TMI BlogFinance (No. 2) Act, 1996--Explanatory Notes on provisions relating to Direct Taxes--IntroductionX X X X Extracts X X X X X X X X Extracts X X X X ..... the Wealth-tax Act, 1957. Provisions in brief 3. The provisions of the Finance (No. 2) Act, 1996, in the sphere of direct taxes relate to the following matters :-- I. Prescribing the rates of income-tax on incomes liable to tax for the assessment year 1996-97, the rates at which tax will be deductible at source in the financial year 1996-97 from interest (including interest on securities), dividends, winnings from lotteries or crossword puzzles, winnings from horse races, commission and other categories of income liable for tax deduction at source under the Income-tax Act ; rates for computing "advance tax", deduction of income-tax from "salaries" and charging of income-tax on current income ; certain cases for the financial year 1996-97. II. Amendment of the Income-tax Act, 1961, with a view to,-- --exempting the commuted value of pension received from a fund set up by the Life Insurance Corporation of India and granting of deduction in respect of contribution to such fund ; --extending income-tax exemption on account of interest payable on money borrowed abroad to facilitate expansion projects of railways ; --granting exemption to SAARC fund for regional proje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of water supply, irrigation, sanitation and sewerage projects. --raising of deduction in respect of dividends and from units of mutual funds ; --rationalising the tax concessions in respect of foreign exchange earnings from service export under sections 80R, 80RR and 80RRA ; --allowing rebate on subscription to shares and debentures offered in approved issues of public companies for infrastructure and power sectors ; --allowing rebate of income-tax in case of senior citizens. --reducing the tax rate on long-term capital gains for all resident assessees ; --providing concessional tax on income from shares, etc., in public sector companies disinvested by the Government ; --providing alternative minimum tax on companies ; --extending the due date for filing the return of income in the case of a working partner of a firm ; --modifying provisions regarding issue of notice where income has escaped assessment ; --amending time limit for completion of assessments and reassessments ; --rationalising special procedure for assessment of search cases ; --raising the limit for tax deduction at source in the case of housing finance companies under section 194A of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Part II of the First Schedule to the Act. These rates apply to income by way of interest on securities, interest other than "interest on securities", dividends, insurance commission, winnings from lotteries or crossword puzzles, winnings from horse races and income of non-residents (including non-resident Indians). These rates are the same as those specified in Part II of the First Schedule to the Finance Act, 1995, for the purposes of deduction of income-tax at source during the financial year 1995-96. 5.2. The amount of income-tax, so deducted at source, shall be increased in the case of a domestic company, by a surcharge calculated at the rate of 7.5 per cent. of such income-tax. III. Rates for deduction of income-tax at source from "salaries", computation of "advance tax" and charging of income-tax in special cases during the financial year 1996-97 6. The rates for deduction of income-tax at source from "salaries" during the financial year 1996-97 and also for computation of "advance tax" payable during that year in the case of all categories of taxpayers, have been specified in Part III of the First Schedule to the Act. These rates are also applicable for charging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Amount (Rs.) Percentage relief 41,000 200 150 50 25 42,000 400 300 100 25 43,000 600 450 150 25 44,000 800 600 200 25 45,000 1,000 750 250 25 50,000 2,000 1,500 500 25 55,000 3,000 2,250 750 25 60,000 4,000 3,000 1,000 25 75,000 8,500 7,500 1,000 11.8 1,00,000 16,000 15,000 1,000 6.3 1,20,000 22,000 21,000 1,000 4.5 1,50,000 34,000 33,000 1,000 2.9 2,00,000 54,000 53,000 1,000 1.9 7.5 There will now be no distinction in the tax rates applicable to specified Hindu undivided families (i.e., those with one or more members having independent total income exceeding the exemption limit) and unspecified Hindu undivided families and the same rates, i.e., those specified in Paragraph A of Part Ill of the First Schedule to the Act, will apply to all Hindu undivided families.8. In the case of co-operative societ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the contributor or the nominees shall be taxable. However, the commuted amount receivable on maturity of the scheme shall be exempt. 13.3 Further, in order to enable th e LIC to offer attractive terms to the contributors, exemption from income-tax has been provided to the income of such funds which the LIC has set up on or after the August 1, 1996, under the scheme to which contributions are made by the contributors. 