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    NewsBills
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    Special taxation regime for offshore funds relaxed to ease corpus and remuneration conditions for fund managers in India.
    Section 9A provides a safe harbour excluding business connection and residency of an eligible investment fund solely because fund management is undertaken by an eligible fund manager in India, subject to conditions on fund residence, corpus, diversification and arm's length remuneration. Proposed amendments relax the corpus condition to require a minimum corpus of one hundred crore rupees at the end of six months from establishment or at the end of the previous year, and replace the remuneration test with an amount to be prescribed; the changes operate retrospectively from 1st April, 2019 for the relevant assessment year and thereafter.
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    Deduction for electric vehicle loan interest allowed subject to sanctioned-loan period and sole-ownership condition under new tax provision.
    Section 80EEB permits a deduction for interest on loans taken to purchase an electric vehicle where the loan is sanctioned by a financial institution (including NBFCs) within the prescribed sanction period and where the borrower does not own any other electric vehicle at loan sanction; the same interest cannot be claimed under any other provision for the same or any other assessment year and the amendment applies from the stated commencement to the relevant assessment years.
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    Interest exemption for nonresident bond investors removes withholding on offshore rupee bond interest issued during the announced period.
    Amendment incorporates the government press release exemption into the statute to provide that interest paid to a non-resident by a specified company in respect of monies borrowed from a source outside India by way of issue of rupee denominated bonds during the announced period is exempt from tax, and that no tax was required to be deducted at source for interest paid on such bonds; the amendment is effective from the start of the stated fiscal year and applies to the specified assessment year and subsequent assessment years.
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    Tax incentive for affordable housing expands interest deduction on home loans, subject to property value and ownership conditions.
    A new provision permits a deduction for interest on residential house loans from financial institutions, subject to conditions: loan sanctioned within the prescribed fiscal window, stamp duty value of the property below a prescribed ceiling, and the borrower owning no residential property on sanction date. The deduction is exclusive and cannot be claimed under any other provision for the same interest. Parallel amendments amend the affordable-housing deduction by capping carpet area by urban category and imposing the same stamp duty valuation limit for qualifying housing projects approved on or after the specified date; both amendments take effect from the same fiscal commencement and apply to ensuing assessment years.
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    National Pension System incentives: higher tax exemption on lump sums, expanded employer deduction and Tier-II deductibility for central employees.
    The Finance Bill increases the tax-exempt portion of lump-sum NPS payments on account closure or opt-out, raises the allowable employer-side deduction for Central Government contributions to employee NPS accounts, and makes Central Government employees' Tier-II NPS contributions eligible for deduction under the general savings deduction provision, with these changes operating prospectively for subsequent assessment years.
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    Carry-forward of startup losses: relaxed shareholder continuity test expands eligibility for loss set-off for eligible startups.
    Proposed amendments permit closely held eligible start-ups to carry forward and set off pre previous year losses on satisfaction of either the existing clause (a) shareholder continuity test or the start up specific clause (b) condition; other closely held companies remain subject to clause (a) only. Amendments to section 54GB extend the rollover relief sunset for investment in eligible start-ups, reduce the required post subscription shareholding threshold to twenty five per cent, and shorten the asset transfer restriction from five years to three years, effective from the stated fiscal implementation date.
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    Exemption on share premium from category two AIF extended to venture capital undertakings, permitting tax-free receipt of funds.
    The amendment extends the exemption from taxation of excess consideration on issue of shares so that venture capital undertakings receiving funds from Category II Alternative Investment Funds will not have the excess over fair market value charged as income, thereby aligning Category II AIF receipts with existing exemptions available to Category I AIFs and notified classes of persons.
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    Carry-forward of tax losses extended to companies under tribunal approved resolution plans after offering tax authorities a hearing.
    Carry-forward and set-off restrictions under section 79 are removed for companies (and their subsidiaries) whose boards were suspended and replaced and whose shareholding changed pursuant to a tribunal approved resolution plan, provided the jurisdictional tax officer was given a reasonable opportunity to be heard. Corresponding amendment to the computation of book profit for minimum alternate tax permits reduction by aggregate unabsorbed depreciation and brought forward loss (excluding depreciation) for such companies.
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    Deeming of fair market value: exemptions where share consideration is approved by specified authorities, relieving applicability of certain tax provisions.
    Proposes empowering the Board to exempt prescribed classes of transactions and persons from the deeming of fair market value for share transfers where consideration is approved by specified authorities, thereby relieving applicability of valuation deeming in both receipt-based chargeability and capital gains computation, with the amendment applying prospectively to subsequent assessment years.
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    Withholding tax online applications enabled to streamline Assessing Officer determinations for non-resident payments and improve monitoring.
