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TMI BlogNOTES ON CLAUSESX X X X Extracts X X X X X X X X Extracts X X X X ..... n clause (xii) of sub-section (2) of section 56 shall also be included within the definition of income. It is also proposed to insert sub-clause (xviid) in the said clause so as to provide that income shall include any sum referred to in clause (xiii) of sub-section (2) of section 56. These amendments will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years. It is also proposed to insert a new clause (28CA) to provide for definition of "Joint Commissioner (Appeals)" to mean a person appointed to be a Joint Commissioner of Income-tax (Appeals) or an Additional Commissioner of Income-tax (Appeals) under subsection (1) of section 117. This amendment will take effect from 1st April, 2023. Clause (42A) of the said section defines "short-term capital asset" and the Explanation 1 of the said clause provides for determining the period for which any capital asset is held by the assessee. It is proposed to insert a new sub-clause (hi) in clause (i) to the Explanation 1 of the said clause so as to provide that in the case of capital asset, being Electronic Gold Receipt or gold being capital asset, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the ambit of the said clause. It is also proposed to insert a proviso to provide that the amount of distributed income referred to in the said clause shall include only so much of the amount which is chargeable to tax in the hands of the offshore banking unit under section 115AD. These amendments will take effect from 1st April, 2024 and, will, accordingly apply in relation to the assessment year 2024-2025 and subsequent assessment years. Clause (10D) of the said section, inter alia, provides exemption to any sum received under a life insurance policy, including the sum allocated by way of bonus on such policy. It is also proposed to omit the reference of Explanation to sub-section (2A) of section 88 in the second proviso to clause (10D) of the said section which is consequential due to the omission of section 88. This amendment will take effect from 1st April, 2023. It is also proposed to substitute the sixth proviso in the said clause to the effect that nothing contained in this clause shall apply with respect to any life insurance policy other than a unit linked insurance policy, issued on or after 1st April, 2023, if the amount of premium payable for any of the previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , apply in relation to the assessment year 2024-2025 and subsequent assessment years. Clause (23BBF) of said section provides income tax exemption to any income of the North-Eastern Development Finance Corporation Limited. This exemption has been withdrawn for assessment year beginning on the 1st day of April, 2010 and any subsequent assessment year or years. It is proposed to omit the said clause with effect from 1st April, 2023. Clause (23C) of the said section provides exemption to the income of certain entities. Sub-clauses (iv), (v), (vi) and (via) of clause (23C) of said section provide exemption to the income received by any person on behalf of any fund or trust or institution or university or other educational institutions or hospital or other institutions which may be approved or provisionally approved by the Principal Commissioner or Commissioner. It is proposed to substitute clause (iv) of the first proviso to clause (23C) to provide that the fund or trust or institution or any university or other educational institution or any hospital or other institution, as is referred to in sub-clauses (iv), (v) , (vi) and (via) of the said clause, which is not covered by claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod of three years from the assessment year from which the approval is sought, and send a copy of such order to the fund or trust or institution or university or other educational institution or hospital or other medical institution These amendments will take effect from 1st October, 2023. It is also proposed to insert a second proviso to clause (i) of Explanation 2 to the third proviso of clause (23C) so as to provide that the provisions of the first proviso shall apply only if there was no violation of the conditions specified in the twelfth, thirteenth and twenty- first proviso, and those specified in Explanation 2 and Explanation 3, of the said clause, at the time the application was made from the corpus. It is also proposed to insert a third proviso to clause (i) of Explanation 2 to the third proviso of clause (23C) of the said section so as to provide that the amount invested or deposited back shall not be treated as application for charitable or religious purposes under the first proviso unless such investment or deposit is made within a period of five years from the end of the previous year in which such application was made from corpus. It is also proposed to insert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years. It is also proposed to amend clause (c) of Explanation 3 to third proviso of clause (23C) to provide that the statement of accumulation shall be furnished at least two months prior to the due date specified under sub-section (1) of section 139 for furnishing the return of income for the previous year. This amendment will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years. It is also proposed to insert clause (e) to Explanation 2 to the fifteenth proviso of clause (23C) to provide that specified violation shall also include the case where the application referred to in the first proviso is not complete or it contains false or incorrect information. This amendment will take effect from 1st April, 2023. It is also proposed to consequentially amend the Explanation to the nineteenth proviso to clause (23C) of the said section so as to give the reference of newly inserted clause (46A) therein. This amendment will take effect from 1st April, 2024 and will, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gulating, or regulating and developing, any activity for the benefit of the general public; or (iv) regulating any matter, for the benefit of the general public, arising out of the object for which it has been created; and (b) is notified by the Central Government in the Official Gazette for the purposes of this clause, shall not be included in total income; Consequentially, it is proposed to amend clause (46) of the said section so as to exclude any income arising to a body or authority or Board or Trust or Commission (by whatever name called) that are covered under clause (46A) of the said section from the provisions of the said clause. These amendments will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years. Clause (49) of the said section provides income tax exemption to