Amendment of section 43D.
18. In section 43D of the Income-tax Act, with effect from the 1st day of April, 2018,-
(i) in clause (a), after the words “scheduled bank or”, the words “a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank or” shall be inserted;
(ii) in the long line, after the words “scheduled bank or”, the words “a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank or” shall be inserted;
(iii) in the Explanation, after clause (f), the following clause shall be inserted, namely:-
‘(g) “co-operative bank”, “primary agricultural credit society” and “primary co-operative agricultural and rural development bank” shall have the meanings respectively assigned to them in the Explanation to sub-section (4) of section 80P.’.
Notes on Clauses:
Clause 18 of the Bill seeks to amend section 43D of the Income-tax Act relating to special provision in case of income of public financial institutions, public companies, etc.
The said section inter alia, provides that interest income in relation to certain categories of bad or doubtful debts received by certain institutions or banks or corporations or companies, as referred to in the Explanation to the said section, shall be chargeable to tax in the previous year in which it is credited to its profit and loss account for that year or actually received, whichever is earlier.
It is proposed to amend the said section so as to provide that the interest income in relation to certain categories of bad or doubtful debts received by a co-operative bank other than a primary agricultural credit society or a primary cooperative agricultural and rural development bank shall also be chargeable to tax in the previous year in which it is credited to its profit and loss account for that year or actually received, whichever is earlier.
It is further proposed to include the definitions of the expressions "co-operative bank", "primary agricultural credit society" and "primary co-operative agricultural and rural development bank" in the said section.
These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years.
