New Finance Bill 2017

Today, on 1st February, 2017, Our Finance Minister Shree Arun Jetly came with an outstanding budget focusing on poor and economic growth. Here is the detailed Finance Bill, 2017 which can also be downloaded from the official website indiabudget.nic.in

Source : www.indiabudget.nic.in/bill.asp

BILL No. 12 OF 2017
THE FINANCE BILL, 2017
(AS INTRODUCED IN LOK SABHA)
THE FINANCE BILL, 2017
_________
ARRANGEMENT OF CLAUSES
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CHAPTER I
PRELIMINARY
CLAUSES
1. Short title and commencement.
CHAPTER II
RATES OF INCOME-TAX
2. Income-tax.
CHAPTER III
DIRECT TAXES
Income-tax
3. Amendment of section 2.
4. Amendment of section 9.
5. Amendment of section 9A.
6. Amendment of section 10.
7. Amendment of section 10AA.
8. Amendment of section 11.
9. Amendment of section 12A.
10. Amendment of section 12AA.
11. Amendment of section 13A.
12. Amendment of section 23.
13. Amendment of section 35AD.
14. Amendment of section 36.
15. Amendment of section 40A.
16. Amendment of section 43.
17. Amendment of section 43B.
18. Amendment of section 43D.
19. Amendment of section 44AA.
20. Amendment of section 44AB.
21. Amendment of section 44AD.
22. Amendment of section 45.
23. Amendment of section 47.
24. Amendment of section 48.
25. Amendment of section 49.
26. Insertion of new section 50CA.
27. Amendment of section 54EC.
28. Amendment of section 55.
29. Amendment of section 56.
30. Amendment of section 58.
31. Amendment of section 71.
32. Substitution of new section for section 79.
33. Amendment of section 80CCD.
34. Amendment of section 80CCG.
35. Amendment of section 80G.
36. Amendment of section 80-IAC.
37. Amendment of section 80-IBA.
38. Amendment of section 87A.
39. Amendment of section 90.
40. Amendment of section 90A.
41. Amendment of section 92BA.
42. Insertion of new section 92CE.
43. Insertion of new section 94B.
44. Amendment of section 115BBDA.
45. Amendment of section 115BBG.
46. Amendment of section 115JAA.
47. Amendment of section 115JB.
48. Amendment of section 115JD.
49. Amendment of section 119.
50. Amendment of section 132.
51. Amendment of section 132A.
52. Amendment of section 133.
53. Amendment of section 133A.
54. Amendment of section 133C.
55. Amendment of section 139.
56. Amendment of section 140A.
57. Amendment of section 143.
58. Amendment of section 153.
59. Amendment of section 153A.
60. Amendment of section 153B.
61. Amendment of section 153C.
62. Amendment of section 155.
63. Insertion of new section 194-IB.
64. Insertion of new section 194-IC.
65. Amendment of section 194J.
66. Amendment of section 194LA.
67. Amendment of section 194LC.
68. Amendment of section 194LD
69. Amendment of section 197A.
70. Amendment of section 204.
71. Amendment of section 206C.
72. Insertion of new section 206CC.
73. Amendment of section 211.
74. Amendment of section 234C.
75. Insertion of new section 234F.
76. Insertion of new section 241A.
77. Amendment of section 244A.
(ii)
CLAUSES
78. Amendment of section 245A.
79. Amendment of section 245N.
80. Amendment of section 245-O.
81. Amendment of section 245Q.
82. Amendment of section 253.
83. Insertion of section 269ST.
84. Insertion of section 271DA.
85. Amendment of section 271F.
86. Insertion of new section 271J.
87. Amendment of section 273B.
CHAPTER IV
INDIRECT TAXES
Customs
88. Amendment of section 2.
89. Amendment of section 7.
90. Amendment of section 17.
91. Amendment of section 27.
92. Amendment of section 28E.
93. Substitution of new section for section 28F.
94. Omission of section 28G.
95. Amendment of section 28H.
96. Amendment of section 28-I.
97. Insertion of new section 30A.
98. Insertion of new section 41A.
99. Amendment of section 46.
100. Amendment of section 47.
101. Substitution of new section for section 49.
102. Amendment of section 69.
103. Omission of section 82.
104. Amendment of section 84.
105. Amendment of section 127B.
106. Amendment of section 127C.
107. Amendment of section 157.
Customs Tariff
108. Amendment of section 9.
109. Amendment of First Schedule.
110. Amendment of Second Schedule.
Excise
111. Amendment of section 23A.
112. Omission of section 23B.
113. Amendment of section 23C.
114. Amendment of section 23D.
(iii)
CLAUSES
(iv)
115. Insertion of new section 23-I.
116. Amendment of section 32E.
117. Amendment of section 32F.
Central Excise Tariff
118. Amendment of First Schedule.
119. Retrospective amendment of certain entries in First Schedule.
CHAPTER V
SERVICE TAX
120. Amendment of section 65B.
121. Amendment of section 66D.
122. Amendment of section 96A.
123. Omission of section 96B.
124. Amendment of section 96C.
125. Amendment of section 96D.
126. Insertion of new section 96HA.
127. Insertion of new sections 104 and 105.
128. Amendment of rule 2A of Service Tax (Determination of Value) Rules, 2006, retrospectively.
CHAPTER VI
MISCELLANEOUS
PART I
AMENDMENTS TO THE INDIAN TRUSTS ACT, 1882
129. Commencement of this Part.
130. Amendment of section 20 of Act 2 of 1882.
PART II
AMENDMENTS TO THE INDIAN POST OFFICE ACT, 1898
131. Commencement of this Part.
132. Amendment of section 7 of Act 6 of 1898.
PART III
AMENDMENTS TO THE RESERVE BANK OF INDIA ACT, 1934
133. Commencement of this Part.
134. Amendment of section 31 of Act 2 of 1934.
PART IV
AMENDMENTS TO THE REPRESENTATION OF THE PEOPLE ACT, 1951
135. Commencement of this Part.
136. Amendment of section 29C of Act 43 of 1951.
CLAUSES
PART V
AMENDMENTS TO THE OIL INDUSTRY (DEVELOPMENT) ACT, 1974
137. Commencement of this Part.
138. Amendment of section 18 of Act 47 of 1974.
PART VI
REPEAL OF THE RESEARCH AND DEVELOPMENT CESS ACT, 1986
139. Commencement of this Part.
140. Repeal of Act 32 of 1986.
141. Savings.
142. Collection and payment of arrears of duties.
PART VII
AMENDMENTS TO THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992
143. Commencement of this Part.
144. Amendment of Act 15 of 1992.
145. Amendment of Chapter VIB.
PART VIII
AMENDMENT TO THE FINANCE ACT, 2005
146. Amendment of Act 18 of 2005.
PART IX
AMENDMENTS TO THE PAYMENT AND SETTLEMENT SYSTEMS ACT, 2007
147. Commencement of this Part.
148. Amendment of Act 51 of 2007.
149. Amendment of section 38.
PART X
AMENDMENTS TO THE FINANCE ACT, 2016
150. Amendment of Act 28 of 2016.
THE FIRST SCHEDULE.
THE SECOND SCHEDULE.
THE THIRD SCHEDULE.
THE FOURTH SCHEDULE.
THE FIFTH SCHEDULE.
THE SIXTH SCHEDULE.
THE SEVENTH SCHEDULE.
(v)
CLAUSES
1
Income-tax.
AS INTRODUCED IN LOK SABHA
ON 1ST FEBRUARY, 2017
Bill No.12 of 2017
THE FINANCE BILL, 2017
A
BILL
to give effect to the financial proposals of the Central Government for the financial year 2017-2018.
BE it enacted by Parliament in the Sixty-eighth Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
1. (1) This Act may be called the Finance Act, 2017.
(2) Save as otherwise provided in this Act, sections 2 to 87 shall come into force on the 1st day of
April, 2017.
CHAPTER II
RATES OF INCOME-TAX
Short title and
commencement.
2. (1) Subject to the provisions of sub-sections (2) and (3), for the assessment year commencing on
the 1st day of April, 2017, income-tax shall be charged at the rates specified in Part I of the First
Schedule and such tax shall be increased by a surcharge, for purposes of the Union, calculated in
each case in the manner provided therein.
(2) In the cases to which Paragraph A of Part I of the First Schedule applies, where the assessee
has, in the previous year, any net agricultural income exceeding five thousand rupees, in addition to
total income, and the total income exceeds two lakh fifty thousand rupees, then,—
(a) the net agricultural income shall be taken into account, in the manner provided in clause (b)
[that is to say, as if the net agricultural income were comprised in the total income after the first two
lakh fifty thousand rupees of the total income but without being liable to tax], only for the purpose of
charging income-tax in respect of the total income; and
(b) the income-tax chargeable shall be calculated as follows:—
(i) the total income and the net agricultural income shall be aggregated and the amount of
income-tax shall be determined in respect of the aggregate income at the rates specified in the
said Paragraph A, as if such aggregate income were the total income;
(ii) the net agricultural income shall be increased by a sum of two lakh fifty thousand rupees,
and the amount of income-tax shall be determined in respect of the net agricultural income as so
increased at the rates specified in the said Paragraph A, as if the net agricultural income as so
increased were the total income;
(iii) the amount of income-tax determined in accordance with sub-clause (i) shall be reduced
by the amount of income-tax determined in accordance with sub-clause (ii) and the sum so
arrived at shall be the income-tax in respect of the total income:
Provided that in the case of every individual, being a resident in India, who is of the age of sixty
years or more but less than eighty years at any time during the previous year, referred to in item (II)
of Paragraph A of Part I of the First Schedule, the provisions of this sub-section shall have effect as
if for the words “two lakh fifty thousand rupees”, the words “three lakh rupees” had been substituted:
Provided further that in the case of every individual, being a resident in India, who is of the age of
eighty years or more at any time during the previous year, referred to in item (III) of Paragraph A of
Part I of the First Schedule, the provisions of this sub-section shall have effect as if for the words
“two lakh fifty thousand rupees”, the words “five lakh rupees” had been substituted.
(3) In cases to which the provisions of Chapter XII or Chapter XII-A or section 115JB or section
115JC or Chapter XII-FA or Chapter XII-FB or sub-section (1A) of section 161 or section 164 or
section 164A or section 167B of the Income-tax Act, 1961 (hereinafter referred to as the Income-tax
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Act) apply, the tax chargeable shall be determined as provided in that Chapter or that section, and with
reference to the rates imposed by sub-section (1) or the rates as specified in that Chapter or section,
as the case may be:
Provided that the amount of income-tax computed in accordance with the provisions of
section 111A or section 112 of the Income-tax Act shall be increased by a surcharge, for the purposes of
the Union, as provided in Paragraph A, B, C, D or E, as the case may be, of Part I of the First Schedule:
Provided further that in respect of any income chargeable to tax under section 115A, 115AB, 115AC,
115ACA, 115AD, 115B, 115BB, 115BBA, 115BBC, 115BBD, 115BBDA, 115BBF,115E, 115JB or 115JC
of the Income-tax Act, the amount of income-tax computed under this sub-section shall be increased
by a surcharge, for the purposes of the Union, calculated,—
(a) in the case of every individual or Hindu undivided family or association of persons or body of
individuals, whether incorporated or not, or every artificial juridical person referred to in
sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, at the rate of fifteen per cent. of
such income-tax, where the total income exceeds one crore rupees;
(b) in the case of every co-operative society or firm or local authority, at the rate of twelve per
cent. of such income-tax, where the total income exceeds one crore rupees;
(c) in the case of every domestic company,—
(i) at the rate of seven per cent. of such income-tax, where the total income exceeds one crore
rupees but does not exceed ten crore rupees;
(ii) at the rate of twelve per cent. of such income-tax, where the total income exceeds ten crore
rupees;
(d) in the case of every company, other than a domestic company,—
(i) at the rate of two per cent. of such income-tax, where the total income exceeds one crore
rupees but does not exceed ten crore rupees;
(ii) at the rate of five per cent. of such income-tax, where the total income exceeds ten crore
rupees:
Provided also that in the case of persons mentioned in (a) and (b) above, having total income
chargeable to tax under section 115JC of the Income-tax Act, and such income exceeds one crore
rupees, the total amount payable as income-tax on such income and surcharge thereon shall not
exceed the total amount payable as income-tax on a total income of one crore rupees by more than
the amount of income that exceeds one crore rupees:
Provided also that in the case of every company having total income chargeable to tax under
section 115JB of the Income-tax Act, and such income exceeds one crore rupees but does not
exceed ten crore rupees, the total amount payable as income-tax on such income and surcharge
thereon, shall not exceed the total amount payable as income-tax on a total income of one crore
rupees by more than the amount of income that exceeds one crore rupees:
Provided also that in the case of every company having total income chargeable to tax under
section 115JB of the Income-tax Act, and such income exceeds ten crore rupees, the total amount
payable as income-tax on such income and surcharge thereon, shall not exceed the total amount
payable as income-tax and surcharge on a total income of ten crore rupees by more than the
amount of income that exceeds ten crore rupees:
Provided also that in respect of any income chargeable to tax under clause (i) of sub-section (1)
of section 115BBE of the Income-tax Act, the amount of income-tax computed under this subsection
shall be increased by a surcharge, for purposes of the Union, calculated at the rate of
twenty-five per cent. of such income-tax.
(4) In cases in which tax has to be charged and paid under section 115-O or section 115QA or
sub-section (2) of section 115R or section 115TA or section 115TD of the Income-tax Act, the tax shall
be charged and paid at the rates as specified in those sections and shall be increased by a surcharge,
for the purposes of the Union, calculated at the rate of twelve per cent. of such tax.
(5) In cases in which tax has to be deducted under sections 193, 194, 194A, 194B, 194BB, 194D,
194LBA, 194LBB, 194LBC and 195 of the Income-tax Act, at the rates in force, the deductions shall be
made at the rates specified in Part II of the First Schedule and shall be increased by a surcharge, for
the purposes of the Union, calculated in cases wherever prescribed, in the manner provided therein.
(6) In cases in which tax has to be deducted under sections 192A, 194C, 194DA, 194E, 194EE,
194F, 194G, 194H, 194-I, 194-IA, 194-IB, 194-IC, 194J, 194LA, 194LB, 194LBA, 194LBB, 194LBC,
194LC, 194LD, 196B, 196C and 196D of the Income-tax Act, the deductions shall be made at the rates
specified in those sections and shall be increased by a surcharge, for the purposes of the Union,—
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(a) in the case of every individual or Hindu undivided family or association of persons or body of
individuals, whether incorporated or not, or every artificial juridical person referred to in
sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, being a non-resident, calculated,—
(i) at the rate of ten per cent. of such tax, where the income or the aggregate of such incomes
paid or likely to be paid and subject to the deduction exceeds fifty lakh rupees but does not
exceed one crore rupees;
(ii) at the rate of fifteen per cent. of such tax, where the income or the aggregate of such
incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees;
(b) in the case of every co-operative society or firm, being a non-resident, calculated at the rate
of twelve per cent. of such tax, where the income or the aggregate of such incomes paid or likely to
be paid and subject to the deduction exceeds one crore rupees;
(c) in the case of every company, other than a domestic company, calculated,—
(i) at the rate of two per cent. of such tax, where the income or the aggregate of such incomes
paid or likely to be paid and subject to the deduction exceeds one crore rupees but does not
exceed ten crore rupees;
(ii) at the rate of five per cent. of such tax, where the income or the aggregate of such incomes
paid or likely to be paid and subject to the deduction exceeds ten crore rupees.
(7) In cases in which tax has to be collected under the proviso to section 194B of the Income-tax Act,
the collection shall be made at the rates specified in Part II of the First Schedule, and shall be increased
by a surcharge, for the purposes of the Union, calculated, in cases wherever prescribed, in the manner
provided therein.
(8) In cases in which tax has to be collected under section 206C of the Income-tax Act, the collection
shall be made at the rates specified in that section and shall be increased by a surcharge, for the
purposes of the Union,—
(a) in the case of every individual or Hindu undivided family or association of persons or body of
individuals, whether incorporated or not, or every artificial juridical person referred to in
sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, being a non-resident, calculated,—
(i) at the rate of ten per cent. of such tax, where the amount or the aggregate of such amounts
collected and subject to the collection exceeds fifty lakh rupees but does not exceed one crore
rupees;
(ii) at the rate of fifteen per cent. of such tax, where the amount or the aggregate of such
amounts collected and subject to the collection exceeds one crore rupees;
(b) in the case of every co-operative society or firm, being a non-resident, calculated at the rate
of twelve per cent. of such tax, where the amount or the aggregate of such amounts collected and
subject to the collection exceeds one crore rupees;
(c) in the case of every company, other than a domestic company, calculated,—
(i) at the rate of two per cent. of such tax, where the amount or the aggregate of such amounts
collected and subject to the collection exceeds one crore rupees but does not exceed ten crore
rupees;
(ii) at the rate of five per cent. of such tax, where the amount or the aggregate of such amounts
collected and subject to the collection exceeds ten crore rupees.
(9) Subject to the provisions of sub-section (10), in cases in which income-tax has to be charged
under sub-section (4) of section 172 or sub-section (2) of section 174 or section 174A or section 175 or
sub-section (2) of section 176 of the Income-tax Act or deducted from, or paid on, income chargeable
under the head “Salaries” under section 192 of the said Act or in which the “advance tax” payable
under Chapter XVII-C of the said Act has to be computed at the rate or rates in force, such income-tax
or, as the case may be, “advance tax” shall be charged, deducted or computed at the rate or rates
specified in Part III of the First Schedule and such tax shall be increased by a surcharge, for the
purposes of the Union, calculated in such cases and in such manner as provided therein:
Provided that in cases to which the provisions of Chapter XII or Chapter XII-A or section 115JB or
section 115JC or Chapter XII-FA or Chapter XII-FB or sub-section (lA) of section 161 or section 164 or
section 164A or section 167B of the Income-tax Act apply, “advance tax” shall be computed with
reference to the rates imposed by this sub-section or the rates as specified in that Chapter or section,
as the case may be:
Provided further that the amount of “advance tax” computed in accordance with the provisions of
section 111A or section 112 of the Income-tax Act shall be increased by a surcharge, for the purposes
of the Union, as provided in Paragraph A, B, C, D or E, as the case may be, of Part III of the First
Schedule:
Provided also that in respect of any income chargeable to tax under section 115A, 115AB, 115AC,
115ACA, 115AD, 115B, 115BA, 115BB, 115BBA, 115BBC, 115BBD, 115BBDA, 115BBF, 115BBG,
115E, 115JB or 115JC of the Income-tax Act, “advance tax” computed under the first proviso shall be
increased by a surcharge, for the purposes of the Union, calculated,—
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(a) in the case of every individual or Hindu undivided family or association of persons or body of
individuals, whether incorporated or not, or every artificial juridical person referred to in
sub-clause (vii) of clause (31) of section 2 of the Income-tax Act,—
(i) at the rate of ten per cent. of such “advance tax”, where the total income exceeds fifty lakh
rupees but does not exceed one crore rupees;
(ii) at the rate of fifteen per cent. of such “advance tax”, where the total income exceeds one
crore rupees;
(b) in the case of every co-operative society or firm or local authority at the rate of twelve per cent.
of such “advance tax”, where the total income exceeds one crore rupees;
(c) in the case of every domestic company,—
(i) at the rate of seven per cent. of such “advance tax”, where the total income exceeds one
crore rupees but does not exceed ten crore rupees;
(ii) at the rate of twelve per cent. of such “advance tax”, where the total income exceeds ten
crore rupees;
(d) in the case of every company, other than a domestic company,—
(i) at the rate of two per cent. of such “advance tax”, where the total income exceeds one crore
rupees but does not exceed ten crore rupees;
(ii) at the rate of five per cent. of such “advance tax”, where the total income exceeds ten crore
rupees:
Provided also that in the case of persons mentioned in (a) above, having total income chargeable to
tax under section 115JC of the Income-tax Act, and such income exceeds,—
(a) fifty lakh rupees but does not exceed one crore rupees, the total amount payable as “advance
tax” on such income and surcharge thereon shall not exceed the total amount payable as “advance
tax” on a total income of fifty lakh rupees by more than the amount of income that exceeds fifty lakh
rupees;
(b) one crore rupees, the total amount payable as “advance tax” on such income and surcharge
thereon shall not exceed the total amount payable as “advance tax” on a total income of one crore
rupees by more than the amount of income that exceeds one crore rupees:
Provided also that in the case of persons mentioned in (b) above, having total income chargeable to
tax under section 115JC of the Income-tax Act, and such income exceeds one crore rupees, the total
amount payable as “advance tax” on such income and surcharge thereon shall not exceed the total
amount payable as “advance tax” on a total income of one crore rupees by more than the amount of
income that exceeds one crore rupees:
Provided also that in the case of every company having total income chargeable to tax under section
115JB of the Income-tax Act, and such income exceeds one crore rupees but does not exceed ten
crore rupees, the total amount payable as “advance tax” on such income and surcharge thereon, shall
not exceed the total amount payable as “advance tax” on a total income of one crore rupees by more
than the amount of income that exceeds one crore rupees:
Provided also that in the case of every company having total income chargeable to tax under section
115JB of the Income-tax Act, and such income exceeds ten crore rupees, the total amount payable as
“advance tax” on such income and surcharge thereon, shall not exceed the total amount payable as
“advance tax” and surcharge on a total income of ten crore rupees by more than the amount of income
that exceeds ten crore rupees:
Provided also that in respect of any income chargeable to tax under clause (i) of sub-section (1) of
section 115BBE of the Income-tax Act, the “advance tax” computed under the first proviso shall be
increased by a surcharge, for the purposes of the Union, calculated at the rate of twenty-five per cent.
of such “advance tax”.
(10) In cases to which Paragraph A of Part III of the First Schedule applies, where the assessee has,
in the previous year or, if by virtue of any provision of the Income-tax Act, income-tax is to be charged
in respect of the income of a period other than the previous year, in such other period, any net agricultural
income exceeding five thousand rupees, in addition to total income and the total income exceeds two
lakh fifty thousand rupees, then, in charging income-tax under sub-section (2) of section 174 or
section 174A or section 175 or sub-section (2) of section 176 of the said Act or in computing the
“advance tax” payable under Chapter XVII-C of the said Act, at the rate or rates in force,—
(a) the net agricultural income shall be taken into account, in the manner provided in clause (b)
[that is to say, as if the net agricultural income were comprised in the total income after the
first two lakh fifty thousand rupees of the total income but without being liable to tax], only for the
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purpose of charging or computing such income-tax or, as the case may be, “advance tax” in respect
of the total income; and
(b) such income-tax or, as the case may be, “advance tax” shall be so charged or computed as
follows:—
(i) the total income and the net agricultural income shall be aggregated and the amount of
income-tax or “advance tax” shall be determined in respect of the aggregate income at the rates
specified in the said Paragraph A, as if such aggregate income were the total income;
(ii) the net agricultural income shall be increased by a sum of two lakh fifty thousand rupees,
and the amount of income-tax or “advance tax” shall be determined in respect of the net agricultural
income as so increased at the rates specified in the said Paragraph A, as if the net agricultural
income were the total income;
(iii) the amount of income-tax or “advance tax” determined in accordance with sub-clause (i)
shall be reduced by the amount of income-tax or, as the case may be, “advance tax” determined
in accordance with sub-clause (ii) and the sum so arrived at shall be the income-tax or, as the
case may be, “advance tax” in respect of the total income:
Provided that in the case of every individual, being a resident in India, who is of the age of sixty
years or more but less than eighty years at any time during the previous year, referred to in item (II) of
Paragraph A of Part III of the First Schedule, the provisions of this sub-section shall have effect as if for
the words “two lakh fifty thousand rupees”, the words “three lakh rupees” had been substituted:
Provided further that in the case of every individual, being a resident in India, who is of the age of
eighty years or more at any time during the previous year, referred to in item (III) of Paragraph A of
Part III of the First Schedule, the provisions of this sub-section shall have effect as if for the words “two
lakh fifty thousand rupees”, the words “five lakh rupees” had been substituted:
Provided also that the amount of income-tax or “advance tax” so arrived at, shall be increased by a
surcharge for the purposes of the Union, calculated in each case, in the manner provided therein.
(11) The amount of income-tax as specified in sub-sections (1) to (10) and as increased by the
applicable surcharge, for the purposes of the Union, calculated in the manner provided therein, shall
be further increased by an additional surcharge, for purposes of the Union, to be called the “Education
Cess on income-tax”, calculated at the rate of two per cent. of such income-tax and surcharge so as to
fulfil the commitment of the Government to provide and finance universalised quality basic education:
Provided that nothing contained in this sub-section shall apply to cases in which tax is to be deducted
or collected under the sections of the Income-tax Act mentioned in sub-sections (5), (6), (7) and (8), if
the income subjected to deduction of tax at source or collection of tax at source is paid to a domestic
company and any other person who is resident in India.
(12) The amount of income-tax as specified in sub-sections (1) to (10) and as increased by the
applicable surcharge, for the purposes of the Union, calculated in the manner provided therein, shall
also be increased by an additional surcharge, for the purposes of the Union, to be called the “Secondary
and Higher Education Cess on income-tax”, calculated at the rate of one per cent. of such income-tax
and surcharge so as to fulfil the commitment of the Government to provide and finance secondary and
higher education:
Provided that nothing contained in this sub-section shall apply to cases in which tax is to be deducted
or collected under the sections of the Income-tax Act mentioned in sub-sections (5), (6), (7) and (8), if
the income subjected to deduction of tax at source or collection of tax at source is paid to a domestic
company and any other person who is resident in India.
(13) For the purposes of this section and the First Schedule,—
(a) “domestic company” means an Indian company or any other company which, in respect of its
income liable to income-tax under the Income-tax Act, for the assessment year commencing on the
1st day of April, 2017, has made the prescribed arrangements for the declaration and payment
within India of the dividends (including dividends on preference shares) payable out of such income;
(b) “insurance commission” means any remuneration or reward, whether by way of commission
or otherwise, for soliciting or procuring insurance business (including business relating to the
continuance, renewal or revival of policies of insurance);
(c) “net agricultural income” in relation to a person, means the total amount of agricultural income,
from whatever source derived, of that person computed in accordance with the rules contained in
Part IV of the First Schedule;
(d) all other words and expressions used in this section and the First Schedule but not defined in
this sub-section and defined in the Income-tax Act shall have the meanings, respectively, assigned
to them in that Act.
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CHAPTER III
DIRECT TAXES
Income-tax
3. In section 2 of the Income-tax Act, in clause (42A),—
(a) in the third proviso [as inserted by section 3 of the Finance Act, 2016], after the words and
brackets “a company (not being a share listed in a recognised stock exchange in India)”, the words
“or an immovable property, being land or building or both,” shall be inserted with effect from the
1st day of April, 2018;
(b) in Explanation 1, in clause (i),—
(A) after sub-clause (he), the following sub-clause shall be inserted with effect from the 1st day
of April, 2018, namely:—
“(hf) in the case of a capital asset, being equity shares in a company, which becomes the
property of the assessee in consideration of a transfer referred to in clause (xb) of section
47, there shall be included the period for which the preference shares were held by the
assessee;”;
(B) after sub-clause (hf) as so inserted, the following sub-clause shall be inserted, namely:—
“(hg) in the case of a capital asset, being a unit or units, which becomes the property of the
assessee in consideration of a transfer referred to in clause (xix) of section 47, there shall be
included the period for which the unit or units in the consolidating plan of a mutual fund scheme
were held by the assessee;”.
4. In section 9 of the Income-tax Act, in sub-section (1), in clause (i), after Explanation 5, the following
Explanation shall be inserted and shall be deemed to have been inserted with effect from the 1st day
of April, 2012, namely:—
“Explanation 5A.––For the removal of doubts, it is hereby clarified that nothing contained in
Explanation 5 shall apply to an asset or capital asset mentioned therein, which is held by a nonresident
by way of investment, directly or indirectly, in a Foreign Institutional Investor as referred to
in clause (a) of the Explanation to section 115AD and registered as Category-I or Category-II
foreign portfolio investor under the Securities and Exchange Board of India (Foreign Portfolio
Investors) Regulations, 2014 made under the Securities and Exchange Board of India Act, 1992.”.
5. In section 9A of the Income-tax Act, in sub-section (3), in clause (j), after the proviso, the following
proviso shall be inserted and shall be deemed to have been inserted with effect from the 1st day of
April, 2016, namely:—
“Provided further that nothing contained in this clause shall apply to a fund which has been
wound up in the previous year;”.
6. In section 10 of the Income-tax Act,—
(a) in clause (4), in sub-clause (ii), in the proviso, for the word, brackets and letter “clause (q)”, the
word, brackets and letter “clause (w)” shall be substituted and shall be deemed to have been
substituted with effect from the 1st day of April, 2013;
(b) after clause (12A) [as inserted by section 7 of the Finance Act, 2016], the following clause
shall be inserted with effect from the 1st day of April, 2018, namely:—
“(12B) any payment from the National Pension System Trust to an employee under the pension
scheme referred to in section 80CCD, on partial withdrawal made out of his account in accordance
with the terms and conditions, specified under the Pension Fund Regulatory and Development
Authority Act, 2013 and the regulations made thereunder, to the extent it does not exceed twentyfive
per cent. of the amount of contributions made by him;”;
(c) in clause (23C),—
(I) after sub-clause (iiiaaa), the following sub-clause shall be inserted and shall be deemed to
have been inserted with effect from the 1st day of April, 1998, namely:—
“(iiiaaaa) the Chief Minister’s Relief Fund or the Lieutenant Governor’s Relief Fund in
respect of any State or Union territory as referred to in sub-clause (iiihf) of clause (a) of
sub-section (2) of section 80G; or”;
(II) after the eleventh proviso, the following proviso shall be inserted with effect from the 1st
day of April, 2018, namely:—
“Provided also that any amount credited or paid out of income of any fund or trust or institution
or any university or other educational institution or any hospital or other medical institution
referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), to any
trust or institution registered under section 12AA, being voluntary contribution made with a
specific direction that they shall form part of the corpus of the trust or institution, shall not be
treated as application of income to the objects for which such fund or trust or institution or
university or educational institution or hospital or other medical institution, as the case may be,
is established:”;
Amendment
of section 9.
Amendment
of section 9A.
Amendment
of section 10.
15 of 1992.
28 of 2016.
23 of 2013.
Amendment
of section 2.
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(d) after clause (37), the following clause shall be inserted and shall be deemed to have been
inserted with effect from the 1st day of April, 2015, namely:—
‘(37A) any income chargeable under the head “Capital gains” in respect of transfer of a specified
capital asset arising to an assessee, being an individual or a Hindu undivided family, who was the
owner of such specified capital asset as on the 2nd day of June, 2014 and transfers that specified
capital asset under the Land Pooling Scheme (herein referred to as “the scheme”) covered under
the Andhra Pradesh Capital City Land Pooling Scheme (Formulation and Implementation) Rules,
2015 made under the provisions of the Andhra Pradesh Capital Region Development Authority Act,
2014 and the rules, regulations and Schemes made under the said Act.
Explanation.—For the purposes of this clause, “specified capital asset” means,—
(a) the land or building or both owned by the assessee as on the 2nd day of June, 2014
and which has been transferred under the scheme; or
(b) the land pooling ownership certificate issued under the scheme to the assessee in
respect of land or building or both referred to in clause (a); or
(c) the reconstituted plot or land, as the case may be, received by the assessee in lieu of
land or building or both referred to in clause (a) in accordance with the scheme, if such plot
or land, as the case may be, so received is transferred within two years from the end of the
financial year in which the possession of such plot or land was handed over to him;’;
(e) in clause (38), after the second proviso and before the Explanation [as inserted by section 7
of the Finance Act, 2016], the following proviso shall be inserted with effect from the 1st day of April,
2018, namely:—
“Provided also that nothing contained in this clause shall apply to any income arising from the
transfer of a long-term capital asset, being an equity share in a company, if the transaction of
acquisition, other than the acquisition notified by the Central Government in this behalf, of such
equity share is entered into on or after the 1st day of October, 2004 and such transaction is not
chargeable to securities transaction tax under Chapter VII of the Finance (No. 2) Act, 2004.”;
(f) after clause (48A), the following clause shall be inserted with effect from the 1st day of April,
2018, namely:—
“(48B) any income accruing or arising to a foreign company on account of sale of leftover stock
of crude oil, if any, from the facility in India after the expiry of the agreement or the arrangement
referred to in clause (48A) subject to such conditions as may be notified by the Central Government
in this behalf;”.
7. In section 10AA of the Income-tax Act, after sub-section (1), the following Explanation shall be
inserted with effect from the 1st day of April, 2018, namely:—
“Explanation.––For the removal of doubts, it is hereby declared that the amount of deduction
under this section shall be allowed from the total income of the assessee computed in accordance
with the provisions of this Act, before giving effect to the provisions of this section and the deduction
under this section shall not exceed such total income of the assessee.”.
8. In section 11 of the Income-tax Act, in sub-section (1), the Explanation below clause (d) shall be
numbered as Explanation 1 thereof and after Explanation 1 as so numbered, the following Explanation
shall be inserted with effect from the 1st day of April, 2018, namely:—
“Explanation 2.—Any amount credited or paid, out of income referred to in clause (a) or
clause (b) read with Explanation 1, to any other trust or institution registered under section 12AA,
being contribution with a specific direction that they shall form part of the corpus of the trust or
institution, shall not be treated as application of income for charitable or religious purposes.”.
9. In section 12A of the Income-tax Act, in sub-section (1), with effect from the 1st day of
April, 2018,—
(i) after clause (aa), the following clause shall be inserted, namely:—
“(ab) the person in receipt of the income has made an application for registration of the trust
or institution, in a case where a trust or an institution has been granted registration under
section 12AA or has obtained registration at any time under section 12A [as it stood before its
amendment by the Finance (No. 2) Act, 1996], and, subsequently, it has adopted or undertaken
modifications of the objects which do not conform to the conditions of registration, in the
prescribed form and manner, within a period of thirty days from the date of said adoption or
modification, to the Principal Commissioner or Commissioner and such trust or institution is
registered under section 12AA;”;
28 of 2016.
Andhra
Pradesh Act
11 of 2014.
23 of 2004.
Amendment
of section
10AA.
Amendment
of section 11.
Amendment
of section
12A.
33 of 1996.
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(ii) after clause (b), the following clause shall be inserted, namely:—
“(ba) the person in receipt of the income has furnished the return of income for the previous
year in accordance with the provisions of sub-section (4A) of section 139, within the time allowed
under that section.”.
10. In section 12AA of the Income-tax Act, with effect from the 1st day of April, 2018,—
(a) in sub-section (1), after the word, brackets and letters “clause (aa)”, the words, brackets and
letters “or clause (ab)” shall be inserted;
(b) in sub-section (2), after the word, brackets and letters “clause (aa)”, the words, brackets and
letters “or clause (ab)” shall be inserted.
11. In section 13A of the Income-tax Act, with effect from the 1st day of April, 2018,—
(I) in the first proviso,—
(i) in clause (b),—
(A) after the words “such voluntary contribution”, the words “other than contribution by way
of electoral bond” shall be inserted;
(B) the word “and” occurring at the end shall be omitted;
(ii) in clause (c), the word “; and” shall be inserted at the end;
(iii) after clause (c), the following clause shall be inserted, namely:—
‘(d) no donation exceeding two thousand rupees is received by such political party otherwise
than by an account payee cheque drawn on a bank or an account payee bank draft or use of
electronic clearing system through a bank account or through electoral bond.
Explanation.––For the purposes of this proviso, “electoral bond” means a bond referred to
in the Explanation to sub-section (3) of section 31 of the Reserve Bank of India Act, 1934.’;
(II) after the second proviso, the following proviso shall be inserted, namely:—
“Provided also that such political party furnishes a return of income for the previous year in
accordance with the provisions of sub-section (4B) of section 139 on or before the due date
under that section.”.
12. In section 23 of the Income-tax Act, after sub-section (4), the following sub-section shall be
inserted with effect from the 1st day of April, 2018, namely:___
“(5) Where the property consisting of any building or land appurtenant thereto is held as stock-intrade
and the property or any part of the property is not let during the whole or any part of the
previous year, the annual value of such property or part of the property, for the period up to one year
from the end of the financial year in which the certificate of completion of construction of the property
is obtained from the competent authority, shall be taken to be nil.”.
13. In section 35AD of the Income-tax Act, in sub-section (8), in clause (f), after the words “shall not
include”, the words “any expenditure in respect of which the payment or aggregate of payments made
to a person in a day, otherwise than by an account payee cheque drawn on a bank or an account
payee bank draft or use of electronic clearing system through a bank account, exceeds ten thousand
rupees or” shall be inserted with effect from the 1st day of April, 2018.
14. In section 36 of the Income-tax Act, in sub-section (1), in clause (viia), in sub-clause (a), for the
words “seven and one-half per cent.”, the words “eight and one-half per cent.” shall be substituted with
effect from the 1st day of April, 2018.
15. In section 40A of the Income-tax Act,—
(a) in sub-section (2), in clause (a), in the proviso, after the words “Provided that”, the words,
figures and letters “for an assessment year commencing on or before the 1st day of April, 2016”
shall be inserted;
(b) with effect from the 1st day of April, 2018,—
(A) in sub-section (3), for the words “exceeds twenty thousand rupees”, the words “or use of
electronic clearing system through a bank account, exceeds ten thousand rupees,” shall be
substituted;
(B) in sub-section (3A),—
(i) after the words “account payee bank draft,”, the words “or use of electronic clearing
system through a bank account” shall be inserted;
(ii) for the words “twenty thousand rupees”, the words “ten thousand rupees” shall be
substituted;
Amendment
of section
12AA.
