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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 ..... 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 exempt entities to other exempt entities, 14.1-14.6 12A Clarity of procedure in respect of change or modifications of object and filing of return of income in case of entities exempt under sections 11 and 12, 15.1-15.7 12AA Clarity of procedure in respect of change or modifications of object and filing of return of income in case of entities exempt under sections 11 and 12, 15.1-15.7 13A Transparency in electoral funding, 16.1-16.4 23 No notional income for house property held as stock-in-trade, 17.1-17.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss from house property, 35.1-35.3 79 Carry forward and set off of loss in case of certain companies, 36.1-36.3 80CCD Rationalisation of deduction under section 80CCD for self-employed individual, 37.1-37.3 80CCG Rationalization of deduction under section 80CCG, 38.1-38.3 80G Restricting cash donations, 39.1-39.3 80-IAC Extending the period for claiming deduction by start-ups, 40.1-40.3 80-IBA Rationalisation of Provisions of Section 80-IBA to promote Affordable Housing, 41.1-41.3 87A Rationalization of rebate allowable under Section 87A, 42.1-42.3 90 Clarification with regard to interpretation of 'terms' used in an agreement entered into under section 90 and 90A, 43.1-43.5 90A Clarification with regard to interpretation of 'terms' used in an agreement entered into under section 90 and 90A, 43.1-43.5 92BA Scope of section 92BA of the Income-tax Act relating to Specified Domestic Transactions, 44.1-44.4 92CE Secondary adjustments in certain cases, 45.1-45.6 94B Limitation of Interest deduction in certain cases, 46.1-46.8 115BBDA Rationalization of taxation of income by way of dividend, 47.1-47.3 115BBG Income from transfer of carbon credits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l provisions for computation of capital gains in case of joint development agreement, 25.1-25.8 194J Simplification of the provisions of tax deduction at source in case Fees for professional or technical services under section 194J, 64.1-64.3 194LA Non-deduction of tax in case of exempt compensation under RFCTLAAR Act, 2013, 65.1-65.5 194LC Extension of eligible period of concessional tax rate on interest in case of External Commercial Borrowing and Extension of benefit to Rupee Denominated Bonds, 66.1-66.8 194LD Extension of eligible period of concessional tax rate under section 194LD, 67.1-67.3 197A Enabling of Filing of Form 15G/15H for commission payments specified under section 194D, 68.1-68.3 204 Definition of 'person responsible for paying' in case of payments 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 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Part I are as follows: 3.1.2 Individual, Hindu undivided family, association of persons, body of individuals or artificial juridical person. Paragraph A of Part I of the First Schedule specifies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 marginal relief shall be available in respect of such cess. 3.1.3 Co-operative Societies. Paragraph B of Part I of the First Schedule to the Act specifies the rates of income-tax in the case of every co-operative society as under:- Income chargeable to tax Rate Up to ₹ 10,000 10% ₹ 10,001 -Rs. 20,000 20% Exceeding ₹ 20,000 30% 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 co-operative society having a total income exceeding one crore rupees. However, marginal relief shall be available so that the total a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able 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. 3.1.6 Companies. Paragraph E of Part I of the First Schedule to the Act specifies the rates of income-tax in the case of a company. In case of a domestic company, the rate of income-tax is__ a) twenty nine per cent of the total income, if the total turnover or gross receipts of the company in the previous year 2014-15 does not exceed five crore rupees; b) twenty-five per cent of the total income at the option of the company, if it satisfies the conditions contained under section 115BA of the Income-tax Act; c) thirty per cent of the total income, in all other cases. The tax computed shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 source during the financial year 2017-18 will continue to be the same as those specified in Part II of the First Schedule to the Finance Act, 2016. 3.2.2 Surcharge. The tax deducted at source in the following cases shall be increased by a surcharge, as specified under, for purposes of the Union: (i) in case of every non-resident individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person, the rate of surcharge is__ (a) ten per cent of such income-tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds fifty lakh rupees but does not exceed one crore rupees; (b) fifteen per cent of such income-tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 current incomes in cases where accelerated assessments have to be made, e.g., provisional assessment of shipping profits arising in India to non-residents, assessment of persons leaving India for good during that financial year, assessment of persons who are likely to transfer property to avoid tax, assessment of bodies formed for short duration, etc. The rates are as follows:- 3.3.2 Individual, Hindu undivided family, association of persons, body of individuals or artificial juridical person. Paragraph A of Part III of the First Schedule specifies the rates of income-tax in the case of every individual, Hindu undivided family, association of persons, body of individuals or artificial juridical person (other than a co-operative society, firm, local authority and company). The basic exemption limits, rates of tax and slabs of income for various categories remain the same as in financial year 2015-16. The rates of tax du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by a surcharge at the rate of twelve per cent of such income-tax in case of a co-operative society 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 computed inclusive of surcharge. No marginal relief shall be available in respect of Education Cess and Secondary and Higher Education Cess. 3.3.4 Firms. Paragraph C of Part III of the First Schedule to the Act specifies the rate of income-tax as thirty per cent in the case of every firm. 