any income of the National Financial Holdings Company Limited of any previous year relevant to any assessment year commencing on or before the 1st day of April, 2014. It is proposed to omit the said clause with effect from 1st April, 2023. Clause 6 of the Bill seeks to amend section 10AA of the Income-tax Act relati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 11 of the Income-tax Act relating to income from property held for charitable or religious purposes. It is proposed to amend clause (2) of Explanation 1 of sub-section (1) of the said section to provide that option by the person under the said Explanation shall be exercised at least two months prior to the due date specified under sub-section (1) of section 139 for furnishing the return of income. It is further proposed to insert a second proviso to clause (i) of Explanation 4 of subsection (1) of the said section so as to provide that the provisions of the first proviso shall apply only if there was no violation of the conditions, specified in (a) clause (c) and those specified in Explanations 2, 3 and 5, of the said sub-section; and (b) in the Explanation to the said section; and (c) in clause (c) of sub-section (1) of section 13, at the time the application was made from the corpus. It is also proposed to insert a third proviso to clause (i) of the said Explanation 4 so as to provide that the amount invested or deposited back shall not be treated as application for charitable or religious purposes under the first proviso unless such investment or deposit is ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the assessment year 2024-2025 and subsequent assessment years. It is also proposed to amend clause (c) of sub-section (2) of the said section so as to provide that the statement of accumulation shall be furnished at least two months prior to the due date specified under sub-section (1) of section 139 for furnishing the return of income for the previous year. This amendment will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years. Sub-section (7) of the said section, inter alia, provides that where a trust or an institution has been granted registration under section 12AA or section 12AB and the said registration is in force for any previous year, then, nothing contained in section 10 other than clause (1) or clause (23C) or clause (46) of section 10, shall operate to exclude any income derived from the property held under trust from the total income of the trust or institution for that previous year. Consequential to insertion of clause (46A) in section 10, it is proposed to give reference of the said new clause in the said sub-section (7) and in the first and second provisos thereof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Principal Commissioner or Commissioner shall follow the procedure provided under clause (b) of sub-section (1). It is further proposed to substitute item (B) of sub-clause (ii) of clause (b) of sub-section (1) of the said section to provide that where the Principal Commissioner or Commissioner not so satisfied about the objects of the trust or institution and the genuineness of its activities and compliance of the requirements, he shall pass an order in writing,-- (I) in a case referred to in sub-clause (ii) or sub-clause (iii) or sub-clause (v) of clause (ac) of sub-section (1) of section 12A rejecting such application and also cancelling its registration; (II) in a case referred to in sub-clause (iv) or in item (B) of sub-clause (vi) of subsection (1) of section 12A, rejecting such application, after affording a reasonable opportunity of being heard. It is also proposed to substitute clause (c) of sub-section (1) of the said section to provide that where the application is made under item (A) of sub-clause (vi) of clause (ac) of subsection (1) of section 12A or the application made under sub-clause (vi) of clause (ac) of sub-section (1) of section 12A, as it stood immedia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Bill seeks to amend section 28 of the Income-tax Act relating to profits and gains of business or profession. Clause (iv) of the said section provides that the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession shall be chargeable to income-tax under the head "Profits and gains of business or profession". It is proposed to amend the said clause so as to apply to cases where benefit or perquisite provided is in cash or in kind or partly in cash and partly in kind. This amendment will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years. Clause 12 of the Bill seeks to amend section 35D of the Income-tax Act relating to amortisation of certain preliminary expenses. Clause (a) of sub-section (2) of the said section includes expenditure in connection with (i) preparation of feasibility report, (ii) preparation of project report, (iii) conducting marketing survey or any other survey necessary for the business of the assessee; and (iv) engineering services related to the business of the assessee: within the scope of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... important non-deposit taking non-banking financial company" with "such class of non-banking financial companies as may be notified by the Central Government in the Official Gazette in this behalf". It is further proposed to substitute clause (h) of the Explanation to the said section to define the expression "non-banking financial company". These amendments will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years. Clause 15 of the Bill seeks to amend section 44AB of the Income-tax Act relating to audit of accounts of certain persons carrying on business or profession. It is proposed to substitute the first proviso to provide that the provisions of the said section shall not apply to a person, who declares profits and gains for the previous year in accordance with the provisions of sub-section (1) of section 44AD or sub-section (1) of section 44ADA, as the case may be. This amendment will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years. Clause 16 of the Bill seeks to amend section 44AD of the Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in the previous year on account of such profession or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the assessee, shall be deemed to be the profits and gains of such profession chargeable to tax under the head "Profits and gains of business or profession". It is proposed to insert two provisos to the said sub-section to provide an increased threshold limit of seventy-five lakh rupees where the amount or aggregate of the amounts received by the assessee during the previous year, in cash, does not exceed five per cent. Of the total gross receipts of such previous year and also that the receipt of amount or aggregate of amount by a cheque drawn on a bank or by