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Income-tax authority definition revised to limit qualifying officers to those specified by the Board, altering entry-and-verification scope.
The proposed amendment restricts the definition of income-tax authority to officers who are subordinate to the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner as specified by the Board, thereby limiting which subordinate officers may exercise entry and verification powers under the section; the amendment takes effect from 1 April, 2022.
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Relaxation of late filing fee enables administrative orders to relieve classes facing genuine hardship from mandated fee imposition.
The amendment expressly adds the statutory late filing fee into the list of provisions for which the Board may, by general or special order, provide relaxation or relief for classes of incomes or cases; this enables the Board to issue orders to exempt or mitigate the fee for persons facing genuine hardships in filing returns on time.
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Revision powers under section 263 expand to permit review of Transfer Pricing Officer orders with mandated implementation timelines.
Proposed amendments grant senior officers assigned transfer pricing jurisdiction power under section 263 to call for and examine TPO records and to revise TPO orders deemed erroneous and prejudicial to revenue. Section 153 is modified so subsections (3) and (5) apply to TPO orders, a new subsection (5A) obliges the Assessing Officer to modify assessments in conformity with a TPO order within two months of receipt, and related implementation provisions are extended to such orders.
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Deduction claimed by donor disallowed where donee fails to file statement of donations; amendment corrects drafting error.
The amendment corrects sub section (1A) of section 35 to provide that the deduction claimed by the donor for donations to specified research associations, educational institutions or companies shall be disallowed unless the donee files the required statement of donations, aligning the rule with section 80G and taking effect retrospectively from April 1, 2021.
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Approval authority for trusts changed to Principal Commissioner or Commissioner, replacing prescribed authority references and procedural filing locus.
Proposal to substitute references to the prescribed authority with Principal Commissioner or Commissioner in specified sub clauses and the nineteenth proviso of clause (23C) of section 10 to align textual references with the existing filing and approval regime for trust applications under the first regime; the amendment is corrective and consequential to prior 2020 changes.
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Application of income: amounts by trusts treated as applied only when actually paid, with an anti-duplication rule preventing later claims.
Explanatory provisions treat sums payable by trusts as application of income in the previous year in which such sums are actually paid, irrespective of when the liability arose under the trust's regular accounting method; a proviso bars treating a sum as applied in a later previous year if it has already been claimed as applied in an earlier year. The amendments apply prospectively to the assessment years following the implementation date.
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Voluntary renovation contributions may be treated as corpus if kept separate, used only for the specified purpose and properly invested.
Trusts or institutions may, at their option, treat voluntary contributions for renovation or repair of notified religious places as part of the corpus, subject to conditions: application only for the specified purpose, no onward donations, separate identification, and investment in forms and modes specified under subsection (5) of section 11; violation of any condition renders the sum deemed income of the year in which the breach occurs. Parallel explanatory provisions are proposed for clause (23C) of section 10. Amendments are proposed retrospective to 1 April 2021.
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Special-rate taxation of trust income under new provision: specified breach income taxed separately and no deductions allowed under the rule.
Proposed amendments subject defined categories of trust or institution income to a special rate by treating only the part of income improperly applied, invested, accumulated or attributed as taxable specified income; disallow deductions or set-offs against such specified income; deem unutilised accumulated sums to be taxable in the last year of accumulation; and define specified income to include excessive accumulations, deemed income under accumulation rules, income rendered non-exempt for impermissible investments or benefit transfers, and income attributable to beneficiaries.
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Deductible trust expenditure allowed when exemption denied, subject to prescribed conditions and exclusive tax treatment.
Proposed amendments allow deduction of revenue (non capital) expenditure for the objects of a trust or institution when exemption is denied for specified non compliances, subject to conditions: expenditure must not be from corpus as at the last day of the preceding financial year, not from any loan or borrowing, not involve depreciation for an asset whose acquisition was treated as application of income earlier, and not be a contribution or donation. Section 40 and 40A provisions apply mutatis mutandis to determine such expenditure, and no other deduction, allowance or set off shall be permitted for that expenditure.
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Exit tax on trusts extended to first regime entities, covering conversions, mergers and asset transfers under the amended provisions.
The Finance Bill proposes to extend Chapter XII-EB's exit tax provisions to trusts and institutions under the first regime by making Sections 115TD, 115TE and 115TF applicable to them, thereby subjecting conversions to non charitable status, mergers with non charitable or dissimilar charitable entities, and failures to transfer assets to a levy on accreted income; the amendment is effective from the commencement of the specified fiscal year and applies to subsequent assessment years.
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Payment to specified person: income applied for their benefit deemed their income, anti benefit rules extended to first regime trusts.
