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News Bills
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Exemption for sovereign and pension funds broadened to allow varied infrastructure investment routes with proportionate tax relief.
Amendments expand tax exemption routes for specified SWF and PF investors by permitting Category I/II AIFs with up to fifty percent non-eligible investments and investment in InvITs, allowing investment via newly formed domestic holding companies with minimum seventy-five percent infrastructure investments, and permitting investment in NBFC-IDF/IFC entities that lend at least ninety percent to infrastructure entities; exemptions will be calculated proportionately where thresholds are not met. Loans for the purpose of making investments in India remain prohibited, day-to-day operational participation is barred while monitoring roles are permitted, and pension funds taxable abroad qualify if fully exempt under their home law. Effective 1 April 2021.
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Taxation of overseas retirement withdrawals: Central Government may prescribe year and manner of taxation to remove timing mismatch.
A new Section 89A is proposed to permit the Central Government to prescribe the year and manner in which income of a specified person from a specified account is taxed, addressing mismatches where an overseas retirement account is taxed on withdrawal abroad but on accrual in India; "specified person", "specified account" and "notified country" are defined, and the amendment is to apply prospectively from the tax year beginning 1 April 2022.
News Bills
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Minimum Alternate Tax adjustments allow recomputation of past years' book profit for APA and secondary adjustments.
Amendments to section 115JB allow a taxpayer to apply to the Assessing Officer for recomputation of past years' book profit and tax where past year income is included in current books due to an APA or secondary adjustment; section 154 applies and its four year period is reckoned from the end of the financial year in which the application is received. Similar treatment is provided for specified dividend income of foreign companies where such income is taxed below MAT under a double taxation agreement, by adjusting both the dividend income and related expense in computing book profit.
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TDS exemption on dividend payments to business trusts now excludes withholding where dividends are exempt in the trust's hands.
The second proviso to section 194 is amended to exclude payment of dividends from withholding where dividends are credited or paid to a business trust by a special purpose vehicle or to other notified persons; the amendment is made retrospective to the start of the prior financial year.
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Withholding on FII payments: deduction at the lower of statutory rate or applicable treaty rate where TRC is furnished.
Withholding on payments to FIIs is amended so that where a payee is entitled to benefits under a double taxation agreement and has furnished the prescribed tax residency certificate, tax shall be deducted at the lower of the statutory deduction rate and the rate provided in the agreement for such income; the amendment is prospective from 1 April, 2021.
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Tax audit threshold increased for eligible businesses with limited cash transactions, easing audit compliance from assessment year 2021-22.
The Finance Bill, 2021 proposes to raise the higher audit-threshold applicable to businesses that maintain limited cash transactions-specifically where aggregate cash receipts and aggregate cash payments do not exceed the prescribed five percent limits-so as to reduce compliance burden on small and medium enterprises and incentivise non-cash transactions. The amendment is prospective and will apply from 1 April 2021 for the relevant assessment year and thereafter, with existing audit requirements remaining in force where the cash-transaction conditions are not met.
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Advance tax interest exemption: dividend income (excluding deemed dividend) added to 234C exclusions when full tax paid later.
The amendment adds dividend income (excluding deemed dividend) to the list of incomes exempted from interest for shortfall in advance tax instalments, so long as the taxpayer pays the full tax in subsequent instalments; it thereby prevents interest being charged on advance tax shortfalls attributable to dividend receipts.
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Exemption threshold for receipts on behalf of educational and hospital institutions expanded, widening small trust eligibility from next assessment year.
Amendment raises the prescribed annual receipts limit that determines entitlement to the exemption under sub-clauses (iiiad) and (iiiae) of clause (23C) of section 10 for income received on behalf of universities/educational institutions and hospitals/institutions. The increased threshold applies to aggregate receipts from the specified institutions, expanding eligibility for small trusts and institutions. The amendment takes effect from 1 April 2022 and applies to the assessment year 2022-23 and subsequent assessment years.
News Bills
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Due date extensions for partner-related taxpayers and reduced filing window for belated and revised returns.
Amendments align original return due dates for spouses of partners and partners of firms with the firms' audit or reporting deadlines, shorten the filing window for belated and revised returns by three months, and allow the Board by notification to relax or modify specified defective-return conditions for classes of assessees; effective from 1st April, 2021 for assessment year 2021-22 and subsequent years.
News Bills
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Employee contribution treatment clarified: employer-payment exclusion no longer applies for determining due date and deduction entitlement.
The Finance Bill amends relevant deduction and employer-payment exclusion provisions to state explicitly that the employer-payment exclusion does not apply, and is deemed never to have applied, for determining the "due date" for employee contributions; the amendments distinguish employee contribution (the employee's own funds held in fiduciary capacity) from employer contribution to prevent unjust enrichment and to clarify deduction entitlement and compliance obligations.
News Bills
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Dispute Resolution Committee offers optional faceless settlement with penalty relief and possible prosecution immunity.
