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    NewsBills
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    NPS deduction limit for state government contributions increased, providing retrospective tax relief to state government employees.
    Amendment increases the statutory deduction under section 80CCD for State Government employer contributions to National Pension System accounts to align with the higher employer contribution threshold, effective retrospectively from April 1, 2020, and applicable to the relevant assessment year onward to prevent additional tax liability on contributions exceeding the prior lower limit.
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    IFSC tax exemptions expanded to cover offshore derivatives, ship lease income and portfolio income managed via IFSC accounts.
    Amendments broaden tax exemptions and deductions for IFSC operations: extend section 10(4E) to non resident income from transfers of offshore derivatives with Offshore Banking Units; expand section 10(4F) to exempt royalty or interest on ship leases paid by qualifying IFSC units and define "ship"; insert section 10(4G) to exempt non resident income from portfolios managed by portfolio managers in IFSC Offshore Banking Unit accounts where income accrues outside India; include regulated Alternative Investment Funds in the section 56 specified funds explanation; and allow section 80LA deductions for transfers of ships leased by IFSC units, subject to commencement conditions.
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    Alternate Minimum Tax parity: co operative societies' AMT rate aligned with companies, lowering their AMT burden from the prior higher rate.
    The Finance Bill proposes amending section 115JC(4) to reduce the alternate minimum tax rate applicable to co operative societies to the company rate and consequentially amending the definition of alternate minimum tax in clause (b) of section 115JF, effective from 1st April, 2023 for the assessment year 2023 24 onwards.
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    Startup tax exemption: incorporation deadline extended to cover delayed incorporations, expanding eligibility for upcoming assessment years.
    Amendment extends the incorporation cutoff for claiming the full-profit deduction by eligible startups to accommodate COVID-related delays, while retaining existing qualifying conditions such as the turnover ceiling and requirement of certification from the Inter-Ministerial Board of Certification; the change takes effect from the commencement of the next fiscal period and applies to the specified assessment year and subsequent years.
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    Concessional tax under section 115BAB extended to give new manufacturers extra time to commence production due to pandemic delays.
    Section 115BAB permits new domestic manufacturing companies to opt for a concessional tax rate if they forgo specified incentives and meet conditions, including commencement of manufacturing by a statutory cut-off. The proposal amends section 115BAB to extend the deadline for commencement of manufacturing or production by one year to relieve companies delayed by the COVID 19 pandemic; the amendment takes effect from 1 April 2022 and applies to the assessment year 2022-23 and subsequent years.
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    Interest on TDS/TCS defaults to be payable as per Assessing Officer's order, clarifying computation and payment obligation.
    The measure amends the TDS and TCS interest provisions to provide that where the Assessing Officer makes an order for a default under the relevant sections, the interest shall be paid by the person in accordance with the order made by the Assessing Officer, clarifying computation and payment obligation for continuing defaults.
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    Actual payment requirement: conversion of interest into debentures or deferred instruments will not qualify as payment under section 43B.
    The proposed amendment clarifies that conversion of interest payable to specified financial institutions, NBFCs, scheduled banks or co-operative banks into debentures or any other instrument deferring payment shall not be deemed to have been actually paid for purposes of claiming a deduction under Section 43B, thereby excluding constructive discharge by conversion from qualifying as payment.
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    Disallowance under section 14A clarified: provisions apply even when exempt income has not accrued, barring related deductions.
    Clarification that disallowance under section 14A applies even where exempt income has not accrued, arisen or been received in the relevant previous year if expenditure was incurred in relation to such exempt income; insertion of an Explanation and a non obstante clause to ensure no deduction is allowed in relation to exempt income. Proposed amendment to section 37(1) adds an Explanation that expenditure which is an offence or prohibited by law includes offences under foreign law, benefits whose acceptance breaches governing rules of the recipient, and payments to compound offences.
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    Successor liability protections validate predecessor assessments and allow modified returns and demand adjustments after reorganisation.
    The proposals validate assessments and proceedings conducted against a predecessor by deeming them made on the successor, allow entities undergoing reorganisation to file modified returns for the period between the reorganisation's effective date and the final order, and establish a mechanism to modify outstanding tax demands to give effect to directions of the competent authority in restructuring.
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    Tax treatment of cess and surcharge: centrally imposed cesses as additional surcharges are non deductible under Section 40(a)(ii).
    The document addresses whether amounts called cess or surcharge are deductible under Section 40(a)(ii), which disallows sums paid on account of any rate or tax levied on business profits. It explains that centrally imposed cesses described in Finance Acts as additional surcharges function as part of income tax and therefore fall within the disallowance, contrasts that with state cesses which historically were treated as allowable, and states a retrospective explanatory amendment will clarify that "tax" includes any surcharge or cess by whatever name called for purposes of the provision.
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    Dispute Resolution Committee decisions: Assessing Officer must give effect to DRC resolutions while preserving taxpayer choice of forum.