a bank draft, which is not account payee, shall be deemed to be receipt in cash. This amendment will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years. Clause 18 of the Bill seeks to amend section 44BB of the Income-tax Act relating to special provision for computing profits and gains in connection with the business of exploration, etc., of mineral oils. Sub-section (1) of section 44BB o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be allowed to the assessee for such previous year. This amendment will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years. Clause 20 of the Bill seeks to amend section 45 of the Income-tax Act relating to capital gains. Sub-section (5A) of the said section, inter alia, provides that on the capital gain arising to an assessee, from the transfer of a capital asset, being land or building or both, under a specified agreement, the capital gains shall be chargeable to income-tax as income of the previous year in which the certificate of completion for the whole or part of the project is issued by the competent authority. Further, for computing the capital gains amount on this transaction, the full value of consideration shall be taken as the stamp duty value of his share, as increased by the consideration received in cash. It is proposed to include consideration received by cash or by a cheque or draft or by any other mode shall be deemed to be full value of consideration of the capital asset as a result of the transfer of the capital asset. This amendment will take effect from 1st April, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... result of the transfer of such capital asset. It is proposed to insert a proviso in clause (ii) of the said section so as to provide that the cost of acquisition of the asset or the cost of improvement thereto shall not include the deductions claimed on the amount of interest under clause (b) of section 24 or under the provisions of Chapter VIA of the Act. This amendment will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years. Clause 23 of the Bill seeks to amend section 49 of the Income-tax Act relating to cost with reference to certain modes of acquisition. It is proposed to insert a new sub-section (10) so as to provide that the cost of acquisition of Electronic Gold Receipt for the purpose of computing capital gain shall be deemed to be the cost of gold in the hands of the person in whose name Electronic Gold Receipt is issued. It is further proposed that the cost of acquisition of gold for the purpose of computing capital gain shall be deemed to be the cost of Electronic Gold Receipt in the hands of such person. This amendment will take effect from 1st April, 2024 and will, according ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in relation to the assessment year 2024-2025 and subsequent assessment years. Clause 26 of the Bill seeks to amend section 54EA of the Income-tax Act relating to capital gain on transfer of long-term capital assets not to be charged in the case of investment in specified securities. It is proposed to omit sub-section (3) of said section which is consequential due to the omission of section 88. This amendment will take effect from 1st April, 2023. Clause 27 of the Bill seeks to amend section 54EB of the Income-tax Act relating to capital gain on transfer of long-term capital assets not to be charged in certain cases. It is proposed to omit sub-section (3) of the said section which is consequential due to the omission of section 88. This amendment will take effect from 1st April, 2023. Clause 28 of the Bill seeks to amend section 54EC of the Income-tax Act relating to capital gain not to be charged on investment in certain bonds. It is proposed to omit clause (a) of sub-section (3) of the said section which is consequential due to the omission of section 88. This amendment will take effect from 1st April, 2023. Clause 29 of the Bill seeks to amend section 54ED of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years. Clause 32 of the Bill seeks to amend section 56 of the Income-tax Act relating to income from other sources. Sub-section (2) of the said section provides for incomes that are chargeable to income tax under the head "Income from other sources". The provisions of clause (viib) of sub-section (2) of the said section, inter alia, provides that where a company, not being a company in which the public are substantially interested, receives, in any previous year, from any person being a resident, any consideration for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares shall be chargeable to income tax under the head "Income from other sources". It is proposed to omit the words "being a resident" from the said clause (viib) so as to cover all the investors within the ambit of the said clause of sub-section (2) of section 56, irrespective of their residency. It is further proposed to insert a new clause (xii) in the said sub-sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ol to the buyer. It is further proposed to provide that the condition of reduction of its shareholding to below fifty-one per cent. shall apply only in a case where shareholding of the Central Government or the State Government or the public sector company was above fifty-one per cent. before such sale of shareholding. It is also proposed to provide that the requirement of transfer of control in relation to such strategic disinvestment may be carried out by either the Central Government, or the State Government or the public sector company or any two of them or all of them. This amendment will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years. Clause 34 of the Bill seeks to amend section 72AA of the Income-tax Act relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in scheme of amalgamation in certain cases. It is proposed to amend clause (i) of the said section to also allow carry forward of accumulated losses and unabsorbed depreciation allowance in the case of amalgamation of one or more banking company with any other banking institution or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc. It is proposed to omit sub-section (7) of the said section which is consequential due to the omission of section 88. This amendment will take effect from 1st April, 2023. Clause 37 of the Bill seeks to amend section 80CCC of the Income-tax Act relating to deduction in respect of contribution to certain pension funds. It is proposed to omit clause (a) of sub-section (3) of the said section which is consequential due to the omission of section 88. This amendment will take effect from 1st April, 2023. Clause 38 of the Bill seeks to amend section 80CCD of the Income-tax Act relating to deduction in respect of contribution to pension scheme of Central Government. It is proposed to omit clause (a) of sub-section (4) of the said section which is consequential due to the omission of section 88. This amendment will take effect from 1st April, 2023. Clause 39 of the Bill seeks to insert a new section 80CCH in the Income-tax Act relating to deductions in respect of contribution to Agnipath Scheme. It is proposed to insert a new section 80CCH to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or fund has been excluded from the total income on account of applicability of sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 or section 11 or section 12 for any previous year ending on or before the date of such application, at any time after the commencement of such activities. Clause (ii) of the second proviso to sub-section (5) of the said section provides for the procedure of granting approval by the Principal Commissioner or Commissioner where the application has been made under clause (ii) or clause (iii) of the first proviso. It is proposed to amend clause (ii) of the second proviso to sub-section (5) of the said section so as to provide that where the application is made under the proposed sub-clause (B) of clause (iv) of the first proviso, the Principal Commissioner or Commissioner shall follow the procedure provided under clause (ii) of the second proviso. It is further proposed to substitute item (B) of sub-clause (b) of clause (ii) of the second proviso to sub-section (5) of the said section so as to provide that if the Principal Commissioner or Commissioner is not so satisfied, about the objects and the gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years. Clause 42 of the Bill seeks to amend section 87 of the Income-tax Act relating to rebate to be allowed in computing income-tax. It is proposed to omit reference of sections 88, 88A, 88B, 88C and 88D in sub-sections (1) and (2) of the said section which is consequential in nature. These amendments will take effect from 1st April, 2023. Clause 43 of the Bill seeks to amend section 87A of the Income-tax Act relating to rebate of income-tax in case of certain individuals. The said section provides that an assessee, being an individual resident in India, whose total income does not exceed five hundred thousand rupees, shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deductions under this Chapter) on his total income with which he is chargeable for any assessment year, of an amount equal to hundred per cent. of such income-tax or an amount of twelve thousand and five hundred rupees, whichever is less. It is proposed to insert a proviso to the said section to provide that where the income tax payable on the total income of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r period not exceeding thirty days. It is proposed to amend the said sub-section (3) and the proviso to reduce the said period from thirty days to ten days for furnishing any information or document, extendable by a further period of not exceeding thirty days. This amendment will take effect from the 1st April, 2023. Clause 47 of the Bill seeks to amend section 94B of the Income-tax Act relating to limitation on interest deduction in certain cases. The said section, inter alia, provides that notwithstanding anything contained in the Act, where an Indian company, or a permanent establishment of a foreign company in India, being the borrower, incurs any expenditure by way of interest or of similar nature exceeding one crore rupees which is deductible in computing income chargeable under the head "Profits and gains of business or profession" in respect of any debt issued by a non-resident, being an associated enterprise of such borrower, the interest deductible in computation of income under the said head shall be restricted only to the extent of thirty per cent., of its earnings before interest, taxes, depreciation and amortisation or interest paid or payable to associa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 2, other than a person who has exercised an option under sub-section (6), for any previous year relevant to the assessment year beginning on or after 1st April, 2024, shall be computed at the rate of tax given in the Table therein. These amendments will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years. It is also proposed to amend clause (i) of sub-section (2) of the said section to give reference of sub-section (2) of section 80CCH therein to provide the benefit of concessional tax regime to an individual enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund on or after 1st November, 2022. This amendment will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years. It is also proposed to amend sub-section (2) of the said section, inter alia, to provide that for the purposes of sub-section (1A), the total income of the person referred to therein shall be computed without any exemption or deduction under the provisions of clause (5) or clause (13A) or prescribed under clause (14) (oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercise the option for concessional rate of taxation under sub-section (1) for any previous year relevant to the assessment year beginning on or after 1st April, 2024. It is also proposed to insert sub-section (6) in the said section so as to provide that nothing contained in sub- section (1A) shall apply to a person where an option is exercised by such person, in the manner as may be prescribed, for any assessment year, and where such option is exercised-- (i) on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for such assessment year, in case of a person having income from business or profession, and such option once exercised shall apply to subsequent assessment years; or (ii) along with the return of income to be furnished under sub-section (1) of section 139 for such assessment year, in case of a person not having income referred to in clause (i). However, the option under clause (i) of the said sub-section (6), once exercised for any previous year can be withdrawn only once for a previous year other than the year in which it was exercised and thereafter, the person shall never be eligible to exercise the option u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature whatsoever. It is proposed to amend the said section to insert a proviso to provide that nothing contained in said section shall apply to income by way of winnings from any online game for the assessment year beginning on or after 1st April, 2024. It is further proposed to substitute the Explanation to define the expression "horse race" and "online game". This amendment will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years. Clause 54 seeks to insert a new section 115BBJ in the Income-tax Act relating to tax on winnings from online games. The proposed section seeks to provide that notwithstanding anything contained in any other provisions of this