TaxTMI 
TaxTMI 
Notes on Clauses
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....r alia, include any payment by a company on purchase of its own shares from a shareholder in accordance with the provisions of section 68 of the Companies Act, 2013. These amendments will take effect from 1st October, 2024. Clause (42A) of the said section provides that "short-term capital asset" means a capital asset held by an assessee for not more than thirty-six months immediately preceding the date of its transfer, provided that in the case of a security (other than a unit) listed in a recognized stock exchange in India or a unit of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963) or a unit of an equity oriented fund or a zero coupon bond or in case of a share of a company (not being a share listed in a recognised stock exchange) or a unit of a Mutual Fund specified under clause (23D) of section 10, which is transferred during the period beginning on the 1st day of April, 2014 and ending on the 10th day of July, 2014, the period of holding for the purposes of this clause would be twelve months. The clause also provides that in the case of a share of a company, not being a share listed in a recognised stock exchange in India, or an ....
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....il, 2030. The Explanation proposed to the said clause provides the meaning of the expressions "specified company", "holding company" and "subsidiary company". These amendments will take effect from 1st April, 2025 and will, accordingly, apply in relation to the assessment year 2025-2026 and subsequent years. Clause (23C) of said section provides exemption to the income of certain entities. Sub-clauses (iv), (v), (vi) and (via) of clause (23C) of the said section provide exemption to the income received by any person on behalf of any fund or trust or institution or university or other educational institutions or hospital or other institutions which may be approved or provisionally approved by the Principal Commissioner or Commissioner. First proviso to clause (23C), inter alia, provides that exemption to the fund or trust or institution or university or other educational institution or hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), under the respective sub-clauses, shall not be available to it unless such fund or trust or institution or university or other educational institution or hospit....
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....undertaking, shall not be included in computing the total income of a previous year. It is also proposed to amend item (II) of sub-clause (A) of clause (b) of the Explanation to the said clause (23FB) to expand the scope of venture capital fund to include the venture capital fund referred to in sub-regulation (2) of regulation 18 of the International Financial Services Centres Authority (Fund Management) Regulations, 2022 made under the International Financial Services Centres Authority Act, 2019. It is also proposed to insert sub-item (iv) in the said item (II) to provide for any other condition as may be provided by rules. These amendments will take effect from 1st April, 2025 and will, accordingly, apply in relation to the assessment year 2025-2026 and subsequent years. Clause (34) of the said section provides exemption to any income arising to an assessee, being a shareholder, on account of buy back of shares by the company as referred to in section 115QA. It is also proposed to insert a new proviso to clause (34) of the said section so as to provide that this clause shall not apply with respect to any buy back of shares by a company on or after the 1st day of Oc....
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....or the date on which this proviso has come into force, whichever is later, or, the 1st day of April of the previous year relevant to the assessment year for which the exemption is claimed under clause (46B) of section 10. Second proviso to sub-section (7) of the said section provides that the trust or institution, whose registration has become inoperative under the first proviso, may apply to get its registration operative under section 12AA or section 12AB subject to the condition that on doing so, the approval under clause (23C) of section 10 or notification under clause (23EC) or clause (46) or clause (46A) of section 10, as the case may be, to such trust or institution shall cease to have any effect from the date on which the said registration becomes operative and thereafter, it shall not be entitled to exemption under the respective clauses. It is proposed to amend the said second proviso so as to provide that the trust or institution, whose registration has become inoperative under the first proviso, may apply to get its registration operative under section 12AA or section 12AB subject to the condition that on doing so, the approval under clause (23C) of section 10 or ....
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.... filed beyond the time allowed in sub-clauses (i) to (vi), the Principal Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in filing the application, condone such delay and such application shall be deemed to have been filed within time. These amendments will take effect from 1st October, 2024. Clause 7 of the Bill seeks to amend section 12AB of the Income-tax Act relating to procedure for fresh registration. Sub-section (3) of the said section provides that the order under clause (a), sub-clause (ii) of clause (b) and clause (c), of sub-section (1) shall be passed, in such form and manner as may be provided by rules, before expiry of the period of three months, six months and one month, respectively, calculated from the end of the month in which the application was received. It is proposed to amend sub-section (3) of the said section so as to provide that the order under sub-clause (ii) of clause (b) of sub-section (1) shall be passed, in such form and manner as may be provided by rules, before expiry of the period of six months from the end of the quarter in which the application was received. This amendment will take effe....
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....hichever is less, shall be made before computing the income under the head "Salaries". It is proposed to insert a new proviso in the said clause to provide that in a case where income-tax is computed under clause (ii) of sub-section (1A) of section 115BAC, the provisions of clause (ia) of section 16 shall have effect as if for the words "fifty thousand rupees", the words "seventy-five thousand rupees" had been substituted. This amendment will take effect from 1st April, 2025, and will accordingly apply to assessment year 2025-2026 and subsequent years. Clause 11 of the Bill seeks to amend section 28 of the Income-tax Act relating to profits and gains of business or profession. The said section provides various types of income that shall be chargeable to income-tax under the head "Profits and gains of business or profession". It is proposed to amend the said section and insert a new Explanation so as to provide that any income from letting out of a residential house or a part of the house by the owner, shall not be chargeable under the head "Profits and gains of business or profession" and shall be chargeable to tax under the head "Income from house property". This....