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 firm having a total income exceeding one crore rupees. However, marginal relief shall be available so that the tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seven per cent where such domestic company has total income exceeding one crore rupees but not exceeding ten crore rupees. Surcharge at the rate of twelve per cent shall continue to be levied if the total income of the company exceeds ten crore rupees. In the case of a company other than a domestic company, income from royalties received from Government or an Indian concern under an approved agreement, made after 31.03.1961 but before 01.04.1976, shall be taxed at fifty per cent. Similarly, income from fees for technical services received by such company from Government or Indian concern under an approved agreement, made after 29.02.1964 but before 01.04.1976, shall be taxed at fifty per cent. On the balance of the total income of such company, the tax rate shall be forty per cent. The tax computed shall continue to be enhanced by a surcharge of two per cent where such company has total income exceeding one crore rupees but not exceeding ten crore rupees. Surcharge at the rate of five per cent shall continue to be levied if the total income of such company exceeds ten crore rupees. However, marginal relief shall be allowed in the case of every company to ensure that: (i) the to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, 2017 and will, accordingly, apply from assessment year 2017-18 and subsequent assessment years. 5. Clarity relating to indirect transfer provisions. 5.1 Section 9 of the Income-tax Act deals with cases of income which are deemed to accrue or arise in India. Sub-section (1) of the said section creates a legal fiction that certain incomes shall be deemed to accrue or arise in India. Clause (i) of said sub-section (1) provides a set of circumstances in which income accruing or arising, directly or indirectly, is taxable in India. The said clause provides that all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, or through the transfer of a capital asset situate in India shall be deemed to accrue or arise in India. 5.2 Certain clarificatory amendments were inserted in the provisions of section 9 vide Finance Act, 2012. The amendments included inter alia the insertion of Explanation 5 in section 9(1)(i) w.e.f. 1st April, 1962. Explanation 5 clarified that an asset or capital asset, being any share or interest in a compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies on its behalf is located in India. The benefit under section 9A is available subject to the conditions provided in sub-sections (3), (4) and (5) of the section. 6.2 Sub-section (3) of section 9A provides for the conditions for the eligibility of the fund. These conditions, inter alia, are related to residence of fund, corpus, size, investor broad basing, investment diversification and payment of remuneration to fund manager at arm's length. In respect of corpus of the fund, before amendment by the Act, it was provided that the monthly average of the corpus of the fund shall not be less than one hundred crore rupees except where the fund has been established or incorporated in the previous year in which case, the corpus of fund shall not be less than one hundred crore rupees at the end of such previous year. 6.3 Representations have been received stating that in the year in which the fund is being wound up, it would not be possible to maintain the monthly average of the corpus of the fund to an amount which would not be less than one hundred crore rupees as required. 6.4 In order to rationalise the regime and to address the concerns of the stakeholders, section 9A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and will, accordingly, apply from assessment year 2018-19 and subsequent assessment years. 9. Exemption of income of Chief Minister's Relief Fund or the Lieutenant Governor's Relief Fund. 9.1 Section 10(23C) of the Income-tax Act provide exemption in respect of income of certain funds which include inter alia the Prime Minister's National Relief Fund. 9.2 The Chief Minister's Relief Fund or the Lieutenant Governor's Relief Fund, referred to in sub-clause (iiihf) of clause (a) of sub-section (2) of section 80G of the Income-tax Act, which is of the same nature at the level of state or the Union Territory as is the Prime Minister's National Relief Fund at the national level, is not exempted under section 10(23C). In the absence of such exemption, these funds are required to obtain registration under section 12A of the Income-tax Act in order to avail exemption of its income under section 11 and 12 of the said Act and are also required to fulfil certain conditions. 