TaxTMI 
TaxTMI 
NOTES ON CLAUSES
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....use so as to exclude goodwill of a business or profession from the purview of "block of asset". It is further proposed to amend clause (14) of the said section which defines the expression "capital asset. It is proposed to insert sub-clause (c) to the said clause so as to include any unit linked insurance policy to which exemption under clause (10D) of section 10 does not apply on account of the applicability of the fourth and fifth proviso thereof. It is also proposed to amend clause (19AA) of the said section which defines the term "demerger", in relation to companies, means the transfer, pursuant to a scheme of arrangement under sections 391 to 394 of the Companies Act, 1956, by a demerged company of its one or more undertakings to any resulting company on satisfaction of conditions provided by rules in the said clause. It is proposed to amend the said clause to insert an Explanation so as to clarify that the reconstruction or splitting up of a public sector company into separate companies shall be deemed to be a demerger, if such reconstruction or splitting up has been made to transfer any asset of the demerged company to the resulting company and such resulting compan....
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....lso to issue zero coupon bonds. It is also proposed to insert a new Explanation 2 to define the expression "infrastructure debt fund". 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. Clause 4 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) and (4) of the said section provide for certain conditions for the applicability of the section. It is proposed to insert sub-section (8A) to the said section so as to provide that the Central Government may, by notification in the Official Gazette, specify that any one or more of the conditions specified in clauses (a) to (m) of sub-section (3) or clauses (a) to (d) of sub-section (4) shall not apply or shall apply with such modifications, as specified in such notification, in case of an eligible investment fund and its eligible fund manager, if such fund manager is located in an International Financial Services Centre, as defined in clause (a) of the Explanation to section 80LA, which has commenced its operations....
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....ncial Services Centre as referred to in sub-section (1A) of section 80LA, if the unit is eligible for deduction under section 80LA for that previous year and has commenced its operations on or before 31st March, 2024. 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. Clause (5) of the said section provides for exemption in respect of the value of travel concession or assistance received by or due to an employee from his employer or former employer for himself and his family, in connection with his proceeding on leave to any place 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 ....
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....ions, 2019 issued by Insurance Regulatory and Development Authority under the Insurance Regulatory Act, 1938 and the Insurance Regulatory and Development Authority Act, 1999. 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 (11) of the said section provides for exemption with respect to any payment from a provident fund to which the Provident Funds Act, 1925 applies or from any other provident fund set up by the Central Government and notified by it in this behalf in the Official Gazette. Clause (12) of the said section 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....
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.... (a) application out of such corpus shall not be considered as application for charitable or religious purposes for the purposes of third proviso of clause (23C), provided when it is invested or deposited back, into one or more of the forms or modes specified in sub-section (5) of section 11 maintained specifically for such corpus from the income of the previous year, such amount shall be allowed as application in the previous year in which it is deposited back to corpus and to the extent it is deposited back; (b) application from loans and borrowings shall not be considered as application for charitable or religious purposes for the 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....
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....6 issued by the Reserve Bank of India or in an Infrastructure Debt Fund, a non banking finance company as referred to in the master circular, namely, the Infrastructure Debt Fund-Non Banking Financial Companies (Reserve Bank) Directions, 2011, issued by the Reserve Bank of India, having minimum ninety per cent. investment in one or more of the companies or enterprises or entities referred to in item (b). It is also proposed to insert fourth proviso to the said clause so as to provide 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 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 ....
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....ut 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. It is also proposed to amend sub-clause (ii) of clause (c) of the said Explanation 1 so as to provide that if pension fund is liable to tax but exemption from taxation for all its income has been provided, by the foreign country under whose laws it is created or established, then such pension fund also would satisfy the condition mentioned in sub-clause (ii). It is also proposed to insert sub-clause (iiia) to the clause to provide 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 rule....
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.... to the assessment year 2021-2022 and subsequent assessment years. Clause 6 of the Bill seeks to amend section 11 of the Income-tax Act relating to income from property held for charitable or religious purposes. Clause (d) of sub-section (1) of the said section provides that voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution shall not be included in the total income of the trust or institution. It is proposed to amend the said clause (d) so as to provide that such voluntary contributions should be invested or deposited in one or more of the forms or modes specified in sub-section (5) maintained specifically for such corpus. It is further proposed to insert a new Explanation 4 to sub-section (1) so as to provide that-- (A) application out of the corpus shall not be considered as application for charitable or religious purposes for the purposes of clause (a) and (b) of sub-section (1), provided when it is invested or deposited back, into one or more of the forms or modes specified in subsection (5) maintained specifically for such corpus, from the income of the previous year, such amount shal....
