TaxTMI 
TaxTMI 
Amendment of section 10.
X X X X Extracts X X X X
X X X X Extracts X X X X
....bility partnership or a body corporate,-- (I) which has been granted a certificate of registration as a Category III Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992 (15 of 1992); (II) which is located in any International Financial Services Centre; and (III) of which all the units other than unit held by a sponsor or manager are held by non-residents; or (ii) investment division of an offshore banking unit, which has been-- (I) granted a certificate of registration as a Category III Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) or which has commenced its operations on or before the 31st day of March, 2024; and . (II) fulfils such conditions including maintenance of separate accounts for its investment division, as may be prescribed;'; (ii) after clause (4D), the following clauses shall be inse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t day of February, 2021, the provisions of this clause shall apply only with respect to those unit linked insurance policies, where the aggregate amount of premium does not exceed the amount referred to in fourth proviso in any of the previous year during the term of any of those policies: Provided also that the provisions of the fourth and fifth provisos shall not apply to any sum received on the death of a person: Provided also that if any difficulty arises in giving effect to the provisions of this clause, the Board may, with the previous approval of the Central Government, issue guidelines for the purpose of removing the difficulty and every guideline issued by the Board under this proviso shall be laid before each House of Parliament, and shall be binding on the income-tax authorities and the assessee."; (ii) after Explanation 2, the following Explanation shall be inserted, namely:-- 'Explanation 3.- For the purposes of this clause, "unit linked insurance policy" means a life insurance policy which has components of both investment and insurance and is linked to a unit as defined in clause (ee) of regulation 3 of the Insurance Regulatory and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lause (iiiad), as well as from hospital or hospitals or institution or institutions as referred to in sub-clause (iiiae), the exemptions under these clauses shall not apply, if the aggregate of annual receipts of the person from such university or universities or educational institution or institutions or hospital or hospitals or institution or institutions, exceed five crore rupees; or"; (III) in the third proviso,-- (A) the Explanation shall be numbered as Explanation 1 thereof and in Explanation 1 as so numbered, after the words "medical institution:" occurring at the end, the words, brackets and figures "subject to the condition that such voluntary contributions are invested or deposited in one or more of the forms or modes specified in sub-section (5) of section 11 maintained specifically for such corpus." shall be inserted; (B) after Explanation 1 as so numbered, the following Explanation shall be inserted, namely:-- "Explanation 2.-- For the purposes of determining the amount of application under this proviso,- (i) application for charitable or religious purposes from the corpus as referred to in Explanation 1, shall not be treate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing financial company registered as an Infrastructure Finance Company as referred to in notification number RBI/2009-10/316 issued by the Reserve Bank of India or in an Infrastructure Debt Fund, a non-banking finance company, as referred to in the Infrastructure Debt Fund-Non-Banking Financial Companies (Reserve Bank) Directions, 2011, issued by the Reserve Bank of India, having minimum ninety per cent. lending to one or more of the companies or enterprises or entities referred to in item (b):"; (B) after the third proviso, the following provisos shall be inserted, namely:-- "Provided also that in case a Category-I or Category-II Alternative Investment Fund referred to in item (c) of sub-clause (iii) has investment of less than one hundred per cent. in one or more of the companies or enterprises or entities referred to in item (b) of the said sub-clause or in an Infrastructure Investment Trust referred to in item (c) of the said sub-clause, income accrued or arisen or received or attributable to such investment, directly or indirectly, which is exempt under this clause shall be calculated proportionately to that investment made in one or more of the companies or e....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the investee including the right to appoint directors or executive director shall not be considered as participation in the day to day operations of the investee" shall be substituted; (ii) in clause (c),-- (I) in sub-clause (ii), after the word "country", the words "or if liable to tax, exemption from taxation for all its income has been provided by such foreign country" shall be inserted; (II) in sub-clause (iii), for the words "prescribed; and", the word "prescribed;", shall be substituted; (III) after sub-clause (iii), the following sub-clause shall be inserted, namely:-- "(iiia) it does not participate in the day to day operations of investee but the monitoring mechanism to protect the investment with the investee including the right to appoint directors or executive director shall not be considered as participation in day to day operations of the investee; and"; (D) after Explanation 1, the following Explanations shall be inserted, namely:-- 'Explanation 2.- For the purposes of this clause,-- (i) "investee" means a business trust, or a company, or an enterprise, or an entity, or a Category I or Cate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly:-- 'Explanation 1.--For the removal of doubts it is hereby clarified that the income referred to in this clause shall not include and shall be deemed never to have been included any income which is chargeable to tax as royalty or fees for technical services in India under this Act read with the agreement notified by the Central Government under section 90 or section 90A. Explanation 2.-For the purposes of this clause,-- (i) "e-commerce supply or services" shall have the meaning assigned to it in clause (cb) of section 164 of the Finance Act, 2016 (28 of 2016);. (ii) "specified service" shall have the meaning assigned to it in clause (i) of section 164 of the Finance Act, 2016 (28 of 2016).'