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TMI BlogNotes on clauses - Income taxX X X X Extracts X X X X X X X X Extracts X X X X ..... of tax at source during the financial year 2015-16 from income other than Salaries Part II of the First Schedule to the Bill specifies the rates at which income-tax is to be deducted at source during the financial year 2015-16 from income other than Salaries . The rates are the same, as those specified in Part II of the First Schedule to the Finance (No.2) Act, 2014 for the purposes of deduction of income tax at source during the financial year 2014-15 except that in case of payment of royalty and fees for technical services in case of agreements made on or after the 1st day of March, 1976, tax shall now be deducted at source at the rate of ten per cent. as against the earlier rate of twenty-five per cent. The amount of tax so deducted shall be increased by a surcharge in the case of- (i) every non-resident (other than a company) at the rate of twelve per cent. where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds one crore rupees; (ii) every company other than a domestic company at the rate of two per cent. where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds one crore rupees but do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing income above one crore rupees shall be levied at the rate of twelve per cent. Marginal relief will be provided. Paragraph C of this Part specifies the rate of income-tax in the case of every firm. In such cases, the rate of tax will continue to be the same as that specified for assessment year 2015-16. The surcharge in cases of firms, having income above one crore rupees shall be levied at the rate of twelve per cent. Marginal relief will be provided. Paragraph D of this Part specifies the rate of income-tax in the case of every local authority. In such cases, the rate of tax will continue to be the same as that specified for the assessment year 2015-16. The surcharge in cases of local authorities, having income above one crore rupees shall be levied at the rate of twelve per cent. Marginal relief will be provided. Paragraph E of this Part specifies the rates of income-tax in the case of companies. In the case of companies, the rate of tax will continue to be the same as that specified for assessment year 2015-16. Surcharge in the case of domestic companies having total income above one crore rupees but not above ten crore rupees shall be levied at the rate of seven per cent. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneral public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless-- (i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and (ii) the aggregate receipts from such activity or activities during the previous year, do not exceed twenty per cent. of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year. It is also proposed to amend clause (37A) of the said section to provide that for the purposes of deduction of tax under section 194LBA, the rates in force , in relation to an assessment year or financial year shall mean the rate or rates of income-tax specified in this behalf in the Finance Act of the relevant year. The existing provisions contained in clause (42A) of the said section provides the definition of the term short-term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said to be resident in India, in any previous year, if-- (a) it is an Indian company; or (b) its place of effective management, at any time in that year, is in India. It is also proposed to insert an Explanation to clarify the expression place of effective management to mean a place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole are, in substance made. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to assessment year 2016-17 and subsequent assessment years. 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. Clause (i) of sub-section (1) of the aforesaid section provides a set of circumstances in which income accruing or arising, directly or indirectly, is taxable in India. Explanation 5 to the said clause provides that an asset or capital asset, being any share or interest in a company or entity registered or incorporated outside India, shall be deemed to be and shall always be deemed to have been situated in India, if the share or interest derives, directly or indirectly, its value substanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia shall be deemed to be a person separate and independent of the non-resident person of which it is a permanent establishment and the provisions of the Act relating to computation of total income, determination of tax and collection and recovery shall apply accordingly. It is further proposed to provide that permanent establishment shall have the same meaning assigned to it in clause (iiia) of section 92F. These amendments will take effect from 1st April, 2016 and accordingly apply in relation to the assessment year 2016-17 and subsequent years. 