TMI BlogExplanatory Notes to the Provisions of the Finance Act, 2017X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 Clarity relating to indirect transfer provisions, 5.1-5.8 9A Modification in conditions of special taxation regime for off shore funds under section 9A , 6.1-6.5 10 Correct reference to FEMA instead of FERA, 7.1-7.4 ; Tax exemption to partial withdrawal from National Pension System (NPS), 8.1-8.3 ; Exemption of income of Chief Minister's Relief Fund or the Lieutenant Governor's Relief Fund, 9.1-9.4 ; Tax incentive for the development of capital of Andhra Pradesh, 10.1-10.5 ; Exemption of long term capital gains tax under section 10(38) of the Income-tax Act, 11.1-11.3 ; Exemption of income of Foreign Company from sale of leftover stock of crude oil from strategic reserves at the expiry of agreement or arrangement, 12.1-12.3 ; Restriction on exemption in case of corpus donation by exempt entities to other exempt entities, 14.1-14.6 10AA Rationalisation of provisions of Section 10AA, 13.1-13.4 11 Restriction on exemption in case of corpus donation by ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to Rupee Denominated Bonds, 27.1-27.5; Shifting base year from 1981 to 2001 for computation of capital gains, 32.1-32.4 49 Consolidation of plans within a scheme of mutual fund, 4.1-4.3; Tax incentive for the development of capital of Andhra Pradesh, 10.1-10.5; Special provisions for computation of capital gains in case of joint development agreement, 25.1-25.8; Tax neutral conversion of preference shares to equity shares, 26.1-26.4; Cost of Acquisition of capital assets of entities in case of levy of tax on accreted income under section 115TD, 28.1-28.4; Cost of acquisition in Tax neutral demerger of a foreign company, 29.1-29.3; Widening scope of Income from other sources, 33.1-33.6 50CA Fair Market Value to be full value of consideration in certain cases, 30.1-30.3 54EC Expanding the scope of long term bonds under 54EC, 31.1-31.3 55 Shifting base year from 1981 to 2001 for computation of capital gains, 32.1-32.4 56 Widening scope of Income from other sources, 33.1-33.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring Board to issue directions in respect of penalty for failure to deduct or collect tax at source, 51.1-51.3 132 Reason to believe to conduct a search, etc. not to be disclosed, 52.1-52.5; Power of provisional attachment and to make reference to Valuation Officer to authorised officer, 53.1-53.5 132A Reason to believe to conduct a search, etc. not to be disclosed, 52.1-52.5 133 Rationalisation of the provisions in respect of power to call for information, 54.1-54.4 133A Extension of the power to survey, 55.1-55.3 133C Legislative framework to enable centralised issuance of notice and processing of information under section 133C, 56.1-56.3 139 Mandatory furnishing of return by certain exempt entities, 57.1-57.3; Rationalisation of time limits for completion of assessment, reassessment and re-computation and reducing the time for filing revised return, 60.1-60.13 139AA Quoting of Aadhaar number, 58.1-58.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts covered under sub-section (6) of section 195, 69.1-69.4 206C Exemption from tax collection at source under section 206C in case of certain specified goods, services and buyers, 70.1-70.5; Restriction on cash transactions, 77.1-77.6 206CC Strengthening of PAN quoting mechanism in the TCS regime, 71.1-71.3 211 Rationalisation of section 211 and section 234C relating to advance tax, 72.1-72.6 234C Rationalisation of section 211 and section 234C relating to advance tax, 72.1-72.6 234F Fee for delayed filing of return, 73.1-73.7 241A Processing of return within the prescribed time and enable withholding of refund in certain cases, 59.1-59.5 244A Interest on refund due to deductor, 74.1-74.3 245A Rationalisation of time limits for completion of assessment, reassessment and re-computation and reducing the time for filing revised return, 60.1-60.13 245N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3A , 153B , 153C , 155 , 194J , 194LA , 194LC , 194LD , 197A , 204 , 206C, 211 , 234C , 244A, 245A , 245N , 245-O, 245Q , 253, 271F and 273B of the Income-tax Act, 1961 ( the Income-tax Act ); (iii) inserted new sections 50CA, 92CE , 94B , 115BBG , 139AA , 194-IB , 194-IC , 206CC , 234F, 241A , 269ST , 271DA and 271J in the Income-tax Act; (v) amended sections 50 and 197 of the Finance Act, 2016 . 3. Rate structure 3.1 Rates of income-tax in respect of incomes liable to tax for the assessment year 2017-18. 3.1.1 Part I of the First Schedule to the Act specifies the rates of income-tax in respect of incomes of all categories of assessees liable to tax for the assessment year 2017-18. These rates are the same as those laid down in Part III of the First Schedule to the Finance Act, 2016 as amended by the Taxation Laws (Second Amendment) Act, 2016 (No. 48 of 2016) for the purposes of computation of advance tax‛, deduction of tax at source from Salaries‛ and charging of tax payable in certain cases during the financial year 2016-17. The main features of the rates specified in the said P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Cess and Secondary and Higher Education Cess. For instance, if the income of an individual below sixty years of age is ₹ 1,01,00,000 and income-tax computed is ₹ 28,55,000/-. Surcharge on the income-tax at the rate of fifteen per cent of such tax is ₹ 4,28,250/-. Thus the total income-tax inclusive of surcharge is ₹ 32,83,250/- without providing marginal relief. On providing marginal relief, the income-tax inclusive of surcharge shall be limited to ₹ 29,55,000/-. Then the education cess of two per cent is to be computed on ₹ 29,55,000/- which works out to ₹ 59,100/-. In addition, the amount of tax computed shall also be increased by an additional cess called Secondary and Higher Education Cess on income-tax at the rate of one per cent of such income-tax which for the present case of income-tax of ₹ 29,55,000/- works out to be ₹ 29,550/-. Thus, where the amount of tax computed is ₹ 29,55,000/-, the Education Cess of two per cent is ₹ 59,100/-, the Secondary and Higher Education Cess is ₹ 29,550/-. The total cess in this case will amount to ₹ 88,650/-( i.e. ₹ 59,100/- + ₹ 29,550/-). No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itional surcharge called Secondary and Higher Education Cess on income-tax at the rate of one per cent of such income-tax inclusive of surcharge. No marginal relief shall be available in respect of Education Cess and Secondary and Higher Education Cess. 3.1.5 Local Authorities. Paragraph D of Part I of the First Schedule to the Act specifies the rate of income-tax as thirty per cent in the case of every local authority. The amount of income-tax so computed shall be increased by a surcharge at the rate of twelve per cent of such income-tax in case of a local authority having a total income exceeding one crore rupees. However, marginal relief shall be available so that the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees. The Education Cess on income-tax shall continue to be levied at the rate of two per cent on the amount of tax computed inclusive of surcharge. In addition, the amount of tax computed shall be further increased by an additional surcharge called Secon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s shall not exceed the total amount payable as income-tax and surcharge on a total income of ten crore rupees, by more than the amount of income that exceeds ten crore rupees. Education Cess on income-tax shall continue to be levied at the rate of two per cent on the amount of tax computed, inclusive of surcharge in the case of every company. Also, such amount of tax and surcharge shall be further increased by an additional surcharge called Secondary and Higher Education Cess on income-tax at the rate of one per cent of the amount of tax computed, inclusive of surcharge. No marginal relief shall be available in respect of Education Cess and Secondary and Higher Education Cess. 3.2 Rates for deduction of income-tax at source from certain incomes during the financial year 2017-18. 