TaxTMI 
TaxTMI 
NOTES ON CLAUSES
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....sment year 2021-2022 and subsequent assessment years. It is further proposed to insert a new clause (47A) to the said section to define the expression "virtual digital asset" to mean,-- (a) any information or code or number or token (not being Indian currency or any foreign currency), generated through cryptographic means or otherwise, by whatever name called, providing a digital representation of value exchanged with or without consideration, with the promise or representation of having inherent value, or functions as a store of value or a unit of account including its use in any financial transaction or investment, but not limited to investment scheme and can be transferred, stored or traded electronically; (b) a non-fungible token or any other token of similar nature by whatever name called; (c) any other digital asset as may be notified by the Central Government in the Official Gazette in this behalf, It is further proposed to provide that the Central Government may, by notification in the Official Gazette, exclude any digital asset from the definition of virtual digital asset subject to such conditions as may be specified therein. It i....
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....roposed to define the expression "portfolio manager" to have the same meaning as assigned to it in clause (z) of sub-regulation (1) of regulation (2) of the International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021 made under the International Financial Services Centres Authority Act, 2019. Clause (8) of the said section provides exemption to the income and remuneration of an individual who is assigned duties in India in connection with any co-operative technical assistance programmes and projects in accordance with an agreement entered by the Central Government and the Government of a foreign state (the terms thereof provide for the exemption given by this clause). Both the remuneration received by the individual from the foreign state and any other income accruing or arising outside India, and is not deemed to accrue or arise in India, are exempt under the said clause in certain cases. Clause (8A) of the said section, inter alia, provides exemption on the remuneration or fee received by certain consultants, directly or indirectly out of the funds made available to an international organisation (agency) under a technical assistance ....
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....itute the reference of "prescribed authority" with the "Principal Commissioner or Commissioner". This amendment will take effect from 1st April, 2022. Third proviso of clause (23C), inter-alia, provides that the fund or institution or trust or any university or other educational institution or any hospital or other medical institution, as is referred to in sub-clauses (iv), (v), (vi) and (via) of the said clause, shall apply at least eighty-five per cent. of its income, wholly and exclusively to the objects for which it is established and in a case where more than fifteen per cent. of its income is accumulated on or after the 1st day of April, 2002, the period of the accumulation of the amount exceeding fifteen per cent. of its income shall in no case exceed five years. It also provides that it shall invest or deposit its funds in specified modes. Explanation 1 to the said third proviso provides that the income of the funds or trust or institution or any university or other educational institution or any hospital or other medical institution, shall not include income in the form of voluntary contributions made with a specific direction that they shall form part of the....
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....roviso, where eighty-five per cent. of the income referred to in clause (a) of that proviso, is not applied wholly and exclusively to the objects for which the 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) is established, during the previous year but is accumulated or set apart, either in whole or in part, for application to such objects, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income, if the following conditions are complied with,- (a) such person furnishes a statement in the form and manner as may be provided by rules to the Assessing Officer stating the purpose for which the income is being accumulated or set apart and the period for which the income is to be accumulated or set apart, which shall in no case exceed five years; (b) the money so accumulated or set apart is invested or deposited in the forms or modes specified in sub-section (5) of section 11; and (c) the statement referred to in cl....
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....d to insert a new Explanation 5 to the said third proviso so as to provide that notwithstanding anything contained in Explanation 4, where due to circumstances beyond the control of the person in receipt of the income, any income invested or deposited in accordance with the provisions of clause (b) of Explanation 3, as inserted, cannot be applied for the purpose for which it was accumulated or set apart, the Assessing Officer may, on an application made to him in this behalf, allow such person to apply that income for such other purpose in India as is specified in the application by such person and as is in conformity with the objects for which the fund or institution or trust or any university or other educational institution or any hospital or medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) is established; and thereupon the provisions of Explanation 4 shall apply as if the purpose specified by that person in the application under the said Explanation were a purpose specified in the notice given to the Assessing Officer under clause (a) of Explanation 3. It is also proposed to insert a proviso to Explanation 5 so as to....
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....he approval of such fund or institution or trust or any university or other educational institution or any hospital or other medical institution, on or before the specified date, after affording a reasonable opportunity of being heard, for such previous year and all subsequent previous years, if he is satisfied that one or more specified violation has taken place; (iii) pass an order in writing refusing to cancel the approval of such fund or institution or trust or any university or other educational institution or any hospital or other medical institution, on or before the specified date, if he is not satisfied about the occurrence of one or more specified violations; (iv) forward a copy of the order under clause (ii) or clause (iii), as the case may be, to the Assessing Officer and such fund or institution or trust or any university or other educational institution or any hospital or other medical institution. It also proposed to insert a new Explanation 1 to the fifteenth proviso of the said clause (23C) to provide that for the purposes of the said proviso, the expression "specified date" shall mean the day on which the period of six months, calculated from ....
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....und or institution or trust or university or other educational institution or any hospital other medical institution has not been withdrawn or the notification issued in its case has not been rescinded, on or before the 31st day of March, 2022, such intimation shall be deemed to be a reference received, by the Principal Commissioner or Commissioner as on the 1st day of April, 2022, and the provisions of clause (b) of the second proviso to sub-section (3) of section 143 shall apply accordingly for such assessment year. It is proposed to substitute the nineteenth proviso of the said clause (23C) so as to substitute the reference of the expression "prescribed authority" with "Principal Commissioner or Commissioner". It is also proposed to remove the reference of the notification by the Central Government in case of the fund or institution referred to in subclause (iv) or the trust or institution referred to in sub-clause (v). These amendments will take effect from 1st April, 2022. It is proposed to insert a new twentieth proviso to the said clause (23C) so as to provide that the fund or institution or trust or any university or other educational institution or any hospital or....
