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    Transformation of Tax Deduction Mechanism in respect of donations to certain funds : Clause 133 of t...
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    Deduction for charitable donations: consolidated framework updates eligible recipients, compliance, digital reporting and anti-duplication rules.
    Clause 133 creates a consolidated deduction regime for monetary donations to specified funds and institutions, distinguishing deduction tiers, imposing an aggregate income-related cap on certain donations, prohibiting duplicate claims for the same donation, and requiring non-cash payment for larger contributions. Deduction entitlement is conditional on donee institutions furnishing prescribed information and accepting risk-based verification; definitions exclude purposes wholly or substantially of a religious nature and delegate procedural detail to subordinate legislation.
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    Rent deduction for non-HRA assessees clarifies eligibility, computation limits, ownership exclusions and rule made procedural conditions.
    Clause 134 grants a deduction for rent paid by individuals for residential accommodation occupied as their own residence, allowable only for rent exceeding 10% of total income and capped at the lower of a prescribed monthly ceiling or 25% of total income, with percentages computed on total income before this deduction. The clause excludes assessees who own residential accommodation at the relevant place or who fall within a specified schedule entry, and authorises rule making for additional conditions and procedural requirements to enable verification and prevent double benefit.
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    Medical expense deduction for specified diseases allows capped relief with specialist prescriptions and insurer offset.
    Clause 128 permits residents, including individuals and HUFs, to deduct out-of-pocket medical treatment expenses for specified diseases subject to prescribed monetary caps, requires prescriptions from specified medical specialists, reduces deductions by amounts reimbursed by insurers or employers, provides an increased cap for senior citizens, and defines key terms such as dependant and insurer; the clause aligns with Section 80DDB and Rule 11DD while simplifying certain documentation requirements and deferring disease enumeration to rules or notifications.
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    Deduction for disabled dependents: proposed clause mirrors existing relief while altering exclusions and insurance conditions and documentation requirements.
    Clause 127 permits resident individuals and HUFs to deduct expenses for maintenance, medical treatment, training or rehabilitation of a dependant with a disability and contributions to qualifying insurance schemes; it prescribes standard and higher deduction limits for severe disability, conditions for scheme-based deductions (annuity or lump sum on death or at a specified age), taxability if the dependant predeceases the taxpayer, a mandatory medical certificate (with renewal where required), and an exclusion for dependants claiming relief under a separate provision.
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    Health insurance deduction expanded to cover premiums, medical expenditure, preventive checks, and senior citizen relief.
    Clause 126 provides deductions for health insurance premia and medical expenditure for individuals and HUFs, establishes separate caps for assessees and parents, specifies an aggregate ceiling for combined insurance and medical claims, allows a sub cap for preventive health check ups, prescribes payment modes with non cash norms for most deductions, recognises enhanced relief and lump sum treatment for senior citizens, and sets definitions and insurer eligibility criteria to guide application.
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    Deduction for Agniveer contributions enables tax relief for enrolled personnel, encouraging savings, recruitment and retention.
    A statutory deduction allows full deduction of contributions to the Agniveer Corpus Fund by individuals enrolled in the Agnipath Scheme and of corresponding Central Government contributions, with eligibility defined by enrolment and effective date; taxpayers must substantiate contributions and authorities must adapt administration and reporting to process both individual and government contributions.
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    Pension contribution deduction: new Clause enhances employer and individual relief while clarifying withdrawal and annuity rules.
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    Deduction for specified savings: new clause aligns tax incentives with existing framework while preserving compliance conditions.
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    Deductions from Gross Total Income now constrained by non-duplication and market-value rules, tightening tax compliance obligations.
    Clause 122 governs deductions from gross total income by capping aggregate deductions at gross total income, prohibiting duplication of deductions between entity and member levels, restricting multiple claims under different provisions, conditioning deductions on timely filing and claiming in the return, and requiring inter-business transfers to be recorded at market value; it also defines gross total income for deduction purposes.
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    Filing requirement for loss carryforward: procedural return submission determines eligibility to set off future taxable income.
    Only losses determined pursuant to a return filed under the prescribed statutory procedure qualify for carry forward and set off; Clause 121 conditions eligibility on a return filed under Section 263(1) while Section 80 conditions it on a return filed under Section 139(3), each referencing the statutory provisions that define eligible loss categories and thereby tying substantive loss recognition to procedural compliance.
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    Disallowing set off of losses against undisclosed income prevents offset after tax searches, requisitions, or surveys.