3.2.1 Part II of the First Schedule to the Act specifies the rates for deduction of income-tax at source during the financial year 2017-18 in every case in which tax is to be deducted at the rates in force under the provisions of sections 193 , 194, 194A , 194B, 194BB, 194D , 194LBA, 194LBB , 194LBC and 195 of the Income-tax Act. The rates for deduction of income-tax at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch amount of tax deducted and surcharge (i.e. ₹ 12,00,000/- + ₹ 24,000/- = ₹ 12,24,000/-) shall be ₹ 24,480/-. In addition, the amount of tax deducted and surcharge shall be further increased by an additional surcharge called Secondary and Higher Education Cess on income-tax at the rate of one per cent in all such cases. Thus in the above illustration, where the amount of tax deducted is ₹ 12,00,000/-, the surcharge is ₹ 24,000/-, the said Secondary and Higher Education Cess will be computed at the rate of one per cent on ₹ 12,24,000/- which works out to be ₹ 12,240/-. The total cess in this case will, therefore, amount to ₹ 36,720 (i.e. ₹ 24,480/- + ₹ 12,240/-). 3.3 Rates for deduction of income-tax at source from Salaries , computation of advance tax and charging of income-tax in special cases during the financial year 2017-18. 3.3.1 Part III of the First Schedule to the Act specifies the rates for deducting income-tax at source from Salaries and computing advance tax during the financial year 2017-18. These rates are also applicable for charging income-tax during the financial year 2017-18 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arginal relief shall be available so that the total amount payable as income-tax and surcharge on total income exceeding, (a) fifty lakh rupees but not exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of fifty lakh rupees by more than the amount of income that exceeds fifty lakh rupees; (b) one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees. The Education Cess on income-tax shall continue to be levied at the rate of two per cent on the amount of tax computed inclusive of surcharge. In addition, the amount of tax computed shall be further increased by an additional surcharge called Secondary and Higher Education Cess on income-tax at the rate of one per cent of such income-tax inclusive of surcharge. No marginal relief shall be available in respect of Education Cess and Secondary and Higher Education Cess. 3.3.3 Co-operative Societies. Paragraph B of Part III of the First Schedule to the Act specifies the rates of income-tax in the case of every co-operative society. The rates are as follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rate of income-tax as thirty per cent in the case of every local authority. The amount of income-tax so computed shall continue to be increased by a surcharge at the rate of twelve per cent of such income-tax in case of a local authority having a total income exceeding one crore rupees. However, marginal relief shall be available so that the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees. Education Cess on income-tax and Secondary and Higher Education Cess on income-tax shall be levied at the rate of two per cent and one per cent respectively of the amount of income-tax and surcharge. No marginal relief shall be available in respect of Education Cess and Secondary and Higher Education Cess. 3.3.6 Companies. Paragraph E of Part III of the First Schedule to the Act specifies the rate of income-tax in the case of a company. In case of a domestic company, the rate of income-tax is__ a) twenty five per cent of the total income, if the total turnover or gross rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able in respect of Education Cess and Secondary and Higher Education Cess. 3.4 Surcharge on Additional Income-tax. Where additional income-tax has to be paid under section 115-O or section 115-QA or sub-section (2) of section 115R or section 115TA or section 115TD of the Income-tax Act , that is to say, on distribution of dividend by domestic companies or distribution of income by a company on buy-back of shares from shareholders or on distribution of income by a mutual fund to its unit holders or on distribution of income by a securitisation trust to its investors or on accreted income of certain trusts and institutions, the additional tax so payable shall be increased by a surcharge of twelve per cent of such income-tax. 4. Consolidation of plans within a scheme of mutual fund. 4.1 Section 47 of the Income-tax Act was amended vide Finance Act, 2016 to provide tax neutrality to the transfer of units in a consolidating plan of mutual fund scheme made in consideration of the allotment of units in the consolidated plan of that mutual fund scheme. 4.2 Clause (42A) of section 2 and section 49 of the Income-tax Act have been amended so as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or indirectly, in a Foreign Institutional Investor as referred to in clause (a) of the Explanation to section 115AD for an assessment year commencing on or after the 1st April, 2012 but before the 1st April, 2015. 5.5 Applicability: This amendment takes effect retrospectively from 1st April, 2012 and will, accordingly, apply from assessment year 2012-13 and subsequent assessment years. 5.6 Section 9 of the Income-tax Act has been further amended so as to clarify that Explanation 5 shall not apply to an asset or capital asset, which is held by a non-resident by way of investment, directly or indirectly, in 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, as these entities are regulated and broad based. 5.7 This amendment is clarificatory in nature. 5.8 Applicability: This amendment takes effect retrospectively from 1st April, 2015 and will, accordingly, apply from assessment year 2015-16 and subsequent assessment years. 6. Modification in conditions of special taxation regime for off shore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, before amendment by the Act, referred individual to be a person resident outside India, as defined in clause (q) of section 2 of Act 46 of 1973, i.e., Foreign Exchange Regulation Act, 1973, (FERA) which stands repealed and re-enacted as Act 42 of 1999, i.e., the Foreign Exchange Management Act, 1999 (FEMA). The definition of person outside India is occurring in clause (w) of FEMA. 7.2 With a view to reflect the correct definition of the expression person resident outside India , the proviso to section 10(4)(ii) of the Income-tax Act has been amended. 