Notes-07 - Notes on clauses-Miscellaneous - Finance Bill, 2017

Miscellaneous Clauses 129 and 130 seek to amend section 20 of the Indian Trusts Act, 1882 [as substituted by section 2 of the Indian Trusts (Amendment) Act, 2016], relating to investment of trust money. The provisions of the aforesaid section, inter alia, provides that where trust-property consists of money and cannot be applied immediately or at an early date, the trustee shall, subject to any direction contained in the instrument of trust, invest the money in any of the securities or class of securities expressly authorised by the instrument of trust or as specified by the Central Government, by notification in the Official Gazette. The said section further provides that where there is a person competent to contract and entitled in possession to receive the income of the trust-property for his life or any greater estate, no investment in any of the securities or class of securities mentioned above shall be made without his consent in writing. It is proposed to amend the said section so as to provide that the trustee can make investment of such money as expressly authorised by the instrument of trust or in any of the securities or class of securities as specified by the Central Government by notification in the Official Gazette. It is further proposed to amend the proviso to the said section so as to omit the expression in any of the securities or class of securities mentioned above occurring therein, which is consequential in nature. This amendment shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint. Clauses 131 and 132 of the Bill seek to amend section 7 of the Indian Post Office Act, 1898 relating to power to fix rates of inland postage. The aforesaid section, inter alia, provides that the Central Government may, by notification in the Official Gazette, fix the rates of postage and other sums to be charged in respect of postal articles sent by the inland post under the said Act, provided that the highest rate of postage when pre-paid, shall not exceed the rate set forth for each class of postal articles in the First Schedule. It is proposed to substitute the proviso to sub-section (1) of the said section of the said Act so as to provide that till the issuance of notification in the Official Gazette, by the Central Government, to fix the rates of postage and other sums of postal articles, in accordance with provisions of sub-section (1) of the said section, the rates set forth in the First Schedule shall be the rates chargeable under the said Act. It is further proposed to omit sub-section (2) of the said section which is consequential in nature. These amendments will take effect from 1st April, 2017. Clauses 133 and 134 of the Bill seek to amend section 31 of the Reserve Bank of India Act, 1934 relating to issue of demand bills and notes. It is proposed to insert a new sub-section (3) to the said section so as to provide that the Central Government may authorise any scheduled bank to issue electoral bond as referred to in the proposed clause (d) of the first proviso to section 13A of the Income-tax Act. It is also proposed to define the expression electoral bond . This amendment is consequential in nature. This amendment will come into force from 1st April, 2017. Clauses 135 and 136 of the Bill seek to amend section 29C of the Representation of the People Act, 1951 relating to declaration of donation received by the political parties. Sub-section (3) of section 29C of the Representation of the People Act, 1951, inter alia, provides that every political party shall furnish a report to the Election Commission with regard to the details of contributions received by it in excess of twenty thousand rupees from any person in order to avail the income-tax relief as per the provisions of Income-tax Act,1961. It is proposed to provide that the contributions received by way of electoral bond shall be excluded from the scope of sub-section (3) of section 29C of the said Act. It is also proposed to define the term electoral bond which is consequential in nature. This amendment will take effect from 1st April, 2017. Clauses 137 and 138 of the Bill seek to amend section 18 of the Oil Industry (Development) Act, 1974 relating to Oil Industry Development Fund. Sub-section (2) of section 18 of the said Act provides for application of the Oil Industry Development Fund for certain purposes. It is proposed to expand the scope of the said section, so as to utilise the said Fund for meeting any expenditure incurred by any Central Public Sector Undertaking in the oil and gas sector, on behalf of the Central Government and for meeting expenditure on any scheme or activity by the Central Government relating to oil and gas sector. This amendment will come into force from 1st April, 2017. Clauses 139 to 142 of the Bill seek to repeal the Research and Development Cess Act, 1986. The Research and Development Cess Act, 1986 provides for the levy and collection of a cess on all payments made for the import of technology for the purposes of