Act, where the total income of an assessee includes any income by way of winnings from any online game, the income-tax payable shall be the aggregate of- (i) the amount of income-tax calculated on net winnings from such online games during the previous year, computed in the manner as may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nverted into any form not eligible for registration or approval in a previous year, if the specified person fails to make an application in accordance with the provisions of clause (i) or clause (ii) or clause (iii) of the first proviso to clause (23C) of section 10 or sub-clause (i) or sub-clause (ii) or sub-clause (iii) of clause (ac) of sub-section (1) of section 12A, within the period specified in the said clauses or subclauses, as the case may be, which expires in the said previous year. It is further proposed to amend clause (ii) of sub-section (5) of the said section to provide that the principal officer or the trustee of the specified person or the specified person, as the case may be, shall also be liable to pay the tax on accreted income to the credit of the Central Government within fourteen days from the end of the previous year in a case referred to in sub-clause (a) of clause (ii), or clause (iii) of sub-section (3) of the said section. Clause (i) of Explanation to the section provides the definition of "date of conversion" for the purposes of the said section. It is also proposed to amend clause (i) of the said Explanation, which defines the expression "date of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s)". This amendment will take effect from 1st April, 2023. Clause 62 of the Bill seeks to amend section 131 of the Income-tax Act relating to power regarding discovery, production of evidence, etc. It is proposed to consequentially amend the said section to substitute the expression "Commissioner (Appeals)" with "Joint Commissioner (Appeals), Commissioner (Appeals)". This amendment will take effect from 1st April, 2023. Clause 63 of the Bill seeks to amend section 132 of the Income-tax Act relating to search and seizure. Sub-section (2) of said section provides that during the course of search, the authorised officer may requisition the services of any police officer or any officer of the Central Government to assist him for any of the action required to be performed during the course of such search and it shall be duty of such officer to comply. It is proposed to substitute sub-section (2) of the said section so as to provide that the authorised officer, during the course of search, may requisition the services of any police officer or of any officer of the Central Government, or of both, or other person or entity, as approved by the Principal Chief Commissioner or the Chie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner (Appeals) or the Commissioner (Appeals)". This amendment will take effect from 1st April, 2023. Clause 65 of the Bill seeks to amend section 134 of the Income-tax Act relating to power to inspect registers of companies. It is proposed to consequentially amend the said section to substitute the expression "the Commissioner (Appeals)" with "the Joint Commissioner (Appeals) or the Commissioner (Appeals)". This amendment will take effect from 1st April, 2023. Clause 66 of the Bill seeks to amend the section 135A of the Income-tax Act, 1961 relating to faceless collection of information. It is proposed to insert a second proviso in the said sub-section (2) of the said section so as to provide that the Central Government may amend any direction issued under the said sub-section on or before 31st March, 2022, by notification in the Official Gazette. This amendment will take effect retrospectively from 1st April, 2022. Clause 67 of the Bill seeks to amend the section 140B of the Income-tax Act relating to tax on updated return. Sub-section (4) of the said section provides that interest payable under section 234B shall be computed on an amount equal to the assessed tax or the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f his income or the income of any other person in respect of which he is assessable. It is proposed to amend the said section to provide that such return shall be furnished in a period of three months from the end of the month in which such notice is issued, or such further period as may be allowed by the Assessing Officer on the basis of an application made in this regard by the assessee. It is further proposed to insert a third proviso in the said section to provide that any return of income, required to be furnished by an assessee under this section and furnished beyond the period allowed shall not be deemed to be a return under section 139. These amendments will take effect from 1st April, 2023. Clause 70 of the Bill seeks to amend section 149 of the Income-tax Act relating to time limit for notice. It is proposed to amend sub-section (1) of the said section to insert the provisos after the second proviso to provide that for cases referred to in clause (i), (iii) and (iv) of the Explanation 2 to section 148 where a search is initiated under section 132 or a search under section 132 for which the last of the authorisations is executed or requisition is made under section 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h or fifth provisos or extended by the sixth proviso to sub-section (1) of section 149. These amendments will take effect from 1st April, 2023. Clause 72 of the Bill seeks to amend the section 153 of the Income-tax Act relating to time limit for completion of assessment, reassessment and recomputation. It is proposed to amend the third proviso to sub-section (1) to provide that the period of nine months specified therein to pass an order of assessment shall be applicable only to the assessment year commencing on 1st April, 2021. It is further proposed to insert a new proviso, so that an order of assessment relating to the assessment year commencing on or after 1st April, 2022 shall be passed within twelve months from the end of the assessment year in which the income was first assessable. It is also proposed to increase the said time limit to pass an order of assessment from nine months to twelve months from the end of the financial year in which return under subsection (8A) of section 139 was furnished. It is also proposed to amend sub-section (3) of the said section to provide that the provisions of the said sub-section shall also be applicable to order under section 263 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such order is received or passed by the Principal Commissioner or Commissioner, as the case may be. It is also proposed to amend the said sub-section to provide that provisions of the said sub-section shall also be applicable to an order under section 263 passed by the Principal Chief