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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 ..... y payment by a company on purchase of its own shares from a shareholder in accordance with the provisions of section 68 of the Companies Act, 2013. These amendments will take effect from 1st October, 2024. Clause (42A) of the said section provides that short-term capital asset means a capital asset held by an assessee for not more than thirty-six months immediately preceding the date of its transfer, provided that in the case of a security (other than a unit) listed in a recognized stock exchange in India or a unit of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963) or a unit of an equity oriented fund or a zero coupon bond or in case of a share of a company (not being a share listed in a recognised stock exchange) or a unit of a Mutual Fund specified under clause (23D) of section 10, which is transferred during the period beginning on the 1st day of April, 2014 and ending on the 10th day of July, 2014, the period of holding for the purposes of this clause would be twelve months. The clause also provides that in the case of a share of a company, not being a share listed in a recognised stock exchange in India, or an immovable property, being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovides the meaning of the expressions specified company , holding company and subsidiary company . These amendments will take effect from 1st April, 2025 and will, accordingly, apply in relation to the assessment year 2025-2026 and subsequent years. Clause (23C) of said section provides exemption to the income of certain entities. Sub-clauses (iv), (v), (vi) and (via) of clause (23C) of the 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. First proviso to clause (23C), inter alia, provides that exemption to the fund or trust or institution or university or other educational institution or hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), under the respective sub-clauses, shall not be available to it unless such fund or trust or institution or university or other educational institution or hospital or other medical institution makes an application in the prescribed for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amend item (II) of sub-clause (A) of clause (b) of the Explanation to the said clause (23FB) to expand the scope of venture capital fund to include the venture capital fund referred to in sub-regulation (2) of regulation 18 of the International Financial Services Centres Authority (Fund Management) Regulations, 2022 made under the International Financial Services Centres Authority Act, 2019. It is also proposed to insert sub-item (iv) in the said item (II) to provide for any other condition as may be provided by rules. These amendments will take effect from 1st April, 2025 and will, accordingly, apply in relation to the assessment year 2025-2026 and subsequent years. Clause (34) of the said section provides exemption to any income arising to an assessee, being a shareholder, on account of buy back of shares by the company as referred to in section 115QA. It is also proposed to insert a new proviso to clause (34) of the said section so as to provide that this clause shall not apply with respect to any buy back of shares by a company on or after the 1st day of October, 2024. This amendment will take effect from 1st October, 2024. Clause (50) of the said section provides exemption to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar for which the exemption is claimed under clause (46B) of section 10. Second proviso to sub-section (7) of the said section provides that the trust or institution, whose registration has become inoperative under the first proviso, may apply to get its registration operative under section 12AA or section 12AB subject to the condition that on doing so, the approval under clause (23C) of section 10 or notification under clause (23EC) or clause (46) or clause (46A) of section 10, as the case may be, to such trust or institution shall cease to have any effect from the date on which the said registration becomes operative and thereafter, it shall not be entitled to exemption under the respective clauses. It is proposed to amend the said second proviso so as to provide that the trust or institution, whose registration has become inoperative under the first proviso, may apply to get its registration operative under section 12AA or section 12AB subject to the condition that on doing so, the approval under clause (23C) of section 10 or notification under clause (23EA) or clause (23EC) or clause (23ED) or clause (46) or clause (46A) of the said section, as the case may be, to such trust or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application, condone such delay and such application shall be deemed to have been filed within time. These amendments will take effect from 1st October, 2024. Clause 7 of the Bill seeks to amend section 12AB of the Income-tax Act relating to procedure for fresh registration. Sub-section (3) of the said section provides that the order under clause (a), sub-clause (ii) of clause (b) and clause (c), of sub-section (1) shall be passed, in such form and manner as may be provided by rules, before expiry of the period of three months, six months and one month, respectively, calculated from the end of the month in which the application was received. It is proposed to amend sub-section (3) of the said section so as to provide that the order under sub-clause (ii) of clause (b) of sub-section (1) shall be passed, in such form and manner as may be provided by rules, before expiry of the period of six months from the end of the quarter in which the application was received. This amendment will take effect from 1st October, 2024. Clause 8 of the Bill seeks to insert a new section 12AC of the Income-tax Act relating to merger of charitable trusts or institutions in certain cases. The proposed new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BAC, the provisions of clause (ia) of section 16 shall have effect as if for the words fifty thousand rupees , the words seventy-five thousand rupees had been substituted. This amendment will take effect from 1st April, 2025, and will accordingly apply to assessment year 2025-2026 and subsequent years. Clause 11 of the Bill seeks to amend section 28 of the Income-tax Act relating to profits and gains of business or profession. The said section provides various types of income that shall be chargeable to income-tax under the head Profits and gains of business or profession . It is proposed to amend the said section and insert a new Explanation so as to provide that any income from letting out of a residential house or a part of the house by the owner, shall not be chargeable under the head Profits and