TMI BlogNotes on clauses-Income TaxX X X X Extracts X X X X X X X X Extracts X X X X ..... income-tax in special cases during the financial year 2016- 2017. Rates for deduction of tax at source during the financial year 2017-2018 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 2017-2018 from income other than Salaries . The rates are the same, as those specified in Part II of the First Schedule to the Finance Act, 2016 for the purposes of deduction of income tax at source during the financial year 2016-2017. The amount of tax so deducted shall be increased by a surcharge in the case of- (i) every non-resident being an individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act,- (a) at the rate of ten per cent. of such tax, where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds fifty lakh rupees but does not exceed one crore rupees; (b) at the rate of fifteen per cent. of such tax, where the income or the aggre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er cent. ₹ 5,00,001 to ₹ 10,00,000 20 per cent. Above ₹ 10,00,000 30 per cent.; (iii) In the case of every individual, being a resident in India, who is of the age of eighty years or more at any time during the previous year:- Up to ₹ 5,00,000 Nil ₹ 5,00,001 to ₹ 10,00,000 20 per cent. Above ₹ 10,00,000 30 per cent. The surcharge in cases of persons referred to in this paragraph, having total income above fifty lakh but not above one crore rupees, shall be levied at the rate of ten per cent. In cases of persons referred to in this paragraph, having total income above one crore rupees, surcharge shall be levied at the rate of fifteen 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 2017-2018. The surcharge in cases of co-operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the First Schedule. In the cases covered under Part II of the First Schedule, there will be no levy of the Education Cess and Secondary and Higher Education Cess on tax deducted or collected at source in the case of domestic company and any other person who is resident in India. Both the cesses would continue to apply on tax deducted at source in the case of salary payments. These would also continue to be levied in the cases of persons not resident in India and companies other than domestic company. Clause 3 of the Bill seeks to amend section 2 of the Incometax Act relating to definitions. The existing provisions contained in clause (42A) of the said section defines the expression short-term capital asset to be a capital asset held by an assessee for not more than thirty-six months immediately preceding the date of its transfer. Further Explanation 1 of the said clause provides for determining the period for which the capital asset is held by the assessee. It is proposed to amend the third proviso to the said clause so as to provide that in the case of an immovable property being land or building or both, the aforesaid period of holding shall be less than twenty-four m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndment is clarificatory in nature. This amendment will take effect retrospectively from 1st April, 2012 and will, accordingly, apply in relation to the assessment year 2012-2013 and subsequent years. Clause 5 of the Bill seeks to amend section 9A of the Income-tax Act relating to certain activities not to constitute business connection in India. Sub-section (3) of the said section 9A provides for the conditions to be fulfilled for being an eligible investment fund. Clause (j) of the said sub-section and the proviso provides that the monthly average of the corpus of the fund shall not be less than one hundred crore rupees except where the fund has been established or incorporated in the previous year, in which case, the corpus of fund shall not be less than one hundred crore rupees at the end of such previous year. It is proposed to insert another proviso to clause (j) of the said sub-section so as to provide that the provisions of the said clause shall not be applicable to a fund which has been wound up in the previous year. This amendment will take effect retrospectively from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-2017 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tenant Governor's Relief Fund referred to in subclause (iiihf) of clause (a) of sub-section (2) of section 80G, are not exempt under the said clause (23C). It is further proposed to insert a new sub-clause (iiiaaaa) in clause (23C) so as to provide the benefit of exemption also to the Chief Minister's Relief Fund or the Lieutenant Governor's Relief Fund. This amendment will take effect retrospectively from 1st April, 1998, the date on which sub-clause (iiihf) of clause (a) of sub-section (2) of section 80G relating to deduction in any sum paid to the Chief Minister's and Lieutenant Governor's Relief Fund came into force, and will, accordingly, apply in relation to assessment year 1998-1999 and subsequent years. Clause (23C) of said section provides that donations made by entities referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) to any trust or institution registered under section 12AA, except those made out of accumulated income, is considered as application of income for the purposes of its objects. It is also proposed to insert a new proviso in the said clause (23C) so as to provide restriction in respect of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany on account of storage of crude oil in a facility in India and sale of crude oil therefrom to any person resident in India shall be exempt, if the said storage and sale is pursuant to an agreement or an arrangement