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Roll-back provisions removed from section 12A(2), eliminating retrospective exemption and reassessment protection after later registration.
The Finance Bill proposes to omit the second, third and fourth provisos to section 12A(2), which previously permitted retrospective application of sections 11 and 12 and barred reassessment under section 147 for certain prior years upon later registration; these provisos are deemed redundant after 2020 amendments requiring provisional registration before commencing activities, and the omission takes effect from 1st April, 2023.
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The Finance Bill restricts treatment of donations from one eligible trust or institution to another by providing that amounts credited or paid to another eligible fund, trust or institution or to a trust registered under the registration provision will be treated as application for charitable or religious purposes only to the extent specified in newly inserted explanatory clauses to the income exemption and income application provisions; the measure aims to prevent layered accumulation through multi stage donations and preserves the non corpus requirement for such transfers.
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Corpus and loan repayment rules limited: deposits or repayments qualify only if returned within a prescribed period and conditions met.
Reinvestment into corpus or repayment of loans previously applied for charitable purposes will not be allowed as a fresh application if the original application was claimed before 01.04.2021, to prevent double deduction. Requalification is permitted only if repayment or reinvestment occurs within a limited period after application and the original application complied with statutory conditions (including prohibitions on corpus transfers, TDS and payment-mode limits, prohibition on benefit to disallowed persons, and India-location rules). Amendments add provisos to clause (23C) of section 10 and to section 11; they take effect from 1 April 2023.
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Tax deduction on benefits and perquisites clarified to cover cash or kind and to trigger withholding obligations.
Amendments clarify that the value of any benefit or perquisite arising from business or profession is chargeable and that withholding under section 194R applies whether the benefit or perquisite is provided wholly in cash, wholly in kind, or partly in cash and partly in kind. The section 28 change addresses past judicial interpretation excluding cash benefits and is effective from 1st April, 2024, while the Explanation to section 194R is stated to take effect from 1st April, 2023.
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NBFC categorisation change: tax rules now specify deposit-taking and systemically important non-deposit-taking NBFCs for interest treatment.
The proposal replaces the earlier statutory phrase referring to notified classes of non-banking financial companies with explicit reference to deposit-taking non-banking financial companies and systemically important non-deposit-taking non-banking financial companies, thereby specifying which NBFC categories are subject to the payment-basis interest deduction rule and the special interest income recognition rule. The amendment is prospective and will take effect from 1st April, 2024, applying to the assessment year 2024-2025 and subsequent years.
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Time limit for export proceeds remittance ties deduction to receipt in convertible foreign exchange or RBI approved account.
Amendments tie SEZ unit deduction eligibility to filing the return of income by the due date and to receipt in India of export proceeds in convertible foreign exchange within six months from the end of the previous year (or within an extended period allowed by the competent authority). Proceeds credited to an RBI approved separate overseas bank account will be deemed received in India. Competent authority means the Reserve Bank of India or an authority regulating foreign exchange. Assessing officers may amend assessments when export earnings are realized after the permitted period.
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Valuation of employee accommodation: uniform Rules based method to compute perquisite value and classify concessional housing.
The proposal consolidates valuation of employer provided residential accommodation by vesting the Rules with power to prescribe a uniform method for computing the value of rent free and concessional accommodation perquisites, treats accommodation as concessional when prescribed value exceeds rent payable by the employee, deletes several existing Explanations, and applies prospectively to assessments after implementation.
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Inclusion of non-resident investors in tax on share premium to curb premium-based tax avoidance schemes.
The Finance Bill proposes removing the residency limitation in the tax on excess consideration for issue of shares so that consideration received from non-resident investors will also be chargeable where aggregate consideration exceeds the fair market value computed under the existing FMV formula for unquoted equity shares; the amendment is effective from the first day of April following enactment and applies to the corresponding assessment year and subsequent years.
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Interest computation on updated returns clarified: interest calculated on assessed tax reduced by claimed advance tax credit, retrospective.
The amendment specifies that interest under the general interest provision shall be computed on the assessed tax reduced by the amount of advance tax credit claimed in the earlier return, if any; this clarification applies to interest computation for updated returns and is made retrospective to the commencement of the updated return regime.
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Specified person exclusion: amendment exempts those not required to file returns from higher TDS/TCS consequences, effective April.
The definition of specified person for higher TDS/TCS is amended to exclude any person who is not required to furnish a return for the relevant assessment year and who is notified by the Central Government in the Official Gazette, thereby relieving persons not required to file from the special higher withholding regime.
