Clause 12 - Amendment of section 28. - FINANCE BILL, 2016

Amendment of section 28.

12. In section 28 of the Income-tax Act, in clause (va), with effect from the 1st day of April, 2017,-

(A) in sub-clause (a), after the words “any business”, the words “or profession” shall be inserted;

(B) in the proviso, in clause (i), after the words “any business”, the words “or profession” shall be inserted.

 

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Notes on Clauses:

Clause 12 of the Bill seeks to amend section 28 of the Income tax Act relating to “Profits and gains of business or profession”.

Clause (va) of the aforesaid section, inter alia, provides that any sum, whether received or receivable, in cash or kind, under an agreement for not carrying out any activity in relation to any business, is chargeable to tax as business income for business entities.

It is proposed to amend the said clause so as to provide that any sum received or receivable, in cash or kind, under an agreement, for not carrying out any activity in relation to any profession, shall also be income chargeable to income-tax under the head “Profits and gains of business or profession”.

This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-2018 and subsequent years.