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    NewsBills
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    Concessional TDS rates on specified foreign borrowings extended and a lower rate introduced for IFSC listed bonds.
    Amendment of section 194LC extends concessional withholding for interest paid to non residents on eligible foreign currency borrowings by a specified company or business trust, maintaining the concessional rate for approved loans, long term bonds and rupee denominated bonds within prescribed limits. It also establishes a lower withholding rate for interest on long term bonds and rupee denominated bonds issued from abroad that are listed solely on a recognised IFSC stock exchange, with the amendment operating from the commencement date specified in the Finance Bill.
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    Concessional tax for new manufacturers: generation of electricity treated as manufacturing allowing concessional rate subject to eligibility conditions.
    The amendment clarifies that manufacturing or production for the concessional tax regime includes generation of electricity. Eligible new domestic manufacturing companies-set up on or after 1 October 2019 and commencing by 31 March 2023-that do not avail specified incentives or deductions may opt for the concessional tax provision. The change takes effect from 1 April 2020 and applies from the assessment year 2020-21 onward.
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    Offshore fund exemption relaxed: manager contributions initially excluded and corpus timing harmonised to reduce discrimination.
    Amendments to section 9A relax two eligibility conditions for offshore funds' exemption from creating a business connection: contributions by the eligible fund manager during the first three years up to a capped amount will be excluded when calculating the aggregate participation of Indian residents, and funds established in the previous year must meet the monthly average corpus requirement within twelve months from the last day of the month of establishment or incorporation. The amendments take effect from 1 April 2020.
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    Deduction under section 80EEA extended to include additional loans, broadening affordable housing tax relief eligibility.
    The proposal extends the sanctioning period for loans eligible for the interest deduction under section 80EEA for acquisition of affordable residential property, allowing additional loans to qualify subject to existing conditions, including the stamp duty threshold and cap on interest relief. The amendment takes effect from 1st April, 2021 and applies to the assessment year 2021 22 and thereafter.
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    Extension of approval period for affordable housing projects expands eligibility for full business profit deduction under section 80-IBA.
    Extension of the approval deadline under section 80-IBA permits additional affordable housing projects to meet the statutory approval-timing condition for claiming a deduction equal to one hundred per cent of profits and gains from the business of developing and building such projects; the approval deadline is extended to 31st March, 2021 and the amendment takes effect from 1st April, 2021, applying to the assessment year 2021-22 and thereafter.
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    Startup deduction expanded: three-year relief selectable within first ten years and turnover eligibility substantially increased.
    Amendment revises the start-up deduction so an eligible start-up may claim a three-consecutive-assessment-year deduction selectable within ten years from incorporation, and raises the turnover eligibility ceiling so the deduction applies where total business turnover does not exceed a substantially higher threshold in any previous year counted from incorporation; the change takes effect from the start of the next fiscal cycle and applies to subsequent assessment years.
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    Exemption for strategic petroleum reserve income: income exempt if replenishment occurs within three-year period under government directions.
    Exemption is provided to ISPRL for income arising from arrangements for replenishment of crude oil stored in its Indian storage facilities when replenishment is carried out pursuant to directions of the Central Government, subject to the condition that the crude oil is replenished within three years from the end of the financial year in which it was first removed from storage; effective from 1 April 2020 for assessment year 2020-21 onward.
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    Exemption for sovereign wealth fund investments: dividends, interest and long-term capital gains eligible if conditions satisfied.
    A new exemption applies to income in the nature of dividend, interest and long-term capital gains of a specified person arising from investments, debt or equity, in Indian companies or enterprises engaged in developing, operating or maintaining infrastructure facilities or other notified businesses, provided the investment is made on or before the prescribed cut-off and held for the minimum required period. "Specified person" includes a wholly owned ADIA subsidiary resident in the UAE and sovereign wealth funds satisfying defined ownership, regulatory, benefit, vesting, commercial activity and notification conditions.
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    Withdrawal of income-tax exemption for specified perquisites to UPSC and Election Commissioners, bringing those benefits into taxable income.
    The Finance Bill removes income-tax exemption for specified allowances and perquisites previously granted to serving and retired UPSC Chairmen and members and to the Chief Election Commissioner and Election Commissioners. Exemptions being withdrawn include rent-free residence, conveyance and transport allowances, sumptuary allowance, leave travel concession, post-retirement secretarial and telephone allowances, medical facilities and related service condition benefits, with the change to apply prospectively from the stated fiscal implementation point and to the subsequent assessment year.
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    Concessional tax option: domestic companies barred from Chapter VI-A deductions except limited exceptions, narrowing eligible incentives.
    Domestic companies electing the concessional tax regime are barred from claiming any Chapter VI-A deductions except two specified exceptions: the employee-related wage deduction and the intercorporate dividend relief provision. This amendment takes effect from 1 April 2020 and applies to the assessment year beginning thereafter and subsequent assessment years, narrowing the deductions and incentives available to companies that opt for the special tax rate.
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    New concessional tax regime for individuals and HUFs allows optional slab taxation with strict deduction and withdrawal conditions.
