Finance Act, 2023 Explanatory Notes to the Provisions of the Finance Act, 2023

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.... in certain cases 17 "Salary", "perquisite" and "profits in lieu of salary" defined 28 Profits and gains of business or profession 35D Amortization of certain preliminary expenses 43B Certain deductions to be only on actual payment 43D Special provision in case of income of public financial institutions, public companies etc. 44AB Audit of accounts of certain persons carrying on business or profession 44AD Special provision for computing profits and gains of business on presumptive basis 44ADA Special provision for computing profits and gains of profession on presumptive basis 44BB Special provision for computing profits and gains in connection with the business of exploration, etc., of mineral oils. 44BBB Special provision for computing profits and gains of foreign companies engaged in the business of civil construction, etc., in certain turnkey power projects 45 Capital Gains 47 Transactions not regarded as transfer 48 Mode of computation 49 Cost with reference to certain modes of acquisition 50AA Special provision for computation of capital gains in case of Market Linked Debenture 54 ....

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....and Hindu Undivided Family 115BAD Tax on income of certain resident co-operative societies 115BAE Tax on income of certain new manufacturing cooperative societies 115BB Tax on winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature whatsoever. 115BBJ Tax on winnings from online games. 115JC Special provisions for payment of tax by certain persons other than a company 115JD Tax credit for alternate minimum tax 115TD Tax on accreted income 115UA Tax on income of unit holder and business trust. 115VP Method and time of opting for tonnage tax scheme 116 Income-tax authorities. 119 Instructions to subordinate authorities 131 Power regarding discovery, production of evidence, etc. 132 Search and seizure 133 Power to call for information. 134 Power to inspect registers of companies. 135A Faceless collection of information. 140B Tax on updated return 142 Inquiry before assessment 148 Issue of notice where income has escaped assessment 149 Time limit for notice 151 Sa....

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....tain or retain books of account, documents, etc. 271AAC Penalty in respect of certain income. 271AAD Penalty for false entry, etc., in books of account. 271C Penalty for failure to deduct tax at source 271FAA Penalty for furnishing inaccurate statement of financial transaction or reportable account. 271J Penalty for furnishing incorrect information in reports or certificates. 274 Procedure. 275 Bar of limitation for imposing penalties. 276A Failure to comply with the provisions of sub-sections (1) and (3) of section 178. 276B Failure to pay tax to the credit of Central Government under Chapter XII-D or XVII-B. 279 Prosecution to be at instance of Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. 287 Publication of information respecting assesses in certain cases 295 Power to make rules. AMENDMENTS TO THE FINANCE (NO. 2) ACT, 2004 CARRIED OUT THROUGH FINANCE ACT, 2023 Revision of rates of Securities Transaction Tax by amendments in Finance (No. 2) Act, 2004- Chapter of Finance (No. 2) Act, 2004 Particulars Chapter VII Securities Transaction Tax AME....

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....tificial juridical person (other than a co-operative society, firm, local authority and company) as under: Income chargeable to tax Rate of income-tax for AY 2023-24   Individual (other than senior and very senior citizen), HUF, association of persons, body of individuals and artificial juridical person. Individual, resident in India who is of the age of sixty years or more but less than eighty years.(senior citizen) Individual, resident in India who is of the age of eighty years or more (very senior citizen) Up to Rs. 2,50,000 Nil Nil Nil Rs. 2,50,001 - Rs. 3,00,000 5% 5% Rs. 3,00,001 - Rs. 5,00,000 Rs. 5,00,001 - Rs. 10,00,000 20% 20% 20% Exceeding Rs. 10,00,000 30% 30% 30% For individuals or HUFs opting for the concessional taxation regime under section 115BAC of the Act, the rates as specified in the said section are as under: Total Income (Rs) Rate of income- tax for AY 2023-24 Up to 2,50,000 Nil From 2,50,001 to 5,00,000 5% From 5,00,001 to 7,50,000 10% From 7,50,001 to 10,00,000 15% From 10,00,001 to 12,50,000 20% From 12,50,001 to 15,00,000 25% Above 1....

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....i) of clause (31) of section 2 of the Act having income under section 115AD of the Act, the amount of income-tax so computed, shall be increased by a surcharge,- (i) having a total income exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of ten per cent of such income-tax; and (ii) having a total income exceeding one crore rupees but not exceeding two crore rupees, at the rate of fifteen per cent of such income-tax; (iii) having a total income [excluding the income by way of dividend or income of the nature referred to in clause (b) of sub-section (1) of section 115AD of the Act] exceeding two crore rupees but not exceeding five crore rupees, at the rate of twenty-five per cent of such income-tax; (iv) having a total income [excluding the income by way of dividend or income of the nature referred to in clause (b) of sub-section (1) of section 115AD of the Act] exceeding five crore rupees, at the rate of thirty-seven per cent of such income-tax; (v) having a total income [including the income by way of dividend or income of the nature referred to in clause (b) of sub-section (1) of section 115AD of the Act] exceeding two crore rupees but is n....

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....111A or section 112 or section 112A of the Act shall be increased by a surcharge at the rate of seven per cent of such income-tax in case the total income of a co-operative society exceeds one crore rupees but does not exceed ten crore rupees. Surcharge at the rate of twelve per cent of such income-tax shall continue to be levied in case of a co-operative society having a total income exceeding ten crore rupees. Further, on satisfaction of certain conditions, a co-operative society resident in India have the option to pay income-tax at the rate of 22 per cent as per the provisions of section 115BAD. Surcharge would be at 10% on such income-tax. It may be mentioned that marginal relief shall be available in the case of every cooperative society, other than those opting for taxation under section 115BAD of the Act, so the total amount payable as income-tax and surcharge on total income exceeding- (i) one crore but not exceeding ten crore rupees, shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees. (ii) ten crore rupees shall not exceed the total amount payable as inco....

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.... Schedule to the FA 2023 specifies the rates of income-tax in the case of a company. (i) In case of a domestic company, the rate of income-tax is- a) twenty-five per cent of the total income, if the total turnover or gross receipts of the company in the previous year 2020-21 does not exceed four hundred crore rupees; b) twenty-five per cent of the total income at the option of the company, if it opts for taxation under section 115BA of the Act; c) twenty-two per cent of the total income, at the option of the company, if it opts for taxation under section 115BAA of the Act; d) fifteen per cent of the total income, at the option of the company, if it opts for taxation under section 115BAB of the Act; e) thirty per cent of the total income, in all other cases. The tax so computed or as computed under the provisions of section 111A or section 112 or section 112A of the Act shall be enhanced by a surcharge of seven per cent where such domestic company has total income exceeding one crore rupees but not exceeding ten crore rupees. Surcharge at the rate of twelve per cent shall be levied if the total income of the company exceeds ten crore rupees. However, where th....

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....purposes of the Union, calculated at the rates provided in sub-section (8) of section 2 of FA 2023. 3.3 Rates for deduction of income-tax at source from certain incomes during the financial year 2023-24 (other than Salaries) 3.3.1 In every case in which tax is to be deducted at the rates in force under the provisions of sections 193, 194A, 194B, 194BB, 194D, 194LBA, 194LBB, 194LBC and 195 of the Act, the rates for deduction of income-tax at source during the financial year 2023-24 have been specified in Part II of the First Schedule to the FA 2023. The rates for deduction of income-tax at source during the financial year 2023 -24 continue to be the same as those specified in Part II of the First Schedule to the Finance Act, 2022 except the following: (i) deduction of income-tax at source on income by way of winnings from online game under the newly inserted section 194BA shall be at the rate of 30%, being the rate in force; (ii) deduction of income-tax at source on the income by way of dividend received from a unit in an International Financial Services Centre, as referred to in sub-section (1A) of section 80LA, shall be at the rate of 10%, being the rate in force; (....

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....es, but is not covered under (iii) and (iv) above. In case where the total income includes any income by way of dividend or income under the provisions of sections 111A, 112 and 112A of the Act, the rate of surcharge on the amount of income-tax deducted in respect of that part of income shall not exceed fifteen per cent. Further, where the income of a person is chargeable to tax under sub-section (1A) of section 115BAC of the Act, the rate of surcharge shall not exceed twenty five per cent. (b) in the case of an association of persons being a non-resident, and consisting of only companies as its members, calculated,- (i) at the rate of ten per cent of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds fifty lakh rupees but does not exceed one crore rupees; (ii) at the rate of fifteen per cent of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees. (c) in the case of every co-operative society, being a non-resident, calculated ,- (i) at the rate of seven per cent of such tax, where the income or the aggre....

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....ear in the case of all categories of assessees have been specified in the said Part of the First Schedule to the FA 2023. These rates are also applicable for charging income-tax during the financial year 2023-24 on current incomes in cases where accelerated assessments have to be made, e.g., provisional assessment of shipping profits arising in India to non-residents, assessment of persons leaving India for good during that financial year, assessment of persons who are likely to transfer property to avoid tax, assessment of bodies formed for short duration, etc. The rates are provided in following paragraphs. 3.4.2 Individual, Hindu undivided family, association of persons, body of individuals or artificial juridical person. The rates provided in sub-section (1A) of section 115BAC of the Act shall be applicable, as default, for determining the income-tax payable in respect of the total income for FY 2023-24 (AY 2024-25), of an individual or Hindu undivided family or association of persons [other than a co-operative society], or body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2. These....

