BILL No. 55 OF 2024
THE FINANCE (NO. 2) BILL, 2024
(AS INTRODUCED IN LOK SABHA)
THE FINANCE (No. 2) BILL, 2024
_______
ARRANGEMENT OF CLAUSES
______
CHAPTER I
PRELIMINARY
CLAUSES
1. Short title and commencement.
CHAPTER II
RATES OF INCOME-TAX
2. Income-tax.
CHAPTER III
DIRECT TAXES
Income-tax
3. Amendment of section 2.
4. Amendment of section 10.
5. Amendment of section 11.
6. Amendment of section 12A.
7. Amendment of section 12AB.
8. Amendment of section 12AC.
9. Amendment of section 13.
10. Amendment of section 16.
11. Amendment of section 28.
12. Amendment of section 36.
13. Amendment of section 37.
14. Amendment of section 40.
15. Amendment of section 43D.
16. Amendment of section 44B.
17. Insertion of new section 44BBC.
18. Amendment of section 46A.
19. Amendment of section 47.
20. Amendment of section 48.
21. Amendment of section 50AA.
22. Amendment of section 55.
23. Amendment of section 56.
24. Amendment of section 57.
25. Amendment of section 80CCD.
ii
CLAUSES
26. Amendment of section 80G.
27. Amendment of section 92CA.
28. Amendment of section 94B.
29. Amendment of section 111A.
30. Amendment of section 112.
31. Amendment of section 112A.
32. Amendment of section 113.
33. Amendment of section 115AB.
34. Amendment of section 115AC.
35. Amendment of section 115ACA.
36. Amendment of section 115AD.
37. Amendment of section 115BAC.
38. Amendment of section 115E.
39. Amendment of section 115QA.
40. Amendment of section 132B.
41. Amendment of section 139.
42. Amendment of section 139AA.
43. Amendment of section 144C.
44. Substitution of new sections for sections 148 and 148A.
45. Substitution of new section for section 149.
46. Substitution of new section for section 151.
47. Amendment of section 152.
48. Amendment of section 153.
49. Substitution of new Chapter for Chapter XIV-B.
50. Amendment of section 192.
51. Amendment of section 193.
52. Amendment of section 194.
53. Amendment of section 194C.
54. Amendment of section 194DA.
55. Omission of section 194F.
56. Amendment of section 194G.
57. Amendment of section 194H.
58. Amendment of section 194-IA.
59. Amendment of section 194-IB.
60. Amendment of section 194M.
61. Amendment of section 194-O.
62. Insertion of new section 194T.
63. Amendment of section 196B.
64. Amendment of section 196C.
65. Amendment of section 197.
66. Amendment of section 198.
67. Amendment of section 200.
68. Amendment of section 200A.
69. Amendment of section 201.
70. Amendment of section 206C.
iii
CLAUSES
71. Amendment of section 230.
72. Amendment of section 244A.
73. Amendment of section 245.
74. Amendment of section 245Q.
75. Amendment of section 245R.
76. Amendment of section 246A.
77. Amendment of section 251.
78. Amendment of section 253.
79. Amendment of section 271FAA.
80. Insertion of new section 271GC.
81. Amendment of section 271H.
82. Amendment of section 273B.
83. Amendment of section 275.
84. Amendment of section 276B.
85. Amendment of section 276CCC.
86. Amendment of section 285.
87. Amendment of First Schedule.
CHAPTER IV
THE DIRECT TAX VIVAD SE VISHWAS SCHEME, 2024
88. Short title and commencement.
89. Definitions.
90. Amount payable by declarant.
91. Filing of declaration and particulars to be furnished.
92. Time and manner of payment.
93. Immunity from initiation of proceedings in respect of offence and imposition of
penalty in certain cases.
94. No refund of amount paid.
95. No benefit, concession or immunity to declarant.
96. Scheme not to apply in certain cases.
97. Power to Board to issue directions, etc.
98. Power to remove difficulties.
99. Power to make rules.
CHAPTER V
INDIRECT TAXES
Customs
100. Amendment of section 28DA.
101. Amendment of section 65.
iv
CLAUSES
102. Amendment of section 143AA.
103. Amendment of section 157.
104. Retrospective effect to notification issued under sub-section (1) of section 25 of
Customs Act, read with sub-section (12) of section 3 of Customs Tariff Act.
105. Retrospective amendment of notification issued under sub-section (1) of section 25
of Customs Act read with section 124 of Finance Act.
Customs Tariff
106. Omission of section 6.
107. Amendment of First Schedule.
Excise
108. Amendment of notification issued under section 5A of Central Excise Act
retrospectively.
109. Amendment of Notification issued under 5A of Central Excise Act.
Central Goods and Service Tax
110. Amendment of section 9.
111. Amendment of section 10.
112. Insertion of new section 11A.
113. Amendment of section 13.
114. Amendment of section 16.
115. Amendment of section 17.
116. Amendment of section 21.
117. Amendment of section 30.
118. Amendment of section 31.
119. Amendment of section 35.
120. Amendment of section 39.
121. Amendment of section 49.
122. Amendment of section 50.
123. Amendment of section 51.
124. Amendment of section 54.
125. Amendment of section 61.
126. Amendment of section 62.
127. Amendment of section 63.
128. Amendment of section 64.
129. Amendment of section 65.
130. Amendment of section 66.
131. Amendment of section 70.
132. Amendment of section 73.
v
CLAUSES
133. Amendment of section 74.
134. Insertion of new section 74A.
135. Amendment of section 75.
136. Amendment of section 104.
137. Amendment of section 107.
138. Amendment of section 109.
139. Amendment of section 112.
140. Amendment of section 122.
141. Amendment of section 127.
142. Insertion of new section 128A.
143. Amendment of section 140.
144. Amendment of section 171.
145. Amendment of Schedule III.
146. No refund of tax paid or input tax credit reversed.
Integrated Goods and Services Tax
147. Amendment of section 5.
148. Insertion of new section 6A.
149. Amendment of section 16.
150. Amendment of section 20.
Union Territory Goods and Services Tax
151. Amendment of section 7.
152. Insertion of new section 8A.
Goods and Services Tax
(Compensation to States)
153. Insertion of new section 8A.
CHAPTER VI
MISCELLANEOUS
PART I
AMENDMENT TO THE PROHIBITION OF BENAMI PROPERTY TRANSACTIONS ACT, 1988
154. Amendment of Act 45 of 1988.
vi
CLAUSES
PART II
AMENDMENT TO THE FINANCE (NO.2) ACT, 2004
155. Amendment of Act 23 of 2004.
PART III
AMENDMENT TO THE BLACK MONEY (UNDISCLOSED OF FOREIGN INCOME AND ASSETS)
AND IMPOSITION OF TAX ACT, 2015
156. Amendment of Act 22 of 2015.
PART IV
AMENDMENT TO THE FINANCE ACT, 2016
157. Amendment to the Finance Act, 2016.
THE FIRST SCHEDULE.
THE SECOND SCHEDULE.
THE THIRD SCHEDULE.
THE FOURTH SCHEDULE.
THE FIFTH SCHEDULE.
THE SIXTH SCHEDULE.
AS INTRODUCED IN LOK SABHA
ON 23RD JULY, 2024
Bill No. 55 of 2024
THE FINANCE (NO. 2) BILL, 2024
A
BILL
to give effect to the financial proposals of the Central
Government for the financial year 2024-2025.
BE it enacted by Parliament in the Seventy-fifth Year of the
Republic of India as follows:––
CHAPTER I
PRELIMINARY
Short title and
commencement.
1. (1) This Act may be called the Finance (No. 2) Act,
2024.
(2) Save as otherwise provided in this Act,––
(a) sections 2 to 87 shall be deemed to have come into
force on the 1st day of April, 2024;
(b) sections 110 to 153 shall come into force on such
date as the Central Government may, by notification in the
Official Gazette, appoint.
CHAPTER II
RATES OF INCOME-TAX
Income-tax.
2. (1) Subject to the provisions of sub-sections (2) and (3),
for the assessment year commencing on the 1st day of April,
2024, income-tax shall be charged at the rates specified in Part
I of the First Schedule and such tax shall be increased by a
surcharge, for the purposes of the Union, calculated in each case
in the manner provided therein.
2
(2) In the cases to which Paragraph A of Part I of the First
Schedule applies, or in the cases where income is chargeable to
tax under sub-section (1A) of section 115BAC of the Income-
tax Act, 1961 (hereinafter referred to as the Income-tax Act)
and, where the assessee has, in the previous year, any net
agricultural income exceeding five thousand rupees, in addition
to total income, and the total income exceeds two lakh fifty
thousand rupees, then,—
43 of 1961.
(a) the net agricultural income shall be taken into
account, in the manner provided in clause (b) (that is to say,
as if the net agricultural income were comprised in the total
income after the first two lakh fifty thousand rupees of the
total income but without being liable to tax), only for the
purpose of charging income-tax in respect of the total
income; and
(b) the income-tax chargeable shall be computed as
follows:—
(i) the total income and the net agricultural income
shall be aggregated and the amount of income-tax shall
be determined in respect of the aggregate income at the
rates specified in the said Paragraph A or sub-section
(1A) of section 115BAC, as if such aggregate income
were the total income;
(ii) the net agricultural income shall be increased by
a sum of two lakh fifty thousand rupees, and the amount
of income-tax shall be determined in respect of the net
agricultural income as so increased at the rates specified
in the said Paragraph A or sub-section (1A) of section
115BAC, as if the net agricultural income as so increased
were the total income;
(iii) the amount of income-tax determined in
accordance with sub-clause (i) shall be reduced by the
amount of income-tax determined in accordance with
sub-clause (ii) and the sum so arrived at shall be the
income-tax in respect of the total income:
Provided that in the case of every individual, being a
resident in India, who is of the age of sixty years or more but
less than eighty years at any time during the previous year,
referred to in item (II) of Paragraph A of Part I of the First
Schedule, the provisions of this sub-section shall have effect
as if for the words “two lakh fifty thousand rupees”, the
words “three lakh rupees” had been substituted:
3
Provided further that in the case of every individual,
being a resident in India, who is of the age of eighty years or
more at any time during the previous year, referred to in item
(III) of Paragraph A of Part I of the First Schedule, the
provisions of this sub-section shall have effect as if for the
words “two lakh fifty thousand rupees”, the words “five lakh
rupees” had been substituted:
Provided also that in the cases where income is
chargeable to tax under sub-section (1A) of section 115BAC
of the Income-tax Act, the provisions of this sub-section
shall have effect as if for the words “two lakh fifty thousand
rupees”, the words “three lakh rupees” had been substituted.