entered into by the Central Government or approved by the Central Government; and having regard to the national interest, the said foreign company and the said agreement or arrangement is notified by the Central Government in that behalf. It is also proposed to insert a new clause (48B) in the said section so as to provide for exemption of any income accruing or arising to a foreign company on account of sale of leftover stock of crude oil, if any, from the facility in India after the expiry of the agreement or the arrangement referred to in clause (48A), subject to such conditions as may be notified by the Central Government in this behalf. These amendments will take effect, from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 7 of the Bill seeks to amend section 10AA of the Income-tax Act relating to special provisions in respect of newly established Units in Special Economic Zones. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the Finance (No. 2) Act, 1996], and, subsequently, it has adopted or undertaken modification of the objects which do not conform to the conditions of registration, it shall be required to make an application for registration in the prescribed form and manner, within a period of thirty days from the date of such adoption or modification in the objects, and that it is registered under section 12AA. It is also proposed to insert a new clause (c) in sub-section (1) of the said section so as to provide that the person in receipt of the income shall furnish the return of income referred to in sub-section (4A) of section 139 within the time allowed under that section. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to assessment year 2018-2019 and subsequent years. Clause 10 of the Bill seeks to amend section 12AA of the Income-tax Act relating to procedure for registration. It is proposed to amend sub-sections (1) and (2) of the said section so as to give reference of newly inserted clause (ab) in section 12A . The proposed amendment is consequential in nature. This amendment will take effect from 1st April, 2018 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the whole or any part of the previous year, the annual value of such property or part of the property, for the period up to one year from the end of the financial year in which the certificate of completion of construction of the property is obtained from the competent authority, shall be taken to be nil. This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 13 of the Bill seeks to amend section 35AD of the Income-tax Act relating to deduction in respect of expenditure on specified business. The existing provisions of the said section provides that deduction in respect of the whole of any expenditure of capital nature incurred, wholly and exclusively, for the purposes of any specified business carried on during the previous year in which such expenditure is incurred, is allowed to an assessee. Clause (f) of sub-section (8) of the said section provides for exclusion of any expenditure incurred on the acquisition of any land or goodwill or financial instrument from the purview of expenditure of capital nature accordingly, not be allowed as deduction. It is propose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection so as to provide that where the payments or aggregate of payments in a day to a person otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, exceeds ten thousand rupees in a day, no deduction shall be allowed under the said sub-section or, as the case may be, such payment shall be deemed to be the profits and gains of business or profession of the assessee. Consequential amendments are also proposed to be made in sub-sections (3A) and (4) of the said section. It is also proposed to amend the proviso to clause (a) of sub-section (2) which is consequential to the amendments proposed in section 92BA. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-20l9 and subsequent years. Clause 16 of the Bill seeks to amend section 43 of the Income-tax Act relating to definitions of certain terms relevant to income from profits and gains of business or profession. Clause (1) of the said section provides for the definition of actual cost for the purposes of claiming depreciation under section 32 of the Act. It is proposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cultural credit society and primary co-operative agricultural and rural development bank in the said section. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 18 of the Bill seeks to amend section 43D of the Income-tax Act relating to special provision in case of income of public financial institutions, public companies, etc. The said section inter alia, provides that interest income in relation to certain categories of bad or doubtful debts received by certain institutions or banks or corporations or companies, as referred to in the Explanation to the said section, shall be chargeable to tax in the previous year in which it is credited to its profit and loss account for that year or actually received, whichever is earlier. It is proposed to amend the said section so as to provide that the interest income in relation to certain categories of bad or doubtful debts received by a co-operative bank other than a primary agricultural credit society or a primary cooperative agricultural and rural development bank shall also be chargeable to tax in the previous year i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrying on business or profession. Section 44AB, inter alia, provides that every person carrying on business is required to get his accounts