TaxTMI 
TaxTMI 
Notes on clauses
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....ed to be listed on a recognised stock exchange in accordance with the aforesaid regulations. It is proposed to amend the said clause so as to omit the long line relating to the requirement of listing of the business trust from recognised stock exchange in accordance with the regulations made by the Securities Exchange Board of India. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. Clause(42A) of the said section defines the expression "short term capital asset" to be capital asset held by an assessee for not more than thirty-six months immediately preceding the date of its transfer. Further Explanation to the said clause provides for determining the period for which the capital asset is held by the assessee. It is proposed to amend clause (i) of the said Explanation so as to insert sub-clause (hh) to provide that in the case of a capital asset, being a unit or units in a segregated portfolio, referred to in sub-section (2AG) of section 49, there shall be included the period for which the original unit or units in the main portfolio were held by the assessee. ....
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....It is proposed to substitute said clause (6) so as to provide that an individual or an Hindu Undivided Family shall be said to be "not ordinarily resident" in India in a previous year if the individual or the manager of the Hindu Undivided Family, as the case may be, has been a non-resident in India in seven out of ten previous years preceding that year. These amendments will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 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 said section provides a set of circumstances in which income accruing or arising, directly or indirectly, is taxable in India. Clause (a) of Explanation 1 to said clause provides that for the purposes of said clause, in the case of a business of which all the operations are not carried out in India, the income of the business deemed under this clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India. It is proposed to ame....
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....o operations carried out in India, as referred to in Explanation 1 of clause (i) of sub-section (1) of said section, shall include income from-- (i)such advertisement which targets a customer who resides in India or a customer who accesses the advertisement through internet protocol address located in India; (ii) sale of data collected from a person who resides in India or from a person who uses internet protocol address located in India; and (iii)sale of goods and services using data collected from a person who resides in India or from a person who uses internet protocol address located in India. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. It is also proposed to insert a proviso to Explanation 3A to provide that the provisions of the said Explanation shall also apply to the income attributable to the transactions or activities referred to in Explanation 2A. This amendment will take effect from the 1st April, 2022 and will, accordingly, apply in relation to the assessment year 2022-2023 and subsequent assessment years. The Explan....
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....uded from definition of royalty. This amendment will take effect from the 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. Clause 6 of the Bill seeks to amend section 9A of the Income-tax Act relating to certain activities not to constitute business connection in India. Sub-section (3) of the said section provides for the conditions to be fulfilled for being an eligible investment fund. Clause (c) of said sub-section provides that the aggregate participation or investment in the fund, directly or indirectly, by persons resident in India should not exceed five per cent. of the corpus of the fund. It is proposed to amend the said clause (c) by insertion of a proviso so as to provide that for the purposes of calculation of the aggregate participation or investment in the fund, any contribution made by the eligible fund manager during the first three years of operation of the fund, not exceeding twenty-five crore rupees, shall not be taken into account. Clause (j) of said sub-section provides that the monthly average of the corpus of the fund shall not be less than one hundred crore rupees. Firs....
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....y hospital or other medical institution is approved and the period of such approval is set to expire, at least six months prior to expiry of said period; where the fund or trust or institution or any university or other educational institution or any hospital or other medical institution has been provisionally approved, at least six months prior to expiry of period of the provisional approval or within six months of commencement of its activities, whichever is earlier; in any other case, at least one month prior to commencement of the previous year relevant to the assessment year from which said registration is sought. Second proviso to clause (23C) of said section thereof provides for the inquiry to be made by the prescribed authority before approving the fund or trust or institution 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 said clause. It is proposed to substitute the second proviso so as to provide that the Principal Commissioner or Commissioner, on receipt of an application made under the proposed first proviso, shall, where the....
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....eof, inter alia, provides for the period within which a notification under sub-clause (iv) or sub-clause (v) shall be issued or approval under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) shall be granted or an order rejecting the application made in this behalf shall be passed. It is proposed to substitute the ninth proviso so as to provide that the order under clause (i), sub-clause (b) of clause (ii) and clause (iii) of the proposed second proviso shall be passed, in such form and manner as may be prescribed, before expiry of period of three months, six months and one month respectively, calculated from the end of the month in which the application was received. These amendments will take effect from 1st June, 2020. The tenth proviso to the said clause provides that where the total income, of the fund or trust or institution 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), without giving effect to the provisions of the said sub-clauses, exceeds the maximum amount which is not chargeable to tax in any previous....
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....le by business trust from a special purpose vehicle under the said clause. Clause (23FD) of the said section exempts income distributed by business trust to a unit holder except the interest and rental income. It is proposed to amend the said clause so as to exclude dividend income received by a unit holder from business trust from such exemption. It is proposed to insert a new clause (23FE) in the said section so as to provide exemption in respect of any income of a specified person in the nature of dividend, interest or long-term capital gains arising from an investment made by it in India, whether in the form of debt or equity, if the investment-- (i) is made on or before the 31st day of March, 2024; (ii) is held for at least three years; and (iii) is in a company or enterprise carrying on the business of developing, or operating and maintaining, or developing, operating or maintaining any infrastructure facility as defined in the Explanation to clause (i) of subsection (4) of section 80-IA or such other business as may be notified by the Central Government in this behalf. It is further proposed to insert an Explanation to the said clause so a....
