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Notes on clauses-Income Tax

Notes-01 - Bills - Notes on clauses - Bill - Notes-01 - Income-tax Clause 2, read with the First Schedule to the Bill, specifies the rates at which income- tax is to be levied on income chargeable to tax for the assessment year 2017-2018. Further, it lays down the rates at which tax is to be deducted at source during the financial year 2017-2018 from income other than Salaries subject to such deductions under the Income-tax Act; and the rates at which advance tax is to be paid, tax is to be dedu .....

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) Act, 2016 (48 of 2016), for the purposes of deduction of tax at source from Salaries , computation of advance tax and charging of 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 r .....

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f 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 aggregate of income paid or likely to be paid and subject to deduction exceeds one crore rupees; (ii) every non-resident being a co-operative society or firm or local authority at the r .....

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come paid or likely to be paid and subject to deduction exceeds ten crore rupees. Rates for deduction of tax at source from "Salaries", computation of "advance tax" and charging of income-tax in special cases during the financial year 2017-2018 Part III of the First Schedule to the Bill specifies the rates at which income-tax is to be deducted at source from, or paid on, income under the head "Salaries" and also the rates at which "advance tax" is to be pa .....

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x Act, not being a case to which any other Paragraph of this Part applies:- Up to ₹ 2,50,000 Nil ₹ 2,50,001 to ₹ 5,00,000 5 per cent. ₹ 5,00,001 to ₹ 10,00,000 20 per cent. Above ₹ 10,00,000 30 per cent.; (ii) In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than the age of eighty years at any time during the previous year:- Up to ₹ 3,00,000 Nil ₹ 3,00,001 to ₹ 5,00,000 5 per cent. .....

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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-operative societies, having income above .....

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tax in 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 2017-2018. The surcharge in cases of local authorities, having income above one crore rupees shall be levied at the rate of twelve per cent. Marginal relief will be provided. Paragraph E of this Part specifies the rates of income-tax in case of companies. In the case of domestic companies the rate of income-tax shall be twenty-five per cent. of the total inc .....

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seven per cent. In the case of domestic companies having total income above ten crore rupees, surcharge shall be levied at the rate of twelve per cent. In the case of companies other than domestic companies having income above one crore rupees but not above ten crore rupees, surcharge shall be levied at the rate of two per cent. In the case of companies other than domestic companies having total income above ten crore rupees, surcharge shall be levied at the rate of five per cent. Marginal reli .....

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ndary 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 containe .....

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both, the aforesaid period of holding shall be less than twenty-four months for it to be treated as short term capital asset. It is also proposed to insert a new sub-clause (hf) in Clause (i) of Explanation 1 of the said clause so as to provide that in the case of a capital asset being equity shares in a company, which becomes the property of the assessee in consideration of a transfer referred to in clause (xb) of section 47, there shall be included the period for which the preference shares we .....

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the unit or units in the consolidating plan of the mutual fund scheme were held by the assessee. 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 4 of the Bill seeks to amend section 9 of the Incometax Act relating to income deemed to accrue or arise in India. Clause (i) of sub-section (1) of the said section provides that certain incomes mentioned therein shall be deemed to accrue or aris .....

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sset mentioned therein and held by a non-resident by way of investment, directly or indirectly, in a Foreign Institutional Investor, as referred to in clause (a) of the Explanation to section 115AD, and registered as Category- I or Category-II foreign portfolio investor under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 made under the Securities and Exchange Board of India Act, 1992. The proposed amendment is clarificatory in nature. This amendment w .....

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age 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 amend .....

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clause (4) of the said section refers to any income of an individual by way of interest on moneys standing to his credit in a Non-Resident (External) Account in any bank in India in accordance with the Foreign Exchange Management Act, 1999 (42 of 1999), and the rules made thereunder. The proviso to the said sub-clause refers individual to be a person resident outside India, as defined in clause (q) of section 2 of Act 46 of 1973, which stands repealed and re-enacted as Act 42 of 1999. The defin .....