    The amendment enables the Assessing Officer to pass a final order giving effect to the Dispute Resolution Committee's resolution: after the DRC determines assessed income the AO must implement the DRC's directions, which may include initiation of penalty proceedings and issuance of a demand notice; a taxpayer may opt for the DRC instead of the alternate dispute resolution panel and the AO's final order shall conform to the DRC resolution.
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    Deferment of Revenue Appeals on identical legal questions - procedure to postpone filing pending final decision with assessee consent.
    The proposed section 158AB allows a collegium of senior tax commissioners to advise non-filing of a revenue appeal where an identical question of law is pending in another case; the Commissioner must then direct the Assessing Officer to apply in prescribed form to defer filing of the appeal until the other case attains finality, provided the assessee accepts that the questions are identical, and may later direct an appeal if the final decision is not consistent with the relevant case.
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    Individual tax regime option: simplified slab structure introduced affecting taxpayer choices and surcharge applicability and cess treatment.
    An optional individual tax regime and a separate optional cooperative society regime take effect for the assessment year 2021-22 on satisfaction of specified conditions, while Part I of the First Schedule preserves baseline rates for individuals by age categories, associations, firms, local authorities and companies (including a lower corporate rate for qualifying domestic companies). A graduated surcharge framework with marginal relief is specified across taxpayer classes, and a Health and Education Cess is levied on tax inclusive of surcharge with no marginal relief for the cess.
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    Tax withholding for non-salary incomes: surcharge and cess adjustments affect non-resident and company payees during fiscal year period.
    Rates for deduction of income-tax at source on non-salary incomes for FY 2021-22 remain as specified in Part II of the First Schedule to the Finance Bill, 2021, unchanged from the prior year; applicable statutory sections continue to govern deduction. A graduated surcharge applies to TDS for specified non-resident recipients, companies and certain entities with caps for dividend and specially taxed income components, and a Health and Education Cess is levied on income tax including surcharge for non-residents and foreign companies.
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    Income-tax withholding and advance tax rules clarified for salaries, with surcharge structure and universal cess applied on computed tax.
    Part III of the First Schedule prescribes rates for tax withholding from salaries, computation of advance tax and charging of tax in special assessments. It sets rate schedules for individuals (including senior categories) and other persons, specifies surcharge slabs with marginal relief, provides an optional alternative tax regime for eligible individuals and HUFs, and outlines separate rate and surcharge rules for co-operative societies, firms, local authorities and companies, with a universal health and education cess applied on tax inclusive of surcharge.
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    LTC cash exemption allowed for prescribed consumer expenditures subject to GST, electronic payment and receipt conditions.
    A new proviso to clause (5) of section 10 will exempt cash allowances in lieu of LTC for the assessment year beginning 1 April 2021, subject to conditions: option for deemed LTC fare for the 2018-21 block; specified expenditure on goods or services taxed at an aggregate GST rate of twelve percent or more from GST-registered vendors during the specified period; payment via prescribed account-payee or electronic modes with tax invoice; an exemption cap per person limited to the lesser of a fixed ceiling or one-third of specified expenditure; and coordination with employer-provided amounts.
    NewsBills
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    Affordable rental housing deduction expanded to include government notified rental projects, and time limit for approvals extended.
    The deduction equal to one hundred percent of profits and gains from the qualifying housing business is extended to include rental housing projects notified by the Central Government that meet conditions in that notification, and the outer time limit for project approval determining eligibility is extended so that the same temporal cut-off applies to these affordable rental housing projects.
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    Tax incentives for IFSC units expand exemptions and relaxed conditions for eligible funds, offshore banking investment divisions.
    Proposed amendments extend tax exemptions and relaxed conditions to units and fund managers located in an International Financial Services Centre by permitting modification of section 9A conditions, treating the investment division of an offshore banking unit as a specified fund for section 10 and section 115AD purposes (subject to Category III AIF registration and separate books), and by inserting exemptions for non-deliverable forward transfers, aircraft-lease royalties, and capital gains arising on relocation of funds where Original Fund, Relocation and Resultant Fund meet prescribed conditions; consequential amendments to sections 47, 49, 56, 79 and 80LA are provided.
    NewsBills
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    Zero coupon bond issuance by infrastructure debt funds permitted, triggering tax-rule amendments and retrospective withholding changes.
    Amendment to the definition of zero coupon bond extends eligible issuers to include notified infrastructure debt funds, enabling those funds to issue instruments with no payment or benefit before maturity; implementing amendments to Income-tax Rules (including Rules 2F and 8B) and an associated amendment to withholding provisions in section 194A are contemplated, with specified staged effective dates and Official Gazette notifications to operationalise the changes.
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    Tax neutral conversion of cooperative banks preserves deduction apportionment and treats asset and share transfers as non-transfers.
    Conversion of primary co-operative (urban co-operative) banks into banking companies is brought within the business reorganisation provisions so that section 44DB's apportionment of deductions between predecessor and successor applies; transfers of capital assets and allotment of shares on conversion are not to be treated as transfers under section 47, effected by amendments to section 44DB and clauses (vica)/(vicb) of section 47, effective 1 April 2021.

