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Business reorganisation obligations require successors to file modified returns and compel Assessing Officers to align assessments with reorganisation orders.
Section 170A requires successor companies affected by a business reorganisation to furnish a modified return in prescribed form and manner limited to the reorganisation order, enabling modification of predecessor returns. The Assessing Officer must, on receipt, modify completed assessments or assess/reassess pending proceedings in accordance with the reorganisation order and the modified return, with all other Act provisions applying and tax charged at the rate applicable to the relevant assessment year.
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Search and seizure powers expanded to allow Board approved external experts and registered valuers to assist with valuation and data forensics.
Amendments permit authorised officers during searches to requisition Board approved persons or entities, including digital forensic experts and registered valuers, to assist with search, valuation and data analysis, and require such valuers to submit prescribed fair market value reports to the authorised officer or Assessing Officer within the stipulated timeline; the law also defines execution of the last authorisation to link assessment timelines to the close of search proceedings.
News Bills
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Appeals to Appellate Tribunal broadened to include penalties by Commissioner (Appeals) and revision orders by senior commissioners.
The amendment expressly permits appeals to the Appellate Tribunal against penalty orders imposed by Commissioner (Appeals) under recent penalty provisions, and permits appeals against revision orders by senior commissioners and related rectifications. It also broadens the right to file a memorandum of cross-objections so respondents may file cross-objections in all cases that may be appealed to the Appellate Tribunal, correcting the previous limitation to appeals originating only from Commissioner (Appeals).
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Timeframe for transfer pricing document production shortened; limited extension remains to manage TP proceeding timelines.
The amendment reduces the period to furnish transfer pricing information or documents to ten days from the date of a notice, with an available extension on application by the taxpayer not to exceed an additional thirty days; the Assessing Officer or the Commissioner (Appeals) may require such production in proceedings concerning international transactions or specified domestic transactions. The change is aimed at streamlining timelines for examination of submitted material and takes effect from 1st April, 2023.
News Bills
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Joint Commissioner (Appeals) authority created to hear specified first appeals with transfer, rehearing and scheme-based procedural powers.
Introduction of a Joint Commissioner (Appeals) as a first appellate authority for specified orders of Assessing Officers below Joint Commissioner rank, vested with powers similar to Commissioner (Appeals). The proposal lists appealable orders (assessment, reassessment, withholding/collection intimations, penalty and rectification amendments), permits transfers of pending appeals between Commissioner (Appeals) and Joint Commissioner (Appeals) with rehearing rights, allows the Government to notify a Scheme to streamline procedures and remove direct interface technologically, and empowers the Board to exclude cases or classes; consequential definitional amendments align the new office.
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Extension of time for settlement procedures to allow interim boards more time to dispose rectification applications.
The Finance Act, 2021 abolished the Settlement Commission retrospectively from 01.02.2021 and authorized Interim Boards for Settlement to handle pending applications; clause (iv) of sub section (9) of section 245D excluded the period from 01.02.2021 until constitution of the IBS from time limit computation and assured a minimum remaining period, and the Finance Bill, 2023 proposes substituting that clause to extend specified expiring time limits to 30.09.2023 with retrospective effect from 01.02.2021 to allow IBS additional time for disposing rectification and amendment applications.
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Cost of acquisition deemed nil for certain intangible assets, altering capital gains computation and taxability.
Amendment treats the cost of acquisition and cost of improvement of capital assets that are intangible assets or other rights for which no consideration was paid as Nil for computing capital gains, clarifying that assets not covered by existing enumerated provisions shall have no cost basis, and thereby resolving judicial uncertainty about taxability of gains on such transfers. The amendment applies prospectively from the Bill's stated effective date and to subsequent assessment years.
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Prevention of double deduction: interest claimed under house property or chapter VIA excluded from cost of acquisition for capital gains.
The Finance Bill proposes a proviso to section 48 that the cost of acquisition or cost of improvement shall exclude any interest amount claimed as a deduction under section 24 or under Chapter VIA, to prevent double deduction when computing capital gains.
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Capital gains computation for joint development agreements clarified to include consideration received by any mode, aligning with TDS rules.
Amendment clarifies that for capital gains under section 45(5A) on transfers under joint development agreements, the full value of consideration equals the stamp duty value of the assessee's share increased by any consideration received in cash, by cheque or draft, or by any other mode, aligning the computation with the TDS treatment under section 194-IC and addressing taxpayer misinterpretation.
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Taxation of high-premium life insurance policies: exempt on death, otherwise taxable under other sources with premium deduction available.
Policies other than unit linked insurance policies issued on or after 1 April 2023 will lose exemption under clause (10D) if premium payable in any previous year during the policy term exceeds the prescribed threshold; death receipts remain exempt. For multiple policies issued on or after that date, exemption applies only where the aggregate premium does not exceed that threshold in any year. Non-exempt sums (including bonuses) will be taxable under the head "Income from Other Sources" with computation rules and a deduction for premium allowed only if not earlier claimed.