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....ril, 2025 and will, accordingly, apply in relation to the assessment year 2025-2026 and subsequent years. Clause 14 of the Bill seeks to amend section 40 of the Income-tax Act relating to amounts not deductible. Sub-clause (v) of clause (b) of the said section provides for disallowance of remuneration paid to any working partner above certain threshold limits. It is proposed to amend item (a) of sub-clause (v) of clause (b) of the said section 40 so as to increase the limit of remuneration to working partners, which is allowable as deduction such that on the first Rs 6,00,000 of the book-profit or in case of a loss, the limit of remuneration is increased to Rs 3,00,000 or at the rate of 90 per cent. of the book-profit, whichever is more. This amendment will take effect from 1st April, 2025 and will, accordingly, apply in relation to the assessment year 2025-2026 and subsequent years. Clause 15 of the Bill seeks to amend section 43D of the Income-tax Act relating to special provision in case of income of public financial institutions, public companies, etc. The said section provides that the income by way of interest credited in relation to certain categories of ba....
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....e aggregate of the amounts specified in sub-section (2) shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession". Sub-section (2) of the said section further proposes to provide that the amounts referred to in sub-section (1) shall be the following, namely:- (i) the amount paid or payable to the assessee or to any person on his behalf on account of the carriage of passengers; and (ii) the amount received or deemed to be received by or on behalf of the assessee on account of the carriage of passengers. These amendments will take effect from 1st April, 2025 and will, accordingly, apply in relation to the assessment year 2025-2026 and subsequent years. Clause 18 of the Bill seeks to amend section 46A of the Income-tax Act relating to capital gains on purchase by company of its own shares or other specified securities. The said section provides that where a shareholder or a holder of other specified securities receives any consideration from any company for purchase of its own shares or other specified securities held by such shareholder or holder of other specified securiti....
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....n substituted. It is proposed to amend the said proviso so as to limit its applicability to cases where long-term capital gain arises from the transfer which takes place before the 23rd day of July, 2024, of a long-term capital asset, other than capital gain arising to a non-resident from the transfer of shares in, or debentures of, an Indian company referred to in the first proviso. This amendment will take effect retrospectively from 23rd July, 2024. Clause 21 of the Bill seeks to amend section 50AA of the Income-tax Act relating to Special provision for computation of capital gains in case of Market Linked Debenture. It is proposed to substitute the opening portion of the said section so as to provide that notwithstanding anything contained in clause (42A) of section 2 or section 48, where the capital asset-- (a) is a unit of a Specified Mutual Fund acquired on or after the 1st day of April, 2023 or a Market Linked Debenture; or (b) is an unlisted bond or an unlisted debenture which is transferred or redeemed or matures on or after the 23rd day of July, 2024; the full value of consideration received or accruing as a result of the transfer or rede....
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.... the same proportion as Cost Inflation Index for the financial year 2017-2018 bears to the Cost Inflation Index for the first year in which the asset was held by the assessee or for the year beginning on the first day of April, 2001, whichever is later. It is proposed to insert item (AA) in the said sub-clause to provide that in a case where the capital asset is an equity share in a company which is not listed on a recognised stock exchange as on the 31st day of January, 2018, or which became the property of the assessee in consideration of share which is not listed on such exchange as on the 31st day of January, 2018 by way of transaction not regarded as transfer under section 47, as the case may be, but listed on such exchange subsequent to the date of transfer, where such transfer is in respect of sale of unlisted equity shares under an offer for sale to the public included in an initial public offer, "fair market value" would mean an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for the financial year 2017-2018 bears to the Cost Inflation Index for the first year in which the asset was held by the assessee or for the year beginning....
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....ction of a sum equal to thirty-three and one-third per cent. of such income or fifteen thousand rupees, whichever is less, shall be made before computing the income chargeable under the head "Income from other sources". It is proposed to insert a new proviso in the said clause so as to provide that in a case where income-tax is computed under clause (ii) of sub-section (1A) of section 115BAC of the Act, the provisions of clause (iia) of section 57 shall have effect as if for the words "fifteen thousand rupees", the words "twenty-five thousand rupees" had been substituted. This amendment will take effect from 1st April, 2025, and will accordingly apply to assessment year 2025-2026 and subsequent years. Clause 25 of the Bill seeks to amend section 80CCD of the Income-tax Act relating to deduction in respect of contribution to pension scheme of Central Government. Sub-section (2) of the said section provides that any contribution by the Central Government or the State Government or any other employer to the account of an assessee referred to in sub-section (1), shall be allowed as a deduction to the assessee in the computation of their total income, if it does not exceed f....
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....ement of the previous year relevant to the assessment year from which the said approval is sought; or commenced, at any time after the commencement of such activities shall make an application for grant of approval. Item (B) of sub-clause (b) of clause (ii) of second proviso to sub-section (5) of the said section, inter alia, provides that the Principal Commissioner or Commissioner, on receipt of an application made under the first proviso, shall where the application is made under clause (ii) or clause (iii) or sub-clause (B) of clause (iv) of the first proviso, after satisfying himself about the genuineness of activities and the fulfilment of all the conditions if he is not so satisfied, pass an order in writing, in this manner specified therein after affording it a reasonable opportunity of being heard. It is also proposed to amend item (B) of sub-clause (b) of clause (ii) of second proviso to the said sub-section (5) to provide that if the Principal Commissioner or Commissioner is not so satisfied, shall pass an order in writing, rejecting such application and cancelling its approval, if any, after affording it a reasonable opportunity of being heard. Third proviso to ....