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provides exemption up to forty per cent. of the total amount payable from National Pension System Trust paid to an employee at the time of closure or his opting out of the scheme. It is also proposed to insert a new clause (12B) in the said section so as to provide exemption from tax at the time of partial withdrawal by an employee from National Pension System Trust in accordance with the terms and conditions specified under Pension Fund Regulatory Development Authority Act, 2013 and regulation .....

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Fund or the Lieutenant 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 clau .....

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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 any amount credited or paid out of income, being voluntary contributions with specific direction that they shall form part of the corpus, to any trust or institution registered under section 12AA by not treating the said contribution of amount as application of income to the objects of such enti .....

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2014 and transfers such land under the Land Pooling Scheme covered under the Andhra Pradesh Capital City Land Pooling Scheme (Formulation and Implementation) Rules, 2015 made under the provisions of the Andhra Pradesh Capital Region Development Authority Act, 2014 and the rules, regulations and schemes made under the said Act, shall not be included in the total income of the assessee. It is also proposed to clarify the term "specified capital asset" in this regard. This amendment will .....

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2) Act, 2004. It is proposed to amend the said clause (38) so as to provide that any income arising from the transfer of a long term capital asset, being an equity share in a company shall not be exempted, if the transaction of acquisition, other than the acquisition notified by the Central Government in this behalf, of such equity share is entered into on or after the 1st day of October, 2004 and such transaction is not chargeable to securities transaction tax under Chapter VII of the Finance ( .....

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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 t .....

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al Economic Zone which are engaged in manufacturing or production of articles or things or providing any services, subject to fulfilment of the conditions mentioned in that section. It is proposed to insert a new Explanation after sub-section (1) of the said section so as to provide that the amount of deduction referred to in that section shall be allowed from the total income of the assessee computed in accordance with the provisions of the Income-tax Act, before giving effect to the provisions .....

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any other trust or institution, except those made out of accumulated income, is considered as application of income for the purposes of its objects. It is proposed to insert a new Explanation 2 under the said sub-section so as to provide that in respect of any amount credited or paid, out of income referred to in clause (a) or clause (b) read with Explanation 1, being contributions with a specific direction that they shall form part of the corpus of the trust or institution shall not be treated .....

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here a trust or an institution has been granted registration under section 12AA or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996], and, 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 .....

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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 will, accordingly, apply in relation to assessment year 2018- 2019 and subsequent years. Clause 11 of the Bill seeks to amend section 13A of the In .....

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al party subject to the conditions that such political party keeps and maintains such books of account and other documents, maintains a record of voluntary contribution in excess of twenty thousand rupees and the accounts are audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and furnishes a report under sub-section (3) of section 29C of the Representation of the People Act,1951 to the Election Commission. It is proposed to amend the said section so as to .....

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as per section 139. It is further proposed to provide that any contributions received by way of electoral bond shall be excluded from reporting as per clause (b) of said section. It is also proposed to define the expression electoral bond . 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 12 of the Bill seeks to amend section 23 of the Income-tax Act relating to annual value how determine .....

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tained 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 .....

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ture in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account, exceeds ten thousand rupees, no deduction shall be allowed in respect of such expenditure also. 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 14 of the B .....

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vision for bad and doubtful debts. Further, the amount of such deduction is limited to seven and one-half per cent. of the amount of the total income (computed before making any deduction under the said clause and Chapter VIA) and an amount not exceeding ten per cent. of the aggregate average advances made by the rural branches of such bank computed in the prescribed manner. It is proposed to amend the provisions of said sub-clause so as to enhance the limit from seven and one-half per cent. to .....

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ssee incurs any expenditure in respect of which payment exceeding twenty thousand rupees is made otherwise than by an account payee cheque drawn on a bank or account payee bank draft to a person in a single day, no deduction shall be allowed in respect of such expenditure. It is proposed to amend the said sub-section 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 cle .....