gains of business or profession and shall be chargeable to tax under the head Income from house property . This amendment will take effect from 1st April, 2025 and will, accordingly, apply in relation to the assessment year 2025-2026 and subsequent years. Clause 12 of the Bill seeks to amend section 36 of the Income-tax Act relating to other deductions. Sub-section (1) of said section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to any working partner above certain threshold limits. It is proposed to amend item (a) of sub-clause (v) of clause (b) of the said section 40 so as to increase the limit of remuneration to working partners, which is allowable as deduction such that on the first Rs 6,00,000 of the book-profit or in case of a loss, the limit of remuneration is increased to Rs 3,00,000 or at the rate of 90 per cent. of the book-profit, whichever is more. This amendment will take effect from 1st April, 2025 and will, accordingly, apply in relation to the assessment year 2025-2026 and subsequent years. Clause 15 of the Bill seeks to amend section 43D of the Income-tax Act relating to special provision in case of income of public financial institutions, public companies, etc. The said section provides that the income by way of interest credited 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 the profit and loss account or, as the case may be, in which it is actually received, whichever is earlier. It is proposed to amend the marginal heading to omit the expression public companies, and or the public company from body o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r payable to the assessee or to any person on his behalf on account of the carriage of passengers; and (ii) the amount received or deemed to be received by or on behalf of the assessee on account of the carriage of passengers. These amendments will take effect from 1st April, 2025 and will, accordingly, apply in relation to the assessment year 2025-2026 and subsequent years. Clause 18 of the Bill seeks to amend section 46A of the Income-tax Act relating to capital gains on purchase by company of its own shares or other specified securities. The said section provides that where a shareholder or a holder of other specified securities receives any consideration from any company for purchase of its own shares or other specified securities held by such shareholder or holder of other specified securities, then, subject to the provisions of section 48, the difference between the cost of acquisition and the value of consideration received by the shareholder or the holder of other specified securities, as the case may be, shall be deemed to be the capital gains arising to such shareholder or the holder of other specified securities, as the case may be, in the year in which such shares or ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pectively from 23rd July, 2024. Clause 21 of the Bill seeks to amend section 50AA of the Income-tax Act relating to Special provision for computation of capital gains in case of Market Linked Debenture. It is proposed to substitute the opening portion of the said section so as to provide that notwithstanding anything contained in clause (42A) of section 2 or section 48, where the capital asset (a) is a unit of a Specified Mutual Fund acquired on or after the 1st day of April, 2023 or a Market Linked Debenture; or (b) is an unlisted bond or an unlisted debenture which is transferred or redeemed or matures on or after the 23rd day of July, 2024; the full value of consideration received or accruing as a result of the transfer or redemption or maturity of such debenture or unit or bond as reduced by (i) the cost of acquisition of the debenture or unit or bond; and (ii) the expenditure incurred wholly and exclusively in connection with such transfer or redemption or maturity, shall be deemed to be the capital gains arising from the transfer of a short-term capital asset. This amendment will take effect retrospectively from 23rd July, 2024. Clause (ii) of the Explanation to the said sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee in consideration of share which is not listed on such exchange as on the 31st day of January, 2018 by way of transaction not regarded as transfer under section 47, as the case may be, but listed on such exchange subsequent to the date of transfer, where such transfer is in respect of sale of unlisted equity shares under an offer for sale to the public included in an initial public offer, fair market value would mean an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for the financial year 2017-2018 bears to the Cost Inflation Index for the first year in which the asset was held by the assessee or for the year beginning on the first day of April, 2001, whichever is later. This amendment will take effect retrospectively from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years. Clause 23 of the Bill seeks to amend section 56 of the Income-tax Act relating to income from other sources. The provisions of clause (viib) of sub-section (2) of the said section provides that where a company, not being a company in which the public are substantially interested, receives, in any ..... 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, 2025, and will accordingly apply to assessment year 2025-2026 and subsequent years. Clause 25 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. Sub-section (2) of the said section provides that any contribution by the Central Government or the State Government or any other employer to the account of an assessee referred to in sub-section (1), shall be allowed as a deduction to the assessee in the computation of their total income, if it does not exceed fourteen per cent. of their salary in previous year, where such contribution is made by the Central Government or the State Government and ten per cent. of salary in previous year where such contribution is made by any other employer. It is proposed to insert a proviso to sub-section (2) in the said section, to provide that where the total income of the assessee is chargeable to tax under sub-section (1A) of section 115BAC, the assessee shall be allowed as a deduction of the whole of the amount of the employer contribution as does not exceed fourteen per cent. of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the genuineness of activities and the fulfilment of all the conditions if he is not so satisfied, pass an order in writing, in this manner specified therein after affording it a reasonable opportunity of being heard. It is also proposed to amend item (B) of sub-clause (b) of clause (ii) of second proviso to the said sub-section (5) to provide that if the Principal Commissioner or Commissioner is not so satisfied, shall pass an order in writing, rejecting such application and cancelling its