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....f income in the same or any other previous year; and (d) such expenditure is not in the form of any contribution or donation to any person. It is also proposed to insert an Explanation to the said twenty-second proviso to provide that for the purposes of determining the amount of expenditure under the said proviso, the provisions of sub-clause (ia) of clause (a) of section 40 and sub-sections (3) and (3A) of section 40A shall, mutatis mutandis, apply as they apply in computing the income chargeable under the head "Profits and gains of business or profession". It is also proposed to insert a new twenty-third proviso to the said clause (23C) so as to provide that for the purposes of computing income chargeable to tax under twenty second proviso, no deduction in respect of any expenditure or allowance or set-off of any loss shall be allowed to the assessee under any other provision of this Act. These amendments will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years. It is also proposed to insert Explanation 3 to the said clause (23C) so as to provide that for the purposes of t....
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....e trust or the institution, subject to the condition that the trust or the institution-- (a) applies such corpus only for the purpose for which the voluntary contribution was made; (b) does not apply such corpus for making contribution or donation to any person; (c) maintains such corpus as separately identifiable; and (d) invests or deposits such corpus in the forms and modes specified under sub-section (5) of section 11. It is also proposed to insert a new Explanation 3B to the said sub-section (1) to provide that for the proposed Explanation 3A where any trust or institution has treated any sum received by it as forming part of the corpus and subsequently any of the conditions mentioned in clause (a) or clause (b) or clause (c) or clause (d) of the said Explanation is violated, such sum shall be deemed to be the income of such trust or institution of the previous year during which the violation takes place. These amendments will take effect retrospectively from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. Sub-section (3) of said section provides that where t....
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....e provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless, inter-alia, where the total income of the trust or institution as computed under this Act without giving effect to the provisions of section 11 and section 12 exceeds the maximum amount which is not chargeable to income-tax in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 before the specified date referred to in section 44AB and the person in receipt of the income furnishes by that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be provided by rules. It is proposed to substitute the said clause so as to provide that in addition to the condition requiring the trust or institutions, having income exceeding the maximum amount not chargeable to tax, to get their accounts audited, such trusts shall also be required to keep and maintain books of account and other documents in such form and manner and at such place, as may be provided by rules. The....
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....ssing Officer and such trust or institution. It is further proposed to insert a new Explanation to the said sub-section so as to provide that the following shall mean "specified violation" means-- (a) where any income derived from property held under trust, wholly or in part for charitable or religious purposes, has been applied, other than for the objects of the trust or institution; or (b) the trust or institution has income from profits and gains of business which is not incidental to the attainment of its objectives or separate books of account are not maintained by such trust or institution in respect of the business which is incidental to the attainment of its objectives; or (c) the trust or institution has applied any part of its income from the property held under a trust for private religious purposes which does not enure for the benefit of the public; or (d) the trust or institution established for charitable purpose created or established after the commencement of this Act, has applied any part of its income for the benefit of any particular religious community or caste; or (e) any activity being carried out by the trust or....
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....han specified modes, then income to the extent of such deposits or investments, shall not be excluded from the total income of the trust or institution in receipt of such income. It is also proposed to insert a new sub-section (10) to the said section so as to provide that where the provisions of sub-section (8) are applicable to any trust or institution or it violates the conditions specified under clause (b) or clause (ba) of sub-section (1) of section 12A, its income chargeable to tax shall be computed after allowing deduction for the expenditure (other than capital expenditure) incurred in India, for the objects of the trust or institution, subject to fulfilment of the following conditions, namely:-- (a) such expenditure is not from the corpus standing to the credit of the trust or institution as on the end of the financial year immediately preceding the previous year relevant to the assessment year for which income is being computed; (b) such expenditure is not from any loan or borrowing; (c) claim of depreciation is not in respect of an asset, acquisition of which has been claimed as application of income in the same or any other previous year; a....
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....effect from 1st April, 2022. Clause 10 seeks to amend section 17 of the Income-tax Act relating to definition of "salary", "perquisite" and "profits in lieu of salary". Clause (2) of the said section, inter alia, provides the definition of the term "perquisite" and proviso to the said clause provides certain exclusions which shall not be part of "perquisite". Clause (ii) of the said proviso provides that any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family in certain specified cases shall not be part of perquisite. It is proposed to amend the said clause (ii) to insert a new sub-clause to provide that any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family in respect of any illness relating to COVID-19 subject to such conditions, as may be notified by the Central Government in this behalf, shall not be forming part of "perquisite". This amendment will take effect retrospectively from 1st April, 2020 and will, accordingly, apply in relation to the assessment year....
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....ny law for the time being in force, in India or outside India; or (ii) to provide any benefit or perquisite, in whatever form, to a person, whether or not carrying on a business or exercising a profession, and acceptance of such benefit or perquisite by such person is in violation of any law or rule or regulation or guideline, as the case may be, for the time being in force, governing the conduct of such person; or (iii) to compound an offence under any law for the time being in force, in India or outside India. This amendment will take effect from 1st April, 2022. Clause 13 seeks to amend section 40 of the Income-tax Act relating to amounts not deductible. Sub-clause (ii) of clause (a) of the said section provides that any sum paid on account of any rate or tax levied on the profits or gains of any business or profession or assessed at a proportion of, or otherwise on the basis of, any such profits or gains shall not be deducted in computing the income chargeable under the head "profits and gains of business or profession". It is proposed to insert a new Explanation 3 to sub-clause (ii) of clause (a) of the said section to clarify that for the purpose....
