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Co-ownership taxation clarifies individual assessment and allocation of rental income among co-owners under broadened property scope.
Taxation of income from co-owned property preserves individual assessment and allocation by definite and ascertainable shares, excludes association-of-persons treatment, broadens the scope of "property," simplifies income computation references to the relevant Chapter, and clarifies relief for self-occupied interests by direct cross-reference to the relief provision.
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Deductions from house property: Bill streamlines deduction rules and documentation requirements for interest and construction periods.
Clause 22 restructures deductions from house property by preserving the standard deduction and interest allowance while imposing a capped interest deduction, clearer rules for prior period interest, and explicit documentation obligations including detailed interest certificates and treatment of refinancing. It extends the construction completion period for deduction eligibility and revises the linkage and references for foreign interest restrictions, aiming to standardise limits, conditions, and verification procedures.
Act Rules Bills
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Taxation of arrears of rent: clause mainstreams treatment, taxes on receipt, and preserves standard deduction.
Proposed Clause 23 treats arrears of rent and unrealised rent as income from house property taxed in the year of receipt or realisation, preserves applicability despite change of ownership and the 30% standard deduction, and reorganises provisions into distinct subsections for chargeability, inclusion in total income, and deductions while substituting "tax year" for "financial year" and simplifying language to reduce interpretive ambiguity.
Act Rules Bills
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Annual value determination simplified: bill streamlines rent-based criteria, expands deductions and vacancy rules to ease compliance.
Determination of the annual value is streamlined to a two criterion test-expected rent and actual rent-while vacancy is addressed in a separate subsection, local authority taxes and specified service taxes are consolidated as deductible items, stock in trade nil value relief is extended, and self occupied property rules retain a two house concession with clearer conditions.
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Income from house property: streamlined charging provision and separate business-use exception clarifies taxation and compliance.
The provision defines the annual value of buildings and appurtenant land owned by the assessee as the charging concept, with the exclusion for portions occupied for business or professional purposes moved into a separate sub section, preserving the substantive tax effect while improving statutory structure and clarity.
Act Rules Bills
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Profits in lieu of salary redefined to separate termination, modification, and fund payments with schedule-based exclusions.
The provision redefines profits in lieu of salary into two subsections: one defining taxable receipts-distinguishing termination payments, modification payments, pre and post employment lump sums, and employer/fund/keyman insurance payments-and the other listing exclusions via schedules. The schedule-based exclusions replace prior cross references to exemption clauses, simplifying identification of non taxable receipts and improving classification and compliance for taxpayers and employers.
Act Rules Bills
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Perquisite taxation modernisation streamlines valuation, standardises employer contribution limits and revises accommodation and medical exemptions.
The Bill reorganises and simplifies perquisite provisions by consolidating accommodation rules, removing detailed computation methods in favour of prescribed approaches, and eliminating distinct treatment for furnished and hotel accommodation. It streamlines benefits and amenities by replacing a monetary threshold with prescribed-amount determinations, unifies fund-related rules with a uniform cap on aggregate employer contributions and annual accretion calculations, and retains but modifies medical exemptions by removing the previous reimbursement ceiling and clarifying overseas treatment conditions.
Act Rules Bills
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Salary definition reform clarifies component categories and statutory references, enhancing transparency and compliance in compensation taxation.
Clause 16 redefines salary by converting a nine-part scheme into twelve distinct sub-clauses, separating previously combined items like fees, commissions, perquisites and profits in lieu of salary, relocating leave encashment and provident fund references to updated schedules, and updating section cross-references while retaining the substantive tax treatment and adding modern compensation elements such as contributions to the Agniveer Corpus Fund.
Act Rules Bills
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Deductions from salaries consolidated: restructured standard deduction tiers and unified gratuity, pension and VRS provisions for clarity.
Clause 19 consolidates salary-related deductions into a single tabular framework, instituting a two-tier standard deduction aligned with a specified tax regime, grouping gratuity types under numbered entries with categorisation and calculation guidance, centralising pension and leave salary provisions with detailed computation rules, consolidating retrenchment compensation with specified limits and conditions, and streamlining Voluntary Retirement Scheme benefits with a defined monetary ceiling and eligible employer criteria to enhance administrative efficiency and taxpayer clarity.
Act Rules Bills
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Salaries taxation clarified: structural reorganisation and retention of substantive tax treatment simplifies employer scope and advance salary rules.
Clause 15 reorganises salary taxation into discrete subsections, modernises terminology by adopting "tax year," and converts explanations into operative provisions. It limits main clauses to "employer" while separately providing that "employer includes former employer," and elevates the treatments of advance salary and partner remuneration to standalone subsections, preserving existing substantive tax effects while improving statutory clarity.
Act Rules Bills
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Disallowance of expenditure related to non-taxable income clarified and assessing officer powers streamlined under the new income tax bill.