approval, if any, after affording it a reasonable opportunity of being heard. Third proviso to sub-section (5) of the said section provide that the order under clause (i), sub-clause (b) of clause (ii) and clause (iii) of the second proviso to the said sub-section (5) shall be passed in such form and manner as may be provided by rules, before expiry of the period of three months, six months and one month, respectively, calculated from the end of the month in which the application was received. It is also proposed to amend the third proviso to said sub-section (5) to omit that the order under sub-clause (b) of clause (ii) of the second proviso to the said sub-section (5) shall be passed in such fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... located in any International Financial Services Centre. It is further proposed to amend sub-section (5) of the said section to provide the meaning of expressions Finance Company and International Financial Services Centre These amendments will take effect from 1st April, 2025 and will, accordingly, apply in relation to the assessment year 2025-2026 and subsequent years. Clause 29 of the Bill seeks to amend section 111A of the Income-tax Act relating to tax on short-term capital gains in certain cases. The said section, inter alia, provides that where the total income of an assessee includes any income chargeable under the head Capital gains , arising from the transfer of a short-term capital asset, being an equity share in a company or a unit of an equity oriented fund or a unit of a business trust and (a) the transaction of sale of such equity share or unit is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act, 2004 comes into force; and (b) such transaction is chargeable to securities transaction tax under that Chapter, the tax payable by the assessee on the total income shall be the aggregate of (i) the amount of income-tax calculated on such short ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been his total income; and (ii) the amount of income-tax calculated on such long-term capital gains at the rate of twenty per cent.: Provided that where the total income as reduced by such long-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such long-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such long-term capital gains shall be computed at the rate of twenty per cent.; (b) in the case of a domestic company, (i) the amount of income-tax payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been its total income; and (ii) the amount of income-tax calculated on such long-term capital gains at the rate of twenty per cent.; (c) in the case of a non-resident (not being a company) or a foreign company, (i) the amount of income-tax payable on the total income as reduced by the amount of such long-term capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maximum amount which is not chargeable to income-tax, then, such long-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such long-term capital gains shall be computed at the rate as applicable in sub-clause (ii); (b) in the case of a domestic company, (i) the amount of income-tax payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been its total income; and (ii) the amount of income-tax calculated on such long-term capital gains (A) at the rate of twenty per cent. for any transfer which takes place before the 23rd day of July, 2024; and (B) at the rate of twelve and one-half per cent. for any transfer which takes place on or after the 23rd day of July, 2024 : (c) in the case of a non-resident (not being a company) or a foreign company, (i) the amount of income-tax payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been its total income; and (ii) the amount of income-tax calculated on such long-term capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduced were the total income of the assessee. It is proposed to substitute clause (i) of the said sub-section, inter alia, so as to provide that the tax payable by the assessee on the total income referred to in sub-section (1) of the section shall be the aggregate of (i) the amount of income-tax calculated on such long-term capital gains exceeding one lakh twenty-five thousand rupees- (a) on long-term capital gains at the rate of ten per cent. for any transfer which takes place before the 23rd day of July, 2024; and (b) on long-term capital gains, at the rate of twelve and one-half per cent. for any transfer which takes place on or after the 23rd day of July, 2024; Provided that the limit of one lakh twenty-five thousand rupees shall apply on aggregate of the long-term capital gains under sub-clause (a) and (b). This amendment will take effect retrospectively from 23rd July, 2024. Clause 32 of the Bill seeks to amend section 113 of the Income-tax Act relating to tax in the case of block assessment of search cases. It is proposed to amend the said section in order to provide reference of total income instead of total undisclosed income. This amendment will take effect from 1st Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf, against the initial issue of shares of an Indian company and purchased by him in foreign currency through an approved intermediary; or (ii) issued against the shares of a public sector company sold by the Government and purchased by him in foreign currency through an approved intermediary; or (iii) issued or re-issued in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf, against the existing shares of an Indian company purchased by him in foreign currency through an approved intermediary; (c) income by way of long-term capital gains arising from the transfer of bonds referred to in clause (a) or, as the case may be, Global Depository Receipts referred to in clause (b), the income-tax payable shall be the aggregate of (i) the amount of income-tax calculated on the income by way of interest or dividends, as the case may be, in respect of bonds referred to in clause (a) or Global Depository Receipts referred to in clause (b), if any, included in the total income, at the rate of ten p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income-tax with which the resident employee would have been chargeable had his total income been reduced by the amount of income referred to in clauses (a) and (b). It is proposed to substitute clause (ii) of longline of said sub-section so as to provide that the amount of income-tax calculated on the income by way of long-term capital gains referred to in clause (b), if any, included in the total income, shall be at the rate of ten per cent. for any transfer which takes place before the 23rd day of July, 2024, and at the rate of twelve and one-half per cent. for any transfer which takes place on or after the 23rd day of July, 2024. This amendment will take effect retrospectively from 23rd