9.3 Therefore, clause (23C) of section 10 of the Income-tax Act has been amended to provide the benefit of exemption to the Chief Minister's Relief Fund or the Lieutenant Governor's Reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 2015-16 and subsequent years. 10.4 Further, section 49 of the Income-tax Act has also been amended so as to provide that where reconstituted plot or land, received under land pooling scheme is transferred after the expiry of two years from the end of the financial year in which the possession of such plot or land was handed over to the said assessee, the cost of acquisition of such plot or land shall be deemed to be its stamp duty value on the last day of the second financial year after the end of financial year in which the possession of such asset was handed over to the assessee. 10.5 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent years. 11. Exemption of long term capital gains tax under section 10(38) of the Income-tax Act. 11.1 Clause (38) of Section 10 of the Income-tax Act, before amendment by the Act, provided that the income arising from a transfer of long term capital asset, being equity share of a company or a unit of an equity oriented fund, shall be exempt from tax if the transaction of sale is undertaken on or after 1st October, 2014 and is chargeable to Securit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in this behalf. 12.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent assessment years. 13. Rationalisation of provisions of Section 10AA. 13.1 Under section 10AA of the Income-tax Act, deduction is allowed, from the total income of an assessee, in respect of profits and gains from his unit operating in a Special Economic Zone (SEZ), subject to fulfilment of certain conditions. 13.2 The said section allows deduction in computing the total income of the assessee; hence the deduction is to be allowed from the total income of the assessee as computed in accordance with the provision of the Income-tax Act before giving effect to the provisions of section 10AA. However, courts have taken a view (while deciding the matter pertaining to the section 10A of the Income-tax Act which also contains similar provision) that the deduction is to be allowed from the total income of the undertaking and not from the total income of the assessee. 13.3 In view of the above, section 10AA of the Income-tax Act has been amended to clarify that the amount of deduction referred to in the said section shall be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dments take effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent assessment years. 15. Clarity of procedure in respect of change or modifications of object and filing of return of income in case of entities exempt under sections 11 and 12. 15.1 The provisions of section 12A of the Income-tax Act provide for conditions for applicability of sections 11 and 12 of the Income-tax Act in relation to the benefit of exemption in respect of income of any trust or institution. 15.2 Further, the provisions of section 12AA of the Income-tax Act provide for registration of the trust or institution which entitles them to the benefit of sections 11 and 12. Section 12AA also provides the circumstances under which registration can be cancelled, one such circumstance being satisfaction of the Principal Commissioner or Commissioner that its activities are not genuine or are not being carried out in accordance with its objects subsequent to grant of registration. However, before amendment by the Act, there was no explicit provision in the Income-tax Act which mandates said trust or institution to approach for fresh registration in the event of adopti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before amendment by the Act, there was no restriction of receipt of any amount of donation in cash by a political party. 16.2 Secondly, a political party is also required to file its return of income under section 139(4B) of the Income-tax Act, if its income exceeds the maximum amount not chargeable to tax (without considering the exemption under section 13A of the Income-tax Act). However, before amendment by the Act, filing of the return was not a condition precedent for availing exemption under the said section. 16.3 In order to discourage the cash transactions and to bring transparency in the source of funding to political parties, section 13A of the Income-tax Act has been amended so as to provide for additional conditions for availing the benefit of the said section which are as under: (i) No donations of ₹ 2000/- or more is received otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account or through electoral bonds, (ii) Political party furnishes a return of income for the previous year in accordance with the provisions of sub-section (4B) of section 139 on or before the due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the entities specified in the sub-clause (a) of section 36(1)(viia) of the Income-tax Act, the said section has been amended so as to enhance the present limit from seven and one-half per cent to eight and one-half per cent of the amount of the total income (computed before making any deduction under that clause and Chapter VIA of the Income-tax Act). 18.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent assessment years. 19. Measures to discourage cash transactions. 