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    Cash Transaction Penalties under Indian Tax Law : Clause 450 of the Income Tax Bill, 2025 Vs. Sectio...
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    Act RulesBills
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    Cash transaction penalty: acceptance of prohibited loans or deposits triggers penalty equal to amount received under the new clause.
    Clause 450 imposes a penalty equal to the amount of any loan, deposit or specified sum taken or accepted in contravention of the substantive prohibition, centralizes authority to impose that penalty with the Assessing Officer, and leaves key interpretive and procedural questions-such as the definition of "specified sum", the availability of a reasonable cause exception, and limitation and hearing procedures-to be clarified elsewhere in the Bill or by administrative guidance.
    Act RulesBills
    Show AI Summary
    Penalty for failure to collect tax at source: Assessing Officer may impose penalty equal to uncollected tax, discretion noted.
    Clause 449 provides that any person required under Chapter XIX-B who fails to collect the whole or part of tax may be liable to a penalty equal to the amount of tax not collected, with the Assessing Officer empowered to impose that penalty; the clause covers total and partial failures, fixes the penalty quantum as equal to the uncollected tax, and does not expressly provide a reasonable cause exception.
    Act RulesBills
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    Penalty for failure to deduct tax at source: equal to unpaid tax, imposed at Assessing Officer's discretion.
    Clause 448 penalises failure to deduct, pay, or ensure payment of tax at source under Chapter XIX-B and specified notes, imposing a penalty equal to the tax unpaid and vesting discretion to impose that penalty in the Assessing Officer; the clause covers partial failures and obligations to ensure payment but is silent on an explicit reasonable cause defence.
    Act RulesBills
    Show AI Summary
    Failure to furnish accountant's report under section 172 may attract fixed statutory penalty; procedural safeguards need clarification.
    Clause 447 authorises the Assessing Officer to impose a fixed penalty of one lakh rupees for failure to furnish an accountant's report as required by section 172; the provision mirrors Section 271BA in structure and intent, emphasising a uniform fixed penalty to enforce documentary compliance, while raising issues about the scope of section 172, the absence of an explicit reasonable cause exception, and procedural safeguards such as show cause notice and opportunity to be heard.
    Act RulesBills
    Show AI Summary
    Audit compliance penalty: failure to obtain or file mandated audit reports may attract a capped percentage-based sanction.
    Clause 446 penalizes failure to obtain a mandatory audit or to furnish the audit report under s.63 by authorizing the Assessing Officer to impose a penalty equal to the lesser of a percentage of total sales, turnover or gross receipts for the relevant tax year(s) or a fixed monetary cap, thereby targeting both non-audit and non-filing conduct and centralizing enforcement discretion under a proportional, capped sanction.
    Act RulesBills
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    Penalty for diversion of charitable funds: escalating sanctions for benefits to related persons under the new income tax framework.
    Clause 445 links penalties to the charging of "specified income" under section 337 where a registered non-profit applies income for the benefit of a related person. It covers direct and indirect benefits, vests discretion in the Assessing Officer to impose a monetary penalty during proceedings, prescribes an equal-amount penalty for the first violation and a doubled penalty for subsequent violations, and does not require proof of mens rea.
    Act RulesBills
    Show AI Summary
    Penalty for false accounting entries: false or omitted entries made to evade tax attract a penalty equal to the entry amount.
    Penalty for false or omitted accounting entries applies where entries are material to computation of total income and made with intent to evade tax; penalty equals the aggregate amount of the false or omitted entry, extends to anyone who causes such entries, and covers use or intention to use forged documents, invoices without actual supply/receipt, and invoices involving non existent persons, with Assessing Officer and specified appellate officers empowered to impose the sanction.
    Act RulesBills
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    Penalty for undisclosed income: fixed tax-based sanction added to assessed tax for unexplained income, with limited exceptions.
    Clause 443 authorises tax officers and appellate commissioners to impose a fixed additional penalty on tax computed in respect of income determined from specified unexplained sources, while exempting amounts voluntarily disclosed and taxed within the relevant year, and barring a duplicate penalty under an alternate penalty provision; procedural safeguards in designated procedural sections apply to the imposition and appeal of the penalty.
    Act RulesBills
    Show AI Summary
    Documentation penalties: new clause preserves ad valorem and flat penalties, reinforcing strict transfer pricing compliance for cross border transactions.
    Clause 442 establishes penalties for failures to maintain, report, or furnish accurate documentation for international transactions and specified domestic transactions, comprising an ad valorem penalty imposed by the Assessing Officer or Commissioner (Appeals) for non maintenance, non reporting or incorrect information, and a prescribed authority's power to levy a flat monetary penalty for failure to furnish required information; the provision largely mirrors Section 271AA but omits an explicit "without prejudice" clause and does not address reasonable cause or proportionality concerns.
    Act RulesBills
    Show AI Summary
    Record keeping obligation triggers fixed penalty for non maintenance or non retention of prescribed tax records, raising proportionality concerns.
    Clause 441 imposes a fixed penalty for failure to keep, maintain, or retain prescribed books of account and documents as required by the statutory reference provision, and vests authority to impose the penalty in the Assessing Officer and appellate officers. The clause applies an objective standard of liability, omits an explicit savings clause preserving other penalty provisions, and contains no express exception for reasonable cause, raising issues of cumulative penalties and proportionality.
    Act RulesBills
    Show AI Summary
    Immunity from penalty: mechanism to obtain protection from penalty and prosecution when tax is paid and no appeal is filed.