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....s removed from the storage facility for the first time. This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years. Clause 8 of the Bill seeks to amend section 10A of the Income-tax Act relating to special provision in respect of newly established undertakings in free trade zone, etc. Sub-section (1) of the said section provides that subject to the provisions of this section, a deduction of such profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce such articles or things or computer software, as the case may be, shall be allowed from the total income of the assessee. Sub-section (5) of the said section provides that the deduction under the said section shall not be admissible for any assessment year beginning on or after the 1st day of April, 2001, unless the assessee furnishes in the prescribed form, along with the return of income, the report of....
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....d section 12AB subject to the condition that on doing so, the approval under clause (23C) or notification under clause (46) of section 10, as the case may be, to such trust or institution shall cease to have any effect from the date on which the said registration becomes operative and thereafter, it would not be entitled to exemption under the respective clause. These amendments will take effect from 1st June, 2020. Clause 10 of the Bill seeks to amend section 12A of the Income-tax Act relating to conditions for applicability of sections 11 and 12. Sub-section (1) of said section provides for the conditions to be fulfilled by any trust or institution subject to which exemption under sections 11 and 12 shall be available to it. It is proposed to insert a new clause (ac) to the said sub-section so as to provide, notwithstanding anything contained in clauses (a), (aa) and (ab) of the said subsection, with condition that the trust or institution is registered under the proposed section 12AB on an application made by the person in receipt of the income in the prescribed form and manner to the Principal Commissioner or Commissioner, for registration of the trust or institutio....
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.... shall apply to a trust or institution, where the application is made under sub-clause (i) of proposed clause (ac) of sub-section (1), from the assessment year from which such trust or institution was earlier granted registration; sub-clause (iii) of proposed clause (ac) of sub-section (1), from the first of the assessment years for which it was provisionally registered. It is proposed to amend the existing first and third proviso to sub-section (2) thereof so as to make reference of proposed new section 12AB. This amendment will take effect from 1st June, 2020. Clause 11 of the Bill seeks to amend section 12AA of the Income-tax Act relating to procedure for registration. It is proposed to insert a new sub-section (5) to said section so as to provide that nothing contained in said section shall apply on or after the 1st day of April, 2021. This amendment will take effect from 1st June, 2020. Clause 12 of the Bill seeks to insert a new section 12AB in the Income-tax Act relating to procedure for fresh registration. Sub-section (1) of the proposed section provides that the Principal Commissioner or Commissioner, on receipt of an application made under the propose....
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....trust or an institution has been granted under clause (a) or clause (b) of sub-section (1) and subsequently, the Principal Commissioner or Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution after affording a reasonable opportunity of being heard. Sub-section (5) of the proposed section provides that without prejudice to the provisions of sub-section (4), where registration of a trust or an institution has been granted under clause (a) or clause (b) of sub-section (1) and subsequently, it is noticed that,-- (a) the activities of the trust or the institution are being carried out in a manner that the provisions of sections 11 and 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of sub-section (1) of section 13; or (b) the trust or institution has not complied with the requirement of any other law, as referred to in item (B) of sub-clause (i) of clause (b) of sub-sec....
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....which the deduction is claimed have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form duly signed and verified by such accountant. It is proposed to amend the said sub-section (5) so as to provide that deduction under sub-section (1) of section 32AB shall not be admissible to assessee unless the accounts of the business or profession of the assessee for the previous year relevant to the assessment year for which deduction is claimed have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 before the specified date referred to section 44AB (i.e., one month prior to the due date for filing of return under sub-section (1) of section 139) and the report of such audit is furnished by that date. This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years. Clause 15 of the Bill seeks to amend section 33AB of the Income-tax Act relating to tea development account, coffee development acc....
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....regate amount so deposited by the assessee or twenty per cent. of the profits of such business computed under the head "Profits and gains from Business or Profession" before making any deduction under the said section. Sub-section (2) of the said section provides that deduction under sub-section (1) of section 33ABA will not be admissible to assessee unless the accounts of the business or profession of the assessee for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form duly signed and verified by such accountant. It is proposed to amend sub-section (2) of the said section to provide that deduction under sub-section (1) shall not be admissible to assessee unless the accounts of the business or profession of the assessee for the previous year relevant to the assessment year for which deduction are claimed have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 before the specified date referr....
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....iso comes into effect, shall be deemed to have been withdrawn unless such research association, university, college or other institution referred to in clause (ii) or clause (iii) or the company referred to in clause (iia) makes an intimation in such form and manner to the prescribed authority within three months from the date on which this proviso has come into effect, and subject to such intimation the notification shall be valid for a period of five consecutive assessment years beginning with the assessment year commencing on or after the 1st day of April, 2021. It is also proposed to insert a new sixth proviso to said sub-section (1) so as to provide that any notification issued, by the Central Government under clause (ii), clause (iia) or clause (iii), after the date on which the Finance Bill, 2020 receives the assent of the President, shall, at any one time, have effect for such assessment year or years, not exceeding five assessment years as may be specified in the notification. It is also proposed to insert a new sub-section (1A) in the said section after sub-section (1) thereof so as to provide that notwithstanding anything contained in sub-section (1), the research ....
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.... assessee and allowed to him under this section. These amendments will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years. Clause 19 of the Bill seeks to amend section 35D of the Income-tax Act relating to amortisation of certain preliminary expenses. Sub-section (1) of the said section provides that an assessee, being an Indian company or a person other than a company who is a resident in India shall be allowed deduction in relation to certain specified expenditure incurred before the commencement of his business or in connection with the extension of undertaking or setting up of new unit of an existing business over a period of ten successive previous years beginning with the previous year in which the business commences or as the case may be, such extension of undertaking or setup of new unit has been carried out. Sub-section (2) of the said section specifies certain expenditures which are allowed as deduction under sub-section (1). Sub-section (4) of the said section provides that deduction under sub-section (1) shall not be admissible to the assessee unless the accounts of th....
