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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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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.
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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.
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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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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