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....sessment year 2025-2026 and subsequent years. Clause 28 of the Bill seeks to amend section 94B of the Income-tax Act relating to limitation on interest deduction in certain cases. Sub-section (3) of the said section provides that nothing contained in sub-section (1) shall apply to an Indian company or a permanent establishment of a foreign company which is engaged in the business of banking or insurance or such class of non-banking financial companies as may be notified by the Central Government in the Official Gazette in this behalf. It is proposed to amend the said sub-section so as to include reference of a Finance Company located in any International Financial Services Centre. It is further proposed to amend sub-section (5) of the said section to provide the meaning of expressions "Finance Company" and "International Financial Services Centre" These amendments will take effect from 1st April, 2025 and will, accordingly, apply in relation to the assessment year 2025-2026 and subsequent years. Clause 29 of the Bill seeks to amend section 111A of the Income-tax Act relating to tax on short-term capital gains in certain cases. The said section, inter alia, prov....
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.... the maximum amount which is not chargeable to income-tax and the tax on the balance of such short-term capital gains shall be computed at the rate as applicable in clause (i). These amendments will take effect retrospectively from 23rd July, 2024. Clause 30 of the Bill seeks to amend section 112 of the Income-tax Act relating to tax on long-term capital gains. The said section provides that where the total income of an assessee includes any income, arising from the transfer of a long-term capital asset, which is chargeable under the head "Capital gains", the tax payable by the assessee on the total income shall be the aggregate of,- (a) in the case of an individual or a Hindu undivided family, being a resident,- (i) the amount of income-tax payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been his total income; and (ii) the amount of income-tax calculated on such long-term capital gains at the rate of twenty per cent.: Provided that where the total income as reduced by such long-term capital gains is below the maximum amount which is not chargeable to income-tax, then, su....
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....income of an assessee includes any income, arising from the transfer of a long-term capital asset, which is chargeable under the head "Capital gains", the tax payable by the assessee on the total income shall be the aggregate of,- (a) in the case of an individual or a Hindu undivided family, being a resident,- (i) the amount of income-tax payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been his total income; and (ii) the amount of income-tax calculated on such long-term capital gains,-- (A) at the rate of twenty per cent. for any transfer which takes place before the 23rd day of July, 2024; and (B) at the rate of twelve and one-half per cent. for any transfer which takes place on or after the 23rd day of July, 2024: Provided that where the total income as reduced by such long-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such long-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the bal....
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....f any income arising from the transfer of a long-term capital asset which takes place before the 23rd day of July, 2024, being listed securities (other than a unit) or zero coupon bond, exceeds ten per cent of the amount of capital gains before giving effect to the provisions of the second proviso to section 48, then, such excess shall be ignored for the purpose of computing the tax payable by the assessee: This amendment will take effect retrospectively from 23rd July, 2024. Clause 31 of the Bill seeks to amend section 112A of the Income-tax Act relating to tax on long-term capital gains in certain cases. The sub-section (2) of said section, inter alia, provide that the tax payable by the assessee on the total income referred to in sub-section (1) of the section shall be the aggregate of- (i) the amount of income-tax calculated on such long-term capital gains exceeding one lakh rupees at the rate of ten per cent.; and (ii) the amount of income-tax payable on the total income as reduced by the amount of long-term capital gains referred to in sub-section (1) as if the total income so reduced were the total income of the assessee. It is proposed to subst....
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.... is proposed to substitute clause (ii) of said sub-section so as to provide that the amount of income-tax calculated on the income by way of long-term capital gains referred to in clause (b), if any, included in the total income, shall be at the rate of ten per cent. for any transfer which takes place before the 23rd day of July, 2024, and at the rate of twelve and one-half per cent. for any transfer which takes place on or after the 23rd day of July, 2024. This amendment will take effect retrospectively from 23rd July, 2024. Clause 34 of the Bill seeks to amend section 115AC of the Income-tax Act relating to tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer. The sub-section (1) of said section provides that where the total income of an assessee, being a non-resident, includes- (a) income by way of interest on bonds of an Indian company issued in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf, or on bonds of a public sector company sold by the Government, and purchased by him in foreign currency; or (b....
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.... or capital gains arising from their transfer. The sub-section (1) of said section provides that where the total income of an assessee, being an individual, who is a resident and an employee of an Indian company engaged in specified knowledge based industry or service, or an employee of its subsidiary engaged in specified knowledge based industry or service (hereafter in this section referred to as the resident employee), includes- (a) income by way of dividends on Global Depository Receipts of an Indian company engaged in specified knowledge based industry or service, issued in accordance with such Employees' Stock Option Scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf and purchased by him in foreign currency; or (b) income by way of long-term capital gains arising from the transfer of Global Depository Receipts referred to in clause (a), the income-tax payable shall be the aggregate of- (i) the amount of income-tax calculated on the income by way of dividends in respect of Global Depository Receipts referred to in clause (a), if any, included in the total income, at the rate of ten per cent....