audited before a specified date, if the total sales, turn over or gross receipts in a previous year, as the case may be, exceed or exceeds one crore rupees. It is proposed to amend the said section so as to insert a new proviso to provide that this section shall not apply to the person, who declares profits and gains for the previous year in accordance with the provisions of sub-section (1) of section 44AD and his total sales, turnover or gross receipts, as the case may be, in business does not exceed two crore rupees in such previous year. This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-2018 and subsequent years. Clause 21 of the Bill seeks to amend section 44AD of the Income-tax Act relating to special provision for computing profits and gains of business on presumptive basis. The provisions contained in the said section (as amended by the Finance Act, 2016), provides that notwithstanding anything to the contrary contained in sections 28 to 43C, in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of the consideration received or accruing as a result of the transfer of the capital asset. It is also proposed to provide that the provisions of this sub-section shall not apply where the assessee transfers his share in the project to any other person on or before the date of issue of said certificate of completion and the capital gains shall be deemed to be the income of the previous year in which such transfer took place and the provisions of the Act, other than the provisions of this sub-section, shall apply for the determination of the full value of consideration received or accruing as a result of such transfer. It is also proposed to define the expressions competent authority , specified agreement and stamp duty value . This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 23 of the Bill seeks to amend section 47 of the Income-tax Act relating to transactions not regarded as transfer. The said section provides that certain transfers of capital assets are not chargeable to tax under section 45 of the Act. Further, under the existing provisions of cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8- 2019 and subsequent years. Clause 25 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 said section provides that where the capital asset became the property of the assessee under certain situations, the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be. It is proposed to amend sub-clause (e) of clause (iii) of said sub-section (1) so as to include the transfer referred to in clause (vic) of section 47 also within the purview of the said sub-section (1). It is further proposed to insert a new sub-section (2AE) in the said section so as to provide that where the capital asset, being equity share of a company, became the property of the assessee in consideration of a transfer as referred to in clause (xb) of section 47, the cost of acquisition of the asset shall be deemed to be the cost of the preference share in relation to which suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the assessment year 2018-2019 and subsequent years. It is also proposed to amend the said section by insertion of a new sub-section so as to provide that where the capital gain arises from the transfer of an asset, being the asset held by a trust or an institution in respect of which accreted income has been computed, and the tax has been paid thereon in accordance with the provisions of Chapter XIIEB, the cost of acquisition of such asset shall be deemed to be the fair market value of the asset which has been taken into account for computation of accreted income as on the specified date referred to in sub-section (2) of section 115TD. The proposed amendment is consequential in nature. This amendment will take effect retrospectively from 1st June, 2016. Clause 26 of the Bill seeks to insert a new section 50CA in the Income-tax Act relating to special provision for full value of consideration for transfer of share other than quoted share. It is proposed to provide that in case of transfer of shares of a company other than quoted share, the fair market value of such shares determined in the prescribed manner shall be deemed to be the full value of consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29 of the Bill seeks to amend section 56 of the Income-tax Act relating to income from other sources. The existing provisions of clause (vii) of sub-section (2) of the said section provide for taxability in the hands of individual or Hindu undivided family on receipt of any money or immovable property or specified movable property without or inadequate consideration, if the value of such receipt exceeds rupees fifty thousand. Further, clause (viia) of subsection (2) of the said section 56 provides for the taxability of receipt of shares of a closely held company by a firm or a closely held company for without or inadequate consideration, if the fair market value of shares exceeds fifty thousand rupees. However, the taxability under clause (vii) and clause (viia) of sub-section (2) of the said section is subject to certain specified exceptions. It is proposed to insert a new clause (x) in sub-section (2) of the said section so as to expand the scope of the provisions of the said section to all categories of assessees so that the assets received without or inadequate consideration may be brought to the tax. Further, the existing exception contained in the said section is propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years in which the loss was incurred. It is further proposed to provide that where a change in shareholding