19.1 Sub-section (3) of Section 40A of the Income-tax Act, before amendment by the Act, specified that any expenditure in respect of which payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, shall not be allowed as a deduction. Further, sub-section (3A) of section 40A of the Income-tax Act also provided for deeming a payment as profits and gains of business of profession if the expenditure is incurred in a particular year but the payment is made in any subsequent year of a sum exceeding twenty thousan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heque drawn on a bank or account payee bank draft or use of electronic clearing system through a bank account, exceeds ten thousand rupees, such expenditure shall be ignored for the purposes of determination of actual cost of such asset. 20.3 Section 35AD of the Income-tax Act has also been amended to provide that any expenditure in respect of which payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account, exceeds ten thousand rupees, no deduction shall be allowed in respect of such expenditure. 20.4 Applicability: These amendments take effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent assessment years. 21. Extension of scope of section 43D to Co-operative Banks. 21.1 Section 43D of the Income-tax Act specifies inter alia that interest income received by certain institutions or banks or corporations or companies in relation to certain categories of bad or doubtful debts shall be chargeable to tax in the previous year in which it is credited to its profit and loss account for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the provisions of the Income-tax Act, provided that the income and total sales or turn over or gross receipts, etc. specified in said clauses exceeds rupees one lakh twenty thousand and rupees ten lakh respectively. 22.2 In order to reduce the compliance burden, section 44AA of the Income-tax Act has been amended so as to increase monetary limits of income and total sales or turn over or gross receipts, etc. specified in said clauses for maintenance of books of accounts from one lakh twenty thousand rupees to two lakh fifty thousand rupees and from ten lakh rupees to twenty-five lakh rupees respectively in the case of individuals and Hindu undivided family carrying on business or profession. 22.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent assessment years. 23. Exclusion of certain specified person from requirement of audit of accounts under section 44AB. 23.1 The provisions of section 44AB of the Income-tax Act provide inter alia that every person carrying on the business is required to get his accounts audited if the total sales, turnover or gross receipts in the previous year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rate of deemed total income of eight per cent to six per cent in respect of the amount of such total turnover or gross receipts received by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account during the previous year or before the due date specified in sub-section (1) of section 139 of the Income-tax Act in respect of that previous year. However, the rate of deemed profit of 8% referred to in section 44AD of the Income-tax Act shall continue to apply in respect of total turnover or gross receipts received in any other mode. 24.3 Applicability: This amendment takes effect from 1st April, 2017 and will, accordingly, apply from assessment year 2017-18 and subsequent assessment years. 25. Special provisions for computation of capital gains in case of joint development agreement. 25.1 Under the provisions of section 45 of the Income-tax Act, capital gain is chargeable to tax in the year in which transfer takes place except in certain cases. The definition of 'transfer' includes inter alia any arrangement or transaction where any rights are handed over in execution of part performance of contract, even though th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e any monetary consideration is payable under the specified agreement, tax at the rate of ten per cent shall be deductible from such payment. 25.8 Applicability: This amendment will take effect from 1st April, 2017. 26. Tax neutral conversion of preference shares to equity shares. 26.1 Conversion of security from one form to another is regarded as transfer for the purpose of levy of capital gains tax under the provisions of the Income-tax Act. However, tax neutrality on conversion of bond or debenture of a company to share or debenture of that company is provided under section 47 of the Income-tax Act. Before amendment by the Act, similar tax neutrality has not been provided on conversion of preference share of a company into its equity share. 26.2 In order to provide tax neutrality to the conversion of preference share of a company into equity share of that company, section 47 of the Income-tax Act has been amended to provide that the conversion of preference share of a company into its equity share shall not be regarded as transfer. 26.3 Consequently, section 49 and section 2(42A) of the Income-tax Act have also been amended in respect of cost of acquisition and period of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cost with reference to certain modes of acquisition of capital asset. 28.2 The said section has been amended to provide that where the capital gain arises from the transfer of an asset, being the asset held by a trust or an institution in respect of which accreted income has been computed, and the tax has been paid thereon in accordance with the provisions of Chapter XII-EB, the cost of acquisition of such asset shall be deemed to be the fair market value of the asset which has been taken into account for computation of accreted income as on the specified date referred to in sub-section (2) of section 115TD of the Income-tax Act. 28.3 This amendment is consequential in nature. 