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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 propo .....

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actual cost. It is also proposed to insert a proviso in Explanation 13 of clause (1) of the said section so as to provide that where any capital asset in respect of which deduction or part of deduction allowed under section 35AD is deemed to be the income of the assessee in accordance with the provisions of sub-section (7B) of the said section, the actual cost of the asset to the assessee shall be the actual cost to the assessee, as reduced by an amount equal to the amount of depreciation calcul .....

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by way of tax, cess, duty or fee, or interest on any loan or borrowing from any scheduled bank or public financial institution, etc., shall be allowed as deduction of the previous year in which the liability to pay such sum was incurred (relevant previous year) and if the same is actually paid on or before the due date of furnishing of the return of income. It is proposed to amend the said section so as to provide that any sum payable by the assessee as interest on any loan or advances from a c .....

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k" 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 instit .....

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operative agricultural and rural development bank shall also 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 further proposed to include the definitions of the expressions "co-operative bank", "primary agricultural credit society" and "primary co-operative agricultural and rural development bank" in the said section. These amendments will take effect from .....

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exceeds one lakh twenty thousand rupees or total sales, turnover or gross receipts, as the case may be, in business or profession exceed or exceeds ten lakh rupees in any one of the three years immediately preceding the previous year to enable the Assessing Officer to compute total income. Clause (ii) of sub-section (2) of the said section, provides that certain persons carrying on newly set up business or profession in any previous year, are required to maintain books of account and such other .....

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n clauses (i) and (ii) shall be enhanced from one lakh twenty thousand rupees to two lakh fifty thousand rupees and from ten lakh rupees to twenty-five lakh rupees, respectively, in the case of an individual and a Hindu undivided family. 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 20 of the Bill seeks to amend section 44AB of the Income-tax Act relating to audit of accounts of certain .....

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ance 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 presu .....

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than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head "profits and gains of business or profession". It is proposed to insert a proviso to the said sub-section (1) so as to reduce the existing rate of deemed total income of eight per cent. to six per cent., in respect of the amount of total turnover or gross receipts which is received by an account payee cheque or an acc .....

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ingly, apply in relation to assessment year 2018- 2019 and subsequent years. Clause 22 of the Bill seeks to amend section 45 of the Income-tax Act relating to Capital gains. Under the existing provisions of the said section, the Capital gains is chargeable in the year in which transfer takes place except in certain cases as provided in the said section. It is proposed to insert a new sub-section (5A) in the said section so as to provide that where the Capital gains arises to an assessee being an .....

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s increased by consideration received in cash, if any, shall be deemed to be the full value 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 .....

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uent 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 clause (x) of the said section, any transfer by way of conversion of bonds or debentures, debenture-stock or deposit certificates in any form, of a company into shares or debentures of that company is no .....

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ded as transfer. 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 24 of the Bill seeks to amend section 48 of the Income-tax Act relating to mode of computation. The fifth proviso to the said section provides that in case of an assessee being a non-resident, any gains arising on account of appreciation of rupee against a foreign currency at the time of redemption of rupee denominated bond .....

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g on the 1st day of April, 1981, whichever is later. It is proposed to amend the said proviso so as to provide that in case of an assessee being a non-resident, any gains arising on account of appreciation of rupee against a foreign currency at the time of redemption of rupee denominated bond of an Indian company held by him, shall be ignored for the purposes of computation of full value of consideration. It is also proposed to make consequential amendments to the said section so as to replace t .....

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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 p .....

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on to the assessment year 2018-2019 and subsequent years. It is also proposed to insert a new sub-section (2AF)so as to provide that where the capital asset, being a unit or units in a consolidated plan of a mutual fund scheme, became the property of the assessee in consideration of a transfer referred to in clause (xix) of section 47, the cost of acquisition of the asset shall be deemed to be the cost of acquisition to him of the unit or units in the consolidating plan of the scheme of the mutu .....