(3) In cases to which the provisions of Chapter XII or
Chapter XII-A or section 115JB or section 115JC or Chapter
XII-FA or Chapter XII-FB or sub-section (1A) of section 161
or section 164 or section 164A or section 167B of the Income-
tax Act apply, the tax chargeable shall be determined as
provided in that Chapter or that section, and with reference to
the rates imposed by sub-section (1) or the rates as specified in
that Chapter or section, as the case may be:
Provided that the amount of income-tax computed in
accordance with the provisions of section 111A or section 112
or section 112A of the Income-tax Act shall be increased by a
surcharge, for the purposes of the Union, as provided in
Paragraph A, B, C, D or E, as the case may be, of Part I of the
First Schedule, except in case of a domestic company whose
income is chargeable to tax under section 115BAA or section
115BAB of the Income-tax Act or in case of an individual or
Hindu undivided family or association of persons, 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 of the Income-tax Act whose income is chargeable to
tax under sub-section (1A) of section 115BAC of the Income-
tax Act, or in case of co-operative society resident in India,
whose income is chargeable to tax under section 115BAD or
under section 115BAE of the Income-tax Act:
Provided further that in respect of any income chargeable
to tax under sections 115A, 115AB, 115AC, 115ACA, 115AD,
115B, 115BA, 115BB, 115BBA, 115BBC, 115BBF, 115BBG,
115BBH, 115BBI, 115BBJ, 115E, 115JB or 115JC of the
Income-tax Act, the amount of income-tax computed under this
sub-section shall be increased by a surcharge, for the purposes
of the Union, calculated,—
(a) in the case of every individual or Hindu undivided
family or association of persons except in a case of an
4
association of persons consisting of only companies as its
members, or body of individuals, whether incorporated or
not, or every artificial juridical person referred to in sub-
clause (vii) of clause (31) of section 2 of the Income-tax Act,
not having any income under section 115AD of the Income-
tax Act, and not having any income chargeable to tax under
sub-section (1A) of section 115BAC of the Income-tax
Act,—
(i) having a total income exceeding fifty lakh rupees
but not exceeding one crore rupees, at the rate of ten per
cent. of such income-tax;
(ii) having a total income exceeding one crore rupees,
but not exceeding two crore rupees, at the rate of fifteen
per cent. of such income-tax;
(iii) having a total income exceeding two crore rupees,
but not exceeding five crore rupees, at the rate of twenty-
five per cent. of such income-tax; and
(iv) having a total income exceeding five crore rupees,
at the rate of thirty-seven per cent. of such income-tax;
(b) in the case of every individual or association of
persons, except in a case of an association of persons
consisting of only companies as its members or body of
individuals, whether incorporated or not, or every artificial
juridical person referred to in sub-clause (vii) of clause (31)
of section 2 of the Income-tax Act, having income under
section 115AD of the Income-tax Act, and not having any
income chargeable to tax under sub-section (1A) of section
115BAC of the Income-tax Act,—
(i) having a total income exceeding fifty lakh rupees
but not exceeding one crore rupees, at the rate of ten per
cent. of such income-tax;
(ii) having a total income exceeding one crore
rupees, but not exceeding two crore rupees, at the rate of
fifteen per cent. of such income-tax;
(iii) having a total income [excluding the income by
way of dividend or income of the nature referred to in
clause (b) of sub-section (1) of section 115AD of the
Income-tax Act] exceeding two crore rupees but not
exceeding five crore rupees, at the rate of twenty-five per
cent. of such income-tax;
5
(iv) having a total income [excluding the income by
way of dividend or income of the nature referred to in
clause (b) of sub-section (1) of section 115AD of the
Income-tax Act] exceeding five crore rupees, at the rate
of thirty-seven per cent. of such income-tax; and
(v) having a total income [including the income by
way of dividend or income of the nature referred to in
clause (b) of sub-section (1) of section 115AD of the
Income-tax Act] exceeding two crore rupees, but is not
covered in sub-clauses (iii) and (iv), at the rate of fifteen
per cent. of such income-tax:
Provided that in case where the total income includes
any income by way of dividend or income chargeable under
clause (b) of sub-section (1) of section 115AD of the
Income-tax Act, the rate of surcharge on the income-tax
calculated on that part of income shall not exceed fifteen per
cent.:
Provided further that where the total income of a person,
being a specified fund referred to in clause (c) of the
Explanation to clause (4D) of section 10 of the Income-tax
Act, includes any income under clause (a) of sub-section (1)
of section 115AD of the Income-tax Act, the income-tax
calculated on that part of income shall not be increased by
any surcharge;
(c) in the case of an association of persons consisting of
only companies as its members,—
(i) at the rate of ten per cent. of such income-tax,
where the total income exceeds fifty lakh rupees but does
not exceed one crore rupees;
(ii) at the rate of fifteen per cent. of such income-tax,
where the total income exceeds one crore rupees;
(d) in the case of every co-operative society except a co-
operative society whose income is chargeable to tax under
section 115BAD or section 115BAE of the Income-tax
Act,—
(i) at the rate of seven per cent. of such income-tax,
where the total income exceeds one crore rupees but
does not exceed ten crore rupees;
(ii) at the rate of twelve per cent. of such income-
tax, where the total income exceeds ten crore rupees;
6
(e) in the case of every firm or local authority, at the rate
of twelve per cent. of such income-tax, where the total
income exceeds one crore rupees;
(f) in the case of every domestic company except such
domestic company whose income is chargeable to tax under
section 115BAA or section 115BAB of the Income-tax
Act,—
(i) at the rate of seven per cent. of such income-tax,
where the total income exceeds one crore rupees but does
not exceed ten crore rupees;
(ii) at the rate of twelve per cent. of such income-tax,
where the total income exceeds ten crore rupees;
(g) in the case of every company, other than a domestic
company,—
(i) at the rate of two per cent. of such income-tax,
where the total income exceeds one crore rupees but
does not exceed ten crore rupees;
(ii) at the rate of five per cent. of such income-tax,
where the total income exceeds ten crore rupees:
Provided also that in the case of persons mentioned in (a)
and (b) above, having total income chargeable to tax under
section 115JC of the Income-tax Act, and such income
exceeds,—
(i) fifty lakh rupees but does not exceed one crore rupees,
the total amount payable as income-tax and surcharge
thereon shall not exceed the total amount payable as income-
tax on a total income of fifty lakh rupees by more than the
amount of income that exceeds fifty lakh rupees;
(ii) one crore rupees but does not exceed two crore
rupees, the total amount payable as income-tax and
surcharge thereon shall not exceed the total amount payable
as income-tax and surcharge on a total income of one crore
rupees by more than the amount of income that exceeds one
crore rupees;
(iii) two crore rupees but does not exceed five crore
rupees, the total amount payable as income-tax and
surcharge thereon shall not exceed the total amount payable
as income-tax and surcharge on a total income of two crore
rupees by more than the amount of income that exceeds two
crore rupees;
7
(iv) five crore rupees, the total amount payable as
income-tax and surcharge thereon shall not exceed the total
amount payable as income-tax and surcharge on a total
income of five crore rupees by more than the amount of
income that exceeds five crore rupees:
Provided also that in the case of association of persons
mentioned in (c) above, having total income chargeable to tax
under section 115JC of the Income-tax Act exceeds,—
(i) fifty lakh rupees but does not exceed one crore rupees,
the total amount payable as income-tax and surcharge
thereon shall not exceed the total amount payable as income-
tax on a total income of fifty lakh rupees by more than the
amount of income that exceeds fifty lakh rupees;
(ii) one crore rupees, the total amount payable as
income-tax and surcharge thereon shall not exceed the total
amount payable as income-tax and surcharge on a total
income of one crore rupees by more than the amount of
income that exceeds one crore rupees:
Provided also that in the case of a co-operative society
mentioned in (d) above, having total income chargeable to tax
under section 115JC of the Income-tax Act, and such income
exceeds,—
(i) one crore rupees but does not exceed ten crore rupees,
the total amount payable as income-tax and surcharge
thereon shall not exceed the total amount payable as income-
tax on a total income of one crore rupees by more than the
amount of income that exceeds one crore rupees;
(ii) ten crore rupees, the total amount payable as income-
tax and surcharge thereon shall not exceed the total amount
payable as income-tax and surcharge on a total income of
ten crore rupees by more than the amount of income that
exceeds ten crore rupees:
Provided also that in the case of persons mentioned in (e)
above, having total income chargeable to tax under section
115JC of the Income-tax Act, and such income exceeds one
crore rupees, the total amount payable as income-tax on such
income and surcharge thereon shall not exceed the total amount
payable as income-tax on a total income of one crore rupees by
more than the amount of income that exceeds one crore rupees:
Provided also that in the case of every company having total
income chargeable to tax under secti
on 115JB of the Income
-
8
tax Act, and such income exceeds one crore rupees but does not
exceed ten crore rupees, the total amount payable as income-
tax on such income and surcharge thereon, shall not exceed the
total amount payable as income-tax on a total income of one
crore rupees by more than the amount of income that exceeds
one crore rupees:
Provided also that in the case of every company having total
income chargeable to tax under section 115JB of the Income-
tax Act, and such income exceeds ten crore rupees, the total
amount payable as income-tax on such income and surcharge
thereon, shall not exceed the total amount payable as income-
tax and surcharge on a total income of ten crore rupees by more
than the amount of income that exceeds ten crore rupees:
Provided also that in respect of any income chargeable to tax
under clause (i) of sub-section (1) of section 115BBE of the
Income-tax Act, the amount of income-tax computed under this
sub-section shall be increased by a surcharge, for the purposes
of the Union, calculated at the rate of twenty-five per cent. of
such income-tax:
Provided also that in case of every domestic company whose
income is chargeable to tax under section 115BAA or section
115BAB of the Income-tax Act, the income-tax computed
under this sub-section shall be increased by a surcharge, for the
purposes of the Union, calculated at the rate of ten per cent. of
such income-tax:
Provided also that in respect of income chargeable to tax
under sub-section (1A) of section 115BAC of the Income-tax
Act, the income-tax computed under this sub-section shall be
increased by a surcharge, for the purposes of the Union,
calculated, in the case of an individual or Hindu undivided
family or association of persons or body of individuals, whether
incorporated or not, or every artificial juridical person referred
to in sub-clause (vii) of clause (31) of section 2 of the Income
tax Act,—
(i) having a total income (including the income by way
of dividend or income under the provisions of section 111A,
section 112 and section 112A of the Income-tax Act)
exceeding fifty lakh rupees but not exceeding one crore
rupees, at the rate of ten per cent. of such income-tax;
(ii) having a total income (including the income by way
of dividend or income under the provisions of section 111A,
section 112 and section 112A of the Income-tax Act)
exceeding one crore rupees but not exceeding two crore
rupees
, at the rate of fifteen per cent. of such income
-
tax;
9
(iii) having a total income (excluding the income by way
of dividend or income under the provisions of section 111A,
section 112 and section 112A of the Income-tax Act)
exceeding two crore rupees, at the rate of twenty-five per
cent. of such income-tax; and
(iv) having a total income (including the income by way
of dividend or income under the provisions of section 111A,
section 112 and section 112A of the Income-tax Act)
exceeding two crore rupees, but is not covered under clause
(iii) above, at the rate of fifteen per cent. of such income-tax:
Provided also that in case where the provisions of sub-
section (1A) of section 115BAC are applicable and the total
income includes any income by way of dividend or income
chargeable under section 111A, section 112 and section 112A
of the Income-tax Act, the rate of surcharge on the income-tax
in respect of that part of income shall not exceed fifteen per
cent.:
Provided also that in the case of a specified fund, referred to
in clause (c) of the Explanation to clause (4D) of section 10 of
the Income-tax Act, whose income is chargeable to tax under
sub-section (1A) of section 115BAC and where such income
includes any income under clause (a) of sub-section (1) of
section 115AD of the Income-tax Act, the income-tax
computed on that part of income shall not be increased by any
surcharge:
Provided also that in case of an association of persons
consisting of only companies as its members, and having its
income chargeable to tax under sub-section (1A) of section
115BAC, the rate of surcharge on the income-tax shall not
exceed fifteen per cent.:
Provided also that in case of every individual or Hindu
undivided family or association of persons, or body of
individuals, whether incorporated or not, or every artificial
juridical person referred to in sub-clause (vii) of clause (31) of
section 2 of the Income-tax Act, having total income
chargeable to tax under sub-section (1A) of section 115BAC of
the Income-tax Act, and such income exceeds,—
(i) fifty lakh rupees but does not exceed one crore rupees,
the total amount payable as income-tax on such income and
surcharge thereon shall not exceed the total amount payable
as income-tax on a total income of fifty lakh rupees by more
than the amount of income that exceeds fifty lakh rupees;
10
(ii) one crore rupees but does not exceed two crore
rupees, the total amount payable as income-tax on such
income and surcharge thereon shall not exceed the total
amount payable as income-tax and surcharge on a total
income of one crore rupees by more than the amount of
income that exceeds one crore rupees;
(iii) two crore rupees, the total amount payable as
income-tax on such income and surcharge thereon shall not
exceed the total amount payable as income-tax and
surcharge on a total income of two crore rupees by more than
the amount of income that exceeds two crore rupees:
Provided also that in case of every co-operative society
resident in India, whose income is chargeable to tax under
section 115BAD or section 115BAE of the Income-tax Act, the
income-tax computed under this sub-section shall be increased
by a surcharge, for the purposes of the Union, calculated at the
rate of ten per cent. of such income-tax.
(4) In cases in which tax has to be charged and paid under
sub-section (2A) of section 92CE or section 115QA or section
115TD of the Income-tax Act, the tax shall be charged and paid
at the rates as specified in those sections and shall be increased
by a surcharge, for the purposes of the Union, calculated at the
rate of twelve per cent. of such tax.