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.... person having a total income (including any income by way of dividend or income under sections 111A, 112 and 112A) exceeding fifty lakh rupees but not exceeding one crore rupees; (b) at the rate of fifteen per cent of such income-tax, in case of a person having a total income (including any income by way of dividend or income under sections 111A, 112 and 112A) exceeding one crore rupees but not exceeding two crore rupees; (c) at the rate of twenty five per cent of such income-tax, in case of a person having a total income (excluding any income by way of dividend or income under sections 111A, 112 and 112A) exceeding two crore rupees but not exceeding five crore rupees; (d) at the rate of thirty-seven per cent of such income-tax, in case of a person having a total income (excluding any income by way of dividend or income under sections 111A, 112 and 112A) exceeding five crore rupees; (e) at the rate of fifteen per cent of such income-tax, in case of a person having a total income (including any income by way of dividend or income under sections 111A, 112 and 112A) exceeding two crore rupees but which is not included in (c) or (d) above; It may be noted that in case w....

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....income-tax payable on a total income not exceeding Rs 7 lakh. Marginal relief shall also be provided to those who have income marginally above Rs 7 lakh. Thus, where the total income is chargeable to tax under sub-section (1A) of section 115BAC, and the total income- (a) does not exceed seven hundred thousand rupees, the assessee shall be entitled to a deduction from the amount of income-tax (as computed before allowing for the deductions under Chapter VIII of the Act) on his total income with which he is chargeable for any assessment year, of an amount equal to one hundred per cent of such income-tax or an amount of twenty-five thousand rupees, whichever is less; (b) exceeds seven hundred thousand rupees and the income-tax payable on such total income exceeds the amount by which the total income is in excess of seven hundred thousand rupees, the assessee shall be entitled to a deduction from the amount of income-tax (as computed before allowing the deductions under Chapter VIII of the Act) on his total income, of an amount equal to the amount by which the income-tax payable on such total income is in excess of the amount by which the total income exceeds seven hundred ....

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....for assessment year 2024-25 onwards. Surcharge would be at the rate of ten per cent on such tax. Marginal relief shall be allowed in the case of co-operative society (other than a co-operative society which claims the benefit of section 115BAD and 115BAE) to ensure that: (i) the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees, (ii) the total amount payable as income-tax and surcharge on total income exceeding ten crore rupees shall not exceed the total amount payable as income-tax and surcharge on a total income of ten crore rupees, by more than the amount of income that exceeds ten crore rupees. Health and Education Cess on income-tax shall be levied at the rate of four per cent of the amount of income-tax computed inclusive of surcharge. No marginal relief shall be available in respect of Health and Education Cess. 3.4.4 Firms. Paragraph C of Part III of the First Schedule to the FA 2023 specifies the rate of income-tax as thirty per cent in the case of every f....

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....total income, at the option of the company, if it opts for taxation under section 115BAA of the Act; d) fifteen per cent of the total income, at the option of the company, if it opts for taxation under section 115BAB of the Act; e) thirty per cent of the total income, in all other cases. The tax so computed or as computed under the provisions of section 111A or section 112 or section 112A of the Act shall continue to be enhanced by a surcharge of seven per cent where such domestic company has total income exceeding one crore rupees but not exceeding ten crore rupees. Surcharge at the rate of twelve per cent shall continue to be levied if the total income of the company exceeds ten crore rupees. However, where the domestic company exercises the option under section 115BAA or section 115BAB, the tax computed shall be enhanced by a surcharge of ten per cent for all levels of income. (ii) In the case of a company other than a domestic company, the tax rate is forty per cent. However, the tax rate shall be fifty percent, on so much of total income of the company, as consists of: (a) royalties received from Government or an Indian concern in pursuance of an agreement....

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....ion 115BBJ the applicable tax rate is provided in the section itself and surcharge shall be levied based on status of the taxpayer as is otherwise applicable to such taxpayer. Health and Education Cess on income-tax shall be levied at the rate of four per cent of the amount of income-tax computed including surcharge. 4. Extending deeming provision under section 9 to gift received by not-ordinarily resident- 4.1. Under the Act, income which, inter-alia , is deemed to accrue or arise in India during a year is chargeable to tax. Sub-section (1) of section 9 of the Act is a deeming provision providing the types of income deemed to accrue or arise in India. 4.2. Finance (No. 2) Act, 2019 inserted clause (viii) to sub-section (1) of section 9 of the Act to provide that the any sum of money exceeding fifty thousand rupees, received by a non-resident without consideration from a person resident in India, on or after the 5th day of July, 2019, shall be income deemed to accrue or arise in India. Sum of money is referred to in sub-clause (xviia) of clause (24) of section 2 of the Act. 4.3. The above amendment was introduced as an anti-abuse provision, as certain instances were ....

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....le 21 AK of the Rules has also been suitably amended to prescribe the conditions to be fulfilled. 5.2 Amendments to clause (4G) of section 10 5.2.1 Clause (4G) of section 10 provides exemption to the income of a non-resident in respect of any income received by a non-resident from portfolio of securities or financial products or funds, managed or administered by any portfolio manager on behalf of such non-resident in an account maintained with an Offshore Banking Unit in any International Financial Services Centre to the extent such income accrues or arises outside India and is not deemed to accrue or arise in India. 5.2.2 It was represented that certain incomes of non-resident arising from various financial products are received in an account(s) maintained with Banking Units located in IFSC which become taxable on receipt basis. However, both the financial products are issued outside India and also income therefrom accrues or arises to non-residents situated in foreign jurisdictions. 5.2.3 In view of the above, on the lines of the exemption provided to income from portfolio management services, FA 2023 amended clause (4G) of section 10 of the Act to enable Central Gove....

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....ded section 115A of the Act in order to provide for taxation of income of a non-resident not being a company or a foreign company, by way of dividend from a unit of IFSC at the rate of 10%. Applicability: This amendment is effective from 1st April, 2024 and applies to the assessment year 2024-25 and subsequent assessment years. 5.4 Extension of date for transfer of assets Clause (viiad) of section 47 of the Act does not regard as transfer for the purposes of capital gains any transfer of a capital asset, being a share or unit or interest held in the original fund by a shareholder or unit holder or interest holder in consideration for the share or unit or interest in resultant fund, in a relocation from original fund to resultant fund. In order to provide further time for such relocation, clause (b) of the Explanation to clause (viiad) of section 47 of the Act has been amended to extend the date for transfer of assets of the original fund, or of its wholly owned special purpose vehicle, to a resultant fund in case of relocation to 31^st March, 2025 from current limitation of 31 st March, 2023. Applicability: The amendment is effective from 1^st April 2023, a....

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....ction 80LA of the Act shall be eligible for 100% deduction from specified income for any assessment year commencing on or after assessment year 2023-24 which was earlier eligible for a 50% deduction, for the remaining period. Applicability : This amendment has come into effect from 1st day of April, 2023 and shall accordingly apply in relation to the assessment year 2023-24 and subsequent assessment years. 5.6 IFSCA (Fund Management) Regulations, 2022 came into force from May 19, 2022. To bring the reference of the said regulation in the provisions of the Act, the definition of "Specified Fund", "Resultant Fund" and "Investment Fund" have been amended in clause (c) of the Explanation to clause (4D) of section 10, clause (c) of the Explanation to clause (viiad) of section 47, and clause (aa) of the Explanation to clause (viib) of subsection (2) of section 56 of the Act to include the reference of IFSCA (Fund Management) Regulations,2022 in the Act. Applicability: The amendment will take effect from 1^st April, 2023 and accordingly apply to assessment year 2023-24 and subsequent assessment years 5.7 Relief for Unit of an IFSC claiming deduction under section 80L....

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.... be paid one time 'Seva Nidhi' package, which shall comprise of their contribution, including interest thereon, and matching contribution from the Government equal to the accumulated amount of their contribution including interest. 6.3. In order to allow deduction from the computation of total income of Agniveer for any contribution made by him or the Central Government to his Agniveer Corpus Fund account and to exempt from tax any payment received by Agniveer or his nominee, from the Agniveer Corpus Fund, the following amendments were made by FA 2023: i. A new clause (12C) in section 10 of the Act has been inserted to provide that any payment received from the Agniveer Corpus Fund by a person enrolled under the Agnipath Scheme, 2022, or the nominee of such person shall be exempted from income tax. ii. A new section 80CCH has also been inserted to provide that an assessee, being an individual enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund on or after the 1^st day of November, 2022, shall be allowed a deduction of the whole of the amount deposited by him and also the amount contributed by the Central Government to his account in the Agniveer....

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....n Development Authority in Civil Appeal No 21762 of 2017 vide its order dated 19.10.2022 held that in sub-clause (b) of clause (46) of section 10 of the Act, "commercial" has the same meaning as "trade, commerce, business" in clause (15) of section 2 of the Act. Therefore, sums charged by such notified body, authority, Board, Trust or Commission (by whatever name called) will require similar consideration - i.e., whether it is at cost with a nominal mark-up or significantly higher, to determine if it falls within the mischief of "commercial activity". 7.4. However, the Hon'ble Court has also made a fine distinction in respect of statutory authorities, boards etc. which have been established by the State government or Central governments, for achieving essentially "public functions/services". In such cases, the court have held that the amounts or any money whatsoever charged for the public services are prima facie to be excluded from the mischief of business or commercial receipts as their objects are essential for advancement of public purposes/ functions. 7.5. In view of the above, FA 2023 has amended the Act so as to exclude income of a body or authority or Board o....