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TDS credit facilitation lets taxpayers apply to amend prior assessments to claim later-deducted TDS as credit.
A provision enables an assessee who reported income in an earlier return to apply to the Assessing Officer within two years from the end of the financial year in which TDS was later deducted, for amendment of the earlier assessment or intimation to allow credit of that TDS in the relevant assessment year; rectification rules apply so far as practicable with the limitation period reckoned from the end of the financial year when TDS was deducted, and the same TDS cannot be credited in any other year.
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TDS on accumulated provident fund payments: non PAN payees taxed at the standard non PAN rate under section 206AA, not maximum.
The amendment omits the second proviso to Section 192A so that where a payee fails to furnish PAN in respect of an accumulated balance payment under the Employees' Provident Fund Scheme, tax will be deducted at the non PAN rate prescribed under section 206AA rather than at the maximum marginal rate; the exemption for payments below the monetary threshold remains unaffected and the change is effective from 1 April 2023.
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Tax treaty relief: lower TDS on specified non-resident fund income where residency certificate is furnished under treaty.
Amendment provides that TDS on payments to eligible non-residents for specified mutual fund units or specified company distributions shall be at the lower of the statutory rate and the rate under the applicable tax treaty, where the payee furnishes the required tax residency certificate; the change is effective from 1 April 2023.
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Interest deduction limitation: proposed carve-out to exclude specified NBFCs from restrictions on interest deductibility under the Act.
The Finance Bill proposes to amend the exclusion from the interest deductibility restriction so that nothing in sub section (1) shall apply to: (i) companies engaged in banking or insurance; or (ii) such class of non banking financial companies as may be notified by the Central Government, with "non banking financial company" adopting the Act's established definition and the amendment effective from 1 April 2024.
News Bills
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TDS compliance: failing to ensure tax on in kind benefits, VDAs and online winnings invites penalty and prosecution.
Amendments add references to the first provisos of Section 194R and Section 194S and to subsection (2) of proposed Section 194BA into Section 271C (penalty) and Section 276B (prosecution), thereby making failure to deduct or to ensure payment of tax where benefits, virtual digital assets or online-game winnings are wholly or partly in kind subject to penalty equal to the tax not deducted or paid and to prosecution; drafting changes align language with parent TDS provisions and the amendments have staged commencements.
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Penalty for false self-certification: reporting institutions face an additional levy and may recover amounts from account holders.
A new sub section makes a prescribed reporting financial institution liable to an additional fixed monetary penalty when an inaccuracy in its statement of specified financial transactions or reportable accounts is due to false or inaccurate information submitted by the account holder; the penalty is imposed by the income tax authority prescribed for the reporting provision, and the reporting institution may recover the amount from or retain funds of the reportable account holder.
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Reassessment limitation period: exclusion and deeming extend notice timelines for searches conducted late in the year.
Amendments streamline reassessment by prescribing a three month deadline to furnish a return to a section 148 notice (subject to AO extension) and state that returns filed beyond that period will not be deemed returns under section 139. Section 149's limitation rules are preserved, with provisos excluding a fifteen day period from limitation computations and deeming notices arising from late year searches or requisitions to have been issued on the last day of the financial year. Section 151's specified authority list is clarified and the excluded/extended period must be counted when computing the three year threshold.
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Power to amend directions for faceless and e-proceedings enables post-expiry modification by notification in Official Gazette.
The Central Government may amend or modify directions issued for faceless schemes and e-proceedings after the originally prescribed time limits, by notification in the Official Gazette, where such directions were issued before the expiry of those limitation periods; the amendment power has specified commencement dates for different provisions.
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Assessment time limits expanded to permit fuller scrutiny, align updated return treatment and extend search linked reassessment periods.
The proposal amends section 153 to extend timeframes for completion of assessment and reassessment, align the period applicable to orders following updated returns, insert a new sub section to extend limitation periods where search under section 132 or requisition under section 132A is initiated or where seized material relates to the assessee, and to make existing timeline provisions applicable to revision orders passed by senior commissioners, with prospective commencement provided in the Bill.
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Appeal filing period revised - time runs from receipt of the adjudicating authority's order at the IO or aggrieved party.
The amendments shift the start of the appeal limitation period to the date an Adjudicating Authority's order is received in the office of the Initiating Officer or the aggrieved person, and they extend the same rule to orders under section 54A. They also modify the definition of High Court to provide jurisdictional clarity for non-resident appellants or respondents by designating the High Court where the Initiating Officer's office is located when no ordinary residence, business or gainful work place falls within any High Court's territory. Effective date: 1 April 2023.

