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    Transformations in Tax Deduction and Collection Compliance and Reporting in India : Clause 397(1) of...
    Reform of Tax Deduction and Collection Certificates : Clause 395(4) of Income Tax Bill, 2025 Vs. Sec...
    Step forward in the rationalization and modernization of recovery of tax collection under Tax law in...
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    Modernizing Withholding Tax on Non-Resident Unit Income : Clause 393(2)[Table: S.No. 10] and Clause ...
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    Grossing Up Mechanisms in Indian TDS Law : Clause 393(10) of the Income Tax Bill, 2025 Vs. Section 1...
    Changing Landscape of TDS on Payments to Non-Residents in Indian Tax Law : Clause 393(2)[Table: S.No...
    Ensure the tax compliance and transparency regarding the income distributed by partnership firms to ...
    Comprehensive Analysis of TDS on Virtual Digital Assets Transfer : Clause 393(1)[Table: S.No. 8(iv)]...
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    Act RulesBills
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    TDCAN requirement modernisation centralises TAN/PAN linkage and reporting, tightening compliance and correction procedures.
    Clause 397 requires persons deducting or collecting tax to apply for and, once allotted, quote a Tax Deduction and Collection Account Number (TDCAN) in all prescribed documents; it consolidates deduction and collection numbers, sets out statutory carve-outs and government-notified exemptions, integrates PAN linkage and consequences for non-furnishing, and centralises payment, reporting and correction mechanisms including procedures for non-resident payments and government offices.
    Act RulesBills
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    TDS/TCS certificate obligation requires deductors and collectors to issue prescribed certificates enabling tax credit and digital reporting.
    Clause 395(4) requires every person deducting or collecting tax at source to issue a certificate to the deductee/collectee specifying the amount of tax deducted or collected, the rate, and any other prescribed particulars within a prescribed period; employers who pay tax on behalf of employees must similarly furnish a certificate confirming payment to the Central Government. The clause covers both TDS and TCS, delegates format and timing to subordinate rules, and anticipates digital and harmonized implementation while leaving rectification, duplicate issuance and penalty mechanics to rules.
    Act RulesBills
    Show AI Summary
    Non-exclusivity of source-based tax collection allows authorities to pursue additional recovery methods when payments are provisional.
    Clause 390(4) states that taxes paid by deduction or collection at source, advance payments and specified payments operate in addition to any other mode of tax collection to discharge the liability for income assessed for a tax year, preserving the tax authority's power to pursue alternative recovery measures where such anticipatory payments are provisional, insufficient, or incorrect while allowing credit or refund for any excess.
    Act RulesBills
    Show AI Summary
    TDS/TCS enforcement: deeming of defaulting deductors as assessees in default triggers interest, charge on assets, and conditioned relief.
    Clause 398 deems persons required to deduct or collect tax, including principal officers and specified collectors, to be an assessee in default where tax is not deducted, not collected, or not paid to the government; relief is available if the recipient files a return, includes the relevant sum, pays the tax due and the deductor/collector furnishes a prescribed accountant's certificate. Interest is prescribed for the periods between deductibility, deduction and payment, unpaid tax plus interest is a statutory charge on assets, time limits for default orders are specified, and penalty requires satisfaction of lack of good and sufficient reasons.
    Act RulesBills
    Show AI Summary
    Centralised TDS/TCS processing: automated, time bound framework mandates intimation within a year and covers correction statements.
    Clause 399 creates an automated framework for processing TDS and TCS statements, including correction statements, requiring rectification of arithmetical errors and adjustment of apparent incorrect claims, computation of interest and fee, determination of net payable or refundable amounts after adjusting prior payments, issuance of a formal intimation to the deductor/collector, and grant of any refund due; it also mandates that intimations be sent within a year from the end of the tax year and empowers the Board to make a centralised processing scheme.
    Act RulesBills
    Show AI Summary
    TDS/TCS compliance: expanded reporting and verified statement obligations, including cross-border and below-threshold payment reporting.