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....hes, along with his return of income for the first year in which the deduction under this section is claimed, the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed. It is proposed to amend the said sub-section (6) so as to provide that deduction under sub-section (1) of section 35E shall not be admissible to assessee unless the accounts of the assessee for the year or years in which the expenditure specified in sub-section (2) is incurred have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 before the specified date referred to section 44AB (i.e., one month prior to the due date for filing of return under sub-section (1) of section 139) and the report of such audit has been furnished by that date. This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years. Clause 21 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. ....
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.... may be, in business exceed or exceeds one crore rupees in any previous year. It is proposed to insert a proviso in the said clause so as to provide that in the case of a person whose aggregate of all amount received including amount received for sales, turnover or gross receipts during the previous years, in cash, does not exceed five per cent. of the said amount; and the aggregate of all payments made including amount incurred for expenditure, in cash, during the previous year does not exceed five per cent. of the said payment, this clause shall have effect as if for the words "one crore rupees", the words "five crore rupees" had been substituted. Clause (ii) of the Explanation to the said section defines the expression "specified date" in relation to the accounts of the assessee of the previous year relevant to an assessment year as due date for furnishing the return of income under sub-section (1) of section 139. It is proposed to amend the said clause so as to provide that the specified date will mean one month prior to the due date for furnishing the return of income under sub-section (1) of section 139. These amendments will take effect from 1st April, 2020 and w....
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....d in the circular in this behalf issued by the Securities and Exchange Board of India under section 11 of the Securities and Exchange Board of India Act, 1992 for the purposes of the said sub-sections. This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years. Clause 26 of the Bill seeks to amend section 50B of the Income-tax Act relating to special provision for computation of capital gains in case of slump sale. Sub-section (1) of the said section provides that any profits or gains arising from the slump sale effected in the previous year shall be chargeable to income-tax as capital gains arising from the transfer of long-term capital assets and shall be deemed to be the income of the previous year in which the transfer took place. Sub-section (3) of the said section provides that every assessee, in the case of slump sale, shall furnish in the prescribed form along with the return of income, a report of an accountant as defined in the Explanation below sub-section (2) of section 288 indicating the computation of the net worth of the undertaking or division, as the case....
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....t the cost of long-term capital asset acquired before the 1st day of April, 2001 is taken to be the cost of acquisition to the assesse or the fair market value of the asset on that date, at the option of the assessee. It is proposed to insert a proviso to clause (b) of sub-section (2) of the said section so as to provide that in case of a capital asset referred to in sub-clauses (i) and (ii), being land or building or both, the fair market value of such asset on the 1st day of April, 2001 for the purposes of the said sub-clauses shall not exceed the stamp duty value, wherever available, of such asset as on the 1st day of April, 2001. It is further proposed to define the expression "stamp duty value" for the purposes of the said proviso to mean the value adopted or assessed or assessable by any authority of the Central Government or a State Government for the purpose of payment of stamp duty in respect of an immovable property. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. Clause 29 of the Bill seeks to amend section 56 of the Income-tax Act relating to income f....
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..... It is proposed to omit the reference of dividend referred to in section 115-O. It is further proposed to insert a proviso to the said section so as to provide that no deduction shall be allowed from the dividend income, or income in respect of units of a Mutual Fund specified under clause (23D) of section 10 or income in respect of units from a specified company defined in the Explanation to clause (35) of section 10, other than deduction on account of interest expense and in any previous year such deduction shall not exceed twenty per cent. of the dividend income, or income in respect of such units, included in the total income for that year without deduction under that section. These amendments will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. Clause 31 of the Bill seeks to substitute section 72AA of the Income-tax Act, relating to carry forward and set-off of accumulated loss and unabsorbed depreciation allowance in scheme of amalgamation in certain cases. It is proposed to substitute the said section so as to provide that notwithstanding anything contained in sub-clauses....
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....ution during the period beginning on the 1st day of April, 2019 and ending on the 31st day of March, 2020. This is subject to further condition that the stamp duty value of residential house property does not exceed forty-five lakh rupees and the assessee does not own any residential house property on the date of sanction of loan. It is proposed to amend the said section so as to provide that the deduction under the said section in respect of interest paid on loan sanctioned by a financial institution for acquisition of a residential house property, shall be available if the loan has been sanctioned during the period beginning on the 1st day of April, 2019 and ending on the 31st day of March, 2021, subject to other conditions specified in the said section. This amendment will take effect from the 1st day of April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. Clause 33 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. Sub-section (5) thereof provides that this section applies to donations to any instit....
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....o the assessment year from which said registration is sought. It is also proposed to insert another proviso to sub-section (5) so as to provide that the Principal Commissioner or Commissioner, on receipt of an application made under the proposed first proviso, shall send a copy of order passed in writing,- (a) where the application is under clause (i) of the said proviso, granting it approval for a period of five years; (b) where the application is under clause (ii) or clause (iii) of the said proviso,-- I. call for such documents or information from it or make such inquiries as he thinks necessary in order to satisfy himself about,- (A) the genuineness of activities of such institution or fund; and (B) the fulfilment of all the conditions laid down in clauses (i) to (v) of sub-section (5); and II. after satisfying himself about the genuineness of activities under item (A), and the fulfilment of all the conditions under item (B), of sub-clause (a),-- (A) granting it approval for a period of five years; (B) if he is not so satisfied, pass an order in writing rejecting such application and also cancelling its approval aft....
