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    Tax Recovery from Directors of Private Companies : Clause 323 of the Income Tax Bill, 2025 Vs. Secti...
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    Act RulesBills
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    Director liability for unpaid company taxes: joint and several personal exposure subject to defence of absence of gross neglect.
    Clause 323 imposes joint and several personal liability on every person who was a director at any time during the relevant tax year where tax due from a private company cannot be recovered, with "tax due" including penalty, interest, fees and other sums; the director may avoid liability only by proving that non recovery was not attributable to gross neglect, misfeasance or breach of duty, and the provision overrides contrary company law provisions.
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    Liquidator personal liability: enforced civil responsibility to secure tax dues during liquidation while aligning with insolvency priorities.
    Clause 322 requires any liquidator or receiver to notify the assessing officer within thirty days of appointment and, after the assessing officer notifies an amount sufficient to cover tax liabilities (within three months), to set aside that sum and refrain from disposing of assets without leave; exceptions permit payment of tax, secured creditors with legal priority, and reasonable winding up expenses. Non compliance attracts personal civil liability for the liquidator, capped at the notified amount where applicable, and obligations are joint and several, with Clause 322 subject to the primacy of the Insolvency and Bankruptcy Code.
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    Assessment continuity: Dissolution of an AOP does not prevent assessment, penalty imposition, or recovery from members.
    Clause 321 permits assessment of an association of persons as if no discontinuance or dissolution had taken place, applying all statutory provisions including penalties and other sums. It empowers original and appellate officers to impose penalties specified in the penalty chapter, imposes joint and several liability on members and their legal representatives, and allows continuation of proceedings already commenced against such persons from the stage they stood at dissolution. A saving clause preserves interaction with specified cross referenced provisions.
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    Accelerated assessment on business discontinuance enables taxation up to cessation with mandatory notice and taxation of post-cessation receipts.
    Clause 320 permits discretionary accelerated assessment of income up to the date of business discontinuance, mandates separate assessments for each completed tax year or part thereof, requires mandatory notification of discontinuance within fifteen days, empowers notice and information-gathering powers on persons, partners or officers, and deems post-discontinuance receipts to be taxable as income of the recipient while clarifying that tax charged under the clause is additional to any other tax liability.
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    Preventive assessment of likely asset transfers: current year taxation triggered by AO belief of tax avoidance intent.
    Clause 319 empowers the Assessing Officer to tax the total income of persons believed likely to dispose of assets to avoid tax, charging income in the current tax year from its first day until proceedings commence; it requires formation of an AO opinion based on credible material, applies procedural provisions analogous to those for persons leaving the jurisdiction, and raises interpretive issues including the undefined scope of "assets", the standard for AO satisfaction, the truncated assessment period, and overlap with other anti avoidance rules.
    Act RulesBills
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    Taxation of short lived entities: income of event specific AOPs/BOIs/AJPs charged in the tax year up to dissolution.
    Clause 318 empowers the Assessing Officer to treat the total income of an AOP, BOI or AJP formed for a particular event or purpose as chargeable to tax for the tax year from its first day up to the date of dissolution where the AO is satisfied the entity is likely to dissolve, and applies the Bill's expedited procedural machinery for assessment, provisional determination and recovery.
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    Assessment of persons leaving India: expedited tax assessment from the tax year start to departure with short notice requirements.
    Clause 317 permits the Assessing Officer to assess an individual's total income from the first day of the current tax year up to the probable date of departure where the AO reasonably believes the individual intends not to return; income is assessed by completed tax years or part-years at rates in force, may be estimated if not readily determinable, and the AO may require an expedited return within a minimum seven-day period, with taxes charged under this provision being additional to other tax liabilities.
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    Recovery of tax from non residents: source withholding and attachment of any assets within India enable enforcement.
    Clause 422 and Section 173 authorise two primary enforcement mechanisms against non residents: recovery by deduction at source imposed on payers, agents or representative assessees, and recovery by attachment of any assets of the non resident that are, or may at any time come, within India. These powers apply whether tax is assessed in the non resident's name or in the name of a representative assessee and operate without prejudice to other assessment and recovery provisions, creating a continuing domestic enforcement right subject to definitional, procedural and treaty interaction issues.
    Act RulesBills
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    Presumptive taxation of foreign shipping secures Indian tax on carriage income via deemed income and port clearance linkage.
    Clause 316 introduces a presumptive regime deeming a fixed proportion of amounts paid or payable for carriage from Indian ports as income of non resident ship owners or charterers, includes demurrage and similar charges, requires the ship's master to file a pre departure return with the Assessing Officer (with limited deferred filing), empowers assessment within nine months, ties tax payment or satisfactory arrangements to port clearance, and preserves an option for regular assessment with payments treated as advance tax.
    Act RulesBills
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    HUF partition rules preserve deemed continuity and joint liability, limiting recognition of partial partitions and strengthening tax recovery.
    Clause 315 deems an assessed HUF to remain undivided for tax purposes until a formal finding of partition is recorded; mandates AO inquiry with notice to all members when a partition is claimed; assesses HUF income up to the partition date as if no partition occurred; imposes joint and several liability on former members for tax, penalties, interest and other sums; allows recovery from pre-partition members; computes several liability in proportion to property allotted; and disallows recognition of partial partitions for tax purposes within the specified post-cut-off period.
