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News Bills
Section 194B - Winnings from lottery or crossword puzzle
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Tax deduction on lottery winnings now triggers per single transaction rather than by annual aggregation.
The Finance Bill, 2025 amends Section 194B to remove the aggregate-year threshold and instead require tax withholding on each single transaction that exceeds the statutory threshold, changing the trigger for deduction from annual aggregation to per-transaction basis; this amendment takes effect from 1 April 2025 (Clause 54).
News Bills
Section 194BB - Winnings from horse race
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Tax deduction on horse race winnings: threshold now applies per single payout, altering withholding obligation at payment.
Section 194BB requires a bookmaker or licensed person paying horse-race winnings to deduct tax at source at the rates in force at the time of payment. The Finance Bill 2025 removes the aggregate-year threshold and makes the deduction requirement apply where a single transaction exceeds the threshold, shifting the test from annual aggregation to single-transaction application.
News Bills
Section 194D – Insurance commission
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Insurance commission TDS threshold raised, reducing mandatory withholding on smaller commission payments from the Bill's effective financial year.
Section 194D requires deduction of income-tax at source on remuneration or reward for soliciting or procuring insurance business paid to a resident where payments in a financial year exceed a prescribed threshold. The Finance Bill, 2025 raises that threshold, reducing the instances where TDS is required, and makes the amendment effective from the commencement of the specified financial year.
News Bills
Section 194G - Commission, etc., on sale of lottery tickets.
Show AI Summary
TDS on lottery commissions: threshold raised, reducing instances of deduction at source; new rule effective next fiscal year.
Amendment to Section 194G raises the monetary threshold that triggers a two percent TDS obligation on commission, remuneration or prize payments to persons engaged in stocking, distributing, purchasing or selling lottery tickets, thereby reducing instances where tax must be deducted at source. The two percent deduction rate remains unchanged, and the amendment takes effect from the commencement of the next fiscal year.
News Bills
Section 194H - Commission or brokerage.
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TDS on commission: threshold for deduction raised, narrowing scope of withholding for small payees next fiscal year
Persons other than individuals and HUFs paying commission or brokerage to resident payees must deduct tax at source at a two percent rate where annual payments exceed the prescribed threshold; the Finance Bill proposes to raise that threshold, reducing the number of payments subject to deduction while excluding insurance commission treated under a separate provision, effective from the commencement of the relevant fiscal year.
News Bills
Section 194-I – Rent
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TDS on rent threshold lowered, expanding deduction requirement to monthly rent payments effective next fiscal year.
The amendment expands the requirement to deduct tax at source on rent by replacing the prior annual exemption with a monthly (or part-month) threshold for payers other than individuals and HUFs; rent exceeding the specified monthly amount will attract withholding, and the change is effective from the start of the next fiscal year.
News Bills
Section 194J - Fees for professional or technical services.
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TDS on professional and technical fees: higher thresholds reduce mandatory withholding obligations from the next financial year.
The Finance Bill increases the threshold for tax deduction at source on payments characterised as fees for professional services, fees for technical services, royalty and other specified sums made by persons other than individuals or HUFs; deductions are required only when aggregate payments in a financial year exceed the revised thresholds, with the amendment effective from the start of the specified financial year.
News Bills
Section 194K – Income in respect of units
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TDS on mutual fund unit income: threshold for mandatory deduction increased, narrowing instances where withholding is required.
Persons paying income in respect of mutual fund units, administrators of specified undertakings, or specified companies must deduct tax at source at the prescribed rate only when the payee's income from such units exceeds the revised threshold; the amendment narrows the circumstances requiring deduction and applies prospectively from the effective date specified in the Finance Bill.
News Bills
Section 194LA - Payment of compensation on acquisition of certain immovable property.
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TDS on compensation for compulsory acquisition: deduction threshold raised while the deduction rate is retained, effective next fiscal April.
Section 194LA requires tax deduction at source on compensation or enhanced compensation and consideration for compulsory acquisition of immovable property (other than agricultural land) where amounts in a financial year exceed the prescribed threshold. The Finance Bill, 2025 proposes to raise that threshold while retaining the existing deduction rate and mechanism; the amendment is to take effect from 1 April 2025.
News Bills
Definition of “forest produce” rationalised
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Definition of forest produce clarified to align with State Acts or Indian Forest Act, narrowing TCS scope to leased produce.
The Finance Bill aligns the definition of forest produce with any State Act or the Indian Forest Act, 1927, to clarify TCS coverage; it confines TCS on "other forest produce" (excluding timber and tendu leaves) to items obtained under a forest lease, and sets TCS at two per cent for timber or other forest produce under lease and two per cent for timber obtained otherwise, effective from 1 April 2025.
News Bills
Reduction in compliance burden by omission of TCS on sale of specified goods
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Tax Collection at Source exemption removes duplicate TCS/TDS obligation, streamlining seller and buyer compliance from April 1, 2025.