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....iness or profession, from the block of asset in accordance with sub-item (B) of item (ii) of sub-clause (c) of clause (6) of section 43 shall be deemed to be transfer. This amendment will take effect retrospectively from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. Clause 16 seeks to amend section 56 of the Income-tax Act relating to income from other sources. Sub-section (2) of the said section provides that certain incomes as provided therein shall be chargeable to income-tax under the head "Income from other sources" without prejudice to the generality of the provisions of sub-section (1) thereof. Clause (viib) of the said-sub-section provides that where a company, not being a company in which the public are substantially interested, receives, in any previous year, from any person being a resident, any consideration for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares shall be chargeable under the head of Income-from other sources. The first proviso to said clause (viib) provide....
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....conditions, as may be notified by the Central Government in this behalf, shall not be the income of such person. It is also proposed to insert an Explanation to provide that for the purpose of both of the said clauses (XII) and (XIII) of this proviso, "family" in relation to an individual shall have the same meaning as assigned to in the Explanation 1 to clause (5) of section 10. This amendment will take effect retrospectively from 1st April, 2020 and shall accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years. Explanation to clause (x) of the said sub-section provides that for the purposes of the said clause, the expressions "assessable", "fair market value", "jewellery", "property", "relative" and "stamp duty value shall have the same meanings as respectively assigned to them in the Explanation to clause (vii). It is proposed to amend the said Explanation to include the definition of the expression "property" to have the same meaning as assigned to it in clause (d) of the Explanation to clause (vii) and shall include virtual digital asset. This amendment will take effect from 1st April, 2023 and will, accordingly, apply in ....
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....at nothing in sub-section (1) shall apply to an erstwhile public sector company subject to the condition that the ultimate holding company of such company, immediately after the completion of strategic disinvestment, continues to hold, directly or through its subsidiary or subsidiaries, at least fifty-one per cent. of the voting power of the erstwhile public sector company in aggregate. It is further proposed to insert a new sub-section (3) in the said section to provide that notwithstanding anything contained in sub-section (2), if the condition specified in clause (f) of the said sub-section is not complied with in any previous year after the completion of strategic disinvestment, the provisions of sub-section (1) shall apply for such previous year and subsequent previous years. It is also proposed to amend the Explanation, inter alia, to insert the definition of the expressions "erstwhile public sector company", and "strategic disinvestment". 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 19 seeks to insert a new section 79A of the Income tax Act,....
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....020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years. Clause 21 seeks to amend section 80DD of the Income-tax Act relating to deduction in respect of maintenance including medical treatment of a dependant who is a person with disability. The provisions of the said section, inter alia, provide for a deduction to an individual or Hindu undivided family, who is a resident in India, in respect of expenditure incurred for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or amount paid to Life Insurance Company or any other insurer or administrator or specified company, in respect of a scheme for the maintenance of a disabled dependant. Sub-section (2) of the said section provides that deduction shall be allowed only if the payment of annuity or lump sum amount has been made for the benefit of the dependant, being a person with disability, in the event of the death of the individual or the member of the Hindu undivided family in whose name subscription to the scheme has been made and the assessee nominates either the dependant or any other person to rece....
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....pril, 2016 but before the 1st day of April 2022. It is proposed to amend sub-clause (a) of clause (ii) of the Explanation occurring after sub-section (4) of the said section so as to extend the period of incorporation of eligible startups to the 1st day of April, 2023. 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 23 seeks to amend section 80LA of the Income-tax Act relating to deductions in respect of certain incomes of Offshore Banking Units and International Financial Services Centre. Sub-section (1A) of the said section, inter-alia, provides that where the gross total income of an assessee, being a Unit of an International Financial Services Centre, includes any income referred to in sub-section (2) of the said section, there shall be allowed, in accordance with and subject to the provisions of that section, a deduction from such income, of an amount equal to one hundred per cent. of such income for any ten consecutive assessment years, at the option of the assessee, out of fifteen years, beginning with the assessment year relevant to the previous....
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....2024. This amendment will take effect from 1st April, 2022. Clause 25 seeks to amend section 94 of the Income-tax Act relating to avoidance of tax by certain transactions in securities. It is proposed to amend sub-section (8) of said section so as to provide that the provisions of the said sub-section shall also be applicable to securities. It is further proposed to substitute clause (aa) of the Explanation to the said section, so as to substitute the definition of the expression "record date" to mean such date as may be fixed by a company, or a Mutual Fund or the Administrator of the specified undertaking or the specified company referred to in the Explanation to clause (35) of section 10; or a business trust as defined in clause (13A) of section 2; or an Alternative Investment Fund as defined in clause (b) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992, for the purposes of entitlement of the holder of the securities or units, as the case may be, to receive dividend, income, or additional securities or unit without any c....