13.4 It is also provided that the pension scheme will be approved by the "Controller of Insurance". "Controller of Insurance" shall mean an officer appointed by the Central Government to perform the duties of the Controller of Insurance under the Insurance Act, 1938 (4 of 1938). 13.5 The amendment will take effect from April 1, 1997, and will, accordingly, apply in relation to the assessment year 1997-98 and subsequent years. [Sections 4 and 23] Taxation of a sum received under the keyman insurance policy 14.1 A Keyman Insurance Policy of the Life Insurance Corporation of India, etc., provides for an insurance policy taken by a business organisation or a professional organisation on the life of an employee, in order to protect the business against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the relevant section. 15.3 The Act has, therefore, widened the scope of the definition of the expression "industrial undertaking" so as to include therein an undertaking engaged in construction or operation of rail systems also. 15.4 The amendment will take effect from the 1st day of April, 1997, and will, accordingly, apply in relation to the assessment year 1997-98 and subsequent years. [Section 4] Income-tax exemption to SAARC Fund for regional projects 16.1 The SAARC fund for regional projects (SFRP) was established in 1991 by the Colombo Declaration of the Heads of State or Government of the member-countries of the South Asian Association for Regional Co-operation (SAARC) with a view to making available credit on easy terms for the identification and development of projects having a regional character in the fields of industry, energy, agriculture and service sectors. Respective national contributions to the fund are held by the Nodal Development Financing Institutions (DFIs) of SAARC member-countries. India's contribution is held by the Industrial Development Bank of India (IDBI) which earns income out of investment of these funds. 16.2 Keeping in view the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re facility. The expression "infrastructure facility" shall mean a road, highway, bridge, airport, port, a rail system, or any other public facility of a similar nature as may be notified by the Central Board of Direct Taxes in this behalf in the Official Gazette. It will also include water supply projects, sewerage, sanitation or irrigation systems. The expression "long-term finance" shall mean any loan or advance which is repayable along with the interest during a period of not less than five years. 17.5 The amendment will take effect from 1st April, 1997, and will, accordingly, apply in relation to the assessment year 1997-98 and subsequent years. [Section 4] Income-tax exemption to associations of registered trade unions 18.1 Under the existing provisions of clause (24) of section 10, any income of a registered union within the meaning of the Trade Unions Act, 1926 (16 of 1926), under the heads "Income from house property" and "Income from other sources" is exempt from income-tax if such trade union is formed primarily for the purpose of regulating the relations between workmen and employer or between workmen and workmen. 18.2 The Act, in line with the above, provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of standard deduction in the case of low-paid salaried employees . 20.1 Under the existing provisions of section 16 of the Income-tax Act, a standard deduction of a sum equal to 33-1/3 per cent. of the salary or Rs. 15,000, whichever is less, is allowed to a person having income from salary. A higher standard deduction of Rs. 18,000 is allowed to working women whose total income does not exceed Rs. 75,000. 20.2 The Finance Act has enhanced the upper limit of the standard deduction to eighteen thousand rupees in the case of employees having income up to sixty thousand rupees. In any other case, the existing limit of deduction shall continue. 20.3 This amendment will be effective from April 1, 1997, and shall apply to the assessment year 1997-98 and subsequent assessment years. [Section 7] Increase in the limit of deduction allowable for interest payable on borrowed capital in respect of self-occupied house property 21.1 Income under the head "Income from house property" is calculated after allowing certain specified deductions from the annual value of house property. One of the deductions is the amount of interest payable on borrowed capital used for acquisition, const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for the purposes of the business or profession. The admissibility of the allowance is based upon two conditions, namely, that the asset is owned by the assessee and it is used for the purposes of the business or profession. In the case of Banarasi Das Gupta v. CIT [1987] 166 ITR 783 (SC), it was held that there is hardly any scope for holding the view that the benefit of section 10(2)(vi) of the Act (1922 Act concerning allowance of depreciation) would be admissible in respect of fractional ownership of the asset. The Supreme Court further pointed out that under the scheme of the Act, it is the assessee who alone is entitled to maintain such claim of depreciation and it would indeed be difficult within the framework of the deduction contained in the statute to maintain a separate value of a portion of the asset to work out depreciation. A large number of big projects are currently being undertaken in which cost of the assets are financed by a number of companies without the intention of holding the assets jointly as an association of persons and, therefore, each of the participating company owns a fraction of the asset. The asset is subject to wear and tear on use. However, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears only. By an amendment the business loss and the unabsorbed depreciation have been brought at par for the purposes of set off and carry forward notwithstanding the fact that sub-section (2) of section 72 maintains a distinction between them regarding the priorities. 