Amendment
of section 23.
Amendment
of section
35AD.
Amendment
of section 36.
Amendment
of section
40A.
Amendment
of section
13A.
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9
(iii) in the first proviso, for the words “exceeds twenty thousand rupees”, the words “or use
of electronic clearing system through a bank account, exceeds ten thousand rupees,” shall be
substituted;
(iv) in the second proviso, for the words “twenty thousand rupees”, the words “ten thousand
rupees” shall be substituted;
(C) in sub-section (4),—
(i) after the words “account payee bank draft”, the words “or use of electronic clearing
system through a bank account” shall be inserted;
(ii) after the words “such cheque or draft”, the words “or electronic clearing system” shall be
inserted.
16. In section 43 of the Income-tax Act, in clause (1), with effect from the 1st day of April, 2018,—
(a) after the proviso and before Explanation 1, the following proviso shall be inserted, namely:—
“Provided further that where the assessee incurs any expenditure for acquisition of any asset
or part thereof in respect of which a payment or aggregate of payments made to a person in a
day, otherwise than by an account payee cheque drawn on a bank or an account payee bank
draft or use of electronic clearing system through a bank account, exceeds ten thousand rupees,
such expenditure shall be ignored for the purposes of determination of actual cost.”;
(b) in Explanation 13, the following proviso shall be inserted, namely:—
“Provided that where any capital asset in respect of which deduction or part of deduction
allowed under section 35AD is deemed to be the income of the assessee in accordance with the
provisions of sub-section (7B) of the said section, the actual cost of the asset to the assessee
shall be the actual cost to the assessee, as reduced by an amount equal to the amount of
depreciation calculated at the rate in force that would have been allowable had the asset been
used for the purposes of business since the date of its acquisition.”.
17. In section 43B of the Income-tax Act, with effect from the 1st day of April, 2018,—
(i) in clause (e), after the words “scheduled bank”, the words “or a co-operative bank other than a
primary agricultural credit society or a primary co-operative agricultural and rural development bank”
shall be inserted;
(ii) in Explanation 4, after clause (c), the following clause shall be inserted, namely:—
‘(d) “co-operative bank”, “primary agricultural credit society” and “primary co-operative
agricultural and rural development bank” shall have the meanings respectively assigned to them
in the Explanation to sub-section (4) of section 80P.’.
18. In section 43D of the Income-tax Act, with effect from the 1st day of April, 2018,—
(i) in clause (a), after the words “scheduled bank or”, the words “a co-operative bank other than a
primary agricultural credit society or a primary co-operative agricultural and rural development bank
or” shall be inserted;
(ii) in the long line, after the words “scheduled bank or”, the words “a co-operative bank other
than a primary agricultural credit society or a primary co-operative agricultural and rural development
bank or” shall be inserted;
(iii) in the Explanation, after clause (f), the following clause shall be inserted, namely:—
‘(g) “co-operative bank”, “primary agricultural credit society” and “primary co-operative
agricultural and rural development bank” shall have the meanings respectively assigned to them
in the Explanation to sub-section (4) of section 80P.’.
19. In section 44AA of the Income-tax Act, in sub-section (2), the following provisos shall be inserted
with effect from the 1st day of April, 2018, namely:—
‘Provided that in the case of a person being an individual or a Hindu undivided family, the provisions
of clause (i) and clause (ii) shall have effect, as if for the words “one lakh twenty thousand rupees”,
the words “two lakh fifty thousand rupees” had been substituted:
Provided further that in the case of a person being an individual or a Hindu undivided family, the
provisions of clause (i) and clause (ii) shall have effect, as if for the words “ten lakh rupees”, the
words “twenty-five lakh rupees” had been substituted.’.
20. In section 44AB of the Income-tax Act,—
(i) before the first proviso, the following proviso shall be inserted, namely:—
Amendment of
section 43.
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section 43B.
Amendment of
section 43D.
Amendment of
section 44AA.
Amendment of
section 44AB.
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“Provided that this section shall not apply to the person, who declares profits and gains for the
previous year in accordance with the provisions of sub-section (1) of section 44AD and his total
sales, turnover or gross receipts, as the case may be, in business does not exceed two crore
rupees in such previous year:”;
(ii) in the first proviso, for the words “Provided that”, the words “Provided further that” shall be
substituted;
(iii) in the second proviso, for the words “Provided further”, the words “Provided also” shall be
substituted.
21. In section 44AD of the Income-tax Act, in sub-section (1), the following proviso shall be inserted,
namely:—
‘Provided that this sub-section shall have effect as if for the words “eight per cent.”, the words “six
per cent.” had been substituted, in respect of the amount of total turnover or gross receipts which is
received by an account payee cheque or an account payee bank draft or use of electronic clearing
system through a bank account during the previous year or before the due date specified in subsection
(1) of section 139 in respect of that previous year.’.
22. In section 45 of the Income-tax Act, after sub-section (5) and the Explanation thereto, the following
sub-section shall be inserted with effect from the 1st day of April, 2018, namely:—
‘(5A) Notwithstanding anything contained in sub-section (1), where the capital gain arises to an
assessee, being an individual or a Hindu undivided family, from the transfer of a capital asset,
being land or building or both, under a specified agreement, the capital gains shall be chargeable
to income-tax as income of the previous year in which the certificate of completion for the whole or
part of the project is issued by the competent authority; and for the purposes of section 48, the
stamp duty value, on the date of issue of the said certificate, of his share, being land or building
or both in the project, as increased by the consideration received in cash, if any, shall be deemed
to be the full value of the consideration received or accruing as a result of the transfer of the
capital asset:
Provided that the provisions of this sub-section shall not apply where the assessee transfers his
share in the project on or before the date of issue of said certificate of completion, and the capital
gains shall be deemed to be the income of the previous year in which such transfer takes place and
the provisions of this Act, other than the provisions of this sub-section, shall apply for the purpose of
determination of full value of consideration received or accruing as a result of such transfer.
Explanation.—For the purposes of this sub-section, the expression—
(i) “competent authority” means the authority empowered to approve the building plan by or
under any law for the time being in force;
(ii) “specified agreement” means a registered agreement in which a person owning land or
building or both, agrees to allow another person to develop a real estate project on such land or
building or both, in consideration of a share, being land or building or both in such project, whether
with or without payment of part of the consideration in cash;
(iii) “stamp duty value” means the value adopted or assessed or assessable by any authority of
Government for the purpose of payment of stamp duty in respect of an immovable property being
land or building or both.’.
23. In section 47 of the Income-tax Act, with effect from the 1st day of April, 2018,—
(a) after clause (viia), the following clause shall be inserted, namely:—
“(viiaa) any transfer, made outside India, of a capital asset being rupee denominated bond of
an Indian company issued outside India, by a non-resident to another non-resident;”;
(b) after clause (xa), the following clause shall be inserted, namely:—
“(xb) any transfer by way of conversion of preference shares of a company into equity shares
of that company;”.
24. In section 48 of the Income-tax Act, with effect from the 1st day of April, 2018,—
(a) in the fifth proviso, for the word “subscribed”, the word “held” shall be substituted;
(b) in the Explanation, in clause (iii), for the figures, letters and words “1st day of April, 1981”, the
figures, letters and words “1st day of April, 2001” shall be substituted.
Amendment
of section
44AD.
Amendment
of section 47.
5
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35
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50
Amendment
of section 45.
Amendment
of section 48.
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25. In section 49 of the Income-tax Act,—
(a) in sub-section (1), in clause (iii), in sub-clause (e), after the word, brackets, figures and letter
“clause (vib)”, the words, brackets, figures and letter “or clause (vic)” shall be inserted with effect
from the 1st day of April, 2018;
(b) after sub-section (2AD), the following sub-section shall be inserted with effect from the 1st
day of April, 2018, namely:–-
“(2AE) Where the capital asset, being equity share of a company, became the property of the
assessee in consideration of a transfer referred to in clause (xb) of section 47, the cost of acquisition
of the asset shall be deemed to be that part of the cost of the preference share in relation to which
such asset is acquired by the assessee.”;
(c) after sub-section (2AE) as so inserted, the following sub-section shall be inserted, namely:—
“(2AF) Where the capital asset, being a unit or units in a consolidated plan of a mutual fund
scheme, became the property of the assessee in consideration of a transfer referred to in
clause (xix) of section 47, the cost of acquisition of the asset shall be deemed to be the cost of
acquisition to him of the unit or units in the consolidating plan of the scheme of the mutual fund.”;
(d) in sub-section (4), after the words, brackets, figures and letter “or clause (viia)” at both the
places where they occur, the words, brackets and figure “or clause (x)” shall be inserted;
(e) after sub-section (5) [as inserted by section 30 of the Finance Act, 2016], the following
sub-sections shall be inserted with effect from the 1st day of April, 2018, namely:—
‘(6) Where the capital gain arises from the transfer of a specified capital asset referred to in
clause (c) of the Explanation to clause (37A) of section 10, which has been transferred after the
expiry of two years from the end of the financial year in which the possession of such asset was
handed over to the assessee, the cost of acquisition of such specified capital asset shall be
deemed to be its stamp duty value as on the last day of the second financial year after the end of
the financial year in which the possession of the said specified capital asset was handed over to
the assessee.
Explanation.––For the purposes of this sub-section, “stamp duty value” means the value adopted
or assessed or assessable by any authority of the State Government for the purpose of payment
of stamp duty in respect of an immovable property.
(7) Where the capital gain arises from the transfer of a capital asset, being share in the project,
in the form of land or building or both, referred to in sub-section (5A) of section 45, not being the
capital asset referred to in the proviso to the said sub-section, the cost of acquisition of such
asset, shall be the amount which is deemed as full value of consideration in that sub-section.’;
(f) after sub-section (7) as so inserted, the following sub-section shall be inserted and shall be
deemed to have been inserted with effect from the 1st day of June, 2016, namely:–
“(8) Where the capital gain arises from the transfer of an asset, being the asset held by a trust
or an institution in respect of which accreted income has been computed and the tax has been
paid thereon in accordance with the provisions of Chapter XII-EB, the cost of acquisition of such
asset shall be deemed to be the fair market value of the asset which has been taken into account
for computation of accreted income as on the specified date referred to in sub-section (2) of
section 115TD.”.
26. After section 50C of the Income-tax Act, the following section shall be inserted with effect from
the 1st day of April, 2018, namely:—
‘50CA. Where the consideration received or accruing as a result of the transfer by an assessee
of a capital asset, being share of a company other than a quoted share, is less than the fair market
value of such share determined in such manner as may be prescribed, the value so determined
shall, for the purposes of section 48, be deemed to be the full value of consideration received or
accruing as a result of such transfer.
Explanation.—For the purposes of this section, “quoted share” means the share quoted on any
recognised stock exchange with regularity from time to time, where the quotation of such share is
based on current transaction made in the ordinary course of business.’.
27. In section 54EC of the Income-tax Act, in sub-section (3), in the Explanation, in clause (ba), for
the words and figures “the Companies Act, 1956” occurring at the end, the words and figures “the
Companies Act, 1956; or any other bond notified by the Central Government in this behalf” shall be
substituted with effect from the 1st day of April, 2018.
Amendment
of section 49.
Insertion of
new section
50CA.
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Special
provision for
full value of
consideration
for transfer of
share other
than quoted
share.
Amendment
of section
54EC.
1 of 1956.
28 of 2016.
12
28. In section 55 of the Income-tax Act, with effect from the 1st day of April, 2018,—
(A) in sub-section (1), in clause (b), in sub-clause (2), in item (i), for the figures, letters and words
“1st day of April, 1981”, the figures, letters and words “1st day of April, 2001” shall be substituted;
(B) in sub-section (2), in clause (b), for the figures, letters and words “1st day of April, 1981”
wherever they occur, the figures, letters and words “1st day of April, 2001” shall be substituted.
29. In section 56 of the Income-tax Act, in sub-section (2),—
(I) in clause (vii), after the figures, letters and words “1st day of October, 2009”, the words, figures
and letters “but before the 1st day of April, 2017” shall be inserted;
(II) in clause (viia), after the figures, letters and words “1st day of June, 2010”, the words, figures
and letters “but before the 1st day of April, 2017” shall be inserted;
(III) after clause (ix), the following clause shall be inserted, namely:—
‘(x) where any person receives, in any previous year, from any person or persons on or after
the 1st day of April, 2017,—
(a) any sum of money, without consideration, the aggregate value of which exceeds fifty
thousand rupees, the whole of the aggregate value of such sum;
(b) any immovable property,—
(A) without consideration, the stamp duty value of which exceeds fifty thousand rupees,
the stamp duty value of such property;
(B) for a consideration which is less than the stamp duty value of the property by an
amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds
such consideration:
Provided that where the date of agreement fixing the amount of consideration for the
transfer of immovable property and the date of registration are not the same, the stamp duty
value on the date of agreement may be taken for the purposes of this sub-clause:
Provided further that the provisions of the first proviso shall apply only in a case where
the amount of consideration referred to therein, or a part thereof, has been paid by way of
an account payee cheque or an account payee bank draft or by use of electronic clearing
system through a bank account, on or before the date of agreement for transfer of such
immovable property:
Provided also that where the stamp duty value of immovable property is disputed by the
assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer
may refer the valuation of such property to a Valuation Officer, and the provisions of section
50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the
stamp duty value of such property for the purpose of this sub-clause as they apply for
valuation of capital asset under those sections;
(c) any property, other than immovable property,—
(A) without consideration, the aggregate fair market value of which exceeds fifty thousand
rupees, the whole of the aggregate fair market value of such property;
(B) for a consideration which is less than the aggregate fair market value of the property
by an amount exceeding fifty thousand rupees, the aggregate fair market value of such
property as exceeds such consideration:
Provided that this clause shall not apply to any sum of money or any property received—
(I) from any relative; or
(II) on the occasion of the marriage of the individual; or
(III) under a will or by way of inheritance; or
(IV) in contemplation of death of the payer or donor, as the case may be; or
(V) from any local authority as defined in the Explanation to clause (20) of section 10; or
(VI) from any fund or foundation or university or other educational institution or hospital
or other medical institution or any trust or institution referred to in clause (23C) of section
10; or
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Amendment
of section 55.
Amendment
of section 56.
13
(VII) from or by any trust or institution registered under section 12AA; or
(VIII) by any fund or trust or institution or any university or other educational institution
or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v)
or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10; or
(IX) by way of transaction not regarded as transfer under clause (i) or clause (vi) or
clause (via) or clause (viaa) or clause (vib) or clause (vic) or clause (vica) or clause (vicb)
or clause (vid) or clause (vii) of section 47.
Explanation.— For the purposes of this clause, the expressions “assessable”, “fair market value”,
“jewellery”, “property”, “relative” and “stamp duty value” shall have the same meanings respectively
assigned to them in the Explanation to clause (vii).’.
30. In section 58 of the Income-tax Act, in sub-section (1A), for the word, brackets, figures and letter
“sub-clause (iia)”, the words, brackets, figures and letters “sub-clauses (ia) and (iia)” shall be substituted
with effect from the 1st day of April, 2018.
31. In section 71 of the Income-tax Act, after sub-section (3), the following sub-section shall be
inserted with effect from the 1st day of April, 2018, namely:—
‘(3A) Notwithstanding anything contained in sub-section (1) or sub-section (2), where in respect
of any assessment year, the net result of the computation under the head “Income from house
property” is a loss and the assessee has income assessable under any other head of income, the
assessee shall not be entitled to set off such loss, to the extent the amount of the loss exceeds two
lakh rupees, against income under the other head.’.
32. For section 79 of the Income-tax Act, the following section shall be substituted with effect from
the 1st day of April, 2018, namely:—
“79. Notwithstanding anything contained in this Chapter, where a change in shareholding has
taken place in a previous year,—
(a) in the case of a company not being a company in which the public are substantially interested
and other than a company referred to in clause (b), no loss incurred in any year prior to the
previous year shall be carried forward and set off against the income of the previous year, unless
on the last day of the previous year, the shares of the company carrying not less than fifty-one per
cent. of the voting power were beneficially held by persons who beneficially held shares of the
company carrying not less than fifty-one per cent. of the voting power on the last day of the year
or years in which the loss was incurred;
(b) in the case of a company, not being a company in which the public are substantially interested
but being an eligible start-up as referred to in section 80-IAC, the loss incurred in any year prior
to the previous year shall be carried forward and set off against the income of the previous year,
if, all the shareholders of such company who held shares carrying voting power on the last day of
the year or years in which the loss was incurred,—
(i) continue to hold those shares on the last day of such previous year; and
(ii) such loss has been incurred during the period of seven years beginning from the
year in which such company is incorporated:
Provided that nothing contained in this section shall apply to a case where a change in the
said voting power and shareholding takes place in a previous year consequent upon the death of
a shareholder or on account of transfer of shares by way of gift to any relative of the shareholder
making such gift:
Provided further that nothing contained in this section shall apply to any change in the
shareholding of an Indian company which is a subsidiary of a foreign company as a result of
amalgamation or demerger of a foreign company subject to the condition that fifty-one per cent.
shareholders of the amalgamating or demerged foreign company continue to be the shareholders
of the amalgamated or the resulting foreign company.”.
33. In section 80CCD of the Income-tax Act, in sub-section (1), in clause (b), for the words “ten per
cent.”, the words “twenty per cent.” shall be substituted with effect from the 1st day of April, 2018.
34. In section 80CCG of the Income-tax Act, after sub-section (4), the following sub-section shall be
inserted with effect from the 1st day of April, 2018, namely:—
“(5) Notwithstanding anything contained in sub-sections (1) to (4), no deduction under this section
shall be allowed in respect of any assessment year commencing on or after the 1st day of
April, 2018:
Amendment
of section 58.
Amendment
of section 71.
Substitution of
new section for
section 79.
Carry forward
and set off of
losses in case
of certain
companies.
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of section
80CCD.
Amendment
of section
80CCG.
14
Provided that an assessee, who has acquired listed equity shares or listed units of an equity
oriented fund in accordance with the scheme referred to in sub-section (1) and claimed deduction
under this section for any assessment year commencing on or before the 1st day of April, 2017,
shall be allowed deduction under this section till the assessment year commencing on the 1st day of
April, 2019, if he is otherwise eligible to claim the deduction in accordance with the other provisions
of this section.”.
35. In section 80G of the Income-tax Act, in sub-section (5D), for the words “ten thousand rupees”,
the words “two thousand rupees” shall be substituted with effect from the 1st day of April, 2018.
36. In section 80-IAC of the Income-tax Act [as inserted by section 42 of the Finance Act, 2016], in
sub-section (2), for the words “five years”, the words “seven years” shall be substituted with effect from
the 1st day of April, 2018.
37. In section 80-IBA of the Income-tax Act [as inserted by section 44 of the Finance Act, 2016],
with effect from the 1st day of April, 2018,—
(a) in sub-section (2),—
(i) in clause (b), for the words “three years”, the words “five years” shall be substituted;
(ii) in clauses (c) and (f), for the expression “built-up area” wherever they occur, the words
“carpet area” shall be substituted;
(iii) the words “or within the distance, measured aerially, of twenty-five kilometres from the
municipal limits of these cities” wherever they occur shall be omitted;
(b) in sub-section (6), for clause (a), the following clause shall be substituted, namely:—
‘(a) “carpet area” shall have the same meaning as assigned to it in clause (k) of section 2 of the
Real Estate (Regulation and Development) Act, 2016.’.
38. In section 87A of the Income-tax Act, with effect from the 1st day of April, 2018,—
(a) for the words “five hundred thousand rupees”, the words “three hundred fifty thousand rupees”
shall be substituted;
(b) for the words “five thousand rupees” [as substituted by section 46 of the Finance Act, 2016],
the words “two thousand five hundred rupees” shall be substituted.
39. In section 90 of the Income-tax Act, after Explanation 3, the following Explanation shall be
inserted with effect from the 1st day of April, 2018, namely:—
“Explanation 4.––For the removal of doubts, it is hereby declared that where any term used in an
agreement entered into under sub-section (1) is defined under the said agreement, the said term
shall have the same meaning as assigned to it in the agreement; and where the term is not defined
in the said agreement, but defined in the Act, it shall have the same meaning as assigned to it in the
Act and any explanation given to it by the Central Government.”.
40. In section 90A of the Income-tax Act, after Explanation 3, the following Explanation shall be
inserted with effect from the 1st day of April, 2018, namely:—
“Explanation 4.––For the removal of doubts, it is hereby declared that where any term used in an
agreement entered into under sub-section (1) is defined under the said agreement, the said term
shall have the same meaning as assigned to it in the agreement; and where the term is not defined
in the said agreement, but defined in the Act, it shall have the same meaning as assigned to it in the
Act and any explanation given to it by the Central Government.”.
41. In section 92BA of the Income-tax Act, clause (i) shall be omitted.
42. After section 92CD of the Income-tax Act, the following section shall be inserted with effect from
the 1st day of April, 2018, namely:—
‘92CE. (1) Where a primary adjustment to transfer price,—
(i) has been made suo motu by the assessee in his return of income;
(ii) made by the Assessing Officer has been accepted by the assessee;
(iii) is determined by an advance pricing agreement entered into by the assessee under section
92CC;
(iv) is made as per the safe harbour rules framed under section 92CB; or
(v) is arising as a result of resolution of an assessment by way of the mutual agreement
procedure under an agreement entered into under section 90 or section 90A for avoidance of
double taxation,
Amendment
of section
80G.
Amendment
of section
87A.
Amendment
of section 90.
Amendment
of section
90A.
Amendment
of section
92BA.
Insertion of
new section
92CE.
Secondary
adjustment in
certain cases.
16 of 2016.
Amendment
of section
80-IAC.
28 of 2016.
Amendment
of section
80-IBA.
28 of 2016.
28 of 2016.
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the assessee shall make a secondary adjustment:
Provided that nothing contained in this section shall apply, if,–
(i) the amount of primary adjustment made in any previous year does not exceed one crore
rupees; and
(ii) the primary adjustment is made in respect of an assessment year commencing on or
before the 1st day of April, 2016.
(2) Where, as a result of primary adjustment to the transfer price, there is an increase in the total
income or reduction in the loss, as the case may be, of the assessee, the excess money which is
available with its associated enterprise, if not repatriated to India within the time as may be prescribed,
shall be deemed to be an advance made by the assessee to such associated enterprise and the
interest on such advance, shall be computed in such manner as may be prescribed.
(3) For the purposes of this section,—
(i) “associated enterprise” shall have the meaning assigned to it in sub-section (1) and
sub-section (2) of section 92A;
(ii) “arm’s length price” shall have the meaning assigned to it in clause (ii) of section 92F;
(iii) “excess money” means the difference between the arm’s length price determined in primary
adjustment and the price at which the international transaction has actually been undertaken;
(iv) “primary adjustment” to a transfer price means the determination of transfer price in
accordance with the arm’s length principle resulting in an increase in the total income or reduction
in the loss, as the case may be, of the assessee;
(v) “secondary adjustment” means an adjustment in the books of account of the assessee and
its associated enterprise to reflect that the actual allocation of profits between the assessee and
its associated enterprise are consistent with the transfer price determined as a result of primary
adjustment, thereby removing the imbalance between cash account and actual profit of the
assessee.’.
43. After section 94A of the Income-tax Act, the following section shall be inserted with effect from
the 1st day of April, 2018, namely:—
‘94B. (1) Notwithstanding anything contained in this Act, where an Indian company, or a permanent
establishment of a foreign company in India, being the borrower, pays interest or similar consideration
exceeding one crore rupees which is deductible in computing income chargeable under the head
“Profits and gains of business or profession” in respect of any debt issued by a non-resident, being an
associated enterprise of such borrower, the interest shall not be deductible in computation of income
under the said head to the extent that it arises from excess interest, as specified in sub-section (2):
Provided that where the debt is issued by a lender which is not associated but an associated
enterprise either provides an implicit or explicit guarantee to such lender or deposits a corresponding
and matching amount of funds with the lender, such debt shall be deemed to have been issued by
an associated enterprise.
(2) For the purposes of sub-section (1), the excess interest shall mean an amount of total interest
paid or payable in excess of thirty per cent. of earnings before interest, taxes, depreciation and
amortisation of the borrower in the previous year or interest paid or payable to associated enterprises
for that previous year, whichever is less.
(3) Nothing contained in sub-section (1) shall apply to an Indian company or a permanent
establishment of a foreign company which is engaged in the business of banking or insurance.
(4) Where for any assessment year, the interest expenditure is not wholly deducted against
income under the head “Profits and gains of business or profession”, so much of the interest
expenditure as has not been so deducted, shall be carried forward to the following assessment year
or assessment years, and it shall be allowed as a deduction against the profits and gains, if any, of
any business or profession carried on by it and assessable for that assessment year to the extent of
maximum allowable interest expenditure in accordance with sub-section (2):
Provided that no interest expenditure shall be carried forward under this sub-section for more
than eight assessment years immediately succeeding the assessment year for which the excess
interest expenditure was first computed.
(5) For the purposes of this section, the expressions––
(i) “associated enterprise” shall have the meaning assigned to it in sub-section (1) and
sub-section (2) of section 92A;
Insertion of
new section
94B.
Limitation on
interest
deduction in
certain cases.
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16
(ii) “debt” means any loan, financial instrument, finance lease, financial derivative, or any
arrangement that gives rise to interest, discounts or other finance charges that are deductible in
the computation of income chargeable under the head “Profits and gains of business or profession”;
(iii) “permanent establishment” includes a fixed place of business through which the business
of the enterprise is wholly or partly carried on.’.
44. In section 115BBDA of the Income-tax Act [as inserted by section 52 of the Finance Act, 2016],
with effect from the 1st day of April, 2018,—
(i) in sub-section (1), for the words “an assessee, being an individual, a Hindu undivided family or
a firm”, the words “a specified assessee” shall be substituted;
(ii) for sub-section (3), the following Explanation shall be substituted, namely:—
‘Explanation.––For the purposes of this section,—
(a) “dividend” shall have the meaning assigned to it in clause (22) of section 2 but shall not
include sub-clause (e) thereof;
(b) “specified assessee” means a person other than,—
(i) a domestic company; or
(ii) a fund or institution or trust or any university or other educational institution or any
hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or
sub-clause (vi) or sub-clause (via) of clause (23C) of section 10; or
(iii) a trust or institution registered under section 12AA.’.
45. After section 115BBF of the Income-tax Act [as inserted by section 54 of the Finance Act, 2016],
the following section shall be inserted with effect from the 1st day of April, 2018, namely:—
‘115 BBG. (1) Where the total income of an assessee includes any income by way of transfer of
carbon credits, the income-tax payable shall be the aggregate of––
(a) the amount of income-tax calculated on the income by way of transfer of carbon credits, at
the rate of ten per cent.; and
(b) the amount of income-tax with which the assessee would have been chargeable had his
total income been reduced by the amount of income referred to in clause (a).
(2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or
allowance shall be allowed to the assessee under any provision of this Act in computing his income
referred to in clause (a) of sub-section (1).
Explanation.––For the purposes of this section “carbon credit” in respect of one unit shall mean
reduction of one tonne of carbon dioxide emissions or emissions of its equivalent gases which is
validated by the United Nations Framework on Climate Change and which can be traded in market
at its prevailing market price.’.
46. In section 115JAA of the Income-tax Act, with effect from the 1st day of April, 2018,—
(a) in sub-section (2A), after the proviso, the following proviso shall be inserted, namely:—
“Provided further that where the amount of tax credit in respect of any income-tax paid in any
country or specified territory outside India, under section 90 or section 90A or section 91, allowed
against the tax payable under the provisions of sub-section (1) of section 115JB exceeds the
amount of such tax credit admissible against the tax payable by the assessee on its income in
accordance with the other provisions of this Act, then, while computing the amount of credit
under this sub-section, such excess amount shall be ignored.”;
(b) in sub-section (3A), for the words “tenth assessment year”, the words “fifteenth assessment
year” shall be substituted.
47. In section 115JB of the Income-tax Act,—
(i) in sub-section (2),—
(a) for the words “profit and loss account” wherever they occur, the words “statement of profit
and loss” shall be substituted;
(b) for the words and figures “the Companies Act, 1956” wherever they occur, the words and
figures “the Companies Act, 2013” shall be substituted;
(c) in clause (a), for the words and figures “Part II of Schedule VI”, the word and figures
“Schedule III” shall be substituted;
Insertion of
new section
115BBG.
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Tax on
income from
transfer of
carbon
credits.
Amendment
of section
115BBDA.
28 of 2016.
Amendment
of section
115JAA.
Amendment
of section
115JB.
1 of 1956.
18 of 2013.
28 of 2016.
17
(d) in clause (b), for the words, brackets and figures “proviso to sub-section (2) of section 211”,
the words, brackets and figures “second proviso to sub-section (1) of section 129” shall be
substituted;
(e) in the first proviso, for the word and figures “section 210”, the word and figures
“section 129” shall be substituted;
(ii) after sub-section (2), the following sub-sections shall be inserted, namely:—
‘(2A) For a company whose financial statements are drawn up in compliance to the Indian
Accounting Standards specified in Annexure to the Companies (Indian Accounting Standards)
Rules, 2015, the book profit as computed in accordance with Explanation 1 to sub-section (2)
shall be further––
(a) increased by all amounts credited to other comprehensive income in the statement of
profit and loss under the head “Items that will not be re-classified to profit or loss”;
(b) decreased by all amounts debited to other comprehensive income in the statement of
profit and loss under the head “Items that will not be re-classified to profit or loss”;
(c) increased by amounts or aggregate of the amounts debited to the statement of profit
and loss on distribution of non-cash assets to shareholders in a demerger in accordance with
Appendix A of the Indian Accounting Standards 10;
(d) decreased by all amounts or aggregate of the amounts credited to the statement of profit
and loss on distribution of non-cash assets to shareholders in a demerger in accordance with
Appendix A of the Indian Accounting Standards 10:
Provided that nothing contained in clause (a) or clause (b) shall apply to the amount credited
or debited to other comprehensive income under the head “Items that will not be re-classified
to profit or loss” in respect of—
(i) revaluation surplus for assets in accordance with the Indian Accounting Standards 16
and Indian Accounting Standards 38; or
(ii) gains or losses from investments in equity instruments designated at fair value through
other comprehensive income in accordance with the Indian Accounting Standards 109:
Provided further that the book profit of the previous year in which the asset or investment
referred to in the first proviso is retired, disposed, realised or otherwise transferred shall be
increased or decreased, as the case may be, by the amount or the aggregate of the amounts
referred to in the first proviso for the previous year or any of the preceding previous years
and relatable to such asset or investment.
(2B) In the case of a resulting company, where the property and the liabilities of the undertaking
or undertakings being received by it are recorded at values different from values appearing in the
books of account of the demerged company immediately before the demerger, any change in
such value shall be ignored for the purpose of computation of book profit of the resulting company
under this section.
(2C) For a company referred to in sub-section (2A), the book profit of the year of convergence
and each of the following four previous years, shall be further increased or decreased, as the
case may be, by one-fifth of the transition amount:
Provided that the book profit of the previous year in which the asset or investment referred to
in sub-clauses (B) to (E) of clause (iii) of the Explanation is retired, disposed, realised or otherwise
transferred, shall be increased or decreased, as the case may be, by the amount or the aggregate
of the amounts referred to in the said sub-clause relatable to such asset or investment:
Provided further that the book profit of the previous year in which the foreign operation referred
to in sub-clause (F) of clause (iii) of the Explanation is disposed or otherwise transferred, shall be
increased or decreased, as the case may be, by the amount or the aggregate of the amounts
referred to in the said sub-clause relatable to such foreign operations.
Explanation.––For the purposes of this sub-section, the expression––
(i) “year of convergence” means the previous year within which the convergence date
falls;
(ii) “convergence date” means the first day of the first Indian Accounting Standards reporting
period as defined in the Indian Accounting Standards 101;
(iii) “transition amount” means the amount or the aggregate of the amounts adjusted in the
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other equity (excluding equity component of compound financial instruments, capital reserve,
and securities premium reserve) on the convergence date but not including the following,––
(A) amount or aggregate of the amounts adjusted in the other comprehensive income on
the convergence date which shall be subsequently re-classified to the profit or loss;
(B) revaluation surplus for assets in accordance with the Indian Accounting
Standards 16 and Indian Accounting Standards 38 adjusted on the convergence date;
(C) gains or losses from investments in equity instruments designated at fair value through
other comprehensive income in accordance with the Indian Accounting Standards 109
adjusted on the convergence date;
(D) adjustments relating to items of property, plant and equipment and intangible assets
recorded at fair value as deemed cost in accordance with paragraphs D5 and D7 of the
Indian Accounting Standards 101 on the convergence date;
(E) adjustments relating to investments in subsidiaries, joint ventures and associates
recorded at fair value as deemed cost in accordance with paragraph D15 of the Indian
Accounting Standards 101 on the convergence date; and
(F) adjustments relating to cumulative translation differences of a foreign operation in
accordance with paragraph D13 of the Indian Accounting Standards 101 on the convergence
date.’;
(iii) in Explanation 1,—
(a) for the words “net profit”, the word “profit” shall be substituted;
(b) for the words “profit and loss account” wherever they occur, the words “statement of profit
and loss” shall be substituted;
(c) in clause (k) for the words “profit or loss account”, the words “statement of profit and loss”
shall be substituted;
(iv) in Explanation 3,—
(a) for the words, brackets and figures “proviso to sub-section (2) of section 211 of the Companies
Act, 1956”, the words, brackets and figures “second proviso to sub-section (1) of section 129 of
the Companies Act, 2013” shall be substituted;
(b) for the words “profit and loss account”, the words “statement of profit and loss” shall be
substituted;
(c) for the words and figures “Part II and Part III of Schedule VI to the Companies Act, 1956”,
the words and figures “Schedule III to the Companies Act, 2013” shall be substituted.
48. In section 115JD of the Income-tax Act, with effect from the 1st day of April, 2018,—
(a) in sub-section (2), the following proviso shall be inserted, namely:—
“Provided that where the amount of tax credit in respect of any income-tax paid in any country
or specified territory outside India, under section 90 or section 90A or section 91, allowed against
the alternate minimum tax payable exceeds the amount of the tax credit admissible against the
regular income-tax payable by the assessee, then, while computing the amount of credit under
this sub-section, such excess amount shall be ignored.”;
(b) in sub-section (4), for the words “tenth assessment year”, the words “fifteenth assessment
year” shall be substituted.
49. In section 119 of the Income-tax Act, in sub-section (2), in clause (a), after the figures “271”, the
figures and letters “,271C, 271CA” shall be inserted.
50. In section 132 of the Income-tax Act,—
(i) in sub-section (1), after the fourth proviso, the following Explanation shall be inserted and
shall be deemed to have been inserted with effect from the 1st day of April, 1962, namely:—
“Explanation.––For the removal of doubts, it is hereby declared that the reason to believe, as
recorded by the income-tax authority under this sub-section, shall not be disclosed to any person
or any authority or the Appellate Tribunal.”;
(ii) in sub-section (1A), the following Explanation shall be inserted and shall be deemed to have
been inserted with effect from the 1st day of October, 1975, namely:—
“Explanation.––For the removal of doubts, it is hereby declared that the reason to suspect, as
recorded by the income-tax authority under this sub-section, shall not be disclosed to any person
or any authority or the Appellate Tribunal.”;
Amendment
of section
115JD.
40
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25
30
35
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1 of 1956.
18 of 2013.
Amendment
of section
119.
Amendment
of section
132.
1 of 1956.
18 of 2013.
19
(iii) after sub-section (9A), the following sub-sections shall be inserted, namely:—
“(9B) Where, during the course of the search or seizure or within a period of sixty days from the
date on which the last of the authorisations for search was executed, the authorised officer, for
the reasons to be recorded in writing, is satisfied that for the purpose of protecting the interest of
revenue, it is necessary so to do, he may with the previous approval of the Principal Director
General or Director General or the Principal Director or Director, by order in writing, attach
provisionally any property belonging to the assessee, and for the said purpose the provisions of
the Second Schedule shall, mutatis mutandis, apply.
(9C) Every provisional attachment made under sub-section (9B) shall cease to have effect
after the expiry of a period of six months from the date of the order referred to in sub-section (9B).
(9D) The authorised officer may, during the course of the search or seizure or within a period
of sixty days from the date on which the last of the authorisations for search was executed, make
a reference to a Valuation Officer referred to in section 142A, who shall estimate the fair market
value of the property in the manner provided under that section and submit a report of the estimate
to the said officer within a period of sixty days from the date of receipt of such reference.”;
(iv) for Explanation 1, the following Explanation shall be substituted, namely:—
‘Explanation 1.––For the purposes of sub-sections (9A), (9B) and (9D), with respect to “execution
of an authorisation for search”, the provisions of sub-section (2) of section 153B shall apply.’.
51. In section 132A of the Income-tax Act, in sub-section (1), the following Explanation shall be
inserted and shall be deemed to have been inserted with effect from the 1st day of October, 1975,
namely:—
“Explanation.––For the removal of doubts, it is hereby declared that the reason to believe, as
recorded by the income-tax authority under this sub-section, shall not be disclosed to any person or
any authority or the Appellate Tribunal.”.
52. In section 133 of the Income-tax Act,—
(i) in the first proviso, for the words “and the Principal Commissioner or Commissioner”, the
words “or the Principal Commissioner or Commissioner or the Joint Director or Deputy Director or
Assistant Director” shall be substituted;
(ii) in the second proviso, after the words “Director or Principal Commissioner or Commissioner”,
the words “, other than the Joint Director or Deputy Director or Assistant Director,” shall be inserted.