    Act RulesBills
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    Modified return requirement ensures tax assessments follow business reorganisation orders and must be adjusted accordingly.
    Clause 314 mandates that a successor entity furnish a modified return within the prescribed period after a business reorganisation order, limited to changes necessitated by that order, and requires the Assessing Officer to modify completed assessments or complete pending assessments in accordance with the order and the modified return; ordinary Act provisions apply unless expressly overridden, and key terms including business reorganisation and successor are defined with coverage of insolvency-sanctioned reorganisations.
    Act RulesBills
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    Continuity of tax liability on business succession: successor taxed post succession and may bear predecessor's unrecoverable dues.
    Clause 313 mandates that the predecessor is assessed for income up to the succession date and the successor for income thereafter in the same tax year; pending proceedings against the predecessor are deemed on the successor; if the predecessor cannot be found or dues are irrecoverable, assessment and recovery may be effected on the successor, who may then recover amounts from the predecessor. The clause explicitly includes gains from transfer in "income" and defines "pendency" for insolvency and tribunal contexts, aligning tax continuity with insolvency processes.
    Act RulesBills
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    Executor's right of recovery: statutory mechanism to reclaim taxes paid from the estate, subject to procedural adaptations.
    Clause 312(7) makes Section 305 applicable to executors "so far as may be" in respect of tax paid or payable by them, treating executors as representative assessees and thereby enabling statutory recovery of taxes from the estate or beneficiaries while permitting necessary adaptations of procedures and raising questions on priority and apportionment in insolvent or contested estates.
    Act RulesBills
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    Taxation of deceased estates: executor liable for estate income until complete distribution, with legatee inclusion on distributed income.
    Clause 312 taxes income of a deceased person's estate in the hands of the executor or administrator, with a single executor assessed as an individual and multiple executors as an association of persons; the executor is deemed to have the deceased's residential status for the tax year of death, assessments of estate income are separate from the executor's personal returns, separate assessments apply for each tax year or part thereof until complete distribution, and income distributed to specific legatees is excluded from the estate's income and included in the legatees' income.
    Act RulesBills
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    Joint and several liability of LLP partners applies where tax dues cannot be recovered from the LLP, subject to exculpation.
    Clause 331 makes every person who was a partner of an LLP during the relevant tax year jointly and severally liable for any tax, penalty, interest, fees or other sums payable under the Income tax law that cannot be recovered from the LLP or relevant persons, expressly overriding LLP Act protections. Liability is triggered only after non recovery from the LLP and is rebuttable: a partner can escape liability by proving that the non recovery was not due to his gross neglect, misfeasance, or breach of duty.
    Act RulesBills
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    Taxation of AOPs/BOIs with unknown member shares: maximum marginal rate applied to deter tax avoidance.
    Clause 311 mandates taxation of an AOP/BOI's total income at the maximum marginal rate where members' shares are indeterminate or unknown, and requires taxation at any higher rate applicable to any member; when shares are determinate, it taxes the whole income at the maximum marginal rate if a member's other income exceeds the exemption threshold, while portions attributable to members chargeable at higher rates are taxed at those higher rates, with a deeming provision treating shares as indeterminate if so at formation or thereafter.
    Act RulesBills
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    Firm taxation: firms taxed on total income at rates set annually in the Finance Act.
    Clause 324 charges a firm which is assessable as a firm with tax on its total income at the rate specified in the Finance Act for the relevant year, applying only to entities that qualify as firms and requiring alignment with definitional, computation and allocation provisions elsewhere in the Act.
    Act RulesBills
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    Representative assessee liability: authorities may use the same remedies against property under a representative's control to recover tax dues.
    Clause 304(5) of the Income Tax Bill, 2025, mirrors Section 167 by empowering the Assessing Officer to exercise the same remedies in the same manner against all property vested in, or under the control or management of, a representative assessee as would be available against a person directly liable for tax, covering all kinds of property and applying regardless of whether the tax demand is raised against the representative or the beneficiary.
    Act RulesBills
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    Direct assessment empowers tax authorities to bypass representative assessees and pursue beneficiaries directly, preserving recovery powers.
    Clause 304(3) (Income Tax Bill, 2025) and Section 166 (Income tax Act, 1961) are non obstante provisions empowering the AO to directly assess and recover tax from the person entitled to income, irrespective of the existence of a representative assessee; these powers are discretionary, cover both assessment and recovery, preserve procedural safeguards for the beneficiary, and operate as alternative (not cumulative) mechanisms to prevent revenue loss due to procedural technicalities or representative non cooperation.
    Act RulesBills
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    Proportional apportionment clarifies how beneficiaries' trust distributions are computed for tax using a statutory formula.
    Clause 304(4) prescribes that where only part of a trust's income is chargeable, the taxable portion of a beneficiary's receipts is determined by multiplying the beneficiary's receipt by the ratio of the trust's chargeable part to its whole income (A x C / B), thereby codifying proportional apportionment and imposing related recordkeeping and reporting obligations on trustees and representative assessees.

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

      3 February, 2020

      Contents
      Rules & Regulations
      Plus +
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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

      ActsIncome Tax