The proposed Dispute Resolution Committee under section 245MA offers an optional, faceless dispute resolution route for small and medium taxpayers where returned income and aggregate variation fall within prescribed thresholds; exclusions apply for cases originating from searches, requisitions, surveys or specified information and for taxpayers subject to detention, prosecution or conviction. The DRC may, subject to conditions, reduce or waive penalties and grant prosecution immunity. The Central Government may notify a scheme to operationalise faceless procedures, adapt Act provisions for the scheme, and impose time limited notification powers; the amendment is to take effect from 1 April 2021.
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Advance Rulings Reform: Board issues non-binding rulings with judicial appeal, replaces existing Authority and transfers pending cases
A two-member Board for Advance Rulings will replace the Authority from a notified date; Board rulings will not be binding and may be challenged by judicial appeal. Pending applications with no final order before the notified date will be transferred to the Board with all records. Chapter XIX-B provisions will be amended to substitute references to the Authority with the Board, insert Board definitions, permit a government scheme to govern Board procedures, and align procedural and appellate mechanisms accordingly.
News Bills
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Assessment procedure reform: pre notice enquiries and prior authority approval introduced, with risk flagged information driving reopens.
Proposed amendments recast assessment procedure so section 147 reassessments require information suggesting escaped income and prior specified authority approval before issuing a section 148 notice. Section 148A mandates, except in search/requisition cases, prior enquiries, an opportunity to be heard and a reasoned order on fitness to issue notice, with Board risk flagged data and third party information treated as triggering information. Time limits retain a general three year bar with limited extended exceptions, exclude periods of taxpayer response or court stays, and preserve Assessing Officer powers to address subsequently discovered issues during proceedings.
News Bills
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Faceless notice issuance: prescribed income-tax authority may issue notices under inquiry-before-assessment provision enabling centralized automated compliance.
Amendment empowers the prescribed income-tax authority, alongside the Assessing Officer, to issue notices under section 142(1)(i) to compel non-filers to submit returns; this enables centralized, automated and faceless issuance of such notices and aligns notice powers with the Government's policy to eliminate person-to-person taxpayer-department interface, effective 1 April 2021.
News Bills
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Faceless proceedings enable jurisdictionless appellate processing to reduce human interface and improve administrative efficiency.
Faceless proceedings for appellate disposal before the Income-tax Appellate Tribunal are proposed to eliminate physical interface to the extent technologically feasible, optimise resource utilisation through economies of scale and functional specialisation, and introduce an appellate system with dynamic jurisdiction. The Central Government would be empowered to notify a scheme and issue notifications adapting or disapplying provisions of the Act as necessary to implement the faceless framework, with publication in the Official Gazette and parliamentary laying requirements.
News Bills
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Discontinuance of Income-tax Settlement Commission: pending settlement cases transferred to Interim Boards with inherited powers.
Income-tax Settlement Commission is discontinued and pending settlement applications will be handled by one or more Interim Boards of Settlement composed of three senior officers; the Interim Boards inherit the Commission's powers mutatis mutandis for disposal and rectification of orders, pending applications are deemed valid where invalidity was not declared, assessees may withdraw applications within a prescribed period causing proceedings to abate with specified exclusions to limitation and use of material, and the Central Government may notify a scheme to regulate settlement of pending applications and adapt Act provisions for transitional efficiency.
News Bills
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Reduction of assessment time-limit shortens statutory window for completing income-tax assessments under faceless assessment reforms.
The Finance Bill reduces the statutory time limit for completion of income-tax assessment proceedings, further shortening the window for passing assessment orders in scrutiny cases. The amendment is justified by the operational efficiencies of the Faceless Assessment Scheme-characterised by electronic, team-based, jurisdiction-less procedures-and aims to reduce taxpayer compliance burden and enable earlier detection of revenue leakages; it takes effect from 1 April, 2021.
News Bills
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Double deduction prevention: corpus and loan-funded applications excluded unless reinvested or repaid from prior-year income.
Voluntary contributions specifically directed to form part of corpus must be invested or deposited in prescribed modes maintained separately; application from corpus and from loans or borrowings will not qualify as application for computing the mandatory application threshold, except where reinvestment to corpus or repayment of loans from previous year's income is deposited into prescribed modes, which will then be allowed as application in that previous year. No set-off or allowance of excess application from years before the previous year shall be permitted.
News Bills
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Exemption limits for ULIPs tightened, with excluded policies taxed as capital gains and included under equity-oriented fund rules.
Amendments exclude from the exemption under clause (10D) of section 10 those ULIPs issued on or after 1 February 2021 whose annual premium for any policy year (or aggregate premium across multiple ULIPs held by a person) exceeds the prescribed threshold, while excluding death proceeds. Such excluded ULIPs are classified as capital assets, gains on redemption are to be taxed as capital gains under a new section 45(1B) with rules for computation, and will be treated as equity oriented funds for section 112A and 111A purposes. STT is made applicable on maturity or partial withdrawal of such ULIPs.
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Slump sale definition expanded to include all forms of transfer, extending scope of capital gains computation.
Amendment expands the scope of the slump sale definition so that any mode of transfer included in the statutory definition of "transfer" can constitute a slump sale for capital gains computation; this codifies the judicial principle that transactions in substance amounting to a sale - including those with non monetary consideration or alternative legal forms - fall within the slump sale regime and aims to prevent structuring to defeat the provision.