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.... shall not be considered as an asset for the purpose of the said clause and, hence, not eligible for depreciation. Explanation 3 to the said sub-section defines the expression "assets" to mean tangible assets, being buildings, machinery, plant or furniture; and intangible assets, being knowhow, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature. It is proposed to amend the said Explanation 3 so as to provide that goodwill of a business or profession shall not be considered as an asset for that purposes of the said subsection. 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 8 of the Bill seeks to amend section 36 of the Income-tax Act, relating to other deductions. Sub-section (1) of the said section provides for allowing of deductions provided for in the clauses thereof for computing the income referred to in section 28 of the said Act. Clause (va) of the said sub-section provides for allowance of deduction for any sum received by the assessee from any of his employees to which the pro....
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....ub-clause (x) of clause (24) of section 2 applies. 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 10 of the Bill seeks to amend section 43CA of the Income-tax Act relating to special provision for full value of consideration for transfer of assets other than capital assets in certain cases. The proviso to sub-section (1) of the said section provides that where the value adopted or assessed or assessable by the authority for the purpose of payment of stamp duty does not exceed one hundred and ten per cent. of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration received or accruing as a result of such transfer. It is proposed to insert a second proviso to said sub-section to provide that in case of transfer of an asset, being a residential unit, the provisions of the first proviso shall have the effect as if for the words "one hundred a....
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....nd section 44ADA of the Income-tax Act relating to special provision for computing profits and gains of profession on presumptive basis. Sub-section (1) of the said section provides that notwithstanding anything contained in sections 28 to 43C, in the case of an assessee, being a resident in India engaged in a profession referred to in sub-section (1) of section 44AA and whose total gross receipts do not exceed fifty lakh rupees in a previous year, a sum equal to fifty per cent. of the total gross receipts of the assessee in the previous year on account of such profession, or as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the assessee, shall be deemed to be the profits and gains of such profession chargeable to tax under the head "profits and gains of business of profession". It is proposed to amend the said sub-section so that the assessee referred to therein shall, inter alia, mean an individual, Hindu undivided family or a partnership firm other than a Limited Liability Partnership as defined under clause (n) of sub-section (1) of section 2 of Limited Liability Partnership Act, 2008. This amendment will come into force from 1st Ap....
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....proviso thereof, including the amount allocated by way of bonus on such policy, then, any profits or gains arising from receipt of such amount by such person shall be chargeable to income-tax under the head "Capital gains" and shall be deemed to be the income of such person of the previous year in which such amount was received and the income taxable shall be calculated in such manner as may be provided by rules. It is further proposed to substitute sub-section (4) in the said section so as to provide that where a specified person receives during the previous year any capital asset at the time of its dissolution or reconstitution of the specified entity, which represents the balance in his capital account in the books of accounts of such specified entity at the time of dissolution or reconstitution, then any profits or gains arising from receipt of such capital asset by the specified person shall be chargeable to income-tax as income of such specified entity under the head "Capital gains" and shall be deemed to be the income of such specified entity of the previous year in which such capital asset was received by the specified person. It is also proposed to amend the section ....
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....he capital account of the specified person due to revaluation of any asset or due to self-generated goodwill or any other selfgenerated asset. It is also proposed to amend the section to provide that for the purpose of this subsection, the expressions "specified entity", "self-generated goodwill", "self-generated asset" and "specified person" shall have the meaning assigned to them in sub-section (4) of the Act. 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 15 of the Bill seeks to amend section 47 of the Income-tax Act relating to transactions not regarded as transfer. The said section, inter alia, provides that any transfer of a capital asset by the predecessor co-operative bank to the successor co-operative bank in a case of business reorganisation shall not be regarded as transfer. It is proposed to amend clause (vica) of the said section to expand the scope of the said clause so as to provide that any transfer of a capital asset by the primary co-operative bank which has been converted into a banking company as a result of conversion shall no....
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....tion received or accruing as a result of transfer of the capital asset. This amendment shall come into effect from the 1st day of April, 2021 and shall accordingly apply to assessment year 2021-2022 and subsequent assessment years. Clause 17 of the Bill seeks to amend section 49 of the Income-tax Act relating to cost with reference to certain modes of acquisition. Sub-section (1) of the said section provides that where the capital asset became the property of the assessee under certain situations, the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be. It is proposed to amend sub-clause (e) of clause (iii) of the said sub-section so as to include the transfer referred to in clause (viiac) and (viiad) of section 47 also within the purview of that sub-section (1). This amendment will take effect from 1st April, 2022 and will, accordingly, apply in relation to the assessment year 2022-2023 and subsequent assessment years. Clause 18 of the Bill seeks to amend section....
