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Home Acts & Rules Bill Bills FINANCE BILL, 2020 Chapters List Chapter III DIRECT TAXES - Income-tax This
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Clause 9 - Amendment of section 11. - FINANCE BILL, 2020

FINANCE BILL, 2020
Chapter III
DIRECT TAXES - Income-tax
  • Contents
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Amendment of section 11.

9. In section 11 of the Income-tax Act, in sub-section (7), with effect from the 1st day of June, 2020,––

(a) for the words, brackets, letters and figures “under clause (b) of sub-section (1) of section 12AA”, the words, figures and letters “under section 12AA or section 12AB” shall be substituted;

(b) for the words, brackets, figures and letter “clause (1) and clause (23C)”, the words, brackets, figures and letter “clause (1), clause (23C) and clause (46)” shall be substituted;

(c) the following provisos shall be inserted, namely:––

“Provided that such registration shall become inoperative from the date on which the trust or institution is approved under clause (23C) of section 10 or is notified under clause (46) of the said section, as the case may be, or the date on which this proviso has come into force, whichever is later:

Provided further that the trust or institution, whose registration has become inoperative under the first proviso, may apply to get its registration operative under section 12AB subject to the condition that on doing so, the approval under clause (23C) of section 10 or notification under clause (46) of the said section, as the case may be, to such trust or institution shall cease to have any effect from the date on which the said registration becomes operative and thereafter, it shall not be entitled to exemption under the respective clauses.”.

 



 

Notes on Clauses:

Clause 9 of the Bill seeks to amend section 11 of the Income-tax Act relating to income from property held for charitable or religious purposes.

Sub-section (7) of said section provides that where a trust or an institution has been granted registration under clause (b) of sub-section (1) of section 12AA or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996] and the said registration is in force for any previous year, then, nothing contained in section 10 [other than clause (1) and clause (23C) thereof] shall operate to exclude any income derived from the property held under trust from the total income of the person in receipt thereof for that previous year.

It is proposed to amend said sub-section so as to substitute the reference to “clause (b) of sub-section (1) of section 12AA” to “section 12AA, and section 12AB”.

It is further proposed to insert a proviso to said subsection so as to provide that the registration referred therein shall become inoperative from the date on which the trust or institution is approved under clause (23C), or is notified under clause (46) of section 10, as the case may be, or the date on which this proviso comes into force, whichever is later.

It is further proposed to insert another proviso to said sub-section so as to provide that the trust or institution, whose registration has become inoperative under the proposed first proviso, may apply to get its registration operative under proposed section 12AB subject to the condition that on doing so, the approval under clause (23C) or notification under clause (46) of section 10, as the case may be, to such trust or institution shall cease to have any effect from the date on which the said registration becomes operative and thereafter, it would not be entitled to exemption under the respective clause.

These amendments will take effect from 1st June, 2020.

 
 
 
 
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