Consequential amendment to section 56

The existing provisions of the section 56 of the Income-tax Act, inter alia, provide that income by way of interest received on compensation or on enhanced compensation referred to in section 145A(b) shall be chargeable to tax. The Finance Act, 2018 substituted the provisions of section 145A with sections 145A and section 145B. However, no consequential amendment is made in section 56. It is proposed to amend section 56 of the Act to provide the correct reference of section 145B(1) in section 56, in place of the existing reference of section 145A(b).

This amendment will take retrospective effect from 1st April, 2017 and will accordingly apply in relation to assessment year 2017-18 and subsequent assessment years.

[Clause 21]

 

 

 

Statutory reference correction in tax law: interest on compensation aligned with amended valuation provision, applied retrospectively. An amendment will correct the statutory reference in section 56 of the Income tax Act to cite section 145B(1) instead of section 145A(b), ensuring that interest on compensation or enhanced compensation is chargeable to tax under the revised provisions introduced by the Finance Act, 2018. The correction is retrospective to the start of the applicable fiscal period and applies to the relevant assessment years.