TMI BlogNotes on clauses - Income taxX X X X Extracts X X X X X X X X Extracts X X X X ..... 014-15. Rates for deduction of tax at source during the financial year 2015-16 from income other than Salaries Part II of the First Schedule to the Bill specifies the rates at which income-tax is to be deducted at source during the financial year 2015-16 from income other than Salaries . The rates are the same, as those specified in Part II of the First Schedule to the Finance (No.2) Act, 2014 for the purposes of deduction of income tax at source during the financial year 2014-15 except that in case of payment of royalty and fees for technical services in case of agreements made on or after the 1st day of March, 1976, tax shall now be deducted at source at the rate of ten per cent. as against the earlier rate of twenty-five per cent. The amount of tax so deducted shall be increased by a surcharge in the case of- (i) every non-resident (other than a company) at the rate of twelve per cent. where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds one crore rupees; (ii) every company other than a domestic company at the rate of two per cent. where the income or the aggregate of income paid or likely to be paid and subje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Above ₹ 10,00,000 30 per cent. The surcharge in cases of persons referred to in this paragraph, having income above one crore rupees, shall be levied at the rate of twelve per cent. Marginal relief will be provided. Paragraph B of this Part specifies the rates of income-tax in the case of every co-operative society. In such cases, the rates of tax will continue to be the same as those specified for assessment year 2015-16. The surcharge in cases of co-operative societies, having income above one crore rupees shall be levied at the rate of twelve per cent. Marginal relief will be provided. Paragraph C of this Part specifies the rate of income-tax in the case of every firm. In such cases, the rate of tax will continue to be the same as that specified for assessment year 2015-16. The surcharge in cases of firms, having income above one crore rupees shall be levied at the rate of twelve per cent. Marginal relief will be provided. Paragraph D of this Part specifies the rate of income-tax in the case of every local authority. In such cases, the rate of tax will continue to be the same as that specified for the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 made under the Securities and Exchange Board of India Act, 1992, and the units of which are required to be listed on a recognised stock exchange in accordance with the aforesaid regulations. It is proposed to amend clause (15) of the aforesaid section to provide that the definition of charitable purpose shall include yoga as a separate category on the lines of education and medical relief. It is further proposed to amend the said clause (15) to provide that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless-- (i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and (ii) the aggregate receipts from such activity or activities during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such voyage, be determined in the manner and subject to such conditions as may be prescribed. This amendment will take effect retrospectively from 1st April, 2015 and will, accordingly, apply in relation to assessment year 2015-16 and subsequent assessment years. Under the existing provisions contained in clause (3) of the aforesaid section, a company is said to be resident in India in any previous year, if-- (i) it is an Indian company; or (ii) during that year, the control and management of its affairs is situated wholly in India. It is proposed to amend the said clause (3) to provide that a company shall be said to be resident in India, in any previous year, if-- (a) it is an Indian company; or (b) its place of effective management, at any time in that year, is in India. It is also proposed to insert an Explanation to clarify the expression place of effective management to mean a place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole are, in substance made. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to assessment year 2016-17 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t income and provides that the income by way of interest, if payable by persons specified in the said clause, shall be deemed to accrue or arise in India. It is proposed to amend the said clause in order to provide that in the case of a non-resident, being a person engaged in the business of banking, any interest payable by the permanent establishment in India of such non-resident to the head office or any permanent establishment or any other part of such nonresident outside India shall be deemed to accrue or arise in India and shall be chargeable to tax in addition to any income attributable to the permanent establishment in India and the permanent establishment in India shall be deemed to be a person separate and independent of the non-resident person of which it is a permanent establishment and the provisions of the Act relating to computation of total income, determination of tax and collection and recovery shall apply accordingly. It is further proposed to provide that permanent establishment shall have the same meaning assigned to it in clause (iiia) of section 92F. These amendments will take effect from 1st April, 2016 and accordingly apply in relation to the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e certain terms such as associate , connected person , orpus , entity and specified regulations . These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent years. Clause 7 of the Bill seeks to amend section 10 of the Income tax Act relating to incomes not included in