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Scheme (Formulation and Implementation) Rules, 2015 made under the provisions of Andhra Pradesh Capital Region Development Authority Act, 2014 and the rules, regulations and schemes made under the said Act, which has been transferred after the expiry of two years from the end of the financial year in which the possession of such specified capital asset was handed over to the assessee, the cost of acquisition of that specified capital asset shall be deemed to be the stamp duty value of the said .....

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ot being the capital asset referred to in the proviso of the said sub-section, shall be the amount which is deemed as full value of consideration in that sub-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. 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 hel .....

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ectively 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 for the purpose of computing income chargeable to tax as .....

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investment under the said section on or after the 1st day of April, 2007 means any bond, redeemable after three years and issued on or after the 1st day of April, 2007 by the National Highways Authority of India constituted under section 3 of the National Highways Authority of India Act, 1988 or by the Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956. It is proposed to amend the said clause (ba) so as to include any other bond as notified .....

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1981 is taken to be the cost of acquisition to the assessee or the fair market value of the asset on that date, at the option of the assessee. The cost of improvement is also taken into account after the assessee has acquired the asset on or after 1st April, 1981. It is proposed to amend the said section so as to advance the aforesaid cut-off date to 1st day of April, 2001. Where the long-term capital asset has been acquired before the 1st day of April, 2001, then, the cost of acquisition will .....

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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 ma .....

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ined in the said section is proposed to be rationalised by including certain additional exceptions consequently, it is proposed to sun set clauses (vii) and (viia) of sub-section (2) of the said section. This amendment will take effect from 1st April, 2017. Clause 30 of the Bill seeks to amend section 58 of the Income-tax Act relating to amounts not deductible. The provisions of the said section specify the amounts which are not deductible in computing the income from other sources. It is propos .....

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years. Clause 31 of the Bill seeks to amend section 71 of the Income-tax Act relating to set off of loss from one head against income from another. It is proposed to insert a new sub-section (3A) in the aforesaid section to provide that notwithstanding anything contained in sub-section (1) or sub-section (2) of the said section, set off of loss under the head "Income from house property" against any other head of income shall be restricted to two lakh rupees for any assessment year. Th .....

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loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year unless on the last day of the previous year the shares of the company carrying not less than fifty-one per cent. of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than fifty-one per cent. of the voting power on the last day of the year or years in which the loss was incurred. It is further proposed to p .....

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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 .....

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t will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 33 of the Bill seeks to amend section 80CCD of the Income-tax Act relating to deduction in respect of contribution to pension scheme of the Central Government. Sub-section (1) of the said section inter alia, provides that in the case of an individual employed by the Central Government on or after the 1st day of January, 2004 or, being an individual employ .....

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crease the upper limit of gross total income from ten per cent. to twenty per cent. in case of an individual other than employee. 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 34 of the Bill seeks to amend section 80CCG of the Income-tax Act relating to deduction in respect of investment made under an equity savings scheme. The existing provisions of the said section provides that where .....

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five 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 de .....

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e 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 unless such sum is paid by any mode other than cash. It is proposed to amend the said sub-section so as to provide that no deduction is allowed in respect of donation of any sum exceeding two thousand rupees unless such sum is paid by any mode other than cash. This amendment will take effect from 1st April, 2 .....

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s of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to one hundred per cent. of the profits and gains derived from such business for three consecutive assessment years and at the option of the assessee the said deduction may be claimed for any three consecutive assessment years out of five years beginning from the year in which the eligible startup is incorporated subject to the condition that it is incorporated. It is proposed to amend th .....

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d gains from housing projects. The said section provides for hundred per cent. deduction of the profits and gains of an assessee developing and building housing projects subject to certain conditions which, inter alia, include that the upper limit for the built-up area of residential unit comprised in the housing project does not exceed thirty square metres in the cities of Chennai, Delhi, Kolkata and Mumbai and any place, within the distance of twenty-five kilometres, measured aerially, from th .....

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ears 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 .....