July, 2024. Clause 36 of the Bill seeks to amend section 115AD of the Income-tax Act relating to tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer. The said section, inter alia, provides that where the total income of a specified fund or Foreign Institutional Investor includes income by way of short-term or long-term capital gains arising from the transfer of securities (other than units referred to in section 115AB of the Act), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or association of persons (other than a co-operative society), or body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2, other than a person who has exercised an option under sub-section (6), (i) for any previous year relevant to the assessment year beginning on the 1st day of April, 2024, shall be computed at the rate of tax given in the following Table, namely: TABLE Sl. No. Total income Rate of tax (1) (2) (3) 1. Upto Rs. 3,00,000 Nil 2. From Rs. 3,00,001 to Rs. 6,00,000 5 per cent. 3. From Rs. 6,00,001 to Rs. 9,00,000 10 per cent. 4. From Rs. 9,00,001 to Rs. 12,00,000 15 per cent. 5. From Rs. 12,00,001 to Rs. 15,00,000 20 per cent. 6. Above Rs. 15,00,000 30 per cent. (ii) any previous year relevant to the assessment year beginning on or after the 1st day of April, 2025, shall be computed at the rate of tax given in the following Table, namely: TABLE Sl. No. Total income Rate of tax (1) (2) (3) 1. Upto Rs. 3,00,000 Nil 2. From Rs. 3,00,001 to Rs. 7,00,000 5 per cent. 3. From Rs. 7,00,001 to Rs. 10,00,000 10 per cent. 4. From Rs. 10,00,001 to Rs. 12,00,000 15 per cent. 5. From Rs. 12,00,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said sub-section so as to provide that the provisions of the said sub-section shall not apply in respect of any buy-back of shares, that takes place on or after the 1st day of October, 2024. This amendment will take effect from 1st October, 2024. Clause 40 of the Bill seeks to amend section 132B of the Income-tax Act relating to application of seized or requisitioned assets. The said section provides that the amount of any existing liability under the Income-tax Act, the Wealth-tax Act, 1957, the Expenditure-tax Act, 1987, the Gift-tax Act, 1958 and the Interest-tax Act, 1974, and the amount of liability determined on completion of the assessment or reassessment or recomputation and the assessment of the year relevant to the previous year in which search is initiated or requisition is made, or the amount of liability determined, etc., as given in the section may be recovered from the taxpayer out of seized or requisitioned assets under section 132 or requisitioned under section 132A. The provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 provides for taxation of undisclosed foreign income and undisclosed foreign assets and such un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from 1st October, 2024. Clause 43 of the Bill seeks to amend section 144C of the Income-tax Act, relating to reference to dispute resolution panel. It is proposed to amend sub-section (15) of the said section so as to provide that eligible assessee shall not include person referred to in sub-section (1) of section 158BA or section 158BD. It is further proposed to insert a new sub-section (16) so as to provide that the provisions of this section shall not apply to any proceedings under Chapter XIV-B. This amendment will take effect from 1st September, 2024. Clause 44 of the Bill seeks to substitute sections 148 and 148A of the Income-tax Act relating to issue of notice where income has escaped assessment and conducting inquiry, providing opportunity before issue of notice under section 148, respectively. The existing provisions of the said section, inter alia, provides that before making the assessment, reassessment or recomputation under section 147 the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed. It is proposed to substitute the said section so as to provide that if there is any information as to the escaped assessment, the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eable to tax escaping assessment for any assessment year in the case of an assessee where the Assessing Officer has received information under the scheme notified under section 135A. It also provides to insert an Explanation to explain the expression specified authority . These amendments will take effect from 1st September, 2024. Clause 45 of the Bill seeks to substitute section 149 of the Income-tax Act relating to time limit for notice. The existing provisions of the said section, inter alia, provides the time limit for the issuance of notice under section 148. It is proposed to substitute the said section to provide the time line beyond which notice under section 148 and notice to show cause under section 148A shall not be issued by the Assessing Officer in respect of income chargeable to tax, which has escaped assessment. This amendment will take effect from the 1st September, 2024. Clause 46 of the Bill seeks to substitute section 151 of the Income-tax Act relating to sanction for issue of notice. Section 151 provides the specified authority for the purpose of sanction. It is proposed to substitute the said section so as to provide that specified authority for the purposes of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 250 or section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be. It is proposed to insert the reference to section 250 in the said sub-section in order to provide the time-limit for disposal of cases which are separately proposed to be set aside by the Commissioner (Appeals). Sub-section (8) of the said section provides that order of assessment or reassessment relating to any assessment year, which stands revived under sub-section (2) of section 153A, shall be made within a period of one year from the end of the month of such revival or within the period specified in the said section or sub-section (1) of section 153B, whichever is later. It is proposed to amend the said sub-section so as to provide the timeline for passing of order in the case of revived assessment or re-assessment proceedings as a consequence of annulment of block assessments. Clause (xii) of Explanation 1 to the said section, inter alia, pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hapter. Proviso to the said sub-section provides that period for completing the assessment shall extended to three months in given cases. Sub-section (5) of said section provides that if any proceeding initiated under this Chapter or any order of assessment or reassessment made under clause (c) of sub-section (1) of section 158BC has been annulled in appeal or any other legal proceeding, then, notwithstanding anything in this Chapter or section 153, the assessment or reassessment relating to any assessment year which has abated under sub-section (2) or sub-section (3), shall revive with effect from the date of receipt of the order of such annulment by the Principal Commissioner or Commissioner: Proviso of the said sub-section provides that such revival shall cease to have effect, if such order of annulment is set aside. Sub-section (6) of said section provides that the total income of the assessment year relevant to the previous year in which the last of the authorisations for a search is executed or a requisition is made, shall be assessed separately in accordance with the other provisions of the Act. Sub-section (7) of said section provides that the total income relating to the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of sections 68, 69, 69A, 69B and 69C shall, so far as may be, apply and references to financial year in those sections shall be construed as references to the relevant previous year falling in the block period; (c) the provisions of section 92CA shall, so far as may be, apply and references to previous year in that section shall be construed as reference to the relevant previous year falling in the block period excluding the period referred to in sub-section (3). Sub-section (5) of said section provides that the tax referred to in sub-section (6) of section 158BA shall be charged on the total income determined in the manner specified in sub-section (1) as reduced by the total income referred to in clause (ii), (iii) and clause (iv) of sub-section (1). Sub-section (6) of said section provides that for the purposes of sub-section (1) and sub-section (5), if the disclosed income under clause (i) of sub-section (1) or where the income disclosed in respect of any previous year comprising the block period, or the returned income or assessed income under clause (ii) or clause (iii) of the sub-section (1), or where the income as determined under clause (iv), is a loss, it shall be ign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 132A shall be dealt with in accordance with the provisions of section 132B. Sub-section (2) of said section provides that the provisions of sub-section (1) of section 143 shall not apply to the return furnished under said section. Sub-section (3) of said section provides that the prior approval shall be required for issuance of notice. Proposed section 158BD relates to undisclosed income of any other person. The said section provides that where the Assessing Officer is satisfied that any undisclosed income belongs to or pertains to or relates to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, then, any money, bullion, jewellery or other valuable article or thing, or assets, or Explanation or books of account, other documents, or any information contained therein, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed under section 158BC against such other person and the provisions of this Chapter shall apply accordingly. Proposed sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the return of total income including undisclosed income for the block period, in respect of search initiated under section 132, or books of account, other documents or any assets requisitioned under section 132A, on or after the 1st day of September, 2024, as required by a notice under clause (a) of sub-section (1) of section 158BC, is not furnished within the time specified in such notice, or is not furnished, the assessee shall be liable to pay simple interest at the rate of one and one half per cent. of the tax on undisclosed income, determined under clause (c) of sub-section (1) of section 158BC, for every month or part of a month comprised in the period commencing on the day immediately following the expiry of the time specified in the notice, and ending on the date of completion of assessment under clause (c) of sub-section (1) of section 158BC. Sub-section (2) of said section, inter alia, provides that subject to certain conditions the Assessing Officer or the Commissioner (Appeals) in the course of any proceedings under this Chapter, may direct that the person shall pay by way of penalty a sum which shall be equal to fifty per cent. of tax so leviable in respect of the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... giving correct reference of clause or sub-section therein. Sub-section (2B) of the said section provides for consideration of income under any other head and tax, if any, deducted thereon to be taken into account for the purposes of making the deduction under sub-section (1) of the said section. It is further proposed to expand the scope of the said sub-section by substituting it so as to include any tax deducted or collected under the provisions of Part B or Part BB of this Chapter, as the case may be, to be taken into account for the purposes of making the deduction under sub-section (1). These amendments will take effect from 1st October, 2024. Clause 51 of the Bill seeks to amend section 193 of the Income-tax Act relating to interest on securities. The said section provides for deduction of income-tax at source on interest payable on securities. The proviso to said section excludes, inter alia, any interest payable on any security of the Central Government or a State Government from the requirement of deduction of tax at source. Further, the proviso to clause (iv) of the proviso to the said section provides that any interest payable on 8% Savings (Taxable) Bonds, 2003 or 7.75% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax thereon at the rate of five per cent. on the amount of income comprised therein. It is proposed to amend the said section so as to reduce the said rate of tax deduction from five per cent. to two per cent. This amendment will take effect from 1st October, 2024. Clause 55 of the Bill seeks to omit section 194F of the Income-tax Act relating to payments on account of repurchase of units by Mutual Fund or Unit Trust of India. The said section provides that the person responsible for paying to any person any amount referred to in sub-section (2) of section 80CCB shall, at the time of payment thereof, deduct income-tax thereon at the rate of twenty per cent. It is proposed to omit the said section 194F. This amendment will take effect from 1st October, 2024. Clause 56 of the Bill seeks to amend section 194G of the Income-tax Act relating to commission etc. on sale of lottery tickets. The said section provides that any person who is responsible for paying, on or after the 1st day of October, 1991 to any person, who is or has been stocking, distributing, purchasing or selling lottery tickets, any income by way of commission, remuneration or prize (by whatever name called) on such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he consideration shall be the aggregate of the amounts paid or payable by all the transferees to the transferor or all the transferors for