total income. It is proposed to amend the aforesaid section by inserting a new clause (11A) so as to provide that any payment from an account opened in accordance with the Sukanya Samriddhi Account Rules, 2014 made under the Government Savings Bank Act, 1873, shall not be included in the total income of the assessee. The existing provisions of clause (23C) of the said section provide for exemption from tax in respect of the income of certain charitable funds or institutions like the Prime Minister s National Relief Fund; the Prime Minister s Fund (Promotion of Folk Art); the Prime Minister s Aid to Students Fund; the National Foundation for Communal Harmony etc. It is proposed to amend the aforesaid clause by inserting two new sub-clauses (iiiaa) and (iiiaaa) so as to exempt income received by any person on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame nature as income by way of renting or leasing or letting out any real estate asset owned directly by the business trust, shall be included in total income and not be exempted. It is also proposed to amend clause (38) of the said section to provide that any income in the nature of long term capital gain arising from transfer of units of a business trust which were acquired in consideration of exchange of shares of a special purpose vehicle and on which securities transaction tax has been paid shall not be included in the total income of the sponsor. These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent assessment years. Clause 8 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 (2) of the aforesaid section provides that where eighty-five per cent. of the income is not applied, or is not deemed to have been applied, to charitable or religious purposes in India during the previous year but is accumulated or set apart, for application to such purposes in India, then, such income accumulate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to the assessment year 2016-17 and subsequent years. Clause 10 of the Bill seeks to amend section 32 of the Income tax Act relating to depreciation. Under the existing provisions contained in clause (iia) of subsection (1) of the aforesaid section, a further sum equal to twenty per cent. of the actual cost of new machinery or plant (other than ships and aircraft) acquired and installed after the 31st day of March, 2005 by an assessee engaged in the business of manufacture or production of any article or thing or in the business of generation or generation and distribution of power, is allowed as deduction as further depreciation. It is proposed to insert a proviso in clause (iia) of sub-section (1) of the aforesaid section to provide that where an assessee, sets up an undertaking or enterprise for manufacture or production of any article or thing, on or after the 1st day of April, 2015 in any backward area notified by the Central Government in this behalf, in the State of Andhra Pradesh or in the State of Telangana, and acquires and installs any new machinery or plant (other than ships and aircraft) for the purposes of the said undertaking or enterprise during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r manufacture or production of any article or thing, on or after the 1st day of April, 2015 in any backward area notified by the Central Government in this behalf, in the State of Andhra Pradesh or in the State of Telangana, and acquires and installs any new asset for the purposes of the said undertaking or enterprise during the period beginning on the 1st day of April, 2015 and ending before the 1st day of April, 2020 in the said backward area, then, there shall be allowed a deduction of a sum equal to fifteen per cent. of the actual cost of such new asset for the assessment year relevant to the previous year in which such new asset is installed. The proposed sub-section (2) of the aforesaid section provides that if any new asset acquired and installed by the assessee is sold or otherwise transferred, except in connection with the amalgamation or demerger or re-organisation of business referred to in clause (xiii) or clause (xiiib) or clause (xiv) of section 47, within a period of five years from the date of its installation, the amount of deduction allowed under sub-section (1) in respect of such new asset shall be deemed to be the income of the assessee chargeable under the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prescribed authority to submit its report to the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General. The existing provision contained in clause (3) of sub-section (2AB) of the said section provides that no company shall be entitled for deduction under clause (1) of the said sub-section (2AB) unless it enters into an agreement with the prescribed authority for cooperation in such research and development facility and for audit of the accounts maintained for that facility. It is proposed to amend clause (3) of sub-section (2AB) of the said section to provide that no company shall be entitled for deduction under clause (1) of the said sub-section (2AB) unless it enters into an agreement with the prescribed authority for cooperation in such research and development facility and fulfils conditions with regard to maintenance and audit of accounts and furnishing of report, as may be prescribed. The existing provisions contained in clause (4) of sub-section (2AB) of the said section 35 further provides that the prescribed authority shall submit its report in relation to the approval of the research and development facility to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit or units, held by him in the consolidating scheme of a mutual fund, if the transfer is made in consideration of the allotment to him of any unit or units in the