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    NewsBills
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    NPS deduction limit for state government contributions increased, providing retrospective tax relief to state government employees.
    Amendment increases the statutory deduction under section 80CCD for State Government employer contributions to National Pension System accounts to align with the higher employer contribution threshold, effective retrospectively from April 1, 2020, and applicable to the relevant assessment year onward to prevent additional tax liability on contributions exceeding the prior lower limit.
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    IFSC tax exemptions expanded to cover offshore derivatives, ship lease income and portfolio income managed via IFSC accounts.
    Amendments broaden tax exemptions and deductions for IFSC operations: extend section 10(4E) to non resident income from transfers of offshore derivatives with Offshore Banking Units; expand section 10(4F) to exempt royalty or interest on ship leases paid by qualifying IFSC units and define "ship"; insert section 10(4G) to exempt non resident income from portfolios managed by portfolio managers in IFSC Offshore Banking Unit accounts where income accrues outside India; include regulated Alternative Investment Funds in the section 56 specified funds explanation; and allow section 80LA deductions for transfers of ships leased by IFSC units, subject to commencement conditions.
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    Alternate Minimum Tax parity: co operative societies' AMT rate aligned with companies, lowering their AMT burden from the prior higher rate.
    The Finance Bill proposes amending section 115JC(4) to reduce the alternate minimum tax rate applicable to co operative societies to the company rate and consequentially amending the definition of alternate minimum tax in clause (b) of section 115JF, effective from 1st April, 2023 for the assessment year 2023 24 onwards.
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    Startup tax exemption: incorporation deadline extended to cover delayed incorporations, expanding eligibility for upcoming assessment years.
    Amendment extends the incorporation cutoff for claiming the full-profit deduction by eligible startups to accommodate COVID-related delays, while retaining existing qualifying conditions such as the turnover ceiling and requirement of certification from the Inter-Ministerial Board of Certification; the change takes effect from the commencement of the next fiscal period and applies to the specified assessment year and subsequent years.
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    Concessional tax under section 115BAB extended to give new manufacturers extra time to commence production due to pandemic delays.
    Section 115BAB permits new domestic manufacturing companies to opt for a concessional tax rate if they forgo specified incentives and meet conditions, including commencement of manufacturing by a statutory cut-off. The proposal amends section 115BAB to extend the deadline for commencement of manufacturing or production by one year to relieve companies delayed by the COVID 19 pandemic; the amendment takes effect from 1 April 2022 and applies to the assessment year 2022-23 and subsequent years.
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    Interest on TDS/TCS defaults to be payable as per Assessing Officer's order, clarifying computation and payment obligation.
    The measure amends the TDS and TCS interest provisions to provide that where the Assessing Officer makes an order for a default under the relevant sections, the interest shall be paid by the person in accordance with the order made by the Assessing Officer, clarifying computation and payment obligation for continuing defaults.
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    Actual payment requirement: conversion of interest into debentures or deferred instruments will not qualify as payment under section 43B.
    The proposed amendment clarifies that conversion of interest payable to specified financial institutions, NBFCs, scheduled banks or co-operative banks into debentures or any other instrument deferring payment shall not be deemed to have been actually paid for purposes of claiming a deduction under Section 43B, thereby excluding constructive discharge by conversion from qualifying as payment.
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    Disallowance under section 14A clarified: provisions apply even when exempt income has not accrued, barring related deductions.
    Clarification that disallowance under section 14A applies even where exempt income has not accrued, arisen or been received in the relevant previous year if expenditure was incurred in relation to such exempt income; insertion of an Explanation and a non obstante clause to ensure no deduction is allowed in relation to exempt income. Proposed amendment to section 37(1) adds an Explanation that expenditure which is an offence or prohibited by law includes offences under foreign law, benefits whose acceptance breaches governing rules of the recipient, and payments to compound offences.
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    Successor liability protections validate predecessor assessments and allow modified returns and demand adjustments after reorganisation.
    The proposals validate assessments and proceedings conducted against a predecessor by deeming them made on the successor, allow entities undergoing reorganisation to file modified returns for the period between the reorganisation's effective date and the final order, and establish a mechanism to modify outstanding tax demands to give effect to directions of the competent authority in restructuring.
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    Tax treatment of cess and surcharge: centrally imposed cesses as additional surcharges are non deductible under Section 40(a)(ii).
    The document addresses whether amounts called cess or surcharge are deductible under Section 40(a)(ii), which disallows sums paid on account of any rate or tax levied on business profits. It explains that centrally imposed cesses described in Finance Acts as additional surcharges function as part of income tax and therefore fall within the disallowance, contrasts that with state cesses which historically were treated as allowable, and states a retrospective explanatory amendment will clarify that "tax" includes any surcharge or cess by whatever name called for purposes of the provision.
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    Dispute Resolution Committee decisions: Assessing Officer must give effect to DRC resolutions while preserving taxpayer choice of forum.
    The amendment enables the Assessing Officer to pass a final order giving effect to the Dispute Resolution Committee's resolution: after the DRC determines assessed income the AO must implement the DRC's directions, which may include initiation of penalty proceedings and issuance of a demand notice; a taxpayer may opt for the DRC instead of the alternate dispute resolution panel and the AO's final order shall conform to the DRC resolution.
