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Extension of TDS proviso: deductor relief for payments to non residents when the payee files a return and pays tax.
The law is amended to extend the first proviso to section 201 to cover payments to non residents so that where a non resident payee files a return, discloses the payment, pays tax and furnishes a certificate, the deductor will not be treated as an assessee in default; interest will accrue only until the payee's return filing date. Additionally, clause (a) of section 40 is amended to deem tax as deducted and paid on the date the payee files its return, preventing disallowance of such payments.
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Advance Pricing Agreement: Assessing officer limited to modifying total income under APA when taxpayer files a modified return.
The amendment specifies that when a taxpayer files a modified return under the APA framework after a completed assessment or reassessment, the Assessing Officer shall pass an order modifying only the total income of the relevant assessment year as determined in that completed assessment or reassessment, having regard to and in accordance with the APA.
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Secondary adjustment rules updated: option to pay a one-time additional tax instead of repatriating excess transfer pricing amounts.
Section 92CE requires secondary adjustment where a primary transfer-pricing adjustment arises from specified mechanisms. The amendment makes the monetary threshold and earlier-year condition alternative tests; mandates interest calculation on excess funds; limits application to agreements signed after a specified date without refunds for prior taxes; allows repatriation from non-resident associated enterprises; and offers an option to pay a one-time additional income-tax (with surcharge) in lieu of repatriation, which is final, non-creditable, non-deductible, and relieves the secondary adjustment requirement from payment date.
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Concessional short-term capital gains tax extended to certain equity-oriented fund of funds, enhancing disinvestment incentives.
The proposal amends section 111A to extend the concessional rate of short-term capital gains tax to transfers of units of specified equity-oriented fund of funds set up for CPSE disinvestment, bringing short-term tax treatment into alignment with the existing concessional long-term capital gains regime under section 112A; the amendment applies prospectively to assessment years commencing after the stated effective date.
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Pass-through of AIF losses: business losses retained at fund; certain non-business losses deemed to eligible unit holders and carried forward.
Amendment to section 115UB provides that AIF business losses remain at the fund and are carried forward under Chapter VI and not passed to unit holders; non-business losses tied to units not held by a unit holder for at least twelve months are ignored for pass-through; non-business losses accumulated at the fund as on 31 March 2019 are deemed to be the losses of unit holders who held units on that date and may be carried forward and set off by them under Chapter VI, and those deemed losses will not be available to the fund.
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Relief under section 89 to be included in tax computation, making amended computation provisions effective retrospectively for affected assessment years.
Proposed amendments require that tax liability be computed after allowing the relief under section 89, so that existing computation and interest provisions explicitly accommodate credit for this relief; the amendments operate retrospectively and apply to earlier assessment years to address hardship for eligible taxpayers.
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TDS on life insurance income: withholding will target the income component to align taxable reporting and reconciliation.
The amendment requires withholding tax to be deducted on the income component of non-exempt life insurance payouts rather than on the gross payout, to facilitate automatic matching of deductor TDS returns with recipients' tax returns because the payer can ascertain the premium paid by the policyholder, and specifies a commencement date for the change.
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Accounting year definition clarified to follow ultimate parent's year for alternate reporting entities, with retrospective effect.
For an alternate reporting entity resident in India whose ultimate parent is not resident in India, the reporting accounting year for Country-by-Country Reporting shall be the accounting year applicable to that ultimate parent entity rather than the Indian ARE's own previous year; this clarificatory amendment is retrospective to 1 April 2017 and applies to assessment year 2017-18 and thereafter.
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Transfer pricing documentation expanded: constituent entities must maintain and furnish group information even without transactions.
The amendment mandates that a constituent entity of an international group must keep and maintain prescribed group-level information and documents and file the required form even if the constituent entity has undertaken no international transaction. It further requires the constituent entity to furnish the prescribed information to the designated authority, with the amendment effective from 1 April 2020 for the relevant assessment year.
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Tax treatment of excess consideration on share issues: conditional exemptions; non compliance converts excess into taxable deemed income.
The measure makes conditional exemptions from tax on excess consideration for share issues subject to specified compliance conditions and provides that any failure to comply will result in the excess consideration over face value being treated as deemed income of the company, chargeable to income tax in the previous year in which the non compliance occurred.