53. In section 133A of the Income-tax Act, in sub-section (1),—
(i) in the long line, for the portion beginning with “at which a business or profession” and ending
with “such business or profession––”, the following shall be substituted, namely:—
“at which a business or profession or an activity for charitable purpose is carried on, whether
such place be the principal place or not of such business or profession or of such activity for
charitable purpose, and require any proprietor, trustee, employee or any other person who may
at that time and place be attending in any manner to, or helping in, the carrying on of such
business or profession or such activity for charitable purpose––”;
(ii) in the Explanation, after the words “business or profession” wherever they occur, the words
“or activity for charitable purpose” shall be inserted.
54. In section 133C of the Income-tax Act, after sub-section (2) and before the Explanation, the
following sub-section shall be inserted, namely:––
“(3) The Board may make a scheme for centralised issuance of notice and for processing of
information or documents and making available the outcome of the processing to the Assessing
Officer.”.
55. In section 139 of the Income-tax Act, with effect from the 1st day of April, 2018,—
(i) in sub-section (4C),—
(I) after clause (c), the following clause shall be inserted, namely:—
“(ca) person referred to in clause (23AAA) of section 10;”;
(II) after clause (eb), the following clauses shall be inserted, namely:—
“(eba) Investor Protection Fund referred to in clause (23EC) or clause (23ED) of section 10;
(ebb) Core Settlement Guarantee Fund referred to in clause (23EE) of section 10;”;
(III) after clause (f), the following clause shall be inserted, namely:—
“(fa) Board or Authority referred to in clause (29A) of section 10;”;
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Amendment
of section
132A.
Amendment
of section
133.
Amendment
of section
133A.
Amendment
of section
133C.
Amendment
of section
139.
20
(IV) in the long line occurring after clause (h), after the words “association or institution,”, the
words “person or” shall be inserted;
(ii) in sub-section (5) [as substituted by section 67 of the Finance Act, 2016], the words “the expiry
of one year from” shall be omitted.
56. In section 140A of the Income-tax Act, with effect from the 1st day of April, 2018,—
(i) in sub-section (1),—
(a) in the long line,—
(A) after the words “together with interest”, the words “and fee” shall be inserted;
(B) for the words “and interest”, the words, “, interest and fee” shall be substituted;
(b) in the Explanation, for the words “and interest as aforesaid, the amount so paid shall first
be adjusted towards”, the words “, interest and fee as aforesaid, the amount so paid shall first be
adjusted towards the fee payable and thereafter towards” shall be substituted;
(ii) in sub-section (3), for the words “or interest or both” at both the places where they occur , the
words “,interest or fee” shall be substituted.
57. In section 143 of the Income-tax Act,—
(a) in sub-section (1), with effect from the 1st day of April, 2018,—
(i) in clause (b), for the words “and interest”, the words “, interest and fee” shall be substituted;
(ii) in clause (c),—
(A) for the words “and interest”, the words “, interest and fee” shall be substituted;
(B) for the words “or interest”, the words “, interest or fee” shall be substituted;
(iii) in the first proviso, for the words “or interest”, the words “, interest or fee” shall be substituted;
(b) for sub-section (1D) [as substituted by section 68 of the Finance Act, 2016], the following shall
be substituted, namely:—
“(1D) Notwithstanding anything contained in sub-section (1), the processing of a return shall
not be necessary, where a notice has been issued to the assessee under sub-section (2):
Provided that the provisions of this sub-section shall not apply to any return furnished for
the assessment year commencing on or after the 1st day of April, 2017.”.
58. In section 153 of the Income-tax Act,—
(i) in sub-section (1), the following provisos shall be inserted, namely:—
‘Provided that in respect of an order of assessment relating to the assessment year commencing
on the 1st day of April, 2018, the provisions of this sub-section shall have effect, as if for the
words “twenty-one months”, the words “eighteen months” had been substituted:
Provided further that in respect of an order of assessment relating to the assessment year
commencing on or after the 1st day of April, 2019, the provisions of this sub-section shall have
effect, as if for the words “twenty-one months”, the words “twelve months” had been substituted.’;
(ii) in sub-section (2), the following proviso shall be inserted, namely:—
‘Provided that where the notice under section 148 is served on or after the 1st day of
April, 2019, the provisions of this sub-section shall have effect, as if for the words “nine months”,
the words “twelve months” had been substituted.’;
(iii) in sub-section (3), the following proviso shall be inserted, namely:—
‘Provided that where the order under section 254 is received by the Principal Chief Commissioner
or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the
order under section 263 or section 264 is passed by the Principal Commissioner or Commissioner
on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for
the words “nine months”, the words “twelve months” had been substituted.’;
(iv) in sub-section (5), after the proviso, the following proviso shall be inserted and shall be
deemed to have been inserted with effect from the 1st day of June, 2016, namely:—
“Provided further that where an order under section 250 or section 254 or section 260 or
section 262 or section 263 or section 264 requires verification of any issue by way of submission
of any document by the assessee or any other person or where an opportunity of being heard is
Amendment
of section
143.
28 of 2016.
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Amendment
of section
140A.
28 of 2016.
Amendment
of section
153.
21
to be provided to the assessee, the order giving effect to the said order under section 250 or
section 254 or section 260 or section 262 or section 263 or section 264 shall be made within the
time specified in sub-section (3).”;
(v) in sub-section (9), the following proviso shall be inserted and shall be deemed to have been
inserted with effect from the 1st day of June, 2016, namely:—
“Provided that where a notice under sub-section (1) of section 142 or sub-section (2) of
section 143 or section 148 has been issued prior to the 1st day of June, 2016 and the assessment
or reassessment has not been completed by such date due to exclusion of time referred to in
Explanation 1, such assessment or reassessment shall be completed in accordance with the
provisions of this section as it stood immediately before its substitution by the Finance Act, 2016.”;
(vi) in Explanation 1, in the third proviso, the figures and letter “153B,” shall be omitted.
59. In section 153A of the Income-tax Act, in sub-section (1),—
(i) in clause (a), first proviso and the second proviso, after the words “six assessment years”
wherever they occur, the words “and for the relevant assessment year or years” shall be inserted;
(ii) in clause (b), after the words “requisition is made”, the words “and of the relevant assessment
year or years” shall be inserted;
(iii) in the third proviso, after the words “requisition is made”, the words “and for the relevant
assessment year or years” shall be inserted;
(iv) after the third proviso, the following shall be inserted, namely:—
‘Provided also that no notice for assessment or reassessment shall be issued by the Assessing
Officer for the relevant assessment year or years unless––
(a) the Assessing Officer has in his possession books of account or other documents or
evidence which reveal that the income, represented in the form of asset, which has escaped
assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant
assessment year or in aggregate in the relevant assessment years;
(b) the income referred to in clause (a) or part thereof has escaped assessment for such
year or years; and
(c) the search under section 132 is initiated or requisition under section 132A is made on or
after the 1st day of April, 2017.
Explanation 1.––For the purposes of this sub-section, the expression “relevant assessment
year” shall mean an assessment year preceding the assessment year relevant to the previous
year in which search is conducted or requisition is made which falls beyond six assessment
years but not later than ten assessment years from the end of the assessment year relevant to
the previous year in which search is conducted or requisition is made.
Explanation 2.––For the purposes of the fourth proviso, “asset” shall include immovable
property being land or building or both, shares and securities, loans and advances, deposits in
bank account.’.
60. In section 153B of the Income-tax Act,—
(a) in sub-section (1),—
(i) in clause (a), after the words “six assessment years”, the words “and for the relevant
assessment year or years” shall be inserted;
(ii) for the second and third provisos, the following provisos shall be substituted, namely:—
‘Provided further that in the case where the last of the authorisations for search under
section 132 or for requisition under section 132A was executed during the financial year
commencing on the 1st day of April, 2018,—
(i) the provisions of clause (a) or clause (b) of this sub-section shall have effect, as if for
the words “twenty-one months”, the words “eighteen months” had been substituted;
(ii) the period of limitation for making the assessment or reassessment in case of other
person referred to in section 153C, shall be the period of eighteen months from the end of the
financial year in which the last of the authorisations for search under section 132 or for requisition
under section 132A was executed or twelve months from the end of the financial year in which
books of account or documents or assets seized or requisitioned are handed over under
section 153C to the Assessing Officer having jurisdiction over such other person, whichever
is later:
Provided also that in the case where the last of the authorisations for search under
section 132 or for requisition under section 132A was executed during the financial year
commencing on or after the 1st day of April, 2019,—
(i) the provisions of clause (a) or clause (b) of this sub-section shall have effect, as if
for the words “twenty-one months”, the words “twelve months” had been substituted;
Amendment
of section
153A.
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28 of 2016.
Amendment
of section
153B.
22
(ii) the period of limitation for making the assessment or reassessment in case of other
person referred to in section 153C, shall be the period of twelve months from the end of
the financial year in which the last of the authorisations for search under section 132 or
for requisition under section 132A was executed or twelve months from the end of the
financial year in which books of account or documents or assets seized or requisitioned
are handed over under section 153C to the Assessing Officer having jurisdiction over
such other person, whichever is later:
Provided also that in case where the last of the authorisations for search under
section 132 or for requisition under section 132A was executed and during the course of
the proceedings for the assessment or reassessment of total income, a reference under
sub-section (1) of section 92CA is made, the period available for making an order of
assessment or reassessment shall be extended by twelve months:
Provided also that in case where during the course of the proceedings for the
assessment or reassessment of total income in case of other person referred to in
section 153C, a reference under sub-section (1) of section 92CA is made, the period
available for making an order of assessment or reassessment in case of such other
person shall be extended by twelve months.’;
(b) in sub-section (3), the following proviso shall be inserted and shall be deemed to have been
inserted with effect from the 1st day of June, 2016, namely:—
“Provided that where a notice under section 153A or section 153C has been issued prior to the
1st day of June, 2016 and the assessment has not been completed by such date due to exclusion
of time referred to in the Explanation, such assessment shall be completed in accordance with
the provisions of this section as it stood immediately before its substitution by the
Finance Act, 2016.”;
(c) in the Explanation, after the second proviso, the following proviso shall be inserted,
namely:—
“Provided also that where a proceeding before the Settlement Commission abates under
section 245HA, the period of limitation available under this section to the Assessing Officer for
making an order of assessment or reassessment, as the case may be, shall, after the exclusion
of the period under sub-section (4) of section 245HA, be not less than one year; and where such
period of limitation is less than one year, it shall be deemed to have been extended to one year.”.
61. In section 153C of the Income-tax Act, in sub-section (1),—
(a) in the long line, after the words “total income of such other person”, the words “for six assessment
years immediately preceding the assessment year relevant to the previous year in which search is
conducted or requisition is “made and” shall be inserted;
(b) in the second proviso, after the words “requisition is made”, the words, brackets, figures and
letter “and for the relevant assessment year or years as referred to in sub-section (1) of section
153A” shall be inserted.
62. In section 155 of the Income-tax Act, after sub-section (14), the following sub-section shall be
inserted with effect from the 1st day of April, 2018, namely:—
“(14A) Where in the assessment for any previous year or in any intimation or deemed intimation
under sub-section (1) of section 143 for any previous year, credit for income-tax paid in any country
outside India or a specified territory outside India referred to in section 90, section 90A or section 91
has not been given on the ground that the payment of such tax was under dispute, and if subsequently
such dispute is settled; and the assessee, within six months from the end of the month in which the
dispute is settled, furnishes to the Assessing Officer evidence of settlement of dispute and evidence
of payment of such tax along with an undertaking that no credit in respect of such amount has
directly or indirectly been claimed or shall be claimed for any other assessment year, the Assessing
Officer shall amend the order of assessment or any intimation or deemed intimation under
sub-section (1) of section 143, as the case may be, and the provisions of section 154 shall, so far as
may be, apply thereto:
Provided that the credit of tax which was under dispute shall be allowed for the year in which such
income is offered to tax or assessed to tax in India.”.
63. After section 194-IA of the Income-tax Act, the following section shall be inserted with effect
from the 1st day of June, 2017, namely:—
‘194-IB. (1) Any person, being an individual or a Hindu undivided family (other than those referred
to in the second proviso to section 194-I), responsible for paying to a resident any income by way of
rent exceeding fifty thousand rupees for a month or part of a month during the previous year, shall
deduct an amount equal to five per cent. of such income as income-tax thereon.
(2) The income-tax referred to in sub-section (1) shall be deducted on such income at the time of
credit of rent, for the last month of the previous year or the last month of tenancy, if the property is
vacated during the year, as the case may be, to the account of the payee or at the time of payment
thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier.
(3) The provisions of section 203A shall not apply to a person required to deduct tax in accordance
with the provisions of this section.
Amendment
of section
153C.
28 of 2016.
Amendment
of section
155.
Insertion of
new section
194-IB.
Payment of
rent by
certain
individuals or
Hindu
undivided
family.
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65
23
(4) In a case where the tax is required to be deducted as per the provisions of section 206AA,
such deduction shall not exceed the amount of rent payable for the last month of the previous year
or the last month of the tenancy, as the case may be.
Explanation.—For the purposes of this section, “rent” means any payment, by whatever name
called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of
any land or building or both.’.
64. After section 194-IB of the Income-tax Act as so inserted, the following section shall be inserted,
namely:—
“194-IC. Notwithstanding anything contained in section 194-IA, any person responsible for paying
to a resident any sum by way of consideration, not being consideration in kind, under the agreement
referred to in sub-section (5A) of section 45, shall at the time of credit of such sum to the account of
the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other
mode, whichever is earlier, deduct an amount equal to ten per cent. of such sum as income-tax
thereon.”.
65. In section 194J of the Income-tax Act, after the third proviso and before the Explanation, the
following proviso shall be inserted with effect from the 1st day of June, 2017, namely:—
“Provided also that the provisions of this section shall have effect, as if for the words
“ten per cent.”, the words “two per cent.” had been substituted in the case of a payee, engaged only
in the business of operation of call centre.”.
66. In section 194LA of the Income-tax Act, after the proviso and before the Explanation, the following
proviso shall be inserted, namely:—
“Provided further that no deduction shall be made under this section where such payment is
made in respect of any award or agreement which has been exempted from levy of income-tax
under section 96 of the Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013.”.
67. In section 194LC of the Income-tax Act, in sub-section (2),—
(a) in clause (i), with effect from the 1st day of April, 2018,—
(A) in sub-clauses (a) and (c), for the figures, letters and words “1st day of July, 2017”, the
figures, letters and words “1st day of July, 2020” shall be substituted;
(B) in the long line, for the word “and”, the word “or” shall be substituted;
(b) after clause (i), the following clause shall be inserted and shall be deemed to have been
inserted with effect from the 1st day of April, 2016, namely:—
“(ia) in respect of monies borrowed by it from a source outside India by way of issue of rupee
denominated bond before the 1st day of July, 2020, and”.
68. In section 194LD of the Income-tax Act, in sub-section (2), for the figures, letters and words
“1st day of July, 2017”, the figures, letters and words “1st day of July, 2020” shall be substituted with
effect from the 1st day of April, 2018.
69. In section 197A of the Income-tax Act, with effect from the 1st day of June, 2017,—
(a) in sub-section (1A), after the word, figures and letter “section 194A” at both the places where
they occur, the words, figures and letter “or section 194D” shall be inserted;
(b) in sub-section (1C), after the word, figures and letter “section 194A” at both the places where
they occur, the words, figures and letter “or section 194D” shall be inserted.
70. In section 204 of the Income-tax Act, after clause (iia), the following clause shall be inserted,
namely:—
“(iib) in the case of furnishing of information relating to payment to a non-resident, not being a
company, or to a foreign company, of any sum, whether or not chargeable under the provisions of
this Act, the payer himself, or, if the payer is a company, the company itself including the principal
officer thereof;”.
71. In section 206C of the Income-tax Act,—
(a) in sub-section (1D),—
(A) for the words and brackets “or jewellery or any other goods (other than bullion or jewellery)”,
the words and brackets “or any other goods (other than bullion)” shall be substituted;
(B) clause (ii) shall be omitted;
(b) in sub-section (1E), the words “or jewellery” shall be omitted;
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25
30
35
40
45
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Insertion of
new section
194-IC.
Payment
under
specified
agreement.
Amendment
of section
194J.
Amendment
of section
194LA.
30 of 2013.
Amendment
of section
204.
Amendment
of section
206C.
Amendment of
section
194LC.
Amendment of
section
194LD.
Amendment of
section 197A.
24
(c) in the Explanation occurring after sub-section (11),—
(A) in clause (aa),—
(I) in sub-clause (ii), the words, brackets, figure and letter “or sub-section (1F)” shall be
omitted;
(II) after sub-clause (ii), the following sub-clause shall be inserted, namely:—
“(iii) sub-section (1F) means a person who obtains in any sale, goods of the nature
specified in the said sub-section, but does not include,—
(A) the Central Government, a State Government and an embassy, a High Commission,
legation, commission, consulate and the trade representation of a foreign State; or
(B) a local authority as defined in Explanation to clause (20) of section 10; or
(C) a public sector company which is engaged in the business of carrying passengers.”;
(B) clause (ab) shall be omitted.
72. After section 206CB of the Income-tax Act, the following section shall be inserted, namely:—
‘206CC. (1) Notwithstanding anything contained in any other provisions of this Act, any person
paying any sum or amount, on which tax is collectible at source under Chapter XVII-BB (herein
referred to as collectee) shall furnish his Permanent Account Number to the person responsible for
collecting such tax (herein referred to as collector), failing which tax shall be collected at the higher
of the following rates, namely:—
(i) at twice the rate specified in the relevant provision of this Act; or
(ii) at the rate of five per cent.
(2) No declaration under sub-section (1A) of section 206C shall be valid unless the person furnishes
his Permanent Account Number in such declaration.
(3) In case any declaration becomes invalid under sub-section (2), the collector shall collect the
tax at source in accordance with the provisions of sub-section (1).
(4) No certificate under sub-section (9) of section 206C shall be granted unless the application
made under that section contains the Permanent Account Number of the applicant.
(5) The collectee shall furnish his Permanent Account Number to the collector and both shall
indicate the same in all the correspondence, bills, vouchers and other documents which are sent to
each other.
(6) Where the Permanent Account Number provided to the collector is invalid or does not belong
to the collectee, it shall be deemed that the collectee has not furnished his Permanent Account
Number to the collector and the provisions of sub-section (1) shall apply accordingly.
(7) The provisions of this section shall not apply to a non-resident who does not have permanent
establishment in India.
Explanation.—For the purposes of this sub-section, the expression “permanent establishment” includes
a fixed place of business through which the business of the enterprise is wholly or partly carried on.’.
73. In section 211 of the Income-tax Act, in sub-section (1), in clause (b), for the words, figures and
letters “an eligible assessee in respect of an eligible business referred to in section 44AD”, the words,
brackets, figures and letters “an assessee who declares profits and gains in accordance with the
provisions of sub-section (1) of section 44AD or sub-section (1) of section 44ADA, as the case may be”
shall be substituted.
74. In section 234C of the Income-tax Act, in sub-section (1),—
(i) in clause (a), for the words, figures and letters “an eligible assessee in respect of the eligible
business referred to in section 44AD”, the words, brackets and letter “the assessee referred to in
clause (b)” shall be substituted;
(ii) in clause (b), for the words, figures and letters “an eligible assessee in respect of the eligible
business referred to in section 44AD”, the words, brackets, figures and letters “an assessee who
declares profits and gains in accordance with the provisions of sub-section (1) of section 44AD or
sub-section (1) of section 44ADA, as the case may be” shall be substituted;
(iii) in the first proviso,—
(A) in clause (c), for the words “first time,” occurring at the end, the words “first time; or” shall
be substituted;
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Insertion of
new section
206CC.
Requirement
to furnish
Permanent
Account
Number by
collectee.
Amendment
of section
211.
Amendment
of section
234C.
25
(B) after clause (c) and before the long line, the following clause shall be inserted, namely:—
“(d) income of the nature referred to in sub-section (1) of section 115BBDA,”;
(C) in the long line, after the words, brackets and letter “or clause (c)”, the words, brackets and
letter “or clause (d)” shall be inserted.
75. After section 234E of the Income-tax Act, the following section shall be inserted with effect from
the 1st day of April, 2018, namely:—
“234F. (1) Without prejudice to the provisions of this Act, where a person required to furnish a
return of income under section 139, fails to do so within the time prescribed in sub-section (1) of said
section, he shall pay, by way of fee, a sum of,—
(a) five thousand rupees, if the return is furnished on or before the 31st day of December of the
assessment year;
(b) ten thousand rupees in any other case:
Provided that if the total income of the person does not exceed five lakh rupees, the fee payable
under this section shall not exceed one thousand rupees.
(2) The provisions of this section shall apply in respect of return of income required to be furnished
for the assessment year commencing on or after the 1st day of April, 2018.”.
76. After section 241 of the Income-tax Act [as it stood immediately before its omission by
section 81 of the Finance Act, 2001], the following section shall be inserted, namely:—
“241A. For every assessment year commencing on or after the 1st day of April, 2017, where
refund of any amount becomes due to the assessee under the provisions of sub-section (1) of
section 143 and the Assessing Officer is of the opinion, having regard to the fact that a notice has
been issued under sub-section (2) of section 143 in respect of such return, that the grant of the
refund is likely to adversely affect the revenue, he may, for reasons to be recorded in writing and
with the previous approval of the Principal Commissioner or Commissioner, as the case may be,
withhold the refund up to the date on which the assessment is made.”.
77. In section 244A of the Income-tax Act,—
(i) after sub-section (1A), the following sub-section shall be inserted, namely:—
“(1B) Where refund of any amount becomes due to the deductor in respect of any amount paid
to the credit of the Central Government under Chapter XVII-B, such deductor shall be entitled to
receive, in addition to the said amount, simple interest thereon calculated at the rate of one-half
per cent. for every month or part of a month comprised in the period, from the date on which––
(a) claim for refund is made in the prescribed form; or
(b) tax is paid, where refund arises on account of giving effect to an order under section 250
or section 254 or section 260 or section 262,
to the date on which the refund is granted.”;
(ii) in sub-section (2),—
(a) after the words “to the assessee”, the words “or the deductor, as the case may be,” shall be
inserted;
(b) after the word, brackets, figure and letter “or (1A)”, the word, brackets, figure and letter “or
(1B)” shall be inserted.
78. In section 245A of the Income-tax Act, in clause (b), in the Explanation, in clause (iv), for the
words “two years from the end of the relevant assessment year”, the words, brackets and figures “the
time specified for making assessment under sub-section (1) of section 153” shall be substituted.
79. In section 245N of the Income-tax Act, for clause (b), the following clause shall be substituted,
namely:—
‘(b) “applicant” means—
(A) any person who—
(I) is a non-resident referred to in sub-clause (i) of clause (a); or
Insertion of
new section
234F.
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20
25
30
35
40
45
Insertion of
new section
241A.
Fee for
default in
furnishing
return of
income.
14 of 2001.
Withholding
of refund in
certain cases.
Amendment
of section
245A.
Amendment
of section
244A.
Amendment
of section
245N.
26
(II) is a resident referred to in sub-clause (ii) of clause (a); or
(III) is a resident referred to in sub-clause (iia) of clause (a) falling within any such class or
category of persons as the Central Government may, by notification in the Official Gazette,
specify; or
(IV) is a resident falling within any such class or category of persons as the Central
Government may, by notification in the Official Gazette, specify in this behalf; or
(V) is referred to in sub-clause (iv) of clause (a),
and makes an application under sub-section (1) of section 245Q;
(B) an applicant as defined in clause (c) of section 28E of the Customs Act, 1962;
(C) an applicant as defined in clause (c) of section 23A of the Central Excise Act, 1944;
(D) an applicant as defined in clause (b) of section 96A of the Finance Act, 1994;’.
80. In section 245-O of the Income-tax Act,—
‘(a) in sub-section (3),—
(i) in clause (a), after the words “a Judge of the Supreme Court”, the words “or the Chief
Justice of a High Court or for at least seven years a Judge of a High Court” shall be inserted;
(ii) for clause (c), the following clause shall be substituted, namely:—
“(c) a revenue Member—
(i) from the Indian Revenue Service, who is, or is qualified to be, a Member of the Board; or
(ii) from the Indian Customs and Central Excise Service, who is, or is qualified to be, a
Member of the Central Board of Excise and Customs,
on the date of occurrence of vacancy;”;
(iii) in clause (d), after the words “Government of India”, the words “on the date of occurrence
of vacancy” shall be inserted;
(b) after sub-section (6), the following sub-sections shall be inserted, namely:—
“(6A) In the event of the occurrence of any vacancy in the office of the Chairman by reason of
his death, resignation or otherwise, the senior-most Vice-chairman shall act as the Chairman
until the date on which a new Chairman, appointed in accordance with the provisions of this Act
to fill such vacancy, enters upon his office.
(6B) In case the Chairman is unable to discharge his functions owing to absence, illness or
any other cause, the senior-most Vice-chairman shall discharge the functions of the Chairman
until the date on which the Chairman resumes his duties.”.
81. In section 245Q of the Income-tax Act, in sub-section (1), after the words “advance ruling under
this Chapter”, the words, figures and letters “or under Chapter V of the Customs Act, 1962 or under
Chapter IIIA of the Central Excise Act, 1944 or under Chapter VA of the Finance Act, 1994” shall be
inserted.
82. In section 253 of the Income-tax Act, in sub-section (1), in clause (f), after the words “authority
under”, the words, brackets and figures “sub-clause (iv) or sub-clause (v) or” shall be inserted.
83. After section 269SS of the Income-tax Act, the following section shall be inserted, namely:—
‘269ST. No person shall receive an amount of three lakh rupees or more—
(a) in aggregate from a person in a day; or
(b) in respect of a single transaction; or
Amendment
of section
245-O.
5
10
15
20
25
30
35
40
52 of 1962.
1 of 1944.
32 of 1994.
52 of 1962.
1 of 1944.
32 of 1994.
Amendment
of section
245Q.
Amendment
of section
253.
Insertion of
new section
269ST.
Mode of
undertaking
transactions.
27
5
10
15
20
25
30
35
15 of 1992. 40
27 of 1957.
Amendment
of section
273B.
(c) in respect of transactions relating to one event or occasion from a person,
otherwise than by an account payee cheque or an account payee bank draft or use of electronic
clearing system through a bank account:
Provided that the provisions of this section shall not apply to—
(i) any receipt by—
(a) Government;
(b) any banking company, post office savings bank or co-operative bank;
(ii) transactions of the nature referred to in section 269SS;
(iii) such other persons or class of persons or receipts, which the Central Government may, by
notification in the Official Gazette, specify.
Explanation.—For the purposes of this section,—
(a) “banking company” shall have the same meaning as assigned to it in clause (i) of the
Explanation to section 269SS;
(b) “co-operative bank” shall have the same meaning as assigned to it in clause (ii) of the
Explanation to section 269SS.’.
84. After section 271D of the Income-tax Act, the following section shall be inserted, namely:—
“271DA. (1) If a person receives any sum in contravention of the provisions of section 269ST, he
shall be liable to pay, by way of penalty, a sum equal to the amount of such receipt:
Provided that no penalty shall be imposable if such person proves that there were good and
sufficient reasons for the contravention.
(2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner.”.
85. In section 271F of the Income-tax Act, the following proviso shall be inserted with effect from the
1st day of April, 2018, namely:—
“Provided that nothing contained in this section shall apply to and in relation to the return of
income required to be furnished for any assessment year commencing on or after the 1st day of
April, 2018.”.
86. After section 271-I of the Income-tax Act, the following section shall be inserted, namely:—
‘271J. Without prejudice to the provisions of this Act, where the Assessing Officer or the
Commissioner (Appeals), in the course of any proceedings under this Act, finds that an accountant
or a merchant banker or a registered valuer has furnished incorrect information in any report or
certificate furnished under any provision of this Act or the rules made thereunder, the Assessing
Officer or the Commissioner (Appeals) may direct that such accountant or merchant banker or
registered valuer, as the case may be, shall pay, by way of penalty, a sum of ten thousand rupees
for each such report or certificate.
Explanation.––For the purposes of this section,—
(a) “accountant” means an accountant referred to in the Explanation below sub-section (2) of
section 288;
(b) “merchant banker” means Category I merchant banker registered with the Securities and
Exchange Board of India established under section 3 of the Securities and Exchange Board of
India Act, 1992;
(c) “registered valuer” means a person defined in clause (oaa) of section 2 of the
Wealth-tax Act, 1957.’.
87. In section 273B of the Income-tax Act, after the word, figures and letter “section 271-I,”, the
word, figures and letter “section 271J,” shall be inserted.
Insertion of
new section
271J.
Penalty for
furnishing
incorrect
information in
reports or
certificates.
Insertion of
new section
271DA
Penalty for
failiure to
comply with
provisions of
section
269ST.
Amendment of
section 271F.
28
CHAPTER IV
INDIRECT TAXES
Customs
88. In the Customs Act, 1962 (hereinafter referred to as the Customs Act), in section 2,––
(a) after clause (3), the following clause shall be inserted, namely:—
‘(3A) “beneficial owner” means any person on whose behalf the goods are being imported or
exported or who exercises effective control over the goods being imported or exported;’;
(b) in clause (13), for the words “customs airport”, the words “customs airport, international courier
terminal, foreign post office” shall be substituted;
(c) in clause (16), the words “in the case of goods imported or to be exported by post, the entry
referred to in section 82 or’’ shall be omitted;
(d) in clause (20), for the words “any owner”, the words “any owner, beneficial owner” shall be
substituted;
(e) after clause (20), the following clause shall be inserted, namely:––
‘(20A) “foreign post office” means any post office appointed under clause (e) of sub-section (1)
of section 7 to be a foreign post office;’;
(f) in clause (26), for the words “any owner”, the words “any owner, beneficial owner” shall be
substituted;
(g) after clause (28), the following clause shall be inserted, namely:––
‘(28A) “international courier terminal” means any place appointed under clause (f) of subsection
(1) of section 7 to be an international courier terminal;’;
(h) after clause (30A), the following clause shall be inserted, namely:––
‘(30B) “passenger name record information” means the records prepared by an operator of
any aircraft or vessel or vehicle or his authorised agent for each journey booked by or on behalf
of any passenger;’.
89. In the Customs Act, in section 7, in sub-section (1), after clause (d), the following clauses shall
be inserted, namely:––
“(e) the post offices which alone shall be foreign post offices for the clearance of imported goods
or export goods or any class of such goods;
(f) the places which alone shall be international courier terminals for the clearance of imported
goods or export goods or any class of such goods.”.
90. In the Customs Act, in section 17, for sub-section (3), the following sub-section shall be
substituted, namely:––
“(3) For verification of self-assessment under sub-section (2), the proper officer may require the
importer, exporter or any other person to produce any document or information, whereby the duty
leviable on the imported goods or export goods, as the case may be, can be ascertained and
thereupon, the importer, exporter or such other person shall produce such document or furnish
such information.”.
91. In the Customs Act, in section 27, in sub-section (2), in the first proviso, after clause (f), the
following clause shall be inserted, namely:—
“(g) the duty paid in excess by the importer before an order permitting clearance of goods for
home consumption is made where—
(i) such excess payment of duty is evident from the bill of entry in the case of self-assessed bill
of entry; or
(ii) the duty actually payable is reflected in the reassessed bill of entry in the case of reassessment.”.
92. In the Customs Act, in section 28E, for clause (e), the following clause shall be substituted,
namely:––
Amendment
of section 2.
5
10
15
20
25
30
35
40
Amendment of
section 27.
52 of 1962.
f
Amendment
of section 7.
Amendment
of section 17.
Amendment of
section 28E.
45
29
‘(e) “Authority” means the Authority for Advance Rulings constituted under section 245-O of the
Income-tax Act, 1961;’.
93. In the Customs Act, for section 28F, the following section shall be substituted, namely:––
“28F. (1) Subject to the provisions of this Act, the Authority for Advance Rulings constituted under
section 245-O of the Income-tax Act, 1961 shall be the Authority for giving advance rulings for the
purposes of this Act and the said Authority shall exercise the jurisdiction, powers and authority
conferred on it by or under this Act:
Provided that the Member from the Indian Revenue Service (Customs and Central Excise), who
is qualified to be a Member of the Board, shall be the revenue Member of the Authority for the
purposes of this Act.
(2) On and from the date on which the Finance Bill, 2017 receives the assent of the President,
every application and proceeding pending before the erstwhile Authority for Advance Rulings (Central
Excise, Customs and Service Tax) shall stand transferred to the Authority from the stage at which
such application or proceeding stood as on the date of such assent.”.
94. In the Customs Act, section 28G shall be omitted.
95. In the Customs Act, in section 28H, in sub-section (3), for the words “two thousand five hundred
rupees”, the words “ten thousand rupees” shall be substituted.
96. In the Customs Act, in section 28-I, in sub-section (6), for the words “ninety days”, the words
“six months” shall be substituted.
97. In the Customs Act, after section 30, the following section shall be inserted, namely:––
“30A. (1) The person-in-charge of a conveyance that enters India from any place outside India or
any other person as may be specified by the Central Government by notification in the Official
Gazette, shall deliver to the proper officer—
(i) the passenger and crew arrival manifest before arrival in the case of an aircraft or a vessel
and upon arrival in the case of a vehicle; and
(ii) the passenger name record information of arriving passengers,
in such form, containing such particulars, in such manner and within such time, as may be prescribed.
(2) Where the passenger and crew arrival manifest or the passenger name record information or
any part thereof is not delivered to the proper officer within the prescribed time and if the proper
officer is satisfied that there was no sufficient cause for such delay, the person-in-charge or the other
person referred to in sub-section (1) shall be liable to such penalty, not exceeding fifty thousand
rupees, as may be prescribed.”.
98. In the Customs Act, after section 41, the following section shall be inserted, namely:––
“41A. (1) The person-in-charge of a conveyance that departs from India to a place outside India
or any other person as may be specified by the Central Government by notification in the Official
Gazette, shall deliver to the proper officer—
(i) the passenger and crew departure manifest; and
(ii) the passenger name record information of departing passengers,
in such form, containing such particulars, in such manner and within such time, as may be prescribed.
(2) Where the passenger and crew departure manifest or the passenger name record information
or any part thereof is not delivered to the proper officer within the prescribed time and if the proper
officer is satisfied that there was no sufficient cause for such delay, the person-in-charge or the other
person referred to in sub-section (1) shall be liable to such penalty, not exceeding fifty thousand
rupees, as may be prescribed.”.
99. In the Customs Act, in section 46, for sub-section (3), the following sub-section shall be
substituted, namely:—
“(3) The importer shall present the bill of entry under sub-section (1) before the end of the next
day following the day (excluding holidays) on which the aircraft or vessel or vehicle carrying the
5
10
15
20
25
30
35
40
45
Insertion of new
section 30A.
Insertion of
new section
41A.
Authority for
Advance
Rulings.
Omission of
section 28G.
Amendment of
section 28H.
Amendment of
section 28-I.
Passenger and
crew arrival
manifest and
passenger
name record
information.
43 of 1961.
Substitution of
new section for
section 28F.
43 of 1961.
Amendment of
section 46.
Passenger and
crew departure
manifest and
passenger
name record
information.
30
goods arrives at a customs station at which such goods are to be cleared for home consumption or
warehousing:
Provided that a bill of entry may be presented within thirty days of the expected arrival of the
aircraft or vessel or vehicle by which the goods have been shipped for importation into India:
Provided further that where the bill of entry is not presented within the time so specified and the
proper officer is satisfied that there was no sufficient cause for such delay, the importer shall pay
such charges for late presentation of the bill of entry as may be prescribed.”.
100. In the Customs Act, in section 47, in sub-section (2), for the portion beginning with the words
“Where the importer fails to pay” and ending with the words “in the Official Gazette”, the following
shall be substituted, namely:—
“The importer shall pay the import duty—
(a) on the date of presentation of the bill of entry in the case of self-assessment; or
(b) within one day (excluding holidays) from the date on which the bill of entry is returned to
him by the proper officer for payment of duty in the case of assessment, reassessment or
provisional assessment; or
(c) in the case of deferred payment under the proviso to sub-section (1), from such due date
as may be specified by rules made in this behalf,
and if he fails to pay the duty within the time so specified, he shall pay interest on the duty not paid
or short-paid till the date of its payment, at such rate, not less than ten per cent. but not exceeding
thirty-six per cent. per annum, as may be fixed by the Central Government, by notification in the
Official Gazette.”.
101. In the Customs Act, for section 49, the following section shall be substituted, namely:––
“49.Where,––
(a) in the case of any imported goods, whether dutiable or not, entered for home consumption,
the Assistant Commissioner of Customs or Deputy Commissioner of Customs is satisfied on the
application of the importer that the goods cannot be cleared within a reasonable time;
(b) in the case of any imported dutiable goods, entered for warehousing, the Assistant
Commissioner of Customs or Deputy Commissioner of Customs is satisfied on the application of
the importer that the goods cannot be removed for deposit in a warehouse within a reasonable
time,
the goods may pending clearance or removal, as the case may be, be permitted to be stored in a
public warehouse for a period not exceeding thirty days:
Provided that the provisions of Chapter IX shall not apply to goods permitted to be stored in a
public warehouse under this section:
Provided further that the Principal Commissioner of Customs or Commissioner of Customs may
extend the period of storage for a further period not exceeding thirty days at a time.”.
102. In the Customs Act, in section 69, in sub-section (1), for clause (a), the following clause shall
be substituted, namely:––
“(a) a shipping bill or a bill of export or the form as prescribed under section 84 has been presented
in respect of such goods;”.