consolidated scheme of the mutual fund under the process of consolidation of the schemes of mutual fund in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 made under the Securities and Exchange Board of India Act, 1992. Provided, the consolidation is of two or more schemes of equity oriented fund or of two or more schemes of a fund other than equity oriented fund. It is further proposed to define the terms consolidating scheme , consolidated scheme , equity oriented fund and mutual fund . These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent years. Clause 14 of the Bill seeks to amend section 49 of the Income tax Act relating to cost with reference to certain modes of acquisition. The existing provisions contained in sub-section (1) of the aforesaid section provide that where the capital asset became the property of the assessee under certain situations the cost of acquisiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pension from a fund set up under a pension scheme. It is proposed to amend sub-section (1) of the said section so as to raise the limit of deduction from one lakh rupees to one hundred and fifty thousand rupees. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent years. Clause 17 of the Bill seeks to amend section 80CCD of the Income-tax Act relating to deduction in respect of contribution to pension scheme of Central Government. The existing provisions contained in sub-section (1) of section 80CCD, inter alia, provides that in the case of an individual, employed by the Central Government on or after 1st January, 2004, or being an individual employed by any other employer or any other assessee being an individual who has in the previous year paid or deposited any amount in his account under a pension scheme notified or as may be notified by the Central Government, a deduction of such amount not exceeding ten per cent. of his salary is allowed. It is proposed to omit sub-section (1A) and insert a new subsection (1B) so as to provide that an assessee referred to in subsection (1), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an insurance on the health of such person, as does not exceed thirty thousand rupees shall be allowed as deduction under section 80D. It is also proposed to provide that the aggregate of the deduction on account of health insurance premium and the medical expenditure in respect of the assessee or his family would not be more than thirty thousand rupees. Similarly, such aggregate deduction in respect of the parents is also proposed to be not more than thirty thousand rupees. These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent years. Clause 19 of the Bill seeks to amend section 80DD of the Income-tax Act relating to deduction in respect of maintenance including medical treatment of a dependant who is a person with disability. The existing provisions of section 80DD, inter alia, provide for a deduction to an individual or HUF, who is a resident in India, who has incurred only (a) expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or (b) any amount paid to LIC or any other insurer in respect of a sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the aforesaid section. It is also proposed to insert a new clause in the Explanation of the aforesaid section so as to define the term very senior citizen to mean an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year. These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent assessment years. Clause 21 of the Bill, seeks to amend section 80G of the Income-tax Act relating to deduction in respect of donations to certain funds, charitable institutions, etc. Under the existing provisions of the aforesaid section, an assessee is allowed a deduction from his total income in respect of donations made by him to certain funds and charitable institutions. The deduction is allowed at the rate of hundred per cent. of the amount of donations made to certain funds and institutions formed for a social purpose of national importance, like the Prime Ministers National Relief Fund, National Foundation for Communal Harmony etc. It is proposed to amend sub-section (1) and sub-section (2) of the said section so as to provide for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e previous year. It is proposed to amend sub-section (1) of the said section so as to provide that where the gross total income of any assessee includes any profits and gains derived from the manufacture of goods in a factory, the assessee shall be allowed a deduction equal to thirty per cent. of additional wages paid to the new regular workmen employed by the assessee in such factory, in the previous year, for three assessment years including the assessment year relevant to the previous year in which such employment is provided. It is further proposed to amend clause (a) of sub-section (2) so as to provide that no deduction under sub-section (1) shall be allowed, if the factory is acquired by the assessee by way of transfer from any other person or as a result of any business reorganisation. It is also proposed to amend clause (i) of the said Explanation so as to provide additional wages to mean the wages paid to the new regular workmen in excess of fifty workmen employed during the previous year. These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent years. Clause 23 of the Bill, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-section (2) so as to provide that the provisions of Chapter X-A shall apply in respect of any assessment year beginning on or after the 1st day of April, 2018. This amendment will take effect from 1st April, 2015. Clause 26 of the Bill seeks to amend section 111A of the Income-tax Act relating to tax on short-term capital gains in certain cases. The second proviso to sub-section (1) of the said section provides that the provisions of the aforesaid section shall not be applicable in respect of any income arising from transfer of units of a business trust which were acquired by the assessee in exchange of the shares of a special purpose vehicle. It is proposed to omit the said second proviso to provide that the provisions of the said section shall now be applicable in respect of any income arising from transfer of units of a business trust which were acquired by the assessee in exchange of the shares of a special purpose vehicle. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. Clause 27 of the Bill seeks to amend section 115A of the Income-tax Act relatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsequent assessment years. Clause 29 of the Bill seeks to amend section 115JB of the Income-tax Act relating to special provision for payment of tax by certain companies. Under the existing provisions contained in sub-section (1) of the aforesaid section, in case of a company, if the tax payable on the total income as computed under the Income-tax Act in respect of any previous year relevant to the assessment year commencing on or after the 1st April, 2012, is less than eighteen and one-half per cent. of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee for the relevant previous year shall be eighteen and one-half per cent. of its book profit. It is proposed to insert new clause (fa) in Explanation 1 so as to provide that the book profit shall be increased by the amount or amounts of expenditure relatable to, income, being share of income of an assessee on which no tax is payable in accordance with the provisions of section 86. It is further proposed to insert new clause (iic) in Explanation 1 so as to provide that the amount of income, being the share of income of an assessee on which no income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s proposed to amend the said section so as to provide that the existing pass through scheme contained in the provisions of section 10 (23FB) and section 115U shall not apply to such investment fund to which the new regime provided in section 10(23FBA) and section 115UB applies. The amendment will take effect from 1st April, 2016 and accordingly apply in relation to the assessment year 2016-17 and subsequent years. Clause 31 of the Bill seeks to amend section 115UA of the Income-tax Act relating to tax on income of unit holder and business trust. It is proposed to amend the aforesaid section to provide that the distributed income or any part thereof, received by a unit holder from the business trust, being a real estate investment trust, which is in the nature of income by way of renting or leasing or letting out any real estate asset owned directly by such business trust, shall be deemed to be income of such unit holder and shall be charged to tax. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. Clause 32 of the Bill seeks to insert a new Chapter XII-FB consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sub-section (7) of the proposed new section seeks to provide that the person responsible for crediting or making payment of income on behalf of an investment fund and the investment fund shall furnish within such time as may be prescribed, to the person who is liable to tax in respect of such income and to the prescribed income-tax authority, a statement in the prescribed form and verified in such manner, giving details of the nature of the income paid or credited during the previous year and such other relevant details as may be prescribed. Explanation 1 to the proposed new section seeks to define certain terms such as investment fund , trust and unit . Further, Explanation 2 to the proposed new section clarifies that if any income has been included in total income on accrual basis in case of a person, the same shall not be included in total income when such income is actually received by the person. This amendment will take effect from 1st April, 2016 and accordingly apply in relation to the assessment year 2016-17 and subsequent years. Clause 33 of the Bill seeks to amend section 132B of the Income-tax Act relating to application of seized or requisitioned a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es different sanctioning authorities for the cases where earlier assessment has been made under sub-section (3) of section 143 or section 147 and other cases (where no assessment has been so made). Requirement of sanction are also dependent on whether notice is proposed to be issued within or after four years from the end of relevant assessment year. The rank of the Assessing Officer proposing to issue such notice is also relevant to decide whose sanction is required. It is proposed to amend the said section so as to provide that no notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. It is further proposed that in any other case, no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is further proposed to amend sub-section (2) of the aforesaid section to insert the reference of collector in addition to assessee or deductor, so as to enable him to file an application under the said section. It is also proposed to amend sub-section (3) of the aforesaid section to insert the reference of collector in addition to assessee or deductor, so as to provide a reasonable opportunity of being heard to collector in accordance with the provision of said subsection. It is also proposed to amend sub-section (5) of the aforesaid section to insert the reference of collector in addition to assessee or deductor, so as to enable issue of refund to the collector in accordance with the provisions of said sub-section. It is also proposed to amend sub-section (6) of the