7.3 This amendment is clarificatory in nature. 7.4 Applicability: This amendment takes effect retrospectively from 1st April, 2013, and will, accordingly, apply from assessment year 2013-14 and subsequent assessment years. 8. Tax-exemption to partial withdrawal from National Pension System (NPS). 8.1 The provisions of section 10(12A) of the Income-tax Act specify that payment from National Pension System (NPS) trust to an employee on closer of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resettlement Act, 2013, the specified compensation received by the landowner in lieu of acquisition of land is exempt from income tax. The Land Pooling Scheme is an alternative form of arrangement made by the Government of Andhra Pradesh for formation of new capital city of Amaravati to avoid land-acquisition disputes and lessen the financial burden associated with payment of compensation under that Act. In Land pooling scheme, the compensation in the form of reconstituted plot or land is provided to landowners. However, before amendment by the Act, there were no provisions in the Income-tax Act to provide for exemption from tax on transfer of land under the land pooling scheme as well as on transfer of Land Pooling Ownership Certificates (LPOCs) or reconstituted plot or land. 10.2 With a view to provide relief to an individual or Hindu undivided family who was the owner of such land as on 2nd June, 2014, and has transferred such land under the land pooling scheme notified under the provisions of Andhra Pradesh Capital Region Development Authority Act, 2014, a new clause (37A) has been inserted in section 10 of the Income-tax Act to provide that in respect of said persons, ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance (No. 2) Act, 2004. However, to protect the exemption in genuine cases, it is also provided that the Central Government shall notify transactions of acquisition for which the condition of chargeability to the Securities Transaction Tax on acquisition shall not be applicable. 11.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent years. 12. Exemption of income of Foreign Company from sale of leftover stock of crude oil from strategic reserves at the expiry of agreement or arrangement. 12.1 Clause (48A) of section 10 of the Income-tax Act provide that any income accruing or arising to a foreign company 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; and having regard to the national interest, said foreign company and the said agreement or arrangement are notified by the Central Government in that behalf. Before amendment by the Act, the benefit of exemption was not avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 14.1 Donations made by a trust to any other trust or institution registered under section 12AA or to any 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 of the Income-tax Act, except those made out of accumulated income, is considered as application of income for the purposes of its objects. 14.2 Similarly, donations made by entities exempted under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 to any trust or institution registered under section 12AA, except those made out of accumulated income, is also considered as application of income for the purposes of its objects. 14.3 However, donation given by these exempt entities to another exempt entity, with specific direction that it shall form part of corpus, was though considered application of income in the hands of donor trust but was not considered as income of the recipient trust. Trusts, thus, engaged in giving corpus donations without actual applications. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm to the conditions of registration, it shall be required to obtain fresh registration by making an application within a period of thirty days from the date of such adoption or modifications of the objects in the prescribed form and manner. Consequential amendments to Section 12AA of the Income-tax Act have also been made. 15.4 Further, as per the provisions of said section, the entities registered under section 12AA are required to file return of income under sub-section (4A) of section 139 of the Income-tax Act, if the total income without giving effect to the provisions of sections 11 and 12 exceeds the maximum amount which is not chargeable to income-tax. However, there was no clarity as to whether the said return of income was to be filed within time allowed under section 139 or otherwise. 15.5 In order to provide clarity in this regard, further amendment to section 12A of the Income-tax has been made so as to provide for additional condition that the person in receipt of the income chargeable to income-tax shall furnish the return of income within the time allowed under section 139 of the Income-tax Act. 15.6 These amendments are clarificatory in nature. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly, apply from assessment year 2018-19 and subsequent assessment years. 17. No notional income for house property held as stock-in-trade. 17.1 Section 23 of the Income-tax Act provides for the manner of determination of annual value of house property. 17.2 Considering the business exigencies in case of real estate developers, the said section has been amended to provide that where the house property consisting of any building and land appurtenant thereto is held as stock-in-trade and the property or any part of the property is not let 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. 17.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly apply from assessment year 2018-19 and subsequent years. 18. Increase in deduction limit in respect of provision for bad and doubtful debts. 18.1 Sub-clause (a) of section 36(1)(viia) of the Income-tax Act specify ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above ten thousand rupees to a person in a day, shall not be allowed as deduction in computation of Income from Profits and gains of business or profession ; (ii) Deeming a payment as profits and gains of business of profession if the expenditure is incurred in a particular year but the cash payment is made in any subsequent year of a sum exceeding ten thousand rupees to a person in a single day; and (iii) To expand the specified mode of payment under respective sub-section of section 40A of the Income-tax Act from an account payee cheque drawn on a bank or account payee bank draft to by an account payee cheque drawn on a bank or account payee bank draft or use of electronic clearing system through a bank account. 19.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent assessment years. 20. Disallowance of depreciation under section 32 and capital expenditure under section 35AD on cash payment. 20.1 Sub-section (3) of section 40A of the Income-tax Act provides that revenue expenditure incurred in cash exceeding certain monetary threshold is not allowable except in such ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporations, state industrial investment corporations and certain public companies like housing finance companies. With a view to provide a level playing field to co-operative banks vis- -vis scheduled banks and to rationalise the scope of the section 43D, the said section has been amended so as to include co-operative banks other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank/within its scope. 