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Rebate for resident individuals: expanded two-tier relief and tapered withdrawal to avoid abrupt tax cliffs.
Clause 156 creates a two-tier rebate: a general rebate for resident individuals below a base threshold and an enhanced rebate for taxpayers opting into the new tax regime with a higher threshold and larger maximum rebate. The enhanced rebate includes a tapering mechanism for incomes above its threshold and an express cap preventing the rebate from exceeding actual tax liability, with computation rules tied to the new-regime tax rates.
Act Rules Bills
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Rebate allowance framework modernisation - rebates applied after tax computation and capped to prevent negative tax liability.
Allowance of rebates is enabled by Clause 155, which permits rebates to be deducted from income-tax computed on total income after tax computation and before other chapter deductions, and caps aggregate rebates so they cannot exceed the tax computed prior to rebates; the substantive conditions and limits are delegated to Section 156.
Act Rules Bills
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Taxation of member's share: entity-level tax exempts members, unless the entity is untaxed or taxed below top rate.
Clause 310 establishes that a member's share of income from an AOP/BOI is exempt from tax in the member's hands when the association/body is taxed on that income; if the AOP/BOI is not chargeable to tax the member's share is taxed in the member's hands; and if the AOP/BOI is taxed at the maximum marginal rate the member's share is excluded from his total income, otherwise the member's share is included in his total income.
Act Rules Bills
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Deduction for disability: standardized tax relief retained with mandatory medical certification and prescribed certificate submission.
Clause 154 allows resident individuals certified by a medical authority as persons with disability or severe disability to claim a fixed deduction, contingent on furnishing the prescribed certificate with the return and on certificate validity and reassessment rules; definitions are cross referenced to a Bill provision for consistency.
Act Rules Bills
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Deduction for interest on deposits expanded to include senior citizens and time deposits, consolidating small-saver relief.
Clause 153 provides a statutory deduction for interest on deposits to individuals, senior citizens, and HUFs, specifying eligible institutions (banks, cooperative banking societies, and post offices), preserving denial of deductions for interest held by or on behalf of firms, AOPs, or BOIs, and defining time deposits. It consolidates prior disparate provisions by including senior citizens within the same clause with expanded coverage for time deposits, while maintaining the existing deduction treatment for non senior individuals and HUFs.
Act Rules Bills
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Patent royalty deduction for resident inventors: capped, certified relief tied to repatriated foreign receipts and compulsory licence limits.
Clause 152 provides a statutory deduction for resident individual patentees in respect of royalty from patents registered on or after 1 April 2003, subject to a statutory annual ceiling and procedural certification. Deductions in compulsory licence cases are limited to Controller determined royalty; foreign-sourced receipts qualify only to the extent repatriated in convertible foreign exchange within the prescribed period and supported by prescribed certification. Definitions exclude capital gains and sales proceeds from the scope of "royalty," and certification by prescribed authorities is required with the return.
Act Rules Bills
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Deduction for authors' royalty income limited by a fixed cap and repatriation plus certification requirements.
Clause 151 grants a deduction to resident individual authors for professional income from copyright assignment or royalties for literary, artistic, or scientific books (excluding textbooks), subject to a fixed monetary cap and a royalty to sales limit for non lump sum receipts. Foreign income qualifies only if repatriated in convertible exchange within a prescribed period and accompanied by prescribed certification, and claimants must submit payer verified certificates with returns; double deduction for the same income is expressly prohibited.
Act Rules Bills
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Tax deduction for producer companies enables full relief for profits from member-focused agricultural marketing and processing activities.