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....m the transfer of any virtual digital asset, the income-tax payable shall be the aggregate of-- (a) the amount of income-tax calculated on the income from transfer of such virtual digital asset at the rate of thirty per cent.; and (b) the amount of income-tax with which the assessee would have been chargeable had the total income of the assessee been reduced by the income referred to in clause (a). Sub-section (2) of the said section seeks to provide that notwithstanding anything contained in any other provision of the Act,-- (a) no deduction in respect of any expenditure (other than cost of acquisition) or allowance or set off of any loss shall be allowed to the assessee under any provision of the Act in computing the income referred to in clause (a) of sub-section (1); and (b) no set off of loss from transfer of the virtual digital asset computed under clause (a) of sub-section (1) shall be allowed against income computed under any other provision of the Act to the assessee and such loss shall not be allowed to be carried forward to succeeding assessment years. Sub-section (1) of the proposed new section 115BBI provides that where the tot....
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....me-tax Act relating to special provisions for payment of tax by certain persons other than a company. The provisions of the said section, inter alia, provide that where the regular incometax payable for a previous year by a person, other than a company, is less than the alternate minimum tax payable for such previous year, the adjusted total income shall be deemed to be the total income of that person for such previous year and he shall be liable to pay incometax on such total income at the rate of eighteen and one-half per cent. Sub-section (4) of the said section provides that notwithstanding anything contained in sub-section (1) thereof, where the person referred to therein, is a unit located in an International Financial Services Centre and derives its income solely in convertible foreign exchange, it shall be liable to pay income-tax on such total income at the rate of nine per cent. It is proposed to substitute the said sub-section (4), to provide that notwithstanding anything contained in sub-section (1) of the said section, where the person referred to therein, is a unit located in an International Financial Services Centre and derives its income solely in co....
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.... date shall be charged to tax and such trust or institution, as the case may be, shall be liable to pay additional income-tax at the maximum marginal rate on the accreted income. It is proposed to make consequential amendments in the said section so as to provide that the provisions of the said section shall also be applicable to 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 clause (23C) of section 10 of the Act. These amendments will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years. Clause 32 seeks to amend section 115TE of the Income-tax Act relating to interest payable for non-payment of tax by trust or institution. The said section, inter alia, provides that where the principal officer or the trustee of the trust or the institution and the trust or the institution fails to pay the whole or any part of the tax on the accreted income referred to in sub-section (1) of section 115TD, within the time allow....
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....5 seeks to amend section 132 of the Income-tax Act relating to search and seizure. Sub-section (8) of the said section provides that the books of account or other documents seized under sub-section (1) or sub-section (1A) of the said section shall not be retained by the authorised officer for a period exceeding thirty days from the date of the order of assessment under section 153A or clause (c) of section 158BC unless the reasons for retaining the same are recorded by him in writing and the approval of the Principal Chief Commissioner or Chief Commissioner, Principal Commissioner or Commissioner, Principal Director General or Director General or Principal Director or Director for such retention is obtained. It is proposed to amend the said sub-section to provide that provisions therein shall be applicable to an order of assessment or reassessment or recomputation made in a search case. This amendment will take effect from lst April, 2022. Clause 36 seeks to amend section 132B of the Income-tax Act relating to application of seized or requisitioned assets. Sub-section (1) of the said section provides the manner in which assets seized under section 132 or requisitione....
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....son under this Act for the relevant assessment year. It is also proposed that such person shall not be eligible to furnish an updated return under this sub-section, where a search has been initiated under section 132 or books of account or other documents or any assets are requisitioned under section 132A in the case of such person or a survey has been conducted under section 133A other than sub-section (2A) of that section, in the case such person or a notice has been issued to the effect that any money, bullion, jewellery or valuable article or thing, seized or requisitioned under section 132 or section 132A in the case of any other person belongs to such person or a notice has been issued to the effect that any books of account or documents, seized or requisitioned under section 132 or section 132A in the case of any other person, pertain or pertains to, or any other information contained therein, relate to, such person, for the assessment year relevant to the previous year in which such search is initiated or survey is conducted or requisition is made and two assessment years preceding such assessment year. It is also proposed that no updated return shall be furnished by ....
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....urn to be furnished by such assessee under sub-section (8A) of section 139, the assessee shall be liable to pay such tax together with interest and fee payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, along with the payment of additional income-tax, before furnishing such return. The tax payable shall be computed after taking into account the following:-- (i) the amount of tax, if any, already paid as advance tax; (ii) any tax deducted or collected at source; (iii) any relief of tax claimed under section 89; (iv) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India; (v) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and (vi) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD. Such updated return shall be accompanied by proof of payment of such tax, additional income-tax, interest and fee. It is further proposed that, in the case....
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....riod of twelve months from the end of the relevant assessment year. However, if such return is furnished after the expiry of twelve months from the last date of the relevant assessment year but before completion of the period of twenty-four months from the last date of the relevant assessment year, the additional income-tax payable shall be fifty per cent. of aggregate of tax and interest payable, as determined above. It is proposed to insert Explanation in sub-section (3) to provide that for the purpose of computing additional income-tax, "tax" shall include surcharge and cess, by whatever name called, on such tax. It is also proposed that notwithstanding anything contained in Explanation 1 to section 234B, in the cases where an earlier return has been furnished, interest payable under section 234B shall be computed on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid falls short of the "assessed tax" which means the tax on the total income as declared in the return to be furnished under subsection (8A) of section 139, after taking into account the following:-- (i) the amount of relief or tax, referred to in sub-....
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....ection 143 of the Income-tax Act relating to assessment. Sub-section (3) of the said section, inter-alia, provides that the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment. The proviso to the said sub-section, inter-alia, provides that in case of fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via) of clause (23C) of section 10, no order of assessment of the total income or loss shall be made by the Assessing Officer without giving effect to the provisions of section 10, unless contravention of the provisions of sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 has been intimated by the Assessing Officer to the Central Government or prescribed authority and the approval granted has been withdrawn or notification has been rescinded. It is proposed t....