(5) In cases in which tax has to be deducted under sections
193, 194A, 194B, 194BA, 194BB, 194D, 194LBA, 194LBB,
194LBC and 195 of the Income-tax Act, at the rates in force,
the deductions shall be made at the rates specified in Part II of
the First Schedule and shall be increased by a surcharge, for the
purposes of the Union, calculated in cases wherever prescribed,
in the manner provided therein.
(6) In cases in which tax has to be deducted under sections
192A, 194, 194C, 194DA, 194E, 194EE, 194F, 194G, 194H,
194-I, 194-IA, 194-IB, 194-IC, 194J, 194LA, 194LB, 194LBA,
194LBB, 194LBC, 194LC, 194LD, 194K, 194M, 194N, 194-
O, 194Q, 194R, 194S, 196A, 196B, 196C and 196D of the
Income-tax Act, the deductions shall be made at the rates
specified in those sections and shall be increased by a
surcharge, for the purposes of the Union,—
(a) in the case of every individual or Hindu undivided
family or association of persons, except in case of an
association of persons consisting of only companies as its
members, or body of individuals, whether incorporated or
not, or every artificial juridical person referred to in sub-
clause (
vii
) of clause (
31
) of section 2 of the Income
-
t
ax Act,
11
being a non-resident except in case of deduction on income
by way of dividend under section 196D of the Income-tax
Act, calculated,—
(i) at the rate of ten per cent. of such tax, where the
income or the aggregate of such incomes paid or likely
to be paid and subject to the deduction exceeds fifty lakh
rupees but does not exceed one crore rupees;
(ii) at the rate of fifteen per cent. of such tax, where
the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
one crore rupees but does not exceed two crore rupees;
(iii) at the rate of twenty-five per cent. of such tax,
where the income or the aggregate of such incomes paid
or likely to be paid and subject to the deduction exceeds
two crore rupees but does not exceed five crore rupees;
(iv) at the rate of thirty-seven per cent. of such tax,
where the income or the aggregate of such incomes paid
or likely to be paid and subject to the deduction exceeds
five crore rupees:
Provided that where the income of such person is
chargeable to tax under sub-section (1A) of section 115BAC
of the Income-tax Act, the rate of surcharge shall not exceed
twenty-five per cent.;
(b) in the case of every individual or Hindu undivided
family or association of persons except in case of association
of persons consisting of only companies as its members, or
body of individuals, whether incorporated or not, or every
artificial juridical person referred to in sub-clause (vii) of
clause (31) of section 2 of the Income-tax Act, being a non-
resident, in case of deduction on income by way of dividend
under section 196D of the Act, calculated,—
(i) at the rate of ten per cent. of such tax, where the
income or the aggregate of such incomes paid or likely
to be paid and subject to the deduction exceeds fifty lakh
rupees but does not exceed one crore rupees;
(ii) at the rate of fifteen per cent. of such tax, where
the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
one crore rupees;
12
(c) in the case of an association of persons being a non-
resident, and consisting of only companies as its members,
calculated,—
(i) at the rate of ten per cent. of such tax, where the
income or the aggregate of such incomes paid or likely
to be paid and subject to the deduction exceeds fifty lakh
rupees but does not exceed one crore rupees;
(ii) at the rate of fifteen per cent. of such tax, where
the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
one crore rupees;
(d) in the case of every co-operative society, being a non-
resident, calculated,––
(i) at the rate of seven per cent. of such tax, where
the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
one crore rupees but does not exceed ten crore rupees;
(ii) at the rate of twelve per cent. of such tax, where
the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds ten
crore rupees;
(e) in the case of every firm, being a non-resident,
calculated at the rate of twelve per cent. of such tax, where
the income or the aggregate of such incomes paid or likely
to be paid and subject to the deduction exceeds one crore
rupees;
(f) in the case of every company, other than a domestic
company, calculated,—
(i) at the rate of two per cent. of such tax, where the
income or the aggregate of such incomes paid or likely
to be paid and subject to the deduction exceeds one crore
rupees but does not exceed ten crore rupees;
(ii) at the rate of five per cent. of such tax, where the
income or the aggregate of such incomes paid or likely
to be paid and subject to the deduction exceeds ten crore
rupees.
(7) In cases in which tax has to be collected under the
proviso to section 194B of the Income-tax Act, the collection
shall be made at the rates specified in Part II of the First
Schedule,
and shall be increased by a surcharge, for the
13
purposes of the Union, calculated, in cases wherever
prescribed, in the manner provided therein.
(8) In cases in which tax has to be collected under section
206C of the Income-tax Act, the collection shall be made at the
rates specified in that section and shall be increased by a
surcharge, for the purposes of the Union,—
(a) in the case of every individual or Hindu undivided
family or association of persons, except in case of an
association of persons consisting of only companies as its
members, or body of individuals, whether incorporated or
not, or every artificial juridical person referred to in sub-
clause (vii) of clause (31) of section 2 of the Income-tax Act,
being a non-resident, calculated,—
(i) at the rate of ten per cent. of such tax, where the
amount or the aggregate of such amounts collected or
likely to be collected and subject to the collection
exceeds fifty lakh rupees but does not exceed one crore
rupees;
(ii) at the rate of fifteen per cent. of such tax, where
the amount or the aggregate of such amounts collected
or likely to be collected and subject to the collection
exceeds one crore rupees but does not exceed two crore
rupees;
(iii) at the rate of twenty-five per cent. of such tax,
where the amount or the aggregate of such amounts
collected or likely to be collected and subject to the
collection exceeds two crore rupees but does not exceed
five crore rupees;
(iv) at the rate of thirty-seven per cent. of such tax,
where the amount or the aggregate of such amounts
collected or likely to be collected and subject to the
collection exceeds five crore rupees:
Provided that where the income of such person is
chargeable to tax under sub-section (1A) of section 115BAC
of the Income-tax Act, the rate of surcharge shall not exceed
twenty-five per cent.;
(b) in the case of an association of persons, being a non-
resident, and consisting of only companies as its members,
calculated,—
(i) at the rate of ten per cent. of such tax, where the
amount or the aggregate of such amounts collected or
14
likely to be collected and subject to the collection
exceeds fifty lakh rupees but does not exceed one crore
rupees;
(ii) at the rate of fifteen per cent. of such tax, where
the amount or the aggregate of such amounts collected
or likely to be collected and subject to the collection
exceeds one crore rupees;
(c) in the case of every co-operative society, being a non-
resident, calculated,––
(i) at the rate of seven per cent. of such tax, where
the amount or the aggregate of such amounts collected
or likely to be collected and subject to the collection
exceeds one crore rupees but does not exceed ten crore
rupees;
(ii) at the rate of twelve per cent. of such tax, where
the amount or the aggregate of such amounts collected
or likely to be collected and subject to the collection
exceeds ten crore rupees;
(d) in the case of every firm, being a non-resident,
calculated at the rate of twelve per cent. of such tax, where
the amount or the aggregate of such amounts collected or
likely to be collected and subject to the collection exceeds
one crore rupees;
(e) in the case of every company, other than a domestic
company, calculated,—
(i) at the rate of two per cent. of such tax, where the
amount or the aggregate of such amounts collected or
likely to be collected and subject to the collection
exceeds one crore rupees but does not exceed ten crore
rupees;
(ii) at the rate of five per cent. of such tax, where the
amount or the aggregate of such amounts collected or
likely to be collected and subject to the collection
exceeds ten crore rupees.
(9) Subject to the provisions of sub-section (10), in cases in
which income-tax has to be charged under sub-section (4) of
section 172 or sub-section (2) of section 174 or section 174A or
section 175 or sub-section (2) of section 176 of the Income-tax
Act or deducted from, or paid on, income chargeable under the
head “Salaries” under section 192 of the said Act or deducted
under section 194P of the said Act or in which the “advance
15
tax” payable under Chapter XVII-C of the said Act has to be
computed at the rate or rates in force, such income-tax or, as the
case may be, “advance tax” shall be charged, deducted or
computed at the rate or rates specified in Part III of the First
Schedule and such tax shall be increased by a surcharge, for the
purposes of the Union, calculated in such cases and in such
manner as provided therein:
Provided that in cases to which the provisions of Chapter XII
or Chapter XII-A or section 115JB or section 115JC or Chapter
XII-FA or Chapter XII-FB or sub-section (1A) of section 161
or section 164 or section 164A or section 167B of the Income-
tax Act apply, “advance tax” shall be computed with reference
to the rates imposed by this sub-section or the rates as specified
in that Chapter or section, as the case may be:
Provided further that the amount of “advance tax” computed
in accordance with the provisions of section 111A or sections
112 or 112A of the Income-tax Act shall be increased by a
surcharge, for the purposes of the Union, as provided in
Paragraph A, B, C, D or E, as the case may be, of Part III of the
First Schedule except in case of a domestic company whose
income is chargeable to tax under section 115BAA or section
115BAB of the Income-tax Act or in case of an individual or
Hindu undivided family or association of persons, 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 of the Income-tax Act whose income is chargeable to
tax under sub-section (1A) of section 115BAC of the Income-
tax Act, or in case of a co-operative society resident in India
whose income is chargeable to tax under section 115BAD or
under section 115BAE of the Income-tax Act:
Provided also that in respect of any income chargeable to tax
under sections 115A, 115AB, 115AC, 115ACA, 115AD, 115B,
115BA, 115BB, 115BBA, 115BBC, 115BBF, 115BBG,
115BBH, 115BBI, 115BBJ, 115E, 115JB or 115JC of the
Income-tax Act, “advance tax” computed in accordance with
the first proviso shall be increased by a surcharge, for the
purposes of the Union, calculated,—
(a) in the case of every individual or Hindu undivided
family or association of persons, except in a case of an
association of persons consisting of only companies as its
members, or body of individuals, whether incorporated or
not, or every artificial juridical person referred to in sub-
clause (vii) of clause (31) of section 2 of the Income-tax Act,
not having any income under section 115AD of the Income-
tax Act, and not having any income chargeable to tax under
16
sub-section (1A) of section 115BAC of the Income-tax
Act,—
(i) at the rate of ten per cent. of such “advance tax”,
where the total income exceeds fifty lakh rupees but does
not exceed one crore rupees;
(ii) at the rate of fifteen per cent. of such “advance tax”,
where the total income exceeds one crore rupees but does
not exceed two crore rupees;
(iii) at the rate of twenty-five per cent. of such
“advance tax”, where the total income exceeds two crore
rupees but does not exceed five crore rupees;
(iv) at the rate of thirty-seven per cent. of such
“advance tax”, where the total income exceeds five crore
rupees;
(b) in the case of every individual or association of
persons, except in case of an association of persons
consisting of only companies as its members, or body of
individuals, whether incorporated or not, or every artificial
juridical person referred to in sub-clause (vii) of clause (31)
of section 2 of the Income-tax Act, having income under
section 115AD of the Income-tax Act, and not having any
income chargeable to tax under sub-section (1A) of section
115BAC of the Income-tax Act,—
(i) at the rate of ten per cent. of such “advance tax”,
where the total income exceeds fifty lakh rupees, but
does not exceed one crore rupees;
(ii) at the rate of fifteen per cent. of such “advance
tax”, where the total income exceeds one crore rupees
but does not exceed two crore rupees;
(iii) at the rate of twenty-five per cent. of such
“advance tax”, where the total income [excluding the
income by way of dividend and income of the nature
referred to in clause (b) of sub-section (1) of section
115AD of the Income-tax Act] exceeds two crore rupees
but does not exceed five crore rupees;
(iv) at the rate of thirty-seven per cent. of such
“advance tax”, where the total income [excluding the
income by way of dividend or income of the nature
referred to in clause (b) of sub-section (1) of section
115AD of the Income-tax Act] exceeds five crore
rupees;
17
(v) at the rate of fifteen per cent. of such “advance
tax”, where the total income [including the income by
way of dividend or income of the nature referred to in
clause (b) of sub-section (1) of section 115AD of the
Income-tax Act] exceeds two crore rupees but is not
covered in sub-clauses (iii) and (iv):
Provided that in case where the total income includes
any income by way of dividend or income chargeable
under clause (b) of sub-section (1) of section 115AD of
the Income-tax Act, the rate of surcharge on the advance
tax computed on that part of income shall not exceed
fifteen per cent.;
(c) in the case of an association of persons consisting of
only companies as its members,––
(i) at the rate of ten per cent. of such “advance tax”,
where the total income exceeds fifty lakh rupees but does
not exceed one crore rupees;