Commissioner or Chief Commissioner. It is also proposed to amend the first proviso to Explanation 1 of the said section so as to also make it available to the period of limitation mentioned in sub-section (1A) of the said section. These amendments will take effect from 1st April, 2023. It is also proposed to amend clause (iv) of Explanation 1 to the said section, so as to exclude the period for inventory valuation through the cost accountant for the purposes of computation of time limit. This amendment will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years. Clause 73 of the Bill seeks to amend section 154 of the Income-tax Act relating to rectification of mistake. It is proposed to consequentially amend clause (b) of sub-section (2) of the said section to substitute the expression "the Commissioner (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 139 for any assessment year (herein referred to as the relevant assessment year) and tax on such income has been deducted at source and paid to the credit of the Central Government in accordance with the provisions of Chapter XVII-B in a subsequent financial year, the Assessing Officer shall, on an application made by the assessee in the prescribed form within a period of two years from the end of the financial year in which such tax was deducted at source, amend the order of assessment or any intimation allowing credit of such tax deducted at source in the relevant assessment year, and the provisions of section 154 shall, so far as may be, apply thereto and the period of four years specified in sub-section (7) of that section shall be reckoned from the end of the financial year in which such tax has been deducted. However, the credit of such tax deducted at source shall not be allowed in any other assessment year. This amendment will take effect from 1st October, 2023. Clause 75 of the Bill seeks to amend section 158A of the Income-tax Act relating to procedure when assessee claims identical question of law is pending before High Court or Supreme Court. It is proposed to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f modified return under sub-section (1), the Assessing Officer shall pass an order assessing or reassessing the total income of the relevant assessment year in accordance with the order of the business reorganisation and taking into account the modified return so furnished. The proposed sub-section (3) seeks to provide that unless otherwise provided, all other provisions of the Income-tax Act shall apply to the assessment or reassessment made under this section and in such cases, the tax shall be chargeable at the rate applicable to such assessment year. The proposed Explanation seeks to define the expressions "business reorganisation" and "successor" for the purposes of this section. This amendment will take effect from 1st April, 2023. Clause 78 of the Bill seeks to amend section 177 of the Income-tax Act relating to association dissolved or business discontinued. It is proposed to consequentially amend the said section to substitute the expression "the Commissioner (Appeals)" with "the Joint Commissioner (Appeals) or the Commissioner (Appeals)". This amendment will take effect from 1st April, 2023. Clause 79 of the Bill seeks to amend section 189 of the Income-tax Act rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter 1st July, 2023 and also an Explanation to provide that "online game" shall have the meaning assigned to it in clause (iii) of Explanation to the proposed section 115BBJ. This amendment will take effect from 1st July, 2023. Clause 83 of the Bill seeks to insert a new section 194BA in the Income-tax Act relating to winnings from online game. Sub-section (1) of the proposed section provides that notwithstanding anything contained in any other provisions of this Act, any person responsible for paying to any person any income by way of winnings from any online game during the financial year shall, deduct income-tax on the net winnings in his user account, computed in the manner as may be provided by rules, at the end of the financial year at the rates in force. The proviso to the said sub-section provides that in a case where there is a withdrawal from user account during the financial year, the income-tax shall be deducted at the time of such withdrawal on net winnings comprised in such withdrawal, as well as on the remaining amount of net winnings in the user account, computed in the manner as may be provided by rules, at the end of the financial year. Sub-section (2) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been substituted. This amendment will take effect from 1st April, 2023. Clause 86 of the Bill seeks to amend section 194R of the Income-tax Act relating to deduction of tax on benefit or perquisite in respect of business or profession. Sub-section (1) of the said section provides that any person responsible for providing to a resident, any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession, by such resident, shall, before providing such benefit or perquisite, as the case may be, to such resident, ensure that tax has been deducted in respect of such benefit or perquisite at the rate of ten per cent. of the value or aggregate of value of such benefit or perquisite. It is proposed to insert a new Explanation 2 to the said section so as to clarify that the provisions of sub-section (1) shall also apply to any benefit or perquisite, whether in cash or in kind or partly in cash and partly in kind. This amendment will take effect from 1st April, 2023. Clause 87 of the Bill seeks to amend section 196A of the Income-tax Act relating to income in respect of units of non-residents. Sub-section (1) of the said section pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of trading in alcoholic liquor, forest produce, scrap etc. Sub-section (1G) of the said section, inter-alia, provides that every person being an authorised dealer, who receives any amount, or an aggregate of amounts, of seven lakh rupees or more in a financial year for remittance out of India under the Liberalised Remittance Scheme of the Reserve Bank of India from a buyer, being a person remitting such amount out of India; or being a seller of an overseas tour program package, who receives any amount from a buyer, being the person who purchases such package, shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount from the said buyer by any mode, whichever is earlier, collect from the buyer, a sum equal to five per cent. of such amount as income-tax. It is proposed to amend the said sub-section (1G) so as to increase the rate of collection of tax at source from "five per cent." to "twenty per cent. if it is for a purpose other than for education or medical treatment". It is further proposed to amend the first proviso to the said section to