21.3 Consequentially, as per matching principle in taxation, if the interest income on bad or doubtful debts is chargeable to tax on receipt basis, the interest payable on such bad or doubtful debts need to be allowed on actual payment. In view of this, section 43B of the Income-tax Act has also been amended to provide that any sum payable by the assessee as interest on any loan or advances from a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank shall be allowed as deduction if it is actually paid on or before the due date of furnishing the return of income of the relevant previous year. 21.4 Applicability: This amendment takes effect f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act, 2016 . Further vide press release dated 20th June, 2016, it was clarified that if an eligible person opts for presumptive taxation scheme as per section 44AD(1) of the Income-tax Act, he shall not be required to get his accounts audited if the total turnover or gross receipts of the relevant previous year does not exceed two crore rupees. 23.2 In light of the above legislative changes and to reduce the compliance burden of the small tax payers and facilitate the ease of doing business, section 44AB of Income-tax Act has been amended so as to exclude the eligible person, who declares profits for the previous year in accordance with the provisions of sub-section (1) of section 44AD of the Income-tax Act and his total sales, total turnover or gross receipts, as the case may be, in business does not exceed two crore rupees in such previous year, from requirement of audit of books of accounts under section 44AB of the Income-tax Act. 23.3 Applicability: This amendment takes effect from 1st April, 2017 and will, accordingly, apply from assessment year 2017-18 and subsequent assessment years. 24. Measures for promoting digital payments in case of small unorgan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded over to the developer for development of a project. 25.2 With a view to minimise the genuine hardship which the owner of land may face in paying capital gains tax in the year of transfer, a new sub-section (5A) has been inserted in section 45 of the Income-tax Act to provide that in case of an assessee, being an individual or a Hindu undivided family, who enters into a specified agreement for development of a project, the capital gains shall be chargeable to income-tax as income of the previous year in which the certificate of completion for the whole or part of the project is issued by the competent authority. 25.3 It has also been provided that the stamp duty value of his share, being land or building or both, in the project on the date of issuing of said certificate of completion as increased by any monetary consideration received, 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. 25.4 It is also provided that benefit of this regime shall not apply to an assessee who transfers his share in the project to any other person on or before the date of issue of said certificate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27.1 With a view to provide relief to non-resident investors, in the wake of permission to the Indian corporates by the Reserve Bank of India (the RBI) to issue rupee denominated bonds outside India as a measure to enable the Indian corporates to raise funds from a source outside India, the Finance Act, 2016, inter alia, amended section 48 of the Income-tax Act with effect from the 1st April, 2017 so as to provide that the 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 subscribed by him, shall be ignored for the purpose of computation of full value of consideration. 27.2 Representations were received to allow exemption from capital gain arising to secondary holders as well. Representations were also received to allow exemption in respect of transfer of Rupee Denominated Bonds from non-resident to non-resident for the purpose of increasing acceptability and transferability of such instrument in the foreign market. 27.3 In order to further provide relief in respect of gains arising on account of appreciation of rupee against a foreign currency at the time of redemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of demerged foreign company. 29.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent years. 30. Fair Market Value to be full value of consideration in certain cases. 30.1 Under the provisions of the Income-tax Act, income chargeable under the head Capital gains is computed by taking into account the amount of full value of consideration received or accrued on transfer of a capital asset. In order to ensure that the full value of consideration is not understated, the Income-tax Act also contains provisions for deeming of full value of consideration in certain cases such as deeming of stamp duty value as full value of consideration for transfer of immovable property in certain cases. 30.2 In order to rationalise the provisions relating to deeming of full value of consideration for computation of income under the head capital gains , a new section 50CA has been inserted in the Income-tax Act so as to provide that where consideration for transfer of share of a company (other than quoted share) is less than the Fair Market Value (FMV) of such share determined in accordance w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 01.04.1981, section 55 of the Income-tax Act has been amended so as to provide that the cost of acquisition of an asset acquired before 01.04.2001 shall be allowed to be taken as fair market value as on 1st April, 2001 and the cost of improvement shall include only those capital expenses which are incurred after 01.04.2001. 32.3 Consequently, section 48 of the Income-tax Act has also been amended so as to align the provision relating to cost inflation index to the revised base year. 32.4 Applicability: These amendments take effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent years. 33. Widening scope of Income from other sources. 33.1 The provisions of section 56(2)(vii) of the Income-tax Act provided that any sum of money or any property which is received without consideration or for inadequate consideration (in excess of the specified limit of ₹ 50,000) by an individual or Hindu undivided family is chargeable to income-tax in the hands of the resident under the head Income from other sources subject to certain exceptions. 33.2 Further, receipt of certain shares by a firm or a company in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. 34.2 For computing income under the head Profits and gains of business or profession , a disallowance is made for non-deduction of tax from payment to resident also. With a view to improve compliance of provisions relating to tax deduction at source (TDS), section 58 of the Income-tax Act has been amended so as to provide that the provisions of section 40(a)(ia) of the Income-tax Act shall, so far as they may be, apply in computing income chargeable under the head Income from other sources as they apply in computing income chargeable under the head Profit and gains of business or Profession . 