A statutory measure grants a 100% deduction on profits and gains of qualifying Producer Companies for income attributable to an identified eligible business-marketing members' agricultural produce, supplying inputs to members, and processing members' produce-subject to turnover limits, inclusion in gross total income, sequencing after other Chapter VI A deductions, and a legislatively imposed sunset period, with transitional company-law references and apportionment issues creating practical and interpretive compliance challenges.
Act Rules Bills
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Deduction for co operative societies preserved and modernised, with targeted categories and voting control safeguards for eligibility.
Clause 149 permits deductions for specified categories of income of co operative societies-profits from credit to members, cottage industry, marketing and specified processing of members' agricultural produce, supply of agricultural inputs, collective disposal of members' labour, fishing and allied activities, interest or dividends from investments in other co operatives, and income from letting godowns or warehouses-subject to membership, voting restrictions for certain societies, exclusions for most co operative banks, and computation after specified infrastructure deductions.
Act Rules Bills
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Deduction for inter corporate dividends prevents cascading taxation when dividends are onward distributed within the prescribed timeframe.
Clause 148 permits a deduction for dividends received by a domestic company from domestic companies, foreign companies and business trusts, limited to the amount the recipient company actually distributes to its shareholders by the date one month before the due date for filing the return referenced in the Bill; the same amount cannot be deducted in any other tax year. The deduction is conditional on onward distribution and timely compliance, creating documentary and administrative verification obligations and raising clarifications around the definition of dividend, treatment of foreign dividends and business trust distributions.
Act Rules Bills
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Tax deductions for IFSC and OBU income provide extended full relief subject to accountant certification and regulatory permission.
Clause 147 provides a consolidated deduction regime for OBUs and IFSC units in SEZs, specifying eligible assessees and qualifying income categories (OBU income, banking activities tied to SEZ undertakings/developers, approved IFSC activities, and transfers of leased aircraft or ships within the stated commencement deadline). It prescribes full deduction for designated consecutive years with an elective window for IFSC units, and conditions the allowance on submitting a prescribed accountant's certification and evidence of regulatory permission or registration.
Act Rules Bills
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Deduction for additional employee cost incentivises formal hiring through multi year tax relief subject to reporting and anti abuse conditions.
Clause 146 allows a deduction equal to 30% of additional employee cost for three consecutive tax years where an assessee with business income increases employee numbers and pays emoluments through prescribed modes; claims are disallowed for splitting up, reconstruction, transfer or reorganisation except for revived sick units, and are subject to exclusions based on emolument ceilings, provident fund participation, pension contribution arrangements and minimum tenure thresholds, with the deduction claim contingent on a prescribed accountant's report.
Act Rules Bills
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Tax deduction for bio-degradable waste businesses allows full profit exemption for a fixed multi-year period.
Clause 145 provides a deduction for businesses whose profits and gains arise from collecting, processing or treating bio-degradable waste for activities including generating power, producing bio-fertilizers, bio-pesticides or biological agents, producing bio-gas, and making pellets or briquettes for fuel or organic manure. The deduction equals the whole amount of profits and gains from the eligible business and is available for five consecutive tax years beginning with the tax year in which the business commences. Key compliance issues include defining commencement, segregating eligible profits, and clarifying interaction with other incentives.
Act Rules Bills
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Tax incentives for North-Eastern undertakings: full profits deduction under new clause replaces prior provision, with revised cross references and limits.