. - Clause 5 of the Bill seeks to amend section 10 of the Income-tax Act relating to incomes not included in total income. The said section provides that in computing the total income of a previous year of any person, certain categories of income shall not be included in the total income. Clause 4D of said section provides exemption for any income accrued or arisen to, or received by a specified fund as a result of transfer of capital asset referr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce in India. It is proposed to insert a second proviso in the said clause so as to provide that for the assessment year beginning on the 1st day of April, 2021, in the case of an individual, the value in lieu of any travel concession or assistance received by, or due to, such individual shall also be exempted, subject to fulfillment of such conditions (including the condition of incurring such amount of such expenditure within such period), as may be provided by rules. It is further proposed to insert Explanation 2 so as to clarify that where an individual claims such exemption and the same is allowed under the second proviso in connection with the expenditure provided by rules, no exemption shall be allowed under the said clause in respect of the same expenditure to any other individual. These amendments will take effect from 1st April, 2021. Clause (10D) of the said section provides for the exemption for the sum received under a life insurance policy in respect of which the premium payable for any of the years during the terms of the policy does not exceed ten percent of the actual capital sum assured. It is proposed to insert fourth, fifth, sixth and seventh provi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion provides for exemption with respect to the accumulated balance due and becoming payable to an employee participating in a recognised provident fund, to the extent provided in rule 8 of Part A of the Fourth Schedule. It is proposed to insert a proviso to such of the aforesaid clauses so as to provide that the provisions of these clauses shall not apply to the income by way of interest accrued during the previous year in the account of a person to the extent it relates to the amount or the aggregate of amounts of contribution made by that person exceeding two lakh and fifty thousand rupees in any previous year in that fund, on or after the 1st day of April, 2021 and computed in such manner as may be provided by rules. These amendments will take effect from 1st April, 2022 and will, accordingly, apply in relation to the assessment year 2022-2023 and subsequent assessment years. Sub-clause (iiiad) of clause (23C) of the said section provides for exemption for the income received by any person on behalf of university or educational institution as referred to in that sub-clause. The exemptions under the clause are available subject to the condition that the annual receipts o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....purposes of third proviso of clause (23C) provided when loan or borrowing is repaid from the income of the previous year, such repayment shall be allowed as application in the previous year in which it is repaid and to the extent it is repaid. Fourteenth proviso of the said clause provides that if any 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 said clause of said section accumulates its income, then payment or credit out of such accumulation, to exempt entities as prescribed in the proviso, shall not be treated as application. It is proposed to amend the said proviso to make a reference of section 12AB which provides for the procedure of registration. It is also proposed to number the Explanation as Explanation 1 thereof the twentieth proviso to the said clause and to insert a new Explanation 2 therein so as to provide that for the computation of income required to be applied or accumulated during the previous year, no set off or deduction or allowance of any excess application, of any of the year prece....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt. in one or more of the companies or enterprises or entities referred to in item (b) of the said sub-clause or in an Infrastructure Investment Trust referred to in item (c) of that sub-clause, income, accrued or arisen to or received or attributable to such investment, directly or indirectly, which is exempt under the said clause shall be calculated proportionately to the investment made in one or more of the companies or enterprises or entities referred to in item (b) of that sub-clause or in the Infrastructure Investment Trust referred to in item (c) of that sub-clause, in such manner as may be provided by rules. It is also proposed to insert fifth proviso to the said clause so as to provide that in case a domestic company referred to in item (d) of sub-clause (iii) has investment of less than one hundred per cent. in one or more of the companies or enterprises or entities referred to in item (b) of the said sub-clause, income, accrued or arisen to or received or attributable to such investments, directly or indirectly, which is exempt under the said clause shall be calculated proportionately to the investment made in one or more of the companies or enterprises or entities r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vide that the pension fund does not participate in the day to day operations of investee but the monitoring mechanism to protect the investment with the investee including the right to appoint directors or executive director shall not be considered as participation in day to day operations of investee. It is also proposed to insert a new Explanation 2 in the said clause to define the expressions "loan and borrowing" and "investee". It is also proposed to insert a new Explanation 3 so as to provide that the Central Government may, by rules, provide the method of calculation of "fifty per cent." referred to in item (c) or "seventy-five per cent." referred to in item (d) or "ninety per cent." referred to in item (e), of sub-clause (iii) of the said clause. 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. It is also proposed to insert a new clause (23FF) in the said section so as to exempt any income of the nature of capital gains, arising or received by a non-resident, which is on account of transfer of share of a company resident in India, by the resultant fund....