23.4 In order to help the revival of sick companies, an amendment has been made which provides that the period of rehabilitation of such a company, as ordered by the BIFR, shall be excluded in reckoning the period of eight years now prescribed for the purposes of carry forward and set off of the unabsorbed depreciation. 23.5 Sub-section (2) of section 32, as it existed upto assessment year 1996-97, provided that the unabsorbed depreciation of a year shall be added to the amount of the allowance for depreciation of the following previous year and deemed to be part of that allowance. Therefore, the unabsorbed depreciation allowance, if any, of the assessment year 1996-97 shall be added to the amount of the allowance for depreciation of assessment year 1997-98 and deemed to be part of the allowance for this year. In other words, the unabsorbed depreciation allowance of assessment year 1996-97 shall be added to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, however, does not confer any power on the National Committee in explicit terms to withdraw the approval granted to an association or an institution, or to recommend to the Central Government the denotification of an eligible project or a scheme. 25.2 It is generally understood that, the power of approval normally includes the power to withdraw the approval. By an amendment statutory recognition to the aforesaid principle has been given by vesting the requisite powers in the National Committee to withdraw approval, earlier granted to an association or to an institution, and to recommend the withdrawal of notification regarding an eligible project or a scheme to the Central Government. 25.3 The proposed amendment will take effect from the 1st October, 1996. [Section 13] Modification of the provisions relating to deduction from profits derived from the business of providing long-term finance 26.1 Under the existing provisions of section 36(1)(viii), subject to certain conditions deduction is allowable from the total income, in respect of any special reserve created by a financial corporation or a public company engaged in providing long-term finance to certain specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uent years. [Section 15] Modification of provisions relating to profits chargeable to tax 28.1 Sub-section (1) of section 41 deals with profits chargeable to tax. Clause (a) of this sub-section provides that where an allowance or a deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee, and subsequently during any previous year, the assessee has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained or the value of benefit accruing to him shall be deemed to be the profits, and accordingly chargeable to income-tax as income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not. Clause (b) of this sub-section makes similar provision in the case of a successor in business in regard to any amount in respect of which loss or expenditure etc. was incurred by the predecessor. 28.2 It was found that a number of assessees were escaping t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of hire, lease or otherwise. In such a case, the "actual cost", for the purpose of deduction of depreciation allowance shall be taken to be the written down value at the time of transfer of the asset in the hands of the seller, who subsequently acquires the asset by way of hire, lease or otherwise. It has also been provided that even if there are one or more intermediate sales between the point of first sale and reacquisition by the first seller, the cost will be the written down value at the time of first sale. Even if the asset forms part of a block of assets, the individual written down value has to be worked out separately to give effect to this provision. 29.2. This provision will apply in respect of sale and lease back transactions made on or after the 1st day of October, 1996. [Section 17] Modification of provisions regarding certain deductions to be allowed on actual payment 30.1 Existing provisions of section 43B allow the deduction of any sum payable by an assessee as interest on any loan or borrowing from any public financial institution, or a state financial corporation or a state industrial investment corporation in the year in which such interest is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he "lock-in" period, the long-term capital gain which was exempted earlier would be taxed in the year of such transfer. (vi) Where exemption from capital gains is availed of in respect of re-investment in specified bonds, debentures or units, rebate under section 88 not to be available. 