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Inventory valuation can be directed to a cost accountant, with mandated report, government-paid expenses, and hearing rights preserved.
Tax authorities may direct an assessee to obtain inventory valuation by a cost accountant nominated by the senior commissioner; the assessee must furnish a prescribed signed valuation report. Valuation expenses and incidental costs, including the cost accountant's remuneration, will be determined by the senior commissioner under prescribed guidelines and paid by the Central Government. Except for assessments under section 144, the assessee must be given an opportunity to be heard on material derived from such valuation. Consequentially, the valuation period is excluded from limitation computations and rules may prescribe the report form and particulars.
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Taxation of Market Linked Debentures reclassified as short-term capital gains taxed at applicable rates under new provision.
The proposal inserts a new provision treating gains on transfer, redemption or maturity of Market Linked Debentures as short-term capital gains taxable at applicable rates by treating the full consideration received, reduced by cost of acquisition and transfer-related expenditure, as capital gains from a short-term capital asset; it also defines Market Linked Debentures as debt-principal securities with returns linked to market returns or so classified by the market regulator and makes the change prospective.
News Bills
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Limit on rollover benefit under sections 54 and 54F restricts excessive deductions for high-value residential purchases.
The Finance Bill proposes a deemed cost cap so that where the cost of a new residential asset exceeds ten crore rupees, the cost for computing the deduction under the rollover relief provisions will be treated as ten crore rupees, limiting the maximum deduction. A proviso confines the Capital Gains Account Scheme deposit provision to capital gains or net consideration up to that cap. The amendments are prospective, effective 1 April 2024 and applicable to the assessment year 2024 25 and thereafter.
News Bills
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TCS increase on foreign remittances: higher withholding expands coverage and raises compliance burden for remitters.
Increase in the rate of TCS is proposed by amending sub section (1G) of section 206C to raise withholding on certain foreign remittances and sales of overseas tour packages; education and medical remittances retain prior treatment under specified conditions, while tour packages and other remittances become subject to higher rate without threshold, effective from the stated date in the Finance Bill.
News Bills
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TDS on online game winnings restructured: withholding on net account winnings and withdrawals under new targeted provisions.
Amendments require TDS on winnings to be applied to amounts or aggregates exceeding the threshold in a financial year; section 194B is expanded to include gambling and excludes online games from 1 July 2023. A new section 194BA mandates TDS on net winnings in user accounts at year-end and on withdrawals, with prescribed computation and payer obligations where winnings are in kind. Administrative guidelines may be issued to resolve implementation issues. Definitions for computer resource, internet, online game, online gaming intermediary, user and user account are prescribed. Section 115BB is amended to exclude online-game winnings and a new section 115BBJ establishes a separate tax computation for net winnings from online games integrated into overall tax liability.
News Bills
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Presumptive taxation restrictions: bar on set off of carried forward losses and unabsorbed depreciation when presumptive profits are declared.
The Bill proposes that where an assessee declares profits under the presumptive taxation scheme for specified non resident activities, no set off of unabsorbed depreciation or brought forward business loss shall be allowed for that previous year, notwithstanding the general set off and carry forward provisions; the amendment is prospective and will apply from the notified effective date.
News Bills
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TDS exemption removal on interest requires withholding for payments on listed dematerialized debentures to resident holders.
The Finance Bill proposes deletion of the proviso clause that exempted TDS on interest paid to resident holders of listed dematerialized debentures, thereby requiring tax deduction at source on interest payments to such resident holders; the amendment addresses under-reporting of interest income and takes effect from 1 April, 2023.
News Bills
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Taxation of business trust distributions: non-characterised payouts to unit holders treated as taxable income from other sources.
Proposed amendments tax sums received by unit holders from business trusts that are not interest, dividend or rental receipts and not chargeable under the pass-through provisions by treating them as income from other sources. Where sums represent redemption of units, the receipt is reduced by the cost of acquisition to the extent of the amount received. Amendments also exclude such sums from the trust pass-through subsections and expand the definition of income to include them, with prospective application.
News Bills
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Tax exemption for notified news agencies withdrawn, ending clause-based relief and effective from the assessment year starting April 2024.
The finance bill withdraws the tax exemption available to notified news agencies under clause (22B) of section 10 by inserting a proviso excluding any income of such agencies for the previous year relevant to the assessment year beginning on or after 1 April 2024; the amendment takes effect from 1 April 2024 and applies to assessment year 2024-25 and subsequent years.
News Bills
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Deeming provision for gifts extended to not ordinarily residents, bringing certain inbound gifts within the Indian tax net.
Clause (viii) of sub section (1) of section 9 is proposed to be amended to extend the deeming rule so that sums received without consideration by a not ordinarily resident from a person resident in India are treated as income deemed to accrue or arise in India; the change is intended as an anti abuse measure to capture gifts not presently within the scope of the existing deeming provision and will apply prospectively to specified assessment years.