Clause 14 preserves the principle that expenditure related to income not forming part of total income is disallowed, sets out a three-part structure-basic disallowance rule, assessing officer authority to verify or apply a prescribed method, and a tax year temporal application-and streamlines language by incorporating the former Explanation into the main provision while omitting provisions on reassessment, rectification references, and retrospective application.
Act Rules Bills
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Tax exemption for political funding consolidated with stricter documentation, audit and distribution conditions under new clause.
Clause 12 of the Income Tax Bill, 2025 consolidates exemption rules for political parties and electoral trusts, retaining existing excluded income categories while reorganising eligibility and conditions into Schedule VIII's tabular format. It strengthens documentation, retains the cash-donation cap, expands acceptable non-cash payment modes to account-payee and electronic methods and electoral instruments, mandates timely return filing and enhanced audits, requires electoral trusts to distribute the bulk of aggregate donations to registered parties, and provides for taxation of exempt income where statutory conditions are not met.
Act Rules Bills
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Deemed transfer of assets triggers tax; Clause 8 adds guideline timelines and enhanced parliamentary oversight for valuation.
Deemed transfer of capital assets or stock-in-trade on distribution during dissolution or reconstitution constitutes a taxable event with gains measured by fair market value, taxed as business income or capital gains. Clause 8 clarifies terminology, prescribes a limited period for issuing implementation guidelines, introduces parliamentary review and modification procedures, modifies cross-references, and is less explicit about the binding nature of guidelines; specified entities must recognize the deemed transfer and specified persons must maintain valuation documentation.
Act Rules Bills
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Deemed accrual of income expands India's tax nexus to digital activities and indirect transfers, affecting cross-border taxpayers.
Clause 9 establishes when income is deemed to accrue or arise in India, categorising taxable flows from Indian assets/sources, property, business connections and transfers of capital assets situated in India, and prescribing specific rules for salary, dividends, interest, royalty and technical service fees, with tailored definitions for software and digital rights, while introducing Significant Economic Presence and attribution rules plus indirect transfer tests and exemptions.
Act Rules Bills
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Territorial nexus expanded to include significant economic presence, broadening tax scope for digital and cross-border business activities.
The proposed Clause 9 expands the territorial nexus and refines business connection to include significant economic presence, adds targeted rules for online advertising, data monetization and digital services, and integrates investment fund management rules, creating new compliance obligations for businesses, non-residents and fund managers while aligning with international tax guidelines.
Act Rules Bills
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Deemed income consolidation simplifies timing and treatment of employee benefits and dividends under the new bill, improving clarity.
The Bill consolidates rules treating certain receipts as income into one clause, preserving employee-related deemed income categories and provident fund treatment while refining employer-contribution language and updating cross-references. It integrates dividend provisions, maintains the declared versus interim dividend distinction, broadens the dividend definition through updated references, and clarifies unconditional availability of interim distributions, aiming to simplify timing and computation of these receipts and reduce interpretive disputes for tax administration.
Act Rules Bills
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Residential status reform refines residency tests and deemed resident rules, strengthening clarity for high income individuals and companies.
The Bill restructures residential status rules to clarify the day count residency framework, refine temporal definitions and exceptions, and expand deemed residency and not ordinarily resident criteria. It adds targeted provisions for high income individuals with a distinct presence test and develops company residency guidance by elaborating the place of effective management and management control factors, aiming to align with international standards and reduce disputes.
Act Rules Bills
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Apportionment of spousal income: equal division of non-salary income with salary attributed to the earning spouse under Portuguese Civil Code.
Income of spouses under the Portuguese Civil Code is not assessed as community property; non-salary income is divided equally between spouses while salary income is attributed solely to the earning spouse. Section 5A and Clause 10 maintain individual assessment, require separate inclusion of apportioned shares in each spouse's return, and call for clear income segregation and documentation. Clause 10 simplifies language and removes prior references to classification as an association of persons or body of individuals.
Act Rules Bills
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Scope of total income clarified: residency tests and foreign income treatment reorganised to improve clarity and administration.
Clause 5 reorganises the scope of total income by substituting "previous year" with tax year, moving not ordinarily resident treatment into the main clause, and elevating former Explanations into subsections. The Bill preserves the core rules on income received or deemed received in India, income accruing or arising in India, and income accruing outside India, while separately articulating prevention of double inclusion and foreign income treatment to improve clarity and administrative coherence.
Act Rules Bills
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Commercial activities by non-profits face a revenue cap and mandatory separate accounting, tightening compliance and transparency.
Clause 346 of the Income Tax Bill, 2025 requires commercial activities by registered non-profit organisations to be directly related to charitable objectives, subjects receipts from such activities to a statutory revenue cap, and mandates separate accounting for those activities. This contrasts with Section 2(15) of the Income-tax Act, 1961, which conditions tax-exempt status on activities being integral to the charitable purpose and a similar receipts ceiling but lacks an explicit separate accounting requirement. The clause emphasizes transparency, documentation, and clearer compliance parameters.

