Deeming of fair market value: exemptions where share consideration is approved by specified authorities, relieving applicability of certain tax provisions.
Proposes empowering the Board to exempt prescribed classes of transactions and persons from the deeming of fair market value for share transfers where consideration is approved by specified authorities, thereby relieving applicability of valuation deeming in both receipt-based chargeability and capital gains computation, with the amendment applying prospectively to subsequent assessment years.

Withholding tax online applications enabled to streamline Assessing Officer determinations for non-resident payments and improve monitoring.
Amendments to section 195(2) permit electronic filing by payers seeking determination of the portion of payments to non-residents chargeable to tax and authorize prescription of the form and manner of application and of the Assessing Officer's procedure for determining the taxable portion; a parallel change to section 195(7) applies to specified classes, with the reforms intended to speed processing and improve administrative monitoring.

Electronic filing requirement for statements of non-deducted tax on interest introduced, with correction mechanism and effective date.
Amendment to Section 206A requires electronic filing, in the prescribed form and manner, of statements for payments of interest to residents where tax has not been deducted at source; it also provides for correction of such statements to rectify mistakes or add, delete or update information and includes a consequential amendment reflecting an increased TDS threshold for certain payers, effective from 1st September, 2019.

Buy back tax extension: buy backs by listed companies now subject to the anti abuse levy, with shareholder exemption aligned.
The anti abuse levy under Section 115QA is proposed to be extended to companies listed on recognised stock exchanges, bringing buy backs by listed companies within the additional tax regime and addressing tax arbitrage between buy backs and dividends; simultaneously, the exemption for shareholders under clause (34A) of section 10 is extended to listed company shareholders where the company has paid the buy back tax, effective for buy backs on or after the stated commencement date.

Cancellation of registration: expanded to include noncompliance with other material laws and final adverse orders after hearing.
Cancellation of registration is broadened to require that, when granting registration, the tax authority satisfy itself about compliance with other laws material to the trust's or institution's objects. Registration may be cancelled where a trust or institution has violated such other material laws and an order or decree establishing that violation is final or undisputed; cancellation is to be by written order after affording a reasonable opportunity of being heard.

Tax-neutral demerger rules exempt Ind-AS valuation differences, allowing resulting companies to adopt Ind-AS values for transferred undertakings.
The amendment exempts resulting companies from the requirement to record property and liabilities at the demerged company's book values where the assets and liabilities are recorded at different values solely due to compliance with Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015, thereby permitting resulting companies to adopt Ind AS values for the undertaking received.

Extension of TDS proviso: deductor relief for payments to non residents when the payee files a return and pays tax.
The law is amended to extend the first proviso to section 201 to cover payments to non residents so that where a non resident payee files a return, discloses the payment, pays tax and furnishes a certificate, the deductor will not be treated as an assessee in default; interest will accrue only until the payee's return filing date. Additionally, clause (a) of section 40 is amended to deem tax as deducted and paid on the date the payee files its return, preventing disallowance of such payments.

Advance Pricing Agreement: Assessing officer limited to modifying total income under APA when taxpayer files a modified return.
The amendment specifies that when a taxpayer files a modified return under the APA framework after a completed assessment or reassessment, the Assessing Officer shall pass an order modifying only the total income of the relevant assessment year as determined in that completed assessment or reassessment, having regard to and in accordance with the APA.

Secondary adjustment rules updated: option to pay a one-time additional tax instead of repatriating excess transfer pricing amounts.
Section 92CE requires secondary adjustment where a primary transfer-pricing adjustment arises from specified mechanisms. The amendment makes the monetary threshold and earlier-year condition alternative tests; mandates interest calculation on excess funds; limits application to agreements signed after a specified date without refunds for prior taxes; allows repatriation from non-resident associated enterprises; and offers an option to pay a one-time additional income-tax (with surcharge) in lieu of repatriation, which is final, non-creditable, non-deductible, and relieves the secondary adjustment requirement from payment date.