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.... 49, "cost of acquisition" in relation to a capital asset, being goodwill of a business or a trade mark or brand name associated with a business or a right to manufacture, produce or process any article or thing or right to carry on any business or profession, tenancy rights, stage carriage permits or loom hours,- (i) in the case of acquisition of such asset by the assessee by purchase from a previous owner, means the amount of the purchase price; and (ii) in any other case [not being a case falling under sub-clauses (i) to (iv) of sub-section (1) of section 49], shall be taken to be nil ; It is proposed to substitute the said clause so as to provide that in relation to a capital asset, being goodwill of a business or profession, or a trade mark or brand name associated with a business or profession, or a right to manufacture, produce or process any article or thing, or right to carry on any business or profession, or tenancy rights, or stage carriage permits, or loom hours,- (i) in the case of acquisition of such asset by the assessee by purchase from a previous owner, means the amount of the purchase price; and (ii) in the case falling under sub-clause (i) to (iv) ....
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....d to tax under the head "Income from other sources". It is proposed to amend the proviso to said clause of the said sub-section so as to exclude the transfer of capital asset between the original Fund and the resultant fund, which are not regarded as transfer under clause (viiac) or clause (viiad) of section 47, from the scope of clause (x) of the said sub-section. This amendment will take effect from 1st April, 2022 and will, accordingly, apply in relation to the assessment year 2022-2023 and subsequent assessment years. Clause 22 of the Bill seeks to amend section 72A of the Income-tax Act relating to provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in amalgamation or demerger, etc. Sub-section (1) of the said section provides that the accumulated loss and unabsorbed depreciation of the amalgamating company or companies shall be deemed to be the accumulated losses and unabsorbed depreciation of the amalgamated company or companies in specified cases and subject to the conditions specified in the said section. Clause (c) of the said sub-section, inter alia, provides that where there has been amalgamation of o....
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....ses to be a public sector company as a result of strategic disinvestment. It is also proposed to insert an Explanation to define the expressions "control", "erstwhile public sector company" and "strategic disinvestment" for the purposes of clause (d) of the said sub-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 23 of the Bill seeks to amend section 79 of the Income-tax Act relating to carry forward and set off of losses in case of certain companies. Sub-section (1) of the said section provides that where a change in shareholding has taken place during the previous year in the case of a company, not being a company in which the public are substantially interested, no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year, unless on the last day of the previous year, the shares of the company carrying not less than fifty-one per cent. of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than fifty-one per c....
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....le start-up for three consecutive assessment years out of ten years at the option of the assessee subject to the condition that the total turnover of its business does not exceed one hundred crore rupees for an eligible start-up incorporated on or after the 1st day of April, 2016 but before the 1st day of April, 2021. It is proposed to extend the period of incorporation of such eligible start-ups till 1st day of April, 2022. This amendment will take effect from the 1st April, 2021. Clause 26 of the Bill seeks to amend section 80-IBA of the Income-tax Act relating to deductions in respect of profits and gains from housing project. The provisions of sub-section (1) of the said section provides for hundred per cent. deductions of the profits and gains derived from the business of developing and building affordable housing project subject to certain conditions. Further the provisions of clause (a) of sub-section (2) of said section provide that the housing project shall be approved by the competent authority after 1st June, 2016 but on or before 31st March, 2021. It is proposed to insert sub-section (1A) in the said section so as to provide for hundred per cent. deductio....
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....r subject to the condition that the unit has commenced operation on or before the 31st day of 2024 shall also be eligible for deduction. Further sub-section (3) of the said section provides that no deduction under that section shall be allowed unless the assessee furnishes the report by an accountant certifying correct claim of deduction and a copy of permission obtained under clause (a) of subsection (1) of section 23 of the Banking Regulation Act, 1949. It is proposed to amend clause (ii) of sub-section (3) of the said section so as to provide that in case the unit is registered under the International Financial Services Centre Authority Act, 2019 then the copy of permission shall mean a copy of the permission or registration obtained under the International Financial Services Centre Authority Act, 2019. This amendment will take effect from 1st April, 2022 and will, accordingly, apply in relation to the assessment year 2022-2023 and subsequent assessment year. Clause 28 of the Bill seeks to insert a new section 89A in the Income-tax Act relating to relief from taxation in income from retirement benefit account maintains in a notified country. The proposed new secti....