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....l be at the rate of-- (a) fifteen per cent. for any transfer which takes place before the 23rd day of July, 2024; and (b) twenty per cent. for any transfer which takes place on or after the 23rd day of July, 2024; It is further proposed to substitute proviso to clause (iii) of longline of said sub-section so as to provide that in case of income arising from the transfer of a long-term capital asset referred to in section 112A which exceeds one lakh and twenty-five thousand rupees, income-tax shall be calculated at the rate of-- (a) ten per cent. where transfer of such asset takes place before the 23rd day of July, 2024; and (b) twelve and one-half per. cent where transfer of such asset takes place on or after the 23rd day of July, 2024; It is proposed to further provide that the limit of one lakh twenty-five thousand rupees mentioned shall apply on aggregate of the long-term capital gains referred to in clause (a) and (b). These amendments will take effect retrospectively from 23rd July, 2024. Clause 37 of the Bill seeks to amend section 115BAC of the Income-tax Act relating to tax on income of individuals and Hindu undivided family. ....
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....ncome-tax calculated on the income in respect of investment income referred to in clause (a), if any, included in the total income, at the rate of twenty per cent.; (ii) the amount of income-tax calculated on the income by way of long-term capital gains referred to in clause (b), if any, included in the total income, at the rate of ten per cent.; and (iii) the amount of income-tax with which he would have been chargeable had his total income been reduced by the amount of income referred to in clauses (a) and (b). It is proposed to substitute clause (ii) of longline of said section so as to provide that the amount of income-tax calculated on the income by way of long-term capital gains referred to in clause (b), if any, included in the total income at the rate of ten per cent. for any transfer which takes place before the 23rd day of July, 2024 and at the rate of twelve and one-half per cent. for any transfer which takes place on or after the 23rd day of July, 2024. This amendment will take effect retrospectively from 23rd July, 2024. Clause 39 of the Bill seeks to amend section 115QA of the Income-tax Act relating to tax on distributed income to sharehold....
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....a person other than a company or a firm whose total income exceeds the maximum amount which is not chargeable to income-tax, shall, furnish a return of his income. It is proposed to insert a new sub-section (9A) in the said section to provide that return of income furnished in pursuance of an order under clause (b) of sub-section (2) of section 119, the provisions of section 139 shall apply. This amendment will take effect from 1st October, 2024. Clause 42 of the Bill seeks to amend section 139AA of the Income-tax Act relating to quoting of Aadhaar number. The said section provides that every person who is eligible to obtain Aadhaar number shall, on or after the 1st day of July, 2017, quote Aadhaar number- (i) in the application form for allotment of permanent account number; (ii) in the return of income. The proviso to the said sub-section provides that where the person does not possess the Aadhaar Number, the Enrolment ID of Aadhaar application form issued to him at the time of enrolment shall be quoted in the application for permanent account number or in the return of income furnished by him. It is proposed to amend the said sub-section (1) s....
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....hed in the such form and verified in such manner and setting forth such other particulars as may be provided by rules, and the provisions of this Act shall apply accordingly as if such return were a return required to be furnished under section 139. It is also proposed to provide that where the Assessing Officer has received information under the scheme notified under section 135A, no notice shall be issued under section 148 without prior approval of the specified authority. It also provides that any return of income required to be furnished by an assessee under this section and furnished beyond the period specified in the notice under sub-section (1), shall not be deemed to be a return under section 139. It also clarifies the information with the Assessing Officer about the income chargeable to tax which has escaped assessment. The existing provisions of the section 148A, inter alia, provides certain procedures to be followed by Assessing Officer before issuing notice under section 148. It is proposed to substitute the said section so as to provide that where the Assessing Officer has information which suggests that income chargeable to tax has escaped assessment in....
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....ey is conducted under section 133A [other than under sub-section (2A)], on or after the 1st day of April, 2021 but before the 1st day of September, 2024, the provisions of sections 147 to 151 shall apply as they stood immediately before the commencement of the Finance (No. 2) Act, 2024. It is further proposed to insert a new sub-section (4) in the said section so as to provide that where a notice under section 148 has been issued or an order under clause (d) of section 148A has been passed, prior to the 1st day of September, 2024, the assessment, reassessment or recomputation in such case shall be governed as per the provisions of sections 147 to 151, as they stood immediately before the commencement of the Finance (No. 2) Act, 2024. These amendments will take effect from 1st September, 2024. Clause 48 of the Bill seeks to amend section 153 of the Income-tax Act relating to time-limit for completion of assessment, reassessment and recomputation. Sub-section (1) of the said section provides that assessment under section 143 or section 144 shall be completed within twelve months from the end of the assessment year in which the income was first assessable. It is propose....
