Amendment of section 10.
05. In section 10 of the Income-tax Act,—
(A) in clause (10D), with effect from the 1st day of April, 2013,—
(i) in sub-clause (c),—
(I) after the words, figures and letters “the 1st day of April, 2003”, the words, figures and letters “but on or before the 31st day of March, 2012” shall be inserted;
(II) for the word “assured:”, the words “assured; or” shall be substituted;
(ii) after sub-clause (c) and before the first proviso, the following sub-clause shall be inserted, namely:—
“(d) any sum received under an insurance policy issued on or after the 1st day of April, 2012 in respect of which the premium payable for any of the years during the term of the policy exceeds ten per cent. of the actual capital sum assured:”;
(iii) in the first proviso, for the words “this sub-clause”, the words, brackets and letters “sub-clauses (c) and (d)” shall be substituted;
(iv) in the second proviso, for the words “this sub-clause”, the word, brackets and letter “sub-clause (c)” shall be substituted;
(v) the Explanation shall be numbered as Explanation 1 thereof and after Explanation 1 as so numbered, the following Explanation shall be inserted, namely:—
‘Explanation 2.—For the purposes of sub-clause (d), the expression “actual capital sum assured” shall have the meaning assigned to it in the Explanation to sub-section (3A) of section 80C;’;
(B) in clause (23C), after the sixteenth proviso, the following proviso shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2009, namely:—
“Provided also that the income of a trust or institution referred to in sub-clause (iv) or sub-clause (v) shall be included in its total income of the previous year if the provisions of the first proviso to clause (15) of section 2 become applicable to such trust or institution in the said previous year, whether or not any approval granted or notification issued in respect of such trust or institution has been withdrawn or rescinded;”;
(C) in clause (23FB), in Explanation 1, for clause (c), the following clause shall be substituted with effect from the 1st day of April, 2013, namely:—
‘(c) “venture capital undertaking” means a venture capital undertaking referred to in the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996 made under the Securities and Exchange Board of India Act, 1992;’;
(D) after clause (47), the following clause shall be inserted with effect from the 1st day of April, 2012, namely:—
“(48) any income received in India in Indian currency by a foreign company on account of sale of crude oil to any person in India:
Provided that—
(i) receipt of such income in India by the foreign company is pursuant to an agreement or an arrangement entered into by the Central Government or approved by the Central Government;
(ii) having regard to the national interest, the foreign company and the agreement or arrangement are notified by the Central Government in this behalf; and
(iii) the foreign company is not engaged in any activity, other than receipt of such income, in India.”.
Notes on Clauses:
Clause 5 of the Bill seeks to amend section 10 of the Income-tax Act relating to income not included in total income.
The existing provisions of clause (10D) of the aforesaid section provide that any sum received under a life insurance policy, including the sum allocated by way of bonus on such policy other than any sum received under sub-section (3) of section 80DD or any sum received under a Keyman insurance policy, or any sum received under an insurance policy for which the premium amount exceeds twenty per cent. of the actual capital sum assured, shall be exempt.
It is proposed to allow exemption of any sum received under an insurance policy issued on or after 1st April, 2012 only if the premium for the policy does not exceed ten per cent. of the actual capital sum assured.
This amendment will take effect from 1st April, 2013, and will, accordingly, apply in relation to the assessment year 2013-2014 and subsequent assessment years.
It is proposed to insert a new proviso after the sixteenth proviso to clause (23C) of the aforesaid section so as to provide that the income of a trust or institution referred to in sub-clause (iv) or sub-clause (v) shall be included in its total income of the previous year if the provisions of the first proviso to clause (15) of section 2 becomes applicable to such trust or institution in the said previous year, whether or not any approval granted or notification issued in respect of such trust or institution has been withdrawn or rescinded.
This amendment will take effect retrospectively from 1st April, 2009 and will, accordingly, apply in relation to the assessment year2009-2010 and subsequent assessment years.
The existing provisions contained in clause (23FB) of the aforesaid section provide that any income of a venture capital company or venture capital fund from investment in a venture capital undertaking does not form part of its total income. The definitions of “venture capital company”, “venture capital fund” and “venture capital undertaking” are provided in Explanation 1 to clause (23FB).
“Venture capital undertaking” has been defined in clause (c) of the said Explanation to mean such domestic company whose shares are not listed in a recognised stock exchange in India and which is engaged in certain businesses or industries specified in said clause (c).
It is proposed to amend clause (c) of Explanation 1 to the aforesaid clause so as to define the venture capital undertaking as the venture capital undertaking referred to in the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996 made under the Securities and Exchange Board of India Act, 1992.
This amendment will take effect from 1st April, 2013, and will, accordingly, apply in relation to the assessment year 2013-2014 and subsequent assessment years.
It is proposed to insert a new clause (48) in the aforesaid section so as to provide that any income of a foreign company received in India in Indian currency on account of sale of crude oil to any person in India subject to fulfilment of certain conditions specified in the said clause will also not be included in total income.
This amendment will take effect retrospectively from 1st April, 2012 and will, accordingly, apply in relation to the assessment year 2012-2013 and subsequent assessment years.
