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TDS on interest on securities: threshold increased to reduce small-value deductions and limit routine withholding.
Section 193 requires deduction of tax on interest on securities at time of credit or payment to a resident. The Finance Bill, 2025 proposes that tax shall be deducted under this section only when the amount or aggregate amount of interest on securities exceeds a specified monetary threshold during a financial year, and consequentially amends the proviso relating to debenture interest; the amendment takes effect from 1 April 2025.
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Dividend tax withholding: higher exemption threshold for individual shareholders reduces small-payment TDS obligations from next fiscal year.
Section 194 requires the principal officer of an Indian company, or a company with prescribed arrangements for dividend payments (including preference shares), to deduct tax at source from dividend payments to resident shareholders at the rate provided in the section. The Finance Bill raises the aggregate exemption threshold for individual shareholders under the first proviso so that no tax is required to be deducted on small aggregate dividend payments, with the amendment effective from the start of the next fiscal year.
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TDS on interest thresholds increased, raising exemption limits for banks, cooperatives and post office deposits next fiscal year.
Amendments raise thresholds under Section 194A for deduction of tax at source on interest other than interest on securities, increasing payer-specific limits for banks, cooperative banks, certain cooperative societies and notified post office deposits from forty thousand to fifty thousand and raising the baseline for other payers from five thousand to ten thousand; senior citizen thresholds for the specified payer categories are increased to one hundred thousand and to ten thousand for other payers. The revised thresholds take effect from the first day of the fiscal year beginning April 1, 2025.
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Tax deduction on lottery winnings now triggers per single transaction rather than by annual aggregation.
The Finance Bill, 2025 amends Section 194B to remove the aggregate-year threshold and instead require tax withholding on each single transaction that exceeds the statutory threshold, changing the trigger for deduction from annual aggregation to per-transaction basis; this amendment takes effect from 1 April 2025 (Clause 54).
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Tax deduction on horse race winnings: threshold now applies per single payout, altering withholding obligation at payment.
Section 194BB requires a bookmaker or licensed person paying horse-race winnings to deduct tax at source at the rates in force at the time of payment. The Finance Bill 2025 removes the aggregate-year threshold and makes the deduction requirement apply where a single transaction exceeds the threshold, shifting the test from annual aggregation to single-transaction application.
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Insurance commission TDS threshold raised, reducing mandatory withholding on smaller commission payments from the Bill's effective financial year.
Section 194D requires deduction of income-tax at source on remuneration or reward for soliciting or procuring insurance business paid to a resident where payments in a financial year exceed a prescribed threshold. The Finance Bill, 2025 raises that threshold, reducing the instances where TDS is required, and makes the amendment effective from the commencement of the specified financial year.
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TDS on lottery commissions: threshold raised, reducing instances of deduction at source; new rule effective next fiscal year.
Amendment to Section 194G raises the monetary threshold that triggers a two percent TDS obligation on commission, remuneration or prize payments to persons engaged in stocking, distributing, purchasing or selling lottery tickets, thereby reducing instances where tax must be deducted at source. The two percent deduction rate remains unchanged, and the amendment takes effect from the commencement of the next fiscal year.
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TDS on commission: threshold for deduction raised, narrowing scope of withholding for small payees next fiscal year
Persons other than individuals and HUFs paying commission or brokerage to resident payees must deduct tax at source at a two percent rate where annual payments exceed the prescribed threshold; the Finance Bill proposes to raise that threshold, reducing the number of payments subject to deduction while excluding insurance commission treated under a separate provision, effective from the commencement of the relevant fiscal year.
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TDS on rent threshold lowered, expanding deduction requirement to monthly rent payments effective next fiscal year.
The amendment expands the requirement to deduct tax at source on rent by replacing the prior annual exemption with a monthly (or part-month) threshold for payers other than individuals and HUFs; rent exceeding the specified monthly amount will attract withholding, and the change is effective from the start of the next fiscal year.
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TDS on professional and technical fees: higher thresholds reduce mandatory withholding obligations from the next financial year.
The Finance Bill increases the threshold for tax deduction at source on payments characterised as fees for professional services, fees for technical services, royalty and other specified sums made by persons other than individuals or HUFs; deductions are required only when aggregate payments in a financial year exceed the revised thresholds, with the amendment effective from the start of the specified financial year.
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TDS on mutual fund unit income: threshold for mandatory deduction increased, narrowing instances where withholding is required.
