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Statutory Provisions

Home Acts & Rules Bill Bills FINANCE BILL, 2016 Chapters List Chapter III DIRECT TAXES This

Clause 21 - Amendment of section 36. - FINANCE BILL, 2016

FINANCE BILL, 2016
Chapter III
DIRECT TAXES
  • Contents

Amendment of section 36.

21. In section 36 of the Income-tax Act, in sub-section (1), in clause (viia), with effect from the 1st day of April, 2017,-

(i) after sub-clause (c) and before the Explanation, the following sub-clause shall be inserted, namely:-

“(d) a non-banking financial company, an amount not exceeding five per cent. of the total income (computed before making any deduction under this clause and Chapter VI-A).”;

(ii) in the Explanation, after clause (vi), the following clause shall be inserted, namely:-

‘(vii) “non-banking financial company” shall have the meaning assigned to it in clause (f) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934.);’.

 



 

Notes on Clauses:

Clause 21 of the Bill seeks to amend section 36 of the Income tax Act relating to other deductions.

The existing provisions contained in clause (viia) of sub-section (1) of the aforesaid section provide for deduction in respect of any provision for bad and doubtful debts made by certain entities.

It is proposed to insert a new sub-clause (d) in clause (viia) of sub-section (1) of the aforesaid section so as to provide that any provision for bad and doubtful debts made by a non-banking financial company shall be allowed a deduction of an amount not exceeding five per cent. of the total income (computed before making any deduction under this clause and Chapter VI-A).

It is also proposed to define the expression “non-banking financial company”.

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

 
 
 
 

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