Concessional short-term capital gains tax extended to certain equity-oriented fund of funds, enhancing disinvestment incentives.
The proposal amends section 111A to extend the concessional rate of short-term capital gains tax to transfers of units of specified equity-oriented fund of funds set up for CPSE disinvestment, bringing short-term tax treatment into alignment with the existing concessional long-term capital gains regime under section 112A; the amendment applies prospectively to assessment years commencing after the stated effective date.

Pass-through of AIF losses: business losses retained at fund; certain non-business losses deemed to eligible unit holders and carried forward.
Amendment to section 115UB provides that AIF business losses remain at the fund and are carried forward under Chapter VI and not passed to unit holders; non-business losses tied to units not held by a unit holder for at least twelve months are ignored for pass-through; non-business losses accumulated at the fund as on 31 March 2019 are deemed to be the losses of unit holders who held units on that date and may be carried forward and set off by them under Chapter VI, and those deemed losses will not be available to the fund.

Relief under section 89 to be included in tax computation, making amended computation provisions effective retrospectively for affected assessment years.
Proposed amendments require that tax liability be computed after allowing the relief under section 89, so that existing computation and interest provisions explicitly accommodate credit for this relief; the amendments operate retrospectively and apply to earlier assessment years to address hardship for eligible taxpayers.

TDS on life insurance income: withholding will target the income component to align taxable reporting and reconciliation.
The amendment requires withholding tax to be deducted on the income component of non-exempt life insurance payouts rather than on the gross payout, to facilitate automatic matching of deductor TDS returns with recipients' tax returns because the payer can ascertain the premium paid by the policyholder, and specifies a commencement date for the change.

Accounting year definition clarified to follow ultimate parent's year for alternate reporting entities, with retrospective effect.
For an alternate reporting entity resident in India whose ultimate parent is not resident in India, the reporting accounting year for Country-by-Country Reporting shall be the accounting year applicable to that ultimate parent entity rather than the Indian ARE's own previous year; this clarificatory amendment is retrospective to 1 April 2017 and applies to assessment year 2017-18 and thereafter.

Transfer pricing documentation expanded: constituent entities must maintain and furnish group information even without transactions.
The amendment mandates that a constituent entity of an international group must keep and maintain prescribed group-level information and documents and file the required form even if the constituent entity has undertaken no international transaction. It further requires the constituent entity to furnish the prescribed information to the designated authority, with the amendment effective from 1 April 2020 for the relevant assessment year.

Tax treatment of excess consideration on share issues: conditional exemptions; non compliance converts excess into taxable deemed income.
The measure makes conditional exemptions from tax on excess consideration for share issues subject to specified compliance conditions and provides that any failure to comply will result in the excess consideration over face value being treated as deemed income of the company, chargeable to income tax in the previous year in which the non compliance occurred.

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.

Penalty computation for under-reported income clarified for returns filed during reassessment, applied retrospectively to relevant assessment years.
Amendments prescribe the method to compute the quantum of penalty where a taxpayer under-reports income and furnishes a return for the first time during reassessment proceedings; they address the existing absence of such a computation mechanism and apply retrospectively to cover specified assessment years.

Prosecution threshold for late tax returns broadened to include self-assessment tax and tax collected at source.
Determination of tax liability under section 276CC will include pre-paid taxes, specifically tax collected at source and self-assessment tax paid before the expiry of the assessment year, when deciding whether the tax payable falls below the prosecution threshold. The amendment also increases the monetary threshold applicable for prosecution and applies to the relevant subsequent assessment years.

Tax recovery under international agreements expanded to allow enforcement based on residency when property details are unavailable.
Amendments permit recovery of tax under agreements with foreign countries where property details are unavailable by allowing enforcement when the target person is a resident in India, and reciprocally where an assessee in default is a resident in a foreign country despite lack of property details, thereby enabling treaty-based recovery through residency-based enforcement.