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. Clause (i) of sub-section (1) of section 9 provides a set of circumstances in which income is deemed to accrue or arise in India, directly or indirectly, and is taxable in India. Sub-section (1) of the proposed new section 9A seeks to provide that in the case of an eligible investment fund, any fund management activity carried through an eligible fund manager acting on behalf of such fund shall not constitute business connection in India of the said fund. Sub-section (2) of the proposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said section provide for exemption from tax in respect of the income of certain charitable funds or institutions like the Prime Minister s National Relief Fund; the Prime Minister s Fund (Promotion of Folk Art); the Prime Minister s Aid to Students Fund; the National Foundation for Communal Harmony etc. It is proposed to amend the aforesaid clause by inserting two new sub-clauses (iiiaa) and (iiiaaa) so as to exempt income received by any person on behalf of the Swachh Bharat Kosh, set up by the Central Government and to exempt income received by any person on behalf of the Clean Ganga Fund, set up by the Central Government. These amendments will take effect retrospectively from 1st of April, 2015 and accordingly apply in realtion to assessment year 2015-16 and subsequent assessment years. It is also proposed to insert a new clause (23EE) in the aforesaid section so as to provide for exemption in respect of any specified income of such Core Settlement Guarantee Fund, set up by a recognised clearing corporation in accordance with the regulations, as the Central Government may, by notification in the Official Gazette, specify in this behalf. Clause (23FB) of said section provides tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income tax Act relating to income from property held for charitable or religious purposes. Sub-section (2) of the aforesaid section provides that where eighty-five per cent. of the income is not applied, or is not deemed to have been applied, to charitable or religious purposes in India during the previous year but is accumulated or set apart, for application to such purposes in India, then, such income accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income. However, the said exemption is subject to fulfilment of the following conditions that : (i) such person specifies by notice in writing in Form 10, prescribed for such purpose, providing details of the purpose for which the income is being accumulated or set apart and that the period for which the income is to be accumulated or set apart does not exceed five years; and (ii) the money so accumulated or set apart is invested or deposited in the forms or modes specified in sub-section (5) of section 11. With a view to amend the conditions specified in sub-section (2) of the aforesaid section, it is proposed to insert a new clause to provide that the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r enterprise for manufacture or production of any article or thing, on or after the 1st day of April, 2015 in any backward area notified by the Central Government in this behalf, in the State of Andhra Pradesh or in the State of Telangana, and acquires and installs any new machinery or plant (other than ships and aircraft) for the purposes of the said undertaking or enterprise during the period beginning on the 1st day of April, 2015 and ending before the 1st day of April, 2020 in the said backward area, then, the provisions of clause (iia) shall have effect as if for the words twenty per cent. , the words thirty-five per cent. had been substituted: Consequentially, it is proposed to insert the reference of newly inserted proviso in clause (iia) in the second proviso to sub-section (1) of the aforesaid section 32. The existing provisions contained in the second proviso to subsection (1) of the aforesaid section 32 provide that where an asset referred to in clause (i) or clause (ii) or clause (iia), as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eighty day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on with the amalgamation or demerger or re-organisation of business referred to in clause (xiii) or clause (xiiib) or clause (xiv) of section 47, within a period of five years from the date of its installation, the amount of deduction allowed under sub-section (1) in respect of such new asset shall be deemed to be the income of the assessee chargeable under the head Profits and gains of business or profession of the previous year in which such new asset is sold or otherwise transferred, in addition to taxability of gains, arising on account of transfer of such new asset. The proposed sub-section (3) of the aforesaid section provides that in case the new asset is sold or otherwise transferred in connection with the amalgamation or demerger or reorganisation of business referred to in clause (xiii) or clause (xiiib) or clause (xiv) of section 47, within a period of five years from the date of its installation, the provision of sub-section (2) shall apply to the amalgamated company or the resulting company or the successor referred to in clause (xiii) or clause (xiiib) or clause (xiv) of section 47, as the case may be, as they would have applied to the amalgamating company or the deme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintenance and audit of accounts and furnishing of report, as may be prescribed. The existing provisions contained in clause (4) of sub-section (2AB) of the said section 35 further provides that the prescribed authority shall submit its report in relation to the approval of the research and development facility to the Principal Director General or Director General. It is proposed to insert the reference of Principal Chief Commissioner or Chief Commissioner in the said clause so as to enable the prescribed authority to submit its report to the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General. These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent years. Clause 13 of the Bill seeks to amend section 47 of the Income tax Act relating to transactions not regarded as transfer. The existing provisions contained in section 47 of the Act provide that capital