aforesaid section to insert the reference of collector in addition to assessee or deductor, so as to enable service of notice of demand on the collector in accordance with the provisions of said sub-section. It is also proposed to amend sub-section (8) of the aforesaid section to insert the reference of collector in addition to assessee or deductor so as to provide that where an application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irect the Assessing Officer to make an application under subsection( 1) only if an acceptance is received from the assessee to the effect that the question of law in the other case is identical to that arising in the relevant case; and in case no such acceptance is recived, the Commissioner or Principal Commissioner shall proceed in accordance with the provisions contained in subsection( 2) or sub section(2A) of section 253. Sub-section (3) of the proposed new section seeks to provide that where the order of the Commissioner (Appeals) referred to in sub-section(1) is not in conformity with the final decision on the question of law in the other case, the Commissioner or Principal Commissioner may direct the Assessing Officer to appeal to the Appellate Tribunal against such order and, save as otherwise provided in this section, all other provisions of Part B of chapter XX shall apply accordingly. Sub-section (4) of the proposed new section seeks to provide that every appeal under sub-section (3) shall be filed within sixty days of the date on which the order of the Supreme Court in the other case is communicated to the Commissioner or Principal Commissioner. This amendmend w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction shall furnish his Permanent Account Number to the person responsible for deducting such tax, failing which tax shall be deducted at the maximum marginal rate. This amendment will take effect from 1st June, 2015. Clause 42 of the Bill seeks to amend section 194A of the Income-tax Act relating to interest other than interest on securities. Under the existing provisions contained in the proviso to clause (i) of sub-section (3) of the aforesaid section, income credited or paid in respect of time deposits with a banking company or cooperative society or deposits with a public company, as the case may be, shall be computed with reference to the branch of the banking company or co-operative society or public company, as the case may be. It is proposed to insert a proviso after the existing proviso to the said clause (i) of sub-section (3) of the aforesaid section so as to provide that the amount referred to in the first proviso shall be computed with reference to the income credited or paid by the banking company or the co-operative society or the public company, as the case may be, where such banking company or the co-operative society or the public company has adopted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing deposits. These amendments will take effect from 1st June, 2015. Clause 43 of the Bill seeks to amend section 194C of the Income-tax Act relating to payments to contractors. Under the existing provisions contained in sub-section (6) of the aforesaid section, no deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum. It is proposed to amend sub-section (6) of the said section so as to provide that no deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, where such contractor owns ten or less than ten goods carriages at any time during the previous year and furnishes a declaration to that effect along with his Permanent Account Number, to the person paying or crediting such sum. This amendment will take effect from 1st June, 2015. Clause 44 of the Bil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation 1 to section 115UB, the person responsible for making the payment shall, at the time of credit of such income to the account of payee, or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of ten per cent. This amendment will take effect from 1st June, 2015. Clause 47 of the Bill, seeks to amend section 194LD of the Income-tax Act relating to Income by way of interest on certain bonds and Government securities. Under the existing provisions contained in sub-section (2) of the aforesaid section, the interest income eligible for lower withholding tax rate of five per cent. as provided in sub-section (1) has been specified to be the interest payable on or after the 1st day of June, 2013 but before the 1st day of June, 2015. It is proposed to amend aforesaid sub-section (2) to provide that the concessional rate of five per cent. withholding tax on interest payment in respect of investments in Government securities and rupee denominated corporate bonds shall now be available on interest payable before the 1st day of July, 2017. This amendment will take effect f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the credit of the Central Government or as the Board directs. It is proposed to insert sub-section (2A) in the said section to provide that in case of an office of the Government, where the sum deducted in accordance with the foregoing provisions of this Chapter or tax referred to in sub-section (1 ) of section 192 has been paid to the credit of the Central Government without the production of a challan, the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person by whatever name called, who is responsible for crediting such sum or tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed. This amendment will take effect from 1st June, 2015. Clause 51 of the Bill seeks to amend section 200A of the Income-tax Act relating to processing of statements of tax deducted at source. The existing provisions contained in sub-section (1) of the aforesaid section provide that statement