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.... unit". 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. Clause 31 of the Bill seeks to amend section 115JB of the Income-tax Act relating to special provision for payment of tax by certain company. The said section provides for levy of tax 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, 2013. Clause (iid) of Explanation 1 of the said section provides that the amount of income in the nature of capital gains, interest, royalty or fee for technical services accruing or arising to an assessee, being a foreign company, will be reduced from the book profit if such income is credited to the statement of profit and loss and tax on such income is at a rate less than the rate specified under that section. Further such assessee will be allowed expenses relatable to such income mentioned in the said clause under sub-clause (B) of clause (fb) of the said Explanation. It is proposed to amend the said clause (fb) an....
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....y furnish a return for any previous year at any time within three months prior to the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. It is also proposed to amend sub-section (5) of the said section so as to provide that a return of income filed under sub-sections (1) or (4) can be revised at any time within three months prior to the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. It is also proposed to insert proviso before the Explanation to sub-section (9) of the said section so as to provide that the Board may specify, by notification, that any of the conditions specified in clauses (a) to (f) of the said Explanation shall not apply to such class of assessees or shall apply with such modifications, as may be specified in such notification. These amendments will take effect from lst 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 142 of the Income-tax Act relating to inquiry before assessment. Clause (i) of sub-section (1) of the said section e....
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.... 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for such assessment year. This amendment will take effect from 1st April, 2021. Clause 36 of the Bill seeks to amend section 148 of the Income-tax Act relating to issue of notice where income has escaped assessment. It is proposed to substitute the said section so as to provide that before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice along with a copy of order passed under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such....
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....search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. The proposed Explanation 3 provides that the "specified authority" shall mean the specified authority referred to in section 151. This amendment will take effect from 1st April, 2021. Clause 37 of the Bill seeks to insert a new section 148A in the Income-tax Act relating to Conducting inquiry, providing opportunity before issue of notice under section 148. It is proposed to insert a new section 148A, which seeks to provide that the Assessing Officer shall, before issuing any notice under section 148, - (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that income chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven d....
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....so as to provide that no notice under section 148 shall be issued for the relevant assessment year - (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of accounts or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year. Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not have been issued at that time on account of being beyond the time limit prescribed under the provisions of clause (b), as they stood immediately before the commencement of the Finance Act, 2021. Further, the provisions of this section shall not apply to cases where a notice under section 153A or section 153C read with section 153A is required to be issued in relation to a search initiated under se....
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....des for the time-limit for completion of assessment, reassessment and recomputation in certain cases mentioned therein. It is proposed to amend sub-section (1) of the said section to insert the third proviso so as to provide that for the assessment year commencing on or after the 1st April, 2021, the time limit for making an assessment order under sections 143 or 144 shall be reduced from the existing twenty-one months to nine months from the end of the assessment year in which the income was first assessable. This amendment will take effect from lst April, 2021. Clause 42 of the Bill seeks to amend section 153A of the Income-tax Act relating to assessment in case of search or requisition. It is proposed to amend the said section so as to provide that the search or requisition shall only apply where search or requisition is made on or before 31st March, 2021. Consequently, assessments under section 153A and 153C shall not be made in respect of a search or requisition made on or after 1st April, 2021. This amendment will take effect from 1st April, 2021. Clause 43 of the Bill seeks to amend section 153C of the Income-tax Act relating to assessment of income of any ....
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....t of a month during the previous year, shall deduct an amount equal to five per cent. of such income as income-tax thereon. Sub-section (4) of the said section provides that in a case where the tax is required to be deducted as per the provisions of section 206AA, such deduction shall not exceed the amount of rent payable for the last month of the previous year or the last month of the tenancy, as the case may be. It is proposed to amend the said sub-section (4) so as to insert section 206AB for the purposes of the said sub-section. This amendment will take effect from 1st July, 2021. Clause 47 of the Bill seeks to insert a new section 194P of the Income-tax Act relating to deduction of tax in case of specified senior citizen. Sub-section (1) of the said section seeks to provide that notwithstanding anything contained in the provisions of Chapter XVII-B, in case of a specified senior citizen, the specified bank shall, after giving effect to the deduction allowable under Chapter VI-A and rebate allowable under section 87A, compute the total income of such specified senior citizen for the relevant assessment year and deduct income-tax on such total income on the basis ....