    Clause 120 of the Income Tax Bill, 2025 disallows any loss, whether carried forward or otherwise, and any unabsorbed depreciation from being set off against undisclosed income included in total income where such income is detected as a consequence of a search, requisition, or survey; the clause is expressly overriding and depends on the Bill's definition of undisclosed income for its scope.
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    Carry forward of capital losses: long-term losses limited to long-term gains; short-term losses may be set off under new Bill.
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    Carry-forward restrictions on losses after ownership or constitution changes limit tax benefits from strategic restructuring.
    Clause 119 restricts carry forward and set off of losses after changes in firm constitution, business succession by non-inheritance successors, and corporate shareholding changes unless continuity of beneficial voting power is maintained. It permits an exception for start-ups where all original shareholders retain their shares and losses occurred within the first ten years, and enumerates exceptions (death, gifts to relatives, specified amalgamations/demergers, approved insolvency resolution plans) while defining terms relevant for application.
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    Loss carryforward restrictions: ownership or constitution changes can bar set-off unless continuity conditions and specified exceptions apply.
    Clause 119 conditions the permissibility of carrying forward and setting off past losses where ownership or constitution changes occur: it denies set-off for losses attributable to retired or deceased partners upon firm reconstitution, disallows successors (other than by inheritance) from using predecessor losses, and restricts non-public companies from setting off prior losses after shareholding changes unless continuity conditions including original beneficial owner control or start-up safeguards are met; specified exceptions and ongoing compliance requirements are provided.
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    Ring fenced treatment of racehorse losses restricts cross setoff and permits carry forward only within the same activity.
    Clause 115 creates a ring fenced regime: losses from the specified activity of owning and maintaining race horses cannot be set off against other income; unabsorbed losses may be carried forward and set off only against income from the same activity, subject to continuation of the activity and defined temporal limits and eligibility definitions.
    Act RulesBills
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    Restriction on loss set-off: specified business losses may be offset only against profits of other specified businesses.
    Losses from a specified business are restricted to set-off only against profits of other specified businesses in the same year; unabsorbed losses may be carried forward and set off exclusively against profits of specified businesses in subsequent years. The provision relies on defined terms for "specified business" and "unabsorbed loss," confines tax incentives to their intended category to prevent cross-business erosion of the tax base, and requires segregated record-keeping to ensure compliance.
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    Set-off of speculation losses confined to speculation profits; carry forward limited and prioritised before other allowances.
    Clause 113 confines adjustment of losses from a speculation business to profits of another speculation business in the same year; permits carry forward of unabsorbed speculation losses to subsequent years for set off only against speculation business profits within a limited statutory period; requires that unabsorbed speculation losses be set off before certain carried forward allowances; and defines both speculation business (including a deeming rule for share trading to that extent) and specified exceptions to that classification.
    Act RulesBills
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    Carry forward and set off of losses preserved for successor co operative banks, subject to specified conditions and penalties.
    Successor co operative banks may set off predecessor accumulated business losses and unabsorbed depreciation in amalgamations as if the amalgamation had not occurred; in demergers directly related tax attributes transfer wholly to the resulting bank while non relatable attributes are apportioned by asset distribution. Application requires continuity of banking business, retention and use of fixed assets, and genuine continuation of operations; failure to meet conditions renders previously allowed set offs taxable in the year of non compliance. Clause 118 adds a Central Government power to prescribe further conditions to ensure genuine business purposes.
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    Treatment of accumulated losses and unabsorbed depreciation: successor may utilise predecessor tax attributes subject to a limited carry forward period.
    Clause 117 deems accumulated loss and unabsorbed depreciation of specified predecessor entities to be those of the amalgamated entity when amalgamations involve banking companies, corresponding new banks, or government companies under Central Government sanctioned schemes, including cases following strategic disinvestment; successor entities may utilize these tax attributes in the year of amalgamation but are subject to a limited carry forward period and prescribed compliance and reporting requirements.
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    Treatment of accumulated losses and unabsorbed depreciation allows continuity on corporate reorganisations subject to compliance conditions.
    Clause 116 permits continuity of accumulated loss and unabsorbed depreciation on amalgamation, demerger and related reorganisations by deeming the transferor's tax attributes to be those of the transferee or successor, subject to conditions such as asset retention and business continuity. It limits transfers in strategic disinvestment to amounts existing when public sector status ceased, allocates losses in demergers according to transferred undertakings or retained assets, extends treatment to successor entities including LLPs, and empowers the Central Government to prescribe conditions; non compliance attracts tax liabilities for successor entities.