    Amendments to section 195(2) permit electronic filing by payers seeking determination of the portion of payments to non-residents chargeable to tax and authorize prescription of the form and manner of application and of the Assessing Officer's procedure for determining the taxable portion; a parallel change to section 195(7) applies to specified classes, with the reforms intended to speed processing and improve administrative monitoring.
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    Electronic filing requirement for statements of non-deducted tax on interest introduced, with correction mechanism and effective date.
    Amendment to Section 206A requires electronic filing, in the prescribed form and manner, of statements for payments of interest to residents where tax has not been deducted at source; it also provides for correction of such statements to rectify mistakes or add, delete or update information and includes a consequential amendment reflecting an increased TDS threshold for certain payers, effective from 1st September, 2019.
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    Buy back tax extension: buy backs by listed companies now subject to the anti abuse levy, with shareholder exemption aligned.
    The anti abuse levy under Section 115QA is proposed to be extended to companies listed on recognised stock exchanges, bringing buy backs by listed companies within the additional tax regime and addressing tax arbitrage between buy backs and dividends; simultaneously, the exemption for shareholders under clause (34A) of section 10 is extended to listed company shareholders where the company has paid the buy back tax, effective for buy backs on or after the stated commencement date.
    NewsBills
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    Cancellation of registration: expanded to include noncompliance with other material laws and final adverse orders after hearing.
    Cancellation of registration is broadened to require that, when granting registration, the tax authority satisfy itself about compliance with other laws material to the trust's or institution's objects. Registration may be cancelled where a trust or institution has violated such other material laws and an order or decree establishing that violation is final or undisputed; cancellation is to be by written order after affording a reasonable opportunity of being heard.
    NewsBills
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    Tax-neutral demerger rules exempt Ind-AS valuation differences, allowing resulting companies to adopt Ind-AS values for transferred undertakings.
    The amendment exempts resulting companies from the requirement to record property and liabilities at the demerged company's book values where the assets and liabilities are recorded at different values solely due to compliance with Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015, thereby permitting resulting companies to adopt Ind AS values for the undertaking received.
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    Extension of TDS proviso: deductor relief for payments to non residents when the payee files a return and pays tax.
    The law is amended to extend the first proviso to section 201 to cover payments to non residents so that where a non resident payee files a return, discloses the payment, pays tax and furnishes a certificate, the deductor will not be treated as an assessee in default; interest will accrue only until the payee's return filing date. Additionally, clause (a) of section 40 is amended to deem tax as deducted and paid on the date the payee files its return, preventing disallowance of such payments.
    NewsBills
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    Advance Pricing Agreement: Assessing officer limited to modifying total income under APA when taxpayer files a modified return.
    The amendment specifies that when a taxpayer files a modified return under the APA framework after a completed assessment or reassessment, the Assessing Officer shall pass an order modifying only the total income of the relevant assessment year as determined in that completed assessment or reassessment, having regard to and in accordance with the APA.
    NewsBills
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    Secondary adjustment rules updated: option to pay a one-time additional tax instead of repatriating excess transfer pricing amounts.
    Section 92CE requires secondary adjustment where a primary transfer-pricing adjustment arises from specified mechanisms. The amendment makes the monetary threshold and earlier-year condition alternative tests; mandates interest calculation on excess funds; limits application to agreements signed after a specified date without refunds for prior taxes; allows repatriation from non-resident associated enterprises; and offers an option to pay a one-time additional income-tax (with surcharge) in lieu of repatriation, which is final, non-creditable, non-deductible, and relieves the secondary adjustment requirement from payment date.
    NewsBills
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    Concessional short-term capital gains tax extended to certain equity-oriented fund of funds, enhancing disinvestment incentives.
    The proposal amends section 111A to extend the concessional rate of short-term capital gains tax to transfers of units of specified equity-oriented fund of funds set up for CPSE disinvestment, bringing short-term tax treatment into alignment with the existing concessional long-term capital gains regime under section 112A; the amendment applies prospectively to assessment years commencing after the stated effective date.
    NewsBills
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    Pass-through of AIF losses: business losses retained at fund; certain non-business losses deemed to eligible unit holders and carried forward.
    Amendment to section 115UB provides that AIF business losses remain at the fund and are carried forward under Chapter VI and not passed to unit holders; non-business losses tied to units not held by a unit holder for at least twelve months are ignored for pass-through; non-business losses accumulated at the fund as on 31 March 2019 are deemed to be the losses of unit holders who held units on that date and may be carried forward and set off by them under Chapter VI, and those deemed losses will not be available to the fund.
    NewsBills
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    Relief under section 89 to be included in tax computation, making amended computation provisions effective retrospectively for affected assessment years.
    Proposed amendments require that tax liability be computed after allowing the relief under section 89, so that existing computation and interest provisions explicitly accommodate credit for this relief; the amendments operate retrospectively and apply to earlier assessment years to address hardship for eligible taxpayers.

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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