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..... Sub-section (2) thereof section seeks to provide that where any sum referred to in subsection (1) is credited to any account, whether called "Suspense account" or by any other name, in the books of account of the person liable to pay such income, such credit of income shall be deemed to be a credit of such income to the account of the payee and the provisions of this section shall apply accordingly. Sub-section (3) thereof seeks to provide that if any difficulty arises in giving effect to the provisions of the said section, the Board may, with the previous approval of the Central Government, issue guidelines for the purpose of removing the difficulty. Sub-section (4) thereof seeks to provide that every guideline issued by the Board under sub-section (3) shall be laid before each House of Parliament, and shall be binding on the income-tax authorities and the person liable to deduct tax. Sub-section (5) thereof seeks to provide that the provisions of the proposed section shall not apply to a transaction on which-- (a) tax is deductible under any of the provisions of this Act; and (b) tax is collectible under the provisions of section 206C other than a transaction ....
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....ncome-tax return. Sub-section (1) of the proposed new section 206AB seeks to provide that notwithstanding anything contained in any other provisions of this Act, where tax is required to be deducted at source under the provisions of Chapter XVIIB, other than sections 192, 192A, 194B, 194BB, 194LBCor 194N on any sum or income or amount paid, or payable or credited, by a person (hereafter referred to as deductee) to a specified person, the tax shall be deducted at the higher of the following rates, namely, at twice the rate specified in the relevant provision of the Act; or at twice the rate or rates in force; or at the rate of five per cent.. Sub-section (2) thereof seeks to provide that if the provision of section 206AA is applicable to a specified person, in addition to the provision of this section, the tax shall be deducted at higher of the two rates provided in this section and in section 206AA. Sub-section (3) thereof seeks to define the expression "specified person" to mean a person who has not filed the returns of income for both of the two assessment years relevant to the two previous years immediately prior to the previous year in which tax is required to be deduc....
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....lanation to the said section seeks to provide that for the purposes of this sub-section the expression "permanent establishment" includes a fixed place of business through which the business of the enterprise is wholly or partly carried on. This amendment will take effect from 1st July, 2021. Clause 53 of the Bill seeks to amend section 234C of the Income-tax Act relating to interest for deferment of advance tax. The first proviso to sub-section (1) of the said section provides for categories of incomes for which there will be no charge of interest under the said section, in the event of failure to estimate such incomes resulting in a shortfall in the advance tax payments and tax due has been paid in the subsequent advance tax instalments. It is proposed to substitute clause (d) of the first proviso to said sub-section to include dividend income along with capital gains therein, so as to provide that the interest under the said section shall not be applicable to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of under-estimate or failure to estimate dividend. It is further proposed to insert Explanation 2 in the s....
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.... to amend section 245C of the said Act so as to provide that no application shall be made under this section on or after 1st day of February, 2021. This amendment will take effect retrospectively from lst February, 2021. Clause 60 of the Bill seeks to amend section 245D of the said Act so as to provide that where an order was required to be passed on an application made under sub-section (2C) of the said section on or before the 31st day of January, 2021 and has not been passed till such date, such application shall be deemed to be valid. It is further proposed to amend sub-section (6B) to provide that any order passed under sub-section (4) may be amended and specific reference to any amendment made by Settlement Commission be omitted. It is further proposed to insert sub-section (9) to provide that on and from the 1st day of February, 2021, the provisions of sub-sections (1), (2), (2B), (2C), (3), (4), (4A), (5), (6) and section (6B) shall apply to pending applications allotted to the Interim Board. Further, for the purposes of the said section the date referred to in sub-section (2) of section 245M shall be taken as the date on which the application was made and received un....
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.... powers and functions of Settlement Commission under the said sections shall be exercised or performed by the Interim Board on or after the 1st day of February, 2021 and all the provisions of the said sections shall mutatis mutandis apply to Interim Board as they applied to Settlement Commission. These amendments will take effect retrospectively from lst February, 2021. Clause 65 of the Bill seeks to insert new section 245M in the Income-tax Act so as to provide that the assessee an option to withdraw his application made under section 245C. Proposed sub-section (1) thereof, inter alia, provides that the assessee who had filed an application which is pending before the Interim Board has the option to withdraw such application within three months from the date of commencement of Finance Act, 2021 and intimate the Assessing Officer about such withdrawal in the manner prescribed. However, if such option is not exercised by the assessee within the time allowed, the pending application shall be deemed to have been received by the Interim Board on the date on which it is allotted or transferred to it. The Board may, by an order, allot or transfer any pending application from one....