(ii) at the rate of fifteen per cent. of such “advance
tax”, where the total income exceeds one crore rupees;
(d) in the case of every co-operative society except such
co-operative society whose income is chargeable to tax
under section 115BAD or section 115BAE of the Income-
tax Act,––
(i) at the rate of seven per cent. of such “advance
tax”, where the total income exceeds one crore rupees
but does not exceed ten crore rupees;
(ii) at the rate of twelve per cent. of such “advance
tax”, where the total income exceeds ten crore rupees;
(e) in the case of every firm or local authority at the rate
of twelve per cent. of such “advance tax”, where the total
income exceeds one crore rupees;
(f) in the case of every domestic company except such
domestic company whose income is chargeable to tax under
section 115BAA or section 115BAB of the Income-tax
Act,—
(i) at the rate of seven per cent. of such “advance
tax”, where the total income exceeds one crore rupees
but does not exceed ten crore rupees;
18
(ii) at the rate of twelve per cent. of such “advance
tax”, where the total income exceeds ten crore rupees;
(g) in the case of every company, other than a domestic
company,—
(i) at the rate of two per cent. of such “advance tax”,
where the total income exceeds one crore rupees but
does not exceed ten crore rupees;
(ii) at the rate of five per cent. of such “advance tax”,
where the total income exceeds ten crore rupees:
Provided also that in the case of persons mentioned in
(a) and (b) above, having total income chargeable to tax
under section 115JC of the Income-tax Act, and such income
exceeds,—
(i) fifty lakh rupees but does not exceed one crore
rupees, the total amount payable as “advance tax” on
such income and surcharge thereon shall not exceed the
total amount payable as “advance tax” on a total income
of fifty lakh rupees by more than the amount of income
that exceeds fifty lakh rupees;
(ii) one crore rupees but does not exceed two crore
rupees, the total amount payable as “advance tax” on
such income and surcharge thereon shall not exceed the
total amount payable as “advance tax” and surcharge on
a total income of one crore rupees by more than the
amount of income that exceeds one crore rupees;
(iii) two crore rupees but does not exceed five crore
rupees, the total amount payable as “advance tax” on
such income and surcharge thereon shall not exceed the
total amount payable as “advance tax” and surcharge on
a total income of two crore rupees by more than the
amount of income that exceeds two crore rupees;
(iv) five crore rupees, the total amount payable as
“advance tax” on such income and surcharge thereon
shall not exceed the total amount payable as “advance
tax” and surcharge on a total income of five crore rupees
by more than the amount of income that exceeds five
crore rupees:
Provided also that in the case of association of persons
mentioned in (c) above, having total income chargeable to
tax under section 115JC of the Income-tax Act, and such
income exceeds
,
––
19
(i) fifty lakh rupees, but does not exceed one crore
rupees, the total amount payable as “advance tax” on
such income and surcharge thereon shall not exceed the
total amount payable as “advance tax” on a total income
of fifty lakh rupees by more than the amount of income
that exceeds fifty lakh rupees;
(ii) one crore rupees, the total amount payable as
“advance tax” on such income and surcharge thereon
shall not exceed the total amount payable as “advance
tax” and surcharge on a total income of one crore rupees
by more than the amount of income that exceeds one
crore rupees:
Provided also that in the case of a co-operative society
mentioned in (d) above, having total income chargeable to
tax under section 115JC of the Income-tax Act, and such
income exceeds,––
(i) one crore rupees, but does not exceed ten crore
rupees, the total amount payable as “advance tax” on
such income and surcharge thereon, shall not exceed the
total amount payable as “advance tax” on a total income
of one crore rupees by more than the amount of income
that exceeds one crore rupees;
(ii) ten crore rupees, the total amount payable as
“advance tax” on such income and surcharge thereon,
shall not exceed the total amount payable as “advance
tax” and surcharge on a total income of ten crore rupees
by more than the amount of income that exceeds ten
crore rupees:
Provided also that in the case of persons mentioned in
(e) above, having total income chargeable to tax under
section 115JC of the Income-tax Act, and such income
exceeds one crore rupees, the total amount payable as
“advance tax” on such income and surcharge thereon, shall
not exceed the total amount payable as “advance tax” on a
total income of one crore rupees by more than the amount of
income that exceeds one crore rupees:
Provided also that in the case of every company having
total income chargeable to tax under section 115JB of the
Income-tax Act, and such income exceeds one crore rupees
but does not exceed ten crore rupees, the total amount
payable as “advance tax” on such income and surcharge
thereon, shall not exceed the total amount payable as
20
“advance tax” on a total income of one crore rupees by more
than the amount of income that exceeds one crore rupees:
Provided also that in the case of every company having
total income chargeable to tax under section 115JB of the
Income-tax Act, and such income exceeds ten crore rupees,
the total amount payable as “advance tax” on such income
and surcharge thereon, shall not exceed the total amount
payable as “advance tax” and surcharge on a total income of
ten crore rupees by more than the amount of income that
exceeds ten crore rupees:
Provided also that in respect of any income chargeable
to tax under clause (i) of sub-section (1) of section 115BBE
of the Income-tax Act, the “advance tax” computed in
accordance with the first proviso shall be increased by a
surcharge, for the purposes of the Union, calculated at the
rate of twenty-five per cent. of such “advance tax”:
Provided also that in case of every domestic company
whose income is chargeable to tax under section 115BAA or
section 115BAB of the Income-tax Act, the “advance tax”
computed in accordance with the first proviso shall be
increased by a surcharge, for the purposes of the Union,
calculated at the rate of ten per cent. of such “advance tax”:
Provided also that in respect of income chargeable to tax
under sub-section (1A) of section 115BAC of the Income-
tax Act, the “advance tax” computed in accordance with the
first proviso shall be increased by a surcharge, for the
purposes of the Union, calculated, in the case of an
individual or Hindu undivided family or association of
persons or body of individuals, whether incorporated or not,
or every artificial juridical person referred to in sub-clause
(vii) of clause (31) of section 2 of the Income-tax Act,––
(i) having a total income (including the income by
way of dividend or income under the provisions of
section 111A, section 112 and section 112A of the
Income-tax Act) exceeding fifty lakh rupees but not
exceeding one crore rupees, at the rate of ten per cent. of
such “advance-tax”;
(ii) having a total income (including the income by
way of dividend or income under the provisions of
section 111A, section 112 and section 112A of the
Income-tax Act) exceeding one crore rupees but not
exceeding two crore rupees, at the rate of fifteen per cent.
of such “advance-tax”;
21
(iii) having a total income (excluding the income by
way of dividend or income under the provisions of
section 111A, section 112 and section 112A of the
Income-tax Act) exceeding two crore rupees, at the rate
of twenty-five per cent. of such “advance-tax”; and
(iv) having a total income (including the income by
way of dividend or income under the provisions of
section 111A, section 112 and section 112A of the
Income-tax Act) exceeding two crore rupees, but is not
covered under clause (iii) above, at the rate of fifteen per
cent. of such “advance-tax”:
Provided also that in case where the provisions of sub-
section (1A) of section 115BAC are applicable and the total
income includes any income by way of dividend or income
chargeable under section 111A, section 112 and section
112A of the Income-tax Act, the rate of surcharge on the
“advance-tax” in respect of that part of income shall not
exceed fifteen per cent.:
Provided also that in case an association of persons
consisting of only companies as its members, and having its
income chargeable to tax under sub-section (1A) of section
115BAC, the rate of surcharge on the “advance tax” shall
not exceed fifteen per cent.:
Provided also that in case of every individual or Hindu
undivided family or association of persons, or body of
individuals, whether incorporated or not, or every artificial
juridical person referred to in sub-clause (vii) of clause (31)
of section 2 of the Income-tax Act, whose income is
chargeable to tax under sub-section (1A) of section 115BAC
of the Income-tax Act having total income exceeding,—
(i) fifty lakh rupees but does not exceed one crore
rupees, the total amount payable as “advance tax” on
such income and surcharge thereon shall not exceed the
total amount payable as "advance tax" on a total income
of fifty lakh rupees by more than the amount of income
that exceeds fifty lakh rupees;
(ii) one crore rupees but does not exceed two crore
rupees, the total amount payable as “advance tax” on
such income and surcharge thereon shall not exceed the
total amount payable as “advance tax” and surcharge on
a total income of one crore rupees by more than the
amount of income that exceeds one crore rupees;
22
(iii) two crore rupees, the total amount payable as
“advance tax” on such income and surcharge thereon
shall not exceed the total amount payable as “advance
tax” and surcharge on a total income of two crore rupees
by more than the amount of income that exceeds two
crore rupees:
Provided also that in case of every co-operative society
resident in India whose income is chargeable to tax under
section 115BAD or section 115BAE of the Income-tax Act,
the “advance tax” computed in accordance with the first
proviso shall be increased by a surcharge, for the purposes
of the Union, calculated at the rate of ten per cent. of such
“advance tax”:
Provided also that in the case of a specified fund,
referred to in clause (c) of the Explanation to clause (4D) of
section 10 of the Income-tax Act, whose income includes
any income under clause (a) of sub-section (1) of section
115AD of the Income-tax Act, the advance tax computed on
that part of income shall not be increased by any surcharge.
(10) In cases to which Paragraph A of Part III of the First
Schedule applies, or in cases where income is chargeable to tax
under sub-section (1A) of section 115BAC of the Income-tax
Act, where the assessee has, in the previous year or, if by virtue
of any provision of the Income-tax Act, income-tax is to be
charged in respect of the income of a period other than the
previous year, in such other period, any net agricultural income
exceeding five thousand rupees, in addition to total income and
the total income exceeds two lakh fifty thousand rupees, then,
in charging income-tax under sub-section (2) of section 174 or
section 174A or section 175 or sub-section (2) of section 176 of
the said Act or in computing the “advance tax” payable under
Chapter XVII-C of the said Act, at the rate or rates in force,—
(a) the net agricultural income shall be taken into
account, in the manner provided in clause (b) that is to say,
as if the net agricultural income were comprised in the total
income after the first two lakh fifty thousand rupees of the
total income but without being liable to tax, only for the
purpose of charging or computing such income-tax or, as the
case may be, “advance tax” in respect of the total income;
and
(b) such income-tax or, as the case may be, “advance
tax” shall be so charged or computed as follows:—
(i) the total income and the net agricultural income
shall be aggregated and the amount of income
-
tax or
23
“advance tax” shall be determined in respect of the
aggregate income at the rates specified in the said
Paragraph A, or sub-section (1A) of section 115BAC, as
if such aggregate income were the total income;
(ii) the net agricultural income shall be increased by
a sum of two lakh fifty thousand rupees, and the amount
of income-tax or “advance tax” shall be determined in
respect of the net agricultural income as so increased at
the rates specified in the said Paragraph A, or sub-section
(1A) of section 115BAC, as if the net agricultural income
were the total income;
(iii) the amount of income-tax or “advance tax”
determined in accordance with sub-clause (i) shall be
reduced by the amount of income-tax or, as the case may
be, “advance tax” determined in accordance with sub-
clause (ii) and the sum so arrived at shall be the income-
tax or, as the case may be, “advance tax” in respect of
the total income:
Provided that in the case of every individual, being a resident
in India, who is of the age of sixty years or more but less than
eighty years at any time during the previous year, referred to in
item (II) of Paragraph A of Part III of the First Schedule, the
provisions of this sub-section shall have effect as if for the
words “two lakh fifty thousand rupees”, the words “three lakh
rupees” had been substituted:
Provided further that in the case of every individual, being a
resident in India, who is of the age of eighty years or more at
any time during the previous year, referred to in item (III) of
Paragraph A of Part III of the First Schedule, the provisions of
this sub-section shall have effect as if for the words “two lakh
fifty thousand rupees”, the words “five lakh rupees” had been
substituted:
Provided also that in the cases where income is chargeable
to tax under sub-section (1A) of section 115BAC of the Income-
tax Act, the provisions of this sub-section shall have effect as if
for the words “two lakh fifty thousand rupees”, the words “three
lakh rupees” had been substituted:
Provided also that the amount of income-tax or “advance
tax” so arrived at, shall be increased by a surcharge for the
purposes of the Union, calculated in each case, in the manner
provided in this section.