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.... exclusion provided in the said Explanation. These amendments will take effect from 1st October, 2024. Clause 49 of the Bill seeks to substitute Chapter XIV-B of the Income-tax Act relating to special procedure for assessment of search cases. Proposed section 158B provides definition for expressions "block period" and "undisclosed income". Proposed section 158BA relates to Assessment of total income as a result of search. Sub-section (1) of said section provides that notwithstanding anything contained in any other provisions of the Act, where on or after the 1st day of September, 2024, a search is initiated under section 132, or books of account, other documents or any assets are requisitioned under section 132A, in the case of any person, then, the Assessing Officer shall proceed to assess or reassess the total income of the block period in accordance with the provisions of the said Chapter. Sub-section (2) of said section provides that the assessment or reassessment or recomputation under the provisions of this Act, if any, pertaining to any assessment year falling in the block period, pending on the date of initiation of the search under section 132, or making ....
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....mes. Sub-section (2) of said section provides that the undisclosed income falling within the block period, forming part of the total income referred to in sub-section (1) of section 158BA, shall be computed in accordance with the provisions of the Act, on the basis of evidence found as a result of search or survey or requisition of books of account or other documents and such other materials or information as are either available with the Assessing Officer or come to his notice during the course of proceedings under this Chapter. Sub-section (3) of said section provides that where any evidence found as a result of search or requisition of books of account or other documents and such other materials or information as are either available with the Assessing Officer or come to his notice during the course of proceedings under this Chapter, or determined on the basis of entries relating to such income or transactions as recorded in books of account and other documents maintained in the normal course on or before the date of the search or requisition, relates to any international transaction or specified domestic transaction referred to in section 92CA, pertaining to the period be....
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....nt under this Chapter but may be carried forward for being set off in the previous year subsequent to the assessment year in which the block period ends, for the remaining period, taking into account the block period and such assessment year, and in accordance with the provisions of the Act. Proposed section 158BC relates to procedure for block assessment. Sub-section (1) of said section provides that where any search has been initiated under section 132 or books of account, other documents or assets are requisitioned under section 132A, in the case of any person, then,- (a) the Assessing Officer shall, in respect of search initiated, or books of account or other documents or any assets requisitioned, on or after the 1st day of September, 2024, issue a notice to such person, requiring him to furnish within such period, not exceeding a period of sixty days, as may be specified in the notice, a return in the form and verified in the manner, as may be prescribed, setting forth his total income, including the undisclosed income, for the block period. Provisos to clause (a) deal with certain situations under section 139 and section 148 and deal with revised returns. ....
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....equisition under section 132A, was executed or made, as the case may be. Proviso to the said sub-section provide for extension of period by twelve months under certain circumstances. Sub-section (2) of said section provides that in computing the period of limitation under sub-section (1), the period (not exceeding one hundred and eighty days) commencing from the date on which a search is initiated under section 132 or a requisition is made under section 132A and ending on the date on which the books of account, or other documents or money or bullion or jewellery or other valuable article or thing seized under section 132 or requisitioned under section 132A, as the case may be, are handed over to the Assessing Officer having jurisdiction over the assessee, in whose case such search is initiated under section 132 or such requisition is made under section 132A, as the case may be, shall be excluded. Proviso to the said sub-section provide for extension of period by twelve months under certain circumstances. Sub-section (3) of said section provides that the period of limitation for completion of assessment or reassessment for the block period in the case of the other person....
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....riod which shall excluded in computing the period of limitation under the said section. Sub-section (5) of said section provides that an income-tax authority on making an order under sub-section (2) imposing a penalty, unless he is himself an Assessing Officer, shall forthwith send a copy of such order to the Assessing Officer. Proposed section 158BG relates to authority competent to make assessment of block period. The said section provides that the order of assessment for the block period shall be passed by an Assessing Officer not below the rank of a Deputy Commissioner or an Assistant Commissioner or a Deputy Director or an Assistant Director, as the case may be. Proviso to said section provides that no such order shall be passed without the previous approval of the Additional Commissioner or the Additional Director or the Joint Commissioner or the Joint Director, as the case may be, in respect of search initiated under section 132, or books of account, other documents or any assets requisitioned under section 132A, on or after the 1st day of September, 2024. Proposed section 158BH relates to application of other provisions of the Act. The said section provide....
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....se (iv) to also provide that the interest payable on Floating Rate Savings Bonds, 2020 (Taxable) or any other security of the Central Government or the State Government as may be notified by the Central Government shall also be liable for deduction of tax, if the interest payable on such securities exceeds ten thousand rupees during the financial year. This amendment will take effect from 1st October, 2024. Clause 52 of the Bill seeks to amend section 194 of the Income-tax Act relating to dividends. The said section, inter alia, provides that the principal officer of an Indian company or a company which has made the prescribed arrangements for the declaration and payment of dividends (including dividends on preference shares) within India, shall, before making any payment by any mode in respect of any dividend or before making any distribution or payment to a shareholder, who is resident in India, of any dividend within the meaning of sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause (d) or sub-clause (e) of clause (22) of section 2, deduct from the amount of such dividend, income-tax at the rate of ten per cent. It is proposed to amend the said section s....
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....sh or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of five per cent. It is proposed to amend the said section so as to reduce the said rate of tax deduction from five per cent. to two per cent. This amendment will take effect from 1st October, 2024. Clause 57 of the Bill seeks to amend section 194H of the Income-tax Act relating to commission or brokerage. The said section, inter alia, provides that any person, not being an individual or a Hindu undivided family, who is responsible for paying, on or after the 1st day of June, 2001, to a resident, any income by way of commission (not being insurance commission referred to in section 194D) or brokerage, shall, at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of five per cent. It is proposed to amend the said section so as to reduce the said rate of tax deduction from five per cent. to two per cent. This amendment will take effect from 1st October, 2024. Clause 58....
