provisions of the new Companies Act, 2013. The amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-2018 and subsequent years. Clause 48 of the Bill seeks to amend section 115JD of the Income-tax Act relating to tax credit for alternate minimum tax. Sub-section (2) of the said section provides that tax credit of an assessment year shall be the excess of the alternate minimum tax paid over the regular income-tax payable for that year and sub-section (4) provides that such tax credit is allowed to be carried forward for a period of ten years. It is proposed to amend the said sub-sec....
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....umstances specified therein, he may authorise an authority specified therein to carry out search and seizure. It is proposed to insert an Explanation in the said subsection (1A) so as to declare that reason to suspect recorded by the income-tax authority specified therein under the provisions of the said sub-section shall not be disclosed to any person or any authority, or the Appellate Tribunal. This amendment will take effect retrospectively from 1st October, 1975. It is further proposed to insert sub-section (9B) in the said section, to provide that in a search case, where the authorised officer is satisfied that for the purpose of protecting the interest of revenue and for reasons to be recorded in writing it is necessary so to do he may, by order in writing, attach provisionally any property belonging to the assessee with the prior approval of Principal Director General or Director General or Principal Director or Director. It is also proposed to insert sub-section (9C) in the said section, so as to provide that such provisional attachment shall cease to have effect after the expiry of six months from the date of order of attachment. It is also proposed to insert sub-sect....
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.... is pending, may exercise the powers in respect of inquiry without seeking prior approval of the authorities as specified in the said proviso. These amendments will take effect from 1st April, 2017. Clause 53 of the Bill seeks to amend section 133A of the Income-tax Act relating to power of survey. The said section empowers an income-tax authority to survey a place, at which a business or profession is carried on, or at which any books of account or other documents or any part of cash or stock or other valuable article or thing relating to the business or profession are kept. It is proposed to amend sub-section (1) of the said section, so as to provide that a place, at which an activity for charitable purpose is carried on may also be surveyed by an incometax authority. It is further proposed to insert the reference of activity for charitable purpose in the Explanation to sub-section (1) of the said section which is consequential in nature. These amendments will take effect from 1st April, 2017. Clause 54 of the Bill seeks to amend section 133C of the Income-tax Act relating to power to call for information by prescribed income-tax authority. Sub-section (1) of the said sec....
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....come-tax Act as reduced by the amounts specified therein before furnishing a return under the said Act. It also provides the manner of calculation of the amount so payable and consequence of non-payment of the said amount. It is proposed to amend the said section to include that in case of delay in furnishing of return of income, alongwith the tax and interest payable as aforesaid, fee for delay in furnishing of return of income shall also be payable. The proposed amendment is consequential to the insertion of a new section 234F which provides for fee for delay in furnishing of return of income. This amendment will take effect from 1st April, 2018 and will, accordingly apply in relation to assessment year 2018- 2019 and subsequent years. Clause 57 of the Bill seeks to amend section 143 of the Income-tax Act relating to assessment. Sub-section (1) of the said section provides the manner of processing of a return furnished under section 139 or in response to a notice under sub-section (1) of section 142. It is proposed to amend the said sub-section to provide that in computation of amount payable or refund due, as the case may be, on account of processing of return under the sa....
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....ction 254 is received or order under section 263 or 264 is passed by the authority referred therein. It is also proposed to amend the third proviso to Explanation 1 of the said section to omit the reference of section 153B therein. These amendments will take effect from 1st April, 2017. It is also proposed to amend sub-section (5) of the said section to provide that where an order under section 250 or 254 or 260 or 262 or 263 or 264 requires verification of any issue by way of submission of any document by the assessee or any other person or where an opportunity of being heard is to be provided to the assessee, the time-limit relating to fresh assessment provided in sub-section (3) shall apply to the order giving effect to such order. It is also proposed to amend sub-section (9) of the said section to provide that where a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or section 148 has been issued prior to the 1st day of June, 2016 and the assessment or reassessment has not been completed by such date due to exclusion of time referred to in Explanation 1, such assessment or reassessment shall be completed in accordance with the provisions of sect....
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....-section (1) of the said section provides that in respect of each assessment year falling within six assessment years referred to in clause (b) of sub-section (1) of section 153A, the order of assessment or reassessment shall be made within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed. It is proposed to amend the above clause to provide that the time-limit for assessment and reassessment as specified therein shall also apply in respect of the relevant assessment year referred to in sub-section (1) of section 153A. The proposed amendment is consequential to the amendment to section 153A of the Income-tax Act. It is further proposed to amend sub-section (1) to provide that for search and seizure cases conducted in the financial year 2018-2019, the time-limit for making an assessment order under section 153A shall be reduced from existing twenty-one months to eighteen months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed. It is further pr....
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....dment will take effect from 1st April, 2017. Clause 62 of the Bill seeks to amend section 155 of the Income-tax Act relating to other amendments. It is proposed to insert a new sub-section (14A) in the said section so as to provide that where credit for incometax paid in any country outside India or a specified territory outside India, referred to in section 90, section 90A or section 91, has not been given in the order of assessment for the relevant assessment year on the grounds that the payment of such tax was in dispute, then, the Assessing Officer shall rectify the order of assessment or an intimation under subsection (1) of section 143, if the assessee, within six months from the end of the month in which the dispute is settled, furnishes proof of settlement of such dispute and evidence of payment of such tax along with an undertaking that no credit of such amount of tax has been directly or indirectly claimed or shall be claimed for any other assessment year. This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to assessment years 2018- 2019 and subsequent years. Clause 63 of the Bill seeks to insert a new section 194-IB of the In....