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ction so as to provide that the deduction under the said section shall be allowed to an assessee, being an individual resident in India, whose total income does not exceed three hundred fifty thousand rupees, upto hundred percent. of income chargeable for any assessment year or two thousand five hundred rupees, whichever is less. 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 39 of the B .....

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ny term used but not defined in this 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 the 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 s .....

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the Bill seeks to amend section 90A of the Income-tax Act relating to adoption by Central Government of agreement between specified 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 bo .....

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te 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, the said term shall have the same meaning as assigned to it in the agreement; and where the term is not defined in the said agreement, but is defined in the Income-tax Act, it shall ha .....

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the monetary threshold of twenty crore rupees in aggregate during a previous year for the purposes of clause (b) of sub71 section (2) of section 40A, shall come within the meaning of "specified domestic transaction" and shall accordingly, be required to be computed having regard to arm's length principle. It is proposed to amend the said section so as to omit clause (i) of the said section so as to exclude the expenditure in respect of which payment has been made or to be made by t .....

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here a primary adjustment to transfer price, has been made suo motu by the assessee in his return of income; or made by the Assessing Officer has been accepted by the assessee; or is determined by an advance pricing agreement entered into by the assessee under section 92CC; or is made as per the safe harbour rules framed under section 92CB; or is arising as a result of resolution of an assessment by way of the mutual agreement procedure under an agreement entered into under section 90 or 90A for .....

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ed 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 "a .....

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de that where an Indian company, or a permanent establishment of a foreign company in India being the borrower, pays interest or similar consideration exceeding one crore rupees which is deductible in computing income chargeable under the head "Profits and gains of business or profession" in respect of any debt issued by a non-resident, being an associated enterprise of such borrower, interest shall not be deductible in computation of income under the said head to the extent that it ar .....

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ession "excess interest" shall mean an amount of total interest paid or payable in excess of thirty per cent. of earnings before interest, taxes, depreciation, and amortisation of the borrower in the previous year or interest paid or payable to associated enterprises for that previous year, whichever is less. Sub-section (3) of the said section seeks to provide that nothing contained in sub-section (1) shall apply to an Indian company or a permanent establishment of a foreign company w .....

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of any business or profession carried on by him and assessable for that assessment year to the extent of maximum allowable interest expenditure in accordance with sub-section (2). It is further provided that no interest expenditure shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the excess interest expenditure was first computed. Sub-section (5) of the said section seeks to define the expressions "associa .....

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rm, 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 ( .....

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come by way of transfer of carbon credits, the income-tax payable shall be the aggregate of the amount of income-tax calculated on the income by way of transfer of carbon credits at the rate of ten per cent., and the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income by way of transfer of carbon credit. It is further proposed to provide that the assessee shall not be eligible for deduction in respect of any expenditur .....

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of tax paid on deemed income relating to certain companies. Sub-section (2A) of the said section provides that the tax credit to be allowed under sub-section (1A) shall be the difference of the tax paid for any assessment year under sub-section (1) of section 115JB and the amount of tax payable by the assessee on his total income computed in accordance with the other provisions of the Income-tax Act. It is proposed to amend the said sub-section so as to provide that where the amount of tax cred .....

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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 bo .....

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sions of the new Companies Act, 2013. The amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017-2018 and subsequent years. Clause 48 of the Bill seeks to amend section 115JD of the Income-tax Act relating to tax credit for alternate minimum tax. Sub-section (2) of the said section provides that tax credit of an assessment year shall be the excess of the alternate minimum tax paid over the regular income-tax payable for that year and .....

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s Act, such excess amount shall be ignored, while computing the amount of credit and the period for carry forward of tax credit shall be extended 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 49 of the Bill seeks to amend section 119 of the Income-tax Act relating to instructions to subordinate authorities. Sub-clause (a) of sub- .....