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Statutory reference correction in tax law: interest on compensation aligned with amended valuation provision, applied retrospectively.
An amendment will correct the statutory reference in section 56 of the Income tax Act to cite section 145B(1) instead of section 145A(b), ensuring that interest on compensation or enhanced compensation is chargeable to tax under the revised provisions introduced by the Finance Act, 2018. The correction is retrospective to the start of the applicable fiscal period and applies to the relevant assessment years.
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Penalty computation for under-reported income clarified for returns filed during reassessment, applied retrospectively to relevant assessment years.
Amendments prescribe the method to compute the quantum of penalty where a taxpayer under-reports income and furnishes a return for the first time during reassessment proceedings; they address the existing absence of such a computation mechanism and apply retrospectively to cover specified assessment years.
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Prosecution threshold for late tax returns broadened to include self-assessment tax and tax collected at source.
Determination of tax liability under section 276CC will include pre-paid taxes, specifically tax collected at source and self-assessment tax paid before the expiry of the assessment year, when deciding whether the tax payable falls below the prosecution threshold. The amendment also increases the monetary threshold applicable for prosecution and applies to the relevant subsequent assessment years.
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Tax recovery under international agreements expanded to allow enforcement based on residency when property details are unavailable.
Amendments permit recovery of tax under agreements with foreign countries where property details are unavailable by allowing enforcement when the target person is a resident in India, and reciprocally where an assessee in default is a resident in a foreign country despite lack of property details, thereby enabling treaty-based recovery through residency-based enforcement.
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Refund claims must be filed as tax returns, simplifying refunds and extending limitation for sale of attached property.
Claims for refund under Chapter XIX must now be made by furnishing a return under the statutory return-filing provisions, replacing the prior prescribed claim form and verification procedure, effective 1 September 2019. The limitation for sale of immovable property attached for recovery of tax is extended from three to seven years from the end of the financial year in which the demand becomes final, and the Board may further extend that period by three years for reasons recorded in writing; this amendment is also effective 1 September 2019.
News Bills
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Residence-based taxation clarified: expanded assessee definition and reassessment provisions to capture undisclosed foreign income and assets.
Amendments expand the definition of assessee to include residents in the relevant previous year and certain non-residents or not-ordinarily-residents who were resident either in the year the income relates to or in the year an undisclosed foreign asset was acquired, with acquisition year determined without applying a carry-forward provision; they also add "re-assess" and "reassessment" terminology and make reassessment procedure from the income-tax framework applicable with modifications, while clarifying that the appellate authority may both increase and decrease penalties.
News Bills
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Post-deadline payment relief: notified declarants may pay outstanding tax with monthly interest and possible refunds after review.
Amendments permit the Central Government to notify classes of declarants who may make outstanding tax, surcharge and penalty payments after the due date by a notified date, with interest at one per cent per month or part-month from the day after the due date until payment. The Government may also notify classes of persons entitled to refunds of amounts paid in excess under the Scheme; the refund provision is made retrospective to 1 June 2016.
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Securities transaction tax change: levy on exercised options now measured by the strike settlement price difference, affecting option sales.
The taxable value for sale of an option in securities where the option is exercised is redefined to be the difference between the strike price and the settlement price, replacing the previous measure of the settlement price for STT calculations; this legislative amendment is enacted by Clause 193 of the Finance (No.2) Bill, 2019 and takes effect from 1st September, 2019.
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Benami transaction enforcement: amendments streamline initiation, attachment timing, evidence admissibility and penalties.
Amendments clarify that Initiating Officer need not obtain prior Approving Authority approval once notice under section 24(1) is issued; fix that the 90 day periods for provisional attachment and passing of orders run from the end of the month of notice and exclude court stays; introduce a penalty for failure to comply with summonses or furnish information; permit admissibility of certified authority records as evidence; and replace prior sanction by the Board with sanction by the competent authority.
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Tax exemption extension for SUUTI preserves income-tax immunity retrospectively, extending the concession for an additional two-year period.
The Finance Bill (Clause 186) proposes to extend SUUTI's income-tax and related tax exemption for an additional two-year period, maintaining its immunity in relation to income, profits, gains or amounts from the specified undertaking, and to give the amendment retrospective effect from the start of the relevant fiscal year.

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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

Topics

Acts Income Tax