    Clause 397(3) requires persons responsible for deduction or collection of tax, and certain employers, to pay amounts to the credit of the Central Government within prescribed time and to submit verified statements in prescribed form and manner; it mandates reporting of payments to non-residents whether or not chargeable, requires special statements for government payments without challans, permits correction statements within six years, obliges reporting of below-threshold interest payments by specified entities, and makes collectors who fail to collect liable to pay the tax.
    Act RulesBills
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    Tax credit for source deductions ensures remitted taxes are treated as payment on behalf of the relevant taxpayer and allocated by rule.
    Clause 390(5) treats sums remitted as tax paid on behalf of the person from or in respect of whose income such tax was deducted or collected, and Clause 390(6) empowers the Board to make rules for allocating that credit to such persons or to others and for specifying the tax year for which credit is allowed, extending the scope beyond conventional TDS/TCS to include specified pre-payments and leaving operational detail to subordinate rules.
    Act RulesBills
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    Tax deducted is income received: gross receipts included for tax computation with credit for foreign withholding.
    Clause 396 deems amounts deducted under the relevant withholding chapter and income tax deducted abroad (where credit is allowed) to be income received for computing an assessee's taxable income, with specified carve out exceptions; this preserves gross income inclusion while permitting credit for taxes withheld and raises interpretative issues about the chapter's scope, the stated exceptions, cross border withholding and transitional treatment.
    Act RulesBills
    Show AI Summary
    TDS nil-declaration prevents withholding when estimated total income is below taxable threshold, subject to prescribed declaration and reporting.
    Clause 393(6) permits certain recipients to avoid TDS by furnishing a prescribed written declaration that their estimated total income for the year yields nil tax; upon a valid declaration the payer must not deduct tax on specified payments and must forward a copy to tax authorities, subject to the condition that aggregate such incomes do not exceed the basic exemption limit and to general anti evasion consequences for false declarations.
    Act RulesBills
    Show AI Summary
    Lower Deduction Certificates: streamlined TDS/TCS certification requiring AO satisfaction and binding certificate rates.
    Clause 395(1) creates a mechanism for Lower Deduction Certificates allowing taxpayers to apply for lower or nil deduction of tax at source; the Assessing Officer must issue a certificate when satisfied on objective material, the deductor must apply the specified rate until the certificate's validity, and procedural details, scope, validity periods and ancillary measures are to be provided by rules.
    Act RulesBills
    Show AI Summary
    TDS on securities income: clarified withholding rules, treaty relief mechanics, and exemptions for capital gains and exempt fund receipts.
    Clause 393 establishes a tabular TDS regime on income from securities, distinguishing taxable securities income from capital gains and exempt receipts. Clause 393(2) prescribes withholding entries for Foreign Institutional Investors with rates referenced to an interpretative note and a 10% rate for specified funds, subject to documentation for treaty benefits. Clause 393(4) consolidates exemptions by excluding capital gains payable to foreign investors and exempt income of specified funds from TDS, aiming to avoid unnecessary withholding and refund procedures.
    Act RulesBills
    Show AI Summary
    Tax Deduction at Source clarifies withholding obligations on cross border bond and GDR payments to non residents, including DTAA interaction.
    Clause 393(2) Table S. No. 13 and 14 requires withholding on payments to non residents of interest or dividends and long term capital gains from bonds and GDRs referred to in section 209, mandates deduction at the earlier of credit or payment by any person responsible for the payment, prescribes fixed concessional withholding rates, integrates general TDS machinery including declarations and higher deduction for missing PAN, and preserves DTAA relief and exceptions where income is not chargeable.
    Act RulesBills
    Show AI Summary
    TDS on offshore fund income and capital gains: withholding at credit or payment, with higher exit withholding and treaty considerations.
    Clause 393(2) requires any person paying income in respect of specified units or long term capital gains on transfer of such units to deduct tax at source at the prescribed rates at the time of credit or payment, without any monetary threshold; the provision cross refers to definitions in section 208, deems credits to suspense accounts as payment for TDS, and is subject to subsections dealing with exceptions, declarations and specified exclusions, while raising interpretative issues on definitions, treaty interaction, gross up obligations and transitional treatment compared with the prior Section 196B regime.