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....rovisions of section 194C, section 194H or section 194J) responsible for paying any sum to any resident for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract, by way of commission (not being insurance commission referred to in section 194D) or brokerage or by way of fees for professional services during the financial year, shall, at the time of credit of such sum or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to five per cent. of such sum as income-tax thereon. It is proposed to amend the said sub-section so as to reduce the said rate of tax deduction from five per cent. to two per cent. This amendment will take effect from 1st October, 2024. Clause 61 of the Bill seeks to amend section 194-O of the Income-tax Act relating to payment of certain sums by e-commerce operator to e-commerce participant. Sub-section (1) of the said section provides that notwithstanding anything to the contrary contained in any of the provisions of Part B of this Chapter, where sale of goods or provision of services of an e-commerce participan....
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.... the person responsible for making the payment shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of,- (a) ten per cent.in respect of income from units referred to in clause (i) of sub- section (1) of section 115AB; (b) ten per cent.in respect of long-term capital gains arising from transfer of units referred to in section 115AB, which takes place before the 23rd day of July, 2024; (c) twelve and one-half per cent in respect of long-term capital gains arising from transfer of units referred to in section 115AB, which takes place on or after the 23rd day of July, 2024. This amendment will take effect retrospectively from 23rd July, 2024. Clause 64 of the Bill seeks to amend section 196C of the Income-tax Act relating to income from foreign currency bonds or shares of Indian company. The said section provides that where any income by way of interest or dividends in respect of bonds or Global Depository Receipts referred to in section 115AC or by way of long-term capital....
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....m such certificate as may be appropriate. It is proposed to amend the said sub-section so as to include the provisions relating to deduction of tax at source on payment of certain sum for purchase of goods under section 194Q also within its scope. This amendment will take effect from 1st October, 2024. Clause 66 of the Bill seeks to amend section 198 of the Income-tax Act relating to tax deducted is income received. The said section provides that tax deducted as per provisions of Chapter XVII-B shall, for the purpose of computing the income of an assessee, be deemed to be income received. It is proposed to amend the said section so as to provide that all sums deducted in accordance with the foregoing provisions of the said Chapter and income tax paid outside India by way of deduction and in respect of which an assessee is allowed a credit against the tax payable under the said Act, shall for the purpose of computing the income of the assessee, be deemed to be income received. This amendment will take effect from 1st April, 2025. Clause 67 of the Bill seeks to amend section 200 of the Income-tax Act relating to duty of person deducting tax. Sub-section (3) of th....
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.... of the financial year in which the correction statement is delivered, whichever is later. This amendment will take effect from 1st April, 2025. Clause 70 of the Bill seeks to amend section 206C of the Income-tax Act relating to profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc. It is proposed to substitute sub-section (1F) of the said section to extend its scope to, inter alia, provide that every person, being a seller, who receives any amount as consideration for sale of any other goods of value exceeding ten lakh rupees, as may be notified by the Central Government shall, at the time of receipt of such amount, collect from the buyer, a sum equal to one per cent. of the sale consideration as income-tax. This amendment will take effect from 1st January, 2025. Sub-section (3B) of the said section requires that the person collecting tax may also deliver to the prescribed authority, a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under the proviso to sub-section (3) in such form and verified in such manner, as may be specified by the aut....
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....him a certificate for collection of tax at such lower rate than the relevant rate specified in sub-section (1) or sub-section (1C). It is also proposed to amend sub-section (9) of the said section so as to include sub-section (1H) of that section under its purview. It is also proposed to insert a new sub-section (12) in the said section so as to provide that no collection of tax shall be made or collection of tax shall be made at such lower rate in respect of specified transaction, from such person or class of persons, including institution, association or body or class of institutions, associations or bodies, as the Central Government may, by notification in the Official Gazette specify in this behalf. These amendments will take effect from 1st October, 2024. Clause 71 of the Bill seeks to amend section 230 of the Income-tax Act relating to tax clearance certificate. Sub-section (1A) of the said section, inter alia, provides that no person who is domiciled in India, shall leave India, unless he obtains a certificate from the income-tax authorities stating that he has no liabilities under the Income-tax Act, or the Wealth-tax Act, 1957, or the Gift-tax Act, 1958, or ....
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....nter alia, requires the Assessing Officer to form an opinion for withholding the refund that the grant of refund is likely to adversely affect the revenue. It is proposed to amend the said sub-section to omit the said requirement. Further, sub-section (2) of the said section provides that the refund can be withheld up to the date of assessment or reassessment. It is proposed to amend the said sub-section to provide that the refund can be withheld up to sixty days from the date on which such assessment or reassessment is made. These amendments will take effect from 1st October, 2024. Clause 74 of the Bill seeks to amend section 245Q of the Income-tax Act relating to application for advance ruling. Sub-section (4) of the said section provides that where an application for advance ruling is made before the notified date, and in respect of which no order under sub-section (2) of section 245R has been passed or no advance ruling under sub-section (4) of section 245R has been pronounced before such date, such application pending on the file of the Authority shall be transferred to the Board for Advance Rulings. It is proposed to insert a proviso to the said sub-secti....