    Insertion of section 115BAC allows individuals and HUFs to opt into a concessional tax regime from assessment year 2021-22 under specified slab rates, subject to conditions: limited permitted allowances, broad disallowance of exemptions and deductions (including many section 10 exemptions, chapter VI-A deductions, and certain depreciation and loss set-offs), prescribed treatment of depreciation and transitional written-down value adjustment, prescribed exercise and withdrawal mechanics, and consequential exclusion from AMT and AMT credit carry-forward provisions.
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    Concessional tax option for resident co-operative societies permits a reduced corporate rate subject to strict disallowances.
    A new provision allows resident co-operative societies to opt for a concessional tax regime from the assessment year beginning 1 April 2021 where the society elects the option by the prescribed due date; the option is irrevocable and applies to subsequent years. Eligibility requires computing total income without specified deductions or incentives and without set-off of earlier losses or depreciation attributable to those disallowed items; such losses and depreciation are deemed given full effect and barred from future deduction, with prescribed written down value adjustments for unabsorbed depreciation. The regime attracts a 10 per cent surcharge and excludes applicability of Alternate Minimum Tax and related credit carryforward.
    NewsBills
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    Tax rate structure and withholding: optional new regimes affect salary TDS, advance tax and surcharge treatment.
    Part III of the First Schedule prescribes slab-based TDS rates on salaries, advance tax computation rules and surcharge bands with marginal relief for individuals, HUFs, co-operative societies, firms, local authorities and companies; it retains distinct corporate rates tied to turnover, applies a health and education cess, and creates elective alternate tax regimes including optional taxation under section 115BAC for individuals/HUFs and section 115BAD for resident co-operative societies, which affect rate computation and surcharge treatment.
    NewsBills
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    Tax Deduction at Source: rates remain as prior year; new sections added and section 194 rate amended.
    Tax deduction at source rates for non-salary incomes in FY 2020-21 remain as specified in the prior year schedule; section-specific deduction provisions persist. New sections 194K and 194O specify rates within those sections, and the rate under section 194 is revised to a rate stated in the Bill. Surcharge provisions apply to non-resident recipients by category and income bands, and Health and Education Cess continues to apply on income tax including surcharge.
    NewsBills
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    Surcharge tiers on income-tax established by taxpayer class and income bands; marginal relief and health and education cess apply.
    The Bill prescribes tax rates for assessment year 2020-21 and establishes a multi-tier surcharge regime differentiated by taxpayer class and income bands, with specific caps on surcharge for income taxed under certain provisions. Marginal relief is provided to temper surcharge effects at thresholds. A Health and Education Cess is levied at a fixed rate on income tax inclusive of surcharge, with no marginal relief available for the cess.
    News
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    Judicial custody applied where investigative agency failed to demonstrate necessity for police or CBI custodial interrogation.
    The magistrate refused the investigating agency's request for custodial interrogation, finding insufficient grounds for police/CBI custody and remanding the accused to judicial custody pending further production. The accused and co accused presented conflicting accounts-one alleging he had been investigating a larger fraud and that superiors failed to act-while defence counsel warned of administrative consequences arising from custody. The magistrate applied the requirement that custodial remand be justified by demonstrable investigative necessity rather than allegation alone.
    Case LawsIncome Tax
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    Reopening of assessment: Section 148 notices held in abeyance pending Supreme Court decision on Section 80P deduction entitlement.
    Reopening of assessment under Section 147 and notices under Section 148 to cooperative societies were stayed and kept in abeyance pending disposal of Special Leave Petitions concerning entitlement to deduction under Section 80P(2)(a)(i) read with Section 80P(4). The High Court ordered that if the Supreme Court allows the SLPs the notices will revive and reassessment may proceed, and if the Supreme Court rules for the assessees the impugned notices will be set aside.
    Case LawsVAT / Sales Tax
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    Pre-deposit requirement can be satisfied before the appeal is first taken up for consideration, permitting admission if paid.
    The pre-deposit obligation is an independent mandatory condition distinct from the limitation period for filing or condoning delay; it need not be discharged at filing but can be satisfied up to the moment the appellate authority first takes the appeal up for consideration for condonation or admission. If proof of payment of the specified tax dues is not produced by that first consideration, the appellate authority must reject the appeal as institutionally defective and has no power to extend time to deposit.
    Case LawsIncome Tax
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    Substance over form requires assessing officers to inquire beyond certified statutory forms before reopening assessments.
    Non-disclosure must be sufficiently material to show that, but for it, income would have escaped assessment; Assessing Officers must not rely mechanically on CA-certified statutory forms and must make independent enquiries, applying the substance over form principle when determining commencement of commercial production or eligibility for tax concessions.
    Case LawsGST
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    Search and seizure authorization: proper officer's reason to believe permits prohibition orders and provisional release via clause six.
    Section 67 empowers an authorised proper officer, not below Joint Commissioner, to search and seize goods or documents when he has reason to believe they are secreted; if seizure is impracticable, a prohibition on dealing with goods may be issued under Rule 139(4). "Secreted" includes items not kept in their normal place or likely to be kept out of the way, and the officer must have a reasoned belief before exercising search powers. Procedural accuracy in authorisation and forms is required, and clause (6) permits provisional release on bond, security or payment.