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.... having large premium contributions (as it is acting as an investment policy) and claiming exemption on the sum received under such life insurance policies. 8.3. In order to prevent the misuse of exemption under the said clause, Finance Act, 2021, amended clause (10D) of section 10 of the Act to, inter-alia , provide that the sum received under a ULIP (barring the sum received on death of a person), issued on or after the date 01.02.2021 shall not be exempt if the amount of premium payable for any of the previous years during the term of such policy exceeds Rs 2,50,000. It was also provided that if premium is payable for more than one ULIPs, issued on or after the 01.02.2021, the exemption under the said clause shall be available only with respect to such policies where the aggregate premium does not exceed Rs 2,50,000 for any of the previous years during the term of any of the policies. Circular No. 2 of 2022 dated 19.01.2022 was issued to explain how the exemption is to be calculated when there is more than one policy. 8.4. After the enactment of the above amendment, while ULIPs having premium payable exceeding Rs 2, 50,000/- were excluded from the purview of clause (10D) o....

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...., the sum so received as exceeds the aggregate of the premium paid during the term of such life insurance policy shall be chargeable to income-tax under the head "Income from other sources". If the premium paid had been claimed as deduction in any other provision of the Act such premium will not be reduced from sum so received. This would not apply to ULIP or Keyman insurance policies whose taxation is governed by other existing provisions of the Act; (v) insertion of an Explanation to clause (xiii) in sub-section (2) of section 56 of the Act to provide that for the purposes of this clause, "unit linked insurance policy" shall have the same meaning as assigned to it in Explanation 3 to clause (10D) of section 10 of the Act; (vi) insertion of sub-clause (xviid) in clause (24) of section 2 of the Act to provide that income shall include any sum referred to in clause (xiii) of sub-section (2) of section 56 of the Act. Applicability: These amendments are effective from 1st April, 2024 and accordingly apply to the assessment year 2024-25 and subsequent assessment years. Vide Circular no. 15/2023 dated 16.08.2023, the Board has issued guidelines for removal of diffi....

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....changes in India, which are registered under section 12AB of the Act, to apply for notification under clause (23EC) of section 10, FA 2023 has amended sub-section (7) of section 11 of the Act so as to include the reference of clause (23EC) of section 10 in the said sub-section. Applicability : This amendment is effective from 1st April, 2024 and applies to the assessment year 2024-25 and subsequent assessment years. 11. Extending exemption under clause (26AAA) of section 10 of the Act to an Indian citizen, domiciled in Sikkim on or before 26th April, 1975 11.1. Clause (26AAA) of section 10 of the Act provides exemption to any income of a "Sikkimese" from any source in Sikkim as well as exemption to any dividend income and interest on securities. Prior to amendment by the FA 2023, the said clause (26AAA) provided that in case of an individual, being a Sikkimese, any income which accrues or arises to him from any source in the State of Sikkim; or by way of dividend or interest on securities, would be exempt. Further, this exemption would not be applicable to a Sikkimese woman who, on or after 1st April, 2008, married an individual who is not a Sikkimese. For ....

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....t that the name of such individual's father or husband or paternal grand-father or brother from the same father has been recorded in that register; or (iv) any other individual, whose name does not appear in the Register of Sikkim Subjects but it is established that such individual was domiciled in Sikkim on or before the 26th day of April, 1975; or (v) any other individual, who was not domiciled in Sikkim on or before the 26th day of April, 1975, but it is established beyond doubt that such individual's father or husband or paternal grand-father or brother from the same father was domiciled in Sikkim on or before the 26th day of April, 1975. 11.4. The term "Sikkimese" defined for the purposes of the clause (26AAA) of section 10, is only for the purposes of the Income-tax Act, 1961, and not for any other purpose. Applicability: This amendment is effective from 1st April, 1990 and applies to assessment year 1990-91 and subsequent assessment years. 12. Providing exemption to any income of National Credit Guarantee Trustee Company Limited (NCGTC), subsidiaries of NCGTC and Credit Guarantee Fund Trust for Micro and Small Enterprises 12.1. National Credit ....

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....uarantee Fund Trust for Micro and Small Enterprises, being a trust created by the Government of India and the SIDBI established under sub-section (1) of section 3 of the SIDBI Act, 1989 (39 of 1989). Applicability: This amendment is effective from 1st April, 2024 and applies to the assessment year 2024-25 and subsequent assessment years. 13. Omission of certain redundant provisions of Section 10 of the Act 13.1. Section 10 of the Act provides for incomes which are not included in total income. Clauses (23BBF), (23EB),(26A), (41) and (49) of this have already been sunset. 13.2. Hence, Finance Act 2023 has omitted clauses (23BBF), (23EB), (26A), (41) and (49) of section 10 of the Act. Applicability: This amendment has taken effect from 1st April, 2023. 14. Specifying time limit for bringing consideration against export proceeds into India 14.1. Prior to FA 2023, the provisions of the section 10AA of the Act, inter-alia, provided 15-year tax benefit to a unit established in a SEZ which begins to manufacture or produce articles or things or provide any services on or after 01.04.2005. The deduction is available for units that begin operations before 01.04.2020....

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....ference to new sub section (4A) in the definition of "Export Turnover" in clause (ia) of the said Explanation. 14.7. Further, FA 2023 has made consequential amendment in sub-section (11A) of section 155 of the Act to insert section 10AA to allow the Assessing Officer to amend the assessment order later where the export earning is realized in India after the permitted period. Applicability: These amendments will be effective from 1st April, 2024 and shall accordingly, apply in relation to the assessment year 2024-25 and subsequent assessment years. 15. Rationalisation of the provisions of Charitable Trust and Institutions 15.1. Background 15.1.1. Income of 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 or any trust or institution registered u/s 12AA or 12AB of the Act is exempt subject to the fulfilment of the conditions provided under various sections. The exemption to these trusts or institutions is available under the two regimes- (i) Regime for any....

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....when it is invested or deposited back, into one or more of the forms or modes specified in sub-section (5) of section 11 of the Act 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 to the extent of such deposit or investment. d) 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) of section 10 of the Act and clauses (a) and (b) of section 11 of the Act. However, 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 to the extent of such repayment. 15.2.2. While implementing the recent changes vide the Finance Act, 2021 to the provisions related to corpus and loan or borrowing, it was noticed that application from corpus or loan or borrowings have already been claimed as application prior to 01.04.2021. Hence, allowing such amount to be application again as investment or depositing back in corpus or repayment of loan or borrowing....

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....-section (3) of section 13 of the Act and the income of the trust or institution should not enure any benefit to such person [twenty-first proviso to clause (23C) of section 10 of the Act for the trust or institution under first regime and clause (c) of sub-section (1) of section 13 of the Act for the trust or institution under second regime]; (vii) Application should be in India except with the approval of the Board in accordance with the provisions of clause (c) of sub-section (1) of section 11 of the Act. 15.2.5. In order to ensure proper implementation of both the exemption regimes, FA 2023, has provided that application out of corpus or loans or borrowings before 01.04.2021 shall not be allowed as application for charitable or religious purposes when such amount is deposited back or invested in to corpus or when the loan or borrowing is repaid. It has further been provided that if the trust or institution invests or deposits back the amount in to corpus or repays the loan within 5 years of application from the corpus or loan, then such investment/depositing back in to corpus or repayment of loan will be allowed as application for charitable or religious purposes. It is a....

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....he third proviso to clause (23C) of section 10 of the Act to provide that nothing contained in the first proviso shall apply where application, from any loan or borrowing is made on or before the thirty first day of March, 2021; (vii) inserted a second proviso to clause (i) of Explanation 4 to sub-section (1) of section 11 of the Act so as to provide that the provisions of the first proviso shall apply only if there was no violation of the conditions, specified in clause (c) of, and Explanations 2, 3 and 5 to, sub-section (1) of, and Explanation to, section 11 of the Act and clause (c) of sub-section (1) of section 13 of the Act, at the time the application was made from the corpus; (viii) inserted a third proviso to clause (i) of Explanation 4 to sub-section (1) of section 11 of the Act so as to provide that the amount invested or deposited back shall not be treated as application for charitable or religious purposes under the first proviso unless such investment or deposit is made within a period of five years from the end of the previous year in which such application was made from corpus; (ix) inserted a fourth proviso to clause (i) of Explanation 4 to sub-section (1) ....

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....e noticed that certain trusts or institutions were trying to defeat the intention of the legislature by forming multiple trusts and accumulating 15% at each layer. By forming multiple trusts and accumulating 15% at each stage, the effective application towards the charitable or religious activities is reduced significantly to a lesser percentage compared to the mandatory requirement of 85%. 15.3.3. In order to ensure intended application toward charitable or religious purpose, FA 2023 has provided that only 85% of the eligible donations made by a trust or institution under the first or the second regime to another trust under the first or second regime shall be treated as application only to the extent of 85% of such donation. Accordingly, FA 2023 has made the following amendments: a) inserted clause (iii) in Explanation 2 to the third proviso of clause (23C) of section 10 of the Act to provide that any amount credited or paid out of income of any fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of ....