103. In the Customs Act, section 82 shall be omitted.
104. In the Customs Act, in section 84, for clause (a), the following clause shall be substituted,
namely:––
“(a) the form and manner in which an entry may be made in respect of goods imported or to be
exported by post;”.
105. In the Customs Act, in section 127B, after sub-section (4), the following sub-section shall be
inserted, namely:––
“(5) Any person, other than an applicant referred to in sub-section (1), may also make an application
to the Settlement Commission in respect of a show cause notice issued to him in a case relating to
5
10
15
20
25
30
35
40
45
Amendment
of section 84.
Amendment
of section 47.
Storage of
imported
goods in
warehouse
pending
clearance or
removal.
Amendment
of section 69.
Omission of
section 82.
Substitution of
new section for
section 49.
Amendment
of section
127B.
31
the applicant which has been settled or is pending before the Settlement Commission and such
notice is pending before an adjudicating authority, in such manner and subject to such conditions,
as may be specified by rules.’’.
106. In the Customs Act, in section 127C,––
(i) in sub-section (3), for the words “Commissioner of Customs having jurisdiction and the
Commissioner”, the words “Commissioner of Customs or Principal Additional Director General of
Revenue Intelligence or Additional Director General of Revenue Intelligence, as the case may be,
having jurisdiction and such Commissioner or Additional Director General” shall be substituted;
(ii) after sub-section (5), the following sub-section shall be inserted, namely:––
“(5A) The Settlement Commission may, at any time within three months from the date of
passing of the order under sub-section (5), may amend such order to rectify any error apparent
on the face of record, either suo motu or when such error is brought to its notice by the jurisdictional
Principal Commissioner of Customs or Commissioner of Customs or Principal Additional Director
General of Revenue Intelligence or Additional Director General of Revenue Intelligence or the
applicant:
Provided that no amendment which has the effect of enhancing the liability of the applicant
shall be made under this sub-section, unless the Settlement Commission has given notice of
such intention to the applicant and the jurisdictional Principal Commissioner of Customs or
Commissioner of Customs or Principal Additional Director General of Revenue Intelligence or
Additional Director General of Revenue Intelligence, as the case may be, and has given them a
reasonable opportunity of being heard.”.
107. In the Customs Act, in section 157, in sub-section (2), after clause (aa), the following clause
shall be inserted, namely:––
“(ab) the form, the particulars, the manner and the time of delivering the passenger and crew
manifest for arrival and departure and passenger name record information and the penalty for delay
in delivering such information under sections 30A and 41A;”.
Customs Tariff
108. In the Customs Tariff Act, 1975 (hereinafter referred to as the Customs Tariff Act), in section
9, in sub-section (3), for clause (c), the following clause shall be substituted, namely:––
“(c) the subsidy has been conferred on a limited number of persons engaged in the manufacture,
production or export of articles;”.
109. In the Customs Tariff Act, the First Schedule shall—
(a) be amended in the manner specified in the Second Schedule;
(b) be also amended in the manner specified in the Third Schedule.
110. In the Customs Tariff Act, the Second Schedule shall be amended in the manner specified in
the Fourth Schedule.
Excise
111. In the Central Excise Act, 1944 (hereinafter referred to as the Central Excise Act), in section
23A, for clause (e), the following clause shall be substituted, namely:––
‘(e) “Authority” means the Authority for Advance Rulings as defined in clause (e) of section 28E
of the Customs Act, 1962;’.
112. In the Central Excise Act, section 23B shall be omitted.
113. In the Central Excise Act, in section 23C, in sub-section (3), for the words “two thousand and
five hundred rupees”, the words “ten thousand rupees” shall be substituted.
114. In the Central Excise Act, in section 23D, in sub-section (6), for the words “ninety days”, the
words “six months” shall be substituted.
115. In the Central Excise Act, after section 23H, the following section shall be inserted, namely:—
“23-I. On and from the date on which the Finance Bill, 2017 receives the assent of the President,
every application and proceeding pending before the erstwhile Authority for Advance Rulings (Central
Excise, Customs and Service Tax) shall stand transferred to the Authority from the stage at which
such application or proceeding stood as on the date of such assent.”.
5
10
15
20
25
30
35
40
45
51 of 1975.
Amendment of
First Schedule.
Amendment
of section
127C.
Amendment
of section
157.
Amendment
of section 9.
Amendment of
section 23A.
Amendment of
Second
Schedule.
52 of 1962.
Omission of
section 23B.
Amendment of
section 23C.
Amendment of
section 23D.
Insertion of new
section 23-I.
Transitional
provision.
1 of 1944.
50
32
116. In the Central Excise Act, in section 32E, after sub-section (4), the following sub-section shall
be inserted, namely:––
“(5) Any person other than an assessee, may also make an application to the Settlement
Commission in respect of a show cause notice issued to him in a case relating to the assessee
which has been settled or is pending before the Settlement Commission and such notice is pending
before an adjudicating authority, in such manner and subject to such conditions, as may be
prescribed.”.
117. In the Central Excise Act, in section 32F,––
(i) in sub-section (3), for the words “Commissioner of Central Excise having jurisdiction and the
Commissioner”, the words “Commissioner of Central Excise or Principal Additional Director General
of Central Excise Intelligence or Additional Director General of Central Excise Intelligence, as the
case may be, having jurisdiction and such Commissioner or Additional Director General” shall be
substituted;
(ii) after sub-section (5), the following sub-section shall be inserted, namely:––
“(5A) The Settlement Commission may, at any time within three months from the date of passing
of the order under sub-section (5), amend such order to rectify any error apparent on the face of
record, either suo motu or when such error is brought to its notice by the jurisdictional Principal
Commissioner of Central Excise or Commissioner of Central Excise or Principal Additional Director
General of Central Excise Intelligence or Additional Director General of Central Excise Intelligence
or the applicant:
Provided that no amendment which has the effect of enhancing the liability of the applicant
shall be made under this sub-section, unless the Settlement Commission has given notice of
such intention to the applicant and the jurisdictional Principal Commissioner of Central Excise or
Commissioner of Central Excise or Principal Additional Director General of Central Excise
Intelligence or Additional Director General of Central Excise Intelligence, as the case may be,
and has given them a reasonable opportunity of being heard.”.
Central Excise Tariff
118. In the Central Excise Tariff Act, 1985 (hereinafter referred to as the Central Excise Tariff Act),
the First Schedule shall be amended in the manner specified in the Fifth Schedule.
119. In the Central Excise Tariff Act, in the First Schedule, in Chapter 87, in column (4), for the
entry “27%” occurring against tariff items 8702 90 21, 8702 90 22, 8702 90 28 and 8702 90 29, the
entry “12.5%” shall be substituted and shall be deemed to have been substituted retrospectively with
effect from the 1st day of January, 2017.
CHAPTER V
SERVICE TAX
120. In the Finance Act, 1994 (hereinafter referred to as the 1994 Act), in section 65B, clause (40)
shall be omitted.
121. In the 1994 Act, in section 66D, clause (f) shall be omitted.
122. In the 1994 Act, in section 96A, for clause (d), the following clause shall be substituted,
namely:––
‘(d) “Authority” means the Authority for Advance Rulings as defined in clause (e) of section 28E of
the Customs Act, 1962;’.
123. In the 1994 Act, section 96B shall be omitted.
124. In the 1994 Act, in section 96C, in sub-section (3), for the words “two thousand and five
hundred rupees”, the words “ten thousand rupees” shall be substituted.
125. In the 1994 Act, in section 96D, in sub-section (6), for the words “ninety days”, the words “six
months” shall be substituted.
126. In the 1994 Act, after section 96H, the following section shall be inserted, namely:––
Amendment
of section
66D.
5
10
15
20
25
30
35
40
45
Amendment
of section
32E.
Amendment
of section
32F.
Amendment
of First
Schedule.
Amendment
of section
65B.
5 of 1986.
32 of 1994.
Amendment
of section
96A.
52 of 1962.
Omission of
section 96B.
Amendment
of section
96C.
Amendment
of section
96D.
Insertion of
new section
96HA.
Retrospective
amendment
of certain
entries in
First
Schedule.
33
“96HA. On and from the date on which the Finance Bill, 2017 receives the assent of the President,
every application and proceeding pending before the erstwhile Authority for Advance Rulings (Central
Excise, Customs and Service Tax) shall stand transferred to the Authority from the stage at which
such application or proceeding stood as on the date of such assent.”.
127. In the 1994 Act, after section 103, the following sections shall be inserted, namely:—
“104. (1) Notwithstanding anything contained in section 66, as it stood prior to the 1st day of July,
2012, or in section 66B, no service tax, leviable on one time upfront amount (premium, salami, cost,
price, development charge or by whatever name called) in respect of taxable service provided or
agreed to be provided by a State Government industrial development corporation or undertaking to
industrial units by way of grant of long term lease of thirty years or more of industrial plots, shall be
levied or collected during the period commencing from the 1st day of June, 2007 and ending with
the 21st day of September, 2016 (both days inclusive).
(2) Refund shall be made of all such service tax which has been collected, but which would not
have been so collected, had sub-section (1) been in force at all material times.
(3) Notwithstanding anything contained in this Chapter, an application for claim of refund of
service tax shall be made within a period of six months from the date on which the Finance Bill,
2017 receives the assent of the President.
105. (1) Notwithstanding anything contained in section 66, as it stood prior to the 1st day of July,
2012, or in section 66B, no service tax shall be levied or collected in respect of taxable services
provided or agreed to be provided by the Army, Naval and Air Force Group Insurance Funds by way
of life insurance to members of the Army, Navy and Air Force, respectively, under the Group Insurance
Schemes of the Central Government, during the period commencing from the 10th day of September,
2004 and ending with the 1st day of February, 2016 (both days inclusive).
(2) Refund shall be made of all such service tax which has been collected, but which would not
have been so collected, had sub-section (1) been in force at all material times.
(3) Notwithstanding anything contained in this Chapter, an application for the claim of refund of
service tax shall be made within a period of six months from the date on which the Finance Bill,
2017 receives the assent of the President.”.
128. (1) In the Service Tax (Determination of Value) Rules, 2006 made by the Central Government
in exercise of the powers conferred by section 94 of the Finance Act, 1994, published in the Gazette
of India vide notification of the Government of India in the Ministry of Finance (Department of Revenue)
number G.S.R. 228(E), dated the 19th April, 2006,—
(a) rule 2A as inserted by the Service Tax (Determination of Value) (Amendment) Rules, 2007
published vide number G.S.R. 375(E), dated the 22nd May, 2007; and
(b) rule 2A as substituted by the Service Tax (Determination of Value) Second Amendment
Rules, 2012 published vide number G.S.R. 431(E), dated the 6th June, 2012,
shall stand amended and shall be deemed to have been amended in the manner specified in column
(3) of the Sixth Schedule, on and from and up to the corresponding date specified in column (4),
against each of the rule specified in column (2) thereof.
(2) Notwithstanding anything contained in any judgment, decree or order of any court, tribunal or
other authority, any action taken or anything done or purported to have been taken or done at any
time during the period specified in column (4) of the Sixth Schedule relating to the provisions as
amended by sub-section (1) shall be deemed to be and deemed always to have been, for all purposes,
as validly and effectively taken or done as if the amendment made by sub-section (1) had been in
force at all material times.
(3) For the purposes of sub-section (1), the Central Government shall have and shall be deemed
to have the power to make rules with retrospective effect as if the Central Government had the power
to make rules under section 94 of the Finance Act, 1994, retrospectively, at all material times.
Explanation.––For the removal of doubts, it is hereby declared that no act or omission on the part
of any person shall be punishable as an offence which would not have been so punishable had this
section not come into force.
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35
40
45
Special
provision for
exemption in
certain cases
relating to life
insurance
services
provided to
members of
armed forces
of Union.
32 of 1994.
Amendment of
rule 2A of
Service Tax
(Determination
of Value)
Rules, 2006,
retrospectively.
Transitional
provision.
Insertion of
new sections
104 and 105.
Special
provision for
exemption in
certain cases
relating to
long term
lease of
industrial
plots.
32 of 1994.
50
34
CHAPTER VI
MISCELLANEOUS
PART I
AMENDMENTS TO THE INDIAN TRUSTS ACT, 1882
129. The provisions of this Part shall come into force on such date as the Central Government
may, by notification in the Official Gazette, appoint.
130. In section 20 of the Indian Trusts Act,1882 [as substituted by section 2 of the Indian Trusts
(Amendment) Act, 2016],––
(i) for the words “invest the money in any of the securities or class of securities expressly authorised
by the instrument of trust or”, the words “make investments as expressly authorised by the instrument
of trust or in any of the securities or class of securities” shall be substituted;
(ii) in the proviso, the words “in any of the securities or class of securities mentioned above” shall
be omitted.
PART II
AMENDMENTS TO THE INDIAN POST OFFICE ACT, 1898
131. The provisions of this Part shall come into force on the 1st day of April, 2017.
132. In section 7 of the Indian Post Office Act, 1898,—
(a) in sub-section (1), for the proviso, the following proviso shall be substituted, namely:—
“Provided that until such notification is issued, the rates set forth in the First Schedule shall be
the rates chargeable under this Act.”;
(b) sub-section (2) shall be omitted.
PART III
AMENDMENTS TO THE RESERVE BANK OF INDIA ACT, 1934
133. The provisions of this Part shall come into force on the 1st day of April, 2017.
134. In the Reserve Bank of India Act, 1934, in section 31, after sub-section (2), the following
sub-section shall be inserted, namely:—
“(3) Notwithstanding anything contained in this section, the Central Government may authorise
any scheduled bank to issue electoral bond.
Explanation.–– For the purposes of this sub-section, ‘’electroal bond’’ means a bond issued by
any scheduled bank under the scheme as may be notified by the Central Government.’’.
PART IV
AMENDMENTS TO THE REPRESENTATION OF THE PEOPLE ACT, 1951
135.The provisions of this Part shall come into force on the 1st day of April, 2017.
136. In the Representation of the People Act, 1951, in section 29C, in sub-section (1), the following
shall be inserted, namely:––
‘Provided that nothing contained in this sub-section shall apply to the contributions received by
way of an electoral bond.
Explanation.––For the purposes of this sub-section, “electoral bond” means a bond referred to in
the Explanation to sub-section (3) of section 31 of the Reserve Bank of India Act, 1934.
PART V
AMENDMENTS TO THE OIL INDUSTRY (DEVELOPMENT) ACT, 1974
137. The provisions of this Part shall come into force on the 1st day of April, 2017.
138. In the Oil Industry (Development) Act, 1974, in section 18, in sub-section (2), after clause (d),
5
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15
20
25
30
35
40
Commencement
of this Part.
Amendment
of section 20
of Act 2 of
1882.
34 of 2016.
Commencement
of this Part.
Amendment
of section 7
of Act 6 of
1898.
Commencement
of this Part.
Amendment
to section 31
of Act 2 of
1934.
Commencement
of this Part.
Amendment
of section
29C of Act
43 of 1951.
Commencement
of this Part.
Amendment of
section 18 of
Act 47 of 1974.
2 of 1934.
35
the following clauses shall be inserted, namely:—
” (e) for meeting any expenditure incurred by any Central Public Sector Undertaking in the oil
and gas sector, on behalf of the Central Government;
(f) for meeting expenditure on any scheme or activity by the Central Government relating to oil
and gas sector.”.
PART VI
REPEAL OF THE RESEARCH AND DEVELOPMENT CESS ACT, 1986.
139. The provisions of this Part shall come into force on the 1st day of April, 2017.
140. The Research and Development Cess Act, 1986 is hereby repealed.
141. (1) The repeal of the Research and Development Cess Act, 1986 by this Act shall not—
(a) affect any other enactment in which the repealed enactment has been applied, incorporated
or referred to;
(b) affect the validity, invalidity, effect or consequences of anything already done or suffered, or
any right, title, obligation or liability already acquired, accrued or incurred or any remedy or proceeding
in respect thereof, or any release or discharge of or from any debt, penalty, obligation, liability, claim
or demand, or any indemnity already granted, or the proof of any past act or thing;
(c) affect any principle or rule of law, or established jurisdiction, form or course of pleading,
practice or procedure, or existing usage, custom, privilege, restriction, exemption, office or
appointment, notwithstanding that the same respectively may have been in any manner affirmed or
recognised or derived by, in or from the enactment hereby repealed;
(d) revive or restore any jurisdiction, office, custom, liability, right, title, privilege, restriction,
exemption, usage, practice, procedure or other matter or thing not now existing or in force.
(2) The mention of particular matter in sub-section (1) shall not be held to prejudice or affect the
general application of section 6 of the General Clauses Act, 1897, with regard to the effect of repeal.
142. Notwithstanding the repeal of the Research and Development Cess Act, 1986, the proceeds of
duties levied under the said Act immediately preceding the date of commencement of this Part,—
(i) if collected by the collecting agencies but not paid into the Reserve Bank of India; or
(ii) if not collected by the collecting agencies,
shall be paid or, as the case may be, collected and paid into the Reserve Bank of India for being
credited to the Consolidated Fund of India.
PART VII
AMENDMENTS TO THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992
143.The provisions of this Part shall come into force on such date as the Central Government
may, by notification, appoint, and different dates may be appointed for different provisions of this
Part.
144. In the Securities and Exchange Board of India Act, 1992 (hereafter in this Part referred to as
the principal Act), in section 2, in sub-section (1),––
(A) after clause (d), the following clauses shall be inserted, namely:––
‘(da) “Insurance Regulatory and Development Authority” means the Insurance Regulatory and
Development Authority of India established under sub-section (1) of section 3 of the Insurance
Regulatory and Development Authority Act, 1999;
(db) “Judicial Member” means a Member of the Securities Appellate Tribunal appointed under
sub-section (1) of section 15MA and includes the Presiding Officer;’;
(B) after clause (f), the following clause shall be inserted, namely:––
‘(fa) “Pension Fund Regulatory and Development Authority” means the Pension Fund Regulatory
and Development Authority established under sub-section (1) of section 3 of the Pension Fund
Regulatory and Development Authority Act, 2013;’;
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15
20
25
30
35
40
45
Commencement
of this Part.
41 of 1999.
Amendment
of Act 15 of
1992.
15 of 1992.
23 of 2013.
Commencement
of this Part.
Repeal of Act
32 of 1986.
Collection and
payment of
arrears of
duties.
32 of 1986.
10 of 1897.
Savings.
36
(C) after clause (i), the following clause shall be inserted, namely:––
‘(j) “Technical Member” means a Technical Member appointed under sub-section (1) of
section 15MB.’.
145. In Chapter VIB of the principal Act,––
(a) in the chapter heading, for the words “APPELLATE TRIBUNAL”, the words “SECURITIES
APPELLATE TRIBUNAL” shall be substituted;
(b) for section 15K, the following section shall be substituted, namely:––
“15K. (1) The Central Government shall, by notification, establish a Tribunal to be known as
the Securities Appellate Tribunal to exercise the jurisdiction, powers and authority conferred on it
by or under this Act or any other law for the time being in force.
(2) The Central Government shall also specify in the notification referred to in sub-section (1),
the matters and places in relation to which the Securities Appellate Tribunal may exercise
jurisdiction.”;
(c) for section 15L, the following section shall be substituted, namely:––
“15L. (1) The Securities Appellate Tribunal shall consist of a Presiding Officer and such number
of Judicial Members and Technical Members as the Central Government may determine, by
notification, to exercise the powers and discharge the functions conferred on the Securities
Appellate Tribunal under this Act or any other law for the time being in force.
(2) Subject to the provisions of this Act,—
(a) the jurisdiction of the Securities Appellate Tribunal may be exercised by Benches thereof;
(b) a Bench may be constituted by the Presiding Officer of the Securities Appellate Tribunal
with two or more Judicial or Technical Members as he may deem fit:
Provided that every Bench constituted shall include at least one Judicial Member and one
Technical Member;
(c) the Benches of the Securities Appellate Tribunal shall ordinarily sit at Mumbai and may
also sit at such other places as the Central Government may, in consultation with the Presiding
Officer, notify.
(3) Notwithstanding anything contained in sub-section (2), the Presiding Officer may transfer a
Judicial Member or a Technical Member of the Securities Appellate Tribunal from one Bench to
another Bench.”;
(d) for section 15M, the following sections shall be substituted, namely:––
“15M. A person shall not be qualified for appointment as the Presiding Officer or a Judicial
Member or a Technical Member of the Securities Appellate Tribunal, unless he—
(a) is, or has been, a Judge of the Supreme Court or a Chief Justice of a High Court or a
Judge of High Court for at least seven years, in the case of the Presiding Officer; and
(b) is, or has been, a Judge of High Court for at least five years, in the case of a Judicial
Member; or
(c) in the case of a Technical Member––
(i) is, or has been, a Secretary or an Additional Secretary in the Ministry or Department of
the Central Government or any equivalent post in the Central Government or a State
Government; or
(ii) is a person of proven ability, integrity and standing having special knowledge and
professional experience, of not less than fifteen years, in financial sector including securities
market or pension funds or commodity derivatives or insurance.
15MA. The Presiding Officer and Judicial Members of the Securities Appellate Tribunal shall
be appointed by the Central Government in consultation with the Chief Justice of India or his
nominee.
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25
30
35
40
45
Amendment of
Chapter VIB.
Establishment
of Securities
Appellate
Tribunal.
Qualifications for
appointment as
Presiding Officer,
Judicial Member
and Technical
Member.
Appointment
of Presiding
Officer and
Judicial
Members.
Composition
of Securities
Appellate
Tribunal.
37
15MB. (1) The Technical Members of the Securities Appellate Tribunal shall be appointed by
the Central Government on the recommendation of a Search-cum-Selection Committee consisting
of the following, namely:––
(a) the Presiding Officer, Securities Appellate Tribunal—Chairperson;
(b) the Secretary, Department of Economic Affairs—Member;
(c) the Secretary, Department of Financial Services—Member; and
(d) the Secretary, Legislative Department or Secretary, Department of Legal Affairs—Member.
(2) The Secretary, Department of Economic Affairs shall be the Convener of the Search-cum-
Selection Committee.
(3) The Search-cum-Selection Committee shall determine its procedure for recommending
the names of persons to be appointed under sub-section (1).
15MC. (1) No appointment of the Presiding Officer, a Judicial Member or a Technical Member
of the Securities Appellate Tribunal shall be invalid merely by reason of any vacancy or any
defect in the constitution of the Search-cum-Selection Committee.
(2) A member or part time member of the Board or the Insurance Regulatory and Development
Authority or the Pension Fund Regulatory and Development Authority, or any person at senior
management level equivalent to the Executive Director in the Board or in such Authorities, shall not
be appointed as Presiding Officer or Member of the Securities Appellate Tribunal, during his service
or tenure as such with the Board or with such Authorities, as the case may be, or within two years
from the date on which he ceases to hold office as such in the Board or in such Authorities.
(3) The Presiding Officer or such other member of the Securities Appellate Tribunal, holding
office on the date of commencement of Part VII of Chapter VI of the Finance Act, 2017 shall
continue to hold office for such term as he was appointed and the other provisions of this Act shall
apply to such Presiding Officer or such other member, as if Part VII of Chapter VI of the Finance
Act, 2017 had not been enacted.”;
(e) for section 15N, the following section shall be substituted, namely:––
“15N. The Presiding Officer or every Judicial or Technical Member of the Securities Appellate
Tribunal shall hold office for a term of five years from the date on which he enters upon his office,
and shall be eligible for reappointment for another term of maximum five years:
Provided that no Presiding Officer or the Judicial or Technical Member shall hold office after
he has attained the age of seventy years.”;
(f) after section 15P, the following section shall be inserted, namely:—
“15PA. In the event of occurrence of any vacancy in the office of the Presiding Officer of the
Securities Appellate Tribunal by reason of his death, resignation or otherwise, the senior-most
Judicial Member of the Securities Appellate Tribunal shall act as the Presiding Officer until the
date on which a new Presiding Officer is appointed in accordance with the provisions of this Act.”;
(g) in section 15Q, for sub-section (2), the following sub-section shall be substituted, namely:—
“(2) The Central Government may, after an inquiry made by the Judge of the Supreme Court,
remove the Presiding Officer or Judicial Member or Technical Member of the Securities Appellate
Tribunal, if he—
(a) is, or at any time has been, adjudged as an insolvent;
(b) has become physically or mentally incapable of acting as the Presiding Officer, Judicial
or Technical Member;
(c) has been convicted of any offence which, in the opinion of the Central Government,
involves moral turpitude;
(d) has, in the opinion of the Central Government, so abused his position as to render his
continuation in office detrimental to the public interest; or
(e) has acquired such financial interest or other interest as is likely to affect prejudicially his
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30
35
40
45
Vacancy not
to invalidate
selection
proceeding.
Tenure of office of
Presiding Officer,
Judicial or
Technical
Members of
Securities
Appellate Tribunal.
Member to
act as
Presiding
Officer in
certain
circumstances.
Search-cum-
Selection
Committee
for
appointment
of Technical
Members.
38
functions as the Presiding Officer or Judicial or Technical Member:
Provided that he shall not be removed from office under clauses (d) and (e), unless he has
been given a reasonable opportunity of being heard in the matter.”;
(h) In section 15T,—
(I) in sub-section (1),––
(A) in clause (b), for the words “under this Act,”, the words “under this Act; or” shall be
substituted;
(B) after clause (b) and before the long line, the following clause shall be inserted, namely:––
“(c) by an order of the Insurance Regulatory and Development Authority or the Pension
Fund Regulatory and Development Authority,”;
(II) in sub-section (3), after the words “adjudicating officer”, the words “or the Insurance
Regulatory and Development Authority or the Pension Fund Regulatory and Development
Authority” shall be inserted;
(III) in sub-section (5), after the words “the Board”, the words “or the Insurance Regulatory and
Development Authority or the Pension Fund Regulatory and Development Authority, as the case
may be” shall be inserted;
(i) in section 15U, after sub-section (3), the following sub-sections shall be inserted, namely:––
“(4) Where Benches are constituted, the Presiding Officer of the Securities Appellate Tribunal
may, from time to time make provisions as to the distribution of the business of the Securities
Appellate Tribunal amongst the Benches and also provide for the matters which may be dealt
with, by each Bench.
(5) On the application of any of the parties and after notice to the parties, and after hearing
such of them as he may desire to be heard, or on his own motion without such notice, the
Presiding Officer of the Securities Appellate Tribunal may transfer any case pending before one
Bench, for disposal, to any other Bench.
(6) If a Bench of the Securities Appellate Tribunal consisting of two members differ in opinion
on any point, they shall state the point or points on which they differ, and make a reference to the
Presiding Officer of the Securities Appellate Tribunal who shall either hear the point or points
himself or refer the case for hearing only on such point or points by one or more of the other
members of the Securities Appellate Tribunal and such point or points shall be decided according
to the opinion of the majority of the members of the Securities Appellate Tribunal who have heard
the case, including those who first heard it.”.
PART VIII
AMENDMENT TO THE FINANCE ACT, 2005
146. In the Finance Act, 2005, the Seventh Schedule shall be amended in the manner specified in
the Seventh Schedule.
PART IX
AMENDMENTS TO THE PAYMENT AND SETTLEMENT SYSTEMS ACT, 2007
147. The provisions of this Part shall come into force on such date as the Central Government
may, by notification, appoint, and different dates may be appointed for different provisions of this
Part.
148. In the Payment and Settlement Systems Act, 2007 (hereafter in this Part referred to as the
principal Act), for Chapter II, the following Chapter shall be substituted, namely:––
‘CHAPTER II
DESIGNATED AUTHORITY
3. (1) The Reserve Bank shall be the designated authority for the regulation and supervision of
payment systems under this Act.
(2) The Reserve Bank shall exercise the powers, perform the functions and discharge the duties
conferred on it under this Act through a Board to be known as the “Payments Regulatory Board”.
(3) The Board shall consist of the following members, namely:––
5
10
15
20
25
Amendment
of Act 18 of
2005.
Amendment of
Act 51 of 2007.
Commencement
of this Part.
Designated
authority.
51 of 2007.
50
30
35
40
45
39
(a) the Governor of the Reserve Bank—Chairperson, ex officio;
(b) the Deputy Governor of the Reserve Bank who is in-charge of the Payment and Settlement
Systems—Member, ex officio;
(c) one officer of the Reserve Bank to be nominated by the Central Board of the
Reserve Bank—Member, ex officio; and
(d) three persons to be nominated by the Central Government—Members.
(4) The powers and functions of the Board referred to in sub-section (2), the time and venue of its
meetings, the procedures to be followed in such meetings (including the quorum at such meetings)
and other matters incidental thereto shall be such as may be prescribed.’.
149. In section 38 of the principal Act, in sub-section (2), in clause (a), for the words, brackets and
figure “Committee constituted under sub-section (2)”, the words, brackets and figure “Board referred
to in sub-section (2)” shall be substituted.
PART X
AMENDMENTS TO THE FINANCE ACT, 2016
150. In the Finance Act, 2016,––
(i) in section 50, for the words, figures and letters “with effect from the 1st day of April, 2017”, the
words, figures and letters “and shall be deemed to have been substituted with effect from the
1st day of April, 2013” shall be substituted;
(ii) in section 197, clause (c) shall be omitted and shall be deemed to have been omitted with
effect from the 1st day of June, 2016.
————————
Declaration under the Provisional Collection of Taxes Act, 1931
It is hereby declared that it is expedient in the public interest that the provisions of clauses 109(a),
110, 118 and 146 of this Bill shall have immediate effect under the Provisional Collection of Taxes Act,
1931.
————————
Amendment
of Act 28 of
2016.
Amendment
of section 38.
5
10
15
20
16 of 1931.
40
THE FIRST SCHEDULE
(See section 2)
PART I
INCOME-TAX
Paragraph A
(I) In the case of every individual other than the individual referred to in items (II) and (III) of this Paragraph or Hindu undivided
family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in
sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not being a case to which any other Paragraph of this Part
applies,—
Rates of income-tax
(1) where the total income does not exceed Rs. 2,50,000
(2) where the total income exceeds Rs. 2,50,000 but does not
exceed Rs. 5,00,000
(3) where the total income exceeds Rs. 5,00,000 but does not
exceed Rs. 10,00,000
(4) where the total income exceeds Rs. 10,00,000
Nil;
10 per cent. of the amount by which the total income
exceeds Rs. 2,50,000;
Rs. 25,000 plus 20 per cent. of the amount by which
the total income exceeds Rs. 5,00,000;
Rs. 1,25,000 plus 30 per cent. of the amount by which
the total income exceeds Rs. 10,00,000.
(II) In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years
at any time during the previous year,—
Rates of income-tax
(1) where the total income does not exceed Rs. 3,00,000
(2) where the total income exceeds Rs. 3,00,000 but does
not exceed Rs. 5,00,000
(3) where the total income exceeds Rs. 5,00,000 but does
not exceed Rs. 10,00,000
(4) where the total income exceeds Rs. 10,00,000
Nil;
10 per cent. of the amount by which the total income
exceeds Rs. 3,00,000;
Rs. 20,000 plus 20 per cent. of the amount by which
the total income exceeds Rs. 5,00,000;
Rs. 1,20,000 plus 30 per cent. of the amount by which
the total income exceeds Rs. 10,00,000.
(III) In the case of every individual, being a resident in India, who is of the age of eighty years or more at any time during the
previous year,—
Rates of income-tax
(1) where the total income does not exceed Rs. 5,00,000
(2) where the total income exceeds Rs. 5,00,000 but does not
exceed Rs. 10,00,000
(3) where the total income exceeds Rs. 10,00,000
Nil;
20 per cent. of the amount by which the total income
exceeds Rs. 5,00,000;
Rs. 1,00,000 plus 30 per cent. of the amount by which
the total income exceeds Rs. 10,00,000.
Surcharge on income-tax
The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section
111A or section 112 of the Income-tax Act, shall, in the case of every individual or Hindu undivided family or association of persons
or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31)
of section 2 of the Income-tax Act, having a total income exceeding one crore rupees, be increased by a surcharge for the purpose
of the Union calculated at the rate of fifteen per cent. of such income-tax:
Provided that in the case of persons mentioned above having total income exceeding one crore rupees, the total amount
payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income
of one crore rupees by more than the amount of income that exceeds one crore rupees.
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15
20
25
35
5
30
40
40
41
Paragraph C
In the case of every firm,—
Rate of income-tax
On the whole of the total income 30 per cent.
Surcharge on income-tax
The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section
111A or section 112 of the Income-tax Act, shall, in the case of every firm, having a total income exceeding one crore rupees, be
increased by a surcharge for the purposes of the Union calculated at the rate of twelve per cent. of such income-tax:
Provided that in the case of every firm mentioned above having total income exceeding one crore rupees, the total amount
payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income
of one crore rupees by more than the amount of income that exceeds one crore rupees.
Paragraph D
In the case of every local authority,—
Rate of income-tax
On the whole of the total income 30 per cent.
Surcharge on income-tax
The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section
111A or section 112 of the Income-tax Act, shall, in the case of every local authority, having a total income exceeding one crore
rupees, be increased by a surcharge for the purposes of the Union calculated at the rate of twelve per cent. of such income-tax:
Provided that in the case of every local authority mentioned above having total income exceeding one crore rupees, the total
amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total
income of one crore rupees by more than the amount of income that exceeds one crore rupees.
Paragraph E
In the case of a company,—
Rates of income-tax
I. In the case of a domestic company,—
Paragraph B
In the case of every co-operative society,—
Rates of income-tax
(1) where the total income does not exceed Rs.10,000
(2) where the total income exceeds Rs.10,000 but does not
exceed Rs. 20,000
(3) where the total income exceeds Rs. 20,000
10 per cent. of the total income;
Rs.1,000 plus 20 per cent. of the amount by which the
total income exceeds Rs.10,000;
Rs. 3,000 plus 30 per cent. of the amount by which the
total income exceeds Rs. 20,000.
Surcharge on income-tax
The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section
111A or section 112 of the Income-tax Act, shall, in the case of every co-operative society, having a total income exceeding one crore
rupees, be increased by a surcharge for the purposes of the Union calculated at the rate of twelve per cent. of such income-tax:
Provided that in the case of every co-operative society mentioned above having total income exceeding one crore rupees, the
total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a
total income of one crore rupees by more than the amount of income that exceeds one crore rupees.
10
15
20
25
35
5
30
40
29 per cent. of the total income
30 per cent. of the total income;
(i) where its total turnover or the gross receipt in the previous year
2014-15 does not exceed five crore rupees;
(ii) other than that referred to in item (i)
42
II. In the case of a company other than a domestic company,—
(i) on so much of the total income as consists of,—
(a) royalties received from Government or an Indian concern in pursuance of
an agreement made by it with the Government or the Indian concern after the
31st day of March, 1961 but before the 1st day of April, 1976; or
(b) fees for rendering technical services received from Government or an
Indian concern in pursuance of an agreement made by it with the Government or
the Indian concern after the 29th day of February, 1964 but before the 1st day of
April, 1976,
and where such agreement has, in either case, been approved by the Central
Government
(ii) on the balance, if any, of the total income
50 per cent.;
40 per cent..
Surcharge on income-tax
The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of
section 111A or section 112 of the Income-tax Act, shall, be increased by a surcharge for the purposes of the Union calculated,—
(i) in the case of every domestic company,––
(a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of seven per cent. of
such income-tax; and
(b) having a total income exceeding ten crore rupees, at the rate of twelve per cent. of such income-tax;
(ii) in the case of every company other than a domestic company,––
(a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of two per cent. of
such income-tax; and
(b) having a total income exceeding ten crore rupees, at the rate of five per cent. of such income-tax:
Provided that in the case of every company having a total income exceeding one crore rupees but not exceeding ten crore
rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as
income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees:
Provided further that in the case of every company having a total income exceeding ten crore rupees, the total amount payable
as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total
income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.