28.4 Applicability: This amendment takes effect retrospectively from 1st June, 2016 and will, accordingly, apply from assessment year 2016-17 and subsequent assessment years. 29. Cost of acquisition in Tax neutral demerger of a foreign company. 29.1 Section 47(vic) of the Income-tax Act provides that the transfer of shares of an Indian company by a demerged foreign company to a resulting foreign company will be not regarded as transfer. 29.2 Section 49 of the Income-tax Act has been amended to provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act, the said section has been amended so as to provide that investment in any bond redeemable after three years which has been notified by the Central Government in this behalf shall also be eligible for exemption. 31.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent years. 32. Shifting base year from 1981 to 2001 for computation of capital gains. 32.1 Before amendment by the Act, the provisions of section 55 of the Income-tax Act provided that for computation of capital gains, an assessee shall be allowed deduction for cost of acquisition of the asset and also cost of improvement, if any. However, for computing capital gains in respect of an asset acquired before 01.04.1981, the assessee had been allowed an option of either to take the fair market value of the asset as on 01.04.1981 or the actual cost of the asset as cost of acquisition. The assessee was also allowed to claim deduction for cost of improvement incurred after 01.04.1981, if any. 32.2 In order to remove the genuine difficulties in computing the capital gains in respect of transfer of a capital asset, especially ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uot;Income from other sources". The scope of exceptions has also been widened by including the receipt by certain trusts or institutions and receipt by way of certain transfers not regarded as transfer under section 47 of the Income-tax Act. 33.5 Consequential amendments have also been made section 49 of the Income-tax Act for determination of cost of acquisition and section 2(24) of the Income-tax Act to include sum of money or value of property referred to in section 56(2)(x) of the Income-tax Act in the definition of income. 33.6 Applicability: These amendments take effect from 1st April, 2017 and the said receipt of sum of money or property on or after 1st April, 2017 shall be chargeable to tax in accordance with the provisions of clause (x) of sub-section (2) of section 56 of the Income-tax Act. 34. Disallowance for non-deduction of tax from payment to resident. 34.1 Section 58 of the Income-tax Act specifies the amounts which are not deductible in computing the income under the head "Income from other sources" which include certain disallowances made in computation of income under the head "Profits and gains of business or profession". These disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fifty-one per cent of the voting power on the last day of the year or years in which the loss was incurred. 36.2 In order to facilitate ease of doing business and to promote start up India, section 79 of the Income-tax Act has been amended to provide that where a change in shareholding has taken place in a previous year in the case of a company, not being a company in which the public are substantially interested and being an eligible start-up as referred to in section 80-IAC of Income-tax Act, loss shall be carried forward and set off against the income of the previous year, if all the shareholders of such company which held shares carrying voting power on the last day of the year or years in which the loss was incurred, being the loss incurred during the period of seven years beginning from the year in which such company is incorporated, continue to hold those shares on the last day of such previous year. 36.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent assessment years. 37. Rationalisation of deduction under section 80CCD for self-employed individual. 37.1 The provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018-19 and subsequent years. 39. Restricting cash donations. 39.1 Before amendment by the Act, section 80G of the Income-tax Act provided that the deduction shall not be allowed in respect of donation made of any sum exceeding ₹ 10,000, if the same was not paid by any mode other than cash. 39.2 In order to provide cash less economy and transparency, section 80G of the Income-tax Act has been amended so as to provide that no deduction shall be allowed under the section 80G in respect of donation of any sum exceeding two thousand rupees unless such sum is paid by any mode other than cash. 39.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent years. 40. Extending the period for claiming deduction by start-ups. 40.1 Before amendment by the Act, the provisions of section 80-IAC of the Income-tax Act provided that an eligible start-up shall be allowed a deduction of an amount equal to 100% of the profits and gains derived from eligible business for three consecutive assessment years out of five years beginning from the year in which such eligible start-up is incorporated. 40.2 In view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalisation of tax rates for individuals in the income slab of ₹ 2,50,000 to ₹ 5,00,000, section 87A of the Income-tax Act has been amended so as to reduce the maximum amount of rebate available under this section from ₹ 5000 to ₹ 2500. It is also provided that this rebate shall be available to only resident individuals whose total income does not exceed ₹ 3,50,000. 42.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent assessment years. 