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....ct of dispute arising from any variation in the specified order in his case for an assessment year and who fulfils the specified conditions. Sub-section (2) of said section seeks to provide that the Dispute Resolution Committee, subject to such conditions, as may be prescribed, shall have the powers to reduce or waive any penalty imposable under this Act or grant immunity from prosecution for any offence punishable under this Act in case of a person whose dispute is resolved under this Chapter. Sub-section (3) of said section seeks to provide that Central Government may make a scheme, by notification in the Official Gazette, for the purposes of dispute resolution under this Chapter, so as to impart greater efficiency, transparency and accountability by eliminating the interface between the Dispute Resolution Committee and the assessee in the course of dispute resolution proceedings to the extent technologically feasible; optimising utilisation of the resources through economies of scale and functional specialisation; introducing a dispute resolution system with dynamic jurisdiction. Sub-section (4) of said section seeks to provide that the Central Government may, for the p....
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....assessee for the assessment year relevant to such order, total income as per such return does not exceed fifty lakh rupees. This amendment will take effect from the 1st day of April, 2021. Clause 67 of the Bill seeks to amend section 245N of the Income-tax Act relating to definitions. It is proposed to omit sub-clauses (B), (C) and (D) of said section with effect from such date as may be appointed by the Central Government by notification in the Official Gazette. It is further proposed to amend clause (c) of said section so as to insert the words "or the Board for Advance Rulings". It is also proposed to insert clause (ca) to said section so as to provide definitions of Board for Advance Rulings and members of the Board for Advance Rulings. This amendment will take effect from 1st April, 2021. Clause 68 of the Bill seeks to amend section 245-O of the Income-tax Act relating to Authority for Advance Rulings. It also proposed to insert a proviso in the sub-section (1) of said section so as to provide that the Authority constituted under the said sub-section shall cease to operate on and from such date as may be appointed by the Central Government by notification ....
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....n such date as may be appointed by the Central Government by notification in the Official Gazette, the provisions of the said section shall have effect as if for the words "Authority", the words "Board for Advance Rulings" had been substituted and the provisions of that section shall apply mutatis mutandis to the Board for Advance Rulings as they apply to the Authority. Further, it provides that the Central Government may make a scheme, by notification in the Official Gazette, for the purposes of giving advance ruling under Chapter XIX-B by the Board for Advance Rulings, so as to impart greater efficiency, transparency and accountability by eliminating the interface between the Board for Advance Rulings and the applicant in the course of proceedings to the extent technologically feasible; optimising utilisation of the resources through economies of scale and functional specialisation; introducing a system with dynamic jurisdiction. It also provides that the Central Government may, for the purposes of giving effect to the said scheme, by notification in the Official Gazette, direct that any of the provisions of the Income-tax Act shall not apply or shall apply with such exceptions, ....
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....dment will take effect from 1st April, 2021. Clause 77 of the Bill seeks to insert a new section 245W to the Income-tax Act relating to Appeal. It is proposed to insert a new section 245W so as to provide that the applicant may, if he is aggrieved by any ruling pronounced or order passed by the Board for Advance Rulings; or the Assessing Officer, on the directions of the Principal Commissioner or Commissioner, appeal to the High Court within sixty days from the date of the communication of such ruling or order, in such form and manner as may be provided by rules. However, where the High Court is satisfied, on an application made by the appellant in this behalf, that the appellant was prevented by sufficient cause from presenting the appeal within the period specified in sub-section (1), it may grant a further period of thirty days for filing such appeal. It is also proposed that the Central Government may make a scheme, by notification in the Official Gazette, for the purposes of preferring appeal to the High Court by the Assessing Officer, so as to impart greater efficiency, transparency and accountability by optimising utilisation of the resources through economies of scale....