34.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent years. 35. Restriction on set-off of loss from house property. 35.1 Section 71 of the Income-tax Act relates to set-off of loss from one head against income from another. 35.2 In line with the international best practices, a new sub-section (3A) has been inserted in the said section to provide that set-off of loss under the head Income from house property‛ against any other head of income shall be restricted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in National Pension System trusts (NPS). The deduction under section 80CCD(1) of the Income-tax Act could not exceed 10% of salary in case of an employee or 10% of gross total income in case of other individuals. However, under the provisions of section 80CCD(2) of the Income-tax Act, further deduction to an employee in respect of contribution made by his employer was allowed up to 10% of salary of the employee. Thus, in case of an employee, the deduction allowed under section 80CCD of the Income-tax Act added up to 20% of salary whereas in case of other individuals, the total deduction under section 80CCD was limited to 10% of gross total income. 37.2 In order to provide parity between an individual who is an employee and an individual who is self-employed, section 80CCD of the Income-tax Act has been amended so as to increase the upper limit of 10% of gross total income to 20% in case of individual other than employee. 37.3 Applicability: This amendment takes effect from 1st April, 2018 and, will accordingly; apply from assessment year 2018-19 and subsequent years. 38. Rationalization of deduction under section 80CCG. 38.1 Under the provisions of section 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir business, section 80-IAC of the Income-tax Act has been amended to provide that deduction under section 80-IAC can be claimed by an eligible start-up for any three consecutive assessment years out of seven years beginning from the year in which such eligible start-up is incorporated. 40.3 Applicability: These amendments take effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent years. 41. Rationalisation of Provisions of Section 80-IBA to promote Affordable Housing. 41.1 Section 80-IBA of the Income-tax Act provide for 100% deduction in respect of the profits and gains derived from developing and building certain housing projects subject to specified conditions. Before amendment by the Act, the conditions specified included inter alia the limit of 30 square meters for the built-up area of residential unit in respect of project located in the Chennai, Delhi, Kolkata and Mumbai or within 25 kms from the municipal limits of these four cities. Further, it was also provided that in order to be eligible to claim deductions, the project shall be completed within a period of three years. 41.2 In order to promote the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act in the case of an agreement entered into by any specified association in India with any specified association in the specified territory outside India. 43.2 It is further provided in section 90 and 90A that any term' used but not defined in this Act or in the agreement referred to in sub-section (1) of respective provisions 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 this Act or the agreement. 43.3 One of the recommendations of the Income-tax Simplification Committee, in its final report, is bringing in more clarity in the Income-tax Act in respect of interpretation of 'terms' used in an agreement entered under section 90 or 90A for the purposes of its application in order to reduce the avoidable litigation related to taxation of non- residents. 43.4 In the light of above discussion and to bring in clarity to avoid litigation, a new Explanation 4 has been inserted in sections 90 and 90A respectively of the Income-tax Act so as to provide that where any t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... removing the imbalance between cash account and actual profit of the assessee. As per the Organisation for Economic Cooperation and Development (OECD)'s Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (OECD transfer pricing guidelines), secondary adjustment may take the form of constructive dividends, constructive equity contributions, or constructive loans. 45.2 The provisions of secondary adjustment are internationally recognised and are already part of the transfer pricing rules of many leading economies in the world. Whilst the approaches to secondary adjustments by individual countries vary, they represent an internationally recognised method to align the economic benefit of the transaction with the arm's length position. 45.3 In order to align the transfer pricing provisions in line with OECD transfer pricing guidelines and international best practices, a new section 92CE has been inserted in the Income-tax Act so as to provide that the assessee shall be required to carry out secondary adjustment where the primary adjustment to transfer price, has been made suo motu by the assessee in his return of income; or made by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat can be deducted in computing a company's profit for tax purposes. Such rules are designed to counter cross-border shifting of profit through excessive interest payments, and thus aim to protect a country's tax base. 46.2 Under the initiative of the G-20 countries, OECD in its Base Erosion and Profit Shifting (BEPS) project had taken up the issue of base erosion and profit shifting by way of excess interest deductions by the MNEs in Action plan 4 and has recommended several measures in its final report to address this issue. 46.3 In view of the above, a new section 94B has been inserted in the Income-tax Act so as to provide that interest expenses claimed by an entity to its associated enterprises shall be restricted to 30% of its earnings before interest, taxes, depreciation and amortization (EBITDA) or interest paid or payable to associated enterprise, whichever is less. 46.4 The provisions of the section 94B of the Income-tax Act shall be applicable to an Indian company, or a permanent establishment of a foreign company being the borrower who pays interest in respect of any form of debt issued to a non-resident or to a permanent establishment of a non-r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of energy-efficient machinery, landfill methane capture, etc. The Kyoto Protocol commits certain developed countries to reduce their GHG emissions, for which they will be given carbon credits. A reduction in emissions entitles the entity to a credit in the form of a Certified Emission Reduction (CER) certificate. The CER certificate is tradable and its holder can transfer it to an entity which needs carbon credits to overcome an unfavourable position on GHGs reduction. 48.2 The Income-tax Department has been treating the income on transfer of carbon credits as business income which is subject to tax at the rate of 30%. However, divergent decisions have been given by the courts on the issue as to whether the income received or receivable on transfer of carbon credits is a revenue receipt or capital receipt. 