MEMO - MEMORANDUM REGARDING DELEGATED LEGISLATION - Finance Bill, 2015

MEMORANDUM REGARDING DELEGATED LEGISLATION Clause 4 of the Bill seeks to amend section 6 of the Income-tax Act relating to residence in India. The proposed amendment seeks to insert a new Explanation 2 in sub-section (1) of said section 6 so as to provide that in the case of an individual being a citizen of India and a member of the crew of a foreign bound ship leaving India, the period or periods of stay in India, shall in respect of such voyage, be determined in the manner and subject to such conditions as may be prescribed. Clause 5 of the Bill seeks to amend section 9 of the Income-tax Act relating to Income deemed to accrue or arise in India. The proposed amendment seeks to provide that in a case where all assets owned by the company or entity referred to in Explanation 5 of the said section are not located in India only such part of Income shall accure or arise in India as is reasonably attributable to assets located in India and determined in such manner as may be prescribed. Clause 6 of the Bill seeks to insert a new section 9A in the Income-tax Act relating to certain activities not to constitute business connection in India. Sub section (5) of the proposed new section 9A provides for furnishing of statement in prescribed form to the prescribed Income-tax authority containing information regarding fulfilment of conditions specified therein and also to provide such other relevant information or document as may be prescribed. Clause 8 of the Bill seeks to amend section 11 of the Income-tax Act relating to income from property held for charitable or religious purposes. The proposed amendment seeks to provide that trust or institution shall exercise its option under Explanation to sub-section (1) of said section in such form and manner as may be prescribed. The proposed amendment further seeks to provide that the trust or institutions shall for the purpose of subsection (2) of section 11, furnish the statement in the prescribed form and manner. Clause 12 of the Bill seeks to amend section 35 of the Income-tax Act relating to expenditure on scientific research. It is proposed to amend clause (3) of sub-section (2AB) of the said section to provide that no company shall be entitled for deduction under clause (1) of the said sub-section (2AB) unless it enters into an agreement with the prescribed authority for co-operation in such research and development facility and fulfils such conditions with regard to maintenance of accounts and audit thereof and furnishing of reports in such manner as may be prescribed. Clause 20 of the Bill seeks to amend section 80DDB of the Income-tax Act relating to deduction in respect of medical treatment, etc. It is proposed to substitute the first proviso to section 80DDB so as to provide that no such deduction shall be allowed unless the assessee obtains, a copy of the prescription for such medical treatment from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist as may be prescribed. Clause 32 of the Bill seeks to insert a new section 115UB in the Income-tax Act relating to tax on income in certain cases. Sub-section (7) of the proposed section provides that the person referred to therein shall within such time as may be prescribed furnish to the prescribed income tax authority a statement in the prescribed form, verified in such manner and giving such other relevant details as may be prescribed. Clause 40 of the Bill seeks to amend section 192 of the Income-tax Act relating to salary. It is proposed to insert sub-section (2D) in the said section to provide that the person responsible for making the payment referred to in sub-section (1) of the said section shall, for the purposes of estimating income of the assessee or computing tax deductible under sub-section (1) therein, obtain from the assessee the evidence or proof or particulars of prescribed claims (including claim for set-off of loss) under the provisions of the Act in such form and manner as may be prescribed. Clause 48 of the Bill seeks to amend section 195 of the Income-tax Act relating to other sums. It is proposed to substitute sub-section (6) of the aforesaid section so as to provide that the person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum, whether or not chargeable under the provisions of this Act, shall furnish the information relating to payment of such sum in such form and manner as may be prescribed. Clause 50 of the Bill seeks to amend section 200 of the Income-tax Act relating to duty of person deducting tax. It is proposed to insert sub-section (2A) in the said section to provide that in case of an office of the Government, where the sum deducted in accordance with the provisions of Chapter XVII or tax referred to in sub-section (1 ) of section 192 has been paid to the credit of the Central Government without the production of a challan, the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person by whatever name called, who is responsible for crediting such sum or tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed. Clause 53 of the Bill seeks to amend section 206C of the Income-tax Act relating to profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc. It is proposed to insert sub-section (3A) in the said section to provide that in case of an office of the Government, where the amount collected under subsection (1) or sub-section (1C) or sub-section (1D) has been paid to the credit of the Central Government without the production of a challan, the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person, by whatever name called, who is responsible for crediting such tax to the credit of the Central Government, shall deliver or cause to be delivered to the prescribed income-tax authority, or to the person authorised by such authority, a statement in such form, verified in such manner, setting forth such particulars and within such time as may be prescribed. Clause 76 of the Bill seeks to insert a new section 285A in the Income-tax Act relating to furnishing of information or document by an Indian concern in certain cases. It is proposed to provide that where any share or interest in a company or entity registered or incorporated outside India derives, directly or indirectly, its value substantially from the assets located in India as referred to in the Explanation 5 to clause (i) of subsection (1) of section 9, and such company or, as the case may be, entity holds such assets in India through or in an Indian concern, then, such Indian concern shall, for the purposes of determination of income accruing or arising in India, furnish within the prescribed period to the prescribed income-tax authority the relevant information and document in such manner and form as may be prescribed. Clause 77 of the Bill seeks to amend section 288 of the Income-tax Act relating to appearance by authorised representative. It is proposed to substitute the Explanation after sub-section (2) of the said section so as to define the expression accountant . The proposed definition, inter alia, provide vide sub-clause (viii) of clause (b) of the said Explanation that in case of an assessee, not being a company, a person who whether directly or indirectly, has business relationship with the assessee of such nature as may be prescribed shall not be qualified to be an accountant except for the purposes of representing an assessee under sub-section (1) of section 288. Clause 78 of the Bill seeks to amend section 295 of the Income-tax Act relating to power to make rules. It is proposed to amend said sub-section (2) so as to provide that the Board may, by rules, provide the procedures for granting of relief or deduction, as the case may be, of any income-tax paid in any country or specified territory outside India under section 90 or section 90A or section 91, against the income-tax payable under this Act. Indirect-tax Clause 91 of the Bill seeks to amend section 11A of the Central Excise Act, inter alia, to insert a new sub-section (16) therein. The said sub-section (16) empowers the Central Government to make rules to provide for the manner of recovery of non-payment or short-payment of duty. Clause 109 of the Bill seeks to amend section 67 of the 1994 Act to substitute clause (a) of the Explanation thereto, so as to enlarge the scope of the term consideration . Sub-clause (ii) of said clause (a) empowers the Central Government to make rules to provide for circumstances and conditions in which the expression consideration shall not include any reimbursable expenditure or cost incurred by the service provider and charged. Clause 118 of the Bill seeks to insert a new Chapter VII with respect to the establishment of Public Debt Management Agency. Clause 138 of the Bill empowers the Central Government, by notification make rules for carrying out the purposes of the said Chapter. Clause 143 of the Bill seeks to insert a new Chapter VIII with respect to the establishment of the Senior Citizen s Welfare Fund. Clause 151 of the Bill empowers the Central Government to make rules for carrying out the provisions of the said Chapter. 2. The matters in respect of which rules may be made or notification or order may be issued in accordance with the provisions of the Bill are matters of procedure and detail and it is not practicable to provide for them in the Bill itself. 3. The delegation of legislative power is, therefore, of a normal character. LOK SABHA ________ A BILL to give effect to the financial proposals of the Central Government for the financial year 2015-2016. ________ (Shri Arun Jaitley, Minister of Finance.)