provide that collection of tax at source is not applicable wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t where proceedings for assessment or reassessment are pending in respect of an assessee, in computing the period for determining the additional interest payable to such assessee under this sub-section, the period beginning from the date on which such refund is withheld by the Assessing Officer in accordance with and subject to provisions of subsection (2) of section 245 and ending with the date on which such assessment or reassessment is made shall be excluded. This amendment will take effect from 1st April, 2023. Clause 94 of the Bill seeks to substitute section 245 of the Income-tax Act with a new section relating to set off and withholding of refunds in certain cases. Sub-section (1) of the proposed section seeks to provide that where under any of the provisions of this Act, a refund becomes due or is found to be due to any person, the Assessing Officer or Commissioner or Principal Commissioner or Chief Commissioner or Principal Chief Commissioner, as the case may be, may, in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the sum, if any, remaining payable under this Act by the person to whom the refund is due, after givi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enable creation and functioning of Joint Commissioner (Appeals). It is further proposed to substitute section 246 with a new section so as to provide for appealable orders before Joint Commissioner (Appeals). Sub-section (1) of the proposed section seeks to provide that any assessee aggrieved by any of the following orders of an Assessing Officer (below the rank of Joint Commissioner) may appeal to the Joint Commissioner (Appeals) against- (i) (a) an order being an intimation under sub-section (1) of section 143, where the assessee objects to the making of adjustments, or any order of assessment under sub-section (3) of section 143 or section 144, where the assessee objects to the amount of income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed; (b) an order of assessment, reassessment or recomputation under section 147; (c) an order being an intimation under sub-section (1) of section 200A; (d) an order under section 201; (e) an order being an intimation under sub-section (6A) of section 206C; (f) an order under sub-section (1) of section of section 206CB; (g) an order imposing a penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply to any case or any class of cases. It is also proposed to insert an Explanation to the proposed section defines "status" to mean the category under which the assessee is assessed as "individual", "Hindu undivided family" and so on. These amendments will take effect from 1st April, 2023. Clause 99 of the Bill seeks to amend section 249 of the Income-tax Act relating to form of appeal and limitation. It is proposed to amend sub-section (1) of said section to insert Joint Commissioner (Appeals) within the ambit of the said section. It is further proposed to amend sub-section (3) and proviso to sub-section (4) of said section to insert Joint Commissioner (Appeals) in the said sub-sections. These amendments will take effect from 1st April, 2023. Clause 100 of the Bill seeks to amend section 250 of the Income-tax Act relating to procedure in appeal. It is proposed to amend the said section to make the provisions therein applicable to the Joint Commissioner (Appeals) by inserting a reference to the Joint Commissioner (Appeals) wherever the term the Commissioner (Appeals) occurs. It is further proposed to substitute sub-section (6A) of the said section so as to provide that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also be appealable to the Appellate Tribunal. It is proposed to amend sub-section (1) of the said section by inserting a new sub-clause (aa) so as to provide that an order passed by a Joint Commissioner (Appeals) under section 154, section 250, section 270A, section 271, section 271A, section 271AAC, section 271AAD or section 271J shall be appealable before the Appellate Tribunal. It is further proposed to amend clause (c) of the said sub-section to provide that an order passed under section 263 by a Principal Chief Commissioner or Chief Commissioner or an order passed under section 154 amending any such order shall also be appealable to the Appellate Tribunal. It is also proposed to amend sub-section (2) of the said section to make the provisions therein applicable to the Joint Commissioner (Appeals) by substituting "Commissioner (Appeals)" with "Joint Commissioner (Appeals) or Commissioner (Appeals)". It is also proposed to amend sub-section (4) of the said section to enable filing of memorandum of cross-objections in all classes of cases against which appeal can be made to the Appellate Tribunal. These amendments will take effect from 1st April, 2023. Clause 103 of the Bil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said section so as to provide that "co-operative bank", "primary agricultural credit society" and "primary co-operative agricultural and rural development bank" shall have the meanings respectively assigned to them in Explanation to sub-section (4) of section 80P. This amendment will take effect from 1st April, 2023. Clause 107 of the Bill seeks to amend section 270A of the Income-tax Act relating to penalty for under-reporting and misreporting of income. It is proposed to consequentially amend the said section to substitute the expression "the Commissioner (Appeals)" with "the Joint Commissioner (Appeals) or the Commissioner (Appeals)". This amendment will take effect from 1st April, 2023. Clause 108 of the Bill seeks to amend section 270AA of the Income-tax Act relating to immunity from imposition of penalty, etc. It is proposed to consequentially amend sub-section (6) of the said section by giving reference to the appeal filed under section 246 before the Joint Commissioner (Appeals) to make it applicable under the provisions of the said sub-section. This amendment will take effect from 1st April, 2023. Clause 109 of the Bill seeks to amend section 271 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsection (1) of section 194R and the proviso to sub-section (1) of section 194S therein. This amendment will take effect from 1st April, 2023. Clause 114 of the Bill seeks to amend the section 271FAA of the Income-tax Act relating to penalty for furnishing inaccurate statement of financial transaction or reportable account. The said section provides for imposition of penalty of fifty thousand rupees on a person for furnishing inaccurate information in the statement of financial transaction or reportable account. It is proposed to amend the said section to provide that the income-tax authority imposing penalty under the said section shall be the same as