(11) The amount of income-tax as specified in sub-sections
(
1
) to (
3
) and as increased by the applicable surcharge, for the
24
purposes of the Union, calculated in the manner provided
therein, shall be further increased by an additional surcharge,
for the purposes of the Union, to be called the “Health and
Education Cess on income-tax”, calculated at the rate of four
per cent. of such income-tax and surcharge so as to fulfil the
commitment of the Government to provide and finance quality
health services and universalised quality basic education and
secondary and higher education.
(12) The amount of income-tax as specified in sub-sections
(4) to (10) and as increased by the applicable surcharge, for the
purposes of the Union, calculated in the manner provided
therein, shall be further increased by an additional surcharge,
for the purposes of the Union, to be called the “Health and
Education Cess on income-tax”, calculated at the rate of four
per cent. of such income-tax and surcharge so as to fulfil the
commitment of the Government to provide and finance quality
health services and universalised quality basic education and
secondary and higher education:
Provided that nothing contained in this sub-section shall
apply to cases in which tax is to be deducted or collected under
the sections of the Income-tax Act mentioned in sub-sections
(5), (6), (7) and (8), if the income subjected to deduction of tax
at source or collection of tax at source is paid to a domestic
company and any other person who is resident in India:
Provided further that nothing contained in this sub-section
shall apply in respect of income-tax as specified in sub-section
(9), calculated on income, referred to in clause (a) of sub-
section (1) of section 115AD of the Income-tax Act, of
specified fund referred to in clause (c) of the Explanation to
clause (4D) of section 10 of the Income-tax Act.
(13) For the purposes of this section and the First
Schedule,—
(a) “domestic company” means an Indian company or
any other company which, in respect of its income liable to
income-tax under the Income-tax Act, for the assessment
year commencing on the 1st day of April, 2024, has made
the prescribed arrangements for the declaration and payment
within India of the dividends (including dividends on
preference shares) payable out of such income;
(b) “insurance commission” means any remuneration or
reward, whether by way of commission or otherwise, for
soliciting or procuring insurance business (including
business relating to the continuance, renewal or revival of
policies of insurance);
25
(c) “net agricultural income” in relation to a person,
means the total amount of agricultural income, from
whatever source derived, of that person computed in
accordance with the rules contained in Part IV of the First
Schedule;
(d) all other words and expressions used in this section
and the First Schedule but not defined in this sub-section and
defined in the Income-tax Act shall have the meanings,
respectively, assigned to them in that Act.
CHAPTER III
DIRECT TAXES
Income-tax
Amendment of
section 2.
3. In section 2 of the Income-tax Act,––
(a) in clause (22), with effect from the 1st day of October,
2024,––
(I) after sub-clause (e) and before the long line, the
following sub-clause shall be inserted, namely:––
“(f) any 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;”;
18 of 2013.
(II) in the long line, clause (iv) shall be omitted;
(b) in clause (42A), with effect from the 23rd day of July,
2024,––
(i) in the opening portion, for the words “thirty-six
months”, the words “twenty-four months” shall be
substituted and shall be deemed to have been substituted;
(ii) in the first proviso,––
(A) the brackets and words “(other than a unit)” shall
be omitted and shall be deemed to have been omitted;
(B) for the words “thirty-six months”, the words
“twenty-four months” shall be substituted and shall be
deemed to have been substituted;
(iii) in the second proviso, after the words “had been
substituted”, the words, brackets, letters and figures “as it
26
stood immediately prior to the commencement of the
Finance (No.2) Act, 2024” shall be inserted and shall be
deemed to have been inserted;
(iv) the third proviso shall be omitted and shall be
deemed to have been omitted.
Amendment of
section 10.
4. In section 10 of the Income-tax Act,––
(a) with effect from the 1st day of April, 2025,––
(i) in clause (4D), in the Explanation, in clause (c),
in sub-clause (i), item (I) shall be renumbered as item
(I)(a) and after sub-item (a) as so renumbered, the
following sub-item shall be inserted, namely:––
“(b) which has been granted a certificate as a
retail scheme or an Exchange Traded Fund, and is
regulated under the International Financial Services
Centres Authority (Fund Management) Regulations,
2022, made under the International Financial
Services Centres Authority Act, 2019 and satisfies
such conditions, as may be prescribed;”;
50 of 2019.
(ii) after clause (15A), the following clause shall be
inserted, namely:––
‘(15B) any income of a foreign company from
lease rentals, by whatever name called, of cruise
ships, received from a specified company which
operates such ship or ships in India, where such
foreign company and the specified company are
subsidiaries of the same holding company, and such
income is received or accrues or arises in India for
any relevant assessment year beginning on or before
the 1st day of April, 2030.
Explanation.––For the purposes of this clause,―
(a) “specified company” means any
company, other than a domestic company which
operates cruise ships in India and opts to pay tax
in accordance with the provisions of section
44BBC;
(b) “holding company”, in relation to a
foreign company or a specified company, means
a company of which such companies are
subsidiary companies;
27
(c) “subsidiary company” or “subsidiary”, in
relation to a holding company, means a company
in which the holding company exercises or
controls more than one-half of the total share
capital either at its own or together with one or
more of its subsidiary companies.’;
(b) in clause (23C), with effect from the 1st day of
October, 2024,––
(i) in the first proviso, after the words “makes an
application”, the words, figures and letters “before the
1st day of October, 2024,” shall be inserted;
(ii) in the second proviso, after the words “first
proviso”, the words, figures and letters “before the 1st
day of October, 2024,” shall be inserted;
(iii) after the twenty-third proviso, the following
proviso shall be inserted, namely:––
“Provided also that no approval under the second
proviso shall be granted in relation to any application
made on or after the 1st day of October, 2024.”;
(c) with effect from the 1st day of April, 2025,––
(i) in clause (23EE), in the Explanation,––
(A) in clause (i), after the words, brackets and figures
“the Securities Contracts (Regulation) Act, 1956”, the
following shall be inserted, namely:––
42 of 1956.
“or clause (n) of sub-regulation (1) of regulation
2 of the International Financial Services Centres
Authority (Market Infrastructure Institutions)
Regulations, 2021 made under the International
Financial Services Centres Authority Act, 2019”;
50 of 2019.
(B) in clause (ii), after the words, brackets and
figures “the Securities Contracts (Regulation) Act,
1956”, the following shall be inserted, namely:––
42 of 1956.
“or the International Financial Services Centres
Authority (Market Infrastructure Institutions)
Regulations, 2021 made under the International
Financial Services Centres Authority Act, 2019”;
50 of 2019.
(ii) in clause (23FB), in the Explanation, in clause (b), in
sub
-
clause (
A
), in item (
II
),
––
28
(A) in the opening portion, after the words “under the
Alternative Investment Funds Regulations”, the words,
brackets and figures “or as 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,” shall
be inserted;
50 of 2019.
(B) in sub-item (ii), the word “and” shall be omitted;
(C) in sub-item (iii), for the word “or”, the word
“and” shall be substituted;
(c) after sub-item (iii), the following sub-item shall
be inserted, namely:––
“(iv) any other condition as may be prescribed;
or”;
(d) in clause (34A), the following proviso shall be
inserted with effect from the 1st day of October, 2024,
namely:––
“Provided 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.”;
(e) in clause (50), for the portion beginning with the
words “any income arising from” and ending with the words
“under that Chapter”, the following shall be substituted and
shall be deemed to have been substituted with effect from
the 1st day of August, 2024, namely:––
“any income arising from any––
(i) specified service provided on or after the
date on which the provisions of Chapter VIII of
the Finance Act, 2016 comes into force; or
28 of 2016.
(ii) e-commerce supply or services made or
provided or facilitated on or after the 1st day of
April, 2020 but before the 1st day of August,
2024,
and chargeable to equalisation levy under that
Chapter.”.
29
Amendment of
section 11.
5. In section 11 of the Income-tax Act, in sub-section (7),
with effect from the 1st day of April, 2025,––
(a) for the words, brackets, figures and letters “other than
clause (1), clause (23C), clause (23EC), clause (46) and
clause (46A) thereof”, the words, brackets, figures and
letters “other than clause (1), clause (23C), clause (23EA),
clause (23EC), clause (23ED), clause (46), clause (46A) and
clause (46B) thereof” shall be substituted;
(b) in the first proviso,––
(i) for the portion beginning with the words “is
notified under” and ending with the word, brackets and
figures “clause (46)”, the words, brackets, figures and
letters “is notified under clause (23EA) or clause (23EC)
or clause (23ED) or clause (46)” shall be substituted;
(ii) after the words “whichever is later”, the words,
figures, letters and brackets “, or, the 1st day of April of
the previous year relevant to the assessment year for
which the exemption is claimed under clause (46B) of
the said section” shall be inserted;
(c) in the second proviso,––
(i) after the words “notification under”, the words,
brackets, figures and letters “clause (23EA) or” shall be
inserted;
(ii) after the words, brackets, figures and letters
“clause (23EC) or”, the words, brackets, figures and
letters “clause (23ED) or” shall be inserted.
Amendment of
section 12A.
6. In section 12A of the Income-tax Act, in sub-section (1),
in clause (ac) with effect from the 1st day of October, 2024,––
(a) in sub-clause (ii),––
(i) after the words, figures and letters “under section
12AB”, the words, brackets, figures and letters “or
approved under sub-clause (iv) or sub-clause (v) or sub-
clause (vi) or sub-clause (via) of clause (23C) of section
10” shall be inserted;
(ii) after the words “the period of the said
registration”, the words “or approval as the case may
be,” shall be inserted;
(
b
)
in sub
-
clause (
iii
),
––
30
(i) after the words, figures and letters “under section
12AB”, the words, brackets, figures and letters “or
provisionally approved under sub-clause (iv) or sub-
clause (v) or sub-clause (vi) or sub-clause (via) of clause
(23C) of section 10” shall be inserted;
(ii) after the words “period of the provisional
registration”, the words “or provisional approval as the
case may be,” shall be inserted;
(c) after sub-clause (vi), the following proviso shall be
inserted, namely:―
“Provided that where the application is filed beyond
the time allowed in sub-clauses (i) to (vi), the Principal
Commissioner or Commissioner may, if he considers
that there is a reasonable cause for delay in filing the
application, condone such delay and such application
shall be deemed to have been filed within time.”.
Amendment of
section 12AB.
7. In section 12AB of the Income-tax Act, for sub-section
(3), the following sub-section shall be substituted with effect
from the 1st day of October 2024, namely:––
“(3) The order under sub-section (1) shall be passed, in
such form and manner as may be prescribed, within a period
of,––
(i) three months calculated from the end of the month
in which the application was received in case of clause
(a);
(ii) six months calculated from the end of the quarter
in which the application was received in case of sub-
clause (ii) of clause (b); and
(iii) one month calculated from the end of the month
in which the application was received in case of clause
(c).”.
Insertion of new
section 12AC.
8. After section 12AB of the Income-tax Act, the following
section shall be inserted with effect from the 1st day of April
2025, namely:––
Merger of
charitable trusts
or institutions in
certain cases.
“12AC. Where any trust or institution registered under
section 12AB or approved under sub-clause (iv) or sub-
clause (v) or sub-clause (vi) or sub-clause (via) of clause
(
23C
) of section 10, as the case may be, merges with another
31
trust or institution, the provisions of Chapter XII-EB shall
not apply if––
(a) the other trust or institution has same or similar
objects;
(b) the other trust or institution is registered under
section 12AA or section 12AB or approved under sub-
clause (iv) or sub-clause (v) or sub-clause (vi) or sub-
clause (via) of clause (23C) of section 10, as the case
may be; and
(c) the said merger fulfils such conditions as may be
prescribed.”.
Amendment of
section 13.
9. In section 13 of the Income-tax Act, in sub-section (1), in
clause (d), in the proviso, after clause (iii), the following clause
shall be inserted with effect from the 1st day of October, 2024,
namely:––
“(iv) any asset referred to in sub-clauses (i), (ia) and (ii)
of clause (b) of the third proviso to clause (23C) of section
10 or any accretion to the shares, forming part of the corpus
mentioned in the said sub-clause (i) and (ia) and voluntary
contributions referred to in sub-clause (iv) of clause (b) of
the said proviso.”.