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....duct of faceless assessment under sub-section (3) of section 143 or section 144. It further, provides the scope of the cases covered under the faceless assessment, setting up of the National Faceless Assessment Centre (NaFAC), Regional Faceless Assessment Centres, assessment units (AU), verification units (VU), technical units (TU) and review units (RU) as well as the authorities in such units, authentication of electronic record, delegates power to lay down standards, procedures and processes for effective functioning of the various centres and units, etc. It is proposed to substitute sub-sections (1) to (8) of the said section with new subsections (1) to (8) to provide for modified procedure of faceless assessment for resolving the difficulties faced in its implementation. The provisions of the proposed amendment to the said section shall apply for faceless assessment, reassessment or recomputation under sub-section (3) of section 143 or under section 144 or under section 147 of the Act, as the case may be, in the cases specified therein. The NaFAC shall assign the case selected for the purposes of faceless assessment to a specific AU and intimate the assessee that assessment ....
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.... and calling upon him to submit as to why the proposed variation should not be made, through the NaFAC. The assessee shall file his reply to such show cause notice, to the NaFAC, on date and time as specified, which shall forward the reply to the AU. If the assessee fails to respond within the specified time, the NaFAC shall intimate the same to the AU. After considering the response of the assessee or the intimation of failure of assessee to file a response received from NaFAC and all relevant material available on the record, the AU shall prepare an income or loss determination proposal and send the same to the NaFAC. Upon receipt of such income or loss determination proposal, with or without any variations proposed to the income of the assessee, as the case may be, the NaFAC may, convey to the AU to prepare draft order which shall thereafter prepare a draft order, or assign the income or loss determination proposal to a RU through an automated allocation system, which shall conduct a review of such order, prepare a review report and send it to NaFAC. The NaFAC shall forward the review report received from the RU to the AU which had proposed the income or loss determination....
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....4C or in other cases, serve a copy of such order and notice for initiating penalty proceedings, if any, on the assessee, along with the demand notice. The NaFAC shall, after completion of assessment, transfer all the electronic records of the case to the Assessing Officer having jurisdiction over the said case for such action as may be required under the Income-tax Act. The proposed section also provides that faceless assessment shall be made in respect of such territorial area, or persons or class of persons, or incomes or class of incomes, or cases or class of cases, as may be specified by the Board. The proposed section also provides that Board may, for the purposes of faceless assessment, set up the following Centre and units and specify their functions and jurisdiction, namely:-- (i) a National Faceless Assessment Centre to facilitate the conduct of faceless assessment proceedings in a centralised manner; (ii) assessment units, as it may deem necessary to conduct the faceless assessment, to perform the function of making assessment, which includes identification of points or issues material for the determination of any liability (including refund) under....
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....eputy Director or Assistant Commissioner or Assistant Director or Income-tax Officer, as the case may be; (iii) such other income-tax authority, ministerial staff, executive or consultant, as considered necessary by the Board. The proposed amendment also provide that all communication, among the AU, RU, VU or TU or with the assessee or any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making a faceless assessment shall be through the NaFAC, between the NaFAC and the assessee, or his authorized representative, or any other person shall be exchanged exclusively by electronic mode and all communications between the NaFAC and various units shall be exchanged exclusively by electronic mode. However, this provision shall not apply to the enquiry or verification conducted by the verification unit in the circumstances as may be specified by the Board in this regard. It is further proposed to provide for the authentication of electronic record for the purposes of faceless assessment. A person shall not be required to appear either personally or through authorised representative in connect....
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....s of sub-section (2A) of section 142 may be invoked in the case, forward the reference received from an assessment unit to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner having jurisdiction over such case, and inform the assessment unit accordingly. He shall also transfer the case to the Assessing Officer having jurisdiction over such case. Where such a reference has been received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, he shall direct the Assessing Officer, having jurisdiction over the case, to invoke the provisions of sub-section (2A) of section 142. However, where such a reference has not been forwarded to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, having jurisdiction over the case, the assessment unit shall proceed to complete the assessment in accordance with the procedure in the said section. It is also proposed to provide that the Principal Chief Commissioner or the Principal Director General, as the case may be, in charge of National Faceless Assessment Centre may, at any stage of the assessment, if consider....
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....ssue of notice where income has escaped assessment. The said section provides for issuance of notice to a person before making the assessment, reassessment or recomputation under section 147 of the Income-tax Act, requiring such person furnish a return of his income or income of any other person in respect of which he is assessable under the Act, within specified time, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed. It is proposed to insert a new proviso under the first proviso to the effect that approval to issue notice under the said section 148 shall not be required where the Assessing Officer, with the prior approval of the specified authority has passed an order under clause (d) of section 148A that it is a fit case to issue a notice under the said section. It is also proposed to amend Explanation 1 to the said section to provide that for the purposes of the said section and section 148A of the Act, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,- (i) any information in the case of the assessee for the relevant ....