transfer of such immovable property. This amendment will take effect from 1st October, 2024. Clause 59 of the Bill seeks to amend section 194-IB of the Income-tax Act relating to payment of rent by certain individuals or Hindu undivided family. Sub-section (1) of the said section provides that any person, being an individual or a Hindu undivided family (other than those referred to in the second proviso to section 194-I), responsible for paying to a resident any income by way of rent exceeding fifty thousand rupees for a month or part of a month during the previous year, shall deduct an amount equal to five per cent. of such income as income-tax thereon. It is proposed to amend the said sub-section so as to reduce the said rate of tax deduction from five per cent. to two per cent. This amendment will take effect from 1st October, 2024. Clause 60 of the Bill seeks to amend section 194M of the Income-tax Act relating to payment of certain sums by certain individuals or Hindu undivided family. Sub-section (1) of the said section provides that any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of payment thereof, whichever is earlier, deduct income-tax thereon at the rate of ten per cent. Sub-section (2) of the said section provides that no deduction shall be made under sub-section (1) where such sum or, the aggregate of such sums credited or paid or likely to be credited or paid to the partner of the firm does not exceed twenty thousand rupees during the financial year. This amendment will take effect from 1st April, 2025. Clause 63 of the Bill seeks to amend section 196B of the Income-tax Act relating to Income from units. The said section provides that where any income in respect of units referred to in section 115AB or by way of long-term capital gains arising from the transfer of such units is payable to an Offshore Fund, the person responsible for making the payment shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of ten per cent. It is proposed to amend the said section so as to provide that where any income in respect of units referred to in section 115AB or by way of long-term c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lobal Depository Receipts referred to in section 115AC which takes place before the 23rd day of July, 2024; (c) twelve and one-half per cent. in respect of long-term capital gains arising from transfer of such bond or Global Depository Receipts referred to in section 115AC which takes place on or after the 23rd day of July, 2024. This amendment will take effect retrospectively from 23rd July, 2024. Clause 65 of the Bill seeks to amend section 197 of the Income-tax Act relating to certificate for deduction at lower rate. Sub-section (1) of the said section provides that where, in the case of any income of any person or sum payable to any person, income-tax is required to be deducted at the time of credit or, as the case may be, at the time of payment at the rates in force under the provisions of sections 192, 193, 194, 194A, 194C, 194D, 194G, 194H, 194-I, 194J, 194K, 194LA, 194LBA, 194LBB, 194LBC, 194M, 194-O and 195, the Assessing Officer is satisfied that the total income of the recipient justifies the deduction of income-tax at any lower rates or no deduction of income-tax, as the case may be, the Assessing Officer shall, on an application made by the assessee in this behalf, giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 200 shall be processed. It is proposed to amend the marginal heading to insert the words and other statements . It is proposed to insert a new sub-section (3) in the said section to provide that the Board may make a scheme for processing of statements which have been made by any other person, not being a deductor. These amendments will take effect from 1st April, 2025. Clause 69 of the Bill seeks to amend section 201 of the Income-tax Act, relating to consequences of failure to deduct or pay. Sub-section (3) of said section provides time limits for when order under sub-section (1) of the said section deeming a person to be an assessee in default can be made in respect of failure to deduct the whole or any part of the tax from a person resident in India. It is further proposed to amend sub-section (3) of the said section so as to provide that no order shall be made under sub-section (1) deeming a person to be an assessee in default for failure to deduct the whole or any part of the tax from any person after the expiry of six years from the end of the financial year, in which payment is made or credit is given or two years from the end of the financial year in which the correction s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one per cent. to one and one-half per cent. if the person responsible for collecting tax, after collecting the tax fails to pay it as required under this section. It is also proposed to insert a new sub-section (7A) to the said section so as to provide that no order shall be made under sub-section (6A) deeming a person to be an assessee in default for failure to collect the whole or any part of the tax from any person, at any time after the expiry of six years from the end of the financial year in which tax was collectible or two years from the end of the financial year in which the correction statement is delivered under sub-section (3B), whichever is later. These amendments will take effect from 1st April, 2025. Sub-section (9) of the said section provides that where the Assessing Officer is satisfied that the total income of the buyer or licensee or lessee justifies the collection of the tax at any lower rate than the relevant rate specified in sub-section (1) or sub-section (1C), the Assessing Officer shall, on an application made by the buyer or licensee or lessee in this behalf, give to him a certificate for collection of tax at such lower rate than the relevant rate specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment is made, shall be excluded. It is proposed to amend the said proviso to substitute the words on which such assessment or reassessment is made with the words upto which such refund is withheld . This amendment will take effect from 1st October, 2024. Clause 73 of the Bill seeks to amend section 245 of the Income-tax Act relating to set off and withholding of refunds in certain cases. Sub-section (2) of the said section provides that where a part of the refund is set off under the provisions of sub-section (1), or where no such amount is set off, and refund becomes due to a person and the Assessing Officer, having regard to the fact that proceedings for assessment or reassessment are pending in the case of such person, is of the opinion that the grant of refund is likely to adversely affect the revenue, he may, for reasons to be recorded in writing and with the previous approval of the Principal