The Finance Bill proposes omission of the sub section imposing Tax Collection at Source by sellers on sale of specified goods where the buyer is liable to deduct Tax Deduction at Source, to prevent overlapping TCS/TDS obligations and ease compliance; the amendment takes effect from 1 April 2025.
News Bills
Amendments proposed in provisions of Block assessment for search and requisition cases under Chapter...
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Block assessment scope expanded to include virtual digital assets; computation, revival and timeline rules updated.
Amendments bring virtual digital asset within the definition of undisclosed income for Chapter XIV-B; add "recomputation", "reference" and "order" to the list of proceedings that may revive if a Chapter XIV-B proceeding is annulled; replace "pending" with assessments "required to be made" for subsequent searches; amend computation rules to recognise undisclosed income declared in return and include returns filed before search or requisition for credit; exclude income from international or specified domestic transactions from block period income; and change the block assessment time limit to twelve months from the end of the quarter of the last authorisation.
News Bills
Non-applicability of Section 271AAB of the Act
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Non-applicability of penalty under section 271AAB clarified for searches under section 132 after block assessment introduction.
The amendment provides that section 271AAB shall not apply to an assessee in whose case a search under section 132 was initiated on or after 1 September 2024, aligning the penalty provision with the block assessment regime introduced by the Finance Act, 2024 and removing any ambiguity about applicability; the amendment takes effect from 1 September 2024.
News Bills
Amendments proposed in sections 132 and 132B for rationalising provisions
Show AI Summary
Search and seizure: uniform quarterly-based time limit for retention approvals and updated cross-references for execution definitions.
The Bill amends section 132 to provide that the time limit for taking approval for retention of seized books of account or documents will be one month from the end of the quarter in which the assessment, reassessment or recomputation order is made, addressing administrative difficulties in group search cases. It also modifies Explanation 1 to section 132 to substitute "authorisation" with "authorisations", and updates Explanation 1 to section 132B to reference section 158B for the meaning of "execution of an authorisation for search or requisition".
News Bills
Time limit to impose penalties rationalised
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Limitation on penalty imposition extended to a uniform quarterly deadline after completion of connected proceedings or receipt of appeals.
The amendment standardises the limitation for imposing penalties under Chapter XXI so that no penalty order may be passed after the expiry of six months from the end of the quarter in which the connected proceedings are completed, the appellate order is received by the jurisdictional Principal Commissioner or Commissioner, an order of revision is passed, or the notice for imposition of penalty is issued. A consequential amendment updates the cross-reference in section 246A. These changes take effect from 1 April 2025.
News Bills
Clarification regarding commencement date and the end date of the period stayed by the Court
Show AI Summary
Stay period exclusion clarified: computation excludes from date stay granted until certified vacatur received by tax Commissioner.
The amendment excludes from computation of statutory time limits the period beginning on the date a court stay is granted and ending on the date a certified copy of the order vacating that stay is received by the jurisdictional Principal Commissioner or Commissioner (or the Approving Panel where applicable).
News Bills
Rationalisation of provisions related to carry forward of losses in case of amalgamation
Show AI Summary
Carryforward of losses limited to eight assessment years for predecessor losses in amalgamations, preventing loss evergreening.
Sections 72A and 72AA are amended to provide that any accumulated loss of an original predecessor entity deemed to be the loss of the successor entity may be carried forward only for eight assessment years immediately succeeding the assessment year in which that loss was first computed for the original predecessor, aligning these provisions with section 72 and preventing evergreening through successive amalgamations.
News Bills
Rationalisation of transfer pricing provisions for carrying out multi-year arm’s length price dete...
Show AI Summary
Multi-year transfer pricing: one ALP can apply to consecutive years, with TPO validation and AO recomputation.
A voluntary multi-year transfer pricing option permits an ALP determined by the TPO for a transaction in a given previous year to apply to similar transactions in the immediately following consecutive years; the assessee must exercise a prescribed option, the TPO must validate it within a set period, and on validation the AO shall recompute total income for those years in conformity with the TPO's ALP while no fresh references for those transactions shall be permitted.
News Bills
Removal of higher TDS/TCS for non-filers of return of income
Show AI Summary
Higher TDS/TCS for non-filers removed, easing withholding obligations and reducing verification and compliance burden for payors.
The proposal omits provisions imposing higher rates of deduction and collection for non-filers of income-tax returns, responding to stakeholder concerns that payors face difficulty verifying filing status and bear increased compliance and capital blockage; the amendment is intended to simplify withholding obligations and reduce verification burdens, effective from the first day of April, 2025.
News Bills
SOCIO ECONOMIC WELFARE MEASURES - Increase in the limits on the income of the employees for the purp...
Show AI Summary
Perquisite income threshold increase: employer-provided amenities and foreign medical travel may be exempt from perquisite treatment.
Proposed amendment to section 17 would grant rulemaking power to increase the gross total income ceilings for treating employer-provided amenities and benefits as non-perquisites, and to raise the income limit excluding employer-funded foreign medical travel from perquisite treatment; the changes take effect from 1 April 2026 and apply to the subsequent assessment year.