Special tax relief permits a 100% deduction of profits and gains for eligible North Eastern undertakings commencing within the specified window, subject to exclusions for certain goods and activities, anti abuse restrictions on reconstruction or transfer of used machinery, and limits on concurrent deductions and aggregate deduction periods; updated cross references modernize procedural application but may create interpretive ambiguities on commencement date and aggregation scope.
Act Rules Bills
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Transitional deduction continuity preserved for eligible housing projects, computed and constrained by prior statutory conditions.
Clause 142 preserves transitional tax relief by incorporating the prior housing-project deduction by reference: assessees who would have been eligible under the repealed provision may claim deductions computed under the prior statute for the tax years that would have been covered, subject to the same substantive conditions-including project approval and completion requirements, unit size and utilization thresholds, separate project accounts, exclusion of works contracts, and the clawback mechanism-while not extending benefits to new projects commenced after repeal.
Act Rules Bills
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Grandfathering preserves industrial tax deductions, maintaining prior eligibility and compliance requirements for ongoing transitional claims.
Clause 141 preserves existing deductions for profits and gains of specified industrial undertakings by applying the prior law's eligibility, quantum and duration of deduction as if the repealed provision remained in force. It imports legacy compliance, audit and rule based requirements for ongoing claims, maintains original commencement windows and notification statuses, and prohibits new or extended claims. The clause protects continuity of entitlement while leaving unresolved issues on procedural lapses and treatment of reorganisations.
Act Rules Bills
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Start-up tax deduction: eligible start-ups may claim a consecutive-years profits exemption within the first decade, subject to certification and anti-abuse rules.
Clause 140 provides that an eligible start-up deriving profits from an eligible business may claim a full deduction for three consecutive tax years chosen within ten years of incorporation, subject to eligibility limits, certification by an Inter-Ministerial Board, audit and filing requirements, restrictions on formation by splitting or asset transfer, treatment rules for previously used imported machinery and de minimis used-asset transfers, recomputation at market or arm's length value for intra-group transactions, Assessing Officer powers to adjust profits, a bar on double deductions, and a governmental power to notify prospective exclusions of classes of undertakings.
Act Rules Bills
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SEZ developer deductions preserved as a transitional protection, applying legacy eligibility and computation rules to ongoing projects.
Clause 139 functions as a transitional savings provision preserving deductions for profits and gains from SEZ development by applying the eligibility, computation, and temporal rules of the repealed provision to developers who commenced projects under that earlier regime, thereby maintaining investor expectations and limiting the relief to unexpired periods without creating new entitlements.
Act Rules Bills
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Grandfathering of infrastructure tax deductions allows continuation of prior deduction regime into the new income tax code.
Clause 138 preserves the deduction regime of Section 80-IA as a transitional grandfathering provision: where an assessee's income includes profits from businesses referred to in Section 80-IA and the assessee would have been eligible had the old Act not been repealed, a deduction is allowed computed under Section 80-IA and only for the tax years that would have been available under that section, with all eligibility, computation, anti-abuse, audit and exclusion provisions applying by reference.
Act Rules Bills
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Non-cash political contributions incentivised by tax deduction promote traceability and exclude public-funded entities from benefits.
Deductibility is confined to contributions made by non-cash means to political parties registered under the Representation of the People Act or to electoral trusts, with exclusions for local authorities and artificial juridical persons wholly or partly funded by the Government. The rule aims to ensure traceability and transparency by disallowing cash donations, requires contemporaneous treatment within the tax year, and imposes documentary and payment-channel compliance obligations on donors and recipients, while leaving certain interpretative points-such as the definition of artificial juridical person and acceptable modern payment modes-open to clarification.

