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Certificate for lower or nil tax deduction extended to business trust interest, enabling reduced TDS where exemptions justify it.
The amendment extends eligibility for a certificate for deduction of tax at a lower or nil rate to sums on which tax is required to be deducted in relation to business trust interest income, enabling reduced deduction where exemptions (for example, for certain sovereign wealth and pension funds) justify such reduction; the change applies prospectively from 1 April, 2023.
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Presumptive taxation thresholds increased for businesses and professionals, conditional on low cash receipts and audit exemption.
Eligibility thresholds for presumptive taxation schemes are increased for businesses and professionals on the condition that cash receipts do not exceed a prescribed low percentage of total turnover or gross receipts; cheques and non-account-payee bank drafts are deemed cash for this purpose. Persons declaring profits under the presumptive schemes and meeting the cash-receipt condition are exempt from the statutory audit requirement, with the amendments effective from the stated assessment year.
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Amortization of preliminary expenditure: approval requirement removed; assessee must file prescribed statement to claim deduction.
Amendment removes the Board approval requirement for entities performing preparatory activities tied to amortization of preliminary expenditure and replaces it with a requirement that the assessee furnish a prescribed statement containing particulars of such expenditure to the prescribed income tax authority within the prescribed period and form; effective from 1 April 2024 for the relevant assessment year.
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Concessional tax regime for new manufacturing co-operative societies, subject to eligibility conditions, irrevocable option and transfer pricing checks.
A new concessional tax regime permits resident new manufacturing co-operative societies to elect an irrevocable concessional tax rate, subject to prescribed conditions: total income must be computed without specified deductions or set off of earlier losses attributable to those deductions, depreciation must be claimed as prescribed, non manufacturing income and certain excess profits from related-party arrangements are taxed at higher fixed rates, and specified domestic transactions are subject to arm's length pricing; limited use of previously used machinery is permitted under conditions.
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Strategic disinvestment: redefined to cover government or public sector share sales reducing majority shareholding and enabling loss carryforward on amalgamation.
Section 72A is amended to expand strategic disinvestment to include sale of shareholding by the Central Government, State Government or a Public Sector Company that reduces their shareholding below fifty-one per cent and transfers control to the buyer; transfer of control may be effected by any one or more of those entities. Section 72AA is amended to allow carry forward and set off of accumulated losses and unabsorbed depreciation where banking companies amalgamate with another banking institution or company within five years of such strategic disinvestment. The amendments take effect from 1 April 2023.
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Exemption for statutory development authorities expanded to cover non-company bodies providing public services, subject to notification.
Income of a body or authority or Board or Trust or Commission, not being a company, established or constituted by Central or State Act for specified public purpose objects (housing, planning/development of settlements, regulating or developing activities for public benefit, or regulating matters arising from their object) is proposed to be exempted under a new clause, subject to Central Government notification in the Official Gazette; consequential statutory amendments follow and the change applies prospectively to the relevant assessment year.
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Tax exemption for ODI distributions prevents double taxation, easing IFSC banking unit pass-through of taxed income.
Amendments extend the transfer period for original funds to resultant funds on relocation, exempt income distributed to non-resident holders of Offshore Derivative Instruments provided the income was charged to tax in the IFSC banking unit and will incorporate IFSCA (Fund Management) Regulations, 2022 into the definitions of specified, resultant and investment funds to align statutory definitions with the regulatory regime.
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Conversion of Gold to Electronic Gold Receipt: excluded from transfer for capital gains; cost basis and holding period preserved.
Conversion between physical gold and an Electronic Gold Receipt issued by a Vault Manager is proposed to be excluded from the definition of transfer for capital gains. The cost of acquisition of an EGR will be deemed the cost of the underlying gold in the hands of the person in whose name the EGR is issued, and vice versa for gold released against an EGR. The holding period for capital gains will include periods during which the gold or the EGR was held prior to conversion.
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Extension of start up incorporation cutoff expands section 80 IAC eligibility, applying from the stated effective assessment year onward.
The amendment extends the incorporation cutoff so that enterprises incorporated on or before 1st April 2024 qualify as eligible start ups for the three year full deduction under section 80 IAC, subject to the existing turnover ceiling, Inter Ministerial Board certification and other statutory conditions, and is to have effect from 1st April 2023 for the relevant assessment year and subsequent years.
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Carry-forward loss relief extended for startups, easing shareholding continuity requirement to permit set-off of past losses.
