Amendment of section 295.
103. In section 295 of the Income-tax Act, in sub-section (2), in clause (b),––
(a) after sub-clause (ii), the following sub-clause shall be inserted with effect from the 1st day of April, 2021, namely:-
“(iia) operations carried out in India by a non-resident;”;
(b) after sub-clause (iia) as so inserted, the following sub-clause shall be inserted with effect from the 1st day of April, 2022, namely:––
“(iib) transactions or activities of a non-resident;”.
Notes on Clauses:
Clause 103 of the Bill seeks to amend section 295 of the Income-tax Act relating to power to make rules.
Sub-section (1) of said section provides that the Central Board of Direct Taxes may, subject to the control of the Central Government, by notification in the Gazette of India, make rules for the whole or any part of India for carrying out the purposes that Act.
Sub-section (2) of said section enumerates the matters for which the rules made under sub-section (1) may provide for.
Clause (b) of said sub-section (2) provides the matter, which the rules made by the Board may provide, to be the manner in which and the procedure by which the income shall be arrived at in certain cases.
It is proposed to amend said clause (b) by way of insertion of sub-clause (iia) so as to provide that the rules made by the Board may provide, for the manner in which and the procedure by which the income shall be arrived in case of operations carried out in India by a non-resident.
This amendment will take effect from the 1st day of April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years.
It is further proposed to amend said clause (b) by way of insertion of sub-clause (iib) so as to provide that the rules made by the Board may provide, to be the manner in which and the procedure by which the income shall be arrived in case of transaction or activities of a non-resident.
This amendment will take effect from the 1st day of April, 2022 and will, accordingly, apply in relation to the assessment year 2022-2023 and subsequent assessment years.