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Review of Customs duty Exemptions - Review of conditional exemption rates of BCD

24 July, 2024

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

(i) The BCD exemption for the goods covered under following serial numbers of the notification are being extended upto 31st March, 2026 unless specified otherwise.

S. No.

S N of 50/17-Cus

Brief Description

1.

17

Specified Planting materials, namely, oilseeds, seeds of vegetables, tubers, etc.

2.

80A

Algal oil for manufacturing of aquatic feed

3.

90

Lactose for use in manufacture of homeopathic medicines

4.

104

Specified goods used in processing of sea-food

5.

133

Gold ores and concentrates

6.

139

Bunker Fuels namely: (i). IFO 180 CST; (ii). IFO 380 CST; (iii). VLSFO (CTH 27)

7.

150

Naphtha for manufacture of Fertilisers (scope of exemption is being reduced only to Naphtha)

8.

155

Liquefied petroleum gases (LPG) received from unit in SEZ and returned by the DTA unit to the SEZ unit

9.

164

Electrical energy supplied from SEZ unit to DTA

10.

165

Electrical energy supplied from SEZ to DTA

11.

172

Specified goods used in manufacture of silicon wafers or solar wafers, for manufacture of solar cell or module

12.

183

Medical use fission Molybdenum-99 (Mo-99) for use in manufacture of radio pharmaceuticals

13.

184

Pharmaceutical Reference Standard

14.

188

Goods for manufacture of ELISA Kits

15.

191

Maltol for manufacture of deferiprone

16.

204

Anthraquinone or 2-Ethyl Anthraquinone for use in manufacture of Hydrogen peroxide

17.

237

Specified material for manufacture of EVA (Ethylene Vinyl Acetate) sheets or backsheet, which are used in the manufacture of solar photovoltaic cells or modules (Scope of materials which can be imported is being increased)

18.

253

Specified Goods for manufacture of Brushless Direct Current (BLDC) motors

19.

257

Tags, labels, stickers, belts, buttons, hangers or printed bags, imported by bonafide exporters

20.

257A

Specified goods used in manufacture of handicraft items for export when imported by bonafide exporter

21.

257B

Specified goods used in manufacture of textile or leather garments for export when imported by bonafide exporter

22.

257C

Specified goods used in manufacture of leather or synthetic footwear or other leather products for export when imported by bonafide exporter

23.

258

Security fibre, threads, Paper based Taggant, M-feature for use in manufacture of security paper by Security Paper Mill, Hoshangabad and Bank Note Paper Mill India Pvt Ltd, Mysore.

24.

259

Raw materials for manufacture of security fibre and security thread for supply to Security Paper Mill, Hoshangabad and Bank Note Paper Mill India Pvt. Ltd, Mysore for use in manufacture of security paper

25.