Persons paying income in respect of mutual fund units, administrators of specified undertakings, or specified companies must deduct tax at source at the prescribed rate only when the payee's income from such units exceeds the revised threshold; the amendment narrows the circumstances requiring deduction and applies prospectively from the effective date specified in the Finance Bill.
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TDS on compensation for compulsory acquisition: deduction threshold raised while the deduction rate is retained, effective next fiscal April.
Section 194LA requires tax deduction at source on compensation or enhanced compensation and consideration for compulsory acquisition of immovable property (other than agricultural land) where amounts in a financial year exceed the prescribed threshold. The Finance Bill, 2025 proposes to raise that threshold while retaining the existing deduction rate and mechanism; the amendment is to take effect from 1 April 2025.
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Definition of forest produce clarified to align with State Acts or Indian Forest Act, narrowing TCS scope to leased produce.
The Finance Bill aligns the definition of forest produce with any State Act or the Indian Forest Act, 1927, to clarify TCS coverage; it confines TCS on "other forest produce" (excluding timber and tendu leaves) to items obtained under a forest lease, and sets TCS at two per cent for timber or other forest produce under lease and two per cent for timber obtained otherwise, effective from 1 April 2025.
News Bills
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Tax Collection at Source exemption removes duplicate TCS/TDS obligation, streamlining seller and buyer compliance from April 1, 2025.
The Finance Bill proposes omission of the sub section imposing Tax Collection at Source by sellers on sale of specified goods where the buyer is liable to deduct Tax Deduction at Source, to prevent overlapping TCS/TDS obligations and ease compliance; the amendment takes effect from 1 April 2025.
News Bills
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Block assessment scope expanded to include virtual digital assets; computation, revival and timeline rules updated.
Amendments bring virtual digital asset within the definition of undisclosed income for Chapter XIV-B; add "recomputation", "reference" and "order" to the list of proceedings that may revive if a Chapter XIV-B proceeding is annulled; replace "pending" with assessments "required to be made" for subsequent searches; amend computation rules to recognise undisclosed income declared in return and include returns filed before search or requisition for credit; exclude income from international or specified domestic transactions from block period income; and change the block assessment time limit to twelve months from the end of the quarter of the last authorisation.
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Non-applicability of penalty under section 271AAB clarified for searches under section 132 after block assessment introduction.
The amendment provides that section 271AAB shall not apply to an assessee in whose case a search under section 132 was initiated on or after 1 September 2024, aligning the penalty provision with the block assessment regime introduced by the Finance Act, 2024 and removing any ambiguity about applicability; the amendment takes effect from 1 September 2024.
News Bills
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Search and seizure: uniform quarterly-based time limit for retention approvals and updated cross-references for execution definitions.
The Bill amends section 132 to provide that the time limit for taking approval for retention of seized books of account or documents will be one month from the end of the quarter in which the assessment, reassessment or recomputation order is made, addressing administrative difficulties in group search cases. It also modifies Explanation 1 to section 132 to substitute "authorisation" with "authorisations", and updates Explanation 1 to section 132B to reference section 158B for the meaning of "execution of an authorisation for search or requisition".
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Limitation on penalty imposition extended to a uniform quarterly deadline after completion of connected proceedings or receipt of appeals.
The amendment standardises the limitation for imposing penalties under Chapter XXI so that no penalty order may be passed after the expiry of six months from the end of the quarter in which the connected proceedings are completed, the appellate order is received by the jurisdictional Principal Commissioner or Commissioner, an order of revision is passed, or the notice for imposition of penalty is issued. A consequential amendment updates the cross-reference in section 246A. These changes take effect from 1 April 2025.
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Stay period exclusion clarified: computation excludes from date stay granted until certified vacatur received by tax Commissioner.
The amendment excludes from computation of statutory time limits the period beginning on the date a court stay is granted and ending on the date a certified copy of the order vacating that stay is received by the jurisdictional Principal Commissioner or Commissioner (or the Approving Panel where applicable).
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Carryforward of losses limited to eight assessment years for predecessor losses in amalgamations, preventing loss evergreening.
Sections 72A and 72AA are amended to provide that any accumulated loss of an original predecessor entity deemed to be the loss of the successor entity may be carried forward only for eight assessment years immediately succeeding the assessment year in which that loss was first computed for the original predecessor, aligning these provisions with section 72 and preventing evergreening through successive amalgamations.

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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