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AMENDMENTS IN THE FIRST SCHEDULE TO THE CUSTOMS TARIFF ACT, 1975

3 February, 2020

Contents
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Budget 2020-21 + FINANCE BILL, 2020

AMENDMENTS

A.

Tariff rate changes for Basic Customs Duty [to be effective from 02.02.2020] * [Clause 115 (a) of the Finance Bill, 2020]

Rate of Duty

S.No.

Heading, sub-heading, tariff item

Commodity

From

To

 

 

Food processing

 

 

1.

0802 32 00

Walnuts, shelled

30%

100%

 

 

Chemicals

 

 

2.

3824 99 00

Other Chemical products and preparations of the chemical or allied industries, not elsewhere specified

10%

17.5%

 

 

Footwear

 

 

3.

6401, 6402,

6403, 6404, 6405

Footwear

25%

35%

4.

6406

Parts of footwear

15%

20%

 

 

Household Items

 

 

5.

6911 10, 6911 90 20, 6911 90 90

Tableware, kitchenware, water filters (of a capacity not exceeding 40 litres) and other household articles, of porcelain of china.

10%

20%

6.

6912 00 10, 6912 00 20, 6912 00 40, 6912 00 90

Ceramic tableware, kitchen-ware, clay articles and other household articles

10%

20%

7.

7013

Glassware of a kind used for table, kitchen, toilet, office, indoor decoration or Similar purposes (other than that of heading 7010 or 7018)

10%

20%

8.

7323

Table kitchen or other household articles and parts thereof, of iron or steel, iron or steel wool; pot scourers and scouring or polishing pads, gloves and the like, of iron or steel, including pressure cookers pans utensils, misc articles such as iron & steel wool, polishing pads, gloves etc.

10%

20%

9.

7418 10

Table, kitchen or other household articles and parts thereof, of copper; pot scourers and scouring or polishing pads, gloves and the like, of copper.

10%

20%

10.

7615 10

Table, kitchen or other household articles and parts thereof, of aluminum; pot scourer and scouring or polishing pads, gloves and the like, of aluminum.

10%

20%

11.

8301

Padlocks and locks (key, combination or electrically operated) of base metal; Clasps and frames with clasps, incorporating locks of base metals; keys for any of the foregoing articles, of base metals (Other than lock of a kind used for automobiles.)

10%

20%

12.

9603

Brooms, brushes, hand operated mechanical floor sweepers, not motorized, mops and feather dusters; prepared knots and tufts for broom or brush making; paint pads and rollers; Squeegees (other than roller squeegees).

10%

20%

13.

9604 00 00

Hand sieves and hand riddles.

10%

20%

14.

9615

Combs, hair-slides and the like, hairpins curling pins, curling grips, hair curlers and the like other than those of heading 8516 and parts thereof.

10%

20%

15.

9617

Vacuum flasks and other vacuum vessels, complete with cases; parts thereof other than glass inners.

10%

20%

16.

8414 51 10

Table Fans

10%

20%

17.

8414 51 20

Ceiling Fans

10%

20%

18.

8414 51 30

Pedestal Fans

10%

20%

19.

8414 59 20

Blowers, Portable

10%

20%

20.

8509 40 10

Food Grinders

10%

20%

21.

8509 40 90

Other grinders and Mixer

10%

20%

22.

8509 80 00

Other Appliances

10%

20%

23.

8510 10 00

Shavers

10%

20%

24.

8510 20 00

Hair Clippers

10%

20%

25.

8510 30 00

Hair-removing appliances

10%

20%

26.

8516 10 00

Water heaters and immersion heaters

10%

20%

27.

8516 21 00

Storage heating radiators

10%

20%

28.

8516 29 00

Other electrical space heating apparatus

10%

20%

29.

8516 31 00

Hair Dryers

10%

20%

30.

8516 32 00

Other hair dressing apparatus

10%

20%

31.

8516 33 00

Hand Drying apparatus

10%

20%

32.

8516 40 00

Electric smoothing irons

10%

20%

33.

8516 60 00

Other ovens, cookers, cooking plates, boiling rings, grillers and roasters

10%

20%

34.

8516 71 00

Coffee and Tea Makers

10%

20%

35.

8516 72 00

Toasters

10%

20%

36.

8516 79 10

Electro-thermic fluid heaters

10%

20%

37.

8516 79 20

Electrical or electronic devices for repelling insects

10%

20%

38.

8516 79 90

Other electro-thermic appliances used for domestic purposes

10%

20%

39.