has taken place in a previous year in the case of a company, not being a company in which the public are substantially interested but being an eligible start-up as referred to in section 80-IAC, the loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year, if, all the shareholders of such company which held shares carrying voting power on the last day of the year or years in which the loss was incurred, being the loss incurred during the period of seven years beginning from the year in which such company is incorporated, continue to hold those shares on the last day of such previous year. It is also proposed to provide that the provisions of this section shall not apply to a case where a change in the voting power and shareholding, as aforesaid, takes place in a previous year consequent upon the death of a shareholder or on account of transfer of shares by way of gift to any relative of the shareholder making such gift. It is also proposed to provide that nothing contained in this section shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive thousand rupees. It is proposed to insert a new sub-section (5) in the said section so as to provide that no deduction under the said section shall be allowed in respect of any assessment year commencing on or after the 1st day of April, 2018. However, an assessee who has acquired shares or units in accordance with the aforesaid scheme and claimed deduction under the provisions of the said section for any assessment year commencing on or before the 1st day of April, 2017 shall be allowed deduction under the said section till the assessment year commencing on the 1st day of April, 2019, if he is otherwise eligible to claim the deduction in accordance with the other provisions of this section. This amendment will take effect, from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 35 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 contained in sub-section (5D) of the said section, no deduction is allowed in respect of donation of any sum exceeding ten thousand rupees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other place; and the project shall be completed within a period of three years. It is proposed to amend the said section so as to substitute the expression built-up area with the words carpet area and also to do away with the restriction of aerial distance of twenty-five kilometres from the municipal limits of the above said cities and further to extend the period of completion of the housing project from three years to five years for eligibility under the section. It is also proposed to provide the definition of carpet area as provided in the Real Estate (Regulation and Development) Act, 2016. These amendments will take effect, from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 38 of the Bill seeks to amend section 87A of the Income-tax Act relating to rebate of income-tax in case of certain individuals. The existing provisions contained in the said section provide that an assessee, being an individual resident in India, whose total income does not exceed five hundred thousand rupees, shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified associations for double taxation relief. Under the provisions of section 90A, the Central Government may make necessary provisions for adopting and implementing an agreement entered into by any specified association in India with any specified association in the specified territory outside India, for granting of relief in respect of which income-tax has been paid both under the Incometax Act and income-tax in that specified territory outside India, for the avoidance of double taxation of income, exchange of information for the prevention of evasion or avoidance of income-tax or recovery of income-tax. It is further provided that any term used but not defined in Income-tax Act or in the agreement referred to in sub-section (1) of the said section shall have the meaning assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf, unless the context otherwise requires, provided the same is not inconsistent with the provisions of Income-tax Act or the said agreement. It is proposed to provide that where any term used in an agreement entered into under sub-section (1) of the said section is defined under the said agreement, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case may be, of the assessee, the excess money which is available with its associated enterprise, if not repatriated to India within the time as may be prescribed, shall be deemed to be an advance made by the assessee to such associated enterprise and the interest on such advance, shall be computed in such manner as may be prescribed. It is also proposed to provide that the provisions of this section shall apply, if, the amount of primary adjustment made in case of the assessee in any previous year, exceeds one crore rupees. It is also proposed to provide that the provisions of this section shall not apply to such assessees in whose case the primary adjustment is made in respect of an assessment year commencing on or before 1st April, 2016. It is also proposed to define the term associate enterprise , arm's length price , excess money , primary adjustment and secondary adjustment . These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 43 of the Bill seeks to insert a new section 94B in the Income-tax Act relating to limitation on interest deduction in cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for which the excess interest expenditure was first computed. Sub-section (5) of the said section seeks to define the expressions associated