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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.
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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.
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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.
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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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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

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Acts Income Tax