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....n in respect of certain donations for scientific research or rural development. Sub-section (2A) of said section provides that no deduction shall be allowed under this section in respect of any sum exceeding ten thousand rupees unless such sum is paid by any mode other than cash. It is proposed to insert an Explanation to said section so as to declare that assessee's claim for a deduction in respect of any sum referred to in sub-section (2), in the return of income for any assessment year filed by him, shall be allowed on the basis of information relating to such sum furnished by the payee to the prescribed income-tax authority or the person authorised by such authority, subject to verification in accordance with the risk management strategy formulated by the Board from time to time. This amendment will take effect from 1st June, 2020. Clause 35 of the Bill seeks to amend section 80-IA of the Income-tax Act relating to deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc. Sub-section (1) of the said section provides that where the gross total income of an assessee includes any profits and ga....
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.... is proposed to amend the said section so as to provide that the deduction under the said section shall be available to an eligible start-up for a period of three consecutive assessment years out of ten years beginning from the year in which the eligible start-up is incorporated and the total turnover of its business does not exceed one hundred crore rupees in the previous year relevant to the assessment year for which deduction under this section is claimed. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. Clause 37 of the Bill seeks to amend section 80-IB of the Income-tax Act relating to deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings. It is proposed to consequentially amend sub-sections (7A), (7B), (11B) and (11C) to substitute the existing phrase provided therein, respectively, with the phrase "the report of an audit in such form and containing such particulars, as may be prescribed, and duly signed and verified by an accountant, as defined in the Explanation below sub-section (....
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....ulars in the report as may be prescribed. It is proposed to amend the said clause (c) so as to provide that the deduction under sub-section (1) shall not be allowed unless the assessee furnishes the report of the accountant, as defined in the Explanation to section 288 before the specified date referred to in section 44AB (i.e. one month prior to the due date for filing of return under subsection (1) of section 139) giving such particulars in the report as may be prescribed. This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years. Clause 40 of the Bill seeks to insert new section 80M relating to deduction in respect of certain inter-corporate dividends. Sub-section (1) of the said new section provides that where the gross total income of a domestic company in any previous year includes any income by way of dividends from any other domestic company, there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of such domestic company, a deduction of an amount equal to so much of the amount of income by way of di....
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....s as may be necessary for adopting and implementing such agreement for the avoidance of double taxation of income under this Act and under the corresponding law in force in that specified territory outside India. It is proposed to amend said clause so as to provide that the avoidance of double taxation under said agreement shall be without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in the said agreement for the indirect benefit to residents of any other country or territory). This amendment will take effect from 1st day of April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. Clause 43 of the Bill seeks to amend section 92CB of the Income-tax Act relating to power of Board to make safe harbour rules. Sub-section (1) of the said section provides that the determination of arm's length price under section 92C or section 92CA shall be subject to safe harbour rules. It is proposed to substitute the said sub-section (1) so as to provide that the determination of the income ....
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....international transaction entered into by the person; (b) income referred to in clause (i) of sub-section (1) of section 9, or specifying the manner in which the said income is to be determined, as is reasonably attributable to the operations carried out in India by or on behalf of that person, being a non-resident, during any period not exceeding four previous years preceding the first of the previous years referred to in subsection (4), and the arm's length price of such international transaction or the income of such person shall be determined in accordance with the said agreement. These amendments will take effect from 1st April, 2020. Clause 45 of the Bill seeks to amend section 92F of the Income-tax Act relating to definitions of certain terms relevant to computation of arm's length price, etc. Clause (iv) of the said section provides the definition of specified date. It provides that specified date shall have the same meaning as assigned to "due date" in Explanation 2 below sub-section (1) of section 139. It is proposed to substitute the said clause (iv) so as to provide that "specified date" shall mean one month prior to the due date for furn....
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.... the said sub-section and royalty or fees for technical services as specified in clause (b) of the said sub-section. Sub-section (5) of the said section provides that a non-resident will not be required to furnish its return of income under sub-section (1) of section 139 of the Income-tax Act, if the conditions in clause (a) and clause (b) of said subsection are satisfied. The condition under clause (a) of said sub-section requires that the total income of a non-resident should consist only of income in the nature of dividends or interest as referred to in clause (a) of sub-section (1) of the said section. It is proposed to amend clause (a) of the said subsection so as to provide that the total income of the non-resident should consist only of the income in the nature of dividend or interest as referred to in clause (a) of sub-section (1) of the said section or income in the nature of royalty or fee for technical services as referred to in clause (b) of subsection (1) of the said section. The condition under clause (b) of said sub-section requires that the tax deductible at source on such income as referred to in clause (a) of sub-section (1) of the said section has bee....
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....Investors. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. Clause 51 of the Bill seeks to amend section 115BAA relating to tax on income of certain domestic companies. It is proposed to amend sub-clause (i) of sub-section (2) of the section so as to modify this condition to provide that the total income by the company shall be computed without deduction under any provisions of Chapter VI-A other than the provisions of section 80JJAA or section 80M instead of computation without deduction under any provisions of Chapter VI-A under the heading "C.-Deductions in respect of certain incomes" other than the provisions of section 80JJAA. This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years. Clause 52 of the Bill seeks to amend section 115BAB of the Income-tax Act relating to tax on income of new manufacturing domestic companies. It is proposed to amend said sub-clause (i) of sub-section (2) of the aforesaid section so as to modify this condition to provide ....