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      Review of Customs duty Exemptions - Review of conditional exemption rates of BCD

      24 July, 2024

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

      (i) The BCD exemption for the goods covered under following serial numbers of the notification are being extended upto 31st March, 2026 unless specified otherwise.

      S. No.

      S N of 50/17-Cus

      Brief Description

      1.

      17

      Specified Planting materials, namely, oilseeds, seeds of vegetables, tubers, etc.

      2.

      80A

      Algal oil for manufacturing of aquatic feed

      3.

      90

      Lactose for use in manufacture of homeopathic medicines

      4.

      104

      Specified goods used in processing of sea-food

      5.

      133

      Gold ores and concentrates

      6.

      139

      Bunker Fuels namely: (i). IFO 180 CST; (ii). IFO 380 CST; (iii). VLSFO (CTH 27)

      7.

      150

      Naphtha for manufacture of Fertilisers (scope of exemption is being reduced only to Naphtha)

      8.

      155

      Liquefied petroleum gases (LPG) received from unit in SEZ and returned by the DTA unit to the SEZ unit

      9.

      164

      Electrical energy supplied from SEZ unit to DTA

      10.

      165

      Electrical energy supplied from SEZ to DTA

      11.

      172

      Specified goods used in manufacture of silicon wafers or solar wafers, for manufacture of solar cell or module

      12.

      183

      Medical use fission Molybdenum-99 (Mo-99) for use in manufacture of radio pharmaceuticals

      13.

      184

      Pharmaceutical Reference Standard

      14.

      188

      Goods for manufacture of ELISA Kits

      15.

      191

      Maltol for manufacture of deferiprone

      16.

      204

      Anthraquinone or 2-Ethyl Anthraquinone for use in manufacture of Hydrogen peroxide

      17.

      237

      Specified material for manufacture of EVA (Ethylene Vinyl Acetate) sheets or backsheet, which are used in the manufacture of solar photovoltaic cells or modules (Scope of materials which can be imported is being increased)

      18.

      253

      Specified Goods for manufacture of Brushless Direct Current (BLDC) motors

      19.

      257

      Tags, labels, stickers, belts, buttons, hangers or printed bags, imported by bonafide exporters

      20.

      257A

      Specified goods used in manufacture of handicraft items for export when imported by bonafide exporter

      21.

      257B

      Specified goods used in manufacture of textile or leather garments for export when imported by bonafide exporter

      22.

      257C

      Specified goods used in manufacture of leather or synthetic footwear or other leather products for export when imported by bonafide exporter

      23.

      258

      Security fibre, threads, Paper based Taggant, M-feature for use in manufacture of security paper by Security Paper Mill, Hoshangabad and Bank Note Paper Mill India Pvt Ltd, Mysore.

      24.

      259

      Raw materials for manufacture of security fibre and security thread for supply to Security Paper Mill, Hoshangabad and Bank Note Paper Mill India Pvt. Ltd, Mysore for use in manufacture of security paper

      25.

      260

      Goods for the manufacture of specified orthopedic implants (902110)

      26.

      261

      Raw material for manufacture of Copper-T Contraceptive

      (i) Alatheon

      (ii) Copper Wire

      27.

      265

      Capacitor grades polypropylene granules for manufacture of Capacitor grade plastic

      28.

      269

      Super absorbent polymer for manufacture of adult diapers and specified goods

      29.