Commissioner or the Commissioner, withhold the refund up to the date on which such assessment or reassessment is made . Thus, the said sub-section, inter alia, requires the Assessing Officer to form an opinion for withholding the refund that the grant of refund is likely to adversely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (1) of section 158BC in respect of search initiated under section 132, or books of account, other documents or any assets requisitioned under section 132A may be appealable under that section. This amendment will take effect from 1st September, 2024. Clause 77 of the Bill seeks to amend section 251 of the Income-tax Act relating to powers of the Joint Commissioner (Appeals) or the Commissioner (Appeals). Sub-section (1) of the said section provides that Commissioner (Appeals) shall have, inter alia, the powers to confirm, reduce, enhance or annul the assessment, in the case of an appeal against an order of assessment; or confirm, cancel, or vary to enhance or reduce, the penalty order, in the case of an appeal against an order imposing a penalty while disposing of such appeal. It is proposed to amend the said sub-section by inserting a proviso in clause (a) of subsection (1) thereof to provide that where an appeal is against an order of assessment under section 144, the Commissioner (Appeals) shall have the power to set aside such assessment made under section 144, and refer the case back to the Assessing Officer for making a fresh assessment. This amendment will take effect from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l pay, by way of penalty, a sum of fifty thousand rupees. This amendment will take effect from 1st October, 2024. Clause 80 of the Bill seeks to insert a new section 271GC in the Income-tax Act relating to penalty for failure to submit statement under section 285. It is proposed to insert the said section so as to provide that if any person who is required to furnish statement under section 285, fails to do so within the period prescribed under that section, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of one thousand rupees for every day for which the failure continues, if the period of failure does not exceed three months or one lakh rupees in any other case. This amendment will take effect from 1st April, 2025. Clause 81 of the Bill seeks to amend section 271H of the Income-tax Act, relating to penalty for failure to furnish statements, etc. Sub-section (1) of the said section provides for penalty for failure to deliver or cause to be delivered statements referred to in sub-section (3) of section 200 (relating to tax deducted at source) or proviso to sub-section (3) of section 206C (relating to tax collected at source) or furnishing of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine. It is proposed to insert a proviso to the said section so as to provide that the provisions of this section shall not apply if the payment referred to in clause (a) has been made to the credit of the Central Government at any time on or before the time prescribed for filing the statement under sub-section (3) of section 200. This amendment will take effect from 1st October, 2024. Clause 85 of the Bill seeks to amend section 276CCC of the Income-tax Act relating to failure to furnish return of income in search cases. It is proposed to amend said section in order to provide reference of clause (a) of subsection (1) of section 158BC therein. This amendment will take effect from 1st September, 2024. Clause 86 of the Bill seeks to amend section 285 of the Income-tax Act relating to submission of statement by a non-resident having liaison office. The said section provides that ever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax arrear; (e) the provisions relating to immunity from initiation of proceedings in respect of offence and imposition of penalty in certain cases; (f) the provisions of no refund of amount paid under the Scheme; (g) the provisions relating to benefit, concession or immunity not to apply in other proceedings; (h) the provisions relating to the Scheme not being applicable in certain cases; (i) the provisions relating to the power of the Central Board of Direct Taxes to issue directions; (j) the provisions relating to the power of the Central Government to remove difficulties in giving effect to the provisions of the said Scheme, 2024; and (k) the provisions relating to the power of the Central Government to make rules for carrying out the provisions of this Scheme. This Chapter will take effect from such date as the Central Government may notify. Customs Clause 100 of the Bill seeks to amend section 28DA of the Customs Act, so as to enable the acceptance of different types of proof of origin provided in trade agreements to align the said provision with new trade agreements which provide for self-certification. Clause 101 of the Bill seeks to insert a proviso in sub-section (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Act, vide number G.S.R.163(E), dated 17th March, 2012, retrospectively, with effect from 29th June, 2017 in the manner specified in the Fifth Schedule with respect to time frame provided for submission of final mega power project certificates. Clause 109 of the Bill seeks to amend the notification issued under sub-section (1) of section 5A of the Central Excise Act, vide number G.S.R.794(E), dated 30th June, 2017, in the manner specified in the Sixth Schedule so as to provide retrospective exemption from Clean Environment Cess on excisable goods lying in stock as on 30th June, 2017, on which Goods and Service Tax compensation cess is payable at the time of supply of such excisable goods on or after 1st July, 2017. Central Goods and Services Tax Clause 110 of the Bill seeks to amend sub-section (1) of section 9 of the Central Goods and Services Tax Act, so as to not to levy central tax on un-denatured extra neutral alcohol or rectified spirit used for manufacture of alcoholic liquor for human consumption. Clause 111 of the Bill seeks to make consequential amendments in sub-section (5) of section 10 of the Central Goods and Services Tax Act, so as to incorporate a refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in section 21 of the Central Goods and Services Tax Act, so as to incorporate a reference to the proposed new section 74A. Clause 117 of the Bill seeks to insert a new proviso in sub-section (2) of section 30 of the Central Goods and Services Tax Act, so as to empower the Central Government to prescribe conditions and restrictions for revocation of cancellation of registration by rules. Clause 118 of the Bill seeks to amend clause (f) of sub-section (3) of section 31 of the Central Goods and Services Tax Act, so as to empower the Central Government to prescribe the time period for issuance of invoice by the recipient