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....ny previous year, the option shall become invalid in respect of the assessment year relevant to that previous year and other provisions of the Act shall apply, as if the option had not been exercised for the assessment year relevant to that previous year: Second proviso to said sub-section provides that where the option is exercised under clause (i) of sub-section (5), in the event of failure to satisfy the conditions contained in subsection (2), it shall become invalid for subsequent assessment years also and other provisions of the Act shall apply for those years accordingly. Sub-section (2) of proposed section provides that for the purposes of sub-section (1), the total income of the individual or Hindu undivided family shall be computed,- (i) without any exemption or deduction under the provisions of clause (5) or clause (13A) or prescribed under clause (14)(other than those as may be prescribed for this purpose) or clause (17) or clause (32) of section 10 or section 10AA or section 16 or clause (b) of section 24 [in respect of property referred to in sub-section (2) of section 23] or clause (iia) of subsection (1) of section 32 or section 32AD or section 33AB or....
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....to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005. Sub-section (5) of proposed section provides that nothing contained in this section shall apply unless option is exercised in the prescribed manner by the person,- (i) having business income, on or before the due date specified under sub-section (1) of section 139 for furnishing the returns of income for any previous year relevant to the assessment year commencing on or after the 1st day of April, 2021 and such option once exercised shall apply to subsequent assessment years; (ii)having no business income, along with the return of income to be furnished under sub-section (1) of section 139 for an assessment year: Proviso to said sub-section (5) of the proposed section provides that the option under clause (i), once exercised for any previous year can be withdrawn only once for a previous year other than the year in which it was exercised and thereafter, the person shall never be eligible to exercise option under this section, except where such person ceases to have any business income in which case, option under clause (ii) shall be available. Sub-section (1) of the new section 115....
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.... corresponding adjustment shall be made to the written down value of such block of assets as on the 1st day of April, 2020 in the manner as may be provided by rules, if the option under sub-section (5) is exercised for a previous year relevant to the assessment year beginning on the 1st day of April, 2021. Sub-section (4) of the said section provides that in case of a person, having a Unit in the International Financial Services Centre, as referred to in sub-section (1A) of section 80LA, which has exercised option under sub-section (5), the conditions contained in sub-section (2) shall be modified to the extent that the deduction under the said section shall be available to such Unit subject to fulfilment of the conditions contained in the said section. Explanation to the said sub-section defines the term "Unit" to have the meaning assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005. Sub-section (5) of the said section provides that nothing contained in this section shall apply unless option is exercised by the person in the manner as may be provided by rules on or before the due date specified under subsection (1) of section 139 for furnishi....
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...., apply in relation to the assessment year 2021-2022 and subsequent assessment years. Clause 56 of the Bill seeks to amend section 115JB of the Income-tax Act relating to special provision for payment of tax by certain companies. Sub-section (1) of the said section provides that where in the case of an assessee, being a company, the income- tax, payable on the total income as computed under the Income-tax Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of 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 on such total income shall be the amount of income-tax at the rate of eighteen and one-half per cent. Sub-section (4) of the said section provides that every company to which the said section applies, shall furnish a report in the prescribed form from an accountant as defined in the Explanation below sub-section (2) of section 288, certifying that the book profit has been computed in accordance with the provisions of this section along with the return of income filed under sub-section ....
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....computed in accordance with the provisions of this Chapter and furnish such report by that date. This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years. It is proposed to consequentially insert a new subsection (5) in the said section so as to provide that the provisions contained therein shall not apply to a person who has exercised the option referred to in section 115BAC or section 115BAD. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. Clause 58 of the Bill seeks to amend section 115JD of the Income-tax Act relating to tax credit for alternate minimum tax. It is proposed consequentially to insert a new subsection (7) in said section so as to provide that the provisions contained therein shall not apply to a person who has exercised the option referred to in section 115BAC or section 115BAD. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. ....
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.... 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, within a period of twelve months from the end of the month in which the dissolution takes place. Other provisions of aforesaid section provides for procedures in relation to payment of said additional income-tax. It is proposed to make a reference to section 12AB in the said section, wherever the reference to section 12AA has been made so as to provide that provisions of said section 115TD shall, mutatis mutandis, apply to the trust or institution registered under section 12AB. This amendment will take effect from 1st June, 2020. Clause 62 of the Bill seeks to amend section 115UA of the Income-tax Act relating to tax on income of unit holder and business trust. The said section enables pass through of the income of certain nature from business trust to its unit holders. Subsection (3) of the said section provides that if in any previous year, the distributed income or any part thereof, received by a unit holder from the business tr....
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.... (1) of the said section without prior approval of the Joint Director or the Joint Commissioner, as the case may be. It is proposed to substitute the said proviso to provide that in a case where the information has been received from such authority, as may be prescribed, no income-tax authority below the rank of a Joint Director, or a Joint Commissioner, shall conduct any survey under the said section without prior approval of a Joint Director or a Joint Commissioner, as the case may be and in any other case, no income-tax authority below the rank of a Director or a Commissioner, shall conduct any survey under the said section without prior approval of the Director or the Commissioner, as the case may be. This amendment will take effect from 1st April, 2020. Clause 66 of the Bill seeks to amend section 139 of the Income-tax Act relating to return of income. Clause (a) of Explanation(2) of sub-section (1) of the said section provides for due date of furnishing of return of income for certain persons including a working partner of the specified firm as the 30th day of September of the assessment year. It is proposed to amend the said clause so as to omit the word "work....