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lso. This amendment will take effect from 1st April, 2017. Clause 50 of the Bill seeks to amend section 132 of the Income-tax Act relating to search and seizure. Sub-section (1) of the said section provides that where an income-tax authority mentioned therein, based on the information in his possession, has reason to believe of circumstances specified therein, he may authorise an authority specified therein to carry out search and seizure. It is proposed to insert an Explanation after the fourth .....

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n, 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 .....

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o insert sub-section (9C) in the said section, so as to provide that such provisional attachment shall cease to have effect after the expiry of six months from the date of order of attachment. It is also proposed to insert sub-section (9D) in the said section, to provide that in a search case, the authorised officer for estimation of fair market value of a property, may make a reference to a Valuation Officer referred to in section 142A, for valuation in the manner provided under the said subsec .....

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ill seeks to amend section 132A of the Income-tax Act relating to powers to requisition books of account, etc. Sub-section (1) of the said section provides that the specified income-tax authority, based on the information in his possession, has reason to believe of circumstances specified therein, may authorise other income-tax authority mentioned therein to requisition from other officer or authority referred to in clauses (a) to (c) of the said sub-section to deliver books of account, document .....

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for information. The said section empowers certain income-tax authorities 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 .....

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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 said section, so as to provide that a place, at which an activity for charitable purpose is carried on may also be surveyed by an incometax authority. It is further proposed to insert the reference of activity for charitable purpose in the Explanatio .....

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in the possession of such income-tax authority. Sub-section (2) of the said section provides that the prescribed income-tax authority may process any information or document that has been received in response to a notice issued under sub-section (1) and provide the outcome of such processing to the Assessing Officer. It is proposed to insert a new sub-section (3) in the said section so as to provide that the Central Board of Direct Taxes may make a scheme for enabling the centralised issuance of .....

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n clause (23AAA), Investor Protection Fund referred to in clause (23EC) or clause (23ED), Core Settlement Guarantee Fund referred to in clause (23EE) and Board or Authority referred to in clause (29A) of section 10 shall also be mandatorily required to file return of income. Sub-section (5) of the said section 139 provides that a person can furnish a revised return, in case he discovers any omission or wrong statement in his return of income already furnished, within one year from the end of the .....

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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 .....

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the Income-tax Act relating to assessment. Sub-section (1) of the said section provides the manner of processing of a return furnished under section 139 or in response to a notice under sub-section (1) of section 142. It is proposed to amend the said sub-section to provide that in computation of amount payable or refund due, as the case may be, on account of processing of return under the said sub-section, the fee payable under section 234F shall also be considered. The proposed amendment is co .....

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been issued to the assessee under sub-section (2) of the said section. It is proposed to provide that the provisions of the said sub-section shall not apply in relation to any return furnished for the assessment year commencing on or after the 1st day of April, 2017. This amendment will take effect from 1st April, 2017. Clause 58 of the Bill seeks to amend section 153 of the Income-tax Act relating to time-limit for completion of assessment, reassessment and recomputation. The said section provi .....

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m the end of the assessment year in which the income was first assessable. It is further proposed to amend sub-section (2) of the said section to provide that the 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 .....

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on 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 opportunity of being heard is to be provided to the assessee, the time-limit relating to fresh assessment provided in sub-section (3) shall apply to the order .....

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immediately before its substitution by the Finance Act, 2016. These amendments will take effect retrospectively from 1st June, 2016. Clause 59 of the Bill seeks to amend section 153A of the Income-tax Act, 1961 relating to assessment in case of search or requisition. Sub-section (1) of the aforesaid section provides that where a search is conducted under section 132 or requisition is made under section 132A, a notice shall be issued to such person to furnish the return of income in respect of e .....

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is made which falls beyond six assessment years but not beyond ten assessment years from the assessment year relevant to the previous year in which search is conducted or requisition is made, provided that- (i) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in one year or in aggregate in the relevant assessment years; (ii) such inc .....

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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 cla .....