gains are not applicable to the transfers specified in the said section. Clause (via) of the said section provides that transfer of capital asset being shares of an Indian company by a foreign comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income tax Act relating to cost with reference to certain modes of acquisition. The existing provisions contained in sub-section (1) of the aforesaid section provide that where the capital asset became the property of the assessee under certain situations the cost of acquisition of the asset shall be deemed to be cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be. It is proposed to amend sub-clause (e) of clause (iii) of said sub-section (1) so as to include the transfer referred to in clause (vib) of section 47. It is proposed to amend the aforesaid sub-clause (e) to provide for determination of cost of acquisition in respect of shares or interest of foreign company or entity in certain cases. It is also proposed to amend the said section so as to provide that where the capital asset, being a unit or units in a consolidated scheme of a mutual fund, became the property of the assessee in consideration of a transfer referred to in clause (xviii) of section 47, the cost of acquisition of the asset shall be deemed to be the cost of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Government, a deduction of such amount not exceeding ten per cent. of his salary is allowed. It is proposed to omit sub-section (1A) and insert a new subsection (1B) so as to provide that an assessee referred to in subsection (1), shall, be allowed an additional deduction in computation of his total income, of the whole of the amount paid or deposited in the previous year in his account under a pension scheme notified or as may be notified by the Central Government, which shall not exceed fifty thousand rupees. It is also propose to provide that no deduction under this sub-section shall be allowed in respect of the amount on whcih deduction has been claimed and allowed under sub-section (1). Consequential amendments have been proposed in subsection (3) and sub-section (4) of section 80CCD. These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent assessment years. Clause 18 of the Bill seeks to amend section 80D of the Income tax Act relating to deduction in respect of health insurance premia. The existing provisions contained in the aforesaid section inter alia provide for deduction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or (b) any amount paid to LIC or any other insurer in respect of a scheme for the maintenance of a disabled dependant. The aforesaid section provides for a deduction of fifty thousand rupees if the dependant is suffering from disability and one lakh rupees if the dependant is suffering from severe disability. It is proposed to amend said section so as to raise the limit of deduction in respect of a dependant with disability from fifty thousand rupees to seventy-five thousand rupees. It is further proposed to amend the said section so as to raise the limit of deduction in respect of a dependant with severe disability from one lakh rupees to one hundred and twenty-five thousand rupees. These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent assessment years. Clause 20 of the Bill seeks to amend section 80DDB of the Income-tax Act relating to deduction in respect of medical treatment, etc. The existing provisions contained in section 80DDB provide for a deduction to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef Fund, National Foundation for Communal Harmony etc. It is proposed to amend sub-section (1) and sub-section (2) of the said section so as to provide for a deduction of hundred per cent. in respect of the sum donated by an assessee to the Swachh Bharat Kosh set up by the Central Government, other than the sum spent by such assessee in pursuance of Corporate Social Responsibility under sub-section (5) of section 135 of the Companies Act, 2013. It is further proposed to amend sub-section (1) and sub-section (2) of the said section so as to provide for a deduction of hundred per cent. in respect of the sum donated by a resident assessee to the Clean Ganga Fund set up by the Central Government, other than the sum spent by such assessee in pursuance of Corporate Social Responsibility under sub-section (5) of section 135 of the Companies Act, 2013. These amendments will take effect retrospectively from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent years. It is further proposed to amend sub-section (1) and sub-section (2) of the said section so as to provide hundred per cent. deduction in respect of donations made to the National ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent years. Clause 23 of the Bill, seeks to amend section 80U of the Income-tax Act relating to deduction in case of a person with disability. The existing provisions of section 80U, inter alia, provide for a deduction to an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability. The section provides for a deduction of fifty thousand rupees if the person is suffering from disability and one lakh rupees if the person is suffering from severe disability. It is proposed to amend the said section so as to raise the limit of deduction for a person with disability from fifty thousand rupees to seventy-five thousand rupees. It is further proposed to amend the said section so as to raise the limit of deduction for a person with severe disability from one lakh rupees to one hundred and twenty-five thousand rupees. These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent assessment