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Review of concessional rates of BCD prescribed in notification no. 50/2017 - Customs dated 30.62017: The BCD exemption hitherto available on certain goods are being withdrawn by omitting following entries of notification No. 50/2017-Customs dated 30.6.2017.

3 February, 2020

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Budget 2020-21 + FINANCE BILL, 2020

S. No.

S. No. of Notification No 50/2017-customs

Description

1.

5

Tuna bait [0303]

2.

7

Goods upto an aggregate of ten thousand metric tonnes of total imports of Milk and cream, in powder, granules or other solid form in a financial year. [0402 10, 0402 21 00]

3.

7A

Whey, concentrated, evaporated or condensed, liquid or semi-solid [0404 10 10]

4.

7B

Other Whey [0404 90 00)

5.

8

Butter Ghee, Butter Oil [0405]

6.

9

Other cheese [0406 90 00)

7.

10

Pancreas (Products of animal origin, not elsewhere specified) (Chapter 5]

8.

11

Conch shell [0508 00]

9.

18

Bulbs or tubers, other live plants [0601 or 0602]

10.

36

All goods other than meslin or wheat [1001]

11.

38

Meslin [1001]

12.

40

Maize upto an aggregate of five lakh metric tonnes of total imports of such goods in a financial year [1005 90]

13.

47

Sugar beet seeds [1209 10 00)

14.

56

Edible oils [1508, 1512, 1513, 1514, 1515 or 1511 10]

15.

58

Refined vegetable oils of edible grade, in loose or bulk form (other than palm oil) [chapter 15]

16.

59

Vegetable oils of edible grade, in loose or bulk form (other than those specified against S. No. 58 and palm oil), imported for the manufacture of oil commonly known as “Vanaspati” or for refining.

Explanation. -The expression “Vegetable oil” means-

(a) in the case of cottonseed oil, oil having a free fatty acid content of at least 0.2%; and

(b) in the case of any other vegetable oil. oil with free fatty acid content of at least 0.5%. [15]

17.

68

Crude sunflower seed or safflower oil upto an aggregate of one lakh and fifty thousand metric tonnes of total imports of such goods in a financial year [1512 11]

18.

69

Crude sunflower seed or safflower oil other than those specified against S. No. 68 [1512 11]

19.

72

Refined rape, colza or mustard oil upto an aggregate of one lakh and fifty thousand metric tonnes of total imports of such goods in a financial year (1514 19 or 1514 99]

20.

78

Margarine, animal or vegetable oils of edible grade [1517 or 1518]

21.

83

Glycerol, crude; glycerol waters and glycerol lyes, (other than crude glycerin) [1520 00 00]

22.

88A

Raw Sugar upto an aggregate of three lakh metric tonnes of total imports of such goods. Provided that the import of raw sugar in physical form is completed within sixty (60) days from the date of issue Of the Tariff Rate Quota Allocation Certificate or license by Directorate General of Foreign Trade (DGFT) to the importer. Provided further that the importer shall convert the raw sugar into white/ refined sugar within a period, not exceeding thirty (30) days, from the date of filing of bill of entry or the date of entry inwards, whichever is later [1701]

23.

89

Dextrose Monohydrate [1702)

24.

92

Molasses resulting from extraction or refining of sugar [1703]

25.

93

Chewing gum whether or not sugar coated [1704 10 00]

26.

94

Food preparations, for infant use and put up for retail sale, of-

(i) goods of headings 0401 to 0404, containing cocoa calculated on a totally defatted basis, in a proportion by weight of 5% or more but less than 10%; or

(ii) flour, meal, starch or malt extract containing cocoa calculated on a totally defatted basis, in a proportion by weight of 40% or more but less than 50% [1806 90)

27.

95

Preparations for infant use put up for retail sale [1901 10]

28.

98

preserved potatoes [2004 10 00]

29.

99

Peanut Butter [2008 11 00]

30.

105

Wine, for use as sacramental wine [22]

31.

108

Angostura bitters [2208]

32.

113

Fin fish feed [2301 20, 2309 90 32, 2309 90 39]

33.

115

Dietary soya fibre [2304]

34.

148

Naphtha, when imported by Ratnagiri Gas and Power Private Limited (RGPPL), for use in generation of electricity in the power plants of Ratnagiri Gas and Power Private Limited (RGPPL) at Dabhol, District Ratnagiri, Maharashtra [2710]

35.

149

Naphtha, when imported for generation of electrical energy by a generating company as defined in section 2(28) of the Electricity Act, 2003 (36 of 2003) to supply electrical energy-or to engage in the business of supplying electrical energy [2701]

36.

152

Propane, Butane [2711 12 00, 2711 13 00]

37.

160

Electrical energy [ 2716 00 00]

38.

170

Phosphoric acid, for the manufacture of fertilizers(28]

39.

212

Japanese Encephalitis (JE) vaccine, imported by the Andhra Pradesh Government through UNICEF [30]

40.

220

Kyanite salts, in a form indicative of their use for manurial purpose [31]

41.

243

Isolated soya protein [3504]

42.

