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Home Acts & Rules Bill Bills FINANCE BILL, 2015 Chapters List Chapter III DIRECT TAXES - Income-tax This

Clause 29 - Amendment of section 115JB - FINANCE BILL, 2015

FINANCE BILL, 2015
Chapter III
DIRECT TAXES - Income-tax
  • Contents

Amendment of section 115JB

29. In section 115JB of the Income-tax Act , in the Explanation 1 below sub-section (2), with effect from the 1st day of April, 2016,-

(a) after clause (f), the following clauses shall be inserted, namely:-

      “(fa) the amount or amounts of expenditure relatable to, income, being share of the assessee in the income of an association of persons or body of individuals, on which no income-tax is payable in accordance with the provisions of section 86;

      (fb) the amount or amounts of expenditure relatable to income from capital gains arising on transactions in securities (other than short term capital gains arising on transactions on which securities transaction tax is not chargeable), accruing or arising to an assessee being a Foreign Institutional Investor which has invested in such securities in accordance with the regulations made under the Securities and Exchange Board of India Act,1992 (15 of 1992.);”;

(b) after clause (iib), the following clauses shall be inserted, namely:-

     “(iic) the amount of income, being the share of the assessee in the income of an association of persons or body of individuals, on which no income-tax is payable in accordance with the provisions of section 86, if any such amount is credited to the profit and loss account; or

    (iid) the amount of income from capital gains arising on transactions in securities (other than short term capital gains arising on transactions on which securities transaction tax is not chargeable), accruing or arising to an assessee being a Foreign Institutional Investor which has invested in such securities in accordance with the regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992), if any such amount is credited to the profit and loss account; or”;

(c) after Explanation 3, the following Explanation shall be inserted, namely:-

‘Explanation 4.-For the purposes of sub-section (2),-

(a) the expression “Foreign Institutional Investor” shall have the meaning assigned to it in clause (a) of the Explanation to section 115AD;

(b) the expression “securities” shall have the same meaning as assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956(42 of 1956).’.

 



 

Notes on Clauses:

Clause 29 of the Bill seeks to amend section 115JB of the Income-tax Act relating to special provision for payment of tax by certain companies.

Under the existing provisions contained in sub-section (1) of the aforesaid section, in case of a company, if the tax payable on the total income as computed under the Income-tax Act in respect of any previous year relevant to the assessment year commencing on or after the 1st April, 2012, is less than eighteen and one-half per cent. of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee for the relevant previous year shall be eighteen and one-half per cent. of its book profit.

It is proposed to insert new clause (fa) in Explanation 1 so as to provide that the book profit shall be increased by the amount or amounts of expenditure relatable to, income, being share of income of an assessee on which no tax is payable in accordance with the provisions of section 86.

It is further proposed to insert new clause (iic) in Explanation 1 so as to provide that the amount of income, being the share of income of an assessee on which no income-tax is payable in accordance with the provisions of section 86, if any such amount is credited to the profit and loss account, shall be reduced from the book profit.

It is also proposed to insert a new clause (fb) in Explanation 1 so as to provide that the book profit shall be increased by the amount or amounts of expenditure relatable to income from transactions in securities, (other than short term capital gains arising on transactions on which securities transaction tax is not chargeable), accrued or arising to an assessee being a Foreign Institutional Investor which has invested in such securities in accordance with the regulations made under the Securities and Exchange Board of India Act, 1992.

It is also proposed to insert a new clause (iid) in Explanation 1 so as to provide that the amount of income from transactions in securities, (other than short term capital gains arising on transactions on which securities transaction tax is not chargeable), accrued or arising to an assessee being a Foreign Institutional Investor which has invested in such securities in accordance with the regulations made under the Securities and Exchange Board of India Act, 1992, if any such amount is credited to the profit and loss account, shall be reduced from the book profit.

It is also proposed to provide that the expression “Foreign Institutional Investor” shall have the meaning assigned to it in clause (a) of the Explanation to section 115AD and the expression “securities” shall have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulations) Act,1956.

These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 2017 and subsequent assessment years.

 
 
 
 

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