years. Clause 24 seeks to amend section 92BA of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill seeks to amend section 115A of the Income-tax Act relating to tax on dividends, royalty and technical service fees in the case of foreign companies. The existing provisions of the aforesaid section provide for determination of tax in case of a non-resident taxpayer where the total income includes any income by way of Royalty and Fees for technical services received by such non-resident from Government or an Indian concern after the 31st March, 1976, and which is not effectively connected with permanent establishment, if any, of the non-resident in India. The rate of tax currently provided is twenty-five per cent. and is applicable on the gross amount of such income. It is proposed to amend the said section to provide that in case of a non-resident taxpayer, where the total income includes any income by way of Royalty and Fees for technical Services received under an agreement entered after the 31st March, 1976, and which are not effectively connected with permanent establishment, if any, of the non-resident in India, the rate of tax on the gross amount of such income shall be ten per cent. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee on which no income-tax is payable in accordance with the provisions of section 86, if any such amount is credited to the profit and loss account, shall be reduced from the book profit. It is also proposed to insert a new clause (fb) in Explanation 1 so as to provide that the book profit shall be increased by the amount or amounts of expenditure relatable to income from transactions in securities, (other than short term capital gains arising on transactions on which securities transaction tax is not chargeable), accrued or arising to an assessee being a Foreign Institutional Investor which has invested in such securities in accordance with the regulations made under the Securities and Exchange Board of India Act, 1992. It is also proposed to insert a new clause (iid) in Explanation 1 so as to provide that the amount of income from transactions in securities, (other than short term capital gains arising on transactions on which securities transaction tax is not chargeable), accrued or arising to an assessee being a Foreign Institutional Investor which has invested in such securities in accordance with the regulations made under the Securities and Exchange Board of India Act, 1992, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 115UB in the Income-tax Act relating to tax on income of investment funds and income received from such funds. Sub-section (1) of the proposed new section seeks to provide that any income accruing or arising to, or received by, a person, being a unit holder of an investment fund, out of investments made in the investment fund shall be chargeable to income-tax in the same manner as if it were the income accruing or arising to, or received by, such person had the investment made by the investment fund been made directly by him. Sub-section (2) of the proposed new section seeks to provide that where in any previous year, the net result of computation of total income of the investment fund [without giving effect to the provisions of clause (23FBA) of section 10] is a loss, such loss shall be allowed to be carried forward and it shall be set-off by the investment fund in accordance with the provisions of Chapter VI and such loss shall not be allowed to be passed through to the investors. Sub-section (3) of the proposed new section seeks to provide that the income paid or credited by the investment fund shall be deemed to be of the same nature and in the same proportion in the hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion provides that the assets seized under section 132 or requisitioned under section 132A may be adjusted against the amount of existing liability under the Income-tax Act, the Wealth-tax Act, etc., and the amount of liability determined on completion of assessment. It is proposed to amend the said section to provide that the asset seized under section 132 or requisitioned under section 132A may be adjusted against the amount of liability arising on an application made before the Settlement Commission under sub-section (1) of section 245C. This amendment will take effect from 1st June, 2015. Clause 34 of the Bill seeks to amend section 139 of the Income-tax Act relating to return of income. Section 139, inter alia, specifies certain persons which are required to file return of income. The existing provisions contained in sub-section (4C) of the aforesaid section, inter alia, provide for filing return of income by certain entities where income is exempt under section 10 of the Act. It is proposed to amend the said sub-section (4C) so as to provide that a university, hospital or other institution referred to in sub-clauses (iiiab) and (iiiac) of clause (23C) of section 10 shall be re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bill seeks to amend section 153C of the Income-tax Act relating to assessment of income of any other person. The existing provisions contained in section 153C provide that in the course of an assessment proceeding, in the case of a person in whose case search action under section 132 or action under section 132A have been conducted, and whether the Assessing Officer is satisfied that the assets or books of account or documents seized belong to another person, then, the assets or books of account or documents seized shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person, if he is satisfied that the books of