48.3 In order to bring clarity on the issue of taxation of income from transfer of carbon credits and to encourage measures to protect the environment, a new section 115BBG has been inserted in the Income-tax Act so as to provide that where the total income of the assessee includes any income from transfer of carbon credit, such income shall be taxable at the concessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferent approaches have been adopted to deal with the tax issues arising from adoption of IFRS. For ensuring horizontal equity across the companies irrespective of the fact that whether they follow Ind AS or the Indian Generally Accepted Accounting Principles (GAAP), the Central Government has issued Income Computation and Disclosure Standards (ICDS) for computation of taxable income for specified heads of income. 50.3 As the book profit based on Ind AS compliant financial statement is likely to be different from the book profit based on Indian GAAP, the Central Board of Direct Taxes (CBDT) constituted a committee in June 2015 for suggesting the framework for computation of MAT liability under section 115JB for Ind AS compliant companies in the year of adoption and thereafter. 50.4 The Committee submitted first interim report on 18th March, 2016 which was placed in public domain by the CBDT for wider public consultations. The Committee submitted the second interim report on 5th August, 2016 which was also placed in public domain. The comments/suggestions received in respect of the first and second interim reports were examined by the Committee. After taking into account al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... air value to record the distribution as a 'deemed dividend' to the shareholders. As there is a corresponding adjustment in retained earnings, this difference arising on demerger shall be excluded from the book profits. However, in the case of a resulting company, where the property and the liabilities of the undertaking or undertakings being received by it are recorded at values different from values appearing in the books of account of the demerged company immediately before the demerger, any change in such value shall be ignored for the purpose of computing of book profit of the resulting company . B. MAT on first time adoption (i) The adjustments arising on account of transition to Ind AS from Indian GAAP is required to be recorded directly in Other Equity at the date of transition to Ind AS. Several of these items would subsequently never be reclassified to the statement of profit and loss/included in the computation of book profits. Accordingly, the following treatment is provided:- (I) Those adjustments recorded in other comprehensive income and which would subsequently be reclassified to the profit and loss, shall be included in book profits in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PPE and Intangible assets shall be ignored for the purposes of computation of book profits. Depreciation shall be computed ignoring the amount of aforesaid retained earnings adjustment. Similarly, gain/loss on realisation/disposal/retirement of such assets shall be computed ignoring the aforesaid retained earnings adjustment. b) Investments in subsidiaries, joint ventures and associates at fair value as deemed cost An entity may use fair value in its opening Ind AS Balance Sheet as deemed cost for investment in a subsidiary, joint venture or associate in its separate financial statements as mentioned in paragraph D15 of Ind AS 101. In such cases retained earnings adjustment shall be included in the book profit at the time of realisation of such investment. c) Cumulative translation differences An entity may elect a choice whereby the cumulative translation differences for all foreign operations are deemed to be zero at the date of transition to Ind AS. Further, the gain or loss on a subsequent disposal of any foreign operation shall exclude translation differences that arose before the date of transition to Ind AS and shall include only the translation di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19, 2019-20 and 2020-21. 50.7 Applicability: As the Ind-AS is required to be adopted by certain companies for financial year 2016-17 mandatorily, these amendments take effect from 1st April, 2017 and will, accordingly, apply from assessment year 2017-18 and subsequent assessment years. 51. Empowering Board to issue directions in respect of penalty for failure to deduct or collect tax at source. 51.1 The provisions of clause (a) of sub-section (2) of section 119 of the Income-tax Act empower the Board to issue orders setting forth directions or instructions (not being prejudicial to assessees) to be followed by subordinate authorities in the work relating to assessment or collection of revenue or the initiation of proceedings for the imposition of penalties. 51.2 In order to reduce the genuine hardship which may be faced by a person responsible for deduction and collection of tax at source due to levy of penalty under section 271C or 271CA, reference to the aforesaid sections has been inserted in clause (a) of sub-section (2) of section 119 of the Income-tax Act, to empower the Board to issue directions or instructions in respect of the said sections also. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search or seizure or within a period of sixty days from the date on which the last of the authorisations for search was executed, the authorised officer on being satisfied that for protecting the interest of revenue it is necessary so to do, may attach provisionally any property belonging to the assessee with the prior approval of Principal Director General or Director General or Principal Director or Director. It has been provided that such provisional attachment shall cease to have effect after the expiry of six months from the date of order of such attachment. 53.3 In order to enable correct estimation and quantification of undisclosed income held in the form of investment or property by the assessee by the Investigation wing of the Department, a new sub-section (9D) has been inserted in the section 132 of the Income-tax Act to provide that in a case of search, the authorised officer may, for the purpose of estimation of fair market value of a property, make a reference to a Valuation Officer referred to in section 142A of the Income-tax Act, for valuation in the manner provided under that sub-section. It also provides that the Valuation Officer shall furnish the valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble purpose is carried on. 55.3 Applicability: This amendment takes effect from 1st April, 2017. 56. Legislative framework to enable centralised issuance of notice and processing of information under section 133C. 56.1 Section 133C of the Income-tax Act empowers the prescribed income-tax authority to issue notice calling for information and documents for the purpose of verification of information in its possession. 