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....re pending before the Assessing Officer as on the date of such registration if the objects and activities of such trust or institution remain the same for such preceding assessment year. 15.4.3. Third proviso to sub-section (2) of section 12A of the Act provided that no action under section 147 of the Act shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding the aforesaid assessment year only for non- registration of such trust or institution for the said assessment year. 15.4.4. Fourth proviso to sub-section (2) of section 12A of the Act provided that provisions contained in the second and third proviso to sub-section (2) of section 12A of the Act shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under section 12AA of the Act or section 12AB of the Act. 15.4.5. Second, third and fourth proviso to sub-section (2) of section 12A of the Act discussed above had become redundant after the amendment of section 12A of the Act by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 as the trusts and....

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....es have already commenced, are required to apply for two registrations (provisional and regular) simultaneously. 15.5.3. In order to ensure rationalisation of the provisions, FA 2023 has allowed for direct final registration/approval in such cases. To achieve this, FA 2023 has made the following amendments: a) The trusts and institutions under the first regime shall be allowed to make application for the provisional approval only before the commencement of activities under sub-clause (A) of clause (iv) of the first proviso to clause (23C) of section 10 of the Act. b) Similarly trusts and institutions under the second regime shall be allowed to make application for the provisional registration only before the commencement of activities under item (A) of sub-clause (vi) of clause (ac) of sub-section (1) of section 12A of the Act. c) Similarly trusts and institutions under section 80G regime shall be allowed to make application for the provisional approval only before the commencement of activities under sub-clause (A) of clause (iv) of the first proviso to sub-section (5) of section 80G of the Act. d) The trusts and institutions under first regime, which have already c....

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....d for a period of 3 years or till six months from the commencement of activities whichever is earlier. The trusts and institutions under both regimes, already registered or approved, were required to furnish the application in Form No. 10A for re-registration/approval. The process of granting the provisional approval/ registration for the new trusts and re-registration/approval for the trusts already registered is automated. Application is filed by the trust or institution on e-filing portal and provisional approval/registration or the approval/registration in such cases is granted in an automated manner without verification. 15.6.2. It was noticed that in some cases the form furnished by the trusts for provisional approval/registration and for re-registration/approval are defective and since the process of registration/approval/provisional registration/approval is automated, registration has been granted by the CPC. At present the approval/registration and the provisional approval/registration of the trusts can be cancelled by the PCIT/CIT for certain specified violations. 15.6.3. In order to rationalise the provisions, FA 2023 has made the following amendments, a) insert....

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....istration/approval. Further, there may be possible instances where the trusts and institutions under the first or second regime will not apply for re-registration after the expiry of 5 years/3 years. This would have resulted in the following unintended consequences: a) Once a trust or institution under the first or second regime enters in-to exemption regime and thereafter desires to exit from it, it is allowed to exit on payment of tax at the rate of maximum marginal rate on its accreted income (difference between the fair market value of assets and liabilities). This is because of the reason that the income of the trust or institution has been exempted from tax and the accreted income of the trust represents the income on which tax has not been paid and appreciation thereof. b) By not applying for re-registration/approval or registration/approval, the trust gets an easy route to exit without payment of the tax on accreted income. 15.7.3. A trust or institution under the first or second regime may voluntarily wind up its activities and dissolve or may also merge with any other non-charitable institution, or it may convert into a non-charitable organization. In order to en....

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....0 of the Act or in accordance with sub-clause (i) or sub-clause (ii) or sub-clause (iii) of clause (ac) of sub- section (1) of section 12A of the Act, within the period specified in the said clauses or sub-clauses. Upon violation of these, it shall be deemed to have been converted into any form not eligible for registration or approval in the previous year in which such period expires. (ii) amendment of clause (ii) of sub-section (5) of section 115TD of the Act to provide that principal officer or the trustee of the specified person, as the case may be, and the specified person shall also be liable to pay the tax on accreted income to the credit of the Central Government within fourteen days from the end of the previous year in a case referred to in clause (iii) of sub-section (3) of section 115TD of the Act; (iii) insertion of sub-clause (c) in clause (i) to the Explanation to section 115TD of the Act to provide that date of conversion shall also mean the last date for making an application for registration under sub-clause (i) or sub-clause (ii) or sub-clause (iii) of clause (ac) of sub-section (1) of section 12A or for making an application for approval under clause (i) or....

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....turn of income. The trusts are also required to furnish audit report in Form No. 10B/10BB one month before the due date for furnishing return of income. The auditors are required to report the details of Form No. 9A/10 in the audit report. Since the due date for furnishing Form No. 10B/10BB is one month before the due date of furnishing the ITR, auditors find it difficult to report. 15.8.6. In order to rationalise the provisions, FA 2023 has provided for filing of Form No. 10/9A at least two months prior to the due date specified under sub-section (1) of section 139 for furnishing the return of income for the previous year. Necessary amendments in this regard have been made in, a) clause (c) of Explanation 3 to third proviso of clause (23C) of section 10 of the Act; b) clause (2) of Explanation 1 sub-section (1) of section 11 of the Act; c) clause (c) of sub-section (2) of the said section 11 of the Act. Applicability: These amendments are effective from 1st April, 2023 and accordingly apply to the assessment year 2023-24 and subsequent assessment years. 15.9. Denial of exemption where return of income is not furnished within time 15.9.1. As per the provis....

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....effective from 1st April, 2023 and accordingly apply in relation to the assessment year 2023-24 and subsequent assessment years. 16. Rationalization of provisions related to the valuation of residential accommodation provided to employees 16.1. As per clause (2) of section 17 of the Act, "perquisite" inter-alia includes value of rent-free accommodation or value of any concession in the matters of rent provided to employees by the employer. The employer may be either Central/State Government or other than that, with different methodologies of valuation of perquisites for the two categories of employers. 16.2. However, the methodology to compute the value of rent-free accommodation was prescribed in Rule 3 of the Rules, while the methodology to compute the value of any concession in the matters of rent provided to employees by the employer was specified in the Explanations to the clause (2) of section 17. 16.3. In order to rationalize this provision by prescribing a uniform methodology in the Rules for computing the value of perquisite and to clearly classify the two categories of perquisites with respect to accommodation provided by the employers, FA 2023 has amended sub....

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....ome cases the deduction was also being claimed under other provisions of Chapter VIA of the Act. Secondly while computing capital gains on transfer of such property this same interest also formed a part of cost of acquisition or cost of improvement under section 48 of the Act. 17.4. In order to prevent this double deduction, FA 2023 has inserted a proviso after clause (ii) of the section 48 to provide that the cost of acquisition or the cost of improvement shall not include the amount of interest claimed under clause (b) of section 24 or Chapter VIA. Applicability: This amendment shall take effect from 1st April, 2024 and shall accordingly, apply in relation to the assessment year 2024-25 and subsequent assessment years. 18. Providing clarity on benefits and perquisites in cash 18.1 Section 28 of the Act provides for income that shall be chargeable to income-tax under the head "Profits and gains of business or profession". Clause (iv) of this section brings to chargeability the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession. This provision was inserted through the Finance Act 1964 and....

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....ducted whether the benefit or perquisite is in cash or in kind. Accordingly, vide FA 2023 it has been clarified by way of insertion of an Explanation to section 194R of the Act that provisions of sub-section (1) apply to benefit or perquisite whether in cash or in kind or partly in cash and partly in kind. Applicability: This amendment has taken effect from 1st April, 2023. 19. Ease in claiming deduction on amortization of preliminary expenditure 19.1 Section 35D of the Act provides for amortization of certain preliminary expenses which are incurred prior to the commencement of business or after commencement, in connection with extension of undertaking or setting up of a new unit. This includes expenditure in connection with preparation of feasibility report, project report etc. 19.2 Prior to FA 2023, the section inter-alia provided that the work in connection with the preparation of feasibility report or the project report or the conducting of market survey or of any other survey or the engineering services would need to be carried out either by the assessee himself or by a concern which is approved by the CBDT. 19.3 In order to ease the process of claiming amo....

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....r followed by the Reserve Bank of India for the purposes of asset classification. 20.4 In view of the above, vide FA 2023, section 43B and section 43D of the Act were amended, to substitute for the words, "a deposit taking non-banking financial company or systemically important non-deposit taking non-banking financial company", the words "such class of non-banking financial companies as may be notified by the Central Government in the Official Gazette in this behalf". Applicability: These amendments will take effect from 1st April, 2024 and will accordingly apply in relation to the assessment year 2024-2025 and subsequent assessment years. 20.5 Vide Notification No. 80/2023 dated 22.9.2023 (S.O. 4193[E]) , certain classes of NBFCs have been notified for section 43B and vide Notification No. 79/2023 dated 22.9.2023 (S.O. 4192 [E]), certain classes of NBFCs have been notified for section 43D. By these Notifications the following classes of NBFCs have been notified, namely:- (a) all NBFCs classified in the Top Layer; (b) all NBFCs classified in the Upper Layer; (c) all NBFCs classified in the Middle Layer. It has also been clarified that this classification o....

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....have earned higher sum than 8% or 6%, then that higher sum is taxable. 22.2 Section 44ADA of the Act provides for a presumptive income scheme for small professionals. Prior to FA 2023, this scheme applied to certain resident assessees (i.e., an individual, partnership firm other than LLP) who are engaged in any profession referred to in subsection (1) of section 44AA, and whose total gross receipts do not exceed fifty lakh rupees in a previous year. Under this scheme, a sum equal to 50% of the gross receipts is deemed to be the profits and gains from business. If assessee has claimed to have earned a sum higher than 50%, then that higher sum is taxable. 22.3 Under section 44AB of the Act, every person carrying on business is required to get his accounts audited, if his total sales, turnover or gross receipts, in business exceeds one crore rupees in any previous year. The limit is raised to ten crore rupees where at least 95% of receipts/payments are in non-cash mode. In case of a person carrying on profession, he is required to get his accounts audited, if his gross receipts in profession exceeds, fifty lakh rupees in any previous year. Those opting for and fulfilling the con....