Amendment extends the proviso to the carry forward and set off rule so that eligible start-ups may set off carried forward losses incurred within ten years of incorporation under the existing shareholders-continuity relaxation, aligning this period with the ten-year reference in the start-up incentive provision; the change applies from the assessment year 2023-24.
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Cash transaction limit relief for primary co operatives raises the threshold before penalty for member transactions.
The amendments raise the electronic payment threshold for primary agricultural credit societies and primary co operative agricultural and rural development banks so that acceptance of loans or deposits from, or repayment to, their members will be required to be by account payee cheque, account payee bank draft or online bank transfer only where the amount equals or exceeds two lakh rupees; penalties will attach only above that threshold.
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TDS threshold for co-operative societies increased, altering cash withdrawal TDS applicability and retaining higher deduction rates for non-filers.
The Finance Bill, 2023 amends Section 194N to treat co-operative societies as if the statutory cash-withdrawal TDS threshold were replaced by a higher threshold for the purpose of that section, effective from the start of the next financial year, while preserving the existing non-filer deduction rates and the statutory definition of non-filer.
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Deductibility of sugarcane purchase price: recomputation permitted for co-operative mills where prices meet government-fixed approvals.
Confirms that payments by sugar co-operative mills for purchase of sugarcane at prices equal to or less than government-fixed or approved rates are allowable as a deduction for computing business income. Where such deductions were previously claimed and disallowed, an assessee may apply to the tax authority for recomputation of total income for the relevant previous year; the authority must allow the deduction to the extent the expenditure meets the qualifying price condition and apply rectification provisions and the prescribed processing period.
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Agniveer Corpus Fund tax exemption: contributions and Seva Nidhi receipts exempt, government contribution treated as salary with deduction.
The Agnipath Scheme creates a non-lapsable Agniveer Corpus Fund holding Agniveer contributions, matching Government contributions and interest; Seva Nidhi is the one-time terminal package payable on completion of engagement. The Finance Bill proposes to exempt Seva Nidhi receipts from income tax and to permit deduction from total income of both the Agniveer's deposits and the Government's matching contributions, while treating the Government contribution as salary with a corresponding deduction and extending a similar deduction in the new tax regime.
News Bills
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Payment timing for micro and small enterprises: tax deduction allowed only on actual payment when MSMED timelines are missed.
An amendment to Section 43B inserts a clause disallowing accrual-based deduction for sums payable to micro and small enterprises when payment is made after the time limits prescribed by the MSMED Act; the proviso to Section 43B will not apply to such payments, and only payments made within the MSMED timelines qualify for accrual-based deduction.
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Retrospective GST exemptions and reclassifications bar refunds on tax already collected despite prior tax treatment.
Two retrospective GST amendments reclassify past tax treatments and bar refunds: unintended waste from fish meal production (excluding fish oil) is retrospectively exempted for the earlier period but collected tax is non refundable; and grant of alcoholic liquor licences is retrospectively treated as neither supply of goods nor supply of services, with tax already collected likewise not refundable.
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Interest rate under section 50(3) CGST Act set retrospectively to a prescribed statutory rate affecting tax interest liability.
Notification No. 10/2017 (Union Territory Tax) is amended retrospectively from 1 July 2017 to prescribe the rate of interest under sub-section (3) of section 50 of the CGST Act as 18%, thereby fixing the statutory interest chargeable under that CGST provision for the retrospective period.
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Interest rate under CGST Act fixed retrospectively, establishing a statutory uniform rate effective from July 2017.
A retrospective amendment to Notification No. 6/2017 fixes the statutory interest rate applicable under the CGST interest provision, with effect from 1 July 2017, by specifying the rate of interest under subsection (3) of the relevant CGST provision.
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Input tax credit restrictions clarified: availment conditioned on communication and extended rectification windows provided.
Amendments condition availment of input tax credit on absence of restrictions in communications to recipients and extend the claim and rectification window to the thirtieth day of November of the following financial year; they remove two way return communication, replace it with prescribed one way auto generated communication of inward supplies and credits, require tax period sequential filing of outward supplies, substitute provisional credit claims with self assessed credit subject to conditions, limit utilisation and transfer of electronic ledgers, restate interest on wrongly availed credit retrospectively, and clarify refund claim procedures and withholding scope.
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Retail sale price valuation provisions superseded to align central excise valuation with the post GST legal framework under new notification.
Notification No. 49/2008 set out retail sale price based valuation and abatements under section 4A of the Central Excise Act; it has been superseded by Notification No. 01/2022 dated 1 February 2022 to align excise valuation and abatement treatment with the post GST legal framework.