56.2 In order to expedite verification and analysis of the information and documents so received, section 133C of the Income-tax Act has been amended to empower the Central Board of Direct Taxes to make a scheme for centralised issuance of notice calling for information and documents for the purpose of verification of information in its possession, processing of such documents and making the outcome thereof available to the Assessing Officer for necessary action, if any. 56.3 Applicability: This amendment takes effect from 1st April, 2017. 57. Mandatory furnishing of return by certain exempt entities. 57.1 The provisions of sub-section (4C) of section 139 of the Income-tax Act mandate filing of return by certain entities which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndment by the Finance Act, 2016 , the provisions of sub-section (1D) of section 143 of the Income-tax Act specify that the processing of a return shall not be necessary, where a notice has been issued to the assessee under sub-section (2) of the said section. 59.2 The said sub-section was amended vide Finance Act, 2016 and it was provided that with effect from assessment year 2017-18, processing under section 143(1) of the Income-tax Act is to be done before passing of assessment order. 59.3 In order to address the grievance of delay in issuance of refund in genuine cases, a proviso has been inserted in section 143(1D) of the Income-tax Act specifying that the provisions of the said sub-section shall cease to apply in respect of returns furnished for assessment year 2017-18 and onwards. 59.4 However, to address the concern of recovery of revenue in doubtful cases, a new section 241A has been inserted in the Income-tax Act to provide that, for the returns furnished for assessment year commencing on or after 1st April, 2017, where refund of any amount becomes due to the assessee under section 143(1) of the Income-tax Act and the Assessing Officer is of the opinion t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein. 60.5 Applicability: These amendments take effect from 1st April, 2017. 60.6 Sub-section (5) of section 153 of the Income-tax Act has also been amended to provide that where an order under section 250 or 254 or 260 or 262 or 263 or 264 of the Income-tax Act 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) of section 153 of the Income-tax Act shall apply to the order giving effect to such order. 60.7 Sub-section (9) of section 153 of the Income-tax Act has also been amended to provide that where a notice under sub-section (1) of section 142 of the Act or sub-section (2) of section 143 of the Income-tax Act or under section 148 of the Income-tax Act has been issued prior to the 1st day of June, 2016 and the assessment or reassessment has not been completed by such date due to exclusion of time referred to in Explanation 1 to section 153 of the Income-tax Act, such assessment or reassessment shall be completed in accordance with the provisions of section 153 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Act was executed. It is further provided that for search and seizure cases conducted in the financial year 2019-20 and onwards, the said time limit shall be further reduced to twelve 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. 61.3 It is further provided that period of limitation for making the assessment or reassessment in case of other person referred to in section 153C, shall be the period available to make assessment or reassessment in case of person on whom search is conducted or twelve months from the end of the financial year in which books of accounts 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. 61.4 A proviso to Explanation to the said section has been inserted to provide that where a proceeding before the Settlement Commission abates under section 245HA, the period of limitation available under this section for assessment or reassessment shall after the exclusion of the period under sub-section (4) of section 245H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Family (HUF) who is liable for tax audit under section 44AB for any financial year immediately preceding the financial year in which such income by way of rent is credited or paid shall be required to deduction of tax at source under this section. 63.2 Therefore, under the provisions of the aforesaid section, an individual and HUF, being a payer (other than those liable for tax audit) are out of the scope of section 194-I of the Income tax Act. 63.3 In order to widen the scope of tax deduction at source, a new section 194-IB has been inserted in the Income-tax Act to provide that individuals or a HUF (other than those covered under 44AB of the Income-tax Act) responsible for paying to a resident any income by way of rent exceeding fifty thousand rupees for a month or part of month during the previous year, shall deduct an amount equal to five per cent of such income as income-tax thereon. 63.4 It is also provided that tax shall be deducted on such income at the time of credit of rent, for the last month of the previous year or the last month of tenancy if the property is vacated during the year, as the case may be, to the account of the payee or at the time of paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, ('RFCTLARR Act') on 26th September, 2013 which came into force on 1st January, 2014. Section 96 of the RFCTLARR Act provides inter alia that income-tax shall not be levied on award or agreement made subject to limitations mentioned in section 46 of the said Act. Therefore, compensation received for compulsory acquisition of land under the RFCTLARR Act (except those made under section 46 of RFTCLARR Act), is exempt from the levy of income-tax. 65.3 The Board has issued Circular number 36/2016 dated 25th October, 2016 clarifying that compensation received in respect of any award or agreement which has been exempted from the levy of income-tax vide section 96 of the RFCTLARR Act shall not be taxable under the provisions of the Income-tax Act, even if there is no specific provision of exemption for such compensation under the Income-tax Act. However, the circular addressed only the matter pertaining to taxability of compensation received on compulsory acquisition of land and not tax deduction at source under section 194LA of the Income-tax Act. 65.4 In order to harmonise the provisions of the Income-tax Act with the RCFTLARR Act, section 194LA of the Income-tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 66.8 Applicability: This amendment takes effect retrospectively from 1st April, 2016 and will, accordingly, apply from assessment year 2016-17 and subsequent assessment years. 67. Extension of eligible period of concessional tax rate under section 194LD. 67.1 Before amendment by the Act, the provisions of section 194LD of the Income-tax Act provided for lower TDS at the rate of five per cent in case of interest payable at any time on or after 1st June, 2013 but before the 1st July, 2017 to Foreign Institutional Investors (FIIs) and Qualified Foreign Investors (QFIs) on their investments in Government securities and rupee denominated corporate bonds provided that the rate of interest does not exceed the rate notified by the Central Government in this behalf. 