PART II
RATES FOR DEDUCTION OF TAX AT SOURCE IN CERTAIN CASES
In every case in which under the provisions of sections 193, 194, 194A, 194B, 194BB, 194D , 194LBA, 194LBB, 194LBC and
195 of the Income-tax Act, tax is to be deducted at the rates in force, deduction shall be made from the income subject to the
deduction at the following rates:––
Rate of income-tax
1. In the case of a person other than a company—
(a) where the person is resident in India—
(i) on income by way of interest other than “Interest on securities”
(ii) on income by way of winnings from lotteries, crossword puzzles, card games
and other games of any sort
(iii) on income by way of winnings from horse races
(iv) on income by way of insurance commission
(v) on income by way of interest payable on—
(A) any debentures or securities for money issued by or on behalf of any
local authority or a corporation established by a Central, State or Provincial
Act;
(B) any debentures issued by a company where such debentures are listed
on a recognised stock exchange in India in accordance with the Securities
Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder;
30 per cent.;
10 per cent.;
30 per cent.;
5 per cent.;
10 per cent.;
10
15
20
25
35
45
5
30
40
43
Rate of income-tax
(C) any security of the Central or State Government;
(vi) on any other income
(b) where the person is not resident in India—
(i) in the case of a non-resident Indian—
(A) on any investment income
(B) on income by way of long-term capital gains referred to in section 115E or
sub-clause (iii) of clause (c) of sub-section (1) of section 112
(C) on income by way of short-term capital gains referred to in section 111A
(D) on other income by way of long-term capital gains [not being long-term capital
gains referred to in clauses (33), (36) and (38) of section 10]
(E) on income by way of interest payable by Government or an Indian concern
on moneys borrowed or debt incurred by Government or the Indian concern in foreign
currency (not being income by way of interest referred to in section 194LB or section
194LC)
(F) on income by way of royalty payable by Government or an Indian concern in
pursuance of an agreement made by it with the Government or the Indian concern
where such royalty is in consideration for the transfer of all or any rights (including
the granting of a licence) in respect of copyright in any book on a subject referred to
in the first proviso to sub-section (1A) of section 115A of the Income-tax Act, to the
Indian concern, or in respect of any computer software referred to in the second
proviso to sub-section (1A) of section 115A of the Income-tax Act, to a person resident
in India
(G) on income by way of royalty [not being royalty of the nature referred to in subitem
(b)(i)(F)] payable by Government or an Indian concern in pursuance of an
agreement made by it with the Government or the Indian concern and where such
agreement is with an Indian concern, the agreement is approved by the Central
Government or where it relates to a matter included in the industrial policy, for the
time being in force, of the Government of India, the agreement is in accordance with
that policy
(H) on income by way of fees for technical services payable by Government or
an Indian concern in pursuance of an agreement made by it with the Government or
the Indian concern and where such agreement is with an Indian concern, the
agreement is approved by the Central Government or where it relates to a matter
included in the industrial policy, for the time being in force, of the Government of
India, the agreement is in accordance with that policy
(I) on income by way of winnings from lotteries, crossword puzzles, card games
and other games of any sort
(J) on income by way of winnings from horse races
(K) on the whole of the other income
(ii) in the case of any other person—
(A) on income by way of interest payable by Government or an Indian concern
on moneys borrowed or debt incurred by Government or the Indian concern in foreign
currency (not being income by way of interest referred to in section 194LB or section
194LC)
(B) on income by way of royalty payable by Government or an Indian concern in
pursuance of an agreement made by it with the Government or the Indian concern
where such royalty is in consideration for the transfer of all or any rights (including
the granting of a licence) in respect of copyright in any book on a subject referred to
in the first proviso to sub-section (1A) of section 115A of the Income-tax Act, to the
Indian concern, or in respect of any computer software referred to in the second
proviso to sub-section (1A) of section 115A of the Income-tax Act, to a person resident
in India
10 per cent.;
20 per cent.;
10 per cent.;
15 per cent.;
20 per cent.;
20 per cent.;
10 per cent.;
10 per cent.;
10 per cent.;
30 per cent.;
30 per cent.;
30 per cent.;
10 per cent.;
20 per cent.;
10
15
20
25
35
45
5
30
40
50
44
(C) on income by way of royalty [not being royalty of the nature referred to
in sub-item (b)(ii)(B)] payable by Government or an Indian concern in pursuance
of an agreement made by it with the Government or the Indian concern and
where such agreement is with an Indian concern, the agreement is approved
by the Central Government or where it relates to a matter included in the
industrial policy, for the time being in force, of the Government of India, the
agreement is in accordance with that policy
(D) on income by way of fees for technical services payable by Government
or an Indian concern in pursuance of an agreement made by it with the
Government or the Indian concern and where such agreement is with an Indian
concern, the agreement is approved by the Central Government or where it
relates to a matter included in the industrial policy, for the time being in force,
of the Government of India, the agreement is in accordance with that policy
(E) on income by way of winnings from lotteries, crossword puzzles, card
games and other games of any sort
(F) on income by way of winnings from horse races
(G) on income by way of short-term capital gains referred to in section
111A
(H) on income by way of long-term capital gains referred to in sub-clause
(iii) of clause (c) of sub-section (1) of section 112
(I) on income by way of other long-term capital gains [not being longterm
capital gains referred to in clauses (33), (36) and (38) of section 10]
(J) on the whole of the other income
2. In the case of a company—
(a) where the company is a domestic company—
(i) on income by way of interest other than “Interest on securities”
(ii) on income by way of winnings from lotteries, crossword puzzles, card
games and other games of any sort
(iii) on income by way of winnings from horse races
(iv) on any other income
(b) where the company is not a domestic company—
(i) on income by way of winnings from lotteries, crossword puzzles, card
games and other games of any sort
(ii) on income by way of winnings from horse races
(iii) on income by way of interest payable by Government or an Indian concern
on moneys borrowed or debt incurred by Government or the Indian concern in
foreign currency (not being income by way of interest referred to in section 194LB
or section 194LC)
(iv) on income by way of royalty payable by Government or an Indian concern
in pursuance of an agreement made by it with the Government or the Indian
concern after the 31st day of March, 1976 where such royalty is in consideration
for the transfer of all or any rights (including the granting of a licence) in respect
of copyright in any book on a subject referred to in the first proviso to sub-section
(1A) of section 115A of the Income-tax Act, to the Indian concern, or in respect of
any computer software referred to in the second proviso to sub-section (1A) of
section 115A of the Income-tax Act, to a person resident in India
(v) on income by way of royalty [not being royalty of the nature referred to in
sub-item (b)(iv)] payable by Government or an Indian concern in pursuance of
an agreement made by it with the Government or the Indian concern and where
such agreement is with an Indian concern, the agreement is approved by the
Central Government or where it relates to a matter included in the industrial
policy, for the time being in force, of the Government of India, the agreement is in
accordance with that policy—
(A) where the agreement is made after the 31st day of March, 1961 but
before the 1st day of April, 1976
10 per cent.;
10 per cent.;
30 per cent.;
10 per cent.;
10 per cent.;
15 per cent.;
30 per cent..
30 per cent.;
20 per cent.;
10 per cent.;
30 per cent.;
30 per cent.;
30 per cent.;
30 per cent.;
20 per cent.;
10 per cent.;
Rate of income-tax
10
15
20
25
35
45
5
30
40
50
50 per cent.;
45
(B) where the agreement is made after the 31st day of March, 1976
(vi) on income by way of fees for technical services payable by Government or an
Indian concern in pursuance of an agreement made by it with the Government or the
Indian concern and where such agreement is with an Indian concern, the agreement is
approved by the Central Government or where it relates to a matter included in the
industrial policy, for the time being in force, of the Government of India, the agreement
is in accordance with that policy—
(A) where the agreement is made after the 29th day of February, 1964 but
before the 1st day of April, 1976
(B) where the agreement is made after the 31st day of March, 1976
(vii) on income by way of short-term capital gains referred to in section 111A
(viii) on income by way of long-term capital gains referred to in sub-clause (iii) of
clause (c) of sub-section (1) of section 112
(ix) on income by way of other long-term capital gains [not being long-term capital
gains referred to in clauses (33), (36) and (38) of section 10]
(x) on any other income
10 per cent.;
10 per cent.;
10 per cent.;
50 per cent.;
15 per cent.;
20 per cent.;
40 per cent..
Rate of income-tax
Surcharge on income-tax
The amount of income-tax deducted in accordance with the provisions of––
(i) item 1 of this Part, shall be increased by a surcharge, for the purposes of the Union,––
(a) in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether
incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Incometax
Act, being a non-resident, calculated,––
I. at the rate of ten per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and
subject to the deduction exceeds fifty lakh rupees but does not exceed one crore rupees;
II. at the rate of fifteen per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid
and subject to the deduction exceeds one crore rupees; and
(b) in the case of every co-operative society or firm, being a non-resident, calculated at the rate of twelve per cent., where
the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees;
(ii) Item 2 of this Part shall be increased by a surcharge, for purposes of the Union, in the case of every company other than
a domestic company, calculated,––
(a) at the rate of two per cent. of such income-tax where the income or the aggregate of such incomes paid or likely to be
paid and subject to the deduction exceeds one crore rupees but does not exceed ten crore rupees; and
(b) at the rate of five per cent. of such income-tax where the income or the aggregate of such incomes paid or likely to be
paid and subject to the deduction exceeds ten crore rupees.
PART III
RATES FOR CHARGING INCOME-TAX IN CERTAIN CASES, DEDUCTING INCOME-TAX FROM
INCOME CHARGEABLE UNDER THE HEAD “SALARIES” AND COMPUTING “ADVANCE TAX”
In cases in which income-tax has to be charged under sub-section (4) of section 172 of the Income-tax Act or sub-section (2) of
section 174 or section 174A or section 175 or sub-section (2) of section 176 of the said Act or deducted from, or paid on, from
income chargeable under the head “Salaries” under section 192 of the said Act or in which the “advance tax” payable under
Chapter XVII-C of the said Act has to be computed at the rate or rates in force, such income-tax or, as the case may be, “advance
tax” [not being “advance tax” in respect of any income chargeable to tax under Chapter XII or Chapter XII-A or income chargeable
to tax under section 115JB or section 115JC or Chapter XII-FA or Chapter XII-FB or sub-section (1A) of section 161 or section 164
or section 164A or section 167B of the Income-tax Act at the rates as specified in that Chapter or section or surcharge, wherever
applicable, on such “advance tax” in respect of any income chargeable to tax under section 115A or section 115AB or section
115AC or section 115ACA or section 115AD or section 115B or section 115BA or section 115BB or section 115BBA or section
115BBC or section 115BBD or section 115BBDA or section 115BBE or section 115BBF or section 115BBG or section 115E or
section 115JB or section 115JC] shall be charged, deducted or computed at the following rate or rates:—
Paragraph A
(I) In the case of every individual other than the individual referred to in items (II) and (III) of this Paragraph or Hindu undivided
family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in
sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not being a case to which any other Paragraph of this Part
applies,—
Explanation.— For the purposes of item 1(b)(i) of this Part, “investment income” and “non-resident Indian” shall have the
meanings assigned to them in Chapter XII-A of the Income-tax Act.
10
15
20
25
35
45
5
30
40
50
55
46
Rates of income-tax
(1) where the total income does not exceed Rs. 2,50,000
(2) where the total income exceeds Rs. 2,50,000 but does not
exceed Rs. 5,00,000
(3) where the total income exceeds Rs. 5,00,000 but does not
exceed Rs. 10,00,000
(4) where the total income exceeds Rs. 10,00,000
Nil;
5 per cent. of the amount by which the total income
exceeds Rs. 2,50,000;
Rs. 12,500 plus 20 per cent. of the amount by which the
total income exceeds Rs. 5,00,000;
Rs. 1,12,500 plus 30 per cent. of the amount by which
the total income exceeds Rs. 10,00,000.
(II) In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years
at any time during the previous year,—
Rates of income-tax
(1) where the total income does not exceed Rs. 3,00,000
(2) where the total income exceeds Rs. 3,00,000 but does not
exceed Rs. 5,00,000
(3) where the total income exceeds Rs. 5,00,000 but does not
exceed Rs. 10,00,000
(4) where the total income exceeds Rs. 10,00,000
Nil;
5 per cent. of the amount by which the total income
exceeds Rs. 3,00,000;
Rs. 10,000 plus 20 per cent. of the amount by which the
total income exceeds Rs. 5,00,000;
Rs. 1,10,000 plus 30 per cent. of the amount by which
the total income exceeds Rs. 10,00,000.
(III) In the case of every individual, being a resident in India, who is of the age of eighty years or more at any time during the
previous year,—
Rates of income-tax
(1) where the total income does not exceed Rs. 5,00,000
(2) where the total income exceeds Rs. 5,00,000 but does not
exceed Rs. 10,00,000
(3) where the total income exceeds Rs. 10,00,000
Nil;
20 per cent. of the amount by which the total income
exceeds Rs. 5,00,000;
Rs. 1,00,000 plus 30 per cent. of the amount by which
the total income exceeds Rs. 10,00,000.
Surcharge on income-tax
The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section
111A or section 112 of the Income-tax Act, shall be increased by a surcharge for the purposes of the Union, calculated, in the case
of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every
artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act,—
(a) having a total income exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of ten per cent. of such
income-tax; and
(b) having a total income exceeding one crore rupees, at the rate of fifteen per cent. of such income-tax:
Provided that in the case of persons mentioned above having total income exceeding,—
(a) fifty lakh rupees but not exceeding one crore rupees, the total amount payable as income-tax and surcharge on such
income shall not exceed the total amount payable as income-tax on a total income of fifty lakh rupees by more than the amount
of income that exceeds fifty lakh rupees;
(b) one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total
amount payable as income-tax and surcharge on a total income of one crore rupees by more than the amount of income that
exceeds one crore rupees.
Paragraph B
In the case of every co-operative society,—
Rates of income-tax
(1) where the total income does not exceed Rs. 10,000
(2) where the total income exceeds Rs. 10,000 but does not
exceed Rs. 20,000
(3) where the total income exceeds Rs. 20,000
10 per cent. of the total income;
Rs. 1,000 plus 20 per cent. of the amount by which the
total income exceeds Rs. 10,000;
Rs. 3,000 plus 30 per cent. of the amount by which the
total income exceeds Rs. 20,000.
10
15
20
25
35
45
5
30
40
47
Surcharge on income-tax
The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section
111A or section 112 of the Income-tax Act, shall, in the case of every co-operative society, having a total income exceeding one
crore rupees, be increased by a surcharge for the purposes of the Union calculated at the rate of twelve per cent. of such incometax:
Provided that in the case of every co-operative society mentioned above having total income exceeding one crore rupees, the
total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a
total income of one crore rupees by more than the amount of income that exceeds one crore rupees.
Paragraph C
In the case of every firm,—
Rate of income-tax
On the whole of the total income 30 per cent.
Surcharge on income-tax
The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section
111A or section 112 of the Income-tax Act, shall, in the case of every firm, having a total income exceeding one crore rupees, be
increased by a surcharge for the purposes of the Union calculated at the rate of twelve per cent. of such income-tax:
Provided that in the case of every firm mentioned above having total income exceeding one crore rupees, the total amount
payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income
of one crore rupees by more than the amount of income that exceeds one crore rupees.
Paragraph D
In the case of every local authority,—
Rate of income-tax
On the whole of the total income 30 per cent.
Surcharge on income-tax
The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section
111A or section 112 of the Income-tax Act, shall, in the case of every local authority, having a total income exceeding one crore
rupees, be increased by a surcharge for the purposes of the Union calculated at the rate of twelve per cent.of such income-tax:
Provided that in the case of every local authority mentioned above having total income exceeding one crore rupees, the
total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a
total income of one crore rupees by more than the amount of income that exceeds one crore rupees.
Paragraph E
In the case of a company,—
Rates of income-tax
40 per cent..
50 per cent.;
10
15
20
25
35
45
5
30
40
50
I. In the case of a domestic company,—
(i) where its total turnover or the gross receipt in the previous year
2015-16 does not exceed fifty crore rupees;
(ii) other than that referred to in item (i)
II. In the case of a company other than a domestic company—
(i) on so much of the total income as consists of,—
(a) royalties received from Government or an Indian concern in
pursuance of an agreement made by it with the Government or the
Indian concern after the 31st day of March, 1961 but before the 1st
day of April, 1976; or
(b) fees for rendering technical services received from Government
or an Indian concern in pursuance of an agreement made by it with
the Government or the Indian concern after the 29th day of February,
1964 but before the 1st day of April, 1976,
and where such agreement has, in either case, been approved by the
Central Government
(ii) on the balance, if any, of the total income
25 per cent. of the total income;
30 per cent. of the total income.
48
Surcharge on income-tax
The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section
111A or section 112 of the Income-tax Act, shall, be increased by a surcharge for the purposes of the Union, calculated,––
(i) in the case of every domestic company,––
(a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of seven per cent. of
such income-tax; and
(b) having a total income exceeding ten crore rupees, at the rate of twelve per cent. of such income-tax;
(ii) in the case of every company other than a domestic company,––
(a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of two per cent. of
such income-tax; and
(b) having a total income exceeding ten crore rupees, at the rate of five per cent. of such income-tax:
Provided that in the case of every company having a total income exceeding one crore rupees but not exceeding ten crore
rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as
income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees:
Provided further that in the case of every company having a total income exceeding ten crore rupees, the total amount payable
as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total
income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.
PART IV
[See section 2(13)(c)]
RULES FOR COMPUTATION OF NET AGRICULTURAL INCOME
Rule 1.—Agricultural income of the nature referred to in sub-clause (a) of clause (1A) of section 2 of the Income-tax Act shall be
computed as if it were income chargeable to income-tax under that Act under the head “Income from other sources” and the
provisions of sections 57 to 59 of that Act shall, so far as may be, apply accordingly:
Provided that sub-section (2) of section 58 shall apply subject to the modification that the reference to section 40A therein shall
be construed as not including a reference to sub-sections (3), (3A) and (4) of section 40A.
Rule 2.—Agricultural income of the nature referred to in sub-clause (b) or sub-clause (c) of clause (1A) of section 2 of the
Income-tax Act [other than income derived from any building required as a dwelling-house by the receiver of the rent or revenue
of the cultivator or the receiver of rent-in-kind referred to in the said sub-clause (c)] shall be computed as if it were income
chargeable to income-tax under that Act under the head “Profits and gains of business or profession” and the provisions of
sections 30, 31, 32, 36, 37, 38, 40, 40A [other than sub-sections (3), (3A) and (4) thereof], 41, 43, 43A, 43B and 43C of the Incometax
Act shall, so far as may be, apply accordingly.
Rule 3.—Agricultural income of the nature referred to in sub-clause (c) of clause (1A) of section 2 of the Income-tax Act, being
income derived from any building required as a dwelling-house by the receiver of the rent or revenue or the cultivator or the
receiver of rent-in-kind referred to in the said sub-clause (c) shall be computed as if it were income chargeable to income-tax under
that Act under the head “Income from house property” and the provisions of sections 23 to 27 of that Act shall, so far as may be,
apply accordingly.
Rule 4.—Notwithstanding anything contained in any other provisions of these rules, in a case—
(a) where the assessee derives income from sale of tea grown and manufactured by him in India, such income shall be
computed in accordance with rule 8 of the Income-tax Rules, 1962, and sixty per cent. of such income shall be regarded as the
agricultural income of the assessee;
(b) where the assessee derives income from sale of centrifuged latex or cenex or latex based crepes (such as pale latex
crepe) or brown crepes (such as estate brown crepe, re-milled crepe, smoked blanket crepe or flat bark crepe) or technically
specified block rubbers manufactured or processed by him from rubber plants grown by him in India, such income shall be
computed in accordance with rule 7A of the Income-tax Rules, 1962, and sixty-five per cent. of such income shall be regarded
as the agricultural income of the assessee;
(c) where the assessee derives income from sale of coffee grown and manufactured by him in India, such income shall be
computed in accordance with rule 7B of the Income-tax Rules, 1962, and sixty per cent. or seventy-five per cent., as the case
may be, of such income shall be regarded as the agricultural income of the assessee.
Rule 5.—Where the assessee is a member of an association of persons or a body of individuals (other than a Hindu undivided
family, a company or a firm) which in the previous year has either no income chargeable to tax under the Income-tax Act or has
total income not exceeding the maximum amount not chargeable to tax in the case of an association of persons or a body of
individuals (other than a Hindu undivided family, a company or a firm) but has any agricultural income then, the agricultural income
or loss of the association or body shall be computed in accordance with these rules and the share of the assessee in the agricultural
income or loss so computed shall be regarded as the agricultural income or loss of the assessee.
10
15
20
25
35
45
5
30
40
50
49
Rule 6.—Where the result of the computation for the previous year in respect of any source of agricultural income is a loss, such
loss shall be set off against the income of the assessee, if any, for that previous year from any other source of agricultural income:
Provided that where the assessee is a member of an association of persons or a body of individuals and the share of the
assessee in the agricultural income of the association or body, as the case may be, is a loss, such loss shall not be set off against
any income of the assessee from any other source of agricultural income.
Rule 7.—Any sum payable by the assessee on account of any tax levied by the State Government on the agricultural income
shall be deducted in computing the agricultural income.
Rule 8.—(1) Where the assessee has, in the previous year relevant to the assessment year commencing on the 1st day of April,
2017, any agricultural income and the net result of the computation of the agricultural income of the assessee for any one or more
of the previous years relevant to the assessment years commencing on the 1st day of April, 2009 or the 1st day of April, 2010 or
the 1st day of April, 2011 or the 1st day of April, 2012 or the 1st day of April, 2013 or the 1st day of April, 2014 or the 1st day of April,
2015 or the 1st day of April, 2016, is a loss, then, for the purposes of sub-section (2) of section 2 of this Act,––
(i) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2009, to
the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2010 or the 1st day of April, 2011 or the 1st day of April, 2012 or the 1st day of April,
2013 or the 1st day of April, 2014 or the 1st day of April, 2015 or the 1st day of April, 2016,
(ii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2010, to
the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2011 or the 1st day of April, 2012 or the 1st day of April, 2013 or the 1st day of April,
2014 or the 1st day of April, 2015 or the 1st day of April, 2016,
(iii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2011, to
the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2012 or the 1st day of April, 2013 or the 1st day of April, 2014 or the 1st day of April,
2015 or the 1st day of April, 2016,
(iv) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2012, to
the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2013 or the 1st day of April, 2014 or the 1st day of April, 2015 or the 1st day of April,
2016,
(v) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2013, to
the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2014 or the 1st day of April, 2015 or the 1st day of April, 2016,
(vi) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2014, to
the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2015 or the 1st day of April, 2016,
(vii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2015,
to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2016,
(viii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2016,
shall be set off against the agricultural income of the assessee for the previous year relevant to the assessment year commencing
on the 1st day of April, 2017.
(2) Where the assessee has, in the previous year relevant to the assessment year commencing on the 1st day of April, 2018, or,
if by virtue of any provision of the Income-tax Act, income-tax is to be charged in respect of the income of a period other than the
previous year, in such other period, any agricultural income and the net result of the computation of the agricultural income of the
assessee for any one or more of the previous years relevant to the assessment years commencing on the 1st day of April, 2010 or
the 1st day of April, 2011 or the 1st day of April, 2012 or the 1st day of April, 2013 or the 1st day of April, 2014 or the 1st day of April,
2015 or the 1st day of April, 2016 or the 1st day of April, 2017, is a loss, then, for the purposes of sub-section (10) of section 2 of
this Act,––
(i) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2010, to
the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2011 or the 1st day of April, 2012 or the 1st day of April, 2013 or the 1st day of April,
2014 or the 1st day of April, 2015 or the 1st day of April, 2016 or the 1st day of April, 2017,
(ii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2011, to
the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2012 or the 1st day of April, 2013 or the 1st day of April, 2014 or the 1st day of April,
2015 or the 1st day of April, 2016 or the 1st day of April, 2017,
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50
(iii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2012, to
the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2013 or the 1st day of April, 2014 or the 1st day of April, 2015 or the 1st day of April,
2016 or the 1st day of April, 2017,
(iv) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2013, to
the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2014 or the 1st day of April, 2015 or the 1st day of April, 2016 or the 1st day of April,
2017,
(v) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2014, to
the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2015 or the 1st day of April, 2016 or the 1st day of April, 2017,
(vi) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2015, to
the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2016 or the 1st day of April, 2017,
(vii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2016,
to the extent, if any, such loss has not been set off against the agricultural income for the previous year relevant to the assessment
year commencing on the 1st day of April, 2017,
(viii) the loss so computed for the previous year relevant to the assessment year commencing on the 1st day of April, 2017,
shall be set off against the agricultural income of the assessee for the previous year relevant to the assessment year commencing
on the 1st day of April, 2018.
(3) Where any person deriving any agricultural income from any source has been succeeded in such capacity by another
person, otherwise than by inheritance, nothing in sub-rule (1) or sub-rule (2) shall entitle any person, other than the person
incurring the loss, to have it set off under sub-rule (1) or, as the case may be, sub-rule (2).
(4) Notwithstanding anything contained in this rule, no loss which has not been determined by the Assessing Officer under the
provisions of these rules or the rules contained in the First Schedule to the Finance (No. 2) Act, 2009 (33 of 2009) or the First
Schedule to the Finance Act, 2010 (14 of 2010) or the First Schedule to the Finance Act, 2011 (8 of 2011) or the First Schedule to
the Finance Act, 2012 (23 of 2012) or the First Schedule to the Finance Act, 2013 (17 of 2013) or the First Schedule to the Finance
(No. 2) Act, 2014 (25 of 2014) or the First Schedule to the Finance Act, 2015 (20 of 2015) or the First Schedule to the Finance Act,
2016 (28 of 2016) shall be set off under sub-rule (1) or, as the case may be, sub-rule (2).
Rule 9.—Where the net result of the computation made in accordance with these rules is a loss, the loss so computed shall be
ignored and the net agricultural income shall be deemed to be nil.
Rule 10.—The provisions of the Income-tax Act relating to procedure for assessment (including the provisions of section 288A
relating to rounding off of income) shall, with the necessary modifications, apply in relation to the computation of the net agricultural
income of the assessee as they apply in relation to the assessment of the total income.
Rule 11.—For the purposes of computing the net agricultural income of the assessee, the Assessing Officer shall have the
same powers as he has under the Income-tax Act for the purposes of assessment of the total income.
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THE SECOND SCHEDULE
[See section 109(a)]
In the First Schedule to the Customs Tariff Act,––
(a) in Chapter 20, for the entry in column (4) occurring against tariff item 2008 19 10, the entry “45%” shall be substituted;
(b) in Chapter 84, for the entry in column (4) occurring against tariff item 8421 99 00, the entry “10%” shall be substituted.
THE THIRD SCHEDULE
[See section 109(b)]
In the First Schedule to the Customs Tariff Act,––
Tariff item Description of goods. Unit Rate of Duty
Standard Preferential
(1) (2) (3) (4) (5)
(1) in Chapter 11, for tariff item 1106 10 00 and the entries relating thereto, the following shall be substituted, namely:—
“1106 10 – Of the dried leguminous vegetables of heading 0713
1106 10 10 — Guar Meal kg. 30% –
1106 10 90 — Others kg. 30% -”;
(2) in Chapter 13, tariff items 1302 32 10 and 1302 32 20 and the entries relating thereto shall be omitted;
(3) in Chapter 15, after tariff item 1511 90 20 and the entries relating thereto, the following tariff item and entries shall be
inserted, namely:––
“1511 90 30 — Refined bleached deodorised palm stearin kg. 100% 90%”;
(4) in Chapter 38,––
(a) in heading 3823, for sub-heading 3823 11 and tariff items 3823 11 11 to 3823 11 90 and the entries relating thereto, the
following shall be substituted, namely:––
“3823 11 00 — Stearic acid kg. 30% -”;
(b) in heading 3824, against tariff item 3824 88 00 , in column (2), for the words “hexa-hepta-”, the words “ hexa-, hepta-”
shall be substituted;
(5) in Chapter 39, in heading 3904, for sub-heading 3904 00 and tariff items 3904 10 10 and 3904 10 90, sub-heading
3904 21, tariff items 3904 21 10 and 3904 21 90 and sub-heading 3904 22, tariff items 3904 22 10 and 3904 22 90 and the entries
relating thereto, the following shall be substituted, namely:––
“3904 10 – Poly (vinyl chloride), not mixed with any other substances:
3904 10 10 — Emulsion grade PVC resin / PVC Paste resin/ PVC
dispersion resin kg. 10% –
3904 10 20 — Suspension grade PVC resin kg. 10% –
3904 10 90 — Other kg. 10% –
– Other poly (vinyl chloride), mixed with other substances:
3904 21 00 — Non-plasticised kg. 10% –
3904 22 00 — Plasticised kg. 10% -”;
(6) in Chapter 44, against tariff item 4401 22 00, in column (2), for the words “agglomerated, in logs”, the words “agglomerated
in logs” shall be substituted;
(7) in Chapter 48, in Note 4, for the word “apply”, the word “applies” shall be substituted;
(8) in Chapter 54, tariff items 5402 59 10 and 5402 69 30 and the entries relating thereto shall be omitted;
(9) in Chapter 63, in sub-heading Note, for the words “from fabrics”, the words “from warp knit fabrics” shall be substituted;
(10) in Chapter 98,––
(i) in Chapter Note 4, for clauses (b) and (c), the following clauses shall be substituted, namely:––
“(b) alcoholic beverages; and
(c) tobacco and manufactured products thereof.”;
(ii) for the entry in column (2) occurring against heading 9804, the entry “All dutiable goods imported for personal use” shall
be substituted.
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THE FOURTH SCHEDULE
(See section 110)
In the Second Schedule to the Customs Tariff Act, after Sl. No. 23B and the entries relating thereto, the following Sl. No. and
entries shall be inserted, namely:—
(1) (2) (3) (4)
“23C 2606 00 90 Other aluminium ores and concentrates 30%”.
THE FIFTH SCHEDULE
(See section 118)
In the First Schedule to the Central Excise Tariff Act, in Chapter 24,––
(a) for the entry in column (4) occurring against tariff items 2402 10 10 and 2402 10 20, the entry “12.5% or Rs.4006 per
thousand, whichever is higher” shall be substituted;
(b) for the entry in column (4) occurring against tariff item 2402 90 10, the entry “Rs.4006 per thousand” shall be substituted;
(c) for the entry in column (4) occurring against tariff items 2402 90 20 and 2402 90 90, the entry “12.5% or Rs.4006 per
thousand, whichever is higher” shall be substituted.
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THE SIXTH SCHEDULE
(See section 128)
Sl. No. Provisions of the Amendment Period of effect of
Service Tax amendment
(Determination of
Value) Rules, 2006
to be amended
(1) (2) (3) (4)
In the Service Tax (Determination of Value) Rules, 2006, in
rule 2A,––
(I) in sub-rule (1), in clause (i), after the words “value of
transfer of property in goods”, the words “or in goods and
land or undivided share of land, as the case may be,” shall
be inserted;
(II) after sub-rule (1), the following sub-rule shall be
inserted, namely:-
“(2) Where the value has not been determined under
sub-rule (1) and the gross amount charged includes the
value of goods as well as land or undivided share of land,
the service tax shall be payable on twenty-five per cent.
of the gross amount charged for the works contract, subject
to the following conditions, namely:––
(i) the CENVAT Credit of duty paid on inputs or capital
goods or the CENVAT Credit of service tax on input
services, used for providing such taxable service, has
not been taken under the provisions of the CENVAT
Credit Rules, 2004;
(ii) the service provider has not availed the benefit
under the notification of the Government of India in the
Ministry of Finance (Department of Revenue), No. 12/
2003-Service Tax, dated the 20th June, 2003 [G.S.R.
503(E), dated the 20th June, 2003].
Explanation.––For the purposes of this sub-rule, the
gross amount charged shall include the value of goods
and materials supplied or provided or used for
providing the taxable service by the service provider.”.
In the Service Tax (Determination of Value) Rules, 2006, in
rule 2A,––
(I) in clause (i), after the words “value of property in goods”,
the words “or in goods and land or undivided share of land,
as the case may be,” shall be inserted;
(II) in clause (ii), in sub-clause (A),––
(a) the following proviso shall be inserted, namely:––
“Provided that where the amount charged for works
contract includes the value of goods as well as land or
undivided share of land, the service tax shall be
payable on twenty-five per cent. of the total amount
charged for the works contract.”;
Rule 2A as inserted by
notification number G.S.R.
375(E), dated the 22nd
May, 2007 [29/2007–
Service Tax, dated the
22nd May, 2007].
Rule 2A as substituted by
notification number G.S.R.
431(E), dated the
6th June, 2012. [24/
2012– Service Tax, dated
the 6th June, 2012].
1st day of July, 2010 to 30th
day of June, 2012 (both
days inclusive).
1st day of July, 2010 to 30th
day of June, 2012 (both
days inclusive).
1st day of July, 2012
onwards.
1st day of July, 2012 to 28th
day of February, 2013
(both days inclusive).
1.
2.
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Sl. No. Provisions of the Amendment Period of effect of
Service Tax amendment
(Determination of
Value) Rules, 2006
to be amended
(1) (2) (3) (4)
(b) for the proviso, the following provisos shall be substituted,
namely:––
“Provided that where the amount charged for works
contract includes the value of goods as well as land or
undivided share of land, the service tax shall be payable on
thirty per cent. of the total amount charged for the works
contract:
Provided further that in case of works contract for
construction of residential units having carpet area up to
2000 square feet or where the amount charged per
residential unit from service recipient is less than rupees
one crore and the amount charged for the works contract
includes the value of goods as well as land or undivided
share of land, the service tax shall be payable on twenty-five
per cent. of the total amount charged for the works contract.”;
(c) for the provisos, the following provisos shall be
substituted, namely:––
“Provided that where the amount charged for works
contract includes the value of goods as well as land or
undivided share of land, the service tax shall be payable on
thirty per cent. of the total amount charged for the works
contract:
Provided further that in case of works contract for
construction of residential units having carpet area up to
2000 square feet and where the amount charged per
residential unit from service recipient is less than rupees
one crore and the amount charged for the works contract
includes the value of goods as well as land or undivided
share of land, the service tax shall be payable on twenty-five
per cent. of the total amount charged for the works contract.”;
(d) for the provisos, the following proviso shall be substituted,
namely:––
“Provided that where the amount charged for works
contract includes the value of goods as well as land or
undivided share of land, the service tax shall be payable on
thirty per cent. of the total amount charged for the works
contract.”.
1st day of March, 2013
to 7th day of May, 2013
(both days inclusive).
8th day of May, 2013 to
31st day of March, 2016
(both days inclusive).
1st day of April, 2016
onwards.
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30
35
40
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THE SEVENTH SCHEDULE
(See section 146)
In the Seventh Schedule to the Finance Act, 2005,––
(a) for the entry in column (4) occurring against tariff item 2402 20 10, the entry “Rs.311 per thousand” shall be substituted;
(b) for the entry in column (4) occurring against tariff item 2402 20 20, the entry “Rs.541 per thousand” shall be substituted;
(c) for the entry in column (4) occurring against tariff item 2402 20 30, the entry “Rs.311 per thousand” shall be substituted;
(d) for the entry in column (4) occurring against tariff item 2402 20 40, the entry “Rs.386 per thousand” shall be substituted;
(e) for the entry in column (4) occurring against tariff item 2402 20 50, the entry “Rs.541 per thousand” shall be substituted;
(f) for the entry in column (4) occurring against tariff item 2402 20 90, the entry “Rs.811 per thousand” shall be substituted;
(g) for the entry in column (4) occurring against tariff items 2403 99 10, 2403 99 30 and 2403 99 90, the entry “12%” shall be
substituted.
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10
STATEMENT OF OBJECTS AND REASONS
The object of the Bill is to give effect to the financial proposals of the
Central Government for the financial year 2017-2018. The notes on clauses
explain the various provisions contained in the Bill.
ARUN JAITLEY.
NEW DELHI;
The 28th January, 2017.
—————
PRESIDENT’S RECOMMENDATION UNDER ARTICLES 117 AND 274 OF THE
CONSTITUTION OF INDIA
[Copy of letter No.F.2(1)-B(D)/2017, dated the 28th January, 2017 from
Shri Arun Jaitley, Minister of Finance, to the Secretary-General, Lok Sabha.]
The President, having been informed of the subject matter of the proposed
Bill, recommends, under clauses (1) and (3) of article 117, read with clause (1)
of article 274, of the Constitution of India, the introduction of the Finance Bill,
2017 to the Lok Sabha and also recommends to the Lok Sabha the consideration
of the Bill.
2. The Bill will be introduced in the Lok Sabha immediately after the
presentation of the Budget on the 1st February, 2017.
58
59
Notes on clauses
59
Income-tax
Clause 2, read with the First Schedule to the Bill, specifies
the rates at which income- tax is to be levied on income
chargeable to tax for the assessment year 2017-2018.
Further, it lays down the rates at which tax is to be deducted
at source during the financial year 2017-2018 from income
other than “Salaries” subject to such deductions under the
Income-tax Act; and the rates at which “advance tax” is to
be paid, tax is to be deducted at source from, or paid on,
income chargeable under the head “Salaries” and tax is to
be calculated and charged in special cases for the financial
year 2017-2018.
Rates of income-tax for the assessment year 2017-2018
Part I of the First Schedule to the Bill specifies the rates at
which income is liable to tax for the assessment year 2017-
18. These rates are the same as those specified in Part Ill of
the First Schedule to the Finance Act, 2016 as amended by
the Taxation Laws (Second Amendment) Act, 2016 (48 of
2016), for the purposes of deduction of tax at source from
“Salaries”, computation of “advance tax” and charging of
income-tax in special cases during the financial year 2016-
2017.
Rates for deduction of tax at source during the financial
year 2017-2018 from income other than “Salaries”
Part II of the First Schedule to the Bill specifies the rates
at which income-tax is to be deducted at source during the
financial year 2017-2018 from income other than “Salaries”.
The rates are the same, as those specified in Part II of the
First Schedule to the Finance Act, 2016 for the purposes of
deduction of income tax at source during the financial year
2016-2017.
The amount of tax so deducted shall be increased by a
surcharge in the case of—
(i) every non-resident being an individual or Hindu
undivided family or association of persons or body of
individuals, whether incorporated or not, or every artificial
juridical person referred to in sub-clause (vii) of clause
(31) of section 2 of the Income-tax Act,—
(a) at the rate of ten per cent. of such tax, where the
income or the aggregate of income paid or likely to be
paid and subject to deduction exceeds fifty lakh rupees
but does not exceed one crore rupees;
(b) at the rate of fifteen per cent. of such tax, where
the income or the aggregate of income paid or likely to
be paid and subject to deduction exceeds one crore
rupees;
(ii) every non-resident being a co-operative society or
firm or local authority at the rate of twelve per cent. where
the income or the aggregate of income paid or likely to be
paid and subject to deduction exceeds one crore rupees;
(iii) every company other than a domestic company at
the rate of two per cent. where the income or the aggregate
of income paid or likely to be paid and subject to deduction
exceeds one crore rupees but does not exceed ten crore
rupees;
(iv)every company other than a domestic company
at the rate of five per cent. where the income or the
aggregate of income paid or likely to be paid and subject
to deduction exceeds ten crore rupees.