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AMENDMENTS IN THE FIRST SCHEDULE TO THE CUSTOMS TARIFF ACT, 1975

3 February, 2020

Contents
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Budget 2020-21 + FINANCE BILL, 2020

AMENDMENTS

A.

Tariff rate changes for Basic Customs Duty [to be effective from 02.02.2020] * [Clause 115 (a) of the Finance Bill, 2020]

Rate of Duty

S.No.

Heading, sub-heading, tariff item

Commodity

From

To

 

 

Food processing

 

 

1.

0802 32 00

Walnuts, shelled

30%

100%

 

 

Chemicals

 

 

2.

3824 99 00

Other Chemical products and preparations of the chemical or allied industries, not elsewhere specified

10%

17.5%

 

 

Footwear

 

 

3.

6401, 6402,

6403, 6404, 6405

Footwear

25%

35%

4.

6406

Parts of footwear

15%

20%

 

 

Household Items

 

 

5.

6911 10, 6911 90 20, 6911 90 90

Tableware, kitchenware, water filters (of a capacity not exceeding 40 litres) and other household articles, of porcelain of china.

10%

20%

6.

6912 00 10, 6912 00 20, 6912 00 40, 6912 00 90

Ceramic tableware, kitchen-ware, clay articles and other household articles

10%

20%

7.

7013

Glassware of a kind used for table, kitchen, toilet, office, indoor decoration or Similar purposes (other than that of heading 7010 or 7018)

10%

20%

8.

7323

Table kitchen or other household articles and parts thereof, of iron or steel, iron or steel wool; pot scourers and scouring or polishing pads, gloves and the like, of iron or steel, including pressure cookers pans utensils, misc articles such as iron & steel wool, polishing pads, gloves etc.

10%

20%

9.

7418 10

Table, kitchen or other household articles and parts thereof, of copper; pot scourers and scouring or polishing pads, gloves and the like, of copper.

10%

20%

10.

7615 10

Table, kitchen or other household articles and parts thereof, of aluminum; pot scourer and scouring or polishing pads, gloves and the like, of aluminum.

10%

20%

11.

8301

Padlocks and locks (key, combination or electrically operated) of base metal; Clasps and frames with clasps, incorporating locks of base metals; keys for any of the foregoing articles, of base metals (Other than lock of a kind used for automobiles.)

10%

20%

12.

9603

Brooms, brushes, hand operated mechanical floor sweepers, not motorized, mops and feather dusters; prepared knots and tufts for broom or brush making; paint pads and rollers; Squeegees (other than roller squeegees).

10%

20%

13.

9604 00 00

Hand sieves and hand riddles.

10%

20%

14.

9615

Combs, hair-slides and the like, hairpins curling pins, curling grips, hair curlers and the like other than those of heading 8516 and parts thereof.

10%

20%

15.

9617

Vacuum flasks and other vacuum vessels, complete with cases; parts thereof other than glass inners.

10%

20%

16.

8414 51 10

Table Fans

10%

20%

17.

8414 51 20

Ceiling Fans

10%

20%

18.

8414 51 30

Pedestal Fans

10%

20%

19.

8414 59 20

Blowers, Portable

10%

20%

20.

8509 40 10

Food Grinders

10%

20%

21.

8509 40 90

Other grinders and Mixer

10%

20%

22.

8509 80 00

Other Appliances

10%

20%

23.

8510 10 00

Shavers

10%

20%

24.

8510 20 00

Hair Clippers

10%

20%

25.

8510 30 00

Hair-removing appliances

10%

20%

26.

8516 10 00

Water heaters and immersion heaters

10%

20%

27.

8516 21 00

Storage heating radiators

10%

20%

28.

8516 29 00

Other electrical space heating apparatus

10%

20%

29.

8516 31 00

Hair Dryers

10%

20%

30.

8516 32 00

Other hair dressing apparatus

10%

20%

31.

8516 33 00

Hand Drying apparatus

10%

20%

32.

8516 40 00

Electric smoothing irons

10%

20%

33.

8516 60 00

Other ovens, cookers, cooking plates, boiling rings, grillers and roasters

10%

20%

34.

8516 71 00

Coffee and Tea Makers

10%

20%

35.

8516 72 00

Toasters

10%

20%

36.

8516 79 10

Electro-thermic fluid heaters

10%

20%

37.

8516 79 20

Electrical or electronic devices for repelling insects

10%

20%

38.

8516 79 90

Other electro-thermic appliances used for domestic purposes

10%

20%

39.

8516 80 00

Electric heating resistors

10%

20%

 

 

Precious Metals

 

 

40.

7118

Coin

10%

20%

 

 

Machinery

 

 

41.