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....sessee shall also take into account any tax or interest payable under the provisions of sub-section (2) of section 191. This amendment will take effect from 1st April, 2020. Clause 69 of the Bill seeks to amend section 143 of the Income-tax Act relating to assessment. Sub-section (3A) of the said section provides that the Central Government may make a scheme, by notification in the Official Gazette, for the purposes of making assessment of total income or loss of the assessee under sub-section (3) of section 143 so as to impart greater efficiency, transparency and accountability by certain means specified therein. In order to enable assessment under section 144 under the aforementioned notified scheme, it is proposed to amend the said sub-section so as to include the reference of section 144 of the Act in it. Sub-section (3B) of the said section provides that the Central Government may for the purpose of giving effect to the scheme, by notification in the Official Gazette, direct that any of the provisions of the Act relating to assessment of total income or loss shall not apply or shall apply with such exceptions, modification and adaptations as may be specified in ....
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....he 1st day of April, 2021, includes an income of the nature specified in clause (vi) of sub-section (2) of section 17 and such specified security or sweat equity shares as referred to the said clause are allotted or transferred directly or indirectly by the current employer, being an eligible start-up referred to in section 80-IAC, then tax or interest on such income included in the notice of demand shall be payable by the assessee within fourteen days after the expiry of forty-eight months from the end of the relevant assessment year; or from the date of the sale of such specified security or sweat equity share by the assessee; or from the date of the assessee ceasing to be employee of the employer who allotted or transferred him such specified security or sweat equity share, whichever is earlier. This amendment will take effect from 1st April, 2020. Clause 72 of the Bill seeks to amend section 191 of the Income-tax Act relating to direct payment. The said section provides that in the case of income in respect of which provision is not made for deducting income-tax at the time of payment, and in any case where income-tax has not been deducted in accordance with the provis....
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.... is proposed to insert new sub-section (1C) so as to provide that for the purpose of deducting or paying tax under sub-section (1) or sub-section (1A), as the case may be, a person, being an eligible start-up referred to in section 80- IAC, responsible for paying any income to the assessee being perquisite of the nature specified in clause (vi) of subsection (2) of section 17 in any previous year relevant to the assessment year, beginning on or after the 1st day of April, 2021, shall deduct or pay, as the case may be, tax on such income within fourteen days after the expiry of forty-eight months from the end of the relevant assessment year; or from the date of the sale of such specified security or sweat equity share by the assessee; or from the date of the assessee ceasing to be the employee of the person, whichever is earlier, on the basis of rates in force of the financial year in which the said specified security or sweat equity share is allotted or transferred. This amendment will take effect from 1st April, 2020. Clause 74 of the Bill seeks to amend section 194 of the Income-tax Act relating to dividends. The said section, inter alia, provides that the principal offi....
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.... sales, gross receipts or turnover from the business or profession carried on by him exceed one crore rupees in case of business or fifty lakh rupees in case of profession during the financial year immediately preceding the financial year in which such interest is credited or paid, shall be liable to deduct income-tax under the said section. Sub-section (3) of the said section provides for circumstances in which the provisions of sub-section (1) shall not apply. Clause (i) of sub-section (3) provides that sub-section (1) shall not apply where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the person referred to in sub-section (1) to the account of, or to, the payee, does not exceed certain threshold. Sub-clause (b) of the said clause provides that threshold to be forty thousand rupees, where the payer is a cooperative society engaged in carrying on the business of banking. This threshold is fifty thousand rupees, in case the payee is a senior citizen. Clause (v) of sub-section (3) provides that sub-section (1) shall not apply to such income credi....
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....o one per cent. where the payment is being made or credit is being given to an individual or a Hindu undivided family; two per cent. where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family, of such sum as income-tax on income comprised therein. Item (B) of sub-clause (l) of clause (i) of the Explanation to the said section provides the definition of "specified person" to mean any person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, if such person, is liable to audit of accounts under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the contractor. It is proposed to amend the said sub-clause so as to define the expression "specified person" to mean any person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, if such person, has total sales, gross receipts or turnover from business or profession carried on by him exceeding one crore rupees in case of business or fifty lakh rupees in case of....
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....ly, whose total sales, gross receipts or turnover from business or profession carried on by him exceed one crore rupees in case of business or fifty lakh rupees in case of profession during the financial year immediately preceding the financial year in which such interest is credited or paid, shall be liable to deduct income-tax under the said section. This amendment will take effect from 1st April, 2020. Clause 78 of the Bill seeks to amend 194-I of the Income-tax Act relating to rent. The said section provides that any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of two per cent. for the use of any machinery or plant or equipment; and ten per cent. for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings. The second proviso to the said section provides that an....
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....her case. The second proviso to the said sub-section provides that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such interest is credited or paid, shall be liable to deduct income-tax under this section. It is proposed to amend the said proviso so as to provide that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed one crore rupees in case of business or fifty lakh rupees in case of profession during the financial year immediately preceding the financial year in which such interest is credited or paid, shall be liable to deduct income-tax under the said section. These amendments will take effect from 1st April, 2020. Clause 80 of the Bill seeks to insert a new section 194K relating to income in respect of units. The said section, inter alia, provides that any person responsible for paying to a resident any income in respect....