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....case of a non-resident foreign company who is engaged in the business of civil construction or the business of erection of plant or machinery or testing or commissioning thereof, in connection with a turnkey power project approved by the Central Government. Under this scheme, a sum equal to ten per cent of the amount paid or payable (whether in or out of India) to the said assessee or to any person on his behalf on account of such civil construction, erection, testing or commissioning is deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession". 23.3 Both sections provide that an assessee may claim lower profits and gains than the profits and gains specified if he keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA of the Act and gets his accounts audited and furnishes a report of such audit as required under section 44AB of the Act. 23.4 It was seen that taxpayers opt in and opt out of presumptive scheme in order to avail benefit of both presumptive scheme income and non-presumptive income. In a year when they have loss, they claim actual loss ....

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....sical gold to the Electronic Gold Receipt issued by a Vault Manager or such Electronic Gold Receipt to physical gold shall not be considered as 'transfer'. ii. For the purposes of this clause, the expressions 'Electronic Gold Receipt' and 'Vault Manager' shall have the meanings respectively assigned to them in clauses (h) and (l) of sub-regulation (1) of regulation 2 of Securities and Exchange Board of India (Vault Managers) Regulations, 2021. iii. A new sub-section (10) to section 49 of the Act has been inserted to provide that where an Electronic Gold Receipt issued by a Vault Manager, became the property of the person as consideration of a transfer, as referred in the newly inserted clause (viid) in section 47, the cost of acquisition of the asset for the purpose of the said transfer, shall be deemed to be the cost of gold in the hands of the person in whose name Electronic Gold Receipt is issued. Similarly, where the gold released against an Electronic Gold Receipt, which became the property of the person as consideration for a transfer, as referred in clause (viid) in section 47,the cost of acquisition of the asset (being gold) for the purposes of....

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....amp duty value of his share as increased by any consideration received in cash or by a cheque or draft or by any other mode. Applicability: This amendment will take effect from 1st April, 2024 and shall accordingly, apply in relation to the assessment year 2024-25 and subsequent assessment years. 26. Definition of 'original fund' for the purposes of exemption under section 47 26.1 Clause (viiac) of section 47 of the Act exempts any transfer, in a relocation, of a capital asset by the original fund to the resulting fund, while clause (viiad) of section 47 of the Act exempts any transfer by a shareholder or unit holder or interest holder, in a relocation, of a capital asset being a share or unit or interest held by him in the original fund in consideration for the share or unit or interest in the resultant fund. 26.2 Prior to the amendment by the FA 2023, for the purposes of these clauses, clause (a) of the Explanation to clause (viiac) and (viiad) of section 47 of the Act defined an 'original fund' as a fund established or incorporated or registered outside India, which collects funds from its members for investing it for their benefit and fulfils th....

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....t, in accordance with the laws of that foreign state shall not be considered as a transfer. 27.2 Further, Finance Act 2023 has inserted a new sub-section (2AI) after sub-section (2AH) of section 49 of the Act, to provide that where the capital asset, being shares as referred to in clause (xx) of section 47, became the property of the assessee, the cost of acquisition of such asset shall be deemed to be the cost of acquisition to it of the interest in the joint venture referred to in the said clause. Applicability: This amendment has come into effect from 1st April, 2023 and shall accordingly apply in relation to the assessment year 2023-24 and subsequent assessment years. 28. Special provision for taxation of capital gains in case of Market Linked Debentures and certain Specified Mutual Funds 28.1 It has been noticed that a variety of hybrid securities that combine features of plain vanilla debt securities and exchange traded derivatives are being issued through private placements and listed on stock exchanges. It is seen that such securities differ from plain vanilla debt securities. 28.2 'Market Linked Debentures' are listed securities. Long term capit....

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....ing figures. Applicability: This amendment will take effect from 1st April, 2024 and shall accordingly, apply in relation to the assessment year 2024-25 and subsequent assessment years. 29. Limiting the roll over benefit claimed under section 54 and section 54F 29.1. Prior to the FA, 2023, the provisions of section 54 and section 54F of the Act allowed deduction on the Capital gains arising from the transfer of long-term capital asset if an assessee, within a period of one year before or two years after the date on which the transfer took place purchased any residential property in India, or within a period of three years after that date constructed any residential property in India. For section 54 of the Act, the deduction was available on the long-term capital gain arising from transfer of a residential house if the capital gain is reinvested in a residential house. In section 54F of the Act, the deduction is available on the long term capital gain arising from transfer of any long term capital asset except a residential house, if the net consideration was reinvested in a residential house. These deductions are available subject to certain conditions specified in th....

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....had not found favour with the Courts. 30.2. Therefore, to define the term 'cost of acquisition' and 'cost of improvement' of such assets, FA 2023 has amended the provisions of sub-clause (1) of the clause (b) of the sub-section (1) to provide that the cost of improvement of an intangible asset or any other right shall be taken to be nil. Also clause (a) of sub-section (2) of section 55 has been amended to provide that the 'cost of acquisition' of a capital asset being any intangible asset or any other right shall be 'Nil' where it falls in sub-clause (iii) of clause (a) of sub-section (2) of section 55 of the Act.. Applicability: This amendment is will take effect from 1st April, 2024 and shall accordingly apply in relation to the assessment year 2024-25 and subsequent assessment years. 31. Bringing the non-resident investors within the ambit of section 56(2)(viib) to eliminate the possibility of tax avoidance 31.1. Prior to FA, 2023, section 56(2)(viib) of the Act, inter-alia, provided 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 r....

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....n 56(2) (viib) of the Act was put in the public domain for comments. Taking into consideration the suggestions received in this regard and detailed interactions held with stakeholders, Rule 11UA has been amended vide Notification No. 81/2023 dated 25.9.2023 (GSR 685 [E]). The notified Rule provides for expansion of the valuation methodologies to include globally accepted methodology. 32. Facilitating strategic disinvestment of public sector companies 32.1. Section 72A of the Act relates to provisions on carry forward and set off of accumulated loss and unabsorbed depreciation allowance in amalgamation or demerger. Sub-section (1) of section 72A provides that in specified cases, accumulated loss and unabsorbed depreciation of the amalgamating company shall be deemed to be the accumulated loss and unabsorbed depreciation of amalgamated company for the previous year in which the amalgamation was affected. Conditions have also been laid down in the said section to facilitate carry forward and set off of loss and unabsorbed depreciation in the case of strategic disinvestment. Prior to FA 2023, strategic disinvestment had been defined as sale of shareholding by the Central Governme....

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....to start-ups in carrying forward and setting off of losses 33.1. Section 79 of the Act restricts carrying forward and setting off of losses in cases of companies, other than the companies in which the public is substantially interested. It prohibits setting off of carried forward losses if there is change in shareholding. The carried forward loss is set off only if at least 51% shareholding (as on the last date of the previous year) remains same with the company on the last date of the previous year to which the loss belongs. 33.2. However, some relaxation has been provided in case of an eligible start-up as referred to in section 80-IAC of the Act. The condition of continuity of at least 51% shareholding is not applicable to the eligible start-up, if all the shareholders of the company as on the last day of the year, in which the loss was incurred, continue to hold those shares on the last day of the previous year in which the loss is set off. There was an additional condition that the loss is allowed to be set off, under this relaxation, only if it has been incurred during the period of seven years beginning from the year in which such company is incorporated. 33.3. In o....

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.... holding a certificate of eligible business from the Inter-Ministerial Board of Certification, and iii. it is incorporated on or after 1st day of April, 2016 but before 1st day of April 2023. 35.2. In order to further promote the development of start-ups in India and to provide them with a competitive platform, FA 2023 has amended the provisions of section 80-IAC of the Act and extended the period of incorporation of eligible start-ups to 1st day of April 2024. Applicability: This amendment has taken effect from 1st April, 2023 and shall accordingly; apply in relation to the assessment year 2023-24 and subsequent assessment years. 36. Omission of certain redundant provisions of the Act 36.1. The provisions of the section 88 of the Act related to rebate on life insurance premia, contribution to provident fund, etc. 36.2. The said section had no relevance at present as it was sunset by the Finance Act, 2005 and section 80C was introduced for allowing deduction on various instruments listed therein. 36.3. In order to remove the redundant provisions from the Act, Finance Act 2023 has omitted section 88 from the Act. In consequence of the omission of section 88....

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....ending proceedings. 37.4. In view of the above, FA 2023 has amended sub-section (3) of section 92D of the Act to provide that,- (i) the Assessing Officer or the Commissioner (Appeals) may, in the course of any proceeding under the Act, require any person referred to in clause (i) of sub-section (1) of section 92D of the Act i.e., who has entered into an international transaction or specified domestic transaction, to furnish any information or document referred therein, within a period of ten days from the date of receipt of a notice issued in this regard; and (ii) the Assessing Officer or the Commissioner (Appeals) may, on an application made by such person who has entered into an international transaction or specified domestic transaction, extend the period of ten days by a further period not exceeding thirty days. Applicability: This amendment is effective from 1st April, 2023. 38. Excluding non-banking financial companies (NBFC) from restriction on interest deductibility 38.1. Section 94B of the Act provides restriction on deduction of interest expense in respect of any debt issued by a non-resident, being an associated enterprise of the borrower. It applies to....