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....r section 135A, pertaining to income chargeable to tax escaping assessment for any assessment year in the case of the assessee. These amendments will take effect from lst April, 2022. Clause 46 seeks to insert a new section 148B in the Income-tax Act relating to prior approval for assessment, reassessment or recomputation in certain cases. The proposed new section seeks to provide that no order of assessment or reassessment or recomputation under the Act shall be passed by an Assessing Officer below the rank of Joint Commissioner, except with the prior approval of the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director, in respect of an assessment year to which clause (i), clause (ii), clause (iii) or clause (iv) of the Explanation 2 to section 148 apply. This amendment will take effect from lst April, 2022. Clause 47 seeks to amend section 149 of the Income-tax Act relating to time limit for notice. The said section provides the time limit for issuance of notice under section 148 for assessment, reassessment or recomputation of income. It is proposed to amend the clause (b) of sub-section (1) of the said section to provide th....
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.... the said section to provide that where an updated return is furnished under sub-section (8A) of section 139, an order of assessment under section 143 or section 144 may be made at any time before the expiry of nine months from the end of the financial year in which such return was furnished. It is further proposed to amend sub-section (3) of the said section to provide that fresh order under section 92CA, in pursuance of an order, setting aside or cancelling an order under section 92CA shall also come within the provision of the said sub-section. It is also proposed to amend sub-section (5) of the said section to provide that an order passed by the Transfer Pricing Officer under section 92CA of the Act, in consequence to an order under section 263 of the Act shall also come within the purview of the said Act. It is also proposed to insert a new sub-section (5A) to provide that where the Transfer Pricing Officer gives effect to an order or direction under section 263 by means of an order under section 92CA and forwards such order to the Assessing Officer, the Assessing Officer shall proceed to modify the order of assessment or reassessment or recomputation, in conformity w....
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....r under clause (ii) or clause (iii) of fifteenth proviso to clause (23C) of section 10 or clause (ii) or clause (iii) of sub-section (4) of section 12AB, as the case may be, is received by the Assessing Officer, shall be excluded while computing the period of limitation under the said section. This amendment will take effect from lst April, 2022. Clause 49 seeks to amend section 153B of the Income-tax Act relating to time limit for completion of assessment under section 153A. The said section provides the time limit for completion of assessment or reassessment under section 153A in the case of an assessee in whose case a search has been conducted under section 132 or books of account, other documents or any assets are requisitioned under section 132A. It further provides the period of limitation for completion of assessment or reassessment under section 153C. It is proposed to insert a new sub-section (4) in the said section to provide that nothing contained in the said section shall apply to any search under section 132 or requisition done under section 132A on or after the 1st day of April, 2021. This amendment will take effect from lst April, 2022. The Explanat....
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....st day of April, 2022. This amendment will take effect from 1st April, 2022. Clause 52 seeks to insert a new section 158AB in the Income-tax Act relating to procedure where an identical question of law is pending before the High Courts or Supreme Court. Sub-section (1) of the proposed section seeks to provide that where a collegium of Chief Commissioners or Principal Commissioners or Commissioners is of the opinion that any question of law arising in the case of an assessee for any assessment year ("relevant case") is identical with a question of law arising in his case or in the case of any other assessee for an assessment year, which is pending before the jurisdictional High Court under section 260A or the Supreme Court in an appeal under section 261 or in a special leave petition under article 136 of the Constitution, against the order of the Appellate Tribunal or the jurisdictional High Court, as the case may be, in favour of such assessee ("other case"), it may, decide and inform the Principal Commissioner or Commissioner not to file any appeal, at this stage, to the Appellate Tribunal under sub-section (2) of section 253 or to the jurisdictional High Court under sub-....
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....r the purposes of the proposed section to mean a collegium comprising of two or more Chief Commissioners, Principal Commissioners or Commissioners as may be specified by the Board. This amendment will take effect from 1st April, 2022. Clause 53 seeks to amend section 170 of the Income-tax Act relating to succession to business otherwise than on death. It is proposed to amend the said section to insert a new sub-section (2A) to provide a deeming provision in order to save and validate the proceedings and to hold the assessment or other proceedings pending or completed on the predecessor in the event of a business reorganisation, to be held in the hands of the successor and to insert an Explanation to define the expressions,-- (i) "business reorganisation" means the reorganisation of business involving the amalgamation or de-merger or merger of business of one or more persons; (ii) "pendency" to mean the period commencing from the date of filing of application for such reorganisation of business before the High Court or tribunal or the date of admission of an application for corporate insolvency resolution by the Adjudicating Authority as defined in clause ....
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.... than agricultural land. Sub-section (1) of the said section provides for deduction of tax by any person responsible for paying to a resident any sum by way of consideration for transfer of any immovable property (other than agricultural land) shall at the time of credit or payment of such sum to the resident at the rate of one per cent. of such sum as income-tax thereon. Sub-section (2) of the said section provides that no deduction of tax shall be made where the consideration for the transfer of an immovable property is less than fifty lakh rupees. It is proposed to amend sub-section (1) of the said section to provide that the person responsible for paying to a resident any sum by way of consideration for transfer of any immovable property (other than agricultural land) shall at the time of credit or payment of such sum to the resident deduct tax at the rate of one per cent. of such sum or the stamp duty value of such property, whichever is higher, as income-tax thereon. It is further proposed to amend sub-section (2) of the said section to provide that no deduction of tax shall be made where the consideration for the transfer of an immovable property and the stamp du....