31.4 Section 54EB provides that the capital gain arising from the transfer of a long-term capital asset will be exempt from tax if the capital gain so arising is re-invested within six months in specified assets to be notified by the Board. If part of the capital gain is so invested in the specified assets, proportionate exemption would be available. A lock-in- period of seven years is prescribed. If the asset is transferred before the expiry of the lock-in-period of seven years, the exemption will be liable to be withdrawn. 31.5 The amendments will take effect from 1st October, 1996, and will apply in the cases where transfer takes place on or after the 1st day of October, 1996. [Sections 19 and 20] Omission of redundant sections of the Income-tax Act, 1961 32. The Finance Act has omitted sections 80CC, 80J and 88A from the Income-tax Act with effect from April 4, 1993, April 1, 1989, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessment year 1997-98 and subsequent assessment years. [Section 25] 100 per cent. deduction of donations made to a fund set up by a State Government for the medical relief of the poor 35.1 Under section 80G of the Income-tax Act, a deduction from total income is allowed in respect of donations made by an assessee. In most cases the deduction is 50 per cent. of the donations. However, in respect of donations to certain funds and universities, deduction of 100 per cent. is allowed. 35.2 Certain State Governments have proposed to establish funds to provide medical relief to poor people. The funds shall be constituted with the help of grants from the State Governments and donations from individuals and trade bodies. 35.3 The Finance Act has amended section 80G of the Income-tax Act, 1961, to provide for 100 per cent. deduction for donations made to these funds. 35.4 This amendment will be effective from April 1, 1997, i.e., in respect of the assessment year 1997-98 and subsequent years. Thus, persons making donations during the financial year ended on March 31, 1997, will be eligible to obtain the deduction as above. [Section 26] 100 per cent. deduction to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 37.2 The Finance Act has raised the monetary limit to Rs. 2,000 per month without modifying the other ceiling of deduction in terms of percentage of the total income, which is 25 per cent. The lower of the two ceilings will be admissible as deduction. 37.3 This amendment will be effective from April 1, 1997, and shall apply to the assessment year 1997-98 and subsequent assessment years. [Section 27] Tax holiday for companies engaged in scientific and industrial research and development activity on commercial basis under section 80-IA of the Income-tax Act 38.1 Under the provisions of section 80-IA, new industrial undertakings are allowed a deduction of 25 per cent. (30 per cent. for companies) for the first ten years (twelve years for the co-operative sector) of production. However, for an industrial undertaking engaged in the generation or generation and distribution of power or to an industrial undertaking set up in specified backward States/districts, a five-year full tax holiday is allowed, while normal deduction 25 per cent. (30 per cent. for companies) is allowed for the balance period after the five-year holiday. 38.2 The five-year tax holiday for the power s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd maintaining an infrastructure facility on Build-Operate-Transfer (BOT) or on Build-Own-Operate-Transfer (BOOT) basis, subject to certain conditions specified in that sub-section. The infrastructure facility shall be ultimately transferred to the Government. The deduction has been restricted to infrastructure facilities in the nature of roads, highways, bridges, airports, ports, rail systems or any other public facility of a similar nature. 39.2 The Finance Act has amended section 80-IA of the Income-tax Act, so as to extend the benefit of tax holiday, to other infrastructure facilities like the water supply projects, irrigation systems, sanitation and sewerage systems. 39.3 This amendment will be effective from April 1, 1997, and shall apply to the assessment year 1997-98 and subsequent assessment years. [Section 28] Raising of deduction in respect of dividends and from units of mutual funds 40.1 Section 80-L of the Income-tax Act, 1961, provides for deduction up to Rs. 13,000 from the gross total income of an individual or a Hindu undivided family in respect of income earned by way of interest from the Government securities, National Savings Certificate, deposits, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt years. [Section 31, 32 and 33] Rebate on subscription to shares and debentures offered in approved issues of public companies for infrastructure and power sectors 42.1 Under the existing provisions of section 88 of the Income-tax Act, a tax rebate of twenty per cent. of the sums paid or deposited in the life insurance premia, provident fund, etc., is available to an individual or a Hindu undivided family, subject to a maximum of twelve thousand rupees. 