8414 51 40

Railway Carriage fans

7.5%

10%

42.

8414 51 90

Other fans with a self-contained electric motor not exceeding 125W

7.5%

20%

43.

8414 59 10

Air Circulator

7.5%

10%

44.

8414 59 30

Industrial fans blowers and similar blowers

7.5%

10%

45.

8414 59 9

Other industrial fans

7.5%

10%

46.

8414 30 00, 8414 80 11

Compressor of Refrigerator and Air conditioner

10%

12.5%

47.

8419 89 10

Pressure vessels

7.5%

10%

48.

8418 10 10

Commercial type combined refrigerator freezers, fitted separate external doors

7.5%

15%

49.

8418 30 10

Commercial freezer of chest type, not exceeding 800 litre capacity

7.5%

15%

50.

8418 30 90

Other chest type freezers

10%

15%

51.

8418 40 10

Electrical freezers of upright type, not exceeding 800 litre capacity

7.5%

15%

52.

8418 40 90

Other freezers of upright type, not exceeding 800 litre capacity

7.5%

15%

53.

8418 50 00

Refrigerating or freezing display counters, cabinets, Show-cases and the like

7.5%

15%

54.

8418 61 00

Heat pumps other than air conditioning machines

7.5%

15%

55.

8418 69 10

Ice making machinery

7.5%

15%

56.

8418 69 20

Water cooler

10%

15%

57.

8418 69 30

Vending machine, other than automatic

10%

15%

58.

8418 69 40

Refrigerating equipment/devices used in leather industry

7.5%

15%

59.

8418 69 50

Refrigerated farm tanks, industrial ice cream freezer

7.5%

15%

60.

8418 69 90

Others (like freezers of capacity 800 litres and more etc.]

7.5%

15%

61.

8515 (except 8515 90 00)

Welding and Plasma cutting machines

7.5%

15%

 

 

Other Electronic goods

 

 

62.

8504 40 (except 8404 40 21)

Static Converters

15%

20%

63.

8504 40 21

Dip bridge rectifier

10%

20%

64.

8517 70 10

Populated, loaded or stuffed printed circuit boards

10%

20%

 

 

Automobile and automobile parts

 

 

65.

8421 39 20, 8421 39 90

Catalytic Convertor

10%

15%

 

 

Furniture Goods

 

 

66.

9401

Seats and parts of seats (other than aircraft seats and their parts)

20%

25%

67.

9403

Other Furniture and parts thereof

20%

25%

68.

9404

Mattress supports: Articles of bedding and similar furnishing

20%

25%

69.

9405

Lamps and lighting fittings including searchlights and spotlights and pads thereof; Illuminated signs, illuminated name plates and the like, having a permanently fixed light source, and parts thereof (except solar lantern and solar lamps).

20%

25%

 

 

Toys

 

 

70.

9503

Tricycles, scooters, pedal-cars and similar wheeled-toys; dolls' carriages; dolls; other toys; reduced-Size (“scale”) models and similar recreational models, working or not; puzzles of all kinds

20%

60%

 

 

Stationary items

 

 

71.

8304 00 00

Filing, cabinets. card-index cabinets, paper-trays, paper rests, pen trays, office-stamp stands and similar office or desk equipment of base metal, Other than office furniture of heading 9403

10%

20%

72.

8305

Fittings for loose-leaf binders or files, letter clips, letter corners, paper clips, indexing tags and similar office articles, of base metal; staples in strips (for example, for offices, upholstery, packaging), of base metal

10%

20%

73.

8310

Sign-plates, name-plates, address-plates and similar plates, numbers, letters and other symbols, of base metal, excluding those of heading 9405

10%

20%

 

 

Miscellaneous

 

 

74.

6702

Artificial Flowers

10%

20%

75.

7018 10 20

Glass Beads

10%

20%

76.

8306

Bells, gongs, statuettes, trophies and like, non-electric of base metal; statuettes and other ornaments of base metal; photograph, picture or similar frames, of base metal; mirrors of base metal.

10%

20%

B.

New entries added to the First Schedule [to be effective from 02.02.2020] * [Clause 115(b) of the Finance Bill, 2020]

S. No

Tariff Item

Description

Tariff Rate

Effective rate

1.

8414 51 50

Wall fans

20%

20%

2.

8529 90 30

Open cell for television set

15%

0%

3.

8541 40 11

Solar cells, not assembled

20%

0%

4.

8541 40 12

Solar cells, assembled in modules or made up in panels

20%

0%

*Will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.

 


Full Text:

Budget 2020-21 + FINANCE BILL, 2020

Topics

Acts Income Tax