in case of reverse charge mechanism supplies by rules. It also proposes to insert an Explanation in sub-section (3) of the said section so as to specify that a supplier registered solely for the purposes of tax deduction at source under section 51 of the said Act shall not be considered as a registered person for the purpose of clause (f) of sub-section (3) of section 31 of the said Act. Clause 119 of the Bill seeks to make consequential amendment in sub-section (6) of section 35 of the Central Goods and Services Tax Act, so as to incorporate a reference to the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence to the proposed new section 74A. Clause 130 of the Bill seeks to make consequential amendments in sub-section (6) of section 66 of the Central Goods and Services Tax Act, so as to incorporate a reference to the proposed new section 74A. Clause 131 of the Bill seeks to insert a new sub-section (1A) in section 70 of the Central Goods and Services Tax Act, so as to enable an authorised representative to appear on behalf of the summoned person before the proper officer in compliance of summons issued by the said officer. Clause 132 of the Bill seeks to insert a new sub-section (12) in section 73 of the Central Goods and Services Tax Act, so as to restrict the applicability of the said section for determination of tax pertaining to the period upto Financial Year 2023-24. It also proposes to amend the marginal heading of the said section accordingly. Clause 133 of the Bill seeks to insert a new sub-section (12) in section 74 of the Central Goods and Services Tax Act, so as to restrict the applicability of the said section for determination of tax pertaining to the period upto Financial Year 2023-24. It also proposes to amend the marginal heading of the said section accordingly. Cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that shall be heard only by the Principal Bench of the Appellate Tribunal. Clause 139 of the Bill seeks to amend sub-sections (1) and (3) of section 112 of the Central Goods and Services Tax Act, so as to empower the Government to notify the date for filing appeal before the Appellate Tribunal and provide a revised time limit for filing appeals or application before the Appellate Tribunal. It is proposed to make the said amendments effective from the 1st day August, 2024. It also seeks to amend sub-section (6) of the said section so as to enable the Appellate Tribunal to admit appeals filed by the department within three months after the expiry of the specified time limit of six months. Further, it seeks to amend sub-section (8) of the said section to reduce the maximum amount of pre-deposit for filing appeals before the Appellate Tribunal from the existing twenty percent to ten percent of the tax in dispute and also reduce the maximum amount payable as pre-deposit from rupees fifty crores to rupees twenty crores in central tax. Clause 140 of the Bill seeks to amend sub-section (1B) of section 122 of the Central Goods and Services Tax Act, so as to restrict the applicability of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x liability on the entire amount of premium paid by the insured. It also proposes to provide that the services by the insurer to the re-insurer, for which the ceding commission or the reinsurance commission is deducted from reinsurance premium paid by the insurer to the reinsurer, shall be treated as neither supply of goods nor supply of services, provided that tax liability on the gross reinsurance premium inclusive of reinsurance commission or the ceding commission is paid by the reinsurer. Clause 146 of the Bill seeks to provide that no refund shall be made of all the tax paid or the input tax credit reversed, which would not have been so paid, or not reversed had the said section 114 been in force at all material times. Integrated Goods and Services Tax Clause 147 of the Bill seeks to amend sub-section (1) of section 5 of the Integrated Goods and Services Tax Act, so as to not levy integrated tax on extra neutral alcohol or rectified spirit used for manufacture of alcoholic liquor for human consumption. Clause 148 of the Bill seeks to insert a new section 6A in the Integrated Goods and Services Tax Act, so as to empower the Government to regularise non-levy or short levy of int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns Act, 1988. Sub-section (2) of section 24 of the said Act provides for any time limit for a benamidar to furnish a reply to the notice issued under sub-section (1) or the beneficial owner to file submissions on copy of said notice given to him under sub-section (2). It is proposed to insert a new sub-section (2A) in the said section so as to provide a maximum period of three months from the last day of the month in which notice is issued under sub-section (1) for the benamidar or the beneficial owner to file their explanations or submissions. Sub-section (3) and sub-section (4) of the said section provide for a time limit of ninety days from the last day of the month in which notice under sub-section (1) is issued for the Initiating Officer to provisionally attach the property or to pass an order for continuing the provisional attachment or revoking the provisional attachment or deciding not to attach the property, as the case may be. It is further proposed to amend the said sub-sections to increase the said time limit from ninety days to four months from the last day of the month in which notice under sub-section (1) is issued. Sub-section (5) of the said section allows for a ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would otherwise have been liable. These amendments will take effect from 1st October, 2024. Clause 155 of the Bill seeks to amend section 98 in Chapter VII of the Finance (No.2) Act, 2004 relating to charge of securities transaction tax. The said section, inter alia, provides that the securities transaction tax on sale of an option in securities is 0.0625 per cent. of the option premium. The section also provides that the securities transaction tax on sale of a futures in securities is 0.0125 per cent. of the price at which futures are traded. It is proposed to amend entries (a) and (c) in column (3), in serial number (4) of the Table to the said section to increase the said rates of securities transaction tax on sale of an option in securities to 0.1 per cent. of the option premium, and on sale of a futures in securities to 0.02 per cent. of the price at which such futures are traded. This amendment will take effect from 1st October, 2024. Clause 156 of the Bill seeks to amend the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Section 42 of the said Act relating to penalty for failure to furnish return in relation to foreign income and asset. ..... 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