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Income Tax

Example:-During the previous year ending 31st March, 2013, X, a salaried employee received ₹ 10,67,000 as basic salary and ₹ 20,000 as arrears of bonus of the financial year 1992-93. During the previous year 1992-93, X has received ₹ 50,000 as salary. X deposits ₹ 1,500 (during 1992-93) and ₹ 10,000 (during 2012-13) in PPF.

11 August, 2015

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Chapter No. 29 - Salary - Relief if Salary is received in Arrears or in Advance - Section 89(1)

Particulars

Taxable income and tax liability on “receipt basis”

Taxable income and tax liability on “receipt basis”

2013-14

1993-94

2013-14

1993-94

Salary

10,67,000

50,000

10,67,000

50,000

Arrears of Salary

20,000

-

-

20,000

Gross Salary

10,87,000

50,000

10,67,000

70,000

Less: Standard deduction us/ 16(i)

Nil

12,000

Nil

12,000

Gross Total Income

10,87,000

38,000

10,67,000

58,000

Less: Deduction us/ 80C

10,000

Nil

10,000

Nil

Net income

10,77,000

38,000

10,57,000

58,000

Tax on net Income

1,53,100

2,000

1,47,100

6,800

Less: Rebate u/s 88

Nil

300

Nil

300

Tax

1,53,100

1,700

1,47,100

6,500

Add: Surcharge

Nil

-

Nil

-

Tax and Surcharge

1,53,100

1700

1,47,100

6,500

Add: Cess & SHEC

4,593

-

4,413

-

Tax Liability

1,57,693

1700

1,51,513

6,500

 

Tax Liability of the two AY on receipt basis                                                   1,59,393

Tax Liability of the two AY on accrual basis                                                   1,58,013

Tax relief u/s 89 for the AY 2013-14 (i.e. 1,59,393 – 1,58,013)                     1,380

Tax payable for the AY 2013-14 (i.e. 1,57,693 – 1,380)                                 1,56,313

 

Topics

Acts Income Tax
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