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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.
    NewsBills
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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.
    NewsBills
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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.
    NewsBills
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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.
    NewsBills
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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.
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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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      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