43. Clarification with regard to interpretation of 'terms' used in an agreement entered into under section 90 and 90A. 43.1 Under the provisions of section 90 of the Income-tax Act, power has been conferred upon the Central Government to enter into an agreement with the Government of any country outside India for granting relief in respect of income on which income tax has been paid both under the Income-tax Act and the income tax law in that foreign country, avoidance of double taxation of income, exchange of information for the prevention of evasion or avoidance of income-tax or recovery of income-tax. Similar provisions are pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties, nature and value of SDTs, method used to determine the arm's length price for SDTs, positions taken with regard to certain transactions not considered as SDTs, etc. This had considerably increased the compliance burden of the taxpayers. 44.3 In order to reduce the compliance burden of taxpayers, section 92BA of the Income-tax Act has been amended so as to provide that expenditure in respect of which payment has been made by the assessee to a person referred to in under section 40A(2)(b) are to be excluded from the scope of section 92BA of the Income-tax Act. Consequential amendment has also been made to section 40(A)(2)(a) of the Income-tax Act. 44.4 Applicability: These amendments take effect from 1st April, 2017 and will, accordingly, apply from assessment year 2017-18 and subsequent assessment years. 45. Secondary adjustments in certain cases. 45.1 "Secondary adjustment" means an adjustment in the books of accounts of the assessee and its associated enterprise to reflect that the actual allocation of profits between the assessee and its associated enterprise are consistent with the transfer price determined as a result of primary adjustment, thereby r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is made in respect of an assessment year commencing on or before 1st April, 2016. 45.6 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent years. 46. Limitation of Interest deduction in certain cases. 46.1 A company is typically financed or capitalized through a mixture of debt and equity. The way a company is capitalized often has a significant impact on the amount of profit it reports for tax purposes as the tax legislations of countries typically allow a deduction for interest paid or payable in arriving at the profit for tax purposes while the dividend paid on equity contribution is not deductible. Therefore, the higher the level of debt in a company, and thus higher the amount of interest it pays, the lower will be its taxable profit. For this reason, debt is often a more tax efficient method of finance than equity. Multinational Enterprises (MNEs) are often able to structure their financing arrangements to maximize these benefits. For this reason, tax administrations of several countries have introduced rules that place a limit on the amount of interest that can be deducted in computin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of dividend. 47.1 Before amendment by the Act, the provisions contained in section 115BBDA of the Income-tax Act specified that income by way of dividend in excess of ₹ 10 lakh shall be chargeable to tax at the rate of 10% on gross basis in case of a resident individual, Hindu undivided family or firm. 47.2 With a view to ensure horizontal equity among all categories of tax payers deriving income from dividend, section 115BBDA has been amended so as to specify that the provisions of said section shall be applicable to all resident assessees except domestic company and certain funds, trusts, institutions, etc. 47.3 Applicability: This amendment takes effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent years. 48. Income from transfer of carbon credits. 48.1 A carbon credit is an incentive given to an industrial undertaking for reduction of the emission of Green House Gases (GHGs) including carbon dioxide. There are several ways of reducing GHGs emissions such as switching over to wind and solar energy, forest regeneration, installation of energy-efficient machinery, landfill methane capture, etc. The Kyoto Protocol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... teen assessment years in case of non-corporate assessees. 49.4 Sections 115JAA and 115JD of the Income-tax Act have also been amended so as to provide that the amount of tax credit in respect of MAT/AMT shall not be allowed to be carried forward to subsequent year to the extent such credit relates to the difference between the amount of foreign tax credit (FTC) allowed against MAT/AMT and FTC allowable against the tax computed under regular provisions of Act other than the provisions relating to MAT/AMT. 49.5 Applicability: These amendments take effect from 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent years. 50. Rationalisation of provisions of section 115JB in line with Indian Accounting Standards (Ind AS). 