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Home Acts & Rules Bill Bills FINANCE BILL, 2011 Chapters List Chapter III - Part 1 Direct Taxes - Income Tax This

Clause 18 - Insertion of new Chapter XII-BA- Special provisions for payment of tax by certain limited liability partnerships- Tax credit for alternate minimum tax - FINANCE BILL, 2011

FINANCE BILL, 2011
Chapter III - Part 1
Direct Taxes - Income Tax
  • Contents

Insertion of new Chapter XII-BA.

18. After Chapter XII-B of the Income-tax Act, the following Chapter shall be inserted with effect from the 1st day of April, 2012, namely:-

'CHAPTER XII-BA

SPECIAL PROVISIONS RELATING TO CERTAIN LIMITED LIABILITY PARTNERSHIPS

Special provisions for payment of tax by certain limited liability partnerships.

115JC. (1) Notwithstanding anything contained in this Act, where the regular income-tax payable for a previous year by a limited liability partnership is less than the alternate minimum tax payable for such previous year, the adjusted total income shall be deemed to be the total income of the limited liability partnership for such previous year and it shall be liable to pay income-tax on such total income at the rate of eighteen and one-half per cent.

(2) Adjusted total income referred to in sub-section (1) shall be the total income before giving effect to this Chapter as increased by-

(i) deductions claimed, if any, under any section included in Chapter VI-A under the heading

 "C.-Deductions in respect of certain incomes"; and

(ii) deduction claimed, if any, under section 10AA.

(3) Every limited liability partnership to which this section applies shall obtain a report, in such form as may be prescribed, from an accountant certifying that the adjusted total income and the alternate minimum tax have been computed in accordance with the provisions of this Chapter and
furnish such report on or before the due date of filing of return under sub-section (1) of section 139.

Tax credit for alternate minimum tax.

115JD. (1) The credit for tax paid by a limited liability partnership under section 115JC shall be allowed to it in accordance with the provisions of this section.                                                                  

(2) The tax credit of an assessment year to be allowed under sub-section (1) shall be the excess of alternate minimum tax paid over the regular income-tax payable of that year.

(3) No interest shall be payable on tax credit allowed under sub-section (1).

(4) The amount of tax credit determined under sub-section (2) shall be carried forward and set off in accordance with the provisions of sub-sections (5) and (6) but such carry forward shall not be 25 allowed beyond the tenth assessment year immediately succeeding the assessment year for which tax credit becomes allowable under sub-section (1).

(5) In any assessment year in which the regular income-tax exceeds the alternate minimum tax,
the tax credit shall be allowed to be set off to the extent of the excess of regular income-tax over the
alternate minimum tax and the balance of the tax credit, if any, shall be carried forward.                    

(6) If the amount of regular income-tax or the alternate minimum tax is reduced or increased as a result of any order passed under this Act, the amount of tax credit allowed under this section shall also be varied accordingly.

Application of other provisions of this Act.

115JE. Save as otherwise provided in this Chapter, all other provisions of this Act shall apply to a limited liability partnership referred to in this Chapter.

Interpretation in this Chapter.

115JF. In this Chapter-

(a) "accountant" shall have the same meaning as in the Explanation below sub-section (2) of section 288;

(b) "alternate minimum tax" means the amount of tax computed on adjusted total income at a rate of eighteen and one-half per cent.;

(c) "limited liability partnership" shall have the same meaning as assigned to it in clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008;  (6 of 2009.)

(d) "regular income-tax" means the income-tax payable for a previous year by a limited liability partnership on its total income in accordance with the provisions of this Act other than the provisions of this Chapter.'

 



 

Notes on Clauses:

Clause 18 of the Bill seeks to insert a new Chapter XII-BA [consisting of new sections 115JC, 115JD, 115JE and 115JF] in the Income-tax Act containing special provisions relating to certain limited liability partnerships.

Under the provisions of newly inserted section 115JC, where the regular income-tax payable for a previous year by any limited liability partnership is less than the alternate minimum tax payable for such previous year, the adjusted total income shall be deemed to be the total income of such limited liability partnership and it shall be liable to pay income-tax on such total income at the rate of eighteen and one-half per cent.

For the purpose of the aforesaid provision, adjusted total income shall be the total income before giving effect to the newly inserted Chapter XII-BA as increased by the deductions claimed under any section included in Chapter VI A under the heading “C.-Deductions in respect of certain incomes” and deduction claimed under section 10AA.

The proposed new section 115JD seeks to provide that the credit for tax paid by a limited liability partnership under section 115JC shall be the excess of the alternate minimum tax paid over the regular income-tax payable.  This shall be allowed to be carried forward up to the tenth assessment year immediately succeeding the assessment year for which such tax credit becomes allowable and shall be allowed to be set off for an assessment year in which the regular income-tax exceeds the alternate minimum tax to the extent of the excess of the regular income-tax over the alternate minimum tax.

The proposed new section 115JE seeks to provide that save as provided in the newly inserted Chapter XII-BA, all other provisions of the Income-tax Act shall apply to a limited liability partnership.

The proposed new section 115JF seeks to define the expressions “accountant”, “alternate minimum tax”, “limited liability partnership” and “regular income-tax”  for the purposes of newly inserted Chapter XII-BA.

These amendments will take effect from 1st April, 2012 and will, accordingly, apply in relation to the assessment year 2012-13 and subsequent years.

 
 
 
 

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