Insertion of new section 115BBG.
45. After section 115BBF of the Income-tax Act [as inserted by section 54 of the Finance Act, 2016 (28 of 2016)], the following section shall be inserted with effect from the 1st day of April, 2018, namely:-
Tax on income from transfer of carbon credits.
‘115 BBG. (1) Where the total income of an assessee includes any income by way of transfer of carbon credits, the income-tax payable shall be the aggregate of––
(a) the amount of income-tax calculated on the income by way of transfer of carbon credits, at the rate of ten per cent.; and
(b) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (a).
(2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) of sub-section (1).
Explanation.––For the purposes of this section “carbon credit” in respect of one unit shall mean reduction of one tonne of carbon dioxide emissions or emissions of its equivalent gases which is validated by the United Nations Framework on Climate Change and which can be traded in market at its prevailing market price.’.
Notes on Clauses:
Clause 45 of the Bill seeks to insert a new section 115BBG in the Income-tax Act relating to tax on income from transfer of carbon credits.
The proposed new section 115BBG seeks to provide that in case of an assessee whose total income includes any income by way of transfer of carbon credits, the income-tax payable shall be the aggregate of the amount of income-tax calculated on the income by way of transfer of carbon credits at the rate of ten per cent., and the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income by way of transfer of carbon credit.
It is further proposed to provide that the assessee shall not be eligible for deduction in respect of any expenditure or allowance under any provision of the Income-tax Act in computing his income referred to in clause (a) of sub-section (1) of the proposed section.
It is also proposed to define the expression "carbon credits" in the said section.
This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years.