enterprise , debt and permanent establishment . This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 44 of the Bill seeks to amend section 115BBDA of the Income-tax Act relating to tax on certain dividends received from domestic companies. Under the existing provisions of section 115BBDA, in case of an assessee, being an individual, Hindu undivided family or a firm, resident in India, tax is charged at the rate of ten per cent. on income by way of dividend exceeding ten lakh rupees. It is proposed to amend the said section so as to provide that this section shall be applicable to all resident persons other than a domestic company, a fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 or a trust or institution registered under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roposed to amend sub-section (3A) of the said section so as to extend the period for carry forward of tax credit from tenth assessment year to fifteenth assessment year. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 47 of the Bill seeks to amend section 115JB of the Income-tax Act relating to special provision for payment of tax by certain companies. The said section provides for levy of tax on certain companies on the basis of book profit which is determined after making certain adjustments to the net profit disclosed in the profit and loss account prepared in accordance with the provisions of the Companies Act, 1956. It is proposed to amend the section so as to align the provisions of section 115JB for the company preparing financial statements in accordance with the provisions of Indian Accounting Standards and to update the provisions of the Companies Act,1956 referred in the said section in accordance with the provisions of the new Companies Act, 2013. The amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so to the said sub-section (1) so as to provide that the reason to believe recorded by the income-tax authority specified therein under the said sub-section shall not be disclosed to any person or any authority or the Appellate Tribunal. This amendment will take effect retrospectively from 1st , April, 1962, the date of commencement of the Income-tax Act, 1961. Sub-section (1A) of the said section provides that where an authority mentioned therein, based on the information in his possession, has reason to suspect of the circumstances specified therein, he may authorise an authority specified therein to carry out search and seizure. It is proposed to insert an Explanation in the said subsection (1A) so as to declare that reason to suspect recorded by the income-tax authority specified therein under the provisions of the said sub-section shall not be disclosed to any person or any authority, or the Appellate Tribunal. This amendment will take effect retrospectively from 1st October, 1975. It is further proposed to insert sub-section (9B) in the said section, to provide that in a search case, where the authorised officer is satisfied that for the purpose of protecting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities to call for information for the purpose of any inquiry or proceeding under the Act. It is proposed to amend the first proviso of the said section so as to provide that the power in respect of inquiry or proceeding under the Act, as referred to in clause (6) of the said section, may also be exercised by the Joint Director, Deputy Director or Assistant Director. It is further proposed to amend the second proviso of the said section, so as to provide that the Joint Director, Deputy Director or Assistant Director, in a case where no proceeding is pending, may exercise the powers in respect of inquiry without seeking prior approval of the authorities as specified in the said proviso. These amendments will take effect from 1st April, 2017. Clause 53 of the Bill seeks to amend section 133A of the Income-tax Act relating to power of survey. The said section empowers an income-tax authority to survey a place, at which a business or profession is carried on, or at which any books of account or other documents or any part of cash or stock or other valuable article or thing relating to the business or profession are kept. It is proposed to amend sub-section (1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id sub-section (5) so as to provide that the time for furnishing of revised return shall be available upto the end of the relevant assessment year or before the completion of assessment, whichever is earlier. These amendments will take effect from 1st April, 2018 and will, accordingly apply in relation to assessment year 2018-2019 and subsequent years. Clause 56 of the Bill seeks to amend section 140A of the Income-tax Act relating to self-assessment. The said section provides that the assessee shall be liable to pay tax together with interest payable under any provision of the Income-tax Act as reduced by the amounts specified therein before furnishing a return under the said Act. It also provides the manner of calculation of the amount so payable and consequence of non-payment of the said amount. It is proposed to amend the said section to include that in case of delay in furnishing of return of income, alongwith the tax and interest payable as aforesaid, fee for delay in furnishing of return of income shall also be payable. The proposed amendment is consequential to the insertion of a new section 234F which provides for fee for delay in furnishing of return of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he time-limit for making an order of assessment, reassessment or recomputation under section 147, in respect