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Review of concessional rates of BCD prescribed in notification no. 50/2017 - Customs dated 30.62017: The BCD exemption hitherto available on certain goods are being withdrawn by omitting following entries of notification No. 50/2017-Customs dated 30.6.2017.

3 February, 2020

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Budget 2020-21 + FINANCE BILL, 2020

S. No.

S. No. of Notification No 50/2017-customs

Description

1.

5

Tuna bait [0303]

2.

7

Goods upto an aggregate of ten thousand metric tonnes of total imports of Milk and cream, in powder, granules or other solid form in a financial year. [0402 10, 0402 21 00]

3.

7A

Whey, concentrated, evaporated or condensed, liquid or semi-solid [0404 10 10]

4.

7B

Other Whey [0404 90 00)

5.

8

Butter Ghee, Butter Oil [0405]

6.

9

Other cheese [0406 90 00)

7.

10

Pancreas (Products of animal origin, not elsewhere specified) (Chapter 5]

8.

11

Conch shell [0508 00]

9.

18

Bulbs or tubers, other live plants [0601 or 0602]

10.

36

All goods other than meslin or wheat [1001]

11.

38

Meslin [1001]

12.

40

Maize upto an aggregate of five lakh metric tonnes of total imports of such goods in a financial year [1005 90]

13.

47

Sugar beet seeds [1209 10 00)

14.

56

Edible oils [1508, 1512, 1513, 1514, 1515 or 1511 10]

15.

58

Refined vegetable oils of edible grade, in loose or bulk form (other than palm oil) [chapter 15]

16.

59

Vegetable oils of edible grade, in loose or bulk form (other than those specified against S. No. 58 and palm oil), imported for the manufacture of oil commonly known as “Vanaspati” or for refining.

Explanation. -The expression “Vegetable oil” means-

(a) in the case of cottonseed oil, oil having a free fatty acid content of at least 0.2%; and

(b) in the case of any other vegetable oil. oil with free fatty acid content of at least 0.5%. [15]

17.

68

Crude sunflower seed or safflower oil upto an aggregate of one lakh and fifty thousand metric tonnes of total imports of such goods in a financial year [1512 11]

18.

69

Crude sunflower seed or safflower oil other than those specified against S. No. 68 [1512 11]

19.

72

Refined rape, colza or mustard oil upto an aggregate of one lakh and fifty thousand metric tonnes of total imports of such goods in a financial year (1514 19 or 1514 99]

20.

78

Margarine, animal or vegetable oils of edible grade [1517 or 1518]

21.

83

Glycerol, crude; glycerol waters and glycerol lyes, (other than crude glycerin) [1520 00 00]

22.

88A

Raw Sugar upto an aggregate of three lakh metric tonnes of total imports of such goods. Provided that the import of raw sugar in physical form is completed within sixty (60) days from the date of issue Of the Tariff Rate Quota Allocation Certificate or license by Directorate General of Foreign Trade (DGFT) to the importer. Provided further that the importer shall convert the raw sugar into white/ refined sugar within a period, not exceeding thirty (30) days, from the date of filing of bill of entry or the date of entry inwards, whichever is later [1701]

23.

89

Dextrose Monohydrate [1702)

24.

92

Molasses resulting from extraction or refining of sugar [1703]

25.

93

Chewing gum whether or not sugar coated [1704 10 00]

26.

94

Food preparations, for infant use and put up for retail sale, of-

(i) goods of headings 0401 to 0404, containing cocoa calculated on a totally defatted basis, in a proportion by weight of 5% or more but less than 10%; or

(ii) flour, meal, starch or malt extract containing cocoa calculated on a totally defatted basis, in a proportion by weight of 40% or more but less than 50% [1806 90)

27.

95

Preparations for infant use put up for retail sale [1901 10]

28.

98

preserved potatoes [2004 10 00]

29.

99

Peanut Butter [2008 11 00]

30.

105

Wine, for use as sacramental wine [22]

31.

108

Angostura bitters [2208]

32.

113

Fin fish feed [2301 20, 2309 90 32, 2309 90 39]

33.

115

Dietary soya fibre [2304]

34.

148

Naphtha, when imported by Ratnagiri Gas and Power Private Limited (RGPPL), for use in generation of electricity in the power plants of Ratnagiri Gas and Power Private Limited (RGPPL) at Dabhol, District Ratnagiri, Maharashtra [2710]

35.

149

Naphtha, when imported for generation of electrical energy by a generating company as defined in section 2(28) of the Electricity Act, 2003 (36 of 2003) to supply electrical energy-or to engage in the business of supplying electrical energy [2701]

36.