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.... cent. in case of income the nature referred to in sub-clause (a) of clause (23FC) of section 10 and at the rate of ten per cent. in case of income of the nature referred to in sub-clause (b) of the said clause. These amendments will take effect from 1st April, 2020. Clause 82 seeks to amend section 194LC of the Income-tax Act relating to income by way of interest from Indian company. Sub-section (1) of the said section provides that income-tax at the rate of five per cent. shall be deducted on any interest referred to in sub-section (2), payable by a specified company or business trust to a non-resident, in respect of monies borrowed in foreign currency from a source outside India. It is proposed to insert a proviso in sub-section (1) of the said section so as to provide that the withholding tax of four per cent. shall be deducted on interest referred to in clause (ib) of sub-section (2) of said section. Sub-section (2) of said section specifies the interest which is eligible for withholding tax of five per cent. on borrowings made under a loan agreement at any time on or after the 1st day of July, 2012 but before the 1st day of July, 2020, through issue of long-ter....
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....enominated bond of an Indian company shall not exceed the rate as may be notified by the Central Government in this behalf. It is also proposed to insert new clause (ba) in the Explanation to the said section so as to define the expression "municipal debt securities". These amendments will take effect from 1st April, 2020. Clause 84 of the Bill seeks to insert a new section 194-O in the Income-tax Act relating to payment of certain sums by e-commerce operator to e-commerce participants. Sub-section (1) of the said section provides that notwithstanding anything to the contrary contained in any of the provisions of Part B of this Chapter, where sale of goods or provision of services of an e-commerce participant is facilitated by an e-commerce operator through its digital or electronic facility or platform (by whatever name called), such e-commerce operator shall, at the time of credit of amount of sale or services or both to the account of an ecommerce participant or at the time of payment thereof to such e-commerce participant by any mode, whichever is earlier, deduct income-tax at the rate of one per cent. of the gross amount of such sales or services or both. It is fur....
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.... Sub-section (1) of the said section provides that any person responsible for paying to a non-resident, not being a company, or to a foreign company, any income in respect of a Mutual Fund specified under clause (23D) of section 10 or of the Unit Trust of India shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of twenty per cent. It is proposed to amend the said sub-section to substitute the expression "Unit Trust of India" referred to in the said sub-section with "specified company referred to in the Explanation to clause (35) of section 10; and to enable credit of income or payment thereof by any mode. Proviso to this sub-section provides that no deduction shall be made under this section from any such income credited or paid on or after the 1st day of April, 2003. It is further proposed to omit the proviso to the said subsection. These amendments will take effect from 1st April, 2020. Clause 87 of the Bill seeks to amend section 196C of the Income-tax Act relating to income from fore....
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....osed to omit the said section. This amendment will take effect from 1st June, 2020. Clause 91 of the Bill seeks to amend section 204 of the Income-tax Act relating to meaning of "person responsible for paying". It is proposed to insert a new clause in the said section so as to provide that in the case of a person not resident in India, the person himself or any person authorised by such person or the agent of such person in India including any person treated as an agent under section 163 shall also be included within the meaning of the definition of the expression "person responsible for paying" under the said section. This amendment will take effect from 1st April, 2020. Clause 92 of the Bill seeks to amend section 206AA of the Income-tax Act relating to requirement to furnish Permanent Account Number. It is proposed to insert a proviso in sub-section (1) of the said section so as to provide that where the tax is required to be deducted under section 194-O, the provisions of clause (iii) shall apply as if for the words "twenty per cent.", the words "five per cent." had been substituted. This amendment will take effect from 1st April, 2020. Clause 93 of the ....
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.... or at the time of receipt of such amount from the said buyer by any mode, whichever is earlier, collects from the buyer, a sum equal to five per cent. of such amount as income-tax. The provisions of the said sub-section shall not apply if the buyer is liable to deduct tax at source under any other provision of the Act and he has deducted such amount. It is further provided that the provisions of the said sub-section shall not apply if the buyer is the Central Government, or a State Government, or an embassy, or a High Commission, or a legation, a commission, a consulate, the trade representation of a foreign State, or a local authority as defined in the Explanation to clause (20) of section 10 or any other person notified by the Central Government for this purpose subject to conditions as may be specified in that notification. For the purposes of the said sub-section, it is also proposed to define the expressions "authorised dealer" and "overseas tour package". It is also proposed to insert sub-section (1H), to provide that every person being a seller, who receives any amount as consideration for sale of any goods of the value or aggregate of such value exceeding fifty la....
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....b-section (1) of the proposed section provides that without prejudice to the provisions of that Act, where the research association, university, college or other institution or the company fails to deliver or cause to be delivered a statement within the time prescribed under clause (i), or furnish a certificate prescribed under clause (ii) of subsection (1A) of section 35; or the institution or fund fails to deliver or cause to be delivered a statement within the time prescribed under clause (viii) of sub-section (5), or furnish a certificate prescribed under clause (ix) of sub-section (5) of section 80G; it shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues. Sub-section (2) of the proposed section provides that the amount of said fee shall not exceed the amount in respect of which the failure referred therein has occurred and shall be paid before delivering or causing to be delivered the statement mentioned in sub-section (1). This amendment will take effect from 1st June, 2020. Clause 95 of the Bill seeks to amend section 250 of the Income-tax Act, 1961 relating to procedure in appeal. It is proposed to ....
