NCCD revision on specified cigarettes raises excise incidence under the Seventh Schedule and alters tariff rate application.
Revision of NCCD rates increases per thousand levies on specified HS 2402 cigarette subitems in the Seventh Schedule, effective 2 February 2023 with provisional collection available. Notification No. 05/2023 Central Excise exempts excise duty on blended CNG to the extent of GST paid on contained biogas/compressed bio gas, subject to specified conditions.

Customs Tariff Rationalization: Revised duties, AIDC and SWS adjust tariffs and amend exemption notifications structure.
Amendments limit the two year validity rule for exemption notifications by excluding international agreements, diplomatic privileges, specified schemes and certain import categories; insert a nine month disposal deadline for Settlement Commission applications; clarify that countervailing and anti dumping determinations and reviews must follow rules under the Customs Tariff Act and that appeals lie against such determinations or reviews; and materially revise the First Schedule and related notifications to rationalize Basic Customs Duty rates, adjust tariff entries, and amend AIDC and SWS treatment while extending, discontinuing or rescinding targeted exemptions.

Decriminalisation of liquidator prosecution: no new prosecutions under the provision after the sunset, existing prosecutions continue.
The amendment inserts a sunset clause decriminalising the provision that imposed criminal liability on liquidators for non compliance with distribution obligations: no fresh prosecution may be launched under the provision on or after 1 April 2023, while prosecutions instituted earlier remain unaffected. The change is justified by the government's decriminalisation policy and by the existing Insolvency and Bankruptcy Code regime and oversight that now govern liquidations.

Tax exemption extension for SUUTI permits continued tax-free administration until a notified date, with revised vacation rules.
Proposal amends the UTI Repeal Act, 2002 to extend that no income-tax or other tax shall be payable by the Administrator in relation to the specified undertaking until the period ending on the thirtieth day of September, 2023, and to provide that the Administrator shall vacate office immediately on redemption of all schemes and payment of entire amounts to investors or from a date notified by the Central Government, whichever is earlier.

Omission of redundant tax provisions: repeal of section 88 and specified income exclusions to streamline statutory law.
Proposal to omit a provision relating to rebate on life insurance premia and provident fund contribution-formerly in section 88-on the ground that it was sunsetted and superseded by the deduction regime under section 80C; and to omit specified clauses of section 10 that had already been sunsetted, with the amendments to take effect from the commencement of the next fiscal year beginning 1st April, 2023.

Withholding of refunds: amended set-off and suspension rules let tax authorities withhold refunds pending assessment, limiting additional interest.
Amendments integrate set-off and withholding mechanisms so the tax authority may set off any refund against sums payable after giving written intimation; where part or no amount is set off, the Assessing Officer, with reasons recorded and prior approval of the Principal Commissioner or Commissioner, may withhold the remaining refund while assessment or reassessment is pending if grant of refund would likely affect revenue. Additional interest will not accrue for the period the refund is withheld, while other interest rights remain unchanged.

Charitable donation deduction change removes named funds from eligible list, affecting deduction eligibility from next assessment year.
Amendment omits sub-clauses (ii), (iiic) and (iiid) of clause (a) of sub section (2) of section 80G, removing three named funds from the statutory list of organizations whose donations qualify for allowed deductions, thereby changing deduction eligibility under the approval-based framework.

Denial of exemption for charities and institutions where income-tax returns are not filed within prescribed filing windows.
Amendments clarify that exemptions for charitable, educational and medical entities will be denied if the return of income for the previous year is not furnished within the time allowed under the principal return-filing provisions, requiring returns to be furnished in accordance with the updated-return provisions but within the initial statutory filing windows.

Filing deadline alignment for trusts' accumulation statements: advance submission required to ease audit reporting and reconciliation burdens.
The Finance Bill proposes that trusts and institutions required to furnish prescribed accumulation statements advance filing so that Form 9A/10 is submitted at least two months before the due date for filing the return of income; this change is intended to resolve the difficulty auditors face in reporting statement details when audit reports are due one month prior to the return filing deadline and requires amendments to explanatory clauses governing accumulation and deemed application reporting.

Exit tax on accreted income applicable when trusts fail re registration, deemed conversion triggers tax liability and payment obligation.
Failure by a trust or institution under the first or second regime to file required provisional, regular or re registration/approval applications within prescribed periods will be deemed a conversion not eligible for registration, attracting Chapter XII EB taxation. The tax is on accreted income (FMV of assets less liabilities per rules), charged at the maximum marginal rate and collectible in addition to other taxes. Principal officers/trustees and the specified person are jointly liable to pay the tax within fourteen days from the end of the previous year; the date of conversion includes the last date to apply.