42.2 With a view to channelise the savings of the taxpayers in the infrastructure sector including power, it is proposed to provide for a tax rebate of a sum equal to twenty per cent. of the amounts invested in debentures and equity shares and units of any mutual fund of a public company engaged in infrastructure including power sector. 42.3 The following are the salient features of the provision-- (i) The eligible shares/debentures or units of mutual fund shall form part of the public issue, which is approved by the Central Board of Direct Taxes on an application made by the company in the prescribed form, in the prescribed manner, setting forth the prescribed particulars. (ii) The proceeds of the issue are wholly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reduction of tax rate on long-term capital gains for domestic companies, etc. 44.1 As per section 112 of the Income-tax Act, long-term capital gains arising to various persons are taxed at the following rates : Category of person Rate of long-term capital gains tax Individual/HUF 20 per cent. Domestic company 30 per cent. Non-resident (not being a company) 20 per cent. or a foreign company Any other case of a resident 30 per cent 44.2 In order to place all these taxable entities on the same footing, the Act reduces the rate of long-term capital gains tax in the case of a domestic company and any other case of a resident to 20 per cent. 44.3 The amendment will take effect from 1st April, 1997, and will accordingly, apply in relation to the assessment year 1997-98 and subsequent years. [Section 37] Provision for concessional tax on income from shares, etc., in public sector companies disinvested by Government 45.1 Under the existing provisions of section 115AC of the Income-tax Act, concessional treatment is available to non-resident taxpayers in respect of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the book profits, the provisions of section 115JA will not be attracted. In other words, the MAT will apply only to such cases where export profits forming part of book profits of an assessee exceed 70 per cent. of the total profits. 46.6 Companies engaged in the business of generation and distribution of power and those enterprises engaged in developing, maintaining and operating infrastructure facilities under sub-section (4A) of section 80-IA are exempted from the levy of MAT, so that the incentive given to infrastructure development is not affected. 46.7 The amendment will take effect from 1st April, 1997, and will accordingly apply in relation to the assessment year 1997-98 and subsequent years. [Section 39] Extension of due date for filing the return of income in the case of a working partner of a firm 47.1 Section 139(1) of the Income-tax Act requires every person, whose income during the previous year exceeds the maximum amount not chargeable to tax, to furnish a return of his income on or before the due date. In the case of a firm carrying on business or profession whose accounts are required to be audited, the due date for filing of the return is the 31st O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to notices issued under section 148 on or after that date. [Section 43] Amendment of time limit for completion of assessments and reassessments 49.1 Under the existing provisions of the Income-tax Act, the time limit for making an order of assessment is two years from the end of the assessment year in which the income was first assessable. However, in certain circumstances the time is extended, or certain periods are excluded from the period of limitation. 49.2 In cases where special audit is ordered, the Assessing Officer is of the opinion that, having regard to the nature and complexity of the accounts of the assessee and the interests of the Revenue, it is necessary so to do, he may, with the previous approval of the Chief Commissioner or Commissioner, direct the assessee to get the accounts audited by an accountant nominated by the Chief Commissioner or the Commissioner in this behalf. The assessee is required to furnish a report of such audit in the prescribed form duly signed and verified by the prescribed accountant. In such cases, the period commencing from the date on which the Assessing Officer directs the assessee to get his accounts audited under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ethod of assessment applicable. As per this, in respect of the assessment years prior to the assessment year 1993-94, the firm and the partners would both suffer tax at 60 per cent. in respect of undisclosed income detected during the search in the case of the firm. From the assessment year 1993-94 onwards, the firm would first pay tax at 60 per cent. on undisclosed income. Due to adjustment of book profits, the partners' income on account of salary and interest may become higher and the differential would also become taxable at 60 per cent. (ii) In order to prevent double taxation of "undisclosed income" first in the hands of the firm and then again in the hands of the partners, the Act amends Explanation (b) to sub-section (1) of section 158BB to provide that in the case of a firm, its business income will be taken to be the income before allowing for deduction under clause (b) of section 40 as it existed before April 1, 1993, and also as