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....to faceless schemes and e-proceedings 39.1. The Central Government has undertaken a number of measures to make the processes under the Act, electronic, by eliminating person to person interface between the taxpayer and the Department to the extent technologically feasible, and provide for optimal utilisation of resources and a team-based assessment with dynamic jurisdiction. 39.2. Consequent to these amendments introduced in the Act, various schemes have been notified and directions issued for implementation of e-proceedings and faceless schemes, as follows: Sl. No. Section Scheme 1. 135A e-Verification Scheme, 2021 2. 245MA e-Dispute Resolution Scheme, 2022 3. 245R e-advance rulings Scheme, 2022 4. 250 Faceless Appeal Scheme, 2021 5. 274 Faceless Penalty Scheme, 2022 39.3. While introducing these amendments in the relevant provisions, time limitations were also incorporated into the statute for issuing directions, with an intent to implement these reforms in a timely manner. These time limits in case of each provision are as below: Sl. No. Section Scheme 1. 135A 31.03.2022 2. 245MA 31.03.2023....

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.... the assessment year 2024-25 and subsequent assessment years. 41. 15% concessional tax to promote new manufacturing co-operative society 41.1. The Taxation Laws (Amendment) Act, 2019, inter-alia, inserted section 115BAB in the Act which provides that new manufacturing domestic companies set up on or after 01.10.2019, which commence manufacturing or production by 31.03.2023 and do not avail of any specified incentive or deductions, may opt to pay tax at a concessional rate of 15 per cent. The time for commencing manufacturing or production has been extended to 31.03.2024 by the Finance Act, 2022. To provide a level playing field between new manufacturing co-operative societies and new manufacturing companies by providing for a similar concessional tax regime of 15% to new manufacturing co-operative societies as well, Finance Act 2023 has inserted a new section 115BAE in the Act in which concessional tax regime is being provided for the new manufacturing cooperative societies as well. The conditions are materially similar to the conditions applicable to new manufacturing companies, which are as under:- i. notwithstanding anything contained in the Act but subject to the provi....

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.... shall be made in computing such income; vii. where it appears to the Assessing Officer that, owing to the close connection between the assessee to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the assessee more than the ordinary profits which might be expected to arise in such business, the Assessing Officer shall, in computing the profits and gains of such business for the purposes of this section, take the amount of profits as maybe reasonably deemed to have been derived there from and such income shall be charged at a tax rate of thirty per cent.; viii. in case the aforesaid arrangement involves a specified domestic transaction referred to in section 92BA, the amount of profits from such transaction shall be determined having regard to arm's length price as defined in clause (ii) of section 92F. The amount, being profits in excess of the amount of the profits determined by the Assessing Officer, shall be deemed to be the income of the assessee. The income-tax payable in respect of the income, in such case shall be computed at the rate of....

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....ns of section 115BAE of the Income-tax Act. Further, Form 10-IFA has also been issued to enable exercise of option under sub-section (5) of section 115BAE of the Act for new manufacturing co-operative societies. 42. Tax avoidance through distribution by business trusts to its unit holders 42.1 Finance (No.2) Act, 2014 had introduced a special taxation regime for Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InVIT) [referred to as business trusts]. The special regime was introduced in order to address the challenges of financing and investment in infrastructure. Business trusts invest in special purpose vehicles (SPV) through equity or debt instruments. 42.2 Keeping in mind the business structure, the special taxation regime under section 115UA of the Act, inter-alia, provides a pass-through status to business trusts in respect of interest income, dividend income received by the business trust from a special purpose vehicle in case of both REIT and InvIT and rental income in case of REIT. Such income is taxable in the hands of the unit holders unless specifically exempted. 42.3 Sub-section (1) of section 115UA of the Act, inter-alia, provides a....

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....it, during the previous year or during any earlier previous year or years, to such unit holder, who holds such unit on the date of distribution of sum or to any other unit holder who held such unit at any time prior to the date of such distribution, which is,- (a) not in the nature of income referred to in clause (23FC) or clause (23FCA) of section 10; and (b) not chargeable to tax under sub-section (2) of section 115UA; B = amount at which such unit was issued by the business trust; and C = amount charged to tax under clause (xii) of section 56(2) in any earlier previous year; (ii) inserted Explanation 1 to clause (ii) of section 48 to clarify that the cost of acquisition of a unit of a business trust shall be reduced and shall be deemed to have always been reduced by any sum received by a unit holder from the business trust with respect to such unit, which is not in the nature of income as referred to in clause (23FC) or clause (23FCA) of section 10 and which is not chargeable to tax under clause (xii) of sub-section (2) of section 56 and under sub-section (2) of section 115UA. (iii) inserted Explanation 2 to clause (ii) of section 48 to clarify that for the pur....

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....imilarly, there is also a provision that the authorised officer may make a reference to a valuation officer for estimating the fair market value of the property and such reference can be made during the search or within 60 days from the date of executing the last authorisation for search. 43.3 In the recent past, due to the increased use of technology and digitisation in every aspect including management and maintenance of accounts, digitisation of data, cloud storage etc., the procedure for search & seizure has become complex, requiring the use of data forensics, advanced technologies for decoding data etc., for complete and proper analysis of accounts. Similarly, there is an increasing trend of undisclosed income being held in a vast variety of forms of assets or investments in addition to immovable property. Valuation of such assets and decryption of information often require specific domain experts like digital forensic professionals, valuers, archive experts etc. In addition to this, services of other professionals like locksmiths, carpenters etc. are also required in most of the cases, due to typical nature of the operations. 43.4 Therefore, the relevant provisions of t....

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....by which procedure has been prescribed to requisition services of various persons during the search is applicable from 28th August, 2023. Further, the amendment providing the meaning of last authorization and its execution in Explanation 1 of section 132, is effective retrospectively from the 1st April, 2022. 44. Clarification regarding advance tax while filing Updated Return 44.1 The Finance Act, 2022 inserted sub-section (8A) in section 139 of the Act enabling the furnishing of an updated return by taxpayers up to two years from the end of the relevant assessment year subject to fulfilment of certain conditions as well as payment of additional tax. For the determination of the amount of additional tax on such updated return section 140B was inserted in the Act. 44.2 The sub-section (4) of the section 140B of the Act provides for the computation of interest under section 234B of the Act on the tax on updated return. The said sub-section (4) provides that interest payable under section 234B of the Act shall be computed on an amount equal to the assessed tax or the amount by which the advance tax paid falls short of the assessed tax. This implied that interest was payabl....

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....the Act, the assessee will be given an opportunity of being heard in respect of any material gathered on the basis of such inventory valuation which is proposed to be utilized for assessment. (iv) To define "cost accountant" to mean a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who holds a valid certificate of practice under sub-section (1) of section 6 of that Act. 45.3 Further, vide the FA 2023, the following consequential amendments were also made:- (i) amendment to the Explanation 1 to section 153 of the Act, so as to exclude the period for inventory valuation through the cost accountant for the purposes of computation of time limitation. (ii) amendment to section 295 of the Act, so as to include in the aforesaid section, the power to make rules for the form of prescription of report of inventory valuation and the particulars which such report shall contain. Applicability: The amendments in section 142 and 153 of the Act have taken effect from 1st April, 2023 and accordingly apply in relation to the assessment year 2023-2024 and subsequent assessment years. The amendment in ....

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....ction 148 of the Act for commencement of proceedings under section 147 of the Act. It is imperative to note here that in case of a search action under section 132 of the Act, requisition under section 132A of the Act and cases for which information emanates from the above proceedings are deemed to be information under section 149 of the Act and there is no requirement for proceedings under section 148A of the Act to be conducted prior to re-opening the cases in these cases. 46.4 In cases where survey under section 133A of the Act is conducted, the Assessing Officer is deemed to have information for the purposes of section 148 of the Act but proceedings under section 148A of the Act need to be conducted prior to issuance of notice under section 148 of the Act. It has been seen that in the cases where the aforementioned search, requisition or survey proceedings are conducted after 15th March of a financial year, there is extremely little time to collate this information and issue a show cause notice under section 148A(b) of the Act. Moreover, the search is conducted by the Investigation Wing and the notice is required to be issued by the Assessing Officers. 46.5 However, eviden....

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....ded that the authority would be the Principal Chief Commissioner and where there is no Principal Chief Commissioner, the Chief Commissioner shall give approvals beyond a period of three years. 46.8 It was seen that the clause (ii) of the said section was resulting in misinterpretation as well as confusion with regards to the specified authority for the cases where re-opening was being done after three years from the relevant assessment year. Therefore, to clarify the position of law in this regard, an amendment has been made to provide that the specified authority under clause (ii) of section 151 of the Act shall be Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. 46.9 At the same time, to give further clarity with regards to the specified authority, a proviso has been inserted in the section 151 of the Act to provide that while computing the period of three years for the purposes of determining the specified authority the period which has been excluded or extended as per the provisos in section 149 of the Act from the time limit for issuance of notice under section 148 of the Act shall be taken into account. Applicabili....