8516 80 00

Electric heating resistors

10%

20%

 

 

Precious Metals

 

 

40.

7118

Coin

10%

20%

 

 

Machinery

 

 

41.

8414 51 40

Railway Carriage fans

7.5%

10%

42.

8414 51 90

Other fans with a self-contained electric motor not exceeding 125W

7.5%

20%

43.

8414 59 10

Air Circulator

7.5%

10%

44.

8414 59 30

Industrial fans blowers and similar blowers

7.5%

10%

45.

8414 59 9

Other industrial fans

7.5%

10%

46.

8414 30 00, 8414 80 11

Compressor of Refrigerator and Air conditioner

10%

12.5%

47.

8419 89 10

Pressure vessels

7.5%

10%

48.

8418 10 10

Commercial type combined refrigerator freezers, fitted separate external doors

7.5%

15%

49.

8418 30 10

Commercial freezer of chest type, not exceeding 800 litre capacity

7.5%

15%

50.

8418 30 90

Other chest type freezers

10%

15%

51.

8418 40 10

Electrical freezers of upright type, not exceeding 800 litre capacity

7.5%

15%

52.

8418 40 90

Other freezers of upright type, not exceeding 800 litre capacity

7.5%

15%

53.

8418 50 00

Refrigerating or freezing display counters, cabinets, Show-cases and the like

7.5%

15%

54.

8418 61 00

Heat pumps other than air conditioning machines

7.5%

15%

55.

8418 69 10

Ice making machinery

7.5%

15%

56.

8418 69 20

Water cooler

10%

15%

57.

8418 69 30

Vending machine, other than automatic

10%

15%

58.

8418 69 40

Refrigerating equipment/devices used in leather industry

7.5%

15%

59.

8418 69 50

Refrigerated farm tanks, industrial ice cream freezer

7.5%

15%

60.

8418 69 90

Others (like freezers of capacity 800 litres and more etc.]

7.5%

15%

61.

8515 (except 8515 90 00)

Welding and Plasma cutting machines

7.5%

15%

 

 

Other Electronic goods

 

 

62.

8504 40 (except 8404 40 21)

Static Converters

15%

20%

63.

8504 40 21

Dip bridge rectifier

10%

20%

64.

8517 70 10

Populated, loaded or stuffed printed circuit boards

10%

20%

 

 

Automobile and automobile parts

 

 

65.

8421 39 20, 8421 39 90

Catalytic Convertor

10%

15%

 

 

Furniture Goods

 

 

66.

9401

Seats and parts of seats (other than aircraft seats and their parts)

20%

25%

67.

9403

Other Furniture and parts thereof

20%

25%

68.

9404

Mattress supports: Articles of bedding and similar furnishing

20%

25%

69.

9405

Lamps and lighting fittings including searchlights and spotlights and pads thereof; Illuminated signs, illuminated name plates and the like, having a permanently fixed light source, and parts thereof (except solar lantern and solar lamps).

20%

25%

 

 

Toys

 

 

70.

9503

Tricycles, scooters, pedal-cars and similar wheeled-toys; dolls' carriages; dolls; other toys; reduced-Size (“scale”) models and similar recreational models, working or not; puzzles of all kinds

20%

60%

 

 

Stationary items

 

 

71.

8304 00 00

Filing, cabinets. card-index cabinets, paper-trays, paper rests, pen trays, office-stamp stands and similar office or desk equipment of base metal, Other than office furniture of heading 9403

10%

20%

72.

8305

Fittings for loose-leaf binders or files, letter clips, letter corners, paper clips, indexing tags and similar office articles, of base metal; staples in strips (for example, for offices, upholstery, packaging), of base metal

10%

20%

73.

8310

Sign-plates, name-plates, address-plates and similar plates, numbers, letters and other symbols, of base metal, excluding those of heading 9405

10%

20%

 

 

Miscellaneous

 

 

74.

6702

Artificial Flowers

10%

20%

75.

7018 10 20

Glass Beads

10%

20%

76.

8306

Bells, gongs, statuettes, trophies and like, non-electric of base metal; statuettes and other ornaments of base metal; photograph, picture or similar frames, of base metal; mirrors of base metal.

10%

20%

B.

New entries added to the First Schedule [to be effective from 02.02.2020] * [Clause 115(b) of the Finance Bill, 2020]

S. No

Tariff Item

Description

Tariff Rate

Effective rate

1.

8414 51 50

Wall fans

20%

20%

2.

8529 90 30

Open cell for television set

15%

0%

3.

8541 40 11

Solar cells, not assembled

20%

0%

4.

8541 40 12

Solar cells, assembled in modules or made up in panels

20%

0%

*Will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.

 


Full Text:

Budget 2020-21 + FINANCE BILL, 2020

Topics

Acts Income Tax