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OMISSIONS OF PROVISIONS OF INCOME TAX 1961 BY FINANCE ACT, 2023 |
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OMISSIONS OF PROVISIONS OF INCOME TAX 1961 BY FINANCE ACT, 2023 |
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Change is inevitable. The laws are not exception to this. The laws are amended now and then. The amendment may omit some provisions or substitute a new one for the existing one or insert some new provisions. Likewise the Finance Act, 2023 omitted some provisions, substituted some provisions and also inserted new provisions to the direct taxes as well as indirect taxes. In this article we are going to see what are the provisions in the Income Tax Act (‘Act’ for short) are omitted by the provisions of Finance Act, 2023. Deputy Commissioner Section 2(19B) of the Act defines the expression ‘Deputy Commissioner’ as a person appointed to be a Deputy Commissioner of Income-tax or an Additional Commissioner of Income Tax (Appeals) section 117 (1). The Act omitted the words ‘or an Additional Commissioner of Income Tax (Appeals). Section 3 of the Finance Act omitted the words and brackets or an Additional Commissioner of Income Tax (Appeals). Omissions in Section 10(D) Section 10(D) of the Act provides the details of the income that shall not be included in computation of income. Section 5 (d) of the Finance Act omitted the ‘words, brackets, figures and letter ‘or the Explanation to sub-section (2A) of section 88, as the case may be’ in second proviso to Section 10(D). Section 5(g) of the Finance Act omitted Section 10(23BBF). Section 10(23BBF) provides that any income of the North-Eastern Development Finance Corporation Limited, being a company formed and registered under the Companies Act, 1956: Provided that in computing the total income of the North-Eastern Development Finance Corporation Limited, the amount to the extent of-
Section 5(h)(IV)(i) of the Finance Act omitted Section 10(23EB). Section 10(23EB) provides that - ‘any income of the Credit Guarantee Fund Trust for Small Industries, being a trust created by the Government of India and the Small Industries Development Bank of India established under sub-section (1) of section 3 of the Small Industries Development Bank of India Act, 1989, for 5 previous years relevant to the assessment years beginning on the 01.04.2002 and ending on the 31.03.2007’. Section 5(k) of the Finance Act omitted Section 10(26A). Section 10(26A) provides - ‘any income accruing or arising to any person from any source in the district of Ladakh or outside India in any previous year relevant to any assessment year commencing before the 01.04.1989, where such person is resident in the said district in that previous year’. Section 5(n) of the Finance Act omitted Section 10(41). Section 10(41) provides - ‘any income arising from transfer of a capital asset, being an asset of an undertaking engaged in the business of generation or transmission or distribution of power where such transfer is effected on or before the 31st day of March, 2006, to the Indian company notified under sub-clause (a) of clause (v) of sub-section (4) of section 80-IA’. Section 5(q) of the Finance Act omitted Section 10(49). Section 10(49) provides - ‘any income of the National Financial Holdings Company Limited, being a company set up by the Central Government, of any previous year relevant to any assessment year commencing on or before the 1st day of April, 2014’. Omissions in Section 12A Section 12A of the Act the provisions of section 11 (income from property held for charitable purpose or religious purposes) and section 12 (income of trusts or institutions from contributions) shall not apply in relation to the income of any trust or institution unless the prescribed conditions are fulfilled. Section 8 of the Finance Act omitted the second, third and fourth provisos to Section 12A (2). The second proviso provides that where registration has been granted to the trust or institution under section 12AA or section 12AB, then, the provisions of sections 11 and 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are pending before the Assessing Officer as on the date of such registration and the objects and activities of such trust or institution remain the same for such preceding assessment year. The third proviso provides that no action under section 147 shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding the aforesaid assessment year only for non-registration of such trust or institution for the said assessment year. The fourth proviso provides that provisions contained in the first and second proviso shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under section 12AA or section 12AB. Omission in Section 54EA Section 54EA of the Act provides that Capital gain on transfer of long-term capital assets not to be charged in the case of investment in specified securities. Section 26 of the Finance Act omitted Section 54EA(3). Section 54EA(3) provides - “Where the cost of the specified securities has been taken into account for the purposes of clause (a) or clause (b) of sub-section (1), a rebate with reference to such cost shall not be allowed under section 88. Explanation.-For the purposes of this section,-
Omission in Section 54EB Section 54EB of the Act provides that capital gain on transfer of long-term capital assets not to be charged in certain cases. Section 27 of the Finance Act omitted Section 54EB(3). Section 54EB(3) provides - ‘Where the cost of the long-term specified asset has been taken into account for the purposes of clause (a) or clause (b) of sub-section (1), a deduction from the amount of income-tax with reference to such cost shall not be allowed under section 88’. Omission in Section 54EC Section 54EC of the Act provides that Capital gain not to be charged on investment in certain bonds. Section 28 of the Finance Act omitted Section 54EC (3)(a). Section 54EC (3) of the Act provides -‘a deduction from the amount of income-tax with reference to such cost shall not be allowed under section 88 for any assessment year ending before the 01.04.2006’. Omission in Section 54ED Section 54ED of the Act provides that capital gain on transfer of certain listed securities or unit not to be charged in certain cases. Section 29 of the Finance Act provides - ‘a deduction from the amount of income-tax with reference to such cost shall not be allowed under section 88 for any assessment year ending before the 01.04.2006’. Omission in Section 56 Section 56 of the Act prescribes the list of income from other sources. Section 56(2)(viib) provides that where a company, not being a company in which the public are substantially interested, receives, in any previous year, from any person being a resident any consideration for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares. Section 32 of the Finance Act omitted the words ‘being a resident’ with effect from 01.04.2024. Omission in Section 80C Section 80C provides for the Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc. Section 36 of the Finance Act omitted Section 80C (7). Section 80C (7) provides - ‘For the purposes of this section,-