50.1 The Central Government notified the Indian Accounting Standards (Ind AS) which are converged with International Financial Reporting Standards (IFRS) and prescribed the Companies (Indian Accounting Standards) Rules, 2015 which laid down a roadmap for implementation of Ind AS. 50.2 Globally, different approaches have been adopted to deal with the tax issues arising from adoption of IFRS. For ensuring horizontal equity across ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equity instruments designated at fair value through other comprehensive income (Ind AS 109) To be included in book profits at the time of realisation/disposal/retirement or otherwise transferred 3 Re-measurements of defined benefit plans (Ind AS 19) To be included in book profits every year as the re-measurements gains and losses arise 4 Any other item To be included in book profits every year as the gains and losses arise (iii) Appendix A of Ind AS 10 provides that any distributions of non-cash assets to shareholders (for example, in a demerger) shall be accounted for at fair value. The difference between the carrying value of the assets and the fair value is recorded in the profit and loss account. Correspondingly, the reserves are debited at fair 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intangible asset as mentioned in paragraphs D5 and D7 of Ind AS 101. In such cases the treatment shall be as under- * The provisions for computation of book profits under section 115JB of the Income-tax Act provide that in case of revaluation of assets, any impact on account of such revaluation shall be ignored for the purposes of computation of book profits. Further, the adjustments in retained earnings on first time adoption with respect to items of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an opening balance sheet as of 1st of April, 2015 and restate the financial statements for the comparative period 2015-16. In such a case, the first time adoption adjustments as of 31st of March, 2016 shall be considered for computation of MAT liability for previous year 2016-17 (Assessment year 2017-18) and thereafter. Further, in this case, the period of five years provided above shall be previous years 2016-17, 2017-18, 2018-19, 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 penalti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation Officer to authorised officer. 53.1 Section 132 of the Income-tax Act provides the power of search and seizure subject to fulfilment of conditions specified therein. 53.2 In order to protect the interest of revenue and safeguard recovery in search cases, sub-sections (9B) and (9C) have been inserted in the said section, to provide that during the course of a 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 Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount or other documents or any part of cash or stock or other valuable article or thing relating to the business or profession are kept, for the purposes of conducting a survey. 55.2 The scope of the said section has been widened by amending section 133A of the Income-tax Act to include any place, at which an activity for charitable 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 Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the said provisions of the said section shall not apply. 58.6 Applicability: This amendment takes effect from 1st April, 2017. 59. Processing of return within the prescribed time and enable withholding of refund in certain cases. 59.1 Before amendment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 263 or 264 of the Income-tax Act shall be twelve months from the end of the financial year in which order under section 254 is received or order under section 263 or 264 is passed by the authority referred to therein. 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 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear in which the last of the authorisations for search under section 132 of the Income-tax Act or for requisition under section 132A of the Income-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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond a threshold limit. It is further provided that an individual or a Hindu Undivided 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation and Resettlement Act, 2013, ('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 194 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility: 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 assessment years. 68. Enabling of Fili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 embassy, a High Commission, legation, commission, consulate and the trade representation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 taxation regime provided under section 44ADA of the Income-tax Act shall also be liable to pay advance tax in one instalment on or before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnished 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 failure to furnish return of income shall not apply in respect of assessment year 2018-19 and onwards. 73.7 Applicability: These amendments take effect from 1st April, 2018 and will, according ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 to provide reference of applications for Advance Ruling made under the Customs Act, 1962, the Central Excise Act, 1944 and the Finance Act, 1994 (which makes provisions in respect of Service Tax Matters). 75.3 Applicability: These amendments tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 provisions of the Income-tax Act is correct. Various provisions exist under the Income-tax Act to penalise the defaulting assessee in case of furnishing incorrect information. However, there existed no penal provisions for levy of penalty for furnishing incorrect information by the person who is responsible for certifying t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 is issued by the Assessing Officer, and provisions of the said Act shall apply accordingly. 80.2 In view of the various representations received from stakeholders, section 197 of the Finance Act, 2016 has been amended so as to omit clause (c) of the said section. 80.3 Applicability: This amendment takes effect retrospectively from 1st June, 2016. 80.4 Howeve ..... 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