    Act RulesBills
    Show AI Summary
    Withholding tax on non-resident unit income: consolidation preserves treaty relief and UTI exemption under prescribed conditions.
    Clause 393 consolidates TDS on income in respect of units paid to non-residents: Clause 393(2) requires deduction by any payer on units of specified mutual funds and specified companies paid to non-resident individuals and foreign companies at rates per Note 2 with DTAA benefits subject to prescribed documentation; Clause 393(4) exempts income on Unit Trust of India units payable to NRIs and non-resident HUFs subject to prescribed conditions and FEMA compliance, thereby retaining the legacy UTI carve-out while delegating exemption details to subordinate rules.
    Act RulesBills
    Show AI Summary
    TDS exemption for specified public entities prevents withholding on interest, dividends and other income, simplifying payer compliance.
    Clause 393(5) provides an overriding TDS exemption for payments to the Government, the Reserve Bank of India, statutorily tax exempt corporations established by or under a Central Act, and mutual funds specified in Schedule VII, covering interest, dividends (in respect of securities or shares owned by or in which they have full beneficial interest) and any other income accruing or arising to them, with the non obstante language ensuring the exemption prevails over other withholding obligations.
    Act RulesBills
    Show AI Summary
    Grossing-up requirement preserves tax base where payer bears recipient's tax liability, altering TDS computation and compliance.
    Clause 393(10) mandates a grossing-up requirement where the payer bears the recipient's tax: taxable income must be increased so that, after deduction of tax at the rates provided in the Chapter (including applicable surcharge and cess), the net amount equals the contractual payment. The clause applies to TDS payments under the Chapter except specified salary cases, covers residents and non residents, and requires use of the applicable DTAA rate when beneficial. Key practical issues include computation of add ons, allocation across composite payments, currency fluctuation effects, and contract drafting to evidence net of tax obligations.
    Act RulesBills
    Show AI Summary
    TDS on payments to non-residents: a table-based framework modernizes withholding obligations and aligns rates with treaty benefits.
    Clause 393(2) Table S.No.17 imposes a residuary TDS obligation on interest (excluding specified categories) and any other sum chargeable under the Act, excluding salaries, payable to non-residents or foreign companies; deduction is by "any person" at the earlier of credit or payment at the "rates in force," with treaty rates available subject to procedural compliance, and operates alongside exemptions, lower/nil deduction certificates, suspense-account deeming rules and grossing-up anti-avoidance provisions.
    Act RulesBills
    Show AI Summary
    TDS on partner payments: mandatory withholding on specified firm-to-partner payments with prescribed threshold and compliance duties.
    Mandatory withholding applies to sums in the nature of salary, remuneration, commission, bonus or interest paid or credited (including to the capital account) by a firm to a partner, deductible at ten per cent at the earlier of credit or payment, with a per-partner annual threshold exemption and declaration-based non-deduction mechanisms; the firm bears the deduction obligation and normal TDS procedures apply.
    Act RulesBills
    Show AI Summary
    TDS on virtual digital assets imposes withholding obligations with targeted exemptions for small-value and small-taxpayer transfers.
    The Bill requires withholding on any benefit or perquisite arising from business or profession whether cash or non-cash, obliges the provider to deduct tax and, if consideration is wholly or partly in kind with insufficient cash, to ensure tax payment before release. A parallel VDA withholding regime mandates deduction on transfers of virtual digital assets with specified exemptions for small-value transactions and small taxpayers, similar safeguards for non-cash consideration, and procedural rules addressing timing, aggregation and crediting for compliance.
    Act RulesBills
    Show AI Summary
    TDS on non-monetary benefits: providers must withhold tax on in-kind and indirect business advantages, affecting compliance and valuation.
    Clause 393(1)[Table: S.No. 8(iv)] and section 194R require the provider of any benefit or perquisite arising from business or profession to deduct tax at source on the value or aggregate value of such benefits, covering cash and non-cash advantages, with specified thresholds and exemptions for smaller providers; the Bill consolidates this obligation, clarifies anti-overlap treatment with other TDS provisions, links timing of deduction to credit or payment, and preserves reliance on administrative guidance for valuation and operational issues.

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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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      ActsIncome Tax