A proviso to clause (23C) of section 10 deems any income or property of a first regime trust applied for the benefit of a person in section 13(3) to be that person's income in the year of application; sections 13(2), (4) and (6) are made applicable to first regime trusts, aligning anti benefit and attribution rules across regimes.
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Accumulation provisions alignment: consistent tax treatment for accumulated charitable income with prescribed conditions and deemed income triggers.
The measure harmonises accumulation rules between the two exemption regimes by requiring a prescribed statement to the Assessing Officer, investment or deposit of accumulated funds in specified modes, and timely filing; it provides that accumulated income meeting these conditions is excluded from total income but will be deemed income of the last previous year of the accumulation period if misapplied, ceases to be invested as required, is not utilised within the stated period, or is credited or paid to another exempt trust or institution.
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Cancellation of charitable registration: Principal Commissioner empowered to inquire and cancel approvals within a prescribed decision period.
Amendments empower the Principal Commissioner or Commissioner to call for documents, inquire into and, after hearing, cancel or refuse to cancel registrations or approvals of trusts, institutions and similar entities on finding one or more specified violations (including misuse of income, non incidental business income without separate books, non genuine activities, preferential religious benefit, or final non compliance with other laws). Orders must be forwarded to the Assessing Officer and the entity, and a six month statutory deadline governs decision making from the quarter end in which the first notice is issued.
News Bills
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Penalty for passing on unreasonable benefits: trusts face penalties equal to the benefit for first offences and greater penalties for repeat breaches.
The proposal inserts section 271AAE to penalise trusts or institutions that apply income for the benefit of trustees or specified persons: the Assessing Officer may impose a penalty equal to the aggregate amount so applied where the violation is first detected in a previous year, and a higher penalty where the violation is detected again in a subsequent previous year; this penalty is in addition to any other penalties under Chapter XXI and the amendments take effect for the relevant assessment year following enactment.
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Liability of directors of private company clarified as joint responsibility for tax, fees, interest and penalties if company recovery fails.
Amendment renames the section title to Liability of directors of private company to reflect that directors are jointly and severally liable where tax cannot be recovered from the company, clarifies that this liability is not conditional on liquidation, and expands the Explanation so that the expression "tax due" expressly includes fees alongside penalty, interest and other sums payable.
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Penalty authority expanded: Commissioner (Appeals) may now impose penalties for undisclosed income; per day penalty increased.
Amendments enable the Commissioner (Appeals) to levy penalties alongside the Assessing Officer for provisions targeting undisclosed income, unexplained credits or expenditures, and falsification or omission in books of account; and increase the per day penalty for failures to answer questions, sign statements, furnish information, returns or allow inspections to strengthen deterrence. These measures are to take effect from 1 April 2022.
News Bills
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Assessment and reassessment procedures clarified, aligning search linked notices, limitation exclusions and officer level safeguards.
Proposed amendments streamline assessment and reassessment procedure by removing duplicate approval requirements for notices under section 148 where an order under section 148A(d) exists, correcting drafting errors in section 148 explanations, extending search/requisition consequences into assessments under sections 143(3), 144 and 147, prescribing officer level approval norms for post search orders, excluding a capped period from limitation where material is seized or requisitioned, and clarifying the meaning of information and threshold conditions for issuing section 148 notices.
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Undisclosed income set-off prohibited: losses and unabsorbed depreciation cannot be adjusted against income found by search or survey.
Section 79A prohibits set-off of any loss, whether brought forward or otherwise, and unabsorbed depreciation under sub section (2) of section 32 against undisclosed income discovered as a result of a search under section 132, requisition under section 132A, or survey under section 133A (excluding surveys under sub section (2A) of section 133A). "Undisclosed income" is defined to include money, valuables, books entries or transactions not recorded or not disclosed before the detection, and expense entries found to be false and revealed only because of the detection action.
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Faceless assessment process: centralised NaFAC-driven electronic workflow directing assessment, verification, technical review and dispute procedures.
The amendment centralises faceless assessment through a National Faceless Assessment Centre which assigns cases to Assessment Units and routes all notices, responses, verification requests and technical referrals electronically to Verification, Technical and Review Units; communications are authenticated by digital signature, electronic verification code or portal login and all internal exchanges occur via NaFAC with automated allocation and real time alerting.
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Faceless procedures expanded for transfer pricing, dispute resolution and tribunal appeals, after allowing stabilization and consultation.
Introduction of faceless procedures under specified direct tax sections (92CA, 144C, 253, 255) is deferred to allow IT system stabilization and Ministry of Law & Justice consultation; appellate procedures must align with tribunal procedure and non-assessment functions will follow phased faceless assessment workflows.

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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