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CUSTOMS DUTY EXEMPTIONS / CONCESSIONS BEING ALLOWED TO LAPSE

24 July, 2024

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Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

Certain BCD exemptions entries under S No. 50/2017-Customs dated 30.6.2017 and other notifications are being allowed to lapse with effect from 30.9.2024.

(a) The following entries of notification no. 50/2017-Customs dated 30.6.2017 are being allowed to lapse with effect from 30.9.2024:

S. No.

S N of 50/2017 Customs

Description

1.

478

Wireless apparatus, accessories and parts as specified in List 29 imported by a licensed amateur radio operator

2.

353

Foreign currency coins when imported into India by a Scheduled Bank

3.

387

 Zinc metal recovered by toll smelting or toll processing from zinc concentrates exported from India for such processes

4.

441

Spinnerettes made inter alia of Gold, Platinum and Rhodium or any one or more of these metals, when imported in exchange of worn-out or damaged spinnerettes exported out of India

5.

238

Organic/inorganic Coating material for manufacture of electrical steel

6.

254

Catalyst for manufacture of cast components of Wind Operated Electricity Generator

7.

255

Resin for manufacture of cast components of Wind Operated Electricity Generator

8.

277A

Calendared plastic sheet for manufacturing of Smart Card under chapter heading 8523

9.

339

Concessional rate on import of Toughened glass with low iron content and transmissivity of minimum 91% and above, for use in manufacture of solar thermal collectors or heaters

10.

421

Specified goods required for basic telephone service, cellular mobile telephone service, internet service or closed users’ group 64 KBPS domestic data network via INSAT satellite system service and parts, for manufacture of the goods

11.

479

Mono or Bi polar Membrane electrolysers and parts thereof including secondary brine purification components, jumper switches, filtering elements for hydrogen filters for caustic soda or potash units; Membrane and parts thereof or other parts for caustic soda or potash units;

12.

475

Specified goods including scramblers, descramblers, encoders, decoders, jammers, network firewalls, network sniffers, scanners and monitoring systems, probes for data monitoring and SMS/MMS monitoring systems

13.

482

Newspaper page transmission and reception facsimile system or equipment; and Telephoto transmission and reception system or equipment

14.

495

Batteries for electrically operated vehicles, including two and three wheeled electric motor vehicles.

15.

497

Active Energy Controller (AEC) for use in manufacture of Renewable Power System (RPS) inverters

16.

579

Survey (DGPS) instruments, 3D modeling software for ore body simulation cum mine planning and exploration (geophysics and geochemistry) equipment required for surveying and prospecting of minerals

17.

419

Aluminium Oxide for manufacture of washcoat of catalytic converter

18.

420

Clay 2 powder for use in ceramic substrate for catalytic convertor

19.

340

Solar tempered glass or solar tempered (anti-reflective coated) glass for use in manufacture of solar cells/panels/modules

20.

565

Specified goods for use in the manufacture of Flexible Medical Video Endoscope [heading 9018]

21.

566

 Specific input goods for manufacture of syringes, needles, catheters and cannulae

22.

568

Parts and components for manufacture of blood pressure monitors and blood glucose monitoring system (Glucometers)

Note: Description of entries is indicative. Notification may be referred to for complete description.

(b) The following notifications are being allowed to lapse with effect from 30.9.2024:

S. No

Notification No.

Description

1.

97/99-Customs dated 21 July 1999

Exempts BCD and additional duty under Sections 3(1), 3(3) and 3(5) on standard gold bars imported by a RBI authorised bank

2.

30/2004-Customs dated 28 January 2004

Provides full exemption from BCD to second-hand computers/accessories and peripherals received as donation by schools, charitable institutions.

3.

102/2007-Customs dated 14 September 2017

Provides exemption from Special Additional Duty (SAD) levied vide section 3(5) of CTA on to all goods imported for subsequent sale when IGST, CGST, SGST or UTGST paid by importer.

4.

45/2005-Customs dated 16 May 2005

Provides exemption from Special Additional Duty levied under Section 3(5) of CTA on goods cleared from SEZ to DTA.

5.

151/94-Customs dated 13 July 1994

Provides exemption to imports of duty-paid fuel and lubricating oil on aircrafts taken during the outward flight; goods imports by United Arab Airlines; aircraft engines, spares imported by Indian Airlines and Air India International. Re-import entries will operate from re-import notification 45/2017-Cus

6.

26-Customs dated 19th February 1962

Provides exemption from import duty under the Sea Customs Act on catering cabin equipment, food and drink on re-importation by aircrafts of the Indian Airlines Corporation from foreign flights

Note: Description of entries is indicative. Notification may be referred to for complete description.


Full Text:

Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

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Acts Income Tax