      271

      Polytetrametylene ether glycol, (PT MEG) for use in manufacture of spandex yarn

      30.

      276

      Ethylene- propylene- non-conjugated diene rubber (EPDM) for manufacture of insulated wire and cables

      31.

      279

      New or retreated Pneumatic tyres of rubber for use in servicing, repair of maintenance of aircrafts used for operating scheduled air transport service or scheduled air cargo service etc

      32.

      280

      New or retreated Pneumatic tyres of rubber for use in servicing, repair or maintenance of aircraft imported or procured by Aero Club of India/ for flying training purpose/ operating non-scheduled (passenger or charter) services/ AAI for flight calibration purpose

      33.

      290

      Wood pulp for manufacture of newsprint, paper or paperboard

      34.

      292

      Goods imported for manufacture of paper, paper boards, newsprint

      35.

      293A

      Newsprint and uncoated paper imported for printing of newsprint

      36.

      296A

      Lightweight coated paper imported by actual users for printing of magazines

      37.

      326

      Hydrophilic /Hydrophobic Non- Woven, imported for use in the manufacture of Adult Diapers

      38.

      329

      Pile fabrics for the manufacture of toys

      39.

      333

      Moulds, tools and dies, for the manufacture of parts of electronic components or electronic equipment

      40.

      334

      (i) Graphite Felt or Graphite pack for growing silicon ingots (ii) Thin Steel wire used in wire saw for slicing of silicon wafers

      41.

      345A

      Simply Sawn Diamonds

      42.

      364A

      Spent catalyst or ash containing precious metals

      43.

      368

      Ferrous Scrap

      44.

      374

      Magnesium Oxide (MgO) coated cold rolled steel coils for use in manufacture of cold rolled grain oriented (CRGO) steel

      45.

      375

      Specified items for manufacture of cold rolled grain-oriented steel (CRGO) steel

      46.

      378

      Metal parts for manufacture of electrical insulators falling under heading 8546

      47.

      379

      Pipes and tubes for use in manufacture of boilers

      48.

      380

      Forged steel rings for manufacture of special bearings for use in wind operated electricity generators

      49.

      381

      Flat copper wire for use in the manufacture of photo voltaic ribbon for manufacture of solar photovoltaic cell or modules

      50.

      392

      Dies for drawing metal, where imported after repairs from abroad

      51.

      403

      Parts and raw materials for offshore oil exploration

      52.

      404

      Specified items including capital goods and raw materials for off shore oil exploration

      53.

      415

      Parts for manufacture of catalytic convertors

      54.

      415A

      Platinum or Palladium for manufacture of Noble Metal Compounds & Noble Metal Solutions

      55.

      416

      Ceria zirconia compounds for use in the manufacture of washcoat for catalytic converters

      56.

      417

      Cerium compounds for use in the manufacture of washcoat for catalytic converters

      57.

      418

      Zeolite for use in the manufacture of washcoat for catalytic converters

      58.

      422

      Machinery, electrical equipment for use in semiconductor wafer and LCD

      59.

      423

      Machinery, electrical equipment for use in marking and packaging of semiconductor chips

      60.

      426

      Specified goods for the manufacture of semiconductor devices, memory card, IC, solar cell

      61.

      435

      Capital goods for printing industry

      62.

      442

      Bushings made of Platinum and Rhodium alloy when imported in exchange of worn out or damaged bushings exported out of India

      63.

      446

      Parts and components for manufacture of tunnel boring machines

      64.

      451

      Evacuated tubes with three layers of solar selective coating for use in manufacture of solar water heater

      65.

      462

      Ball screws for use in the manufacture of CNC Lathes

      66.

      463

      Linear Motion Guides for use in the manufacture of CNC Lathes

      67.

      464

      CNC Systems for use in the manufacture of CNC Lathes

      68.

      464A

      Goods for manufacture of plastic processing machineries

      69.

      467

      Parts and components of cash dispenser or automatic bank note dispenser

      70.

      468

      Parts for manufacture of Micro ATM, Fingerprint reader/scanner, Iris scanner, Miniaturised POS (Scope of exemption is being limited to import of raw materials only)

      71.

      471

      All parts for use in the manufacture of LED lights

      72.

      472

      All inputs for use in the manufacture of LED driver or MCPCB for LED lights

      73.

      476

      Television equipment, cameras etc for taking films, imported by a foreign film unit or television team

      74.

      477

      Filming equipment of foreign origin if imported into India after having been exported therefrom.

      75.

      480

      Goods imported for being tested in specified test centers

      76.