244

Colour positive unexposed cinematographic film in jumbo rolls and colour negative unexposed cinematographic film in rolls of 400 feet and 1000 feet [37]

43.

245

Instant print film [3701 20 00 or 3702]

44.

246

Cinematographic films, exposed but not developed [3704]

45.

247

Promotional material (like Trailers, making of film etc.) imported in the form of electronic promotion kits (EPK)/ beta cams (Any Chapter)

46.

263

The following polymers of ethylene, namely: -

(i) Cow density polyethylene (LDPE),

(ii) Linear low-density polyethylene (LLDPE),

(iii) High density polyethylene (HDPE),

(iv) Linear medium density polyethylene (LMDPE),

(v) Linear high-density polyethylene (LHDPE) [3901]

47.

264

All goods other than poly 'so-butylene [39021

48.

266

All goods [3903]

49.

274

Compostable polymer or bio-plastic used in the manufacture of bio degradable agro mulching films, nursery plantation pots and flower pots [3913 90 90]

50.

275

Water blocking tape for use in the manufacture of insulated Wires and cables falling under heading 8544 (except sub-heading 8544 11) [3919 90 90]

51.

278

Subbed polyester base, imported by M/s. Hindustan Photo Films Manufacturing Company Limited, Udhagamandalam for the manufacture of medical or industrial X-ray films and graphic art films [39201

52.

286

Patent leather [4114 20 10]

53.

287

Raw furskins [4301). tanned and dried furskins [4302]

54.

386

Lead bars. rods. profiles and wire [7806]

55.

388

Zinc tubes, pipes and tube or pipe fittings [7907]

56.

389

Tin plates, sheets and strip, of a thickness exceeding 0.2 mm; tin foil (whether or not printed or backed with paper, paperboard, plastics or similar backing materials), of a thickness (excluding any backing) not exceeding 0.2 mm; tin powders and flakes [8007]

57.

398

Parts and components of the goods specified in List 10 required for use in high voltage power transmission project (Any chapter]

58.

401

All items of equipment including machinery and rolling stock, procured by or on behalf of Delhi Metro Rail Corporation Ltd. for use in-

(i) Delhi MRTS Project Phase-I, and

(ii) Specified corridors of Delhi MRTS Project Phase-Il, comprising of the following, namely: -

(a) Vishwavidyalaya- Jahangirpuri;

(b) Central Secretariat-Qutab Minar (via All India Institute of Medical Sciences);

(c) Shahdara- Dilshad Garden;

(d) Indraprastha-New Ashok Nagar;

(e) Yamuna Bank-Anand Vihar-lnter State Bus Terminus; and

(f) Kirti Nagar-Mundka (along with operational Link to Shahdara- Rithala corridor) (Any Chapter)

59.

412

Goods specified in List 15 required for construction of roads [84 or any other chapter]

60.

447

The following goods required for manufacture of Optical disk drives (ODD), namely: -

(i) Pick up assembly

(ii) Digital signature procession integrated circuit

(iii) DC motor

(iv) LDO voltage regulator [84 or Any other Chapter]

61.

456

The following goods, namely: -

(a) Sprinklers and drip irrigation systems for agricultural and horticultural purposes;

(b) Micro Irrigation equipment [8424]

62.

457

Poultry incubators and brooders [8436 21 00]

63.

459

Parts for manufacture of printers falling under sub heading 8443 32 (except 8443 99 51, 8443 99 52, 8443 99 53) [8443]

64.

465

CD -Writers (8471]

65.

474

MP3 or MP4 or MPEG 4 player with or without radio or video reception facility [85]

66.

483

One set of pre-recorded cassettes accompanying books for learning languages and essential complement to such books, [85]

67.

484

Audio cassettes, if recorded with material from books, newspaper or magazines, for the blind [85]

68.

515

Colour television picture tubes for use in the manufacture of cathode ray televisions [8540 11]

 

 


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Budget 2020-21 + FINANCE BILL, 2020

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Acts Income Tax