Amendment of
section 16.
10. In section 16 of the Income-tax Act, in clause (ia), the
following proviso shall be inserted with effect from the 1st day
of April, 2025, namely:––
‘Provided that in a case where income-tax is computed
under clause (ii) of sub-section (1A) of section 115BAC, the
provisions of this clause shall have effect as if for the words
“fifty thousand rupees”, the words “seventy-five thousand
rupees” had been substituted;’.
Amendment of
section 28.
11. In section 28 of the Income-tax Act, after Explanation 2,
the following Explanation shall be inserted with effect from the
1st day of April, 2025, namely:––
‘Explanation 3.––It is hereby clarified 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
under the head “Income from house property”.’.
Amendment of
section 36.
12. In section 36 of the Income-tax Act, in sub-section (1),
in
clause (
iva
)
,
for the word
s
“
ten
per cent.”
, the word
s
32
“fourteen per cent.” shall be substituted with effect from the 1st
day of April, 2025.
Amendment of
section 37.
13. In section 37 of the Income-tax Act, in sub-section (1),
in Explanation 3, in clause (iii), for the words “outside India”,
the following shall be substituted with effect from 1st day of
April, 2025, namely:––
“outside India; or
(iv) to settle proceedings initiated in relation to
contravention under such law as may be notified by the
Central Government in the Official Gazette in this behalf.”.
Amendment of
section 40.
14. In section 40 of the Income-tax Act, in clause (b), in sub-
clause (v), in item (a), with effect from the 1st day of April,
2025, —
(a) for the letters and figures “Rs. 3,00,000”, the letters
and figures “Rs. 6,00,000” shall be substituted;
(b) for the letters and figures “Rs. 1,50,000”, the letters
and figures “Rs. 3,00,000” shall be substituted.
Amendment of
section 43D.
15. In section 43D of the Income-tax Act, with effect from
the 1st day of April, 2025,—
(i) in the marginal heading, the words “public
companies,” shall be omitted;
(ii) clause (b) shall be omitted;
(iii) in the long line, the words “or the public company”
shall be omitted;
(iv) in the Explanation, clauses (a) and (b) shall be
omitted.
Amendment of
section 44B.
16. In section 44B of the Income-tax Act, with effect from
the 1st day of April, 2025,––
(a) for the marginal heading, the following marginal
heading shall be substituted, namely:––
“Special provision for computing profits and gains
of shipping business other than cruise shipping in case
of non-residents”;
(b) in sub-section (1), after the words “business of
operation of ships
,
”, the words
, figures and letters
“other
33
than cruise ships referred to in section 44BBC,” shall be
inserted.
Insertion of new
section 44BBC.
17. After section 44BBB of the Income-tax Act, the
following section shall be inserted with effect from the 1st day
of April, 2025, namely:––
Special
provision for
computing
profits and
gains of
business of
operation of
cruise ships in
case of non-
residents.
‘44BBC. (1) Notwithstanding anything to the contrary
contained in sections 28 to 43A, in the case of an assessee,
being a non-resident, engaged in the business of operation of
cruise ships subject to such conditions as may be prescribed,
a sum equal to twenty per cent. of the aggregate of the
amounts specified in sub-section (2) shall be deemed to be
the profits and gains of such business chargeable to tax under
the head "Profits and gains of business or profession”.
(2) The amounts referred to in sub-section (1) shall be
the following, namely:—
(a) the amount paid or payable to the assessee or to
any person on his behalf on account of the carriage of
passengers; and
(b) the amount received or deemed to be received by
or on behalf of the assessee on account of the carriage of
passengers.’.
Amendment of
section 46A.
18. In section 46A of the Income-tax Act, the following
proviso shall be inserted before the Explanation, with effect
from the 1st day of October, 2024, namely:––
“Provided that where the shareholder receives any
consideration of the nature referred to in sub-clause (f) of
clause (22) of section 2 from any company, in respect of any
buy-back of shares, that takes place on or after the 1st day of
October, 2024, then for the purposes of this section, the
value of consideration received by the shareholder shall be
deemed to be nil.”.
Amendment of
section 47.
19. In section 47 of the Income-tax Act, for clause (iii), the
following clause shall be substituted with effect from the 1st
day of April, 2025, namely:––
“(iii) any transfer of a capital asset by an individual or a
Hindu undivided family, under a gift or will or an
irrevocable trust;”.
Amendment of
section 48.
20. In section 48 of the Income-tax Act, in the second
proviso, after the words “where long-term capital gain arises
from the transfer”, the brackets, words, figures and letters
34
“(which takes place before the 23rd day of July, 2024)” shall be
inserted and shall be deemed to have been inserted with effect
from the 23rd day of July, 2024.
Amendment of
section 50AA.
21. In section 50AA of the Income-tax Act,––
(a) for the portion beginning with the words
“Notwithstanding anything contained in” and ending with
the words “short-term capital asset:”, the following shall be
substituted and shall be deemed to have been substituted
with effect from the 23rd day of July, 2024, namely:––
“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 23
rd
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:”;
(b) in the Explanation, for clause (ii), the following
clause shall be substituted with effect from the 1st day of
April, 2026, namely:––
‘(ii) “Specified Mutual Fund” means,––
(a) a Mutual Fund by whatever name called,
which invests more than sixty-five per cent. of its
total proceeds in debt and money market
instruments; or
35
(b) a fund which invests sixty-five per cent. or
more of its total proceeds in units of a fund referred
to in sub-clause (a):
Provided that the percentage of investment in debt
and money market instruments or in units of a fund, as
the case may be, in respect of the Specified Mutual Fund,
shall be computed with reference to the annual average
of the daily closing figures:
Provided further that for the purposes of this clause,
“debt and money market instruments” shall include any
securities, by whatever name called, classified or
regulated as debt and money market instruments by the
Securities and Exchange Board of India.’.
Amendment of
section 55.
22. In section 55 of the Income-tax Act, in sub-section (2),
in clause (ac), in the Explanation, in clause (a), in sub-clause
(iii), after item (A), the following item shall be inserted and
shall be deemed to have been inserted with effect from the 1st
day of April, 2018, namely:––
“(AA) not listed on a recognised stock exchange as on
the 31st day of January, 2018, or which became the property
of 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);”.
Amendment of
section 56.
23. In section 56 of the Income-tax Act, in sub-section (2),
in clause (viib), after the second proviso, the following proviso
shall be inserted with effect from the 1st
day of April, 2025,
namely:––
“Provided also that the provisions of this clause shall
not apply on or after the 1st day of April, 2025.”.
Amendment of
section 57.
24. In section 57 of the Income-tax Act,––
(i) with effect from the 1st day of October, 2024, ––
(a) in clause (i), after the words “in the case of
dividends,”, the words, brackets, letter and figures “other
than that referred in sub-clause (f) of clause (22) of
section 2” shall be inserted;
36
(b) after the proviso, the following proviso shall be
inserted, namely:––
“Provided further that no deduction shall be allowed
in case of dividend income of the nature referred to in
sub-clause (f) of clause (22) of section 2.”;
(ii) in clause (iia), before the Explanation, the following
proviso shall be inserted with effect from the 1st day of
April, 2025, namely:––
‘Provided that in a case where income-tax is
computed under clause (ii) of sub-section (1A) of section
115BAC, the provisions of this clause shall have effect
as if for the words “fifteen thousand rupees”, the words
“twenty-five thousand rupees” had been substituted;’.
Amendment of
section 80CCD.
25. In section 80CCD of the Income-tax Act, in sub-section
(2), the following proviso shall be inserted with effect from the
1st day of April, 2025, namely:––
‘Provided that where the total income of the assessee is
chargeable to tax under sub-section (1A) of section 115BAC,
the provisions of sub-section (2) shall have effect as if for
the words “ten per cent.” referred to in clause (b), the words
“fourteen per cent.” had been substituted.’.
Amendment of
section 80G.
26. In section 80G of the Income-tax Act,––
(a) in sub-section (2), in clause (a), in sub-clause (iiihg),
for the words “the National Sports Fund to be set up”, the
words “the National Sports Development Fund set up” shall
be substituted with effect from the 1st day of April, 2025;
(b) in sub-section (5), with effect from the 1st day of
October, 2024,––
(I) in the first proviso,––
(i) in clause (iii), for the words “whichever is
earlier;”, the words “whichever is earlier; or” shall
be substituted;
(ii) in clause (iv),––
(a) the words “in any other case,” shall be
omitted;
(b) in sub-clause (B), the portion beginning
with the words “and where no income or part”
37
and ending with the words “such application,”
shall be omitted;
(II) in the second proviso, in clause (ii), in sub-clause
(b), for item (B), the following item shall be substituted,
namely:––
“(B) if he is not so satisfied, pass an order in
writing, rejecting such application and cancelling its
approval, if any, after affording it a reasonable
opportunity of being heard;”;
(III) for the third proviso, the following proviso shall
be substituted, namely:––
“Provided also that the order under clause (i) and
clause (iii) of the second proviso shall be passed in
such form and manner as may be prescribed, before
expiry of the period of three months and one month,
as the case may be, calculated from the end of the
month in which the application was received:”;
(IV) after the third proviso, the following proviso
shall be inserted, namely:––
“Provided also that the order under sub-clause
(b) of clause (ii) of the second proviso shall be passed
in such form and manner as may be prescribed,
before expiry of the period of six months from the
end of the quarter in which the application was
received:”.
Amendment of
section 92CA.
27. In section 92CA of the Income-tax Act, with effect from
the 1st day of April, 2025,––
(a) in sub-section (2A),––
(i) for the words and bracket “any other international
transaction [other than an international transaction”, the
words and bracket “any other international transaction or
specified domestic transaction [other than an
international transaction or a specified domestic
transaction” shall be substituted;
(ii) for the words “if such other international
transaction is an international transaction”, the words “if
such other international transaction or a specified
domestic transaction is an international transaction or a
specified domestic transaction” shall be substituted;
38
(b) in the sub-section (2B),––
(i) after the words “Where in respect of an
international transaction”, the words “or a specified
domestic transaction” shall be inserted;
(ii) for the words “such transaction is an international
transaction”, the words “such transaction is an
international transaction or a specified domestic
transaction” shall be substituted.
Amendment of
section 94B.
28. In section 94B of the Income-tax Act, with effect from
the 1st day of April, 2025,––
(a) in sub-section (3), after the words “banking or
insurance”, the words “or a Finance Company located in any
International Financial Services Centre,” shall be inserted;
(b) in sub-section (5), after clause (iii), the following
clauses shall be inserted, namely:––
‘(iv) “Finance Company” means a finance company
as defined in clause (e) of sub-regulation (1) of
regulation 2 of the International Financial Services
Centres Authority (Finance Company) Regulations,
2021 made under the International Financial Services
Centres Authority Act, 2019 and which satisfies such
conditions and carries on such activities, as may be
prescribed;
50 of 2019.
(v) “International Financial Services Centre” shall
have the meaning as assigned to it in clause (q) of section
2 of the Special Economic Zones Act, 2005.’.
28 of 2005.
Amendment of
section 111A.
29. In section 111A of the Income-tax Act, in sub-section (1)
with effect from the 23rd day of July, 2024,––
(a) for the long line occurring before the first proviso, the
following shall be substituted and shall be deemed to have
been substituted with effect from the 23rd day of July, 2024,
namely:––
“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
-
term capital gains
––
(a) at the rate of fifteen per cent. for any
transfer which takes place before the 23rd day of
July, 2024; and
39
(b) at the rate of twenty per cent. for any
transfer which takes place on or after the 23
rd
day
of July, 2024;
(ii) the amount of income-tax payable on the
balance amount of the total income as if such balance
amount were the total income of the assessee:”;
(b) in the first proviso, for the words “rate of fifteen per
cent.”, the words, brackets and figure “rate as applicable in
clause (i)” shall be substituted and shall be deemed to have
been substituted.
Amendment of
section 112.