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....hall not exceed three hundred and sixty-five days and the Appellate Tribunal shall dispose of the appeal within the period or periods of stay so extended or allowed. These amendments will take effect from 1^st April, 2020. Clause 98 of the Bill seeks to insert a new section 271AAD in the Income-tax Act relating to penalty for false or omission of entry in books of account. It is proposed to insert a new section 271AAD, under which penalty shall be levied on a person who is required to maintain books of account, if it is found that the books contain a false entry or that any entry has been omitted which is relevant for the computation of his total income. Such person shall be liable to pay by way of penalty a sum equal to the aggregate amount of such false and omitted entries. Penalty shall also be levied on any other person who causes the person required to maintain books of account to make or causes to make any false entry or omit or cause to omit any entry in books of account. The false entries shall include use or intention to use forged or falsified documents such as a false invoice or, in general, a false piece of documentary evidence; or invoice in respect of su....
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....-tax Act relating to appearance by authorised representative. Sub-section (2) of the said section, inter alia, provides for the definition of "authorised representative" who shall be entitled or required to attend before any income-tax authority or the Appellate Tribunal in connection with any proceeding under the said Act. It is proposed to amend the said sub-section so as to enable any other person, as may be provided by rules by the Board to appear as an authorised representative. This amendment will take effect from 1st April, 2020. Clause 103 of the Bill seeks to amend section 295 of the Income-tax Act relating to power to make rules. Sub-section (1) of said section provides that the Central Board of Direct Taxes may, subject to the control of the Central Government, by notification in the Gazette of India, make rules for the whole or any part of India for carrying out the purposes that Act. Sub-section (2) of said section enumerates the matters for which the rules made under sub-section (1) may provide for. Clause (b) of said sub-section (2) provides the matter, which the rules made by the Board may provide, to be the manner in which and the procedure by ....
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....nd will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years. Customs Clause 105 seeks to amend clause (f) of sub-section (2) of section 11 of the Customs Act so as to include any other goods along with gold or silver to enable the Central Government to prohibit either absolutely or conditionally the import or export of such goods to prevent injury to the economy on account of uncontrolled import or export of such goods. Clause 106 of the Bill seeks to substitute Explanation 4 of section 28 of the Customs Act to provide that notwithstanding anything to the contrary contained in any judgment, decree or order of the Appellate Tribunal or any Court or in any other provisions of this Act or the rules or regulations made thereunder or in any other law for the time being in force, in cases where notice has been issued for non-levy, short-levy, non-payment, short-payment or erroneous refund prior to the 29th day of March, 2018, being the date of commencement of the Finance Act, 2018, such notice shall continue to be governed by the provisions of section 28 as it stood immediately before such date. This amendment shall come into effect r....
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....f imports of an article to prevent serious injury to domestic industry. Clause 115 of the Bill seeks to amend the First Schedule to the Customs Tariff Act so as to-- (a)revise tariff rates in respect of certain tariff items in the manner specified in the Second Schedule; (b)create new tariff lines in the manner specified in the Third Schedule. Central Goods and Services Tax Clause 116 of the Bill seeks to amend clause (114) of section 2 of the Central Goods and Services Tax Act so as to align the definition of "Union territory" in line with the Jammu and Kashmir Reorganisation Act, 2019 and the Dadra and Nagar Haveli and Daman and Diu (Merger of Union Territories), Act, 2019. Clause 117 of the Bill seeks to amend clauses (b), (c) and (d) of sub-section (2) of section 10 of the Central Goods and Services Tax Act to harmonise the conditions for eligibility for opting to pay tax under sub-section (1) and subsection (2A) of the said Act. Clause 118 of the Bill seeks to amend sub-section (4) of section 16 of the Central Goods and Services Tax Act so as to delink the date of issuance of debit note from the date of issuance of the underlying invoice for pu....
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....amend section 168 of the Central Goods and Services Tax Act so as to make provisions for enabling the jurisdictional Commissioners to exercise powers under sub-section (5) of section 66 and also under second proviso to sub-section (1) of section 143. Clause 128 of the Bill seeks to amend section 172 of the Central Goods and Services Tax Act so as to extend the time limit provided for removal of difficulties thereunder from three years to five years, with effect from the date of commencement of the said Act. Clause 129 of the Bill seeks to amend paragraph 4 of Schedule II to the Central Goods and Services Tax Act so as to omit the words "whether or not for consideration" so as to give clarity to the meaning of the entries (a) and (b) of said paragraph. This amendment shall take effect retrospectively from the 1st day of July, 2017. Clause 130 of the Bill seeks to provide retrospective exemption from central tax on supply of fishmeal, during the period from the 1st day of July, 2017 up to 30th day of September, 2019 (both days inclusive). It further seeks to retrospectively levy central tax at the reduced rate of six per cent. on supply of pulley, wheels and other parts (....
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....ith effect from the date of commencement of the said Act. Clause 137 of the Bill seeks to provide retrospective exemption from Union territory tax on supply of fishmeal, during the period from the 1st day of July, 2017 up to 30th day of September, 2019 (both days inclusive). It further seeks to retrospectively levy Union territory tax at the reduced rate of six per cent. on supply of pulley, wheels and other parts (falling under heading 8483) and used as parts of agricultural machinery of headings 8432, 8433 and 8436, during the period from the 1st day of July, 2017 up to 31st day of December, 2018 (both days inclusive). It also seeks to provide that no refund shall be made of the tax which has already been collected. Goods and Services Tax (Compensation to States) Clause 138 of the Bill seeks to amend section 14 of the Goods and Services Tax (Compensation to States) Act so as to extend the time limit provided for removal of difficulties thereunder from three years to five years with effect from the date of commencement of the said Act. Health Cess Clause 139 of the Bill seeks to provide for levy of Health Cess at the rate of 5% as duty of customs on all the goods....