accounts or documents or assets seized have a bearing on determination on the total income of such other person. It is proposed to amend sub-section (1) of the said section so as to provide that where the Assessing Officer is satisfied that, (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amendments will take effect from 1st June, 2015. Clause 38 of the Bill seeks to amend section 156 of the Income tax Act relating to notice of demand. The existing provisions contained in the proviso to the aforesaid section provide that where any sum is determined to be payable by the assessee or by the deductor under sub-section (1) of section 143 or sub-section (1) of section 200A, the intimation under those sub-sections shall be deemed to be a notice of demand for the purposes of this section. It is proposed to amend the aforesaid proviso to section 156 so as to provide that where any sum is determined to be payable by the assessee or the deductor or the collector under sub-section (1) of section 143 or sub-section (1) of section 200A or sub-section (1) of section 206CB, the intimation under those sub-sections shall be deemed to be a notice of demand for the purposes of this section. This amendment will take effect from 1st June, 2015. Clause 39 of the Bill seeks to insert a new section 158AA in the Income-tax Act relating to procedure when in an appeal by revenue an identical question of law is pending before Supreme Court. Sub-section (1) of the proposed new section seeks to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid section, any person responsible for paying any income chargeable under the head Salaries shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made on the estimated income of the assessee under the head Salaries for that financial year. 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), 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. This amendment will take effect from 1st June, 2015. Clause 41 of the Bill seeks to insert a new section 192A in the Income-tax Act relating to payment of accumulated balance due to an employee. It is proposed to insert a new section 192A so as to provide that notwithstanding anything contained in any other provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erative society to a member thereof or to any other cooperative society. It is proposed to amend the said sub-clause so as to provide that the provisions of sub-section (1) of section 194A shall not apply to income credited or paid by a co-operative society (other than a co-operative bank) to a member thereof or to such income credited or paid by a co-operative society to any other co-operative society. It is further proposed to provide an Explanation below clause (v) of sub-section (3) of aforesaid section 194A to define the expression co-operative bank . The existing provisions of clause (ix) of sub-section (3) of section 194A provides that the provisions of sub-section (1) of section 194A shall not apply to income credited or paid by way of interest on the compensation amount awarded by the Motor Accidents Claims Tribunal where the amount of such income or, as the case may be, the aggregate of the amounts of such income paid during the financial year does not exceed fifty thousand rupees. It is proposed to substitute the aforesaid clause so as to provide that the provisions of sub-section (1) of section 194A shall not apply to income credited by way of interest on the compensati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made under the section where the income by way of rent is credited or paid to a business trust, being a real estate investment trust, in respect of any real estate asset, referred to in clause (23FCA) of section 10, owned directly by such business trust. This amendment will take effect from 1st June, 2015. Clause 45 of the Bill seeks to amend section 194LBA of the Income-tax Act relating to certain income from units of a business trust. It is proposed to amend the sub-section (1) of the aforesaid section to provide that where any distributed income referred to in section 115UA, being of the nature referred to in clause (23FCA) of section 10, is payable by a business trust to its unit holder being a resident, the person responsible for making the payment shall at the time of credit of such payment to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates of ten per cent. It is further proposed to amend the said section to provide that where any distributed income referred to in section 115UA, being of the nature referred to in clause (23FCA) of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m and manner as may be prescribed by the Board. 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. This amendment will take effect from 1st June, 2015. Clause 49 of the Bill seeks to amend section 197A of the Income-tax Act relating to no deduction to be made in certain cases. The existing provisions contained in sub-sections (1A) and (1C) of the aforesaid section provide that no deduction of tax shall be made under the sections referred to in the said sub-sections in the case of a person specified therein, if such person furnishes to the persons responsible for paying any income of the nature referred to in specified sections, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r also taking into account the fee, if any, payable in accordance with the provisions of section 234E. The sum payable or refundable shall be determined after adjusting the aforesaid computed sum against any amount paid under section 200 or section 201 or section 234E and any amount paid otherwise by way of tax or