      489B

      Goods for manufacturing of Microphones

      77.

      504

      Parts and Components of Digital Still Image Video Cameras

      78.

      509

      Parts, components and accessories for manufacture of Digital Video Recorder

      79.

      510

       Parts, components and accessories for use in manufacture of reception apparatus for television

      80.

      511

      Parts, components and accessories for manufacture of CCTV Camera

      81.

      512

      Specified Parts, components and for use in manufacture of Lithium-ion battery and battery pack

      82.

      512A

      Inputs, parts or sub-parts for use in the manufacturing of Printed Circuit Board Assembly

      83.

      515A

      Open Cell for manufacture of TV Panel

      84.

      516

      The following goods for use in the manufacture of Liquid Crystal Display (LCD) /LED TV Panel

      85.

      517

      Magnetrons for manufacture of domestic microwave ovens

      86.

      519

      Raw materials or parts for use in manufacture of e-Readers

      87.

      523A

      Parts, sub-parts, inputs or raw material for use in manufacture of Lithium-ion cells

      88.

      527

      Lithium-ion cell use in manufacture of battery or battery pack

      89.

      527A

      Lithium-Ion Cell for use in manufacture of battery or battery pack of cellular mobile

      90.

      527B

      Lithium-Ion Cell manufacture of battery or battery pack of EV

      91.

      534

      Parts of gliders or simulators of aircrafts (excluding rubber tyres and tubes of gliders)

      92.

      535

      Raw materials for manufacture of aircraft and parts of aircraft

      93.

      535A

      Parts of aircraft for manufacture of aircraft or for manufacture of parts of aircraft by PSU under Min of Defence

      94.

      536

      Parts, testing equipment, tools and tool-kits for maintenance, repair, and overhauling of aircraft, components or parts of aircrafts

      95.

      537

      All goods of Heading 8802 (except 88026000-spacecraft)

      96.

      538

      Components or parts, including engines, of aircraft of heading 8802

      97.

      539

      (a) Satellites and payloads; (b) Ground equipment brought for testing of (a)

      98.

      539A

      Scientific and technical instruments etc for launch vehicles and satellites

      99.

      540

      Specified goods imported by scheduled air transporter

      100.

      542

      Specified goods imported by Aero Club, Flying Training Institutes

      101.

      543

      Specified goods imported by non-scheduled air transporter

      102.

      544

      Parts (other than rubber tubes), of aircraft of heading 8802

      103.

      546

      Parts (other than rubber tubes), of aircraft of heading 8802

      104.

      548

      Barges or pontoons imported along with ships

      105.

      551

      Cruise ships, Excursion ships

      106.

      553

      Fishing vessels, Tugs and Pusher crafts, light vessels excluding vessels and floating structure imported for break up

      107.

      555

      Vessels like warships, lifeboats excluding vessels and floating structure imported for break up

      108.

      567

      Stainless steel tube and wire, for manufacture of Coronary stents /artificial valve

      109.

      569

      Parts required for manufacture of Ostomy products

      110.

      570

      Medical and surgical instruments, apparatus and appliances including spare parts and accessories thereof

      111.

      575

      Specified Hospital Equipment for use in specified hospitals

      112.

      578A

      Raw materials, for the manufacture of Cochlear Implants

      113.

      580

      X-Ray Baggage Inspection Systems and parts thereof

      114.

      581

      Portable X-ray machine / system

      115.

      583

      Parts and cases of braille watches, for the manufacture of Braille watches

      116.

      591

      Parts of electronic toys

      117.

      593

      Parts of video games for the manufacture of video games

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

      (ii) The BCD exemption for the goods covered under following serial numbers of the notification no 50/2017-Customs is being extended upto 31st March 2029.

      S. No.

      S. No. of 50/2017Cus

      Brief Description

      1.

      212A

      Medicines/drugs/vaccines supplied free by United  Nations International Children's Emergency Fund (UNICEF), Red Cross etc

      2.

      213

      Drugs and materials

      3.

      428

      Specified goods imported by accredited press cameraman

      4.

      429

      Specified goods, imported by accredited journalist

      5.

      549

      Capital goods, raw materials and spares for repairs of ocean-going vessels

      6.

      550

      Spare parts and consumables for repairs of ocean going vessels registered in India.

      7.

      577

      Lifesaving medical equipment for personal use

      8.

      607

      Life Saving drugs like Keytruda etc

      9.

      607A

      Lifesaving drugs/medicines for personal use

      10.

      611

      Archaeological artefacts for exhibition in a museum

      11.

      612

      Specified raw material for sports goods

      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