of section 88(2) shall be eligible for deduction under the corresponding provisions of this section and the deduction shall be allowed in accordance with the provisions of this section’. Omission in Section 80CCC Section 80CCC of the Act provides for deduction in respect of contribution to certain pension funds. Section 37 of the Finance Act omitted Section 80CCC (3)(a). The said section provides -‘a rebate with reference to such amount shall not be allowed under section 88 for any assessment year ending before the 01.04.2006’. Omission in Section 80CCD Section 80CCD of the Act provides for deduction in respect of contribution to pension scheme of Central Government. Section 38 of the Finance Act omitted Section 80CCD (4) (a). The said section provides - ‘no rebate with reference to such amount shall be allowed under section 88 for any assessment year ending before the 01.04.2006’. Omissions in Section 80G Section 80G of the Act provides for Deduction in respect of donations to certain funds, charitable institutions, etc. Section 40 of the Finance Act omitted Section 80G(2)(a)(ii), (iiic) and (iiid) with effect from 01.04.2024. Section 80G(2)(a)(ii) - the Jawaharlal Nehru Memorial Fund referred to in the Deed of Declaration of Trust adopted by the National Committee at its meeting held on the 17th day of August, 1964; or Section 80g(2)(a) (iiic) - the Indira Gandhi Memorial Trust, the deed of declaration in respect whereof was registered at New Delhi on the 21st day of February, 1985; or Section 80G(2)(iiid) - the Rajiv Gandhi Foundation, the deed of declaration in respect whereof was registered at New Delhi on the 21st day of June, 1991; or Omissions in Section 87 Section 87 of the Act provides for rebate to be allowed in computing income tax. Section 87(1) provides - ‘In computing the amount of income-tax on the total income of an assessee with which he is chargeable for any assessment year, there shall be allowed from the amount of income-tax (as computed before allowing the deductions under this Chapter), in accordance with and subject to the provisions of sections 87A, 88, 88A, 88B, 88C, 88D and 88E, the deductions specified in those sections’. Section 43(a) of the Finance Act omitted the figures and letters 88, 88A, 88B, 88C, 88D. Section 87(2) provides - The aggregate amount of the deductions under section 87A or section 88 or section 88A or section 88B or section 88C or section 88D or section 88E shall not, in any case, exceed the amount of income-tax (as computed before allowing the deductions under this Chapter) on the total income of the assessee with which he is chargeable for any assessment year. Section 43(b) of the Finance Act omitted the words, figures and letters ‘or section 88 or section 88A or section 88B or section 88C or section 88D’. Omission of Section 88 Section 45 of the Finance Act omitted section 88 which provides rebate on life insurance premia contribution to provident fund etc. Omission in Section 111A Section 111A of the Act provides the levy of tax on short term gains in certain cases. Section 49 of Finance Act omitted Section 111A (3) of the Act. The said section provides that where the total income of an assessee includes any short term capital gains referred to in sub-section (1), the rebate under section 88 shall be allowed from the income-tax on the total income as reduced by such capital gains. Omission in Section 112 Section 112 of the Act provides the levy of long term capital gains. Section 50 of the Finance Act omitted section 112(3) of the Act. The said section provides that where the total income of an assessee includes any income arising from the transfer of a long-term capital asset, the total income shall be reduced by the amount of such income and the rebate under section 88 shall be allowed from the income-tax on the total income as so reduced. Omission in Section 140B Section 140B of the Act provides the procedure for updated tax return. Section 140B(4) provides - ‘Notwithstanding anything contained in Explanation 1 to section 234B, for the purposes of sub-section (2), interest payable under section 234B shall be computed on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid falls short of the assessed tax, where, ‘assessed tax’ means the tax on the total income as declared in the return to be furnished under sub-section (8A) of section 139- Section 70 of the Finance Act omitted the words or, as the case may be, on the amount by which the advance tax paid falls short of the assessed tax. Omission in Section 151 Section 151 of the Act provides the procedure for sanction for issue of notice. Section 151(ii) provides that Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year. Section 74 of the Finance Act omitted the words where there is no Principal Chief Commissioner or Principal Director General. Omission in Section 153 Section 153 of the Act provides the time limit for completion of assessment, reassessment and re-computation. The third proviso to Section 153(1) provides that in respect of an order of assessment relating to the assessment year commencing on or after the 01.04.2021, the provisions of this sub-section shall have effect, as if for the words ‘twenty-one months’, the words ‘nine months’ had been substituted. Section 75 omitted the words in the proviso to Section 153(1) or after. Omission in Section 192A Section 192A of the Act provides the procedure for payment of accumulated balance due to an employee. Section 83 of the Finance Act omitted the second proviso to Section 192A. The said proviso provides that any person entitled to receive any amount on which tax is deductible under this section shall furnish his Permanent Account Number to the person responsible for deducting such tax, failing which tax shall be deducted at the maximum marginal rate. Omission in Section 276B Section 276B of the Act provides that if a person fails to pay to the credit of the Central Government,-
he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine. Section 124 of the Finance Act omitted the worlds pay to the credit of the Central Government.
By: Mr. M. GOVINDARAJAN - April 18, 2023
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