interest or fee. This amendment will take effect from 1st June, 2015. Clause 52 of the Bill seeks to amend section 203A of the Income-tax Act relating to tax deduction and collection account number. Under the existing provisions contained in sub-section (1) of the aforesaid section, every person deducting or collecting tax in accordance with Chapter XVII, who has not been allotted a tax deduction account number or, as the case may be, a tax collection account number , is required to apply for tax deduction and collection account number . Sub-section (2) of the said section provides that a person, to whom tax deduction account number or, as the case may be, tax collection account number or tax deduction and collection account number is allotted, is required to quote such number in the challans, certificates, statements, returns or documents as specified in clauses (a) to ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under the said proviso in such form and verified in such manner, as may be specified by the authority. This amendment will take effect from 1st June, 2015. Clause 54 of the Bill seeks to insert a new section 206CB of the Income-tax Act relating to processing of statements of tax collected at source. The existing provisions contained in the Income-tax Act provide the method of processing of statements of tax deducted at source. Since there is no procedure specified with respect to the processing of tax collected at source, it is proposed to insert a new section 206CB relating to processing of statements of tax collected at source and the said section provide that statement of tax collection at source or a correction statement made under section 206C shall be processed in the manner specified therein. This amendment will take effect from 1st June, 2015. Clause 55 of the Bill seeks to amend section 220 of the Income tax Act relating to when tax payable and when assessee deemed in default. It is proposed to insert sub-section (2C) in the aforesaid section so as to provide t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following the financial year and end on the date of determination of total income under section 147 or section 153A. These amendments will take effect from 1st day of June, 2015. Clause 57 of the Bill seeks to amend section 245A of the Income-tax Act relating to definitions in respect of settlement of cases. The existing provision contained in clause (b) of the aforesaid section defines a case for the purpose of Chapter XIX-A as any proceeding for assessment under this Act, of any person in respect of any assessment year or assessment years which may be pending before an Assessing Officer on the date on which an application under sub-section (1) of section 245C is made. The Explanation to the said clause provides for deemed commencement of proceedings under different situations. It is proposed to amend clause (i) of the Explanation to clause (b) of the said section to provide that a proceeding for assessment or reassessment or recomputation under section 147 shall be deemed to have commenced-- (a) from the date on which a notice under section 148 is issued for any assessment year; (b) from the date of issuance of such notice referred to in sub-clause (a), for any other assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xisting provision contained in sub-section (1) of section 245H of the Income-tax Act provides that the Settlement Commission may, if it is satisfied that any person who made the application for settlement under section 245C has co-operated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his income and the manner in which such income has been derived, grant to such person, immunity from prosecution. It is proposed to amend the said sub-section to provide that the Settlement Commission may, if it is satisfied that any person who made the application for settlement under section 245C has co-operated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his income and the manner in which such income has been derived, grant to such person, for the reasons to be recorded in writing, immunity from prosecution. This amendment will take effect from 1st June, 2015. Clause 60 of the Bill seeks to amend section 245HA of the Income-tax Act relating to abatement of proceeding before Settlement Commission. The existing provision contained in sub-section (1) of section 245HA of the Income-tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indu family, the karta of that Hindu undivided family. This amendment will take effect from 1st June, 2015. Clause 62 of the Bill seeks to amend section 246A of the Income-tax Act relating to appealable order before Commissioner (Appeals). The existing provisions of aforesaid section, inter alia, provide for appeal to be preferred by any assessee or deductor to the Commissioner (Appeals) as against the orders passed under various provisions of the Income-tax Act as specified in sub-section (1) thereof. It is proposed to include the reference of any collector , in addition to any assessee or any deductor, in subsection (1) of the said sub-section so as to enable such collector also to prefer an appeal under the said section. It is further proposed to amend clause (a) of sub-section (1) of the said section so as to provide that the collector may prefer an appeal to the Commissioner (Appeals) against an intimation issued under sub-section (1) of section 206CB. This amendment will take effect from 1st June, 2015. Clause 63 of the Bill seeks to amend section 253 of the Income tax Act relating to appeals to the Appellate Tribunal. The existing provision contained