encouraging the commercial application of indigenously developed technology and for adapting imported technology to wider domestic application and for matters connected therewith or incidental thereto. It is proposed to repeal the said Act, and to make budgetary allocation for Research and Development. This amendment will come into force from 1st April, 2017. Clauses 143 to 145 of the Bill seek to amend certain provisions of the Securities and Exchange Board of India Act, 1992. It is proposed to amend section 2 of the Act so as to insert therein definitions of the expressions Insurance Regulatory and Development Authority , Judicial Member , Pension Fund Regulatory and Development Authority and Technical Member . It is proposed to substitute section 15K relating to the establishment of Securities Appellate Tribunal, section 15L relating to the composition of the Appellate Tribunal, section 15M relating to the qualifications for appointment as Presiding Officer and Judicial Member. It is further proposed to insert new sections 15MA, 15MB and section 15MC relating to appointment of Presiding Officer, Judicial Members, Search-cum-Selection Committee for appointment of Technical Members, vacancy not to invalidate selection proceedings. It is also proposed to substitute section 15N relating to tenure of the office of Presiding Officer, Judicial Members and Technical Members. It is also proposed to insert a new section 15PA authorising the Member to act as Presiding Officer in certain circumstances. It is also proposed to substitute sub-section (2) of section 15Q relating to removal of Presiding Officer, Judicial Member or Technical Member of the Tribunal. It is also proposed to make certain consequential amendments in section 15T in view of the above amendments. New sub-sections (4) to (6) are proposed to be inserted in section 15U relating to distribution of business amongst Benches, transfer cases from one Bench to another Bench. Clause 146 of the Bill seeks to amend the Seventh Schedule to the Finance Act, 2005 so as to revise the rates of certain tariff items as specified in the Seventh Schedule. Clauses 147 to 149 of the Bill seek to amend certain provisions of the Payment and Settlement Systems Act, 2007 (hereinafter referred to as the said Act) which provides for the regulation and supervision of payment systems in India. The existing provisions of Chapter II of the said Act relates to Designated Authority and its Committee. It is proposed to substitute the said Chapter so as to provide that instead of the existing Board for Regulation and Supervision of Payments and Settlement, the Payments Regulatory Board will exercise the functions relating to the regulation and supervision of payments and settlement systems under the Act. The proposed new Board shall consist of the Governor, Reserve Bank as Chairperson, Deputy Governor Reserve Bank who is in-charge of Payment and Settlement Systems as Member, one officer of the Reserve Bank to be nominated by the Central Board of the Reserve Bank as Member of the Board and three persons to be nominated by the Central Government as Members. It is also proposed to empower the said Board to devise the procedures to be followed in the meetings, venue of the meetings and other matters, incidental thereto by regulations. It is also proposed to make consequential amendments in section 38 of the Act, so as to give reference of the Board in that section and reference of sub-section (1). These amendments shall come into force on such date as the Central Government may, by notification, in the Official Gazette, appoint. Clause 150 of the Bill seeks to amend the Finance Act, 2016. Section 50 of the said Act amended sub-clause (iii) of clause (c) of sub-section (1) of section 112 of Income-tax Act to provide that with effect from the 1st day of April, 2017, the long-term capital gains arising from transfer of a capital asset being shares of a company not being a company in which the public are substantially interested, shall also be chargeable to tax at the rate of ten per cent. It is now proposed to amend the said section 50 so as to provide that the above said amendments shall be effective from 1st April, 2013 instead of 1st April, 2017. This amendment will take effect, retrospectively from 1st April, 2013 and will, accordingly, apply in relation to the assessment year 2013-2014 and subsequent years. Clause (c) of the section 197 of the said Act provides that where any income has accrued, arisen or received or any asset has been acquired out of such income prior to commencement of the Income Declaration Scheme, 2016, and no declaration in respect of such income is made under the said 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, subsection (2) of section 143 or section 148 or section 153A or section 153C of the Income-tax Act, 1961 is issued by the Assessing Officer, and provisions of the said Act shall apply accordingly. It is proposed to omit clause (c) of the said section. This amendment will take effect retrospectively from 1st June, 2016.