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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.
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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
Show AI Summary
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
Show AI Summary
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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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]

 

 


Full Text:

Budget 2020-21 + FINANCE BILL, 2020

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Acts Income Tax