Rates for deduction of tax at source from “Salaries”,
computation of “advance tax” and charging of income-tax
in special cases during the financial year 2017-2018
Part III of the First Schedule to the Bill specifies the rates
at which income-tax is to be deducted at source from, or
paid on, income under the head “Salaries” and also the rates
at which “advance tax” is to be paid and income-tax is to be
calculated or charged in special cases for the financial year
2017-2018.
Paragraph A of this Part specifies the rates of income-tax
as under:—
(i) in the case of every individual [other than those
specifically mentioned in sub-paras (ii) and (iii)] or Hindu
undivided family or every association of persons or body
of individuals, whether incorporated or not, or every
artificial juridical person referred to in sub-clause (vii) of
clause (31) of section 2 of the Income-tax Act, not being a
case to which any other Paragraph of this Part applies:—
Up to Rs. 2,50,000 Nil
Rs. 2,50,001 to Rs. 5,00,000 5 per cent.
Rs. 5,00,001 to Rs. 10,00,000 20 per cent.
Above Rs. 10,00,000 30 per cent.;
(ii) In the case of every individual, being a resident in
India, who is of the age of sixty years or more but less
than the age of eighty years at any time during the previous
year:—
Up to Rs. 3,00,000 Nil
Rs. 3,00,001 to Rs. 5,00,000 5 per cent.
Rs. 5,00,001 to Rs. 10,00,000 20 per cent.
Above Rs. 10,00,000 30 per cent.;
(iii)In the case of every individual, being a resident in
India, who is of the age of eighty years or more at any
time during the previous year:—
Up to Rs. 5,00,000 Nil
Rs. 5,00,001 to Rs. 10,00,000 20 per cent.
Above Rs. 10,00,000 30 per cent.
60
The surcharge in cases of persons referred to in this
paragraph, having total income above fifty lakh but not above
one crore rupees, shall be levied at the rate of ten per cent.
In cases of persons referred to in this paragraph, having
total income above one crore rupees, surcharge shall be
levied at the rate of fifteen per cent. Marginal relief will be
provided.
Paragraph B of this Part specifies the rates of income-tax
in the case of every co-operative society. In such cases, the
rates of tax will continue to be the same as those specified
for assessment year 2017-2018. The surcharge in cases of
co-operative societies, having income above one crore
rupees shall be levied at the rate of twelve per cent. Marginal
relief will be provided.
Paragraph C of this Part specifies the rate of income-tax
in the case of every firm. In such cases, the rate of tax will
continue to be the same as that specified for assessment
year 2017-2018. The surcharge in cases of firms, having
income above one crore rupees shall be levied at the rate of
twelve per cent. Marginal relief will be provided.
Paragraph D of this Part specifies the rate of income-tax
in case of every local authority. In such cases, the rate of tax
will continue to be the same as that specified for the
assessment year
2017-2018. The surcharge in cases of local authorities,
having income above one crore rupees shall be levied at the
rate of twelve per cent. Marginal relief will be provided.
Paragraph E of this Part specifies the rates of income-tax
in case of companies. In the case of domestic companies
the rate of income-tax shall be twenty-five per cent. of the
total income where the total turnover or gross receipts of
previous year 2015-2016 does not exceed fifty crore rupees
and in all other cases the rate of income-tax shall be thirty
per cent. of the total income. In the case of companies other
than domestic companies, the rate of tax will continue to be
the same as that specified for assessment year 2017-2018.
Surcharge in the case of domestic companies having total
income above one crore rupees but not above ten crore
rupees shall be levied at the rate of seven per cent. In the
case of domestic companies having total income above ten
crore rupees, surcharge shall be levied at the rate of twelve
per cent. In the case of companies other than domestic
companies having income above one crore rupees but not
above ten crore rupees, surcharge shall be levied at the rate
of two per cent. In the case of companies other than domestic
companies having total income above ten crore rupees,
surcharge shall be levied at the rate of five per cent. Marginal
relief will be provided.
In all other cases (including sections 115-O, 115QA, 115R,
115TA, 115TD, etc.), the surcharge will be applicable at the
rate of twelve per cent.
“Education Cess” at the rate of two per cent. and
“Secondary and Higher Education Cess” at the rate of one
per cent. shall continue to be levied in all cases covered
under Part III of the First Schedule. In the cases covered
under Part II of the First Schedule, there will be no levy of
the Education Cess and Secondary and Higher Education
Cess on tax deducted or collected at source in the case of
domestic company and any other person who is resident in
India. Both the cesses would continue to apply on tax
deducted at source in the case of salary payments. These
would also continue to be levied in the cases of persons not
resident in India and companies other than domestic
company.
Clause 3 of the Bill seeks to amend section 2 of the Incometax
Act relating to definitions.
The existing provisions contained in clause (42A) of the
said section defines the expression “short-term capital asset”
to be a capital asset held by an assessee for not more than
thirty-six months immediately preceding the date of its
transfer. Further Explanation 1 of the said clause provides
for determining the period for which the capital asset is held
by the assessee.
It is proposed to amend the third proviso to the said clause
so as to provide that in the case of an immovable property
being land or building or both, the aforesaid period of holding
shall be less than twenty-four months for it to be treated as
short term capital asset.
It is also proposed to insert a new sub-clause (hf) in
Clause (i) of Explanation 1 of the said clause so as to provide
that in the case of a capital asset being equity shares in a
company, which becomes the property of the assessee in
consideration of a transfer referred to in clause (xb) of section
47, there shall be included the period for which the preference
shares were held by the assessee.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
It is also proposed to amend clause (i) of the said
Explanation to insert clause (hg) so as to provide that in the
case of a capital asset, being a unit or units, which becomes
the property of the assessee in consideration of a transfer
referred to in clause (xix) of section 47, there shall be included
the period for which the unit or units in the consolidating
plan of the mutual fund scheme were held by the assessee.
This amendment will take effect from 1st April, 2017 and
will, accordingly, apply in relation to the assessment year
2017-2018 and subsequent years.
Clause 4 of the Bill seeks to amend section 9 of the Incometax
Act relating to income deemed to accrue or arise in India.
Clause (i) of sub-section (1) of the said section provides
that certain incomes mentioned therein shall be deemed to
accrue or arise in India. Explanation 5 to the said clause
provides that an asset or capital asset being any share or
interest in a company or entity registered or incorporated
61
outside India shall be deemed to be and shall always be
deemed to have been situated in India, if the share or interest
derives, directly or indirectly, its value substantially from the
assets located in India.
It is proposed to insert a new Explanation 5A so as to
clarify that the Explanation 5 shall not apply to an asset or
capital asset mentioned therein and held by a non-resident
by way of investment, directly or indirectly, in a Foreign
Institutional Investor, as referred to in clause (a) of the
Explanation to section 115AD, and registered as Category-
I or Category-II foreign portfolio investor under the Securities
and Exchange Board of India (Foreign Portfolio Investors)
Regulations, 2014 made under the Securities and Exchange
Board of India Act, 1992. The proposed amendment is
clarificatory in nature.
This amendment will take effect retrospectively from 1st
April, 2012 and will, accordingly, apply in relation to the
assessment year 2012-2013 and subsequent years.
Clause 5 of the Bill seeks to amend section 9A of the
Income-tax Act relating to certain activities not to constitute
business connection in India.
Sub-section (3) of the said section 9A provides for the
conditions to be fulfilled for being an eligible investment fund.
Clause (j) of the said sub-section and the proviso provides
that the monthly average of the corpus of the fund shall not
be less than one hundred crore rupees except where the
fund has been established or incorporated in the previous
year, in which case, the corpus of fund shall not be less than
one hundred crore rupees at the end of such previous year.
It is proposed to insert another proviso to clause (j) of the
said sub-section so as to provide that the provisions of the
said clause shall not be applicable to a fund which has been
wound up in the previous year.
This amendment will take effect retrospectively from 1st
April, 2016 and will, accordingly, apply in relation to the
assessment year 2016-2017 and subsequent years.
Clause 6 of the Bill seeks to amend section 10 of the
Income-tax Act relating to incomes not included in total
income.
The existing provisions contained in the said section
provide that in computing the total income of a previous year
of any person, certain categories of income shall not be
included in total income.
Further, sub-clause (ii) of clause (4) of the said section
refers to any income of an individual by way of interest on
moneys standing to his credit in a Non-Resident (External)
Account in any bank in India in accordance with the Foreign
Exchange Management Act, 1999 (42 of 1999), and the
rules made thereunder. The proviso to the said sub-clause
refers individual to be a person resident outside India, as
defined in clause (q) of section 2 of Act 46 of 1973, which
stands repealed and re-enacted as Act 42 of 1999. The
definition of person outside India is occurring in clause (w)
of Act 42 of 1999.
It is proposed to amend the proviso to sub-clause (ii) of
clause (4) of the said section so as to reflect the correct
definition of the expression “person resident outside India”
and is clarificatory in nature.
This amendment will take effect retrospectively from 1st
April, 2013, the date on which sub-clause (ii) of clause (4) of
the said section was brought into force.
Further, clause (12A) of the said section provides
exemption up to forty per cent. of the total amount payable
from National Pension System Trust paid to an employee at
the time of closure or his opting out of the scheme.
It is also proposed to insert a new clause (12B) in the said
section so as to provide exemption from tax at the time of
partial withdrawal by an employee from National Pension
System Trust in accordance with the terms and conditions
specified under Pension Fund Regulatory Development
Authority Act, 2013 and regulations made thereunder, to the
extent it does not exceed twenty-five per cent. of the amount
of contributions made by him.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
The provisions contained in clause (23C) of the said
section, provide exemption in respect of income of certain
funds which, inter alia, include, the Prime Minister’s National
Relief Fund. However, the Chief Minister’s Relief Fund or
the Lieutenant Governor’s Relief Fund referred to in subclause
(iiihf) of clause (a) of sub-section (2) of section 80G,
are not exempt under the said clause (23C).
It is further proposed to insert a new sub-clause (iiiaaaa)
in clause (23C) so as to provide the benefit of exemption
also to the Chief Minister’s Relief Fund or the Lieutenant
Governor’s Relief Fund.
This amendment will take effect retrospectively from 1st
April, 1998, the date on which sub-clause (iiihf) of clause (a)
of sub-section (2) of section 80G relating to deduction in any
sum paid to the Chief Minister’s and Lieutenant Governor’s
Relief Fund came into force, and will, accordingly, apply in
relation to assessment year 1998-1999 and subsequent
years.
Clause (23C) of said section provides that donations made
by entities referred to in sub-clause (iv) or sub-clause (v) or
sub-clause (vi) or sub-clause (via) to any trust or institution
registered under section 12AA, except those made out of
accumulated income, is considered as application of income
for the purposes of its objects.
It is also proposed to insert a new proviso in the said clause
(23C) so as to provide restriction in respect of any amount
credited or paid out of income, being voluntary contributions
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with specific direction that they shall form part of the corpus,
to any trust or institution registered under section 12AA by
not treating the said contribution of amount as application of
income to the objects of such entities.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
It is also proposed to insert a new clause (37A) in the said
section so as to provide that any income chargeable under
the head “Capital gains” in respect of transfer of a specified
capital asset arising to an assessee, being an individual or a
Hindu undivided family, was the owner of such specified
capital asset as on the 2nd June, 2014 and transfers such
land under the Land Pooling Scheme covered under the
Andhra Pradesh Capital City Land Pooling Scheme
(Formulation and Implementation) Rules, 2015 made under
the provisions of the Andhra Pradesh Capital Region
Development Authority Act, 2014 and the rules, regulations
and schemes made under the said Act, shall not be included
in the total income of the assessee. It is also proposed to
clarify the term “specified capital asset” in this regard.
This amendment will take effect retrospectively from 1st
April, 2015 and will, accordingly, apply in relation to the
assessment year 2015-2016 and subsequent years.
Clause 38 of the said section, inter alia, provides for an
exemption from tax on the income arising from the transfer
of a long-term capital asset, being an equity share in a
company or a unit of an equity oriented fund or a unit of a
business trust, where such transaction is chargeable to
securities transaction tax under Chapter VII of the Finance
(No.2) Act, 2004.
It is proposed to amend the said clause (38) so as to
provide that any income arising from the transfer of a long
term capital asset, being an equity share in a company shall
not be exempted, if the transaction of acquisition, other than
the acquisition notified by the Central Government in this
behalf, of such equity share is entered into on or after the 1st
day of October, 2004 and such transaction is not chargeable
to securities transaction tax under Chapter VII of the Finance
(No. 2) Act, 2004.
Clause (48A) of said section provides that any income
accruing or arising to a foreign company on account of
storage of crude oil in a facility in India and sale of crude oil
therefrom to any person resident in India shall be exempt, if
the said storage and sale is pursuant to an agreement or an
arrangement entered into by the Central Government or
approved by the Central Government; and having regard to
the national interest, the said foreign company and the said
agreement or arrangement is notified by the Central
Government in that behalf.
It is also proposed to insert a new clause (48B) in the said
section so as to provide for exemption of any income accruing
or arising to a foreign company on account of sale of leftover
stock of crude oil, if any, from the facility in India after the
expiry of the agreement or the arrangement referred to in
clause (48A), subject to such conditions as may be notified
by the Central Government in this behalf.
These amendments will take effect, from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
Clause 7 of the Bill seeks to amend section 10AA of the
Income-tax Act relating to special provisions in respect of
newly established Units in Special Economic Zones.
Under the existing provisions of the said section, deduction
for fifteen consecutive years is provided from the total income
of an assessee in respect of profits and gains from his Unit
operating in Special Economic Zone which are engaged in
manufacturing or production of articles or things or providing
any services, subject to fulfilment of the conditions mentioned
in that section.
It is proposed to insert a new Explanation after sub-section
(1) of the said section so as to provide that the amount of
deduction referred to in that section shall be allowed from
the total income of the assessee computed in accordance
with the provisions of the Income-tax Act, before giving effect
to the provisions of the said section and the deduction under
the said section shall not exceed such total income of the
assessee.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 8 of the Bill seeks to amend section 11 of the
Income-tax Act relating to income from property held for
charitable or religious purposes.
Sub-section (1) of the said section provides that voluntary
contributions made by a trust to any other trust or institution,
except those made out of accumulated income, is considered
as application of income for the purposes of its objects.
It is proposed to insert a new Explanation 2 under the said
sub-section so as to provide that in respect of any amount
credited or paid, out of income referred to in clause (a) or
clause (b) read with Explanation 1, being contributions with
a specific direction that they shall form part of the corpus of
the trust or institution shall not be treated as application of
such contribution to charitable or religious purposes.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply to the assessment year 2018-2019
and subsequent years.
Clause 9 of the Bill seeks to amend section 12A of the
Income-tax Act relating to conditions for applicability of
sections 11 and 12.
It is proposed to insert a new clause (ab) in sub-section
(1) of said section so as to provide another condition for
applicability of sections 11 and 12, where a trust or an
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institution has been granted registration under section 12AA
or has obtained registration at any time under section 12A
[as it stood before its amendment by the Finance (No. 2)
Act, 1996], and, subsequently, it has adopted or undertaken
modification of the objects which do not conform to the
conditions of registration, it shall be required to make an
application for registration in the prescribed form and manner,
within a period of thirty days from the date of such adoption
or modification in the objects, and that it is registered under
section 12AA.
It is also proposed to insert a new clause (c) in sub-section
(1) of the said section so as to provide that the person in
receipt of the income shall furnish the return of income
referred to in sub-section (4A) of section 139 within the time
allowed under that section.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to assessment year
2018-2019 and subsequent years.
Clause 10 of the Bill seeks to amend section 12AA of the
Income-tax Act relating to procedure for registration.
It is proposed to amend sub-sections (1) and (2) of the
said section so as to give reference of newly inserted clause
(ab) in section 12A .
The proposed amendment is consequential in nature.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to assessment year 2018-
2019 and subsequent years.
Clause 11 of the Bill seeks to amend section 13A of the
Income-tax Act relating to special provision relating to
incomes of political parties.
Section 13A of the Income-tax Act, inter alia, provides that
any income of a political party which is chargeable under
the head “Income from house property” or” Income from other
sources” or “Capital gains” or any income by way of voluntary
contributions received by a political party from any person
shall be excluded in computing the total income of the
previous year of such political party subject to the conditions
that such political party keeps and maintains such books of
account and other documents, maintains a record of
voluntary contribution in excess of twenty thousand rupees
and the accounts are audited by an accountant as defined in
the Explanation below sub-section (2) of section 288 and
furnishes a report under sub-section (3) of section 29C of
the Representation of the People Act,1951 to the Election
Commission.
It is proposed to amend the said section so as to provide,
inter alia, that political party shall be eligible for exemption of
income-tax under section 13A if,—
(i) no donation exceeding two thousand rupees is
received otherwise than by an account payee cheque
drawn on a bank or an account payee bank draft or use of
electronic clearing system through a bank account or
through electoral bond;
(ii) it furnishes a return of income for the previous year
in accordance with the provisions of sub-section (4B) of
section 139 on or before the due date as per section 139.
It is further proposed to provide that any contributions
received by way of electoral bond shall be excluded from
reporting as per clause (b) of said section.
It is also proposed to define the expression “electoral
bond”.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
Clause 12 of the Bill seeks to amend section 23 of the
Income-tax Act relating to annual value how determined.
It is proposed to insert a new sub-section (5) in the said
section so as to provide that where the property consisting
of any building and land appurtenant thereto is held as stockin-
trade and the property or any part of the property is not let
during the whole or any part of the previous year, the annual
value of such property or part of the property, for the period
up to one year from the end of the financial year in which the
certificate of completion of construction of the property is
obtained from the competent authority, shall be taken to be
nil.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 13 of the Bill seeks to amend section 35AD of the
Income-tax Act relating to deduction in respect of expenditure
on specified business.
The existing provisions of the said section provides that
deduction in respect of the whole of any expenditure of capital
nature incurred, wholly and exclusively, for the purposes of
any specified business carried on during the previous year
in which such expenditure is incurred, is allowed to an
assessee. Clause (f) of sub-section (8) of the said section
provides for exclusion of any expenditure incurred on the
acquisition of any land or goodwill or financial instrument
from the purview of expenditure of capital nature accordingly,
not be allowed as deduction.
It is proposed to amend the said clause (f) so as to provide
that any expenditure in respect of which a payment or
aggregate of payments made to a person in a day, otherwise
than by an account payee cheque drawn on a bank or an
account payee bank draft or use of electronic clearing system
through a bank account, exceeds ten thousand rupees, no
deduction shall be allowed in respect of such expenditure
also.
64
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 14 of the Bill seeks to amend section 36 of the
Income-tax Act relating to other deductions.
The provisions of sub-clause (a) of clause (viia) of subsection
(1) of the said section, inter alia, provide that a
scheduled bank (not being a bank incorporated by or under
the laws of a country outside India) or a non-scheduled bank
or a co-operative bank other than a primary agricultural credit
society or a primary co-operative agricultural and rural
development bank, shall be allowed deduction in respect of
provision for bad and doubtful debts. Further, the amount of
such deduction is limited to seven and one-half per cent. of
the amount of the total income (computed before making
any deduction under the said clause and Chapter VIA) and
an amount not exceeding ten per cent. of the aggregate
average advances made by the rural branches of such bank
computed in the prescribed manner.
It is proposed to amend the provisions of said sub-clause
so as to enhance the limit from seven and one-half per cent.
to eight and one-half per cent. of the amount of the total income
(computed before making any deduction under the said clause
and Chapter VIA).
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 15 of the Bill seeks to amend section 40A of the
lncome -tax Act relating to expenses or payments not
deductible in certain circumstances.
Sub-section (3) of the said section provides that where
the assessee incurs any expenditure in respect of which
payment exceeding twenty thousand rupees is made
otherwise than by an account payee cheque drawn on a bank
or account payee bank draft to a person in a single day, no
deduction shall be allowed in respect of such expenditure.
It is proposed to amend the said sub-section so as to
provide that where the payments or aggregate of payments
in a day to a person otherwise than by an account payee
cheque or account payee bank draft or use of electronic
clearing system through a bank account, exceeds ten
thousand rupees in a day, no deduction shall be allowed
under the said sub-section or, as the case may be, such
payment shall be deemed to be the profits and gains of
business or profession of the assessee.
Consequential amendments are also proposed to be made
in sub-sections (3A) and (4) of the said section.
It is also proposed to amend the proviso to clause (a) of
sub-section (2) which is consequential to the amendments
proposed in section 92BA.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-20l9 and subsequent years.
Clause 16 of the Bill seeks to amend section 43 of the
Income-tax Act relating to definitions of certain terms relevant
to income from profits and gains of business or profession.
Clause (1) of the said section provides for the definition of
“actual cost” for the purposes of claiming depreciation under
section 32 of the Act.
It is proposed to insert a proviso before Explanation 1 of
clause (1) of said section so as to provide that where the
assessee incurs any expenditure for acquisition of any asset
in respect of which a payment or aggregate of payments
made to a person in a day, otherwise than by an account
payee cheque drawn on a bank or an account payee bank
draft or use of electronic clearing system through a bank
account, exceeds ten thousand rupees, such expenditure
shall be ignored for the purposes of determination of actual
cost.
It is also proposed to insert a proviso in Explanation 13
of clause (1) of the said section so as to provide that where
any capital asset in respect of which deduction or part of
deduction allowed under section 35AD is deemed to be the
income of the assessee in accordance with the provisions of
sub-section (7B) of the said section, the actual cost of the
asset to the assessee shall be the actual cost to the assessee,
as reduced by an amount equal to the amount of depreciation
calculated at the rate in force that would have been allowable
had the asset been used for the purposes of business since
the date of its acquisition.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 17 of the Bill seeks to amend section 43B of the
Income-tax Act relating to certain deductions to be only on
actual payment.
The said section inter alia, provides that any sum payable
by the assessee by way of tax, cess, duty or fee, or interest
on any loan or borrowing from any scheduled bank or public
financial institution, etc., shall be allowed as deduction of
the previous year in which the liability to pay such sum was
incurred (relevant previous year) and if the same is actually
paid on or before the due date of furnishing of the return of
income.
It is proposed to amend the said section so as to provide
that any sum payable by the assessee as interest on any
loan or advances from a co-operative bank other than a
primary agricultural credit society or a primary co-operative
agricultural and rural development bank shall also be allowed
as deduction, if it is actually paid on or before the due date of
furnishing the return of income of the relevant previous year.
It is further proposed to include the definitions of the
expressions “co-operative bank”, “primary agricultural credit
65
society” and “primary co-operative agricultural and rural
development bank” in the said section.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
Clause 18 of the Bill seeks to amend section 43D of the
Income-tax Act relating to special provision in case of income
of public financial institutions, public companies, etc.
The said section inter alia, provides that interest income
in relation to certain categories of bad or doubtful debts
received by certain institutions or banks or corporations or
companies, as referred to in the Explanation to the said
section, shall be chargeable to tax in the previous year in
which it is credited to its profit and loss account for that year
or actually received, whichever is earlier.
It is proposed to amend the said section so as to provide
that the interest income in relation to certain categories of
bad or doubtful debts received by a co-operative bank other
than a primary agricultural credit society or a primary cooperative
agricultural and rural development bank shall also
be chargeable to tax in the previous year in which it is credited
to its profit and loss account for that year or actually received,
whichever is earlier.
It is further proposed to include the definitions of the
expressions “co-operative bank”, “primary agricultural credit
society” and “primary co-operative agricultural and rural
development bank” in the said section.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
Clause 19 of the Bill seeks to amend section 44AA of the
Income-tax Act relating to maintenance of accounts by certain
persons carrying on profession or business.
Clause (i) of sub-section (2) of the said section, provides
that certain persons carrying on business or profession are
required to maintain books of account and such other
documents if the income from business or profession
exceeds one lakh twenty thousand rupees or total sales,
turnover or gross receipts, as the case may be, in business
or profession exceed or exceeds ten lakh rupees in any one
of the three years immediately preceding the previous year
to enable the Assessing Officer to compute total income.
Clause (ii) of sub-section (2) of the said section, provides
that certain persons carrying on newly set up business or
profession in any previous year, are required to maintain
books of account and such other documents if the income
from such business or profession is likely to exceed one
lakh twenty thousand rupees or total sales, turnover or gross
receipts, as the case may be, in business or profession are,
or is, likely to exceed ten lakh rupees, during such previous
year to enable the Assessing Officer to compute his total
income.
It is proposed to amend sub-section (2) of the said section
so as to provide that the monetary limits of income and total
sales, turnover or gross receipts specified in clauses (i) and
(ii) shall be enhanced from one lakh twenty thousand rupees
to two lakh fifty thousand rupees and from ten lakh rupees to
twenty-five lakh rupees, respectively, in the case of an
individual and a Hindu undivided family.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 20 of the Bill seeks to amend section 44AB of the
Income-tax Act relating to audit of accounts of certain persons
carrying on business or profession.
Section 44AB, inter alia, provides that every person
carrying on business is required to get his accounts audited
before a specified date, if the total sales, turn over or gross
receipts in a previous year, as the case may be, exceed or
exceeds one crore rupees.
It is proposed to amend the said section so as to insert a
new proviso to provide that this section shall not apply to the
person, who declares profits and gains for the previous year
in accordance with the provisions of sub-section (1) of section
44AD and his total sales, turnover or gross receipts, as the
case may be, in business does not exceed two crore rupees
in such previous year.
This amendment will take effect from 1st April, 2017 and
will, accordingly, apply in relation to the assessment year
2017-2018 and subsequent years.
Clause 21 of the Bill seeks to amend section 44AD of the
Income-tax Act relating to special provision for computing
profits and gains of business on presumptive basis.
The provisions contained in the said section (as amended
by the Finance Act, 2016), provides that notwithstanding
anything to the contrary contained in sections 28 to 43C, in
the case of an eligible assessee engaged in an eligible
business, having total turnover or gross receipts not
exceeding two crore rupees, a sum equal to eight per cent.
of the total turnover or gross receipts of the assesse in the
previous year on account of such business, or, as the case
may be, a sum higher than the aforesaid sum claimed to
have been earned by the eligible assessee, shall be deemed
to be the profits and gains of such business chargeable to
tax under the head “profits and gains of business or
profession”.
It is proposed to insert a proviso to the said sub-section
(1) so as to reduce the existing rate of deemed total income
of eight per cent. to six per cent., in respect of the amount of
total turnover or gross receipts which is received by an
account payee cheque or an account payee bank draft or
use of electronic clearing system through a bank account
during the previous year or before the due date specified in
sub-section (1) of section 139 in respect of that previous
66
year. However, the existing rate of deemed profit and gains
of eight per cent. referred to in the provisions of the said
section, shall continue to apply in respect of total turnover or
gross receipts received in any other mode.
This amendment will take effect from 1st April, 2017 and
shall accordingly, apply in relation to assessment year 2018-
2019 and subsequent years.
Clause 22 of the Bill seeks to amend section 45 of the
Income-tax Act relating to Capital gains.
Under the existing provisions of the said section, the
Capital gains is chargeable in the year in which transfer takes
place except in certain cases as provided in the said section.
It is proposed to insert a new sub-section (5A) in the said
section so as to provide that where the Capital gains arises
to an assessee being an individual or Hindu undivided family,
from the transfer of a Capital asset, being land or building or
both, under a specified agreement, the capital gains shall be
chargeable to income-tax as income of the previous year in
which the certificate of completion for the whole or part of
the project is issued by the competent authority.
It is further proposed to provide that the stamp duty value
of his share, being land or building or both, in the project on
the date of issuing of said certificate as increased by
consideration received in cash, if any, shall be deemed to
be the full value of the consideration received or accruing as
a result of the transfer of the capital asset.
It is also proposed to provide that the provisions of this
sub-section shall not apply where the assessee transfers
his share in the project to any other person on or before the
date of issue of said certificate of completion and the capital
gains shall be deemed to be the income of the previous
year in which such transfer took place and the provisions
of the Act, other than the provisions of this sub-section,
shall apply for the determination of the full value of
consideration received or accruing as a result of such
transfer.
It is also proposed to define the expressions “competent
authority”, “specified agreement” and “stamp duty value”.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 23 of the Bill seeks to amend section 47 of the
Income-tax Act relating to transactions not regarded as
transfer.
The said section provides that certain transfers of capital
assets are not chargeable to tax under section 45 of the Act.
Further, under the existing provisions of clause (x) of the
said section, any transfer by way of conversion of bonds or
debentures, debenture-stock or deposit certificates in any
form, of a company into shares or debentures of that company
is not regarded as transfer.
It is proposed to insert a new clause (viiaa) in section 47
so as to provide that any transfer made outside India of a
capital asset being rupee denominated bond of Indian
company issued outside India, by a non-resident to another
non-resident shall not be regarded as transfer.
It is also proposed to insert a new clause (xb) in the said
section so as to provide that the conversion of preference
shares of a company into equity shares of that company
shall also not be regarded as transfer.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
Clause 24 of the Bill seeks to amend section 48 of the
Income-tax Act relating to mode of computation.
The fifth proviso to the said section provides that in case
of an assessee being a non-resident, any gains arising on
account of appreciation of rupee against a foreign currency
at the time of redemption of rupee denominated bond of an
Indian company subscribed by him, shall be ignored for the
purposes of computation of full value of consideration.
Further, under the existing provisions of the said section,
“indexed cost of acquisition” is defined to be an amount which
bears to the cost of acquisition the same proportion as Cost
Inflation Index for the year in which the asset is transferred
bears to the Cost Inflation Index for the first year in which the
asset was held by the assessee or for the year beginning on
the 1st day of April, 1981, whichever is later.
It is proposed to amend the said proviso so as to provide
that in case of an assessee being a non-resident, any gains
arising on account of appreciation of rupee against a foreign
currency at the time of redemption of rupee denominated
bond of an Indian company held by him, shall be ignored for
the purposes of computation of full value of consideration.
It is also proposed to make consequential amendments
to the said section so as to replace the reference of 1st day
of April, 1981 with the 1st day of April, 2001.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply to the assessment year 2018-
2019 and subsequent years.
Clause 25 of the Bill seeks to amend section 49 of the
Income-tax Act relating to cost with reference to certain
modes of acquisition.
The existing provisions contained in sub-section (1) of the
said section provides that where the capital asset became
the property of the assessee under certain situations, the
cost of acquisition of the asset shall be deemed to be the
cost for which the previous owner of the property acquired it,
as increased by the cost of any improvement of the assets
incurred or borne by the previous owner or the assessee, as
the case may be.
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It is proposed to amend sub-clause (e) of clause (iii) of
said sub-section (1) so as to include the transfer referred to
in clause (vic) of section 47 also within the purview of the
said sub-section (1).
It is further proposed to insert a new sub-section (2AE) in
the said section so as to provide that where the capital asset,
being equity share of a company, became the property of
the assessee in consideration of a transfer as referred to in
clause (xb) of section 47, the cost of acquisition of the asset
shall be deemed to be the cost of the preference share in
relation to which such asset is acquired by the assessee.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
It is also proposed to insert a new sub-section (2AF)so as
to provide that where the capital asset, being a unit or units
in a consolidated plan of a mutual fund scheme, became the
property of the assessee in consideration of a transfer
referred to in clause (xix) of section 47, the cost of acquisition
of the asset shall be deemed to be the cost of acquisition to
him of the unit or units in the consolidating plan of the scheme
of the mutual fund.
This amendment will take effect from 1st April, 2017 and
will, accordingly, apply in relation to the assessment year
2017-2018 and subsequent years.
It is also proposed to insert a new sub-section (6) in the
said section so as to provide that where the capital gain arises
from the transfer of specified capital asset referred to in
clause (c) of the Explanation to clause (37A) of section 10,
received under the Land Pooling Scheme covered under
the Andhra Pradesh Capital City Land Pooling Scheme
(Formulation and Implementation) Rules, 2015 made under
the provisions of Andhra Pradesh Capital Region
Development Authority Act, 2014 and the rules, regulations
and schemes made under the said Act, which has been
transferred after the expiry of two years from the end of the
financial year in which the possession of such specified
capital asset was handed over to the assessee, the cost of
acquisition of that specified capital asset shall be deemed to
be the stamp duty value of the said specified capital asset
as on the last day of the second financial year after the end
of the financial year in which the possession of the said
specified capital asset was handed over to the assessee.
It is also proposed to define “stamp duty value”.
It is also proposed to insert a new sub-section (7) in the
said section so as to provide that the cost of acquisition of
the share in the project, in the form of land or building or
both, as referred to in sub-section (5A) of section 45, not
being the capital asset referred to in the proviso of the said
sub-section, shall be the amount which is deemed as full
value of consideration in that sub-section.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
It is also proposed to amend the said section by insertion
of a new sub-section so as to provide that where the capital
gain arises from the transfer of an asset, being the asset
held by a trust or an institution in respect of which accreted
income has been computed, and the tax has been paid
thereon in accordance with the provisions of Chapter XIIEB,
the cost of acquisition of such asset shall be deemed to
be the fair market value of the asset which has been taken
into account for computation of accreted income as on the
specified date referred to in sub-section (2) of section 115TD.
The proposed amendment is consequential in nature.
This amendment will take effect retrospectively from 1st
June, 2016.
Clause 26 of the Bill seeks to insert a new section 50CA
in the Income-tax Act relating to special provision for full
value of consideration for transfer of share other than quoted
share.
It is proposed to provide that in case of transfer of shares
of a company other than quoted share, the fair market value
of such shares determined in the prescribed manner shall
be deemed to be the full value of consideration for the
purpose of computing income chargeable to tax as capital
gains.
It is also proposed to define the term “quoted share”.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 27 of the Bill seeks to amend section 54EC of the
Income-tax Act relating to capital gain not to be charged on
investment in certain bonds.
The existing provisions contained in clause (ba) of subsection
(3) of the said section define long-term specified
asset for making any investment under the said section on
or after the 1st day of April, 2007 means any bond,
redeemable after three years and issued on or after the 1st
day of April, 2007 by the National Highways Authority of India
constituted under section 3 of the National Highways
Authority of India Act, 1988 or by the Rural Electrification
Corporation Limited, a company formed and registered under
the Companies Act, 1956.
It is proposed to amend the said clause (ba) so as to
include any other bond as notified by the Central Government
in this behalf.
This amendment will take effect, from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 28 of the Bill seeks to amend section 55 of the
Income-tax Act relating to meaning of “adjusted”, “cost of
improvement” and “cost of acquisition”.
Under the existing provisions of the said section, the cost
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of long-term capital asset acquired before the 1st day of April,
1981 is taken to be the cost of acquisition to the assessee or
the fair market value of the asset on that date, at the option
of the assessee. The cost of improvement is also taken into
account after the assessee has acquired the asset on or
after 1st April, 1981.
It is proposed to amend the said section so as to advance
the aforesaid cut-off date to 1st day of April, 2001. Where
the long-term capital asset has been acquired before the 1st
day of April, 2001, then, the cost of acquisition will be taken
to be the value of the asset as on the 1st day of April, 2001.
Similarly, in such cases the cost of improvement will be taken
to be the cost of improvement after this date.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
Clause 29 of the Bill seeks to amend section 56 of the
Income-tax Act relating to income from other sources.
The existing provisions of clause (vii) of sub-section (2) of
the said section provide for taxability in the hands of individual
or Hindu undivided family on receipt of any money or
immovable property or specified movable property without
or inadequate consideration, if the value of such receipt
exceeds rupees fifty thousand. Further, clause (viia) of subsection
(2) of the said section 56 provides for the taxability
of receipt of shares of a closely held company by a firm or a
closely held company for without or inadequate consideration,
if the fair market value of shares exceeds fifty thousand
rupees. However, the taxability under clause (vii) and clause
(viia) of sub-section (2) of the said section is subject to certain
specified exceptions.
It is proposed to insert a new clause (x) in sub-section (2)
of the said section so as to expand the scope of the provisions
of the said section to all categories of assessees so that the
assets received without or inadequate consideration may be
brought to the tax. Further, the existing exception contained
in the said section is proposed to be rationalised by including
certain additional exceptions consequently, it is proposed to
sun set clauses (vii) and (viia) of sub-section (2) of the said
section.
This amendment will take effect from 1st April, 2017.
Clause 30 of the Bill seeks to amend section 58 of the
Income-tax Act relating to amounts not deductible.
The provisions of the said section specify the amounts
which are not deductible in computing the income from other
sources.
It is proposed to amend sub-section (1A) of the said section
so as to provide that the provisions of sub-clause (ia) of clause
(a) of section 40 shall also apply in computing the income
chargeable under the head “Income from other sources” as
they apply in computing the income chargeable under the
head “Profit and gains of business or profession”.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 31 of the Bill seeks to amend section 71 of the
Income-tax Act relating to set off of loss from one head
against income from another.
It is proposed to insert a new sub-section (3A) in the
aforesaid section to provide that notwithstanding anything
contained in sub-section (1) or sub-section (2) of the said
section, set off of loss under the head “Income from house
property” against any other head of income shall be restricted
to two lakh rupees for any assessment year.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 32 of the Bill seeks to substitute section 79 of the
Income-tax Act relating to carry forward and set off of losses
in the case of certain companies.
It is proposed to provide that where a change in
shareholding has taken place in a previous year in the case
of a company, not being a company in which the public are
substantially interested, no loss incurred in any year prior to
the previous year shall be carried forward and set off against
the income of the previous year unless on the last day of the
previous year the shares of the company carrying not less
than fifty-one per cent. of the voting power were beneficially
held by persons who beneficially held shares of the company
carrying not less than fifty-one per cent. of the voting power
on the last day of the year or years in which the loss was
incurred.