260

Goods for the manufacture of specified orthopedic implants (902110)

26.

261

Raw material for manufacture of Copper-T Contraceptive

(i) Alatheon

(ii) Copper Wire

27.

265

Capacitor grades polypropylene granules for manufacture of Capacitor grade plastic

28.

269

Super absorbent polymer for manufacture of adult diapers and specified goods

29.

271

Polytetrametylene ether glycol, (PT MEG) for use in manufacture of spandex yarn

30.

276

Ethylene- propylene- non-conjugated diene rubber (EPDM) for manufacture of insulated wire and cables

31.

279

New or retreated Pneumatic tyres of rubber for use in servicing, repair of maintenance of aircrafts used for operating scheduled air transport service or scheduled air cargo service etc

32.

280

New or retreated Pneumatic tyres of rubber for use in servicing, repair or maintenance of aircraft imported or procured by Aero Club of India/ for flying training purpose/ operating non-scheduled (passenger or charter) services/ AAI for flight calibration purpose

33.

290

Wood pulp for manufacture of newsprint, paper or paperboard

34.

292

Goods imported for manufacture of paper, paper boards, newsprint

35.

293A

Newsprint and uncoated paper imported for printing of newsprint

36.

296A

Lightweight coated paper imported by actual users for printing of magazines

37.

326

Hydrophilic /Hydrophobic Non- Woven, imported for use in the manufacture of Adult Diapers

38.

329

Pile fabrics for the manufacture of toys

39.

333

Moulds, tools and dies, for the manufacture of parts of electronic components or electronic equipment

40.

334

(i) Graphite Felt or Graphite pack for growing silicon ingots (ii) Thin Steel wire used in wire saw for slicing of silicon wafers

41.

345A

Simply Sawn Diamonds

42.

364A

Spent catalyst or ash containing precious metals

43.

368

Ferrous Scrap

44.

374

Magnesium Oxide (MgO) coated cold rolled steel coils for use in manufacture of cold rolled grain oriented (CRGO) steel

45.

375

Specified items for manufacture of cold rolled grain-oriented steel (CRGO) steel

46.

378

Metal parts for manufacture of electrical insulators falling under heading 8546

47.

379

Pipes and tubes for use in manufacture of boilers

48.

380

Forged steel rings for manufacture of special bearings for use in wind operated electricity generators

49.

381

Flat copper wire for use in the manufacture of photo voltaic ribbon for manufacture of solar photovoltaic cell or modules

50.

392

Dies for drawing metal, where imported after repairs from abroad

51.

403

Parts and raw materials for offshore oil exploration

52.

404

Specified items including capital goods and raw materials for off shore oil exploration

53.

415

Parts for manufacture of catalytic convertors

54.

415A

Platinum or Palladium for manufacture of Noble Metal Compounds & Noble Metal Solutions

55.

416

Ceria zirconia compounds for use in the manufacture of washcoat for catalytic converters

56.

417

Cerium compounds for use in the manufacture of washcoat for catalytic converters

57.

418

Zeolite for use in the manufacture of washcoat for catalytic converters

58.

422

Machinery, electrical equipment for use in semiconductor wafer and LCD

59.

423

Machinery, electrical equipment for use in marking and packaging of semiconductor chips

60.

426

Specified goods for the manufacture of semiconductor devices, memory card, IC, solar cell

61.

435

Capital goods for printing industry

62.

442

Bushings made of Platinum and Rhodium alloy when imported in exchange of worn out or damaged bushings exported out of India

63.

446

Parts and components for manufacture of tunnel boring machines

64.

451

Evacuated tubes with three layers of solar selective coating for use in manufacture of solar water heater

65.

462

Ball screws for use in the manufacture of CNC Lathes

66.

463

Linear Motion Guides for use in the manufacture of CNC Lathes

67.

464

CNC Systems for use in the manufacture of CNC Lathes

68.

464A

Goods for manufacture of plastic processing machineries

69.

467

Parts and components of cash dispenser or automatic bank note dispenser

70.

468

Parts for manufacture of Micro ATM, Fingerprint reader/scanner, Iris scanner, Miniaturised POS (Scope of exemption is being limited to import of raw materials only)

71.

471

All parts for use in the manufacture of LED lights

72.

472

All inputs for use in the manufacture of LED driver or MCPCB for LED lights

73.