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.... of the Commissioner (Appeals). Clause 82 of the Bill seeks to insert a new sub-section (4A) in section 25 of the Customs Act so as to provide that the exemption to be granted subject to conditions under sub-section (1) shall, unless otherwise specified or varied or rescinded, be valid for a period upto the 31st March falling immediately after two years from the date of such grant or variation. It further seeks to insert a proviso therein to provide that in respect of any such exemption in force as on the date on which the Finance Bill, 2021 receives the assent of the President, the said period of two years shall be reckoned from the 1st February, 2021. Clause 83 of the Bill seeks to insert a new section 28BB in the Customs Act so as to provide time limit for completion of certain actions under this Act. Clause 84 of the Bill seeks to amend sub-section (3) of section 46 of the Customs Act so as to ensure mandatory filing of bill of entry in advance, i.e. before the day of arrival (including holidays) of conveyance. It further seeks to insert a proviso therein to empower the Board to provide different time limits for presentation of bill of entry in such cases, as it dee....
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.... other purposes as may be specified by the Board. Customs tariff Clause 92 of the Bill seeks to amend sub-section (6) of section 8B of the Customs Tariff Act to make both conditions thereunder mutually exclusive and to define the expression 'special economic zone' in the same manner as defined in the Special Economic Zone Act, 2005 (28 of 2005). Clause 93 of the Bill seeks to amend sub-section (1A) of section 9 of the Customs Tariff Act to provide for retrospective levy of countervailing duty to counter circumvention. It further seeks to insert a new sub-section (1B) in the said section to provide for antiabsorption measures in countervailing duty. It also seeks to insert a new sub-section (2A) in that section to align it with the provisions contained in sub-section (6) of section 8B of the said Act relating to safeguard measures. It also seeks to amend sub-section (6) thereof to provide for further imposition of countervailing duty after review, for a period upto five years. It also seeks to insert a third proviso therein so as to provide that if countervailing duty is revoked temporarily, the period of such revocation shall not be more than one year at a time. Clau....
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....), dated the 31st December, 2019, issued in exercise of powers under section 3C thereof, so as to give effect to said amendments on and from the 1st day of January, 2020. Central Goods and Services Tax Clause 99 of the Bill seeks to amend section 7 of the Central Goods and Services Tax Act, 2017, with retrospective effect from the 1st July, 2017, by inserting a new clause (aa) in sub-section (1) thereof, so as to ensure levy of tax on activities or transactions involving supply of goods or services by any person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. It is also proposed to insert an Explanation therein, to clarify that the person or its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one person to another. Clause 100 of the Bill seeks to amend section 16 of the Central Goods and Services Tax Act by inserting a new clause (aa) in sub-section (2) thereof, so as to provide that input tax credit on invoice or debit note may be availed only when the details of such invoice or ....
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....amend section 129 of the Central Goods and Services Tax Act so as to delink the proceedings under that section relating to detention, seizure and release of goods and conveyances in transit, from the proceedings under section 130 relating to confiscation of goods or conveyances and levy of penalty. Clause 109 of the Bill seeks to amend section 130 of the Central Goods and Services Tax Act, so as to delink the proceedings under that section relating to confiscation of goods or conveyances and levy of penalty from the proceedings under section 129 relating to detention, seizure and release of goods and conveyances in transit. Clause 110 of the Bill seeks to substitute section 151 of the Central Goods and Services Tax Act so as to empower the jurisdictional commissioner to call for information from any person relating to any matters dealt with in connection with the Act. Clause 111 of the Bill seeks to amend sub-section (1) of section 152 of the Central Goods and Services Tax Act so as to provide that no information obtained under sections 150 and 151 shall be used for the purposes of any proceedings under the Act without giving an opportunity of being heard to the person con....
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....f twenty nine thousand five hundred crores of rupees from the Consolidated Fund of India to the Contingency Fund of India. This amendment will take effect from the date on which the Finance Bill, 2021 receives the assent of the President. Clauses 119 to 137 of the Bill seek to amend certain provisions of the Life Insurance Corporation Act, 1956 (hereinafter referred to as "the LIC Act"). It is proposed to amend section 2 of the LIC Act so as to insert new clauses to define the expressions "Audit Committee", "Board of Directors" or "Board", "Chairperson", "Companies Act", "court", "director", "financial statement", "fully diluted basis", "independent director", "Managing Director", "Nomination and Remuneration Committee", "notification" and "special resolution", to amend the definition of expression "member", and to provide that the words and expressions not defined in the LIC Act or in the Insurance Act, 1938 but defined in the Companies Act, 2013, shall have the meanings respectively assigned to them in the Companies Act, 2013. These amendments are consequential to the other amendments proposed to the LIC Act. It is further proposed to substitute section 4 of the LIC A....