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.... time available for completion of assessment relating to the assessment year commencing on or after the 1st day of April, 2022 shall be twelve months from the end of the assessment year in which the income was first assessable. Consistent with the above, the time available for completion of assessment proceedings in the case of an updated return has also been increased to 12 months from the end of the financial year in which such return is furnished. 47.4 Further, vide Finance Act, 2021, section 263 of the Act was amended to enable Principal Chief Commissioner and Chief Commissioner to also pass an order of revision under the said section. However, the time line provided in section 153 of the Act under sub-sections (3), (5) and (6) to pass an order of assessment or reassessment or order under section 92CA of the Act by the Transfer Pricing Officer does not refer to the orders so passed by the Principal Chief Commissioner or the Chief Commissioner. Therefore, section 153 of the Act has been amended to provide that the provisions of the said sub-sections (3), (5) and (6) shall also be applicable to order under section 263 or section 264 of the Act, passed by the Principal Chief Co....

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....g Officer to conduct proper scrutiny of the case on the basis of seized material and investigation made and align the dates of limitation for completion of reassessment proceedings for all the assessment years under scrutiny consequent to a search under section 132 of the Act or requisition under section 132A of the Act. 47.8 Therefore, a new sub-section (3A) has been inserted in section 153 of the Act to provide that where an assessment or reassessment is pending on the date of initiation of search under section 132 of the Act or making of requisition under section 132A of the Act, the period available for completion of assessment or reassessment, as the case may be, under the said sub-sections (1), (1A), (2) and (3) of the said section shall be extended by twelve months in a case of an assessee where such search is initiated under section 132 of the Act or such requisition is made under section 132A of the Act or in the case of an assessee to whom any money, bullion, jewellery or other valuable article or thing seized or requisitioned belongs to or in the case of an assessee to whom any books of account or documents seized or requisitioned pertains or pertain to, or any inform....

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....any expenditure incurred for the purchase of sugarcane has been claimed by an assessee and such deduction has been disallowed wholly or partly, the Assessing Officer shall, on the basis of a simple application made by such assessee in this regard, recompute the total income of such assessee for such previous year. The Assessing Officer shall allow the deduction to the extent such expenditure is incurred at a price which is equal to or less than the price fixed or approved by the Government for that previous year. Also, the provision of section 154 shall, so far as may be, apply thereto, and the period of four years specified in sub-section (7) of section 154 shall be reckoned from the end of previous year commencing on the 1st day of April, 2022. Applicability: This amendment is effective from 1st April, 2023. 48.5 Subsequently, in order to standardize the manner of filing application to the Jurisdictional Assessing Officer under section 155(19) of the Act and its disposal by the Jurisdictional Assessing Officer under the said section, a Standard Operating Procedure (SOP) has been issued vide CBDT Circular 14/2023 dated 27.07.2023 (F. No.370133/8/2023-TPL). 49. F....

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....he period from the date of the application to the date on which the refund is granted. Applicability: These amendments have taken effect from 1st October, 2023 49.4. Vide Notification 73/2023 dated 30.8.2023 (GSR 637[E]), Rule 134 has been inserted in the Rules and Form No. 71 has been prescribed for application under sub-section (20) of section 155 of the Act regarding credit of tax deduction at source. 50. Provisions related to business reorganisation 50.1. Section 170A of the Act was inserted vide Finance Act, 2022 in order to make provisions for giving effect to the order of business reorganisation issued by tribunal or court or an Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016. 50.2. The section provided that in case of business reorganisation, where a return of income has been filed by the successor under section 139 of the Act, such successor shall furnish a modified return within six months from the end of the month in which such order of business reorganisation was issued, in accordance with and limited to the said order. Consequently, Rule 12AD has been notified, prescribing the form and manner of furnishing such modified re....

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.... relevant assessment year in accordance with the order of the business reorganisation and taking into account the modified return so furnished. 50.6. For the purposes of such assessment or reassessment, unless provided otherwise, all other provisions of the Act shall apply and the tax shall be chargeable at the rate applicable to such assessment year. 50.7. The following terms have also been defined for the purposes of this section: (i) "business reorganisation" means the reorganisation of business involving the amalgamation or demerger or merger of business of one or more persons; (ii) "successor" means all resulting companies in a business reorganisation, whether or not the company was in existence prior to such business reorganisation. Applicability: This amendment is effective from 1st April, 2023. 51. TDS on payment of accumulated balance due to an employee 51.1. Section 192A of the Act provides for TDS on payment of accumulated balance due to an employee under the Employees' Provident Fund Scheme, 1952. The existing provisions of section 192A of the Act, inter-alia, provide for deduction of tax at the rate of 10% of the taxable component of the lump s....

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....for interest on listed debentures and provide exemption from TDS in respect of any interest payable to a "business trust", in respect of any securities paid by a special purpose vehicle referred to in the Explanation to clause (23FC) of section 10 of the Act. Applicability: This amendment has taken effect from 1st April, 2023. 53. TDS and taxability on net winnings from online games 53.1. Section 194B of the Act provides that the person responsible for paying to any person any income by way of winnings from any lottery or crossword puzzle or card game and other game of any sort in an amount exceeding ten thousand rupees shall, at the time of payment thereof, deduct income-tax thereon at the rates in force. 53.2. Section 194BB of the Act provides for similar provisions for deduction of tax at source for horse racing in any race course or for arranging for wagering or betting in any race course. Section 115BB of the Act provides for the rate of tax on winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature. 53.3. It was seen that deductors were deducting tax under secti....

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....before each House of Parliament, and shall be binding on the income-tax authorities and on the person responsible for deduction of income-tax on any income by way of winnings from online game. Accordingly, the Central Board of Direct Taxes has issued Circular No. 5 of 2023 dated 22nd May 2023 which provides clarity on various issues relating to deduction of tax at source on "net winnings"; (vii) provided the definition of "computer resource", "internet", "online game", "online gaming intermediary", "user", "user account" in section 194BA; (viii) amended section 115BB of the Act to exclude income from winnings from online games from the purview of the said section from the assessment year 2024-25, since section 115BBJ was introduced to tax winnings from online games from that assessment year; (ix) inserted a new section 115BBJ in the Act with regard to tax on winnings from online games to provide that where the total income of an assessee includes any income by way of winnings from any online game, the income-tax payable shall be the aggregate of- - the amount of income-tax calculated on net winnings from such online games during the previous year, computed in ....

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.... of any long-term bond or rupee denominated bonds at any time on or after 01.04.2020 but before 01.07.2023, listed only on a recognised stock exchange located in an IFSC, the concessional rate of tax on the interest income paid to a non-resident is 4%. 54.3. FA 2023 has amended section 194LC of the Act to provide that the withholding tax in respect of interest income paid to a non-resident on money borrowed by, a specified company or a business trust from a source outside India by way of issuance of any long-term bond or rupee denominated bond on or after the 1st day of July, 2023, which is listed only on a recognised stock exchange located in an International Financial Services Centre shall be at the concessional rate of 9%. Applicability: This amendment is effective from 1st July, 2023. 55. Increasing threshold limit for co-operatives to withdraw cash without TDS 55.1. Section 194N of the Act provides that a banking company or a co-operative society engaged in carrying on the business of banking or a post office, which is responsible for paying any sum to any person (referred to as the recipient) shall, at the time of payment of such sum in cash, deduct an amount equa....

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....le at the time of tax deduction. 56.3. To remove this difficulty, vide FA 2023 sub-section (1) of section 197 of the Act has been amended to provide that the sums on which tax is required to be deducted under section 194LBA of the Act shall also be eligible for certificate for deduction at lower rate. Applicability: This amendment has taken effect from 1st April, 2023. 57. Tax treaty relief at the time of TDS under section 196A of the Act 57.1. Section 196A of the Act provides for TDS on payment of certain income to a non-resident (not being a company) or to a foreign company, at the rate of 20%. The income is required to be in respect of units of a Mutual Fund specified under clause (23D) of section 10 of the Act or from the specified company referred to in the Explanation to clause (35) of section 10 of the Act. 57.2. Representations were received requesting that the benefit of tax treaty may be considered at the time of TDS so that if the treaty provides a rate lower than 20%, TDS is made at that lower rate. 57.3. In order to provide the relief requested by taxpayers, vide FA 2023, a proviso to sub-section (1) of section 196A of the Act has been inserted to pro....

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....ion 206AB would lead to the rate of deduction of tax (under section 194BA) to jump to 60% in the case of specified persons thereby causing hardship to the taxpayers. Applicability: These amendments have taken effect from 1st April, 2023. 59. Increasing rate of TCS of certain remittances 59.1. Section 206C of the Act provides for tax collection at source (TCS) on business of trading in alcoholic liquor, forest produce, scrap etc. Sub-section (1G) of the aforesaid section provides for TCS on foreign remittance through the Liberalised Remittance Scheme (LRS) and on sale of overseas tour package. 59.2. FA 2023 has, with effect from 1st July 2023, amended sub-section (1G) of section 206C of the Act to, inter-alia, (i) increase the rate of Tax Collection at Source (TCS) from 5% to 20% for remittance under LRS as well as for purchase of overseas tour program package; (ii) remove the threshold of Rs 7 lakh for triggering TCS on LRS. 59.3. These two changes did not apply when the remittance is for education and medical purpose. Prior to amendment vide FA 2023, TCS under LRS was applicable only when the remittance was being made out of India. The condition of "remittance....