per the present clause (b) of section 40. There would be no effect on the "undisclosed income" of the firm in the hands of the partners. (iii) The amendment will take effect retrospectively from 1st July, 1995. (b) Assessment procedure : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing experienced in getting such special audit done. This is for the reason that section 158BA(1) contains a non-obstante clause which states that notwithstanding anything contained in any other provisions of the Act, the Assessing Officer shall proceed to assess the undisclosed income in accordance with the provisions of Chapter XIV-B. A time limit of one year for completion of the block assessment has been prescribed under section 158BE. In a case where a special audit is required, the time taken in obtaining the report of such audit is excluded by virtue of item (iii) of Explanation 1 to section 153. Due to the operation of the non-obstante clause, this exclusion of time is not possible in cases of block assessment. Hence in such cases very little time is left available for completing the assessment. (iii) In order to remove the difficulty outlined above, the Act amends section 158BE to provide for exclusion from the period of limitation of the period commencing on the day on which the Assessing Officer directs the assessee to get his accounts audited and ending on the day on which the assessee is required to furnish the report of such audit. (iv) The amendment will take effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of the higher limit for tax deduction at source available to the latter. In their case, the limit continues to remain at Rs. 2,500. 51.4 The Act, therefore, provides that the limit for tax deduction at source in the case of housing finance companies which are approved for the purpose of clause (viii) of sub-section (1) of section 36 shall also be Rs. 10,000. 51.5 The amendment is effective from the 1st day of October, 1996. [Section 49] Enlarging the scope of credit for tax deducted at source 52.1 Under the existing provisions of the Income-tax Act, credit for tax deducted at source is to be given to each co-owner in cases of jointly owned securities or shares in a company, in the same proportion in which the interest on such securities or dividend on such shares is assessable as income of each of such owners. 52.2 Through the Act, the scope of the aforesaid provision has been enlarged so as to cover other situations also in which income which is subjected to deduction of tax at source is assessable in the hands of two or more persons. For this purpose, the scope of the existing provision to allow credit for tax deducted at source is extended in cases of income der ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the amount of such tax payable during that year is one thousand five hundred rupees or more. 55.2 The limit of one thousand five hundred rupees was fixed in 1988. The low limit was causing inconvenience to smaller taxpayers and increasing workload for banks and the Income-tax Department. 55.3 The Act has, therefore, raised the threshold limit for payment of advance tax from the present one thousand five hundred rupees to five thousand rupees. 55.4 The amendment is effective from the 1st day of October, 1996. [Section 53] Payment of advance tax relatable to capital gains etc., to be allowed in the remaining instalments 56.1 Under the existing provisions of the Income-tax Act, penal interest is not charged on account of underestimate or failure to estimate either the amount of capital gains or of income from winnings from lottery, horse races, etc., if the assessee pays the whole of the tax payable in respect of such incomes, as part of the instalment of advance tax which is immediately due. 56.2 This requirement of paying the whole of the tax was causing hardship as the entire tax was required to be paid on a short notice. In many cases even the sale proceeds o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wner for the purposes of taxation in the following situations :-- (i) a member of a co-operative society or a company or any association of persons, to whom a building or part thereof is allotted or leased under a house building scheme of the society or the company or the association, as the case may be, (ii) a person who is allowed to take or retain possession of any building or part thereof in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882. (iii) a person who acquires any rights, excluding any rights by way of a lease from month to month or for a period not exceeding one year, in or with respect to any building or part thereof, by virtue of any such transaction as is referred to in clause (f) of section 269UA of the Income-tax Act. 58.2 In order to bring harmony between the provisions under the Income-tax Act and the Wealth-tax Act, the Wealth-tax Act has been amended. Henceforth, the beneficial owners of properties in all the cases understood under clause (iii) or clause (iiia) or clause (iiib) of section 27 of the Income-tax Act, shall be liable to pay wealth-tax. 58.3 This provision will come into force w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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