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on (1) of section 153A. The proposed amendment is consequential to the amendment to section 153A of the Income-tax Act. It is further proposed to amend sub-section (1) to provide that for search and seizure cases conducted in the financial year 2018-2019, the time-limit for making an assessment order under section 153A shall be reduced from existing twenty-one months to eighteen months from the end of the financial year in which the last of the authorisations for search under section 132 or for .....

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ferred to in section 153C, shall be as available in case of person on whom search is conducted or twelve months from the end of the financial year in which books of account or documents or assets seized or requisitioned are handed over under section 153C to the Assessing Officer having jurisdiction over such other persons, whichever is later. It is also proposed to insert a proviso to the Explanation of the said section so as to provide that where a proceeding before the Settlement Commission ab .....

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ection 153A or section 153C has been issued prior to the 1st day of June, 2016 and the assessment has not been completed by such date due to exclusion of time referred to in the Explanation, such assessment shall be completed in accordance with the provisions of this section as it stood immediately 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 rel .....

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use 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 dispute, then, the Assessi .....

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rdingly, apply in relation to assessment years 2018- 2019 and subsequent years. Clause 63 of the Bill seeks to insert a new section 194-IB of the Income-tax Act relating to payment of rent by certain individuals or Hindu undivided family. The proposed new section provides that any person, being an individual or a Hindu undivided family (other than those referred to in second proviso of section 194-I), responsible for paying to a resident any income by way of rent exceeding fifty thousand rupees .....

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ue of a cheque or draft or by any other mode, whichever is earlier. It is also proposed to provide that the provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of this section. It is also proposed to provide that where the tax is required to be deducted as per the provisions of section 206AA, such deduction shall not exceed the amount of rent payable for the last month of the previous year or the last month of the tenancy, as the case m .....

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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 .....

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n per cent. of such sum as income-tax on income comprised therein. It is proposed to insert a proviso in the said section so as to reduce the rate of tax deduction at source to two per cent. from ten per cent. in case of payments received or credited to a payee, who is engaged only in the business of operation of call centre. This amendment will take effect from 1st June, 2017. Clause 66 of the Bill seeks to amend section 194LA of the Income-tax Act relating to payment of compensation on acquisi .....

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a new proviso to provide that no deduction of tax at source shall be made under this section, where such payment is made in respect of any award or agreement which has been exempted from the levy of income-tax under section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This amendment will take effect from 1st April, 2017. Clause 67 of the Bill seeks to amend section 194LC of the Income-tax Act relating to income by way of i .....

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nd (c) of clause (i) of the said sub-section further provides that the borrowing shall be made, under a loan agreement at any time on or after the 1st day of July, 2012, but before the 1st day of July, 2017; and by way of any long-term bond including long-term infrastructure bond on or after the 1st day of October, 2014, but before the 1st day of July, 2017, respectively. It is proposed to amend sub-clauses (a) and (c) of clause (i) of sub-section (2) of the said section to provide that the borr .....

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m 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 paya .....

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9 and subsequent years. Clause 69 of the Bill seeks to amend section 197A of the Income-tax Act relating to no deduction to be made in certain cases. The existing provisions contained in sub-sections (1A) and (1C) of the aforesaid section provide that no deduction of tax shall be made under the various sections referred to in the said sub-sections (1A) and (1C) of section 197A, if the persons referred to in the said sub-sections furnish to the persons responsible for paying any income of the nat .....

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of the Bill seeks to amend section 204 of the Income-tax Act relating to meaning of person responsible for paying . It is proposed to insert a new clause (iib) in the said section so as to provide that in the case of furnishing of information relating to payment to a non-resident, not being a company, or to a foreign company, of any sum, whether or not chargeable under the provisions of this Act, the payer himself, or, if the payer is a company, the company itself including the principal office .....

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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 amou .....

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s 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. It is also proposed to omit the reference of sub-section (1F) in sub-clause (ii) in the Explanation to section 206C. These amendments will take effect from 1st April, 2017. Clause 72 of the Bill seeks to insert a new section 206CC after section 206CB of the Income-tax Act relating to requirement to furnish Permanent Account Number by collectee. The .....