152

Propane, Butane [2711 12 00, 2711 13 00]

37.

160

Electrical energy [ 2716 00 00]

38.

170

Phosphoric acid, for the manufacture of fertilizers(28]

39.

212

Japanese Encephalitis (JE) vaccine, imported by the Andhra Pradesh Government through UNICEF [30]

40.

220

Kyanite salts, in a form indicative of their use for manurial purpose [31]

41.

243

Isolated soya protein [3504]

42.

244

Colour positive unexposed cinematographic film in jumbo rolls and colour negative unexposed cinematographic film in rolls of 400 feet and 1000 feet [37]

43.

245

Instant print film [3701 20 00 or 3702]

44.

246

Cinematographic films, exposed but not developed [3704]

45.

247

Promotional material (like Trailers, making of film etc.) imported in the form of electronic promotion kits (EPK)/ beta cams (Any Chapter)

46.

263

The following polymers of ethylene, namely: -

(i) Cow density polyethylene (LDPE),

(ii) Linear low-density polyethylene (LLDPE),

(iii) High density polyethylene (HDPE),

(iv) Linear medium density polyethylene (LMDPE),

(v) Linear high-density polyethylene (LHDPE) [3901]

47.

264

All goods other than poly 'so-butylene [39021

48.

266

All goods [3903]

49.

274

Compostable polymer or bio-plastic used in the manufacture of bio degradable agro mulching films, nursery plantation pots and flower pots [3913 90 90]

50.

275

Water blocking tape for use in the manufacture of insulated Wires and cables falling under heading 8544 (except sub-heading 8544 11) [3919 90 90]

51.

278

Subbed polyester base, imported by M/s. Hindustan Photo Films Manufacturing Company Limited, Udhagamandalam for the manufacture of medical or industrial X-ray films and graphic art films [39201

52.

286

Patent leather [4114 20 10]

53.

287

Raw furskins [4301). tanned and dried furskins [4302]

54.

386

Lead bars. rods. profiles and wire [7806]

55.

388

Zinc tubes, pipes and tube or pipe fittings [7907]

56.

389

Tin plates, sheets and strip, of a thickness exceeding 0.2 mm; tin foil (whether or not printed or backed with paper, paperboard, plastics or similar backing materials), of a thickness (excluding any backing) not exceeding 0.2 mm; tin powders and flakes [8007]

57.

398

Parts and components of the goods specified in List 10 required for use in high voltage power transmission project (Any chapter]

58.

401

All items of equipment including machinery and rolling stock, procured by or on behalf of Delhi Metro Rail Corporation Ltd. for use in-

(i) Delhi MRTS Project Phase-I, and

(ii) Specified corridors of Delhi MRTS Project Phase-Il, comprising of the following, namely: -

(a) Vishwavidyalaya- Jahangirpuri;

(b) Central Secretariat-Qutab Minar (via All India Institute of Medical Sciences);

(c) Shahdara- Dilshad Garden;

(d) Indraprastha-New Ashok Nagar;

(e) Yamuna Bank-Anand Vihar-lnter State Bus Terminus; and

(f) Kirti Nagar-Mundka (along with operational Link to Shahdara- Rithala corridor) (Any Chapter)

59.

412

Goods specified in List 15 required for construction of roads [84 or any other chapter]

60.

447

The following goods required for manufacture of Optical disk drives (ODD), namely: -

(i) Pick up assembly

(ii) Digital signature procession integrated circuit

(iii) DC motor

(iv) LDO voltage regulator [84 or Any other Chapter]

61.

456

The following goods, namely: -

(a) Sprinklers and drip irrigation systems for agricultural and horticultural purposes;

(b) Micro Irrigation equipment [8424]

62.

457

Poultry incubators and brooders [8436 21 00]

63.

459

Parts for manufacture of printers falling under sub heading 8443 32 (except 8443 99 51, 8443 99 52, 8443 99 53) [8443]

64.

465

CD -Writers (8471]

65.

474

MP3 or MP4 or MPEG 4 player with or without radio or video reception facility [85]

66.

483

One set of pre-recorded cassettes accompanying books for learning languages and essential complement to such books, [85]

67.

484

Audio cassettes, if recorded with material from books, newspaper or magazines, for the blind [85]

68.

515

Colour television picture tubes for use in the manufacture of cathode ray televisions [8540 11]

 

 


Full Text:

Budget 2020-21 + FINANCE BILL, 2020

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Acts Income Tax