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News Bill
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Union Budget 2026 27 proposes decriminalisation of tax offences, replacing rigorous terms with graded simple imprisonment and fines.
Amendments to sections 473-485 and 494 recast many penalties from rigorous to simple imprisonment, cap most maximum terms at two years (with lower terms for subsequent offences), introduce fines in lieu of or alongside imprisonment, and adopt a tiered penalty structure tied to amounts of tax evaded-higher tiers permitting up to two years' simple imprisonment, intermediate tiers up to six months, and lower tiers limited to fines-while fully decriminalising selected offences and creating specific carve outs for certain TDS/TCS categories.
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Union Budget change limits block assessment period for third parties when undisclosed income pertains to a single tax year.
Section 295 currently requires that seized material relating to undisclosed income of a person other than the specified person be handed to that person's AO and that the other person undergo block assessment with the same block period; the Finance Bill proposes amending Section 295(2) to limit the period of block for such third parties, particularly where the undisclosed income pertains to a single tax year, with effect for searches or requisitions initiated on or after 1 April 2026.
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Union Budget 2026-27 proposes using initiation of search as the trigger for block assessment and extending the period to eighteen months.
The amendment replaces the last search authorization date with the initiation of search (or requisition) as the reference for computing the block-assessment limitation period and increases that period from twelve months to eighteen months, effective for searches or requisitions initiated on or after 1 April 2026.
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Penalties for certain compliance failures converted into graded fees with specified caps, effective April 1, 2026.
Select penalties for technical compliance failures are converted into prescribed graded fees: audit-reporting failures replaced by fees of Rs. 75,000 and Rs. 1,50,000 depending on delay; failure to furnish accountant reports for international or specified domestic transactions replaced by fees of Rs. 50,000 and Rs. 1,00,000; and failure to furnish statements of financial transactions or reportable accounts is converted into a fee with an introduced upper limit of Rs. 1,00,000 for the post-notice daily levy. The amendments take effect from the tax year beginning 1 April, 2026.
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Union Budget changes penalty process: under-reporting penalties imposed within assessment order; interest charged post-appeal, effective April 2027.
Penalties for under-reporting or misreporting are to be imposed within the assessment order to avoid multiple proceedings; consequential amendments align penalty, dispute resolution and recovery provisions. Interest under the tax recovery provision will be charged only after an appellate order by the first appellate authority or tribunal in appeals from dispute resolution forum orders.
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Increase in penalty for failing to comply with tax information requests from business premises to strengthen compliance.
Amendment to section 466 raises the maximum penalty for non-compliance with section 254 information directions from Rs. 1,000 to Rs. 25,000, to enhance deterrence and voluntary compliance. The enhanced sanction is to be imposed by specified tax officers and takes effect from 1 April 2026, applying to tax year 2026-27 and subsequent years.
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Tax on unexplained income cut to 30% and penalty treatment moved into the misreporting under reporting regime.
The proposal reduces the special tax charge on income determined as unexplained under sections 102-106 from 60% to 30% by amending section 195 and omits the standalone 10% penalty under section 443, subsuming penalty treatment into the under reporting/misreporting regime of section 439(11); the changes take effect from 1 April 2026 for tax year 2026-27 and thereafter.
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Union Budget expands taxpayer immunity to misreporting cases, allowing settlement by paying additional tax in lieu of penalty.
Section 440 is to be amended to allow immunity from penalty and prosecution where under reporting arises from misreporting, subject to existing eligibility and procedural conditions. Immunity requires payment of additional income tax equal to 100% of the tax on such income; for income determined as unexplained credits/investments/assets the additional tax payable for immunity is 120%. The amendment is effective 1 April 2026 for tax year 2026 27 onward.
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Amendment expands tax immunity to cover under reporting that results from misreporting, subject to existing procedural conditions.
Amendment extends the existing immunity from penalty and prosecution to cases where under reporting of income results from misreporting, subject to existing conditions: payment of tax and interest within the demand period, no appeal against the assessment, timely filing of an immunity application within one month, and assessing officer decision on the application within three months.
News Bill
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Cooperative societies: deduction allowed on dividends from other cooperatives in new tax regime; limited federal cooperative relief.
Deduction is extended to dividends received by cooperative societies from other cooperative societies in the new tax regime, limited to amounts distributed to members. Notified federal cooperatives may claim a temporary deduction for dividends from companies for three years, restricted to investments made by the federal cooperative on or before 31.01.2026 and distributed to members. The amendment is effective from 1 April 2026 and applies to the tax year 2026-27 and subsequent years.