30. In section 112 of the Income-tax Act, in sub-section (1),
for the clauses (a), (b), (c), (d) and the first proviso, the
following shall be substituted and shall be deemed to have been
substituted with effect from the 23
rd
day of July, 2024,
namely:―
“(a) in the case of an individual or a Hindu undivided
family, being a resident,—
(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 his
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 23
rd
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:
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 as applicable in sub-clause (ii);
(b) in the case of a domestic company,—
40
(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 23
rd
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 gains,
__
(A) at the rate of twenty per cent. for any transfer
[other than a transfer referred to in sub-clause (iii)]
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;
(iii) the amount of income-tax on long-term capital
gains arising from the transfer of a capital asset which
takes place before the 23rd day of July, 2024, being
unlisted securities or shares of a company not being a
company in which the public are substantially interested,
calculated at the rate of ten per cent. on the capital gains
in respect of such asset as computed without giving
effect to the first and second proviso to section 48;
(d) in any other case of a resident,—
(i) the amount of income-tax payable on the total
income as reduced by the amount of long
-
term capital
41
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:
Provided that where the tax payable in respect of any
income arising from the transfer of a long-term capital asset
which takes place before the 23
rd
day of July, 2024, being
listed securities (other than a unit) or zero coupon bond,
exceeds ten per cent. of the amount of capital gains before
giving effect to the provisions of the second proviso
to section 48, then, such excess shall be ignored for the
purpose of computing the tax payable by the assessee :”.
Amendment of
section 112A.
31. In section 112A of the Income-tax Act, in sub-section
(2), for clause (i) the following shall be substituted and shall be
deemed to have been substituted with effect from the 23
rd
day
of July, 2024, namely:––
“(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 23
rd
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-clauses (a) and (b);”.
Amendment of
section 113.
32. In section 113 of the Income-tax Act, with effect from
the 1st day of September, 2024,––
(a)
the word “undisclosed” shall be omitted
;
42
(b) in the proviso, the words, figures and letters
beginning with “and applicable” and ending with “under
section 132A” shall be omitted.
Amendment of
section 115AB.
33. In section 115AB of the Income-tax Act, in sub-section
(1), in the longline, for clause (ii), the following clause shall be
substituted and shall be deemed to have been substituted with
effect from the 23rd day of July, 2024, namely:––
“(ii) 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,––
(A) at the rate of ten 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: and”.
Amendment of
section 115AC.
34. In section 115AC of the Income-tax Act, in sub-section
(1), in the long line, for clause (ii), the following clause shall be
substituted and shall be deemed to have been substituted with
effect from the 23rd day of July, 2024, namely:––
“(ii) the amount of income-tax calculated on the income
by way of long-term capital gains referred to in clause (c), if
any, included in the total income, -
(A) at the rate of ten 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; and”.
Amendment of
section
115ACA.
35. In section 115ACA of the Income-tax Act, in sub-section
(1), in the longline, for clause (ii), the following clause shall be
substituted and shall be deemed to have been substituted with
effect from the 23
rd
day of July, 2024, namely:––
“(ii) 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,––
(A) at the rate of ten per cent. for any transfer which
takes place before the 23rd day of July, 2024; and
43
(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; and”.
Amendment of
section 115AD.
36. In section 115AD of the Income-tax Act, in sub-section
(1) with effect from the 23rd day of July, 2024,––
(a) in the longline, in clause (ii), for the proviso, the
following proviso shall be substituted and shall be deemed
to have been substituted, namely:––
“Provided that the amount of income-tax calculated
on the income by way of short-term capital gains
referred to in section 111A shall be at the rate of––
(A) fifteen per cent. for any transfer which takes
place before the 23rd day of July, 2024; and
(B) twenty per cent. for any transfer which takes
place on or after the 23rd day of July, 2024;”
(b) in clause (iii), for the proviso, the following provisos
shall be substituted and shall be deemed to have been
substituted, namely:––
“Provided that in case of income arising from the
transfer of a long-term capital asset referred to in section
112A which exceeds one lakh and twenty-five thousand
rupees, income-tax shall be calculated at the rate of––
(A) ten per cent. where transfer of such asset
takes place before the 23rd day of July, 2024; and
(B) twelve and one-half per cent. where transfer
of such asset takes place on or after the 23rd day of
July, 2024:
Provided further that the limit of one lakh twenty-
five thousand rupees mentioned in the first proviso shall
apply on aggregate of the long-term capital gains
referred to in clauses (A) and (B); and”.
Amendment of
section
115BAC.
37. In section 115BAC of the Income-tax Act, for sub-
section (1A), the following sub-section shall be substituted with
effect from the 1st day of April, 2025, namely:––
“(1A) Notwithstanding anything contained in this Act
but subject to the provisions of this Chapter, the income-tax
payable in respect of the total income of a person, being an
individual or Hindu undivided family or association of
44
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) for 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. 12,00,001 to Rs. 15,00,000
20 per cent.
6.
Above Rs. 15,00,000
30 per
cent.”.
Amendment of
section 115E.
38. In section 115E of the Income-tax Act, in the longline,
for clause (ii), the following clause shall be substituted and shall
be deemed to have been substituted with effect from the 23
rd
day of July, 2024, namely:
––
45
“(ii) 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,––
(A) at the rate of ten 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; and”.
Amendment of
section 115QA.
39. In section 115QA of the Income-tax Act, in sub-section
(1), after the proviso and before the Explanation, the following
proviso shall be inserted with effect from the 1st day of
October, 2024, namely:––
“Provided further that the provisions of this 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.”.
Amendment of
section 132B.
40. In section 132B of the Income-tax Act, in sub-section
(1), in clause (i), for the words and figures “and the Interest-tax
Act, 1974”, the words, brackets and figures “the Interest-tax
Act, 1974 and the Black Money (Undisclosed Foreign Income
and Assets) and Imposition of Tax Act, 2015” shall be
substituted with effect from the 1st day of October, 2024.
45 of 1974.
22 of 2015.
Amendment of
section 139.
41. In section 139 of the Income-tax Act, after sub-section
(9) and the proviso to the Explanation thereof, the following
sub-section shall be inserted with effect from the 1st day of
October, 2024, namely:––
“(9A) Where any return of income is furnished in
pursuance of an order under clause (b) of sub-section (2) of
section 119, the provisions of this section shall apply.”.
Amendment of
section 139AA.
42. In section 139AA of the Income-tax Act, with effect
from the 1st day of October, 2024,––
(a) in sub-section (1), after the proviso, the following
proviso shall be inserted, namely:––
“Provided further that nothing in the first proviso
shall apply in respect of any application form for
allotment of permanent account number or return of
income furnished on or after the 1
st
day of October,
2024.”;
46
(b) after sub-section (2), the following sub-section shall
be inserted, namely:––
“(2A) Every person who has been allotted permanent
account number on the basis of Enrolment ID of Aadhaar
application form filed prior to the 1
st
day of October,
2024, shall intimate his Aadhaar number to such
authority in such form and manner, as may be
prescribed, on or before a date to be notified by the
Central Government in the Official Gazette.”.
Amendment of
section 144C.
43. In section 144C of the Income-tax Act, with effect from
the 1st day of September, 2024,––
(i) in sub-section (15), in clause (b), the following
proviso shall be inserted, namely:––
“Provided that such eligible assessee shall not
include person referred to in sub-section (1) of section
158BA or other person referred to in section 158BD.”;
(ii) after sub-section (15), the following sub-section
shall be inserted, namely:––
“(16) The provisions of this section shall not apply
to any proceedings under Chapter XIV-B.”.
Substitution of
new sections for
sections 148
and 148A.
44. For sections 148 and 148A of the Income-tax Act, the
following sections shall be substituted with effect from the 1st
day of September, 2024, namely:––
Issue of notice
where income
has escaped
assessment.
‘148. (1) Before making the assessment, reassessment or
recomputation under section 147, the Assessing Officer
shall, subject to the provisions of section 148A, issue a
notice to the assessee, along with a copy of the order passed
under sub-section (3) of section 148A, requiring him to
furnish, within such period as may be specified in the notice,
not exceeding three months from the end of the month in
which such notice is issued, a return of his income or income
of any other person in respect of whom he is assessable
under this Act during the previous year corresponding to the
relevant assessment year:
Provided that no notice under this section shall be issued
unless there is information with the Assessing Officer which
suggests that the income chargeable to tax has escaped
assessment in the case of the assessee for the relevant
assessment year:
47
Provided further that where the Assessing Officer has
received information under section 135A, no notice under
this section shall be issued without prior approval of the
specified authority.
(2) The return of income required under sub-section (1)
shall be furnished in such form and verified in such manner
and setting forth such other particulars, as may be
prescribed, and the provisions of this Act shall, apply
accordingly as if such return were a return required to be
furnished under section 139:
Provided that any return of income required under sub-
section (1), furnished after the expiry of the period specified
in the notice under the said sub-section, shall not be deemed
to be a return under section 139.
(3) For the purposes of this section and section 148A, the
information with the Assessing Officer which suggests that
the income chargeable to tax has escaped assessment
means,—
(i) any information in the case of the assessee for
the relevant assessment year in accordance with the risk
management strategy formulated by the Board from time
to time; or
(ii) any audit objection to the effect that the
assessment in the case of the assessee for the relevant
assessment year has not been made in accordance with
the provisions of this Act; or
(iii) any information received under an agreement
referred to in section 90 or section 90A of the Act; or
(iv) any information made available to the Assessing
Officer under the scheme notified under section 135A;
or
(v) any information which requires action in
consequence of the order of a Tribunal or a Court; or
(vi) any information in the case of the assessee
emanating from survey conducted under section 133A,
other than under sub-section (2A) of the said section, on
or after the 1st day of September, 2024.
Procedure
before issuance
of notice under
section 148.
148A. (1) Where the Assessing Officer has information
which suggests that income chargeable to tax has escaped
assessment in the case of an assessee for the relevant
48
assessment year, he shall, before issuing any notice under
section 148 provide an opportunity of being heard to such
assessee by serving upon him a notice to show cause as to
why a notice under section 148 should not be issued in his
case and such notice to show cause shall be accompanied by
the information which suggests that income chargeable to
tax has escaped assessment in his case for the relevant
assessment year.
(2) On receipt of the notice under sub-section (1), the
assessee may furnish his reply within such period, as may be
specified in the notice.
(3) The Assessing Officer shall, on the basis of material
available on record and taking into account the reply of the
assessee furnished under sub-section (2), if any, pass an
order with the prior approval of the specified authority
determining whether or not it is a fit case to issue notice
under section 148.
(4) The provisions of this section shall not apply to
income chargeable 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.
Explanation.—For the purposes of this section and
section 148, “specified authority” means the specified
authority referred to in section 151.’.
Substitution of
new section for
section 149.
45. For section 149 of the Income-tax Act, the following
section shall be substituted with effect from the 1st day of
September, 2024, namely:––
Time limit for
notices under
sections 148
and 148A.
“149. (1) No notice under section 148 shall be issued for
the relevant assessment year,—
(a) if three years and three months have elapsed from
the end of the relevant assessment year, unless the case
falls under clause (b);
(b) if three years and three months, but not more than
five years and three months, have elapsed from the end
of the relevant assessment year unless the Assessing
Officer has in his possession books of accounts or other
documents or evidence related to any asset or
expenditure or transaction or entries which show that the
income chargeable to tax, which has escaped
49
assessment, amounts to or is likely to amount to fifty
lakh rupees or more.
(2) No notice to show cause under section 148A shall be
issued for the relevant assessment year,—
(a) if three years have elapsed from the end of the
relevant assessment year, unless the case falls under
clause (b);
(b) if three years, but not more than five years, have
elapsed from the end of the relevant assessment year
unless the income chargeable to tax which has escaped
assessment, as per the information with the Assessing
Officer, amounts to or is likely to amount to fifty lakh
rupees or more.
Substitution of
new section for
section 151.
46. For section 151 of the Income-tax Act, the following
section shall be substituted with effect from the 1st day of
September, 2024, namely:––
Sanction for
issue of notice.
“151. Specified authority for the purposes of sections
148 and 148A shall be the Additional Commissioner or the
Additional Director or the Joint Commissioner or the Joint
Director, as the case may be.”.
Amendment of
section 152.
47. In section 152 of the Income-tax Act, after sub-section
(2), the following sub-sections shall be inserted with effect from
the 1st day of September, 2024, namely:––
“(3) Where a search has been initiated under section 132
or requisition is made under section 132A, or a survey is
conducted under section 133A [other than under sub-section
(2A) of the said section], on or after the 1st day of April,
2021 but before the 1st day of September, 2024, the
provisions of sections 147 to 151 shall apply as they stood
immediately before the commencement of the Finance (No.