Specified violation: incomplete or false registration applications now justify cancellation of trust approvals under the automated regime.
Amendments expand the definition of specified violation to include applications that are incomplete or contain false or incorrect information, permitting cancellation of provisional approval/registration or approval/registration granted through the automated e filing process; the statutory text inserts clause (g) into the Explanation to the fifteenth proviso of clause (23C) of section 10 and into the Explanation to sub section (4) of section 12AB, with effect from 1 April, 2023.

Combining provisional and regular registration allows direct regular approval for active trusts, streamlining application and approval processes.
Amendments permit trusts and institutions that have already commenced activities to seek direct regular approval instead of provisional registration; such applications are to be examined by the Principal Commissioner or Commissioner under applicable procedures, and registration may be granted for a multi year term if the authority is satisfied about objects, genuineness and statutory compliance, with the authority required to pass an order granting or rejecting the application within the prescribed decision period from receipt.

Roll-back provisions removed from section 12A(2), eliminating retrospective exemption and reassessment protection after later registration.
The Finance Bill proposes to omit the second, third and fourth provisos to section 12A(2), which previously permitted retrospective application of sections 11 and 12 and barred reassessment under section 147 for certain prior years upon later registration; these provisos are deemed redundant after 2020 amendments requiring provisional registration before commencing activities, and the omission takes effect from 1st April, 2023.

Application of donations between trusts: inter trust transfers now count only partially as charitable application under the amendment.
The Finance Bill restricts treatment of donations from one eligible trust or institution to another by providing that amounts credited or paid to another eligible fund, trust or institution or to a trust registered under the registration provision will be treated as application for charitable or religious purposes only to the extent specified in newly inserted explanatory clauses to the income exemption and income application provisions; the measure aims to prevent layered accumulation through multi stage donations and preserves the non corpus requirement for such transfers.

Corpus and loan repayment rules limited: deposits or repayments qualify only if returned within a prescribed period and conditions met.
Reinvestment into corpus or repayment of loans previously applied for charitable purposes will not be allowed as a fresh application if the original application was claimed before 01.04.2021, to prevent double deduction. Requalification is permitted only if repayment or reinvestment occurs within a limited period after application and the original application complied with statutory conditions (including prohibitions on corpus transfers, TDS and payment-mode limits, prohibition on benefit to disallowed persons, and India-location rules). Amendments add provisos to clause (23C) of section 10 and to section 11; they take effect from 1 April 2023.

Tax deduction on benefits and perquisites clarified to cover cash or kind and to trigger withholding obligations.
Amendments clarify that the value of any benefit or perquisite arising from business or profession is chargeable and that withholding under section 194R applies whether the benefit or perquisite is provided wholly in cash, wholly in kind, or partly in cash and partly in kind. The section 28 change addresses past judicial interpretation excluding cash benefits and is effective from 1st April, 2024, while the Explanation to section 194R is stated to take effect from 1st April, 2023.

NBFC categorisation change: tax rules now specify deposit-taking and systemically important non-deposit-taking NBFCs for interest treatment.
The proposal replaces the earlier statutory phrase referring to notified classes of non-banking financial companies with explicit reference to deposit-taking non-banking financial companies and systemically important non-deposit-taking non-banking financial companies, thereby specifying which NBFC categories are subject to the payment-basis interest deduction rule and the special interest income recognition rule. The amendment is prospective and will take effect from 1st April, 2024, applying to the assessment year 2024-2025 and subsequent years.

Time limit for export proceeds remittance ties deduction to receipt in convertible foreign exchange or RBI approved account.
Amendments tie SEZ unit deduction eligibility to filing the return of income by the due date and to receipt in India of export proceeds in convertible foreign exchange within six months from the end of the previous year (or within an extended period allowed by the competent authority). Proceeds credited to an RBI approved separate overseas bank account will be deemed received in India. Competent authority means the Reserve Bank of India or an authority regulating foreign exchange. Assessing officers may amend assessments when export earnings are realized after the permitted period.

Valuation of employee accommodation: uniform Rules based method to compute perquisite value and classify concessional housing.
The proposal consolidates valuation of employer provided residential accommodation by vesting the Rules with power to prescribe a uniform method for computing the value of rent free and concessional accommodation perquisites, treats accommodation as concessional when prescribed value exceeds rent payable by the employee, deletes several existing Explanations, and applies prospectively to assessments after implementation.

Inclusion of non-resident investors in tax on share premium to curb premium-based tax avoidance schemes.
The Finance Bill proposes removing the residency limitation in the tax on excess consideration for issue of shares so that consideration received from non-resident investors will also be chargeable where aggregate consideration exceeds the fair market value computed under the existing FMV formula for unquoted equity shares; the amendment is effective from the first day of April following enactment and applies to the corresponding assessment year and subsequent years.