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....hall have the power to set aside such assessment made under section 144, and refer the case back to the Assessing Officer for making a fresh assessment. This amendment will take effect from 1st October, 2024. Clause 78 of the Bill seeks to amend section 253 of the Income-tax Act relating to appeals to the Appellate Tribunal. Sub-section (1) of the said section provides that any assessee aggrieved by any of the orders passed under various provision specified therein may appeal to the Appellate Tribunal against the said orders. It is proposed to amend clause (a) of the said section 253 to provide the reference of section 158BFA therein which provides for levy of interest and penalty in certain cases. Sub-section (3) of the said section provides that every appeals to the Appellate Tribunal is to be filed within sixty days of the date on which the order sought to be appealed against is communicated to the assessee or to the Principal Commissioner or Commissioner, as the case may be. It is proposed to amend the said sub-section to provide that the appeal before the Appellate Tribunal may be filed within two months from the end of the month in which the order sought to ....
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....ure to deliver or cause to be delivered statements referred to in sub-section (3) of section 200 (relating to tax deducted at source) or proviso to sub-section (3) of section 206C (relating to tax collected at source) or furnishing of incorrect information in the statement. Sub-section (3) of the said section prescribed time limit of one year for delivering or causing to be delivered the statements. It is proposed to amend the sub-section (3) so as to reduce the time limit from one year to one month. This amendment will take effect from 1st April, 2025. Clause 82 of the Bill seeks to amend section 273B of the Income-tax Act relating to penalty not to be imposed in certain cases. The said section, inter alia, provides that notwithstanding anything contained in the provisions mentioned therein, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure. It is proposed to amend the said section to give reference of section 271AA also therein so as to allow non-imposition of penalty on any person or assessee for failure under secti....
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....ause (a) of subsection (1) of section 158BC therein. This amendment will take effect from 1st September, 2024. Clause 86 of the Bill seeks to amend section 285 of the Income-tax Act relating to submission of statement by a non-resident having liaison office. The said section provides that every person, being a non-resident having a liaison office in India set up in accordance with the guidelines issued by the Reserve Bank of India under the Foreign Exchange Management Act, 1999, shall, in respect of its activities in a financial year, prepare and deliver or cause to be delivered to the Assessing Officer having jurisdiction, within sixty days from the end of such financial year, a statement in such form and containing such particulars as may be provided by rules. It is proposed to amend the said section to provide that the said statement shall be delivered to the Assessing Officer within the period and containing such particulars as may be provided by rules. This amendment will take effect from 1st April, 2025. Clause 87 of the Bill seeks to amend the First Schedule to the Income-tax Act relating to insurance business. Rule 2 of the said Schedule, states that th....
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....sions of this Scheme. This Chapter will take effect from such date as the Central Government may notify. Customs Clause 100 of the Bill seeks to amend section 28DA of the Customs Act, so as to enable the acceptance of different types of proof of origin provided in trade agreements to align the said provision with new trade agreements which provide for self-certification. Clause 101 of the Bill seeks to insert a proviso in sub-section (1) of section 65 of the Customs Act, to empower the Central Government to specify certain manufacturing processes and other operations in relation to a class of goods that shall not be permitted in a warehouse. Clause 102 of the Bill seeks to amend section 143AA of the Customs Act by inserting the words "or any other persons," after the words "importers or exporters" so as to facilitate trade and encourage compliances. Clause 103 of the Bill seeks to insert the words 'or any other persons' in clause (m) of sub-section (2) of section 157 enabling the Board to make regulation on the measures and separate procedure or documentation for such persons, apart from the existing class or category specified therein. Clause 104 of the Bill s....
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....of such excisable goods on or after 1st July, 2017. Central Goods and Services Tax Clause 110 of the Bill seeks to amend sub-section (1) of section 9 of the Central Goods and Services Tax Act, so as to not to levy central tax on un-denatured extra neutral alcohol or rectified spirit used for manufacture of alcoholic liquor for human consumption. Clause 111 of the Bill seeks to make consequential amendments in sub-section (5) of section 10 of the Central Goods and Services Tax Act, so as to incorporate a reference to the proposed new section 74A. Clause 112 of the Bill seeks to insert a new section 11A in the Central Goods and Services Tax Act, so as to empower the Government to regularise non-levy or short levy of central tax where it is satisfied that such non-levy or short levy was a result of general practice. Clause 113 of the Bill seeks to amend sub-section (3) of section 13 of the Central Goods and Services Tax Act, so as to specify the time of supply of services in cases where the invoice is required to be issued by the recipient of services in reverse charge supplies. Clause 114 of the Bill seeks to insert a new sub-section (5) in section 16 of the Central....