News Bill
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Union Budget expands deduction to include cattle feed and cotton seeds under section 149(2)(b) for primary co operative societies.
Amendment expands section 149(2)(b) to permit full deduction of profits and gains of a primary co-operative society where members supply cattle feed and cotton seeds to a federal co-operative society, Government, local authority, Government company, or corporation engaged in the same business, applying from the tax year beginning 1 April 2026.
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Inclusion of multi-state co-operative societies in the co-operative society definition for tax purposes from April 2026.
Amendment expands the statutory definition of co-operative society to expressly include societies registered under the Multi-State Cooperative Societies Act, 2002, thereby bringing multi state registered cooperatives within the legal category subject to provisions applicable to co-operative societies under the Act.
News Bill
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Advance pricing agreements now allow associated enterprises to file modified returns within three months for covered tax years.
Where income is modified as a result of an advance pricing agreement entered into with any person, that person or any associated enterprise may furnish a return or modified return limited to the agreement, within three months from the end of the month in which the agreement was entered into, in respect of tax years covered by such agreement entered on or after 1 April 2026 for tax years beginning 1 April 2026 and subsequent tax years.
News Bill
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Exemption for foreign companies on income from procuring data centre services if routed through an Indian reseller.
A foreign company is exempt from Indian tax on income arising from procuring data centre services from a specified data centre, provided services to India users are routed through an Indian reseller; a specified data centre must be set up under an approved scheme notified by the Ministry of Electronics and Information Technology and be owned and operated by an Indian company; the exemption applies from the tax year beginning 1 April 2026 through the tax year ending 31 March 2047.
News Bill
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Prospecting of critical minerals now qualifies for deferred tax deduction over ten years under expanded schedule provisions.
The schedule is amended to add critical minerals so that expenditure on prospecting and exploration of those minerals qualifies for the statutory deferred deduction available to resident taxpayers, with such expenses deductible over ten years from the year of commercial production and covering costs incurred in that year and up to four preceding years.
News Bill
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Exemption for foreign companies' income from supplying capital equipment to contract manufacturers in custom bonded areas.
An exemption is introduced for income of a foreign company from providing capital goods, equipment or tooling to an Indian-resident contract manufacturer located in a custom bonded area that manufactures electronic goods for the foreign company for consideration; the time-limited exemption applies up to the tax year 2030-2031 and takes effect from 1 April 2026, applying to the tax year 2026-27 and subsequent years within the stated period.
News Bill
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Non-resident cruise operations and electronics manufacturing services excluded from MAT when using presumptive taxation.
Amendment excludes certain specified non-resident businesses that opt for presumptive taxation from the scope of Minimum Alternate Tax, adding cruise ship operations and services or technology for establishing electronics manufacturing facilities for resident companies to the excluded categories, with prospective application to subsequent tax years.
News Bill
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Non-resident service providers: five-year exemption for foreign income when rendering services under notified Indian schemes.
An individual who has been a non-resident for five consecutive tax years immediately preceding their first visit to India to render services under a Scheme notified by the Central Government may be exempt, for five consecutive tax years commencing with that first tax year, from tax on income that accrues or arises outside India and is not deemed to accrue or arise in India, subject to prescribed conditions.
News Bill
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IFSC units and OBUs will get a longer 100% deduction period and post-expiry income taxed at 15%.
Proposed amendments extend the 100% deduction under section 147 for IFSC units from 10 consecutive years out of 15 to 20 consecutive years out of 25, and for OBUs from 10 consecutive years to 20 consecutive years; business income from IFSC after the deduction period will be taxed at 15%. The amendments apply from 1 April 2026 to the tax year 2026-27 and subsequent years.
News Bill
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Treasury centre dividend exclusion limited to cross border group loans in notified jurisdictions with parent listed abroad.
Amendment restricts the dividend exclusion for inter group advances or loans involving a Finance company or Finance unit by requiring the other group entity to be located in a notified jurisdiction outside India and the group's parent or principal entity to be listed abroad; the Central Government will notify eligible jurisdictions. It also defines "group entity" by reference to the IFSCA (Payment Services) Regulations, 2024, and defines "parent/principal entity" by voting power and board control tests; the changes apply from 1 April 2026 for tax year 2026 27 onward.

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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