67.2 Considering the representations received from stakeholders, section 194LD of the Income-tax Act has been amended to provide that the concessional rate of five per cent TDS on interest will now be available on interest payable before the 1st July, 2020. 67.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 204 of the Income-tax Act has been amended 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 the Income-tax Act, 'person responsible for paying' shall be the payer himself, or, if the payer is a company, the company itself including the principal officer thereof. 69.4 Applicability: This amendment takes effect from 1st April, 2017. 70. Exemption from tax collection at source under section 206C in case of certain specified goods, services and buyers. 70.1 The provisions of sub-section (1F) of section 206C of the Income-tax Act specify inter alia that the seller who receives consideration for sale of a motor vehicle exceeding ten lakh rupees, shall collect one per cent of the sale consideration as tax from the buyer. 70.2 In order to reduce compliance burden in certain cases, section 206C of the Income-tax Act has been amended to specify that the following classes of buyers are exempt from the applicability of the provision of the said subsection: (i) the Central Government, a State Government, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alid or it does not belong to the collectee, then it shall be deemed that PAN has not been furnished to the collector. (viii) The non-resident who does not have permanent establishment in India is exempt from applicability the provisions of the said section. 71.3 Applicability: This amendment takes effect from 1st April, 2017 and will, accordingly, apply from assessment year 2017-18 and subsequent years. 72. Rationalisation of section 211 and section 234C relating to advance tax. 72.1 Section 211 of the Income-tax Act provides for instalments of advance tax and due dates for depositing the same. Clause (b) of sub-section (1) of section 211 of the Income-tax Act provides that an eligible assessee engaged in an eligible business referred to in section 44AD of the Income-tax Act is liable to pay advance tax in a single instalment on or before the 15th of March every financial year. 72.2 Vide Finance Act, 2016 , the presumptive taxation regime has been extended to professionals also. Accordingly, the said clause (b) of section 211 of the Income-tax Act has been amended to provide that the assessee who declares profits and gains in accordance with presumptive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn under sub-section (1) of section 139 of the Income-tax Act. The fee structure is as follows:- (i) a fee of five thousand rupees shall be payable, if the return is furnished after the due date but on or before the 31st day of December of the assessment year; (ii) a fee of ten thousand rupees shall be payable in any other case. 73.3 However, in a case where the total income does not exceed five lakh rupees, it is provided that the fee amount shall not exceed one thousand rupees. 73.4 In view of the above, section 140A of the Income-tax Act has been amended to include that in case of delay in furnishing of return of income, along with the tax and interest payable, fee for delay in furnishing of return of income shall also be payable. 73.5 Section 143 of the Income-tax Act has also been amended 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 of the Income-tax Act shall also be taken into account. 73.6 Consequentially, it is also provided that the provisions of section 271F of the Income-tax Act in respect of penalty for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice, who is qualified to be a member of the Central Board of Excise Customs, shall be eligible to be appointed as revenue Member of AAR. (iii) In order to improve the efficiency and efficacy of the AAR, and to increase the available pool for appointment as Chairman, AAR, the qualification for appointment as Chairman as provided in section 245-O has also been amended to provide that a former Chief Justice of a High Court, or a person who has been a High Court Judge for at least seven years shall also be eligible to be Chairman of the AAR. (iv) It is also provided that the qualifications for appointment as revenue Member or law Member shall be considered as on the date of occurrence of the vacancy. (v) It is also provided that in the event the Chairman is unable to discharge his functions owing to absence, illness or any other reason, or in the event that the office of the Chairman falls vacant, the Vice-chairman shall discharge the functions of the Chairman until the new Chairman enters upon his office or until the incumbent Chairman resumes his duties. (vi) Section 245Q of the Income-tax Act which relates to application for advance ruling has also been amended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act are excluded from the scope of the said section. 77.4 A new section 271DA has also been inserted in the Income-tax Act to provide for levy of penalty on a person who receives a sum in contravention of the provisions of section 269ST of the Income-tax Act. The penalty leviable is a sum equal to the amount of such receipt. The said penalty shall however not be levied if the person proves that there were good and sufficient reasons for such contravention. It is also provided that any such penalty shall be levied by the Joint Commissioner. 77.5 Consequential amendment has also been amended to section 206C of the Income-tax Act to bring it in sync with the provisions of section 269ST of the Income-tax Act. 77.6 Applicability: These amendments take effect from 1st April, 2017. 78. Penalty on professionals for furnishing incorrect information in statutory report or certificate. 78.1 The thrust of the Government in recent past is on voluntary compliance. Certification of various reports and certificates by a qualified professional has been provided in the Income-tax Act to ensure that the information furnished by an assessee under the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply to the period from 1st April, 2013 to 31st March, 2017, section 50 of the Finance Act, 2016 has been amended so as to provide that the effective date of amendment made to section 112(1)(c)(iii) vide Finance Act, 2016 shall be 01-04-2013 instead of 01-04-2017. 79.4 Applicability: This amendment takes effect retrospectively from 1st April, 2013 and will, accordingly, apply from assessment year 2013-14 and subsequent assessment years. 80. Rationalisation of provisions of the Income Declaration Scheme, 2016 and consequential amendment to section 153A and 153C. 80.1 The provisions of clause (c) of the section 197 of the Finance Act, 2016 provide that where any income has accrued, arisen or been received or any asset has been acquired out of such income prior to commencement of the Income Declaration Scheme, 2016 (the Scheme), and no declaration in respect of such income is made under the Scheme, then, such income shall be deemed to have accrued, arisen or received, as the case may be, in the year in which a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or section 148 or section 153A or section 153C of the Income-tax Act i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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