of notices served under section 148 on or after the 1st day of April, 2019 shall be twelve months from the end of the financial year in which notice under section 148 was served. It is also proposed to amend sub-section (3) of the said section to provide that the time-limit for making an order of fresh assessment in pursuance of an order passed or received in the financial year 2019-2020 and onwards under section 254 or 263 or 264 shall be twelve months from the end of the financial year in which order under section 254 is received or order under section 263 or 264 is passed by the authority referred therein. It is also proposed to amend the third proviso to Explanation 1 of the said section to omit the reference of section 153B therein. These amendments will take effect from 1st April, 2017. It is also proposed to amend sub-section (5) of the said section to provide that where an order under section 250 or 254 or 260 or 262 or 263 or 264 requires verification of any issue by way of submission of any document by the assessee or any other person or where an opport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... caping assessment or part thereof relates to such year or years; and (iv) search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. It is further proposed to make consequential amendment to the provisos of the said sub-section. It is also proposed to define the expression relevant assessment year and asset in the form of Explanation. These amendments will take effect from 1st April, 2017. Clause 60 of the Bill seeks to amend section 153B of the Income-tax Act, 1961 relating to time-limit for completion of assessment under section 153A. Clause (a) of sub-section (1) of the said section provides that in respect of each assessment year falling within six assessment years referred to in clause (b) of sub-section (1) of section 153A, the order of assessment or reassessment shall be made within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed. It is proposed to amend the above clause to provide that the time-limit for assessment and reassessment as specified therein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly before its substitution by the Finance Act, 2016. This amendment will take effect retrospectively from 1st June, 2016. Clause 61 of the Bill seeks to amend section 153C of the Income-tax Act, 1961 relating to assessment of income of any other person. It is proposed to amend the second proviso to sub-section of the said section so as to provide a reference to the relevant assessment year as referred to in sub-section (1) of section 153A. The proposed amendment is consequential to the amendment to section 153A of the Income-tax Act and shall apply in respect of search conducted or requisition made on or after the 1st day of April, 2017. This amendment will take effect from 1st April, 2017. Clause 62 of the Bill seeks to amend section 155 of the Income-tax Act relating to other amendments. It is proposed to insert a new sub-section (14A) in the said section so as to provide that where credit for incometax paid in any country outside India or a specified territory outside India, referred to in section 90, section 90A or section 91, has not been given in the order of assessment for the relevant assessment year on the grounds that the payment of such tax was in di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 194-IC in the Income-tax Act relating to deductions in respect of payment under specified agreement. The proposed new section seeks to provide that notwithstanding anything contained in section 194-IA, any person responsible for paying to resident any sum by way of consideration, not being consideration in kind, under the agreement referred to in sub-section (5A) of section 45, shall, at the time of credit of such sum to the account of the 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 an amount equal to ten per cent. of such sum as income-tax thereon. This amendment will take effect from 1st April, 2017. Clause 65 of the Bill seeks to amend section 194J of the Income-tax Act which provides for deduction of tax at source on fees for professional or technical services. The said section provides that a person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of fees for professional or technical services or other services mentioned therein shall deduct an amount equal to ten per cent. of such sum as income-tax on income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d (c) of clause (i) of sub-section (2) of the said section to provide that the borrowings can be made before the 1st day of July, 2020 instead of the 1st day of July, 2017. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. It is also proposed to insert a new clause (ia) in sub-section (2) of the said section to extend the benefit of the said section to the rupee denominated bond issued outside India before 1st July, 2020 also. This amendment will take effect retrospectively from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-2017 and subsequent years. Clause 68 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 said 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 1st day of July, 2017. It is proposed to amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale consideration on cash sale of jewellery exceeding five lakh rupees. It is proposed to omit the said clause in view of restriction on cash transactions as proposed to be provided under section 269ST. The proposed amendment is consequential to the insertion of a new section 269ST in the Income-tax Act. Sub-section (1F) of the said section, inter