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....rse charge mechanism supplies by rules. It also proposes to insert an Explanation in sub-section (3) of the said section so as to specify that a supplier registered solely for the purposes of tax deduction at source under section 51 of the said Act shall not be considered as a registered person for the purpose of clause (f) of sub-section (3) of section 31 of the said Act. Clause 119 of the Bill seeks to make consequential amendment in sub-section (6) of section 35 of the Central Goods and Services Tax Act, so as to incorporate a reference to the proposed new section 74A. Clause 120 of the Bill seeks to substitute sub-section (3) of section 39 of the Central Goods and Services Tax Act, so as to mandate the electronic furnishing of return for each month by the registered person required to deduct tax at source, irrespective of whether any deduction has been made in the said month or not. It also empowers the Government to prescribe by rules, the form, manner and the time within which such return shall be filed. Clause 121 of the Bill seeks to make consequential amendments in sub-section (8) of section 49 of the Central Goods and Services Tax Act, so as to incorporate ....
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....ction 73 of the Central Goods and Services Tax Act, so as to restrict the applicability of the said section for determination of tax pertaining to the period upto Financial Year 2023-24. It also proposes to amend the marginal heading of the said section accordingly. Clause 133 of the Bill seeks to insert a new sub-section (12) in section 74 of the Central Goods and Services Tax Act, so as to restrict the applicability of the said section for determination of tax pertaining to the period upto Financial Year 2023-24. It also proposes to amend the marginal heading of the said section accordingly. Clause 134 of the Bill seeks to insert a new section 74A in the Central Goods and Services Tax Act, so as to provide for determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason pertaining to the Financial Year 2024-25 onwards. It also provides for the same limitation period for issuing demand notices and orders in respect of demands from the Financial Year 2024-25 onwards, irrespective of whether the charges of fraud, wilful misstatement, or suppression of facts are invoked or not, while keeping a higher....
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....e the Appellate Tribunal to admit appeals filed by the department within three months after the expiry of the specified time limit of six months. Further, it seeks to amend sub-section (8) of the said section to reduce the maximum amount of pre-deposit for filing appeals before the Appellate Tribunal from the existing twenty percent to ten percent of the tax in dispute and also reduce the maximum amount payable as pre-deposit from rupees fifty crores to rupees twenty crores in central tax. Clause 140 of the Bill seeks to amend sub-section (1B) of section 122 of the Central Goods and Services Tax Act, so as to restrict the applicability of the said sub-section to electronic commerce operators, who are required to collect tax at source under section 52 of the said Act. The said amendment is proposed to be made effective from the 1st day of October, 2023 when the said sub-section had come into force. Clause 141 of the Bill seeks to make consequential amendments in section 127 of the Central Goods and Services Tax Act, so as to incorporate a reference to the proposed new section 74A. Clause 142 of the Bill seeks to insert a new section 128A in the Central Goods and Servi....
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....of the Bill seeks to provide that no refund shall be made of all the tax paid or the input tax credit reversed, which would not have been so paid, or not reversed had the said section 114 been in force at all material times. Integrated Goods and Services Tax Clause 147 of the Bill seeks to amend sub-section (1) of section 5 of the Integrated Goods and Services Tax Act, so as to not levy integrated tax on extra neutral alcohol or rectified spirit used for manufacture of alcoholic liquor for human consumption. Clause 148 of the Bill seeks to insert a new section 6A in the Integrated Goods and Services Tax Act, so as to empower the Government to regularise non-levy or short levy of integrated tax where it is satisfied that such non-levy or short levy was a result of general practice. Clause 149 of the Bill seeks to amend sub-section (4) of section 16 of the Integrated Goods and Services Tax Act, 2017, so as to empower the Government to notify the class of persons who may make zero rated supplies of goods or services or both or the class of goods or services which may be supplied on zero rated basis, and in respect of which refund of integrated tax can be claimed under sect....
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....ion (1) for the benamidar or the beneficial owner to file their explanations or submissions. Sub-section (3) and sub-section (4) of the said section provide for a time limit of ninety days from the last day of the month in which notice under sub-section (1) is issued for the Initiating Officer to provisionally attach the property or to pass an order for continuing the provisional attachment or revoking the provisional attachment or deciding not to attach the property, as the case may be. It is further proposed to amend the said sub-sections to increase the said time limit from ninety days to four months from the last day of the month in which notice under sub-section (1) is issued. Sub-section (5) of the said section allows for a time period of fifteen days from the date of attachment order to the Initiating Officer to draw up a statement of the case and refer it to the Adjudicating Authority. It is also proposed to amend the said sub-section so as to increase the said time limit to one month from the last day of the month in which the order under sub-clause (i) of clause (a), or under sub-clause (i) of clause (b), of sub-section (4) of the said section, has been passed....
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....the securities transaction tax on sale of a futures in securities is 0.0125 per cent. of the price at which "futures" are traded. It is proposed to amend entries (a) and (c) in column (3), in serial number (4) of the Table to the said section to increase the said rates of securities transaction tax on sale of an option in securities to 0.1 per cent. of the option premium, and on sale of a futures in securities to 0.02 per cent. of the price at which such "futures" are traded. This amendment will take effect from 1st October, 2024. Clause 156 of the Bill seeks to amend the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Section 42 of the said Act relating to penalty for failure to furnish return in relation to foreign income and asset. The said Act provides that an assessee being a resident and ordinarily resident who has failed to furnish the return of income when such assessee has held foreign assets as specified. Failure to furnish the return in relation to foreign income and asset, may attract a penalty of an amount of ten lakh rupees. Proviso to the said section makes an exemption in respect of an asset, being one or more bank ac....