    Clause 440 permits an assessee to apply for immunity from penalty and prosecution where tax and interest under the assessment/reassessment order are paid within the notice period and no appeal is filed; the application must be made within one month in prescribed form, the AO must decide within three months after giving opportunity of being heard, immunity is granted only after the appeal period expires and excludes cases of aggravated defaults, and an order on immunity is final and bars appeal or revision if accepted.
    Act RulesBills
    Show AI Summary
    Penalty for under-reporting: preserves formula-based computation and differential rates for misreporting, and procedural safeguards.
    Clause 439 establishes a formula-based penalty framework empowering a defined Competent Authority to impose penalties for seven specified scenarios of under-reporting, prescribes quantified computation methods for first assessments, reassessments and deemed income, preserves exceptions for bona fide explanations and documented transfer pricing adjustments, requires written orders and bars double penalisation, and differentiates penalties by imposing a higher sanction for misreporting defined by a specified list of misrepresentation and suppression acts.
    Act RulesBills
    Show AI Summary
    Mode of payment restrictions for property linked receipts expanded to include any monetary receipt related to proposed transfers.
    Clause 189 of the Income Tax Bill, 2025 defines "banking company", certain rural finance institutions, "specified sum", and "specified advance" to frame non cash payment rules for receipts and repayments linked to immovable property. It mirrors the Explanation to Section 269T in several respects-notably the definition of "specified advance"-but adds an explicit "specified sum" to capture any monetary receipt related to a proposed property transfer whether or not the transfer occurs, thereby potentially broadening regulatory coverage and creating interpretative issues where payments overlap the two terms.
    Act RulesBills
    Show AI Summary
    Mode of repayment restrictions: non cash repayment mandated for covered loans and advances to ensure traceability and compliance.
    Clause 188 mandates non cash repayment of loans, deposits and specified advances by account payee cheque, bank draft, electronic clearing or other prescribed electronic modes when the amount or the aggregate held by the person equals or exceeds twenty thousand rupees, with a higher threshold of two lakh rupees for primary agricultural credit societies and related rural banks. It exempts repayments to Government and regulated banking or notified entities, allows intra branch crediting by banks, broadly defines "loan or deposit," covers advances related to immovable property, and emphasizes aggregation to prevent splitting transactions.
    Act RulesBills
    Show AI Summary
    Digital payment mandate requires businesses to provide prescribed electronic modes, promoting traceability and reducing cash transactions.
    Clause 187 mandates that every person carrying on business whose sales, turnover, or gross receipts exceed the prescribed monetary threshold in the immediately preceding tax year shall provide facilities for accepting payment through prescribed electronic modes, in addition to any other electronic modes offered; rule-making will specify the required modes, and compliance carries operational, record-keeping and penal implications while raising interpretive issues around prescription, group aggregation, and regulatory harmonization.
    Act RulesBills
    Show AI Summary
    Restriction on high value cash transactions: mandatory use of prescribed banking or electronic modes to enhance traceability and compliance.
    Clause 186 prohibits receipt of cash at or above the specified monetary threshold except through account payee cheque, bank draft, electronic clearing, or other prescribed electronic modes, applying the ban to aggregated daily receipts from the same person, single transactions, and transactions linked to a single event or occasion; exemptions include government and specified banking entities and further classes as notified by the Central Government, while interpretive ambiguities and delegated rulemaking on permissible modes may require administrative clarification.
    Act RulesBills
    Show AI Summary
    Cash transaction restriction: acceptance of loans, deposits and advances must be made only through traceable banking or electronic modes.
    Clause 185 prohibits accepting loans, deposits or specified sums in cash when the current transaction, the unpaid balance of prior transactions with the same person, or their aggregate reaches the prescribed threshold, and permits receipt only by account-payee cheque, account-payee bank draft, electronic clearing through a bank account or other prescribed electronic modes; exceptions cover the Government, specified banking and statutory entities, notified bodies, a rural higher threshold for primary agricultural credit societies and a narrow agricultural income exception.
    Act RulesBills
    Show AI Summary
    Definition of High Court clarifies appellate forum for States and Union Territories in tax law, reducing jurisdictional ambiguity.
    Clause 374 of the Income Tax Bill, 2025, provides a comprehensive, enumerated definition of "High Court" by designating the specific High Court applicable to each State and Union Territory, updating nomenclature, reflecting post reorganization realities (including Jammu & Kashmir and Ladakh), and replacing reliance on piecemeal adaptation orders; this consolidation reduces jurisdictional uncertainty, aids administrative and judicial efficiency, and highlights the need for legislative updates or transitional provisions if future territorial changes occur.
    Act RulesBills
    Show AI Summary
    Monetary limits on tax appeals: Board may set filing thresholds; non filing does not amount to departmental acquiescence.
    Clause 373 authorises the Board to fix monetary limits and other criteria for filing appeals by income tax authorities, permits the Board to revise those limits, and provides that non filing of an appeal in one case does not preclude filing in other years or against other assessees. The clause bars assessees from claiming departmental acquiescence due to non filing and directs tribunals and courts to have regard to the Board's instructions and the circumstances of filing or non filing while leaving the weight of those instructions to judicial discretion.
    Act RulesBills
    Show AI Summary
    Exclusion of time to obtain copy suspends limitation for appeals and applications when copy not provided, subject to diligence.
    Clause 372 excludes the day of service and, where a copy was not provided with the notice, the time required to obtain that copy from computation of limitation for appeals and applications; the exclusion is subject to the assessee's reasonable diligence and requires documentary proof of application and receipt, with electronic service and portal access raising specific interpretive issues.

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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