It is further proposed to provide that where a change in
shareholding has taken place in a previous year in the case
of a company, not being a company in which the public are
substantially interested but being an eligible start-up as
referred to in section 80-IAC, the loss incurred in any year
prior to the previous year shall be carried forward and set off
against the income of the previous year, if, all the
shareholders of such company which held shares carrying
voting power on the last day of the year or years in which the
loss was incurred, being the loss incurred during the period
of seven years beginning from the year in which such
company is incorporated, continue to hold those shares on
the last day of such previous year.
It is also proposed to provide that the provisions of this
section shall not apply to a case where a change in the voting
power and shareholding, as aforesaid, takes place in a
previous year consequent upon the death of a shareholder
or on account of transfer of shares by way of gift to any relative
of the shareholder making such gift.
It is also proposed to provide that nothing contained in
this section shall apply to any change in the shareholding of
an Indian company which is a subsidiary of a foreign company
as a result of amalgamation or demerger of a foreign
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company subject to the condition that fifty-one per cent.
shareholders of the amalgamating or demerged foreign
company continue to be the shareholders of the amalgamated
or the resulting foreign company.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 33 of the Bill seeks to amend section 80CCD of
the Income-tax Act relating to deduction in respect of
contribution to pension scheme of the Central Government.
Sub-section (1) of the said section inter alia, provides that
in the case of an individual employed by the Central
Government on or after the 1st day of January, 2004 or, being
an individual employed by any other employer, or any other
assessee, being an individual who has in the previous year
paid or deposited any amount in his account under a pension
scheme notified or as may be notified by the Central
Government, he shall be allowed a deduction of an amount
not exceeding ten per cent. of his salary in the previous year.
In case of any other assessee, the deduction is limited to ten
per cent. of gross total income in the previous year.
It is proposed to amend sub-section (1) so as to increase
the upper limit of gross total income from ten per cent. to
twenty per cent. in case of an individual other than employee.
This amendment will take effect, from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 34 of the Bill seeks to amend section 80CCG of
the Income-tax Act relating to deduction in respect of
investment made under an equity savings scheme.
The existing provisions of the said section provides that
where an assessee, being a resident individual, has, in a
previous year, acquired listed equity shares or listed units of
an equity oriented fund in accordance with a scheme, as
may be notified by the Central Government, he shall, subject
to certain conditions, be allowed a deduction, in the
computation of his total income of the assessment year
relevant to such previous year, of fifty per cent. of the amount
invested in such equity shares or units to the extent such
deduction does not exceed twenty-five thousand rupees.
It is proposed to insert a new sub-section (5) in the said
section so as to provide that no deduction under the said
section shall be allowed in respect of any assessment year
commencing on or after the 1st day of April, 2018. However,
an assessee who has acquired shares or units in accordance
with the aforesaid scheme and claimed deduction under the
provisions of the said section for any assessment year
commencing on or before the 1st day of April, 2017 shall be
allowed deduction under the said section till the assessment
year commencing on the 1st day of April, 2019, if he is
otherwise eligible to claim the deduction in accordance with
the other provisions of this section.
This amendment will take effect, from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 35 of the Bill seeks to amend section 80G of the
Income-tax Act relating to deduction in respect of donations
to certain funds, charitable institutions, etc.
Under the existing provisions contained in sub-section (5D)
of the said section, no deduction is allowed in respect of
donation of any sum exceeding ten thousand rupees unless
such sum is paid by any mode other than cash.
It is proposed to amend the said sub-section so as to
provide that no deduction is allowed in respect of donation
of any sum exceeding two thousand rupees unless such sum
is paid by any mode other than cash.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 36 of the Bill seeks to amend section 80-IAC of
the Income-tax Act relating to special provision in respect of
specified business.
The existing provisions of said section, inter alia, provide
that where the gross total income of an assessee, being an
eligible start-up, includes any profits and gains derived from
eligible business, there shall, in accordance with and subject
to the provisions of this section, be allowed, in computing
the total income of the assessee, a deduction of an amount
equal to one hundred per cent. of the profits and gains derived
from such business for three consecutive assessment years
and at the option of the assessee the said deduction may be
claimed for any three consecutive assessment years out of
five years beginning from the year in which the eligible startup
is incorporated subject to the condition that it is
incorporated.
It is proposed to amend the said sub-section so as to
provide that the deduction shall be allowed for any three
consecutive assessment years out of seven years instead
of five years, beginning from the year in which such eligible
start-up is incorporated.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 37 of the Bill seeks to amend section 80-IBA of
the Income-tax Act relating to deductions in respect of profits
and gains from housing projects.
The said section provides for hundred per cent. deduction
of the profits and gains of an assessee developing and
building housing projects subject to certain conditions which,
inter alia, include that the upper limit for the built-up area of
residential unit comprised in the housing project does not
exceed thirty square metres in the cities of Chennai, Delhi,
Kolkata and Mumbai and any place, within the distance of
70
twenty-five kilometres, measured aerially, from the municipal
limits of the said cities; and sixty square metres in any other
place; and the project shall be completed within a period of
three years.
It is proposed to amend the said section so as to substitute
the expression “built-up area” with the words “carpet area”
and also to do away with the restriction of aerial distance of
twenty-five kilometres from the municipal limits of the above
said cities and further to extend the period of completion of
the housing project from three years to five years for eligibility
under the section.
It is also proposed to provide the definition of “carpet area”
as provided in the Real Estate (Regulation and Development)
Act, 2016.
These amendments will take effect, from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
Clause 38 of the Bill seeks to amend section 87A of the
Income-tax Act relating to rebate of income-tax in case of
certain individuals.
The existing provisions contained in the said section
provide that an assessee, being an individual resident in
India, whose total income does not exceed five hundred
thousand rupees, shall be entitled to a deduction, from the
amount of income-tax (as computed before allowing the
deductions under Chapter VIII) on his total income with which
he is chargeable for any assessment year, of an amount
equal to one hundred per cent. of such income-tax or an
amount of five thousand rupees, whichever is less.
It is proposed to amend the said section so as to provide
that the deduction under the said section shall be allowed to
an assessee, being an individual resident in India, whose
total income does not exceed three hundred fifty thousand
rupees, upto hundred percent. of income chargeable for any
assessment year or two thousand five hundred rupees,
whichever is less.
This amendment will take effect, from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 39 of the Bill seeks to amend section 90 of the
Income-tax Act relating to agreement with foreign countries
or specified territories.
The existing provisions of the said section confers power
upon the Central Government to enter into an agreement
with the Government of any country or specified territory
outside India for granting of relief in respect of income on
which income-tax has been paid both under the Income-tax
Act and income-tax in that country or specified territory. It is
further provided that any term used but not defined in this
Act or in the agreement referred to in sub-section (1) of the
said section shall have the meaning assigned to it in the
notification issued by the Central Government in the Official
Gazette in this behalf, unless the context otherwise requires,
provided the same is not inconsistent with the provisions of
the Income-tax Act or the said agreement.
It is proposed to provide that where any term used in an
agreement entered into under sub-section (1) of the said
section is defined under the said agreement, the said term
shall have the same meaning as assigned to it in the
agreement; and where the term is not defined in the said
agreement, but defined in the Income-tax Act, it shall have
the same meaning as assigned to it in the said Act and any
Explanation given to it by the Central Government.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 40 of the Bill seeks to amend section 90A of the
Income-tax Act relating to adoption by Central Government
of agreement between specified associations for double
taxation relief.
Under the provisions of section 90A, the Central
Government may make necessary provisions for adopting
and implementing an agreement entered into by any specified
association in India with any specified association in the
specified territory outside India, for granting of relief in respect
of which income-tax has been paid both under the Incometax
Act and income-tax in that specified territory outside India,
for the avoidance of double taxation of income, exchange of
information for the prevention of evasion or avoidance of
income-tax or recovery of income-tax. It is further provided
that any term used but not defined in Income-tax Act or in
the agreement referred to in sub-section (1) of the said section
shall have the meaning assigned to it in the notification issued
by the Central Government in the Official Gazette in this
behalf, unless the context otherwise requires, provided the
same is not inconsistent with the provisions of Income-tax
Act or the said agreement.
It is proposed to provide that where any term used in an
agreement entered into under sub-section (1) of the said
section is defined under the said agreement, the said term
shall have the same meaning as assigned to it in the
agreement; and where the term is not defined in the said
agreement, but is defined in the Income-tax Act, it shall have
the same meaning as assigned to it in the said Act and any
Explanation to it by the Central Government.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 41 of the Bill seeks to amend section 92BA of the
Income-tax Act relating to meaning of specified domestic
transaction.
The provisions of the said section, inter alia, provides that
any transaction entered into by the assessee exceeding the
monetary threshold of twenty crore rupees in aggregate
during a previous year for the purposes of clause (b) of sub71
section (2) of section 40A, shall come within the meaning of
“specified domestic transaction” and shall accordingly, be
required to be computed having regard to arm’s length
principle.
It is proposed to amend the said section so as to omit
clause (i) of the said section so as to exclude the expenditure
in respect of which payment has been made or to be made
by the assessee to a person referred to in clause (b) of subsection
(2) of section 40A, from the scope of section 92BA
of the Income-tax Act.
This amendment will take effect from 1st April, 2017 and
will, accordingly, apply in relation to the assessment year
2017-2018 and subsequent years.
Clause 42 of the Bill seeks to insert a new section 92CE
in the Income-tax Act relating to secondary adjustments in
certain cases.
The proposed new section 92CE provides that a secondary
adjustment shall be made where a primary adjustment to
transfer price, has been made suo motu by the assessee in
his return of income; or made by the Assessing Officer has
been accepted by the assessee; or is determined by an
advance pricing agreement entered into by the assessee
under section 92CC; or is made as per the safe harbour
rules framed under section 92CB; or is arising as a result of
resolution of an assessment by way of the mutual agreement
procedure under an agreement entered into under section
90 or 90A for avoiding double taxation.
It is further proposed to provide that where as a result of
primary adjustment to the transfer price, there is an increase
in the total income or reduction in the loss, as the case may
be, of the assessee, the excess money which is available
with its associated enterprise, if not repatriated to India within
the time as may be prescribed, shall be deemed to be an
advance made by the assessee to such associated enterprise
and the interest on such advance, shall be computed in such
manner as may be prescribed.
It is also proposed to provide that the provisions of this
section shall apply, if, the amount of primary adjustment made
in case of the assessee in any previous year, exceeds one
crore rupees.
It is also proposed to provide that the provisions of this
section shall not apply to such assessees in whose case the
primary adjustment is made in respect of an assessment
year commencing on or before 1st April, 2016.
It is also proposed to define the term “associate enterprise”,
“arm’s length price”, “excess money”, “primary adjustment”
and “secondary adjustment”.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
Clause 43 of the Bill seeks to insert a new section 94B in
the Income-tax Act relating to limitation on interest deduction
in certain cases.
Sub-section (1) of the said section seeks to provide that
where an Indian company, or a permanent establishment
of a foreign company in India being the borrower, pays
interest or similar consideration exceeding one crore rupees
which is deductible in computing income chargeable under
the head “Profits and gains of business or profession” in
respect of any debt issued by a non-resident, being an
associated enterprise of such borrower, interest shall not be
deductible in computation of income under the said head to
the extent that it arises from excess interest, as specified in
sub-section (2).
It is further proposed to provide that where the debt issued
by a lender which is not associated but an associated
enterprise either provides an implicit or explicit guarantee
such lender or deposits a corresponding and matching
amount of funds with the lender, such debt shall be deemed
to have been issued by an associated enterprise.
Sub-section (2) of the said section seeks to provide that
for the purposes of sub-section (1), the expression “excess
interest” shall mean an amount of total interest paid or
payable in excess of thirty per cent. of earnings before
interest, taxes, depreciation, and amortisation of the borrower
in the previous year or interest paid or payable to associated
enterprises for that previous year, whichever is less.
Sub-section (3) of the said section seeks to provide that
nothing contained in sub-section (1) shall apply to an Indian
company or a permanent establishment of a foreign company
which is engaged in the business of banking or insurance.
Sub-section (4) of the said section seeks to provide that
where for any assessment year, the interest expenditure is
not wholly deducted against income under the head “Profits
and gains of business or profession”, so much of the interest
expenditure as has not been so deducted, shall be carried
forward to the following assessment year or assessment
years, and it shall be allowed as deduction against the profits
and gains, if any, of any business or profession carried on
by him and assessable for that assessment year to the extent
of maximum allowable interest expenditure in accordance
with sub-section (2). It is further provided that no interest
expenditure shall be carried forward under this section for
more than eight assessment years immediately succeeding
the assessment year for which the excess interest
expenditure was first computed.
Sub-section (5) of the said section seeks to define the
expressions “associated enterprise”, “debt” and “permanent
establishment”.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 44 of the Bill seeks to amend section 115BBDA of
the Income-tax Act relating to tax on certain dividends
received from domestic companies.
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Under the existing provisions of section 115BBDA, in case
of an assessee, being an individual, Hindu undivided family
or a firm, resident in India, tax is charged at the rate of ten
per cent. on income by way of dividend exceeding ten lakh
rupees.
It is proposed to amend the said section so as to provide
that this section shall be applicable to all resident persons
other than a domestic company, a fund or institution or trust
or any university or other educational institution or any hospital
or other medical institution referred to in sub-clause (iv) or
sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause
(23C) of section 10 or a trust or institution registered under
section 12AA of the Income-tax Act.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
Clause 45 of the Bill seeks to insert a new section 115BBG
in the Income-tax Act relating to tax on income from transfer
of carbon credits.
The proposed new section 115BBG seeks to provide that
in case of an assessee whose total income includes any
income by way of transfer of carbon credits, the income-tax
payable shall be the aggregate of the amount of income-tax
calculated on the income by way of transfer of carbon credits
at the rate of ten per cent., and the amount of income-tax
with which the assessee would have been chargeable had
his total income been reduced by the amount of income by
way of transfer of carbon credit.
It is further proposed to provide that the assessee shall
not be eligible for deduction in respect of any expenditure or
allowance under any provision of the Income-tax Act in
computing his income referred to in clause (a) of sub-section
(1) of the proposed section.
It is also proposed to define the expression “carbon credits”
in the said section.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 46 of the Bill seeks to amend section 115JAA of
the Income-tax Act relating to tax credit in respect of tax
paid on deemed income relating to certain companies.
Sub-section (2A) of the said section provides that the tax
credit to be allowed under sub-section (1A) shall be the
difference of the tax paid for any assessment year under
sub-section (1) of section 115JB and the amount of tax
payable by the assessee on his total income computed in
accordance with the other provisions of the Income-tax Act.
It is proposed to amend the said sub-section so as to
provide that where the amount of tax credit in respect of any
income-tax paid in any country or specified territory outside
India allowed against the tax payable by the assessee under
the provisions of section 115JB exceeds the amount of such
tax credit admissible against the tax payable by the assessee
on its income in accordance with the other provisions of this
Act, then, while computing the amount of credit under the
said sub-section, such excess amount shall be ignored.
It is further proposed to amend sub-section (3A) of the
said section so as to extend the period for carry forward of
tax credit from tenth assessment year to fifteenth assessment
year.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
Clause 47 of the Bill seeks to amend section 115JB of the
Income-tax Act relating to special provision for payment of
tax by certain companies.
The said section provides for levy of tax on certain
companies on the basis of book profit which is determined
after making certain adjustments to the net profit disclosed
in the profit and loss account prepared in accordance with
the provisions of the Companies Act, 1956.
It is proposed to amend the section so as to align the
provisions of section 115JB for the company preparing
financial statements in accordance with the provisions of
Indian Accounting Standards and to update the provisions
of the Companies Act,1956 referred in the said section in
accordance with the provisions of the new Companies Act,
2013.
The amendment will take effect from 1st April, 2017 and
will, accordingly, apply in relation to the assessment year
2017-2018 and subsequent years.
Clause 48 of the Bill seeks to amend section 115JD of the
Income-tax Act relating to tax credit for alternate minimum
tax.
Sub-section (2) of the said section provides that tax credit
of an assessment year shall be the excess of the alternate
minimum tax paid over the regular income-tax payable for
that year and sub-section (4) provides that such tax credit is
allowed to be carried forward for a period of ten years.
It is proposed to amend the said sub-sections so as to
provide that where the amount of tax credit in respect of any
income-tax paid in any country or specified territory outside
India allowed against the alternate minimum tax payable
exceeds the amount of tax credit admissible against the
regular income-tax payable by the assessee on his income
in accordance with the other provisions of this Act, such
excess amount shall be ignored, while computing the amount
of credit and the period for carry forward of tax credit shall
be extended from tenth assessment year to fifteenth
assessment year.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
Clause 49 of the Bill seeks to amend section 119 of the
Income-tax Act relating to instructions to subordinate
authorities.
Sub-clause (a) of sub-section (2) of the said section
empowers the Board to issue orders setting forth directions
or instructions (not being prejudicial to assessees) to be
followed by the subordinate authorities in the work relating
to assessment or collection of revenue or the initiation of
proceedings for the imposition of penalties.
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It is proposed to insert reference of sections 271C and
271CA in the said sub-section, so as to empower the Board
to issue directions or instructions in respect of the said
sections also.
This amendment will take effect from 1st April, 2017.
Clause 50 of the Bill seeks to amend section 132 of the
Income-tax Act relating to search and seizure.
Sub-section (1) of the said section provides that where an
income-tax authority mentioned therein, based on the
information in his possession, has reason to believe of
circumstances specified therein, he may authorise an
authority specified therein to carry out search and seizure.
It is proposed to insert an Explanation after the fourth
proviso to the said sub-section (1) so as to provide that the
reason to believe recorded by the income-tax authority
specified therein under the said sub-section shall not be
disclosed to any person or any authority or the Appellate
Tribunal.
This amendment will take effect retrospectively from 1st ,
April, 1962, the date of commencement of the Income-tax
Act, 1961.
Sub-section (1A) of the said section provides that where
an authority mentioned therein, based on the information in
his possession, has reason to suspect of the circumstances
specified therein, he may authorise an authority specified
therein to carry out search and seizure.
It is proposed to insert an Explanation in the said subsection
(1A) so as to declare that reason to suspect recorded
by the income-tax authority specified therein under the
provisions of the said sub-section shall not be disclosed to
any person or any authority, or the Appellate Tribunal.
This amendment will take effect retrospectively from 1st
October, 1975.
It is further proposed to insert sub-section (9B) in the said
section, to provide that in a search case, where the authorised
officer is satisfied that for the purpose of protecting the interest
of revenue and for reasons to be recorded in writing it is
necessary so to do he may, by order in writing, attach
provisionally any property belonging to the assessee with
the prior approval of Principal Director General or Director
General or Principal Director or Director.
It is also proposed to insert sub-section (9C) in the said
section, so as to provide that such provisional attachment
shall cease to have effect after the expiry of six months from
the date of order of attachment.
It is also proposed to insert sub-section (9D) in the said
section, to provide that in a search case, the authorised officer
for estimation of fair market value of a property, may make a
reference to a Valuation Officer referred to in section 142A,
for valuation in the manner provided under the said subsection.
It is also proposed that the Valuation Officer shall
furnish the valuation report within sixty days of receipt of
such reference.
It is also proposed to amend Explanation 1 to section 132,
so as to provide that for the purposes of sub-section (9A),
sub-section (9B) and sub-section (9D), with respect to
“execution of an authorisation for search” the provisions of
sub-section (2) of section 153B shall apply.
These amendments will take effect from 1st April, 2017.
Clause 51 of the Bill seeks to amend section 132A of the
Income-tax Act relating to powers to requisition books of
account, etc.
Sub-section (1) of the said section provides that the
specified income-tax authority, based on the information in
his possession, has reason to believe of circumstances
specified therein, may authorise other income-tax authority
mentioned therein to requisition from other officer or authority
referred to in clauses (a) to (c) of the said sub-section to
deliver books of account, documents or assets of the
assessee to the income-tax authority so authorised.
It is proposed to insert an Explanation in the said subsection,
so as to declare that the reason to believe for making
the requisition as recorded by the income-tax authority shall
not be disclosed to any person or any authority or the
Appellate Tribunal.
This amendment will come into effect retrospectively from
1st October, 1975.
Clause 52 of the Bill seeks to amend section 133 of the
Income-tax Act relating to power to call for information.
The said section empowers certain income-tax authorities
to call for information for the purpose of any inquiry or
proceeding under the Act.
It is proposed to amend the first proviso of the said section
so as to provide that the power in respect of inquiry or
proceeding under the Act, as referred to in clause (6) of the
said section, may also be exercised by the Joint Director,
Deputy Director or Assistant Director.
It is further proposed to amend the second proviso of the
said section, so as to provide that the Joint Director, Deputy
Director or Assistant Director, in a case where no proceeding
is pending, may exercise the powers in respect of inquiry
without seeking prior approval of the authorities as specified
in the said proviso.
These amendments will take effect from 1st April, 2017.
Clause 53 of the Bill seeks to amend section 133A of the
Income-tax Act relating to power of survey.
The said section empowers an income-tax authority to
survey a place, at which a business or profession is carried
on, or at which any books of account or other documents or
any part of cash or stock or other valuable article or thing
relating to the business or profession are kept.
It is proposed to amend sub-section (1) of the said section,
so as to provide that a place, at which an activity for charitable
purpose is carried on may also be surveyed by an incometax
authority.
It is further proposed to insert the reference of activity for
charitable purpose in the Explanation to sub-section (1) of
the said section which is consequential in nature.
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These amendments will take effect from 1st April, 2017.
Clause 54 of the Bill seeks to amend section 133C of the
Income-tax Act relating to power to call for information by
prescribed income-tax authority.
Sub-section (1) of the said section provides that a
prescribed income-tax authority may issue a notice to any
person, requiring him to submit information or documents
for the purposes of verification of the information in the
possession of such income-tax authority.
Sub-section (2) of the said section provides that the
prescribed income-tax authority may process any information
or document that has been received in response to a notice
issued under sub-section (1) and provide the outcome of
such processing to the Assessing Officer.
It is proposed to insert a new sub-section (3) in the said
section so as to provide that the Central Board of Direct Taxes
may make a scheme for enabling the centralised issuance
of notice, processing of information or documents and for
making available the outcome of the said processing to the
Assessing Officer.
This amendment will take effect from 1st April, 2017.
Clause 55 of the Bill seeks to amend section 139 of the
Income-tax Act relating to return of income.
Sub-section (4C) of the said section mandates filing of
return by certain entities which are exempted under section
10.
It is proposed to amend the said sub-section so as to
provide that any person referred to in clause (23AAA),
Investor Protection Fund referred to in clause (23EC) or
clause (23ED), Core Settlement Guarantee Fund referred
to in clause (23EE) and Board or Authority referred to in
clause (29A) of section 10 shall also be mandatorily required
to file return of income.
Sub-section (5) of the said section 139 provides that a
person can furnish a revised return, in case he discovers
any omission or wrong statement in his return of income
already furnished, within one year from the end of the relevant
assessment year or before completion of assessment,
whichever is earlier.
It is proposed to amend the said sub-section (5) so as to
provide that the time for furnishing of revised return shall be
available upto the end of the relevant assessment year or
before the completion of assessment, whichever is earlier.
These amendments will take effect from 1st April, 2018
and will, accordingly apply in relation to assessment year
2018-2019 and subsequent years.
Clause 56 of the Bill seeks to amend section 140A of the
Income-tax Act relating to self-assessment.
The said section provides that the assessee shall be liable
to pay tax together with interest payable under any provision
of the Income-tax Act as reduced by the amounts specified
therein before furnishing a return under the said Act. It also
provides the manner of calculation of the amount so payable
and consequence of non-payment of the said amount.
It is proposed to amend the said section to include that in
case of delay in furnishing of return of income, alongwith the
tax and interest payable as aforesaid, fee for delay in
furnishing of return of income shall also be payable.
The proposed amendment is consequential to the insertion
of a new section 234F which provides for fee for delay in
furnishing of return of income.
This amendment will take effect from 1st April, 2018 and
will, accordingly apply in relation to assessment year 2018-
2019 and subsequent years.
Clause 57 of the Bill seeks to amend section 143 of the
Income-tax Act relating to assessment.
Sub-section (1) of the said section provides the manner
of processing of a return furnished under section 139 or in
response to a notice under sub-section (1) of section 142.
It is proposed to amend the said sub-section to provide
that in computation of amount payable or refund due, as the
case may be, on account of processing of return under the
said sub-section, the fee payable under section 234F shall
also be considered.
The proposed amendment is consequential to the insertion
of a new section 234F which provides for fee for delay in
furnishing of return of income.
This amendment will take effect from 1st April, 2018 and
will, accordingly apply in relation to assessment year 2018-
2019 and subsequent years.
Sub-section (1D) of the said section (as substituted by
section 68 of the Finance Act, 2016) is proposed to be
substituted by a new sub-section so as to provide that the
processing of a return shall not be necessary, where a notice
has been issued to the assessee under sub-section (2) of
the said section.
It is proposed to provide that the provisions of the said
sub-section shall not apply in relation to any return furnished
for the assessment year commencing on or after the 1st day
of April, 2017.
This amendment will take effect from 1st April, 2017.
Clause 58 of the Bill seeks to amend section 153 of the
Income-tax Act relating to time-limit for completion of
assessment, reassessment and recomputation.
The said section provides for time-limit for completion of
assessment, reassessment and recomputation in certain
cases mentioned therein.
It is proposed to amend sub-section (1) of the said section
to provide that for the assessment year 2018-2019, the timelimit
for making an assessment order under section 143 or
144 shall be reduced from existing twenty-one months to
eighteen months from the end of the assessment year, and
for the assessment year 2019-2020 and onwards, the said
time-limit shall be twelve months from the end of the
assessment year in which the income was first assessable.
It is further proposed to amend sub-section (2) of the said
section to provide that the time-limit for making an order of
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assessment, reassessment or recomputation under section
147, in respect of notices served under section 148 on or
after the 1st day of April, 2019 shall be twelve months from
the end of the financial year in which notice under section
148 was served.
It is also proposed to amend sub-section (3) of the said
section to provide that the time-limit for making an order of
fresh assessment in pursuance of an order passed or
received in the financial year 2019-2020 and onwards under
section 254 or 263 or 264 shall be twelve months from the
end of the financial year in which order under section 254 is
received or order under section 263 or 264 is passed by the
authority referred therein.
It is also proposed to amend the third proviso to
Explanation 1 of the said section to omit the reference of
section 153B therein.
These amendments will take effect from 1st April, 2017.
It is also proposed to amend sub-section (5) of the said
section to provide that where an order under section 250 or
254 or 260 or 262 or 263 or 264 requires verification of any
issue by way of submission of any document by the assessee
or any other person or where an opportunity of being heard
is to be provided to the assessee, the time-limit relating to
fresh assessment provided in sub-section (3) shall apply to
the order giving effect to such order.
It is also proposed to amend sub-section (9) of the said
section to provide that where a notice under sub-section (1)
of section 142 or sub-section (2) of section 143 or section
148 has been issued prior to the 1st day of June, 2016 and
the assessment or reassessment has not been completed
by such date due to exclusion of time referred to in
Explanation 1, such assessment or reassessment shall be
completed in accordance with the provisions of section 153
as it stood immediately before its substitution by the Finance
Act, 2016.
These amendments will take effect retrospectively from
1st June, 2016.
Clause 59 of the Bill seeks to amend section 153A of the
Income-tax Act, 1961 relating to assessment in case of
search or requisition.
Sub-section (1) of the aforesaid section provides that
where a search is conducted under section 132 or requisition
is made under section 132A, a notice shall be issued to such
person to furnish the return of income in respect of each
assessment year falling within six assessment years
immediately preceding the assessment year relevant to the
previous year in which search is conducted or requisition is
made. It also provides for assessment or reassessment of
total income of the said years.
It is proposed that issuance of notice and assessment or
reassessment under the said section can also be made for
an assessment year preceding the assessment year relevant
to the previous year in which search is conducted or
requisition is made which falls beyond six assessment years
but not beyond ten assessment years from the assessment
year relevant to the previous year in which search is
conducted or requisition is made, provided that—
(i) the Assessing Officer has in his possession books
of account or other documents or evidence which reveal
that the income which has escaped assessment amounts
to or is likely to amount to fifty lakh rupees or more in one
year or in aggregate in the relevant assessment years;
(ii) such income escaping assessment is represented
in the form of asset which shall include immovable property
being land or building or both, shares and securities,
deposits in bank account, loans and advances;
(iii)the income escaping assessment or part thereof
relates to such year or years; and
(iv)search under section 132 is initiated or requisition
under section 132A is made on or after the 1st day of
April, 2017.
It is further proposed to make consequential amendment
to the provisos of the said sub-section.
It is also proposed to define the expression “relevant
assessment year” and “asset” in the form of Explanation.
These amendments will take effect from 1st April, 2017.
Clause 60 of the Bill seeks to amend section 153B of the
Income-tax Act, 1961 relating to time-limit for completion of
assessment under section 153A.
Clause (a) of sub-section (1) of the said section provides
that in respect of each assessment year falling within six
assessment years referred to in clause (b) of sub-section
(1) of section 153A, the order of assessment or reassessment
shall be made within a period of twenty-one months from the
end of the financial year in which the last of the authorisations
for search under section 132 or for requisition under section
132A was executed.
It is proposed to amend the above clause to provide that
the time-limit for assessment and reassessment as specified
therein shall also apply in respect of the relevant assessment
year referred to in sub-section (1) of section 153A.
The proposed amendment is consequential to the
amendment to section 153A of the Income-tax Act.
It is further proposed to amend sub-section (1) to provide
that for search and seizure cases conducted in the financial
year 2018-2019, the time-limit for making an assessment
order under section 153A shall be reduced from existing
twenty-one months to eighteen months from the end of the
financial year in which the last of the authorisations for search
under section 132 or for requisition under section 132A was
executed. It is further proposed that for search and seizure
cases conducted in the financial year 2019-2020 and
onwards, the said time-limit shall be further reduced to twelve
months from the end of the financial year in which the last of
the authorisations for search under section 132 or for
requisition under section 132A was executed.
It is also proposed to provide that period of limitation for
making the assessment or reassessment in case of other
person referred to in section 153C, shall be as available in
case of person on whom search is conducted or twelve
months from the end of the financial year in which books of
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account or documents or assets seized or requisitioned are
handed over under section 153C to the Assessing Officer
having jurisdiction over such other persons, whichever is
later.
It is also proposed to insert a proviso to the Explanation of
the said section so as to provide that where a proceeding
before the Settlement Commission abates under section
245HA, the period of limitation available under this section
for assessment or reassessment shall after the exclusion of
the period under sub-section (4) of section 245HA shall not
be less than one year; and where such period of limitation is
less than one year, it shall be deemed to have been extended
to one year.
These amendments will take effect from 1st April, 2017.
It is also proposed to amend sub-section (3) of the said
section to provide that that where a notice under section 153A
or section 153C has been issued prior to the 1st day of June,
2016 and the assessment has not been completed by such
date due to exclusion of time referred to in the Explanation,
such assessment shall be completed in accordance with the
provisions of this section as it stood immediately before its
substitution by the Finance Act, 2016.
This amendment will take effect retrospectively from 1st
June, 2016.
Clause 61 of the Bill seeks to amend section 153C of the
Income-tax Act, 1961 relating to assessment of income of
any other person.
It is proposed to amend the second proviso to sub-section
of the said section so as to provide a reference to the relevant
assessment year as referred to in sub-section (1) of section
153A.
The proposed amendment is consequential to the
amendment to section 153A of the Income-tax Act and shall
apply in respect of search conducted or requisition made on
or after the 1st day of April, 2017.
This amendment will take effect from 1st April, 2017.
Clause 62 of the Bill seeks to amend section 155 of the
Income-tax Act relating to other amendments.
It is proposed to insert a new sub-section (14A) in the
said section so as to provide that where credit for incometax
paid in any country outside India or a specified territory
outside India, referred to in section 90, section 90A or section
91, has not been given in the order of assessment for the
relevant assessment year on the grounds that the payment
of such tax was in dispute, then, the Assessing Officer shall
rectify the order of assessment or an intimation under subsection
(1) of section 143, if the assessee, within six months
from the end of the month in which the dispute is settled,
furnishes proof of settlement of such dispute and evidence
of payment of such tax along with an undertaking that no
credit of such amount of tax has been directly or indirectly
claimed or shall be claimed for any other assessment year.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to assessment years 2018-
2019 and subsequent years.
Clause 63 of the Bill seeks to insert a new section 194-IB
of the Income-tax Act relating to payment of rent by certain
individuals or Hindu undivided family.
The proposed new section provides that any person, being
an individual or a Hindu undivided family (other than those
referred to in second proviso of section 194-I), responsible
for paying to a resident any income by way of rent exceeding
fifty thousand rupees for a month or part of a month during
the previous year, shall deduct an amount equal to five per
cent. of such income as income-tax thereon.
It is further proposed to provide that income-tax referred
to in sub-section (1) shall be deducted on such income at
the time of credit of rent, for the last month of the previous
year or the last month of tenancy, if the property is vacated
during the year, as the case may be, to the account of the
payee or at the time of payment thereof in cash or by issue
of a cheque or draft or by any other mode, whichever is earlier.
It is also proposed to provide that the provisions of section
203A shall not apply to a person required to deduct tax in
accordance with the provisions of this section.
It is also proposed to provide that where the tax is required
to be deducted as per the provisions of section 206AA, such
deduction shall not exceed the amount of rent payable for
the last month of the previous year or the last month of the
tenancy, as the case may be.
It is also proposed to define the term “rent” for the purposes
of this section to mean any payment, by whatever name
called, under any lease, sub-lease, tenancy or any other
agreement or arrangement for the use of any land or building
or both.
This amendment will take effect from 1st June, 2017.
Clause 64 of the Bill seeks to insert a new section 194-IC
in the Income-tax Act relating to deductions in respect of
payment under specified agreement.
The proposed new section seeks to provide that
notwithstanding anything contained in section 194-IA, any
person responsible for paying to resident any sum by way of
consideration, not being consideration in kind, under the
agreement referred to in sub-section (5A) of section 45, shall,
at the time of credit of such sum to the account of the payee
or at the time of payment thereof in cash or by issue of a
cheque or draft or by any other mode, whichever is earlier,
deduct an amount equal to ten per cent. of such sum as
income-tax thereon.
This amendment will take effect from 1st April, 2017.
Clause 65 of the Bill seeks to amend section 194J of the
Income-tax Act which provides for deduction of tax at source
on fees for professional or technical services.
The said section provides that a person, not being an
individual or a Hindu undivided family, who is responsible
for paying to a resident any sum by way of fees for
professional or technical services or other services
mentioned therein shall deduct an amount equal to ten per
cent. of such sum as income-tax on income comprised
therein.
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It is proposed to insert a proviso in the said section so as
to reduce the rate of tax deduction at source to two per cent.
from ten per cent. in case of payments received or credited
to a payee, who is engaged only in the business of operation
of call centre.
This amendment will take effect from 1st June, 2017.
Clause 66 of the Bill seeks to amend section 194LA of the
Income-tax Act relating to payment of compensation on
acquisition of certain immovable property.
The said section, inter alia, provides that any person
responsible for paying compensation to a resident shall
deduct tax at source at the rate of ten per cent. on the
compensation or enhanced compensation or consideration
on account of compulsory acquisition of any immovable
property (other than agricultural land) under any law for the
time being in force subject to certain conditions specified
therein.
It is proposed to amend the said section so as to insert a
new proviso to provide that no deduction of tax at source
shall be made under this section, where such payment is
made in respect of any award or agreement which has been
exempted from the levy of income-tax under section 96 of
the Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, 2013.
This amendment will take effect from 1st April, 2017.
Clause 67 of the Bill seeks to amend section 194LC of the
Income-tax Act relating to income by way of interest from
Indian company.
The existing provisions contained in sub-section (2) of the
said section, specify the interest eligible for lower withholding
tax at the rate of five per cent. It shall be the interest income
payable by the specified company on borrowings made by it
in foreign currency from sources outside India under a loan
agreement or by way of issue of any long-term bonds
including long-term infrastructure bonds subject to the
approval by the Central Government.
Sub-clauses (a) and (c) of clause (i) of the said sub-section
further provides that the borrowing shall be made, under a
loan agreement at any time on or after the 1st day of July,
2012, but before the 1st day of July, 2017; and by way of any
long-term bond including long-term infrastructure bond on
or after the 1st day of October, 2014, but before the 1st day
of July, 2017, respectively.
It is proposed to amend sub-clauses (a) and (c) of clause
(i) of sub-section (2) of the said section to provide that the
borrowings can be made before the 1st day of July, 2020
instead of the 1st day of July, 2017.
These amendments will take effect from 1st April, 2018
and will, accordingly, apply in relation to the assessment
year 2018-2019 and subsequent years.
It is also proposed to insert a new clause (ia) in sub-section
(2) of the said section to extend the benefit of the said section
to the rupee denominated bond issued outside India before
1st July, 2020 also.
This amendment will take effect retrospectively from 1st
April, 2016 and will, accordingly, apply in relation to the
assessment year 2016-2017 and subsequent years.
Clause 68 of the Bill seeks to amend section 194LD of the
Income-tax Act relating to income by way of interest on certain
bonds and Government securities.
Under the existing provisions contained in sub-section (2)
of the said section, the interest income eligible for lower
withholding tax rate of five per cent. as provided in sub-section
(1) has been specified to be the interest payable on or after
the 1st day of June, 2013 but before 1st day of July, 2017.
It is proposed to amend the aforesaid sub-section so as
to provide concessional rate of five per cent. withholding tax
on interest payment in respect of investments in Government
securities and rupee denominated corporate bonds to be
made available on interest payable before 1st day of July,
2020.