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.... by LIC for raising funds to meet its business requirements. These amendments will enable issue of shares to the Central Government against paid-up capital invested by it in LIC as well as issue of bonus shares to the Central Government, which could be offered for sale by way of an initial public offer, with resultant receipt of money into the Consolidated Fund of India. It is also proposed to insert new sections 5A, 5B, 5C, 5D, 5E and 5F in the LIC Act, to provide respectively for transferability of shares, voting rights, register of members, declaration in respect of beneficial interest in shares, deeming of LIC's shares to be securities and right of registered shareholders to nominate, in order to bring the provisions relating to share transfer, rights of shareholders including voting in shareholder meeting, disclosure of beneficial interest in securities and recognition of securities as shares in alignment with the requirements under the Securities Contract (Regulation) Act, 1956 and listing requirements. It is also proposed to substitute section 19 of the LIC Act to provide for the constitution, composition and powers of the Executive Committee of the Board, in order to ....
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.... the provisions relating to the integrity of LIC's audit, accounting standards and compliance with the law and relevant standards in alignment with listing requirements. It is also proposed to insert new sections 25A, 25B, 25C and 25D in the LIC Act, to provide respectively for removal and resignation of auditor, powers and duties of auditor and auditor's report, internal auditor and special auditor, in order to bring the provisions relating to the integrity of LIC's audit, accounting standards and compliance with the law and relevant standards in alignment with listing requirements. It is also proposed to amend section 26 of the LIC Act to provide for substitution of the reference to the Corporation with reference to the Board, consequential to constitution of the Board of LIC under the proposed amended section 4 in place of the constitution of the Corporation under the existing section 4. It is also proposed to amend section 27 of the LIC Act, to omit the provisions relating to giving in the Annual Report an account of activities likely to be taken by LIC in the next financial year, in order to bring the provisions relating to the Annual Report in alignment with listing ....
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....ith modifications to LIC, and to provide for the power of the Central Government to remove difficulties by order published in the Official Gazette, which are matters incidental to the various other amendments proposed in this Part. These amendments will take effect from such dates as the Central Government may, by notification in the Official Gazette, appoint. Clauses 138 to 140 of the Bill seeks to amend the provisions of the Securities Contracts (Regulation) Act, 1956. It is proposed to define the expression "pooled investment vehicle". It is further proposed to clarify that debt securities and such other marketable securities as well as the units issued by pooled investment vehicles are "securities". It is also proposed to insert a new section 30B in the said Act to specify that a pooled investment vehicle, whether constituted as a trust or otherwise, shall be eligible to borrow and issue debt securities and shall be permitted to provide security interest to lenders, in terms of the facility documents, entered into by such pooled investment vehicles. It further provides that in case of default, the lenders shall recover the defaulted amount against the trust assets, ....
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....f section 2 of the Income-tax Act, 1961, shall establish and operate only after the Securities and Exchange Board of India grants a certificate of registration in accordance with the regulations made under the said Act. This amendment will take effect from 1st April, 2021. Clause 149 of the Bill seeks to amend section 2 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 relating to definitions. It is proposed to amend clause (g) of the said section so as to clarify that definition of "debt" shall also include debt incurred by pooled investment vehicles as defined in clause (da) of section 2 of the Securities Contracts (Regulation) Act, 1956. This amendment is consequential in nature in view of the insertion of new section 30B in the Securities Contracts (Regulation) Act, 1956. This amendment will take effect from 1st April, 2021. Clause 150 of the Bill seeks to amend the Seventh Schedule of the Finance Act, 2001, with effect from 1st January, 2022. Clause 151 of the Bill seeks to amend the provisions of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. It is proposed....
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....roposed to insert serial number 5A and entries relating thereto in the Table in section 98 so to provide that the rate for sale or surrender or redemption of a unit of an equity oriented fund to an insurance company, on maturity or partial withdrawal, with respect to unit linked insurance policy issued by such insurance company on or after 1st February, 2021. This amendment will take effect retrospectively from 1st February, 2021. Clauses 157 and 158 of the Bill seeks to amend sections 100 and 101 of the Finance Act (No.2) Act, 2004. It is proposed to consequentially amend sections 100 and 101 of the said Act so as to include insurance company within their purview. This amendment will take effect retrospectively from 1st February, 2021. Clause 159 of the Bill seeks to amend sections 163, 164,165A and 191 of the Finance Act, 2016. It is proposed to insert a proviso to sub-section (3) of section 163 of the said Act to provide that the consideration received or receivable for specified services and consideration received or receivable for e-commerce supply or services shall not include the consideration, which are taxable as royalty or fees for technical services in ....