Amendment of section 36.
14. In section 36 of the Income-tax Act, in sub-section (1),—
(a) in clause (iiia), in the Explanation, in clause (i), after the words "public sector company", at both the places where they occur, the words "or scheduled bank" shall be inserted;
(b) in clause (viii), in the Explanation, in clause (b), for sub-clause (i), the following sub-clause shall be substituted with effect from the 1st day of April, 2010, namely:—
"(i) in respect of the specified entity referred to in sub-clause (i) or sub-clause (ii) or sub-clause
(iii) or sub-clause (iv) of clause (a), the business of providing long-term finance for-
(A) industrial or agricultural development;
(B) development of infrastructure facility in India; or
(C) development of housing in India;";
(c) clause (xvi) shall be omitted.
Notes on Clauses:
Clause 14 of the Bill seeks to amend section 36 of the Incometax Act which relates to other deductions.
The existing provisions contained in clause (i) of the Explanation to clause (iiia) of sub-section (1) of the said section provides for the definition of the expression "discount" as the difference between the amount received or receivable by the infrastructure capital company or infrastructure capital fund or public sector company issuing the bond and the amount payable by such company or fund or public sector company on maturity or redemption of such bond.
It is proposed to amend the said clause so as to include "scheduled bank" after public sector company. The proposed amendment is consequential in nature.
This amendment will take effect retrospectively from 1st April, 2009.
Clause (viii) of the said sub-section relates to deduction in respect of any special reserve created and maintained by eligible entities carrying out eligible businesses for an amount not exceeding twenty per cent. of profits derived from eligible business activities, carried to such reserve.
The Explanation to clause (viii) of said sub-section (1) defines the expressions 'specified entity' and 'eligible business' for the purposes of availing deductions under the aforesaid section. Under sub-clause (i) of clause (b) to the said Explanation, it is proposed to substitute the words "housing development" in place of the words "construction or purchases of houses in India for residential purpose".
This amendment will take effect from 1st April, 2010, and will, accordingly apply in relation to the assessment year 2010-2011 and subsequent years.
Clause (xvi) in sub-section (1) of the said section provides that any amount of commodities transaction tax paid by the assessee during the previous year in respect of taxable commodities transactions entered into in the course of his business during the previous year shall be allowed as a deduction, if the income arising from such taxable commodities transactions is included in the income computed under the head "Profits and gains of business or profession.
It is proposed to omit the said clause (xvi) retrospectively with effect from 1st April, 2009.