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....ithout threshold) 5% till Rs 7 Lakh 20% thereafter Note: (i) TCS rate in column two shall continue to apply till 30th September, 2023. (ii) There shall be no TCS on expenditures under LRS under clause (a) of sub-section (1G) for the first Rs. 7 lakh, irrespective of purpose. 60. Relief from special provision for higher rate TCS for failure to furnish PAN by the collectee 60.1. Section 206CC of the Act provides for the higher of the following rates for tax collection at source in the case of failure to furnish PAN by the collectee: a) Twice the rate as specified in the relevant provision of the Act; or b) 5 percent. 60.2. Sub-section (1G) of section 206C of the Act was amended vide FA 2023, thereby increasing the highest rate of collection of tax at source to twenty per cent on certain foreign remittances and on sale of overseas tour packages. Since the scope of section 206CC of the Act includes the payments made under sub-section (1G) of section 206C of the Act, the rate of TCS would double to 40% under section 206CC of the Act in the case of failure to furnish PAN by the collectee, thereby causing hardship to the taxpayers. Accordingly, vide FA 202....

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....f the provisions of this Act, a refund is due to any person, the Assessing Officer or Commissioner or Principal Commissioner or Chief Commissioner or Principal Chief Commissioner, may, in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against any sum remaining payable under this Act by the person to whom the refund is due, after giving an intimation in writing to such person of the action proposed to be taken under this section. 61.4. It is also been provided that where a part of the refund has been set off under sub-section (1) or where no amount is set off, and refund becomes due to a person, then, the Assessing Officer, having regard to the fact that proceedings of assessment or reassessment are pending in such case and grant of refund is likely to adversely affect the revenue, and for reasons to be recorded in writing and with the previous approval of the Principal Commissioner or Commissioner, may withhold the refund till the date of such assessment or reassessment. 61.5. Section 241A of the Act has also been amended to make the provisions of that section inapplicable from 1st April, 2023. 61.6. Further, as the amendments ....

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....ble for amending the order or for making application is less than 60 days, such period shall be extended to 60 days. Therefore, as per the provisions of clause (iv) of sub-section (9) of section 245D, the period between 01.02.2021 till 10.08.2021 (when the order constituting IBS was issued) shall be excluded for computing the time-limit. 62.4. In this regard, grievances were received from the stakeholders regarding extension of time available to the IBS under the Act, to pass rectification/ amendment orders. As the request only related to rectification or amendment of mistake apparent from the record, the time-limit available to IBS for passing such orders was reconsidered and extended in order to enable disposal of the pendency and to avoid any further litigation. 62.5. Accordingly, clause (iv) of sub-section (9) of section 245D has been amended by the FA 2023 and substituted with a new clause to provide that where the time-limit for amending an order or for filing of rectification application under sub-section (6B) expires on or after 01.02.2021 but before 01.02.2022, such time-limit shall stand extended to 30.09.2023. Applicability: This amendment is effective retrospec....

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....ion 200A of the Act; (iv) an order under section 201 of the Act; (v) an order being an intimation under sub-section (6A) of section 206C of the Act; (vi) an order under sub-section (1) of section 206CB of the Act; (vii) an order imposing a penalty under Chapter XXI of the Act; and (viii) an order under section 154 or section 155 of the Act amending any of the orders mentioned in (i) to (vii) above: 63.4. A proviso under sub-section (1) of section 246 of the Act has also been inserted stating that an appeal cannot be filed before the Joint Commissioner (Appeals) where an order referred to under this sub-section is passed by or with the approval of an income-tax authority above the rank of Deputy Commissioner. 63.5. Sub-section (2) of the section 246 of the Act provides that where any appeal filed against an order referred to in sub-section (1) is pending before the Commissioner (Appeals), the Board or an income-tax authority so authorised by the Board in this regard, may transfer such appeal and any matter arising out of or connected with such appeal and which is so pending, to the Joint Commissioner (Appeals) who may proceed with such appeal or matter, from the....

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....atus" to mean the category under which the assessee is assessed as "individual", "Hindu undivided family" and so on. 63.11. Section 2 of the Act has been amended by inserting a definition for Joint Commissioner (Appeals) and section 116 of the Act has also been amended to make Joint Commissioner (Appeals) an income-tax authority under the Act. 63.12. Further, consequential amendments have been made in other relevant sections of the Act, rules of the Rules and relevant forms in order to ensure that functioning of the Joint Commissioner (Appeals) is aligned with that of the Commissioner (Appeals). Applicability: These amendments made by FA 2023 are effective from 1st April, 2023. 64. Rationalisation of Appeals to the Appellate Tribunal 64.1. Section 253 of the Act contains provisions relating to filing of appeals to the Appellate Tribunal. Sub-section (1) of the said section details the types of orders passed under various sections of the Act, against which an aggrieved assessee may appeal to the Appellate Tribunal. The said sub-section provides that any assessee aggrieved by any order passed by a Commissioner (Appeals) under section 154, section 250, section 270A, sec....

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.... amended so that appeal against an order passed under section 263 of the Act by Principal Chief Commissioner or Chief Commissioner or an order passed under section 154 of the Act in respect of any such order shall be made to the Appellate Tribunal. 64.5. Sub-section (4) of the section 253 of the Act allows the respondent in an appeal, against an order of Commissioner (Appeals), to file a memorandum of cross-objections before the Appellate Tribunal. However, it is pertinent to note here that appeal can be made to the Appellate Tribunal against orders of authorities other than Commissioner (Appeals) also, like Principal Commissioner or Commissioner or Principal Director or Director etc. As a result, the respondent, whether it is Revenue or the assessee, cannot file memorandum of cross-objections against an appeal before the Appellate Tribunal by virtue of the provisions of sub-section (4) of section 253 of the Act. This creates grievances as well as reduces the fair and equitable dispensation of judgement in such cases. Therefore, sub-section (4) of section 253 has been amended to enable filing of memorandum of cross-objections in all classes of cases against which appeal can be m....

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....the provisions of section 269T of the Act have also been amended and the limit of Rs. 20,000 has been increased to Rs. 2 lakh in the case of PACS and PCARDs. As a result, in a case where a deposit is paid by a PACS or a PCARD to its member or a loan is repaid to a PACS or a PCARD by its member, payment shall be made by an account payee cheque or account payee bank draft or online transfer through a bank account if the amount of such deposit or repayment is more than Rs. 2 lakh. As a result penalty shall be imposable if the amount of such repayment of loan or deposit is Rs. 2 lakh or more. Applicability: These amendments are effective from 1st April, 2023. 66. Amendments in consequence to new provisions of TDS 66.1. Section 271C of the Act has provisions for penalty for failure to deduct tax at source. Under this section, a person who has failed to deduct whole or part of tax as required under provisions of Chapter XVII-B (Tax Deduction at Source - TDS) or pay the whole or part of tax as required under section 115-O (Tax on distributed profits) or under proviso to section 194B (tax on winnings from crossword, lottery, puzzles etc.) is liable to pay penalty of sum equal to t....

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....ring, or, maintaining books of account or other document containing a record of any specified financial transaction or any reportable account as may be prescribed, under any law for the time being in force, to furnish a statement in respect of such specified financial transaction or such reportable account to the prescribed income-tax authority. Further, vide Finance (No. 2) Act, 2014, section 271FAA was inserted in the Act in Chapter XXI to provide for penalty for furnishing inaccurate statement of financial transaction or reportable account. 67.2. Self-certifications by reportable persons and the account holders are mandated under the Rule 114H of the Rules for different purposes. This includes, inter-alia, cases where new accounts are opened (to certify the country of tax residence), cases involving curing of indicia for pre-existing accounts (to certify the country of tax residence) and cases of entities to certify whether they are Passive Non-Reporting Financial Entities. While the requirement of having a valid self-certification has been specified in Rule 114H of the Rules, however, there is no penal provision for the submission of a false self-certification which in turn ....

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....es under liquidation and sub-section (6) of section 178 of the Act (the parent section) provides that this section shall not have effect when provisions of the IBC are contrary. Moreover, the liquidator is now working under the oversight of this specific law. 68.3. In view of this, section 276A of the Act was amended by providing a sunset clause on the section with effect from 01.04.2023. Hence, no fresh prosecution shall be launched under this section on or after 1st April, 2023. The earlier prosecutions will however continue. Applicability: This amendment is effective from 1st April, 2023. 69. Revision of rates of Securities Transaction Tax by amendments in Finance (No. 2) Act, 2004 69.1. Levy of Securities Transaction Tax ("STT") on transactions in specified securities was introduced vide Finance (No.2) Act, 2004. As per the provisions of the STT Act, recognised stock exchanges, mutual funds (having equity-oriented scheme) and lead merchant banker appointed by a company in respect of an initial public offer or by a business trust in respect of an initial offer are liable to collect STT on specified transactions from every purchaser or seller and pay the same to the c....

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....ther, prior to FA, 2023, under the provisions of section 2(18) of the PBPT Act, the 'High Court', for the purpose of filing appeal against the order of the Adjudicating authority, had been defined as the High Court within the jurisdiction of which either the aggrieved party ordinarily resides or carries on business or personally works for gain, or if the aggrieved party is Government then, the High Court within the jurisdiction of which the respondent, or any respondent in case of multiple respondents resides, or carries on business or works for gain. It was observed that the non-residents against whom proceedings under PBPT Act have been initiated and who does not fall in the category of appellant or respondent mentioned in the definition, do not fall under the jurisdiction of any High Court. 70.4. Hence, to enable the determination of High Court jurisdiction for the non-resident appellants or respondents, FA 2023 has amended section 2(18) of the PBPT Act to modify the definition of 'High Court' by inserting a proviso so as to provide that where the aggrieved party does not ordinarily reside or carry on business or personally work for gain in the jurisdiction of....