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....re the value or aggregate of value of the benefit or perquisite provided or likely to be provided to such resident during the financial year does not exceed twenty thousand rupees. It is also proposed to provide that the provisions of the section shall not apply to a person being an individual or a Hindu undivided family, whose total sales, gross receipts or turnover does not exceed one crore rupees in case the of business or fifty lakh rupees in the case of profession, during the financial year immediately preceding the financial year in which such benefit or perquisite, as the case may be, is provided by such person. It is also proposed to clarify that the expression "person responsible for providing" means the person providing such benefit or perquisite, or in case of a company, the company itself including the principal officer thereof. This amendment will take effect from 1st July, 2022. Clause 59 seeks to insert a new section 194S in the Income-tax Act relating to payment on transfer of virtual digital asset. The proposed sub-section (1) seeks to provide that any person responsible for paying to a resident any sum by way of consideration for transfer of a virtu....
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...., with the prior approval of the Central Government, issue guidelines for the purpose of removing the difficulty. The proposed sub-section (7) seeks to provide that every guideline issued by the Board under sub-section (6) shall be laid before each House of Parliament, and shall be binding on the income-tax authorities and on the person responsible for paying the consideration on transfer of such virtual digital asset. The proposed sub-section (8) seeks to provide that notwithstanding anything contained in section 194-O, in case of a transaction to which the provisions of the said section are also applicable along with the provisions of this section then, tax shall be deducted under subsection (1). Explanation to the said section seeks to provide that for the purposes of the said section "specified person" means a person,-- (a) being an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business carried on by him or profession exercised by him does not 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 vi....
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....to collect tax or after collecting, fail to deposit the same to the credit of the Central Government. If any person who is liable to collect tax at source does not collect it or after so collecting fails to pay the same to the credit of the Government, then he shall be liable to pay interest at rates specified therein. It is proposed to insert a new proviso to the said sub-section to provide that where an order is made by the Assessing Officer for the default referred to in sub-section (6A), the interest shall be paid by the person in accordance with such order. These amendments will take effect from the 1st day of April, 2022. Clause 63 seeks to amend section 206CCA of the Income-tax Act relating to special provision for collection of tax at source for non-filers of income-tax return. Sub-section (1) of the said section provides for the rates at which tax shall be collected in case of specified person. It is proposed to amend the said sub-section (1) to omit the brackets and words "(hereafter referred to as collectee)". It is further proposed to amend sub-section (3) of the said section to provide that for the purposes of the said section, "specified person" shal....
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.... such person having paid such tax to the credit of the Central Government claims that no tax was required to be deducted on such income, he may file an application before the Assessing Officer for refund of such tax deducted and such application shall be filed by such person only after within a period of thirty days from the date of payment of such tax, in such form and manner as may be provided by rules. Further, it is proposed that the Assessing Officer shall dispose of the abovementioned application for refund within a period of six months from the end of the month in which such application has been received, after making any such enquiry as he may consider necessary. The Assessing Officer may allow or reject such application by an order in writing, however, no such application shall be rejected unless an opportunity of being heard is given to the applicant. This amendment will take effect from lst April, 2022. Clause 67 seeks to amend section 245MA of the Income-tax Act relating to Dispute Resolution Committee. The said section, inter alia, provides that the Central Government shall constitute one or more Dispute Resolution Committees, for specified persons who may ....
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....e said section, inter alia, empowers the Central Government to notify a scheme for the purposes of appeal to the Appellate Tribunal so as to impart greater efficiency, transparency and accountability by-- (a) optimising utilisation of the resources through economies of scale and functional specialisation; (b) introducing a team-based mechanism for appeal to the Appellate Tribunal, with dynamic jurisdiction. Sub-section (9) of the said section further provides that for the purposes of giving effect to the aforesaid scheme, the Central Government may by notification in the Official Gazette direct that any of the provisions of the Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified. It is proposed to amend the proviso to the said sub-section (9), extending the date for issuing directions for the purposes of the said sub-section from 31st day of March, 2022 to 31st day of March, 2024. This amendment will take effect from 1st April, 2022. Clause 71 seeks to amend section 255 of the Income-tax Act relating to procedure of Appellate Tribunal. The said section, inter alia, empowers the Central Governmen....
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....section 92CA and directing a fresh order under section 92CA, after making or causing to be made any such inquiry as he deems necessary. Such order shall be passed only after giving the assessee an opportunity of being heard. It is further proposed to amend clause (a) of Explanation 1 to the said sub-section also to include an order under section 92CA by the Transfer Pricing Officer for the purposes of the said section. It is also proposed that the clause (c) of the Explanation 1 to the sub-section (1) of the said section shall provide that where any order referred to in the said sub-section and passed by the Assessing Officer or the Transfer Pricing Officer, as the case may be, had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Principal Commissioner or Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. It is also proposed to amend the Explanation 2 to the sub-section (1) to make it applicable to an order passed by the Transfer Pricing Officer also. It is also proposed to insert Explanation 3 in ....
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....ice to any other provisions of Chapter XXI of the Act, if during any proceedings under this Act, it is found that a person, being any fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via) of clause (23C) of section 10, or any trust or institution referred to in section 11 has violated the provisions of the twenty-first proviso to clause (23C) of section 10 or clause (c) of sub-section (1) of section 13, as the case may be, the Assessing Officer may direct that such person shall pay by way of penalty-- (a) a sum equal to the aggregate amount of income of such person applied, directly or indirectly, by such person, for the benefit of any person referred to in sub-section (3) of section 13, where the violation is noticed for the first time during any previous year; and (b) a sum equal to two hundred per cent. of the aggregate amount of income of such person applied, directly or indirectly, by that person, for the benefit of any person referred to in sub-section....
