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Extension of TDS proviso: deductor relief for payments to non residents when the payee files a return and pays tax.
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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Advance Pricing Agreement: Assessing officer limited to modifying total income under APA when taxpayer files a modified return.
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.
News Bills
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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.
News Bills
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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.
News Bills
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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.
News Bills
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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.
News Bills
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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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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