in sub-section (1) of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rection or instruction issued by the Board under section 119; or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person. This amendment will take effect from 1st June, 2015. Clause 66 of the Bill seeks to substitute section 269SS of the Income-tax Act relating to mode of taking or accepting certain loans and deposits. The existing provision contained in section 269SS provides that no person shall take from any person any loan or deposit otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, if the amount of such loan or deposit is twenty thousand rupees or more. It is proposed to substitute the said section so as to provide that no person shall take from any person, any loan or deposit or specified sum, otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, if the amount of such loan or deposit or specified sum is twenty thousand rupees or more. It is also proposed to define specified sum as any sum of money receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished; C = amount of tax on the total income assessed as per the provisions contained in section 115JB or section 115JC; D = amount of tax that would have been chargeable had the total income assessed as per the provisions contained in section 115JB or section 115JC been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished: Provided that where the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished on any issue is considered both under general provisions and under the provisions contained in section 115JB or section 115JC, such amount shall not be reduced from total income assessed while determining the amount under item D: Provided further that where the provisions contained in section 115JB or section115JC are not applicable, the item (C - D) in the formula shall be ignored. It is further proposed to provide that where in any case the amount of income in respect of which particulars have been concealed or inaccura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son repays any loan or deposit or specified advance referred to in section 269T otherwise than in accordance with the provisions of that section, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified advance so repaid. This amendment will take effect from 1st June, 2015. Clause 71 seeks to insert a new section 271FAB of the Income-tax Act relating to penalty for failure to furnish statement or information or document by an eligible investment fund. It is proposed to provide that if any eligible investment fund which is required to furnish a statement or any information and document under sub-section (5) of section 9A fails to furnish such statement or information and the document within the time prescribed under that sub-section, the income-tax authority prescribed under the said sub-section may direct that such fund shall pay, by way of penalty, a sum equal to five hundred thousand rupees. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. Clause 72 of the Bill seeks to insert a new section 271GA relating to penalty for fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Clause 75 of the Bill seeks to amend section 273B of the Income-tax Act relating to penalty not to be imposed in certain cases. The section provides for non-levy of penalty under various sections of the Income-tax Act enumerated in the said section, if the assessee is able to show existence of reasonable cause for the failure for which penalty is leviable. It is proposed to amend the aforesaid section so as to include the proposed new section 271FAB relating to penalty for failure to furnish statement or information or document by an eligible investment fund. It is further proposed to amend the said section to include the reference of the proposed new section 271 GA relating to penalty for failure to furnish information or document under section 285A. These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- 17 and subsequent years. It is also proposed to amend the aforesaid section so as to include the reference of new section 271-I. This amendment will take effect from 1st June, 2015. Clause 76 of the Bill seeks to insert a new section 285A relating to furnishing of information by an Indian concern in certain cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see, being a trust or institution, any persons referred to in clauses (a),(b), (c) and (cc) of sub-section (3) of section 13; (iii) in case of a person other than persons referred to in sub-clause (i) and (ii), the person who is competent to verify the return under section 139 in accordance with the provisions of the section 140; (iv) any relative of any of the persons referred to in sub-clauses (i),(ii) and (iii); (v) an officer or employee of the assessee; (vi) an individual who is a partner, or who is in the employment, of an officer or employee of the assessee; (vii) an individual who, or his relative or partner is holding any security of or interest in the assessee. It is also provided that the relative may hold security or interest in the assessee of the face value not exceeding one hundred thousand rupees; an individual who, or his relative or partner is indebted to the assessee. It is also provided that the relative may be indebted to the assessee for an amount not exceeding one hundred thousand rupees; an individual who, or his relative or partner has given a guarantee or provided any security in connection with the indebtedness of any third person to the assessee. It is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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