Amendment of section 43D.
15. In section 43D of the Income-tax Act, with effect from the 1st day of April, 2020,––
(i) in clause (a), after the words “State industrial investment corporation”, the words “or a deposit taking non-banking financial company or a systemically important non-deposit taking non-banking financial company” shall be inserted;
(ii) in the long line, after the words “State industrial investment corporation or”, the words “a deposit taking non-banking financial company or a systemically important non-deposit taking non-banking financial company or” shall be inserted;
(iii) in the Explanation, after clause (g), the following clause shall be inserted, namely:––
‘(h) the expressions “deposit taking non-banking financial company”, “non-banking financial company” and “systemically important non-deposit taking non-banking financial company” shall have the meanings respectively assigned to them in clauses (e), (f) and (g) of Explanation 4 to section 43B.’.
Notes on Clauses:
Clause 15 of the Bill seeks to amend section 43D of the Incometax Act relating to special provision in case of income of public financial institutions, public companies, etc
Clause (a) of the aforesaid section provides that in the case of a public financial institution, scheduled bank, cooperative bank other than a primary agricultural credit society or a primary cooperative agricultural and rural development bank or a State financial corporation or a State industrial investment corporation, the income by way of interest in relation to certain prescribed categories of bad or doubtful debts shall be chargeable to tax when it is actually received or when it is credited to the profit and loss account of such entity, whichever is earlier.
It is proposed to amend the said section so as to insert reference of a deposit-taking non-banking financial company or a systemically important non-deposit taking non-banking financial company in order to extend the benefit of the provision of this section to the said entities.
It is further proposed to define the expressions “deposit taking non-banking financial company”, “non-banking financial company” and “systemically important non-deposit taking non-banking financial company” in the Explanation to the said section.
These amendments will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020- 2021 and subsequent assessment years.