of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (3A) in the said section to provide that in case of an office of the Government, where the amount collected under sub-section (1) or sub-section (1C) or sub-section (1D) has been paid to the credit of the Central Government without the production of a challan by the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person, by whatever name called, who is responsible for crediting such tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed. The existing provisions contained in the proviso to sub-section (3) of the said section provide that any person collecting tax on or after 1st April, 2005 in accordance with the provisions of the said section shall, after paying the tax collected to the credit of the Central Government within the prescribed time, prepare such statements for such period as may be prescribed and deliver or cause to be delivered to the prescribed authority, or to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... simple interest at the rate of one per cent. for every month or part of a month comprised in the period commencing on the 1st day of April of such assessment year and ending on the date of making such application, on the additional amount of income-tax referred to in that sub-section; (b) where as a result of an order of the Settlement Commission under sub-section (4) of section 245D for any assessment year, the amount of total income disclosed in the application under sub-section (1) of section 245C is increased, the assessee shall be liable to pay simple interest at the rate of one per cent. for every month or part of a month comprised in the period commencing on the 1st day of April of such assessment year and ending on the date of such order, on the amount by which the tax on the total income determined on the basis of such order exceeds the tax on the total income disclosed in the application filed under sub-section (1) of section 245C. The existing provisions contained in sub-section (3) of the said section provides that where the total income is increased on reassessment under section 147 or section 153A, the assessee shall be liable for interest at the rate of one pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to amend clause (iv) of the said Explanation to provide that the proceeding for assessment shall be deemed to have commenced from the date on which a return of income for that assessment year is furnished under section 139 or in response to notice under section 142 and concluded on the date on which the assessment is made, or on the expiry of two years from the end of relevant assessment year in case where no assessment is made. This amendment will take effect from 1st June, 2015. Clause 58 of the Bill seeks to amend section 245D of the Income-tax Act relating to procedure on receipt of an application under section 245C. The existing provision contained in sub-section (6B) of section 245D of the Income-tax Act provides that the Settlement Commission may, at any time within a period of six months from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (4). It is proposed to amend the said sub-section (6B) to provide that the Settlement Commission may, with a view to rectify any mistake apparent from the record, amend any order passed by it under sub-section (4)-- (a) at any time withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lement. The existing provisions contained in the aforesaid section provides that where an application of a person has been allowed to be proceeded with under sub-section (1) of section 245D, then, such person shall not be subsequently entitled to make an application before the Settlement Commission. It further provides that in certain situations the person shall not be entitled to apply for settlement before the Settlement Commission. It is proposed to amend section 245K of the Income-tax Act to provide that any person related to the person who is barred on subsequent application for settlement also cannot make any application subsequently before the Settlement Commission. The expression related person with respect to a person has also been clarified to mean,: -- (i) where such person is an individual, any company in which such person holds more than fifty per cent. of the shares or voting power at any time, or any firm or association of person or body of individual in which such person is entitled to more than fifty per cent. of the profits at any time, or any Hindu undivided family in which such person is a karta; (ii) where such person is a company, any individual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act provides for constitution of a single member Bench and a Special Bench. It provides that the single member Bench may dispose of any case which pertains to an assessee whose total income as computed by the Assessing Officer does not exceed five hundred thousand rupees. It is proposed to amend sub-section (3) of the said section so as to provide that a single member Bench may dispose of a case where the total income as computed by the Assessing Officer does not exceed fifteen lakh rupees. This amendment will take effect from 1st June, 2015. Clause 65 of the Bill seeks to amend section 263 of the Income tax Act relating to revision of orders prejudicial to revenue. The existing provisions contained in sub-section (1) of section 263 provide that if the Principal Commissioner or Commissioner considers that any order passed by the assessing officer is erroneous in so far as it is prejudicial to the interest of revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made an enquiry, as he deems necessary, pass an order modifying the assessment made by the assessing officer or cancelling the assessment and dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the amount of such loan or deposit is twenty thousand rupees or more. It is proposed to amend the said section so as to provide that any loan or deposit or specified advance shall not be repaid, otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, by the person specified in the said section, if the amount of such loan or deposit or specified advance is twenty thousand rupees or more. It is further proposed to define specified advance as any sum of money received, as an advance or otherwise, in relation to transfer of an immovable property and becomes repayable if the negotiations do not result in transfer of such immovable property. These amendments will take effect from 1st June, 2015. Clause 68 of the Bill seeks to amend section 271 of the Income tax Act relating to failure to furnish returns, comply with notices, concealment of income, etc. The existing provisions contained in clause (iii) of sub-section (1) of the aforesaid section provide that if a person has concealed the particulars of his income or furnished inaccurate particulars of such income such person shall pay by way of penalty a sum of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total income. It is also proposed to provide that where in any case to which Explanation 3 applies, the amount of tax sought to be evaded shall be the tax on the total income assessed as reduced by the amount of advance tax, tax deducted at source, tax collected at source and self-assessment tax paid before the issue of notice under section 148. These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to assessment year 2016-17 and subsequent years. Clause 69 of the Bill seeks to amend section 271D of the Income-tax relating to penalty for failure to comply with the provisions of section 269SS. The existing provision contained in section 271D of the Income tax Act provides that if a person accepts any loan or deposit in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so accepted. It is proposed to amend section 271D of the Income-tax Act to provide that if a person accepts any loan or deposit or specified sum referred to in section 269SS in contravention of the provisions of that section, he shall be liable to pay, by way of penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch transaction had the effect of directly or indirectly transferring the right of management or control in relation to the Indian concern; (ii) a sum of five hundred thousand rupees in any other case. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent years. Clause 73 of the Bill seeks to insert a new section 271-I in the Income-tax Act relating to penalty for failure to furnish information or for furnishing inaccurate information under section 195. It is proposed to insert a new section 271-I so as to provide that if a person, who is required to furnish information under subsection (6) of section 195, fails to furnish such information; or furnishes inaccurate information, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of one lakh rupees. This amendment will take effect from 1st June, 2015. Clause 74 of the Bill seeks to amend section 272A of the Income-tax Act relating to penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc. The proposed amendment seeks to insert a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncern shall, for the purposes of determination of income accruing or arising in India, under the clause (i) of sub-section (1) of section 9, furnish within the prescribed period to the prescribed income-tax authority the relevant information or document, in such manner and form as is prescribed in this behalf. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent years. Clause 77 of the Bill seeks to amend section 288 of the Income tax Act relating to appearance by authorised representative. The existing Explanation below sub-section (2) of aforesaid section provides that in the aforesaid section, accountant means a chartered accountant within the meaning of the Chartered Accountants Act, 1949, and includes, in relation to any State, any person who by virtue of the provisions of sub-section (2) of section 226 of the Companies Act, 1956, is entitled to be appointed to act as an auditor of companies registered in that State. It is proposed to substitute the said Explanation so as to provide that the expression accountant means a chartered accountant as defined in clause (b) of sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fraud and a period of ten years has not elapsed from the date of such conviction. It is further proposed to amend sub-section (4) of the said section so as to provide that a person who has been convicted by a court of an offence involving fraud shall not be qualified to represent an assessee under sub-section (1) of the said section for a period of ten years from the date of conviction. It is also proposed to insert an Explanation at the end of the said section so as to provide that the expression relative in relation to an individual means (a) spouse of the individual; (b) brother or sister of the individual; (c) brother or sister of the spouse of the individual; (d) any lineal ascendant or descendant of the individual; (e) any lineal ascendant or descendant of the spouse of the individual; (f) spouse of a person referred to in clause (b), clause (c), clause (d) or clause (e); (g) any lineal descendant of a brother or sister of either the individual or of the spouse of the individual. These amendments will take effect from 1st June, 2015. Clause 78 of the Bill seeks to amend section 295 of the Income tax Act relating to power to make rules. The existing provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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