476

Television equipment, cameras etc for taking films, imported by a foreign film unit or television team

74.

477

Filming equipment of foreign origin if imported into India after having been exported therefrom.

75.

480

Goods imported for being tested in specified test centers

76.

489B

Goods for manufacturing of Microphones

77.

504

Parts and Components of Digital Still Image Video Cameras

78.

509

Parts, components and accessories for manufacture of Digital Video Recorder

79.

510

 Parts, components and accessories for use in manufacture of reception apparatus for television

80.

511

Parts, components and accessories for manufacture of CCTV Camera

81.

512

Specified Parts, components and for use in manufacture of Lithium-ion battery and battery pack

82.

512A

Inputs, parts or sub-parts for use in the manufacturing of Printed Circuit Board Assembly

83.

515A

Open Cell for manufacture of TV Panel

84.

516

The following goods for use in the manufacture of Liquid Crystal Display (LCD) /LED TV Panel

85.

517

Magnetrons for manufacture of domestic microwave ovens

86.

519

Raw materials or parts for use in manufacture of e-Readers

87.

523A

Parts, sub-parts, inputs or raw material for use in manufacture of Lithium-ion cells

88.

527

Lithium-ion cell use in manufacture of battery or battery pack

89.

527A

Lithium-Ion Cell for use in manufacture of battery or battery pack of cellular mobile

90.

527B

Lithium-Ion Cell manufacture of battery or battery pack of EV

91.

534

Parts of gliders or simulators of aircrafts (excluding rubber tyres and tubes of gliders)

92.

535

Raw materials for manufacture of aircraft and parts of aircraft

93.

535A

Parts of aircraft for manufacture of aircraft or for manufacture of parts of aircraft by PSU under Min of Defence

94.

536

Parts, testing equipment, tools and tool-kits for maintenance, repair, and overhauling of aircraft, components or parts of aircrafts

95.

537

All goods of Heading 8802 (except 88026000-spacecraft)

96.

538

Components or parts, including engines, of aircraft of heading 8802

97.

539

(a) Satellites and payloads; (b) Ground equipment brought for testing of (a)

98.

539A

Scientific and technical instruments etc for launch vehicles and satellites

99.

540

Specified goods imported by scheduled air transporter

100.

542

Specified goods imported by Aero Club, Flying Training Institutes

101.

543

Specified goods imported by non-scheduled air transporter

102.

544

Parts (other than rubber tubes), of aircraft of heading 8802

103.

546

Parts (other than rubber tubes), of aircraft of heading 8802

104.

548

Barges or pontoons imported along with ships

105.

551

Cruise ships, Excursion ships

106.

553

Fishing vessels, Tugs and Pusher crafts, light vessels excluding vessels and floating structure imported for break up

107.

555

Vessels like warships, lifeboats excluding vessels and floating structure imported for break up

108.

567

Stainless steel tube and wire, for manufacture of Coronary stents /artificial valve

109.

569

Parts required for manufacture of Ostomy products

110.

570

Medical and surgical instruments, apparatus and appliances including spare parts and accessories thereof

111.

575

Specified Hospital Equipment for use in specified hospitals

112.

578A

Raw materials, for the manufacture of Cochlear Implants

113.

580

X-Ray Baggage Inspection Systems and parts thereof

114.

581

Portable X-ray machine / system

115.

583

Parts and cases of braille watches, for the manufacture of Braille watches

116.

591

Parts of electronic toys

117.

593

Parts of video games for the manufacture of video games

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

(ii) The BCD exemption for the goods covered under following serial numbers of the notification no 50/2017-Customs is being extended upto 31st March 2029.

S. No.

S. No. of 50/2017Cus

Brief Description

1.

212A

Medicines/drugs/vaccines supplied free by United  Nations International Children's Emergency Fund (UNICEF), Red Cross etc

2.

213

Drugs and materials

3.

428

Specified goods imported by accredited press cameraman

4.

429

Specified goods, imported by accredited journalist

5.

549

Capital goods, raw materials and spares for repairs of ocean-going vessels

6.

550

Spare parts and consumables for repairs of ocean going vessels registered in India.

7.

577

Lifesaving medical equipment for personal use

8.

607

Life Saving drugs like Keytruda etc

9.

607A

Lifesaving drugs/medicines for personal use

10.

611

Archaeological artefacts for exhibition in a museum

11.

612

Specified raw material for sports goods

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