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    Deferment of Revenue Appeals on identical legal questions - procedure to postpone filing pending final decision with assessee consent.
    The proposed section 158AB allows a collegium of senior tax commissioners to advise non-filing of a revenue appeal where an identical question of law is pending in another case; the Commissioner must then direct the Assessing Officer to apply in prescribed form to defer filing of the appeal until the other case attains finality, provided the assessee accepts that the questions are identical, and may later direct an appeal if the final decision is not consistent with the relevant case.
    NewsBills
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    Individual tax regime option: simplified slab structure introduced affecting taxpayer choices and surcharge applicability and cess treatment.
    An optional individual tax regime and a separate optional cooperative society regime take effect for the assessment year 2021-22 on satisfaction of specified conditions, while Part I of the First Schedule preserves baseline rates for individuals by age categories, associations, firms, local authorities and companies (including a lower corporate rate for qualifying domestic companies). A graduated surcharge framework with marginal relief is specified across taxpayer classes, and a Health and Education Cess is levied on tax inclusive of surcharge with no marginal relief for the cess.
    NewsBills
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    Tax withholding for non-salary incomes: surcharge and cess adjustments affect non-resident and company payees during fiscal year period.
    Rates for deduction of income-tax at source on non-salary incomes for FY 2021-22 remain as specified in Part II of the First Schedule to the Finance Bill, 2021, unchanged from the prior year; applicable statutory sections continue to govern deduction. A graduated surcharge applies to TDS for specified non-resident recipients, companies and certain entities with caps for dividend and specially taxed income components, and a Health and Education Cess is levied on income tax including surcharge for non-residents and foreign companies.
    NewsBills
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    Income-tax withholding and advance tax rules clarified for salaries, with surcharge structure and universal cess applied on computed tax.
    Part III of the First Schedule prescribes rates for tax withholding from salaries, computation of advance tax and charging of tax in special assessments. It sets rate schedules for individuals (including senior categories) and other persons, specifies surcharge slabs with marginal relief, provides an optional alternative tax regime for eligible individuals and HUFs, and outlines separate rate and surcharge rules for co-operative societies, firms, local authorities and companies, with a universal health and education cess applied on tax inclusive of surcharge.
    NewsBills
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    LTC cash exemption allowed for prescribed consumer expenditures subject to GST, electronic payment and receipt conditions.
    A new proviso to clause (5) of section 10 will exempt cash allowances in lieu of LTC for the assessment year beginning 1 April 2021, subject to conditions: option for deemed LTC fare for the 2018-21 block; specified expenditure on goods or services taxed at an aggregate GST rate of twelve percent or more from GST-registered vendors during the specified period; payment via prescribed account-payee or electronic modes with tax invoice; an exemption cap per person limited to the lesser of a fixed ceiling or one-third of specified expenditure; and coordination with employer-provided amounts.
    NewsBills
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    Affordable rental housing deduction expanded to include government notified rental projects, and time limit for approvals extended.
    The deduction equal to one hundred percent of profits and gains from the qualifying housing business is extended to include rental housing projects notified by the Central Government that meet conditions in that notification, and the outer time limit for project approval determining eligibility is extended so that the same temporal cut-off applies to these affordable rental housing projects.
    NewsBills
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    Tax incentives for IFSC units expand exemptions and relaxed conditions for eligible funds, offshore banking investment divisions.
    Proposed amendments extend tax exemptions and relaxed conditions to units and fund managers located in an International Financial Services Centre by permitting modification of section 9A conditions, treating the investment division of an offshore banking unit as a specified fund for section 10 and section 115AD purposes (subject to Category III AIF registration and separate books), and by inserting exemptions for non-deliverable forward transfers, aircraft-lease royalties, and capital gains arising on relocation of funds where Original Fund, Relocation and Resultant Fund meet prescribed conditions; consequential amendments to sections 47, 49, 56, 79 and 80LA are provided.
    NewsBills
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    Zero coupon bond issuance by infrastructure debt funds permitted, triggering tax-rule amendments and retrospective withholding changes.
    Amendment to the definition of zero coupon bond extends eligible issuers to include notified infrastructure debt funds, enabling those funds to issue instruments with no payment or benefit before maturity; implementing amendments to Income-tax Rules (including Rules 2F and 8B) and an associated amendment to withholding provisions in section 194A are contemplated, with specified staged effective dates and Official Gazette notifications to operationalise the changes.
    NewsBills
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    Tax neutral conversion of cooperative banks preserves deduction apportionment and treats asset and share transfers as non-transfers.
    Conversion of primary co-operative (urban co-operative) banks into banking companies is brought within the business reorganisation provisions so that section 44DB's apportionment of deductions between predecessor and successor applies; transfers of capital assets and allotment of shares on conversion are not to be treated as transfers under section 47, effected by amendments to section 44DB and clauses (vica)/(vicb) of section 47, effective 1 April 2021.

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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.

       


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      Budget 2020-21 + FINANCE BILL, 2020

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