alia, provides that the seller who receives any amount as consideration for sale of a motor vehicle of the value exceeding ten lakh rupees, shall at the time of receipt of such amount, collect from the buyer a sum equal to one per cent. of the sale consideration as income-tax. It is further proposed to insert a new sub-clause (iii) in clause (aa) of the Explanation to section 206C to exempt the following class of buyers from the provision of sub-section (1F) of the said section, namely:- (i) the Central Government, a State Government and an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; or (ii) local authority as defined in the Explanation to clause (20) of section 10; or (iii) a public sector company which is engaged in the business of carrying passengers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax and due dates. Clause (a) of sub-section (1) of the said section provides that all the assessees, except those referred to in clause (b), are liable to pay advance tax in four instalments during each financial year and also provides the due dates for the payments and amounts payable. Clause (b) of sub-section (1) of the said section provides that an eligible assessee engaged in an eligible business referred to in section 44AD is liable to pay advance tax in a single instalment on or before the 15th of March every financial year. It is proposed to amend the said clause (b) so as to provide that the assessee who declares profits and gains in accordance with the provisions of sub-section (1) of section 44ADA, shall also be liable to pay advance tax in one instalment on or before the 15th of March every financial year. This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-2018 and subsequent years. Clause 74 of the Bill seeks to amend section 234C of the Income-tax Act relating to interest for deferment of advance tax. It is proposed to provide that in respect of an assessee referred to in secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, he may, for the reasons to be recorded in writing and with the previous approval of the Principal Commissioner or Commissioner, withhold the refund up to the date on which the assessment is made. This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-2018 and subsequent years. Clause 77 of the Bill seeks to amend section 244A of the Income-tax Act relating to interest on refunds. The said section provides that an assessee is entitled to receive interest on refund arising out of excess payment of advance tax, tax deducted or collected at source, etc. It is proposed to insert a new sub-section (1B) in the said section so as to provide that where refund of any amount becomes due to the deductor, then such person shall be entitled to receive, in addition to the refund, simple interest on such refund, calculated at the rate of one-half per cent. for every month or part of a month comprised in the period, from the date on which claim for refund is made in the prescribed form or for giving effect to an order under section 250 or 254 or 260 or 262 from the date on which the tax is paid up to the date on which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (3) of the aforesaid section provides that the revenue Member of the Authority for Advance Rulings shall be a person from the Indian Revenue Service, who is of the rank of Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. It is proposed to amend the said clause (c) so as to provide that an officer from the Indian Revenue Service who is, or is qualified to be, a Member of the Central Board of Direct Taxes or an officer from the Indian Customs and Central Excise Service, who is, or is qualified to be, a Member of the Central Board of Excise and Customs as on the date of occurrence of the said vacancy shall be eligible to be appointed as the revenue Member of the Authority for Advance Rulings. It is further proposed to amend clause (d) of the said subsection (3) so as to provide that eligibility for appointment of law Member shall also be determined on the date of occurrence of vacancy. It is also proposed to insert sub-sections (6A) and (6B) in the aforesaid section so as to provide that in the event the office of Chairman falls vacant or in case the Chairman is unable to discharge his duties, the senior-most Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icultural income and in respect of transactions of the nature referred to in section 269SS; and such other persons or class of persons or receipts, as may be specified by the Central Government by notification in the Official Gazette. This amendment will take effect from 1st April, 2017. Clause 84 of the Bill seeks to insert a new section 271DA of the Income-tax Act relating to penalty for failure to comply with provisions of section 269ST. It is proposed to provide that if a person receives any sum in contravention of the provisions of section 269ST, he shall be liable to pay, by way of penalty, a sum equal to the amount of such receipt. It is further proposed that the penalty shall not be imposable if such person proves that there were good and sufficient reasons for the contravention. It is also proposed that any such penalty shall be imposed by the Joint Commissioner. This amendment will take effect from 1st April, 2017. Clause 85 of the Bill seeks to amend section 271F of the Income-tax Act relating to penalty for failure to furnish return of income. The said section provides for penalty for failure to furnish return of income. It is proposed to provide th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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