This amendment will take effect from 1st April, 2018 and
will, accordingly, apply in relation to the assessment year
2018-2019 and subsequent years.
Clause 69 of the Bill seeks to amend section 197A of the
Income-tax Act relating to no deduction to be made in certain
cases.
The existing provisions contained in sub-sections (1A) and
(1C) of the aforesaid section provide that no deduction of
tax shall be made under the various sections referred to in
the said sub-sections (1A) and (1C) of section 197A, if the
persons referred to in the said sub-sections furnish to the
persons responsible for paying any income of the nature
referred to in specified sections, a declaration in writing in
duplicate in the prescribed form and verified in the prescribed
manner to the effect that the tax on his estimated total income
of the previous year in which such income is to be included
in computing his total income will be nil.
It is proposed to amend the said sub-sections (1A) and
(1C) of the said section so as to cover deduction at source
under section 194D also.
This amendment will take effect from 1st June, 2017.
Clause 70 of the Bill seeks to amend section 204 of the
Income-tax Act relating to meaning of “person responsible
for paying”.
It is proposed to insert a new clause (iib) in the said section
so as to provide that in the case of furnishing of information
relating to payment to a non-resident, not being a company,
or to a foreign company, of any sum, whether or not
chargeable under the provisions of this Act, the payer himself,
or, if the payer is a company, the company itself including
the principal officer thereof shall also be the person
responsible for paying, within the meaning of definition under
this section.
This amendment will take effect from 1st April, 2017.
Clause 71 of the Bill seeks to amend section 206C of the
Income-tax Act relating to profits and gains from the business
of trading in alcoholic liquor, forest produce, scrap, etc.
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Clause (ii) of sub-section (1D) of the said section provides
for tax collection at source at the rate of one per cent. of sale
consideration on cash sale of jewellery exceeding five lakh
rupees. It is proposed to omit the said clause in view of
restriction on cash transactions as proposed to be provided
under section 269ST.
The proposed amendment is consequential to the insertion
of a new section 269ST in the Income-tax Act.
Sub-section (1F) of the said section, inter alia, provides
that the seller who receives any amount as consideration for
sale of a motor vehicle of the value exceeding ten lakh rupees,
shall at the time of receipt of such amount, collect from the
buyer a sum equal to one per cent. of the sale consideration
as income-tax.
It is further proposed to insert a new sub-clause (iii) in
clause (aa) of the Explanation to section 206C to exempt
the following class of buyers from the provision of sub-section
(1F) of the said section, namely:—
(i) the Central Government, a State Government and
an embassy, a High Commission, legation, commission,
consulate and the trade representation of a foreign State;
or
(ii) local authority as defined in the Explanation to
clause (20) of section 10; or
(iii) a public sector company which is engaged in the
business of carrying passengers.
It is also proposed to omit the reference of sub-section
(1F) in sub-clause (ii) in the Explanation to section 206C.
These amendments will take effect from 1st April, 2017.
Clause 72 of the Bill seeks to insert a new section 206CC
after section 206CB of the Income-tax Act relating to
requirement to furnish Permanent Account Number by
collectee.
The proposed sub-section (1) of the said section specifies
that any person paying any sum or amount, on which tax is
collectible at source under Chapter XVII BB (herein referred
to as collectee) shall furnish his Permanent Account Number
to the person responsible for collecting such tax (herein
referred to as collector), failing which tax shall be collected
at twice the rate mentioned in the relevant section or at the
rate of five per cent., whichever is higher.
The proposed sub-section (2) provides that the declaration
filed under sub-section (1A) of section 206C shall not be
valid unless the person filing the declaration furnishes his
Permanent Account Number in such declaration.
The proposed sub-section (3) provides that in case any
declaration becomes invalid under sub-section (2), the
collector shall collect the tax at source in accordance with
the provisions of sub-section (1).
The proposed sub-section (4) provides that no certificate
under sub-section (9) of section 206C shall be granted unless
it contains the Permanent Account Number of the applicant.
The proposed sub-section (5) provides that the collectee
shall furnish his Permanent Account Number to the collector
who shall indicate the same in all its correspondence, bills,
vouchers and other documents which are sent to each other.
The proposed sub-section (6) of the said section provides
that where the Permanent Account Number provided by the
collectee is invalid or it does not belong to the collectee,
then it shall be deemed that Permanent Account Number
has not been furnished to the collector and the tax shall be
collected under sub-section (1).
The proposed sub-section (7) provides that the new
section 206CC shall not apply to a non-resident who does
not have permanent establishment in India and also to explain
the expression ‘permanent establishment’.
This amendment will take effect from 1st April, 2017.
Clause 73 of the Bill seeks to amend section 211 of the
Income-tax Act relating to instalments of advance tax and
due dates.
Clause (a) of sub-section (1) of the said section provides
that all the assessees, except those referred to in clause (b),
are liable to pay advance tax in four instalments during each
financial year and also provides the due dates for the
payments and amounts payable.
Clause (b) of sub-section (1) of the said section provides
that an eligible assessee engaged in an eligible business
referred to in section 44AD is liable to pay advance tax in a
single instalment on or before the 15th of March every
financial year.
It is proposed to amend the said clause (b) so as to provide
that the assessee who declares profits and gains in
accordance with the provisions of sub-section (1) of section
44ADA, shall also be liable to pay advance tax in one
instalment on or before the 15th of March every financial
year.
This amendment will take effect from 1st April, 2017 and
will, accordingly, apply in relation to the assessment year
2017-2018 and subsequent years.
Clause 74 of the Bill seeks to amend section 234C of the
Income-tax Act relating to interest for deferment of advance
tax.
It is proposed to provide that in respect of an assessee
referred to in section 44ADA, interest under the aforesaid
section shall be levied, if the advance tax paid on or before
the 15th day of March, is less than the tax due on the returned
income. The said amendment is consequential to the
amendment of section 211.
Tax on certain dividends received from domestic
companies is being levied under section 115BBDA with effect
from the 1st April, 2017, if such income exceeds ten lakh
rupees. The first proviso to sub-section (1) of section 234C
lays down exceptions to the applicability of the said subsection
to short fall in the payment of advance tax in case of
certain incomes. It is proposed to amend the aforesaid
proviso so as to provide that no interest under said section
shall be levied on the income referred to in sub-section (1)
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of section 115BBDA subject to the conditions specified
therein.
These amendments will take effect from 1st April, 2017
and will, accordingly, apply in relation to the assessment
year 2017-2018 and subsequent years.
Clause 75 of the Bill seeks to insert section 234F of the
Income-tax Act relating to fee for default in furnishing return
of income.
It is proposed to provide that a fee for delay in filing of
return shall be paid for assessment year 2018-2019 and
onwards in a case where the return is not filed within the due
dates specified for filing of return under sub-section (1) of
section 139. It is further proposed that a fee of five thousand
rupees be payable, if the return is furnished after the due
date but on or before the 31st day of December of the
assessment year. A fee of ten thousand rupees is proposed
to be payable in any other case. However, in a case where
the total income does not exceed five lakh rupees, it is
proposed that the fee amount shall not exceed one thousand
rupees.
This amendment will take effect from 1st April, 2018 and
will, accordingly apply in relation to assessment year 2018-
2019 and subsequent years.
Clause 76 of the Bill seeks to insert a new section 241A
in the Income-tax Act relating to withholding of refund in
certain cases.
It is proposed to provide that, for every assessment year
commencing on or after the 1st day of April, 2017, where
refund of any amount becomes due to the assessee under
the provisions of sub-section (1) of section 143 and the
Assessing Officer is of the opinion that grant of the refund
may adversely affect the recovery of revenue, he may, for
the reasons to be recorded in writing and with the previous
approval of the Principal Commissioner or Commissioner,
withhold the refund up to the date on which the assessment
is made.
This amendment will take effect from 1st April, 2017 and
will, accordingly, apply in relation to the assessment year
2017-2018 and subsequent years.
Clause 77 of the Bill seeks to amend section 244A of the
Income-tax Act relating to interest on refunds.
The said section provides that an assessee is entitled to
receive interest on refund arising out of excess payment of
advance tax, tax deducted or collected at source, etc.
It is proposed to insert a new sub-section (1B) in the said
section so as to provide that where refund of any amount
becomes due to the deductor, then such person shall be
entitled to receive, in addition to the refund, simple interest
on such refund, calculated at the rate of one-half per cent.
for every month or part of a month comprised in the period,
from the date on which claim for refund is made in the
prescribed form or for giving effect to an order under section
250 or 254 or 260 or 262 from the date on which the tax is
paid up to the date on which refund is granted.
It is also proposed to amend sub-section (2) of the said
section to give reference of the deductor in addition to the
assessee and to provide that the interest shall not be allowed
for the period for which the delay in the proceedings resulting
in the refund is attributable to the deductor.
These amendments will take effect from 1st April, 2017.
Clause 78 of the Bill seeks to amend section 245A of the
Income-tax Act relating to definitions for the purposes of
Chapter XIX-A relating to settlement of cases.
Clause (b) of the said section provides definition of “case”.
Clause (iv) of the Explanation to the said clause (b) provides
that unless as otherwise specified, in case where no
assessment is made, proceedings shall be deemed to have
concluded on the expiry of two years from the end of the
relevant assessment year.
It is proposed to amend the said clause (iv) to the
Explanation so as to provide that conclusion of proceedings
shall be construed in accordance with the time specified for
making assessment under sub-section (1) of section 153.
The proposed amendment is consequential to the
amendment to section 153 and section 153B of the Incometax
Act.
This amendment will take effect from 1st April, 2017.
Clause 79 of the Bill seeks to amend section 245N of the
Income-tax Act relating to the definitions under Chapter XIXB
relating to advance rulings.
Clause (b) of the said section provides the definition of
the term “applicant”.
It is proposed to amend the said clause so as to include
within the scope of the definition of “applicant” an applicant
as in section 28E of the Customs Act, 1962, section 23A of
the Central Excise Act, 1944 and section 96A of the Finance
Act, 1994.
This amendment will take effect from 1st April, 2017.
Clause 80 of the Bill seeks to amend section 245-O of the
Income-tax Act relating to the Authority for Advance Rulings.
Clause (a) of sub-section (3) of the aforesaid section
provides that the Chairman of the Authority for Advance
Rulings shall be a person who has been a Judge of the
Supreme Court.
It is proposed to amend the said clause (a) so as to provide
that a person who has been the Chief Justice of a High Court
or a Judge of a High Court for at least seven years shall also
be eligible to be appointed as the Chairman of the Authority
for Advance Rulings.
Clause (c) of sub-section (3) of the aforesaid section
provides that the revenue Member of the Authority for
Advance Rulings shall be a person from the Indian Revenue
Service, who is of the rank of Principal Chief Commissioner
or Principal Director General or Chief Commissioner or
Director General.
It is proposed to amend the said clause (c) so as to provide
that an officer from the Indian Revenue Service who is, or is
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qualified to be, a Member of the Central Board of Direct Taxes
or an officer from the Indian Customs and Central Excise
Service, who is, or is qualified to be, a Member of the Central
Board of Excise and Customs as on the date of occurrence
of the said vacancy shall be eligible to be appointed as the
revenue Member of the Authority for Advance Rulings.
It is further proposed to amend clause (d) of the said subsection
(3) so as to provide that eligibility for appointment of
law Member shall also be determined on the date of
occurrence of vacancy.
It is also proposed to insert sub-sections (6A) and (6B) in
the aforesaid section so as to provide that in the event the
office of Chairman falls vacant or in case the Chairman is
unable to discharge his duties, the senior-most Vicechairman
shall act as Chairman or shall discharge the
functions of the Chairman till such time the new Chairman
enters upon his office or the Chairman resumes his duties,
as the case may be.
This amendment will take effect from 1st April, 2017.
Clause 81 of the Bill seeks to amend section 245Q of the
Income-tax Act relating to the application for advance ruling.
Sub-section (1) of the aforesaid section provides that an
applicant desirous of obtaining an advance ruling under
Chapter XIX-B of the Income-tax Act may make an
application in such form and in such manner as may be
prescribed.
It is proposed to amend the said section so as to provide
that an application for advance ruling may also be made
under Chapter V of the Customs Act, 1962 or under Chapter
IIIA of the Central Excise Act, 1944 or under Chapter VA of
the Finance Act, 1994.
This amendment will take effect from 1st April, 2017.
Clause 82 of the Bill seeks to amend section 253 of the
Income-tax Act relating to Appeals to the Appellate Tribunal.
Sub-clause (f) of sub-section (1) of the aforesaid section
provides that an order passed by the prescribed authority
under sub-clause (vi) or sub-clause (via) of clause (23C) of
section 10 shall be appealable before the Appellate Tribunal.
It is proposed to insert sub-clause (iv) and sub-clause (v)
of clause (23C) in the aforesaid section, so as to make an
order passed by the prescribed authority under said subclauses
also appealable before the Appellate Tribunal.
This amendment will take effect from 1st April, 2017.
Clause 83 of the Bill seeks to insert a new section 269ST
in the Income-tax Act relating to mode of undertaking
transactions.
It is proposed to provide that no person shall receive an
amount of three lakh rupees or more, in aggregate from a
person in a day; or in respect of a single transaction; or in
respect of transactions relating to one event or occasion from
a person, otherwise than by an account payee cheque or an
account payee bank draft or use of electronic clearing system
through a bank account.
It is further proposed to provide that the said restriction
shall not apply to Government, any banking company, post
office savings bank or co-operative bank, any receipt from
sale of agricultural produce by any person being an individual
or Hindu Undivided family in whose hands such receipts
constitutes agricultural income and in respect of transactions
of the nature referred to in section 269SS; and such other
persons or class of persons or receipts, as may be specified
by the Central Government by notification in the Official
Gazette.
This amendment will take effect from 1st April, 2017.
Clause 84 of the Bill seeks to insert a new section 271DA
of the Income-tax Act relating to penalty for failure to comply
with provisions of section 269ST.
It is proposed to provide that if a person receives any sum
in contravention of the provisions of section 269ST, he shall
be liable to pay, by way of penalty, a sum equal to the amount
of such receipt. It is further proposed that the penalty shall
not be imposable if such person proves that there were good
and sufficient reasons for the contravention. It is also
proposed that any such penalty shall be imposed by the Joint
Commissioner.
This amendment will take effect from 1st April, 2017.
Clause 85 of the Bill seeks to amend section 271F of the
Income-tax Act relating to penalty for failure to furnish return
of income.
The said section provides for penalty for failure to furnish
return of income.
It is proposed to provide that the provisions of the said
section shall not apply in respect of assessment year 2018-
2019 and subsequent years.
This amendment will take effect from 1st April, 2018 and
will, accordingly apply in relation to assessment year 2018-
2019 and subsequent years.
Clause 86 of the Bill seeks to insert a new section 271J in
the Income-tax Act relating to penalty for furnishing incorrect
information in reports or certificates.
It is proposed to provide that if an accountant or a merchant
banker or a registered valuer furnishes incorrect information
in a report or certificate under any provisions of the Act or
the rules made thereunder, the Assessing Officer or the
Commissioner (Appeals), without prejudice to the provisions
of the Income tax Act, may direct him to pay, by way of
penalty, a sum of ten thousand rupees for each such report
or certificate. It is also proposed to define the expressions of
“accountant”, “merchant banker” and “registered valuer”.
This amendment will take effect from 1st April, 2017.
Clause 87 of the Bill seeks to amend section 273B in the
Income-tax Act relating to penalty not to be imposed in certain
cases.
It is proposed that penalty shall not be imposable in respect
of the proposed section 271J also, if the person proves that
there was reasonable cause for the failure referred to in the
said section.
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This amendment is consequential in nature.
This amendment will take effect from 1st April, 2017.
Customs
Clause 88 of the Bill seeks to amend section 2 of the
Customs Act. It is proposed to amend clauses (13), (16),
(20) and (26) and to insert new clauses (3A), (20A), (28A)
and (30B) therein.
Clause 89 of the Bill seeks to amend section 7 of the
Customs Act so as to insert new clauses (e) and (f) in subsection
(1) to provide for appointment of foreign post offices
and international courier terminals.
Clause 90 of the Bill seeks to amend section 17 of the
Customs Act so as to substitute sub-section (3) thereof to
simplify the production of document or information by the
importer or exporter or any other person for verification of
self-assessment under sub-section (2) of the said section.
Clause 91 of the Bill seeks to amend section 27 of the
Customs Act so as to insert a new clause (g) therein to
exclude certain category of refunds from the scope of unjust
enrichment.
Clause 92 of the Bill seeks to amend section 28E of the
Customs Act, so as to substitute the definition of “Authority”
in clause (e) of the said section.
Clause 93 of the Bill seeks to substitute section 28F of the
Customs Act so as to provide that the Authority for Advance
Rulings constituted under section 245-O of the Income-tax
Act shall be the Authority for giving advance rulings for the
purposes of the Customs Act. It further seeks to provide that
the Member of the Indian Revenue Service (Customs and
Central Excise), who is qualified to be a Member of the Board,
shall be the revenue Member of the Authority for the purposes
of the Customs Act.
It also seeks to provide for transferring the applications
pending before the erstwhile Authority for Advance Rulings
(Central Excise, Customs and Service Tax) to the Authority
constituted under section 245-O of the Income-tax Act from
the stage at which such application or proceeding stood as
on the date on which the Finance Bill, 2017 receives the
assent of the President.
Clause 94 of the Bill seeks to omit section 28G of the
Customs Act.
Clause 95 of the Bill seeks to amend section 28H of the
Customs Act so as to enhance the application fee to rupees
ten thousand.
Clause 96 of the Bill seeks to amend section 28-I of the
Customs Act so as to extend the time-limit to six months for
the Authority to pronounce its rulings.
Clause 97 of the Bill seeks to insert a new section 30A in
the Customs Act so as to make it obligatory on the personin-
charge of a conveyance that enters India from any place
outside India or any other person as may be specified by the
Central Government by notification in the Official Gazette,
to deliver to the proper officer the passenger and crew arrival
manifest before arrival in the case of an aircraft or a vessel
and upon arrival in the case of a vehicle; and passenger
name record information of arriving passengers in such form,
containing such particulars, in such manner and within such
time as may be prescribed. It is proposed to impose such
penalty not exceeding fifty thousand rupees as may be
prescribed, in case of delay in delivering the information.
Clause 98 of the Bill seeks to insert a new section 41A in
the Customs Act so as to make it obligatory on the personin-
charge of a conveyance that departs from India to a place
outside India or any other person as may be specified by the
Central Government by notification in the Official Gazette,
to deliver to the proper officer the passenger and crew
departure manifest and passenger name record information
of departing passengers before the departure of the
conveyance in such form, containing such particulars, in such
manner and within such time as may be prescribed. It is also
proposed to impose a penalty not exceeding fifty thousand
rupees as may be prescribed in case of delay in delivering
the information.
Clause 99 of the Bill seeks to amend section 46 of the
Customs Act so as to provide that the bill of entry for imported
goods shall be presented before the end of the next day
following the day on which the aircraft or vessel or vehicle
carrying the goods arrives at a customs station at which such
goods are to be cleared for home consumption or
warehousing and that in the case of default, he shall pay
such charge for late presentation as may be prescribed.
Clause 100 of the Bill seeks to amend section 47 of the
Customs Act so as to provide the manner of payment of
interest in the case of self-assessed bills of entry or, as the
case may be, assessed, reassessed or provisionally
assessed bills of entry.
Clause 101 of the Bill seeks to substitute section 49 of the
Customs Act so as to provide for storage of imported goods
in a public warehouse pending removal.
Clause 102 of the Bill seeks to substitute clause (a) of
sub-section (1) of section 69 of the Customs Act so as to
substitute the reference of section 82 therein to section 84.
Clause 103 of the Bill seeks to omit section 82 of the Customs
Act.
Clause 104 of the Bill seeks to substitute clause (a) of
section 84 of the Customs Act so as to provide for the form
and manner in which an entry may be made in respect of
goods imported or to be exported by post.
Clause 105 of the Bill seeks to amend section 127B of the
Customs Act so as to insert a new sub-section (5) therein to
enable any person, other than applicant referred to in subsection
(1), to make an application to the Settlement
Commission.
Clause 106 of the Bill seeks to amend sub-section (3) of
section 127C of the Customs Act, so as to substitute certain
words therein. It further seeks to insert a new sub-section
(5A) therein to enable the Settlement Commission to amend
the order passed by it under sub-section (5) to rectify any
error apparent on the face of record.
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Clause 107 of the Bill seeks to amend section 157 of the
Customs Act so as to empower the Board to make regulations
for prescribing the form, particulars, manner and time of
providing the passenger and crew manifest for arrival and
departure and passenger name record information and
penalty in the case of delay in delivering the information.
Customs Tariff
Clause 108 of the Bill seeks to amend clause (c) of
sub-section (3) of section 9 of the Customs Tariff Act so as
to withdraw the exemption to three categories of nonactionable
subsidies specified therein, from the scope of antisubsidy
investigations.
Clause 109 of the Bill seeks to amend the First Schedule
to the Customs Tariff Act,––
(i) in the manner specified in the Second Schedule so
as to revise tariff rates in respect of certain tariff items;
(ii) in the manner specified in the Third Schedule so as
to harmonise certain entries with Harmonised System of
Nomenclature and also to amend Chapter 98.
Clause 110 of the Bill seeks to amend the Second Schedule
to the Customs Tariff Act in the manner specified in the Fourth
Schedule so as to fix a tariff rate of export duty of 30% in
respect of tariff item 2606 00 90 relating to other aluminium
ores and concentrates.
Excise
Clause 111 of the Bill seeks to amend section 23A of the
Central Excise Act so as to substitute the definition of
“Authority” in clause (e) of the said section.
Clause 112 of the Bill seeks to omit section 23B of the
Central Excise Act.
Clause 113 of the Bill seeks to amend sub-section (3) of
section 23C of the Central Excise Act so as to enhance the
application fee to rupees ten thousand.
Clause 114 of the Bill seeks to amend sub-section (6) of
section 23D of the Central Excise Act so as to extend the
time-limit to six months for the Authority to pronounce its
rulings.
Clause 115 of the Bill seeks to insert a new section 23-I in
the Central Excise Act so as to provide for transferring the
pending applications before the erstwhile Authority for
Advance Rulings (Central Excise, Customs and Service Tax)
to the Authority constituted under section 245-O of the
Income-tax Act, from the stage at which such proceedings
stood as on the date on which the Finance Bill, 2017 receives
the assent of the President.
Clause 116 of the Bill seeks to amend section 32E of the
Central Excise Act so as to insert a new sub-section (5)
therein, to enable any person, other than assessee referred
to in sub-section (1), to make an application to the Settlement
Commission.
Clause 117 of the Bill seeks to amend sub-section (3) of
section 32F of the Central Excise Act so as to substitute
certain words therein. It further seeks to insert a new subsection
(5A) therein to enable the Settlement Commission
to amend the order passed by it under sub-section (5) to
rectify any error apparent on the face of record.
Central Excise Tariff
Clause 118 of the Bill seeks to amend the First Schedule to
the Central Excise Tariff Act in the manner specified in the
Fifth Schedule so as to revise the tariff rates in respect of
certain tariff items.
Clause 119 of the Bill seeks to amend the First Schedule
to the Central Excise Tariff Act so as to substitute excise
duty on motor vehicles falling under tariff items 8702 90 21,
8702 90 22,
8702 90 28 and 8702 90 29 retrospectively with effect from
the 1st day of January, 2017.
Service Tax
Clause 120 of the Bill seeks to amend section 65B of the
1994 Act so as to omit clause (40) thereof.
Clause 121 of the Bill seeks to amend section 66 D of the
1994 Act so as to omit clause (f) thereof.
Clause 122 of the Bill seeks to amend section 96A of the
1994 Act so as to substitute the definition of “Authority” in
clause (e) of the said section.
Clause 123 of the Bill seeks to omit section 96B of the
1994 Act.
Clause 124 of the Bill seeks to amend sub-section (3) of
section 96C of the 1994 Act so as to enhance the application
fee to rupees ten thousand.
Clause 125 of the Bill seeks to amend sub-section (6) of
section 96D of the 1994 Act so as to extend the time-limit to
six months for the Authority to pronounce its rulings.
Clause 126 of the Bill seeks to insert a new section 96HA
in the 1994 Act so as to provide for transferring the pending
applications and proceedings before the erstwhile Authority
for Advance Rulings (Central Excise, Customs and Service
Tax) to the Authority constituted under section 245-O of the
Income-tax Act, from the stage at which such application or
proceeding stood as on the date on which the Finance Bill,
2017 receives the assent of the President.
Clause 127 of the Bill seeks to insert new sections 104
and 105 in the 1994 Act so as to––
(a) exempt service tax leviable on one-time upfront
amount (premium, salami, cost, price, development charge
or by whatever name called) in respect of taxable service
provided or agreed to be provided by a State Government
industrial development corporation or undertaking to
industrial units by way of grant of long-term lease of thirty
years or more of industrial plots, during the period
commencing from the 1st day of June, 2007 and ending
with the 21st day of September, 2016 (both days inclusive);
(b) extend service tax exemption on taxable services
provided or agreed to be provided by the Army, Naval and
Air Force Group Insurance Funds by way of life insurance
to members of the Army, Navy and Air Force under the
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Group Insurance Schemes of the Central Government
during the period commencing from the 10th day of
September, 2004 and ending with the 1st day of February,
2016 (both days inclusive).
Clause 128 of the Bill seeks to retrospectively amend rule
2A of the Service Tax (Determination of Value) Rules, 2006
in the manner specified in column (3) of the Sixth Schedule
with retrospective effect, on and from and up to the date
specified in column (4) thereof, so as to make it clear that
value of service portion in execution of a works contract,
which involves transfer of land or undivided share of land,
as the case may be, shall not include value of property in
land or undivided share of land so transferred.
Miscellaneous
Clauses 129 and 130 seek to amend section 20 of the
Indian Trusts Act, 1882 [as substituted by section 2 of the
Indian Trusts (Amendment) Act, 2016], relating to investment
of trust money.
The provisions of the aforesaid section, inter alia, provides
that where trust-property consists of money and cannot be
applied immediately or at an early date, the trustee shall,
subject to any direction contained in the instrument of trust,
invest the money in any of the securities or class of securities
expressly authorised by the instrument of trust or as specified
by the Central Government, by notification in the Official
Gazette.
The said section further provides that where there is a
person competent to contract and entitled in possession to
receive the income of the trust-property for his life or any
greater estate, no investment in any of the securities or class
of securities mentioned above shall be made without his
consent in writing.
It is proposed to amend the said section so as to provide
that the trustee can make investment of such money as
expressly authorised by the instrument of trust or in any of
the securities or class of securities as specified by the Central
Government by notification in the Official Gazette.
It is further proposed to amend the proviso to the said
section so as to omit the expression “in any of the securities
or class of securities mentioned above” occurring therein,
which is consequential in nature.
This amendment shall come into force on such date as
the Central Government may, by notification in the Official
Gazette, appoint.
Clauses 131 and 132 of the Bill seek to amend section 7
of the Indian Post Office Act, 1898 relating to power to fix
rates of inland postage.
The aforesaid section, inter alia, provides that the Central
Government may, by notification in the Official Gazette, fix
the rates of postage and other sums to be charged in respect
of postal articles sent by the inland post under the said Act,
provided that the highest rate of postage when pre-paid, shall
not exceed the rate set forth for each class of postal articles
in the First Schedule.
It is proposed to substitute the proviso to sub-section (1)
of the said section of the said Act so as to provide that till the
issuance of notification in the Official Gazette, by the Central
Government, to fix the rates of postage and other sums of
postal articles, in accordance with provisions of sub-section
(1) of the said section, the rates set forth in the First Schedule
shall be the rates chargeable under the said Act.
It is further proposed to omit sub-section (2) of the said
section which is consequential in nature.
These amendments will take effect from 1st April, 2017.
Clauses 133 and 134 of the Bill seek to amend section 31
of the Reserve Bank of India Act, 1934 relating to issue of
demand bills and notes.
It is proposed to insert a new sub-section (3) to the said
section so as to provide that the Central Government may
authorise any scheduled bank to issue electoral bond as
referred to in the proposed clause (d) of the first proviso to
section 13A of the Income-tax Act.
It is also proposed to define the expression “electoral
bond”.
This amendment is consequential in nature.
This amendment will come into force from 1st April, 2017.
Clauses 135 and 136 of the Bill seek to amend section
29C of the Representation of the People Act, 1951 relating
to declaration of donation received by the political parties.
Sub-section (3) of section 29C of the Representation of
the People Act, 1951, inter alia, provides that every political
party shall furnish a report to the Election Commission with
regard to the details of contributions received by it in excess
of twenty thousand rupees from any person in order to avail
the income-tax relief as per the provisions of Income-tax
Act,1961.
It is proposed to provide that the contributions received
by way of “electoral bond” shall be excluded from the scope
of sub-section (3) of section 29C of the said Act. It is also
proposed to define the term “electoral bond” which is
consequential in nature.
This amendment will take effect from 1st April, 2017.
Clauses 137 and 138 of the Bill seek to amend section 18
of the Oil Industry (Development) Act, 1974 relating to Oil
Industry Development Fund.
Sub-section (2) of section 18 of the said Act provides for
application of the Oil Industry Development Fund for certain
purposes. It is proposed to expand the scope of the said
section, so as to utilise the said Fund for meeting any
expenditure incurred by any Central Public Sector
Undertaking in the oil and gas sector, on behalf of the Central
Government and for meeting expenditure on any scheme or
activity by the Central Government relating to oil and gas
sector.
This amendment will come into force from 1st April, 2017.
Clauses 139 to 142 of the Bill seek to repeal the Research
and Development Cess Act, 1986.
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The Research and Development Cess Act, 1986 provides
for the levy and collection of a cess on all payments made
for the import of technology for the purposes of encouraging
the commercial application of indigenously developed
technology and for adapting imported technology to wider
domestic application and for matters connected therewith or
incidental thereto.
It is proposed to repeal the said Act, and to make budgetary
allocation for Research and Development.
This amendment will come into force from 1st April, 2017.
Clauses 143 to 145 of the Bill seek to amend certain
provisions of the Securities and Exchange Board of India
Act, 1992.
It is proposed to amend section 2 of the Act so as to insert
therein definitions of the expressions “Insurance Regulatory
and Development Authority”, “Judicial Member”, “Pension
Fund Regulatory and Development Authority” and “Technical
Member”. It is proposed to substitute section 15K relating to
the establishment of Securities Appellate Tribunal, section
15L relating to the composition of the Appellate Tribunal,
section 15M relating to the qualifications for appointment as
Presiding Officer and Judicial Member. It is further proposed
to insert new sections 15MA, 15MB and section 15MC
relating to appointment of Presiding Officer, Judicial
Members, Search-cum-Selection Committee for appointment
of Technical Members, vacancy not to invalidate selection
proceedings. It is also proposed to substitute
section 15N relating to tenure of the office of Presiding Officer,
Judicial Members and Technical Members. It is also
proposed to insert a new section 15PA authorising the
Member to act as Presiding Officer in certain circumstances.
It is also proposed to substitute sub-section (2) of section
15Q relating to removal of Presiding Officer, Judicial Member
or Technical Member of the Tribunal. It is also proposed to
make certain consequential amendments in section 15T in
view of the above amendments. New sub-sections (4) to (6)
are proposed to be inserted in section 15U relating to
distribution of business amongst Benches, transfer cases
from one Bench to another Bench.
Clause 146 of the Bill seeks to amend the Seventh
Schedule to the Finance Act, 2005 so as to revise the rates
of certain tariff items as specified in the Seventh Schedule.
Clauses 147 to 149 of the Bill seek to amend certain
provisions of the Payment and Settlement Systems Act, 2007
(hereinafter referred to as the said Act) which provides for
the regulation and supervision of payment systems in India.
The existing provisions of Chapter II of the said Act relates
to Designated Authority and its Committee. It is proposed to
substitute the said Chapter so as to provide that instead of
the existing Board for Regulation and Supervision of
Payments and Settlement, the Payments Regulatory Board
will exercise the functions relating to the regulation and
supervision of payments and settlement systems under the
Act. The proposed new Board shall consist of the Governor,
Reserve Bank as Chairperson, Deputy Governor Reserve
Bank who is in-charge of Payment and Settlement Systems
as Member, one officer of the Reserve Bank to be nominated
by the Central Board of the Reserve Bank as Member of the
Board and three persons to be nominated by the Central
Government as Members. It is also proposed to empower
the said Board to devise the procedures to be followed in
the meetings, venue of the meetings and other matters,
incidental thereto by regulations.
It is also proposed to make consequential amendments
in section 38 of the Act, so as to give reference of the Board
in that section and reference of sub-section (1).
These amendments shall come into force on such date
as the Central Government may, by notification, in the Official
Gazette, appoint.
Clause 150 of the Bill seeks to amend the Finance Act,
2016.
Section 50 of the said Act amended sub-clause (iii) of
clause (c) of sub-section (1) of section 112 of Income-tax
Act to provide that with effect from the 1st day of April, 2017,
the long-term capital gains arising from transfer of a capital
asset being shares of a company not being a company in
which the public are substantially interested, shall also be
chargeable to tax at the rate of ten per cent.
It is now proposed to amend the said section 50 so as to
provide that the above said amendments shall be effective
from 1st April, 2013 instead of 1st April, 2017.
This amendment will take effect, retrospectively from
1st April, 2013 and will, accordingly, apply in relation to the
assessment year 2013-2014 and subsequent years.
Clause (c) of the section 197 of the said Act provides that
where any income has accrued, arisen or received or any
asset has been acquired out of such income prior to
commencement of the Income Declaration Scheme, 2016,
and no declaration in respect of such income is made under
the said Scheme, then such income shall be deemed to have
accrued, arisen or received, as the case may be, in the year
in which a notice under sub-section (1) of section 142, subsection
(2) of section 143 or section 148 or section 153A or
section 153C of the Income-tax Act, 1961 is issued by the
Assessing Officer, and provisions of the said Act shall apply
accordingly.
It is proposed to omit clause (c) of the said section.
This amendment will take effect retrospectively from 1st
June, 2016.
MEMORANDUM REGARDING DELEGATED LEGISLATION
Clause 9 of the Bill seeks to amend section 12A
of the Income-tax Act relating to conditions for
applicability of sections 11 and 12.
The said clause, inter alia, seeks to insert a new
clause (ab) in sub-section (1) of the said section to
provide that provisions of sections 11 and 12 shall not
apply in relation to income of the trust or institution,
unless the person in receipt of the income has made
an application for registration of the trust or the
institution which has adopted or undertaken
modifications in the objects which do not conform to
the conditions of registration, in the prescribed form
and manner to the Principal Commissioner or
Commissioner.
Clause 26 of the Bill seeks to insert a new section
50CA in the Income-tax Act relating to special provision
for full value of consideration for transfer of share other
than quoted shares.
In the said new section, it is proposed to provide
that in case of transfer of shares of a company other
than quoted shares, the full value of consideration for
the purpose of computing income chargeable to tax as
capital gain shall be the fair market value of such shares
determined in accordance with such manner as may
be prescribed.
Clause 42 of the Bill seeks to insert a new section
92CE of the Income-tax Act relating to secondary
adjustment in certain cases.
Sub-section (2) of the proposed new section,
inter alia, seeks to provide that where, as a result of
primary adjustment to the transfer price, there is an
increase in the total income or reduction in the loss, as
the case may be, of the assessee, the excess money
which is available with its associated enterprise, shall
be deemed to be an advance made by the assessee
to such associated enterprise, if it is not repatriated
within the time as may be prescribed and shall be
computed in such manner as may be prescribed.
Clause 99 of the Bill seeks to amend section 46
of the Customs Act so as to substitute sub-section (3)
thereof. The second proviso to the said sub-section
85
empowers the Board to make regulations to prescribe
the charges for late presentation of bill of entry.
Clause 105 of the Bill seeks to insert a new
sub-section (5) in section 127B of the Customs Act.
The said sub-section empowers the Central
Government to make rules to specify the manner in
which and the conditions subject to which an application
may be made by any person, other than the applicant,
before the Settlement Commission.
Clause 107 of the Bill seeks to insert a new
clause (ab) in sub-section (2) of section 157 of the
Customs Act relating to power to make regulations.
The said clause empowers the Board to make
regulations to provide for the form, the particulars, the
manner and the time of delivering the passenger and
crew manifest for arrival and departure and the
passenger name record information and the penalty,
for the delay in furnishing such information under
sections 30A and 41A thereof.
Clause 116 of the Bill seeks to insert a new
sub-section (5) in section 32E of the Central Excise Act.
The said sub-section empowers the Central
Government to make rules to specify the manner in
which and the conditions subject to which an application
may be made by any person, other than an assessee,
before the Settlement Commission.
Clause 148 of the Bill seeks to substitute Chapter II
of the Payment and Settlement Systems Act, 2007
relating to Designated Authority which, inter alia, seeks
to substitute section 3 of the said Act. The proposed
sub-section (4) provides that the powers and functions
of the Board, the time and venue of its meeting, the
procedure to be followed in such meetings (including
the quorum at such meetings) and other matters
incidental thereto shall be such as may be prescribed.
2. The matters in respect of which rules or
regulations may be made in accordance with the
provisions of the Bill are matters of procedure and detail
and it is not practicable to provide for them in the Bill.
3. The delegation of legislative power is, therefore,
of a normal character.
LOK SABHA
________
A
BILL
to give effect to the financial proposals of the Central Government
for the financial year 2017-2018.
________
(Shri Arun Jaitley,
Minister of Finance.)

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