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that the declaration filed under sub-section (1A) of section 206C shall not be valid unless the person filing the declaration furnishes his Permanent Account Number in such declaration. The proposed sub-section (3) provides that in case any declaration becomes invalid under sub-section (2), the collector shall collect the tax at source in accordance with the provisions of sub-section (1). The proposed sub-section (4) provides that no certificate under sub-section (9) of section 206C shall be gr .....

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e deemed that Permanent Account Number has not been furnished to the collector and the tax shall be collected under sub-section (1). The proposed sub-section (7) provides that the new section 206CC shall not apply to a non-resident who does not have permanent establishment in India and also to explain the expression 'permanent establishment'. This amendment will take effect from 1st April, 2017. Clause 73 of the Bill seeks to amend section 211 of the Income-tax Act relating to instalment .....

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n 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 .....

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g levied under section 115BBDA with effect from the 1st April, 2017, if such income exceeds ten lakh rupees. The first proviso to sub-section (1) of section 234C lays down exceptions to the applicability of the said subsection to short fall in the payment of advance tax in case of certain incomes. It is proposed to amend the aforesaid proviso so as to provide that no interest under said section shall be levied on the income referred to in sub-section (1) of section 115BBDA subject to the conditi .....

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for filing of return under sub-section (1) of section 139. It is further proposed that a fee of five thousand rupees be payable, if the return is furnished after the due date but on or before the 31st day of December of the assessment year. A fee of ten thousand rupees is proposed to be payable in any other case. However, in a case where the total income does not exceed five lakh rupees, it is proposed that the fee amount shall not exceed one thousand rupees. This amendment will take effect fro .....

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ion that grant of the refund may adversely affect the recovery of revenue, 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 .....

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very 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 refund is granted. It is also proposed to amend sub-section (2) of the said section to give reference of the deductor in addition to the assessee and to provide that the interest shall not be allowed for the period for which the delay in t .....

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roceedings shall be deemed to have concluded on the expiry of two years from the end of the relevant assessment year. It is proposed to amend the said clause (iv) to the Explanation so as to provide that conclusion of proceedings shall be construed in accordance with the time specified for making assessment under sub-section (1) of section 153. The proposed amendment is consequential to the amendment to section 153 and section 153B of the Incometax Act. This amendment will take effect from 1st A .....

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ct, 1994. This amendment will take effect from 1st April, 2017. Clause 80 of the Bill seeks to amend section 245-O of the Income-tax Act relating to the Authority for Advance Rulings. Clause (a) of sub-section (3) of the aforesaid section provides that the Chairman of the Authority for Advance Rulings shall be a person who has been a Judge of the Supreme Court. It is proposed to amend the said clause (a) so as to provide that a person who has been the Chief Justice of a High Court or a Judge of .....

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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 .....

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duties, as the case may be. This amendment will take effect from 1st April, 2017. Clause 81 of the Bill seeks to amend section 245Q of the Income-tax Act relating to the application for advance ruling. Sub-section (1) of the aforesaid section provides that an applicant desirous of obtaining an advance ruling under Chapter XIX-B of the Income-tax Act may make an application in such form and in such manner as may be prescribed. It is proposed to amend the said section so as to provide that an app .....

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sub-clause (via) of clause (23C) of section 10 shall be appealable before the Appellate Tribunal. It is proposed to insert sub-clause (iv) and sub-clause (v) of clause (23C) in the aforesaid section, so as to make an order passed by the prescribed authority under said subclauses also appealable before the Appellate Tribunal. This amendment will take effect from 1st April, 2017. Clause 83 of the Bill seeks to insert a new section 269ST in the Income-tax Act relating to mode of undertaking transac .....

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y, post office savings bank or co-operative bank, any receipt from sale of agricultural produce by any person being an individual or Hindu Undivided family in whose hands such receipts constitutes agricultural 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 o .....

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