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      CUSTOMS DUTY EXEMPTIONS / CONCESSIONS BEING ALLOWED TO LAPSE

      24 July, 2024

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      Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

      Certain BCD exemptions entries under S No. 50/2017-Customs dated 30.6.2017 and other notifications are being allowed to lapse with effect from 30.9.2024.

      (a) The following entries of notification no. 50/2017-Customs dated 30.6.2017 are being allowed to lapse with effect from 30.9.2024:

      S. No.

      S N of 50/2017 Customs

      Description

      1.

      478

      Wireless apparatus, accessories and parts as specified in List 29 imported by a licensed amateur radio operator

      2.

      353

      Foreign currency coins when imported into India by a Scheduled Bank

      3.

      387

       Zinc metal recovered by toll smelting or toll processing from zinc concentrates exported from India for such processes

      4.

      441

      Spinnerettes made inter alia of Gold, Platinum and Rhodium or any one or more of these metals, when imported in exchange of worn-out or damaged spinnerettes exported out of India

      5.

      238

      Organic/inorganic Coating material for manufacture of electrical steel

      6.

      254

      Catalyst for manufacture of cast components of Wind Operated Electricity Generator

      7.

      255

      Resin for manufacture of cast components of Wind Operated Electricity Generator

      8.

      277A

      Calendared plastic sheet for manufacturing of Smart Card under chapter heading 8523

      9.

      339

      Concessional rate on import of Toughened glass with low iron content and transmissivity of minimum 91% and above, for use in manufacture of solar thermal collectors or heaters

      10.

      421

      Specified goods required for basic telephone service, cellular mobile telephone service, internet service or closed users’ group 64 KBPS domestic data network via INSAT satellite system service and parts, for manufacture of the goods

      11.

      479

      Mono or Bi polar Membrane electrolysers and parts thereof including secondary brine purification components, jumper switches, filtering elements for hydrogen filters for caustic soda or potash units; Membrane and parts thereof or other parts for caustic soda or potash units;

      12.

      475

      Specified goods including scramblers, descramblers, encoders, decoders, jammers, network firewalls, network sniffers, scanners and monitoring systems, probes for data monitoring and SMS/MMS monitoring systems

      13.

      482

      Newspaper page transmission and reception facsimile system or equipment; and Telephoto transmission and reception system or equipment

      14.

      495

      Batteries for electrically operated vehicles, including two and three wheeled electric motor vehicles.

      15.

      497

      Active Energy Controller (AEC) for use in manufacture of Renewable Power System (RPS) inverters

      16.

      579

      Survey (DGPS) instruments, 3D modeling software for ore body simulation cum mine planning and exploration (geophysics and geochemistry) equipment required for surveying and prospecting of minerals

      17.

      419

      Aluminium Oxide for manufacture of washcoat of catalytic converter

      18.

      420

      Clay 2 powder for use in ceramic substrate for catalytic convertor

      19.

      340

      Solar tempered glass or solar tempered (anti-reflective coated) glass for use in manufacture of solar cells/panels/modules

      20.

      565

      Specified goods for use in the manufacture of Flexible Medical Video Endoscope [heading 9018]

      21.

      566

       Specific input goods for manufacture of syringes, needles, catheters and cannulae

      22.

      568

      Parts and components for manufacture of blood pressure monitors and blood glucose monitoring system (Glucometers)

      Note: Description of entries is indicative. Notification may be referred to for complete description.

      (b) The following notifications are being allowed to lapse with effect from 30.9.2024:

      S. No

      Notification No.

      Description

      1.

      97/99-Customs dated 21 July 1999

      Exempts BCD and additional duty under Sections 3(1), 3(3) and 3(5) on standard gold bars imported by a RBI authorised bank

      2.

      30/2004-Customs dated 28 January 2004

      Provides full exemption from BCD to second-hand computers/accessories and peripherals received as donation by schools, charitable institutions.

      3.

      102/2007-Customs dated 14 September 2017

      Provides exemption from Special Additional Duty (SAD) levied vide section 3(5) of CTA on to all goods imported for subsequent sale when IGST, CGST, SGST or UTGST paid by importer.

      4.

      45/2005-Customs dated 16 May 2005

      Provides exemption from Special Additional Duty levied under Section 3(5) of CTA on goods cleared from SEZ to DTA.

      5.

      151/94-Customs dated 13 July 1994

      Provides exemption to imports of duty-paid fuel and lubricating oil on aircrafts taken during the outward flight; goods imports by United Arab Airlines; aircraft engines, spares imported by Indian Airlines and Air India International. Re-import entries will operate from re-import notification 45/2017-Cus

      6.

      26-Customs dated 19th February 1962

      Provides exemption from import duty under the Sea Customs Act on catering cabin equipment, food and drink on re-importation by aircrafts of the Indian Airlines Corporation from foreign flights

      Note: Description of entries is indicative. Notification may be referred to for complete description.


      Full Text:

      Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

      Topics

      ActsIncome Tax