the income tax authority prescribed under sub-section (1) of section 285BA. It is further proposed to insert a new sub-section (2) in the said section to provide that where in the case of a person, referred to in clause (k) of sub-section (1) of section 285BA, who is required to furnish a statement under that section (herein referred to as reporting financial institution) provides inaccurate information in the statement and the inaccuracy in such statement is due to false or inaccurate information furnished by the holder or hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Bill seeks to amend the section 276B of the Income-tax Act relating to failure to pay tax to the credit of Central Government under Chapter XII-D or XVII-B. It is proposed to amend clause (a) of the said section so as to make it applicable if a person fails to pay to the credit of the Central Government the tax deducted at source by him as required by or under the provisions of Chapter XVII-B. It is further proposed to substitute clause (b) of the said section to provide that failure to pay tax or ensure payment of tax, to the credit of the Central Government as required by or under sub-section (2) of section 115-O, the proviso to section 194B, the first proviso to sub-section (1) of section 194R or the proviso to sub-section (1) of section 194S shall be eligible for initiating proceedings under the section. These amendments will take effect from 1st April, 2023. It is also proposed to provide in the said clause that failure to pay tax or ensure payment of tax, to the credit of Central Government as required under sub-section (2) of section 194BA shall be eligible for initiating proceedings under that section. This amendment will take effect from 1st July, 2023. Clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions 8B, 9, 9A and 9B of the said Act. Clause 126 seeks to amend the First Schedule to the Customs Tariff Act, in the manner specified in-- (a) the Second Schedule so as to revise the rates in respect of certain tariff items with effect from the 2nd day of February, 2023; (b) the Third Schedule with a view to revise the rates in respect of certain tariff items, with effect from the date on which the Finance Bill, 2023 receives the assent of the President. (c) the Fourth Schedule so as to revise the entries in respect of certain tariff items with effect from 1st May,2023. Clause 127 seeks to amend the Second Schedule to the Customs Tariff Act so as to revise the entries in respect of certain tariff items in the manner specified in the Fifth Schedule with effect from 1st May, 2023. Central Goods and Services Tax Clause 128 of the Bill seeks to amend clause (d) of sub-section (2) and clause (c) of sub-section (2A) in section 10 of the Central Goods and Services Tax Act so as to remove the restriction imposed on registered persons engaged in supplying goods through electronic commerce operators from opting to pay tax under the composition levy. Clause 129 of the Bill seeks t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imit of three years upto which the annual return under sub-section (1) of the said section for a financial year can be furnished by a registered person. It further seeks to empower the Government, on the recommendation of the Council, to extend by notification, the said time limit for a registered person or a class of registered persons, subject to certain conditions and restrictions. Clause 135 of the Bill seeks to insert a new sub-section (15) in section 52 of the Central Goods and Services Tax Act so as to provide a time limit of three years upto which the statement under sub-section (4) of the said section for a month can be furnished by an electronic commerce operator. It further seeks to empower the Government, on the recommendation of the Council, to extend by notification, the said time limit for an operator or a class of operators, subject to certain conditions and restrictions. Clause 136 of the Bill seeks to amend sub-section (6) of section 54 of the Central Goods and Services Tax Act by removing reference to the provisionally accepted input tax credit so as to align the same with the present scheme of availment of self-assessed input tax credit as per sub-section (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 2 of the Integrated Goods and Services Tax Act, by omitting certain words therein, so as to restrict the meaning of the term "non-taxable online recipient" to mean any unregistered person receiving online information and database access or retrieval services located in the taxable territory. It further seeks to clarify that the persons registered solely in terms of clause (vi) of section 24 of the Central Goods and Services Tax Act shall be treated as unregistered person for the purpose of the said clause. It also proposes to amend clause (17) of the said section by removing certain words therein so as to remove the condition of "essentially automated" and "involving minimal human intervention" from the said definition. Clause 144 of the Bill seeks to omit the proviso to sub-section (8) of section 12 of the Integrated Goods and Services Tax Act so as to remove the confusion regarding availment of input tax credit and other matters. Miscellaneous Clauses 145 and 146 seek to amend the Government Savings Promotion Act, 1873. It is proposed to substitute sub-section (4) of section 4A of the said Act to make a provision for payment of eligible balance to the legal heir in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved party does not ordinarily reside or carry on business or personally work for gain within the jurisdiction of any High Court; and where the Government being the aggrieved party, any of the respondents do not ordinarily reside or carry on business or personally work for gain within the jurisdiction of any High Court, the High Court shall be the High Court within the jurisdiction of which, the office of the Initiating Officer is located. It is further proposed to amend sub-sections (1) and (1A) of section 46 to provide that the aggrieved persons including the Initiating Officer shall file appeal against the order of the Adjudicating Authority within a period of forty-five days from the date on which the order was received by the Initiating Officer or by such person, instead of forty-five days from the date of the order. These amendments will take effect from 1st April, 2023. Clause 153 seeks to amend the Seventh Schedule to the Finance Act, 2001, in the manner specified in the Sixth Schedule so as to revise the rates in respect of certain tariff items with effect from the 2nd February, 2023. Clause 154 seeks to amend the Unit Trust of India (Transfer of Undertaking and Repeal) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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