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....ct from 1st April, 2017. Clause 65 of the Bill seeks to amend section 194J of the Income-tax Act which provides for deduction of tax at source on fees for professional or technical services. The said section provides that a person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of fees for professional or technical services or other services mentioned therein shall deduct an amount equal to ten per cent. of such sum as income-tax on income comprised therein. It is proposed to insert a proviso in the said section so as to reduce the rate of tax deduction at source to two per cent. from ten per cent. in case of payments received or credited to a payee, who is engaged only in the business of operation of call centre. This amendment will take effect from 1st June, 2017. Clause 66 of the Bill seeks to amend section 194LA of the Income-tax Act relating to payment of compensation on acquisition of certain immovable property. The said section, inter alia, provides that any person responsible for paying compensation to a resident shall deduct tax at source at the rate of ten per cent. on the compensation or enhanced comp....
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.... 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 said 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 1st day of July, 2017. It is proposed to amend the aforesaid sub-section so as to provide concessional rate of five per cent. withholding tax on interest payment in respect of investments in Government securities and rupee denominated corporate bonds to be made available on interest payable before 1st day of July, 2020. This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 69 of the Bill seeks to amend section 197A of the Income-tax Act relating to no deduction to be made in certain cases. The existing provisions contained in sub-sections (1A) and (1C) of the aforesaid section provide that no deduction of tax shall be made under the various sections refer....
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....xempt the following class of buyers from the provision of sub-section (1F) of the said section, namely:- (i) the Central Government, a State Government and an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; or (ii) local authority as defined in the Explanation to clause (20) of section 10; or (iii) a public sector company which is engaged in the business of carrying passengers. It is also proposed to omit the reference of sub-section (1F) in sub-clause (ii) in the Explanation to section 206C. These amendments will take effect from 1st April, 2017. Clause 72 of the Bill seeks to insert a new section 206CC after section 206CB of the Income-tax Act relating to requirement to furnish Permanent Account Number by collectee. The proposed sub-section (1) of the said section specifies that any person paying any sum or amount, on which tax is collectible at source under Chapter XVII BB (herein referred to as collectee) shall furnish his Permanent Account Number to the person responsible for collecting such tax (herein referred to as collector), failing which tax shall be collected at twice the rate mentioned in the rele....
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....alment on or before the 15th of March every financial year. This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-2018 and subsequent years. Clause 74 of the Bill seeks to amend section 234C of the Income-tax Act relating to interest for deferment of advance tax. It is proposed to provide that in respect of an assessee referred to in section 44ADA, interest under the aforesaid section shall be levied, if the advance tax paid on or before the 15th day of March, is less than the tax due on the returned income. The said amendment is consequential to the amendment of section 211. Tax on certain dividends received from domestic companies is being levied under section 115BBDA with effect from the 1st April, 2017, if such income exceeds ten lakh rupees. The first proviso to sub-section (1) of section 234C lays down exceptions to the applicability of the said subsection to short fall in the payment of advance tax in case of certain incomes. It is proposed to amend the aforesaid proviso so as to provide that no interest under said section shall be levied on the income referred to in sub-section (1) of section 115BBDA su....
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....entitled to receive, in addition to the refund, simple interest on such refund, calculated at the rate of one-half per cent. for every month or part of a month comprised in the period, from the date on which claim for refund is made in the prescribed form or for giving effect to an order under section 250 or 254 or 260 or 262 from the date on which the tax is paid up to the date on which refund is granted. It is also proposed to amend sub-section (2) of the said section to give reference of the deductor in addition to the assessee and to provide that the interest shall not be allowed for the period for which the delay in the proceedings resulting in the refund is attributable to the deductor. These amendments will take effect from 1st April, 2017. Clause 78 of the Bill seeks to amend section 245A of the Income-tax Act relating to definitions for the purposes of Chapter XIX-A relating to settlement of cases. Clause (b) of the said section provides definition of "case". Clause (iv) of the Explanation to the said clause (b) provides that unless as otherwise specified, in case where no assessment is made, proceedings shall be deemed to have concluded on the expiry of two ....
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....f the said subsection (3) so as to provide that eligibility for appointment of law Member shall also be determined on the date of occurrence of vacancy. It is also proposed to insert sub-sections (6A) and (6B) in the aforesaid section so as to provide that in the event the office of Chairman falls vacant or in case the Chairman is unable to discharge his duties, the senior-most Vicechairman shall act as Chairman or shall discharge the functions of the Chairman till such time the new Chairman enters upon his office or the Chairman resumes his duties, as the case may be. This amendment will take effect from 1st April, 2017. Clause 81 of the Bill seeks to amend section 245Q of the Income-tax Act relating to the application for advance ruling. Sub-section (1) of the aforesaid section provides that an applicant desirous of obtaining an advance ruling under Chapter XIX-B of the Income-tax Act may make an application in such form and in such manner as may be prescribed. It is proposed to amend the said section so as to provide that an application for advance ruling may also be made under Chapter V of the Customs Act, 1962 or under Chapter IIIA of the Central Excise Act, 1944 or under....