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....to furnish the return of income in due time, if a return is furnished by such person before the expiry of the assessment year or the tax payable by such person, not being a company, on the total income determined on regular assessment does not exceed rupees ten thousand. It is proposed to amend sub-clause (a) of clause (ii) of the said proviso to provide that a person shall not be proceeded against under the said section for failure to furnish in due time the return of income under sub-section (1) of section 139, if such a person has furnished return under sub-section (8A) of section 139 for the relevant assessment year. This amendment will take effect from 1st April, 2022. Clause 82 seeks to amend the section 278A of the Income-tax Act relating to punishment for second and subsequent offences. Section 276B provides for prosecution for failure to credit tax deducted at source to the Central Government and section 276BB provides for prosecution for failure to credit tax collected at source to the Central Government. It is proposed to amend the said section 278A so as to bring section 276BB within the purview of said section. This amendment will take effect from 1st....
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.... the officer of the customs who is assigned the functions by the Board or the Principal Commissioner of Customs or Commissioner of Customs under section 5 of the said Act. Clause 86 seeks to substitute section 3 of the Customs Act so as to specify the classes of officers of customs, including the officers of the Directorate of Revenue Intelligence, officers of Customs (Preventive) and audit officers for various purposes, as the Board may specify. Clause 87 seeks to amend section 5 of the Customs Act relating to the powers of the officers of customs. It is proposed to insert a new sub-section (1A) in the said section so as to empower the Board to assign by notification, such functions as he may deem fit, to an officer of customs, who shall be the proper officer in relation to such functions. It is further proposed to insert a new sub-section (1B) in the said section so as to empower the Principal Commissioner of Customs or Commissioner of Customs within their jurisdiction to assign by order such functions as he may deem fit to an officer of customs, who shall be the proper officer in relation to such functions. It is also proposed to insert a new sub-section (4) in said ....
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.... that where in pursuance of any proceeding under Chapter XIIA or Chapter XIII, if an officer of customs has reasons to believe that any duty has been short-levied, not levied, short-paid or not paid or any duty has been erroneously refunded or any drawback has been erroneously allowed or any interest has been short-levied, not levied, short-paid or not paid, or erroneously refunded, then such officer of customs shall, after inquiry, investigation, or audit, transfer the relevant documents, along with a report in writing to the proper officer having jurisdiction, in respect of assessment of such duty, or who allowed such refund or drawback, or to an officer to whom proper officer is subordinate. It further seeks to provide that in case of multiple jurisdictions, such transfer shall be made to an officer of customs to whom such matter is assigned by the Board under section 5. Clause 94 seeks to insert a new section 135AA in the Customs Act, so as to make punishable the publishing of information relating to the value or classification or quantity of goods entered for export from India, or import into India, or the details of the exporter or importer of such goods, unless require....
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....ith respect to a supply may be availed only when such credit has not been restricted in the details communicated to the registered person under section 38. It further seeks to amend sub-section (4) so as to provide that a registered person shall not be entitled to take input tax credit in respect of any invoice or debit note after the thirtieth day of November following the end of the financial year to which such invoice or debit note pertains, or furnishing of the relevant annual return, whichever is earlier. Clause 100 seeks to amend clause (b) of sub-section (2) of section 29 of the Central Goods and Services Tax Act so as to provide that the registration of a person paying tax under section 10 is liable to be cancelled if the return for a financial year has not been furnished beyond three months from the due date of furnishing of the said return. It further seeks to amend clause (c) of the said sub-section (2) so as to provide for prescribing continuous tax periods for which return has not been furnished, which would make a registration liable for cancellation, in respect of any registered person, other than a person specified in clause (b) thereof. Clause 101....
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....gistration specified under sub-section (1) of section 27, whichever is earlier. It further seeks to substitute the first proviso to sub-section (7) so as to provide an option to the persons furnishing return under proviso to sub-section (1) to pay either the selfassessed tax or an amount that may be prescribed. It also seeks to amend sub-section (9) by removing reference of section 37 and section 38 and to amend the proviso to said sub-section (9) so as to provide for thirtieth day of November following the end of the financial year, or the date of furnishing of the relevant annual return, whichever is earlier, as the last date for the rectification of errors in the return furnished under section 39. It also seeks to amend sub-section (10) so as to provide for furnishing of details of outward supplies of a tax period under sub-section (1) of section 37 as a condition for furnishing the return under section 39 for the said tax period. Clause 105 seeks to substitute a new section for section 41 of the Central Goods and Services Tax Act so as to do away with the concept of "claim" of eligible input tax credit on a "provisional" basis and to provide for availment of self-as....
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....Act so as to provide for thirtieth day of November following the end of the financial year, or the date of furnishing of the relevant annual return, whichever is earlier, as the last date upto which the rectification of errors shall be allowed in the statement furnished under sub-section (4). Clause 112 seeks to amend proviso to sub-section (1) of section 54 of the Central Goods and Services Tax Act so as to explicitly provide that claim of refund of any balance in the electronic cash ledger shall be made in such form and manner as may be prescribed. It further seeks to amend sub-section (2) so as to align it with sub-section (1) by providing time limit of two years from the last day of the quarter in which the supply was received for claiming refund of tax paid on inward supplies of goods or services or both by the person specified in the said sub-section. It also seeks to amend sub-section (10) so as to extend the scope of the said sub-section to all types of refund claims. It also seeks to insert a new sub-clause (ba) in clause (2) of Explanation in order to provide clarity regarding the relevant date for filing refund claim in respect of supplies made to a Special E....