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      REVIEW OF LEVY OF SOCIAL WELFARE SURCHARGE [SWS] ON VARIOUS ITEMS BY AMENDING NOTIFICATION NO. 11/2018- CUSTOMS DATED 02.02.2018

      2 February, 2022

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      VIII. REVIEW OF LEVY OF SOCIAL WELFARE SURCHARGE [SWS] ON VARIOUS ITEMS BY AMENDING NOTIFICATION NO. 11/2018- CUSTOMS DATED 02.02.2018

      S.No.

      Amendment

      1.

       All goods falling under tariff items 0802 91 00, 0802 92 00 and 0802 99 00 have been exempted from SWS.

      2.

      All goods falling under sub-headings 1509 90 and 1510 90 have been exempted from SWS.

      3.

      All goods falling under tariff items 2515 12 90, 2516 11 00, 2516 12 00 have been exempted from SWS.

      4.

      All goods falling under the sub-headings 5208 39, 5209 31, 5209 32, 5209 39, 5209 49, 5210 39, 5211 31, 5211 32, 5211 39, and 5211 49 have been exempted from SWS.

      5.

      All goods falling under the sub-heading 5407 61 have been exempted from SWS.

      7.

      All goods falling under tariff items 5516 22 00 and 5516 23 00 have been exempted from SWS.

      8.

      All goods falling under tariff item 5802 30 00 have been exempted from SWS.

      9.

      The current SWS exemption has been withdrawn for all goods falling under tariff item 6001 92 00.

      10.

      The current SWS exemption has been withdrawn for all the goods falling under tariff item 6101 20 00; goods falling under sub-heading 6101 30; goods falling under tariff items 6102 10 00 & 6102 20 00; goods falling under sub-heading 6102 30; goods falling under sub-heading 6104 19 (except of wool or fine animal hair or cotton); and goods falling under tariff items 6104 62 00, 6104 63 00.

      11.

      SWS exemption has been withdrawn for all the goods falling under subheadings 6201 30, 6201 40, 6202 30, 6202 40; falling under tariff items 6204 11 00, 6204 13 00; goods falling under sub-heading 6204 19, 6204 31; goods falling under tariff items 6204 32 00 & 6204 33 00; and goods falling under sub-headings 6204 39 & 6204 69.

      12.

      In the heading 6203, the exemption from SWS has been narrowed down to all the goods falling under tariff items 6203 22 00, 6203 23 00; goods falling under sub-heading 6203 29; goods falling under tariff item 6203 41 00; and goods falling under sub-heading 6203 42.

      13.

      SWS exemption has been withdrawn for all the goods falling under Sl. No. 3 [Men’s or boy’s overcoats, car coats, capes, cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles, knitted or crocheted, other than those of heading 6103, of wool or fine animal hair, falling under tariff item 6101 90 90] and Sl. No.4 [Upholstery fabrics falling under the following headings or sub-headings - 5208 39, 5209 31, 5209 32, 5209 39, 5209 49, 5210 39, 5211 31, 5211 32, 5211 39, 5211 49, 5407 61, 5516 22 00, 5516 23 00, 5802 30 00] of the notification No. 11/2018 – Customs dated 02.02.2018.

       


      Full Text:

      Budget 2022-23 + FINANCE Bill, 2022

      Topics

      ActsIncome Tax