2) Act, 2024.
(4) Where a notice under section 148 has been issued or
an order under clause (d) of section 148A has been passed,
prior to the 1st day of September, 2024, the assessment,
reassessment or recomputation in such case shall be
governed as per the provisions of sections 147 to 151, as they
stood immediately before the commencement of the Finance
(No. 2) Act, 2024.”.
Amendment of
section 153.
48. In section 153 of the Income-tax Act, with effect from
the 1st day of October, 2024,––
50
(I) after sub-section (1A), the following sub-section shall
be inserted, namely:––
“(1B) Notwithstanding anything in sub-section (1),
where a return is furnished in consequence of an order
under clause (b) of sub-section (2) of section 119, an
order of assessment under section 143 or section 144
may be made at any time before the expiry
of twelve months from the end of the financial year in
which such return was furnished.”;
(II) in sub-section (3), for the words and figures “order
under section 254” wherever they occur, the words and
figures “order under section 250 or section 254” shall be
substituted;
(III) in sub-section (8),––
(i) for the word, figures and letter “section 153B” at
both the places where they occur, the words, figures and
letters “section 153B or section 158BE” shall be
substituted;
(ii) for the words, brackets, figures and letter
“revived under sub-section (2) of section 153A”, the
words, brackets, figures and letters “revived under sub-
section (2) of section 153A or sub-section (5) of section
158BA” shall be substituted;
(IV) in Explanation 1, after the fifth proviso, the
following proviso shall be inserted, namely:––
“Provided also that where after exclusion of the
period referred to in clause (xii), the period of limitation
for making an order of assessment, reassessment or
recomputation, as the case may be, ends before the end
of the month, such period shall be extended to the end of
such month.”.
Substitution of
new Chapter for
Chapter XIV-B.
49. For Chapter XIV-B of the Income-tax Act, the following
Chapter shall be substituted with effect from the 1st day of
September, 2024, namely:––
‘CHAPTER XIV-B
SPECIAL PROCEDURE FOR ASSESSMENT OF
SEARCH CASES
Definitions.
158B. In this Chapter, unless the context otherwise
requires,
—
51
(a) “block period” means the period comprising
previous years relevant to six assessment years preceding
the previous year in which the search was initiated
under section 132 or any requisition was made under section
132A and also includes the period starting from the 1st day
of April of the previous year in which search was initiated
or requisition was made and ending on the date of the
execution of the last of the authorisations for such search or
such requisition;
(b) “undisclosed income” includes any money, bullion,
jewellery or other valuable article or thing or any
expenditure or any income based on any entry in the books
of account or other documents or transactions, where such
money, bullion, jewellery, valuable article, thing, entry in
the books of account or other document or transaction
represents wholly or partly income or property which has
not been or would not have been disclosed for the purposes
of this Act, or any expense, deduction or allowance claimed
under this Act which is found to be incorrect, in respect of
the block period.
Explanation.—For the purposes of this Chapter, the last
of the authorisations shall be deemed to have been
executed,—
(a) in the case of search, on the conclusion of search
as recorded in the last panchnama drawn in relation to
any person in whose case the warrant of authorisation
has been issued;
(b) in the case of requisition under section 132A, on
the actual receipt of the books of account or other
documents or assets by the Authorised Officer.
Assessment of
total income as
a result of
search.
158BA. (1) Notwithstanding anything in any other
provisions of this Act, where on or after the 1st day of
September, 2024, a search is initiated under section 132, or
books of account, other documents or any assets are
requisitioned under section 132A, in the case of any person,
then, the Assessing Officer shall proceed to assess or reassess
the total income of the block period in accordance with the
provisions of this Chapter.
(2) The assessment or reassessment or recomputation
under the provisions of this Act (other than this Chapter), if
any, pertaining to any assessment year falling in the block
period, pending on the date of initiation of the search
under
section 132
,
or making of requisition under
section
52
132A, as the case may be, shall abate and shall be deemed to
have abated on the date of initiation of search or making of
requisition.
(3) Where during the course of any pending proceeding for
the assessment or reassessment or recomputation under the
provisions of this Act (other than this Chapter), a reference
under sub-section (1) of section 92CA has been made, or an
order under sub-section (3) of section 92CA has been passed,
such assessment or reassessment or recomputation, along with
such reference made or order passed, as the case may be, shall
also abate and shall be deemed to have abated on the date of
initiation of search or making of requisition.
(4) Where any assessment under the provisions of this
Chapter is pending in the case of an assessee in whose case a
subsequent search is initiated, or a requisition is made, such
assessment shall be duly completed, and thereafter, the
assessment in respect of such subsequent search or requisition
shall be made under the provisions of this Chapter:
Provided that in a case where the period of completing the
assessment in respect of subsequent search is less than three
months such period shall be extended to three months from the
end of the month in which the assessment in respect of the
earlier search was completed.
(5) 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:
Provided that such revival shall cease to have effect, if
such order of annulment is set aside.
(6) The total income (other than undisclosed 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 this Act.
(7) The total income relating to the block period shall be
charged to tax, at the rate specified in section 113, as income
of the block period irrespective of the previous year or years to
which such income relates.
53
Computation of
total income of
block period.
158BB. (1) The total income referred to in sub-section (1) of
section 158BA of the block period shall be the aggregate of the
following, namely:––
(i) total income disclosed in the return furnished under
section 158BC;
(ii) total income assessed under sub-section (3) of
section 143 or section 144 or section 147 or section 153A
or section 153C prior to the date of initiation of the search
or the date of requisition, as the case may be;
(iii) total income declared in the return of income filed
under section 139 or in response to a notice under sub-
section (1) of section 142 or section 148 and not covered
under clause (i) or clause (ii);
(iv) total income determined where the previous year has
not ended, on the basis of entries relating to such income or
transactions as recorded in the books of account and other
documents maintained in the normal course on or before the
date of last of the authorisations for the search or requisition
relating to such previous year;
(v) undisclosed income determined by the Assessing
Officer under sub-section (2).
(2) The undisclosed income falling within the block period,
forming part of the total income referred to in sub-section (1)
of section 158BA, shall be computed in accordance with the
provisions of this Act, on the basis of evidence found as a result
of search or survey or requisition of books of account or other
documents and such other materials or informations as are
either available with the Assessing Officer or come to his notice
during the course of proceedings under this Chapter.
(3) Where any evidence found as a result of search or
requisition of books of account or other documents and such
other materials or informations as are either available with the
Assessing Officer or come to his notice during the course of
proceedings under this Chapter, or determined on the basis of
entries relating to such income or transactions as recorded in
books of account and other documents maintained in the normal
course on or before the date of the search or requisition, relates
to any international transaction or specified domestic
transaction referred to in section 92CA, pertaining to the period
beginning from the 1
st
day of April of the previous year in
which last of the authorisations was executed and ending with
the date on which last of the authorisations was executed, such
54
evidence shall not be considered for the purposes of
determining the total income of the block period and such
income shall be considered in the assessment made under the
other provisions of this Act.
(4) For the purposes of determination of undisclosed
income,––
(a) of a firm, such income assessed for each of the
previous years falling within the block period shall be the
income determined before allowing deduction of salary,
interest, commission, bonus or remuneration by whatever
name called to any partner not being a working partner;
(b) the provisions 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).
(5) The tax referred to in sub-section (7) 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), clause (iii) and clause (iv) of sub-
section (1).
(6) 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 sub-section (1) or
where the income as determined under clause (iv), is a loss, it
shall be ignored.
(7) For the purposes of assessment under this Chapter, losses
brought forward from the previous year (prior to the first
previous year comprising the block period) under Chapter VI
or unabsorbed depreciation under sub-section (2) of section
32 shall not be set off against the undisclosed income
determined in the block assessment under this Chapter but may
be carried forward for being set off in the previous year
subsequent to the assessment year in which the block period
ends, for the remaining period, taking into account the block
55
period and such assessment year, and in accordance with the
provisions of this Act.
Procedure for
block
assessment.
158BC.
(1) Where any search has been initiated
under section 132 or books of account, other documents or
assets are requisitioned under section 132A, in the case of any
person, then,—
(a) the Assessing Officer shall, in respect of search
initiated, or books of account or other documents or any
assets requisitioned, on or after the 1st day of September,
2024, issue a notice to such person, requiring him to furnish
within such period, not exceeding a period of sixty days, as
may be specified in the notice, a return in the form and
verified in the manner, as may be prescribed, setting forth
his total income, including the undisclosed income, for the
block period:
Provided that such return shall be considered as if it was
a return furnished under the provisions of section 139 and
notice under sub-section (2) of section 143 shall thereafter
be issued:
Provided further that any return of income, required to
be furnished by an assessee under this section and furnished
beyond the period allowed in the notice shall not be deemed
to be a return under section 139:
Provided also that no notice under section 148 is
required to be issued for the purpose of proceeding under
this Chapter:
Provided also that a person who has furnished a return
under this clause shall not be entitled to furnish a revised
return;
(b) the Assessing Officer shall proceed to determine the
total income including the undisclosed income of the block
period in the manner laid down in section 158BB and the
provisions of section 142, sub-sections (2) and (3) of section
143, section 144, section 145, section 145A and section
145B shall, so far as may be, apply;
(c) the Assessing Officer, on determination of the total
income of the block period in accordance with this Chapter,
shall pass an order of assessment or reassessment and
determine the tax payable by him on the basis of such
assessment or reassessment:
56
Provided that nothing in the provisions of section 144C
shall apply in respect of such order:
Provided further that where the order of assessment or
reassessment is made in pursuance of section 158BD, the
block period for such assessment or reassessment shall be
the same as that determined in respect of the person in whose
case search was made under section 132, or whose books of
account or other documents or any assets were requisitioned
under section 132A, and proceedings under section 158BD
were initiated due to such search or requisition, as the case
may be;
(d) the assets seized under section 132 or requisitioned
under section 132A shall be dealt with in accordance with
the provisions of section 132B.
(2) The provisions of sub-section (1) of section 143 shall
not apply to the return furnished under this section.
(3) The Assessing Officer, before issuance of notice under
clause (a) of sub-section (1), shall take prior approval of the
Additional Commissioner or the Additional Director or the
Joint Commissioner or the Joint Director, as the case may be.
Undisclosed
income of any
other person.
158BD. 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 expenditure, 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.
Time-limit for
completion of
block
assessment.
158BE. (1) Notwithstanding the provisions of section 153,
the order under section 158BC shall be passed within twelve
months from the end of the month in which the last of the
authorisations for search under section 132, or requisition
under section 132A, was executed or made, as the case may be:
Provided that in a case where search under section 132 was
initiated, or requisition under section 132A was made, and
during the course of the proceedings for the assessment or
reassessment of the total income of the relevant block period,
any reference und
er sub
-
section (1) of
section 92CA
is made,
57
the period available for making an order of assessment or
reassessment in respect of the block period shall be extended by
twelve months.
(2) In computing the period of limitation under sub-section
(1), the period (not exceeding one hundred and eighty days)
commencing from the date on which a search is initiated
under section 132 or a requisition is made under section
132A and ending on the date on which the books of account, or
other documents or money or bullion or jewellery or other
valuable article or thing seized under section 132 or
requisitioned under section 132A, as the case may be, are
handed over to the Assessing Officer having jurisdiction over
the assessee, in whose case such search is initiated
under section 132 or such requisition is made under section
132A, as the case may be, shall be excluded:
Provided that where after exclusion of the period referred to
in this sub-section, the period of limitation for making an order
of assessment or reassessment, as the case may be, expires
before the end of a month, such period shall be extended to the
end of such month.
(3) The period of limitation for completion of assessment or
reassessment for the block period in the case of the other person
referred to in section 158BD shall be twelve months from the
end of the month in which the notice under section 158BC in
pursuance of section 158BD, was issued to such other person:
Provided that in case where during the course of the
proceedings for the assessment of undisclosed income of the
block period in case of other person referred to in section
158BD, a reference under sub-section (1) of section 92CA is
made, the period available for making an order of assessment
in respect of the block period in case of such other person shall
be extended by twelve months.
(4) In computing the period of limitation under this section,
the following period shall be excluded,—
(i) the period during which the assessment proceeding
is stayed by an order or injunction of any court; or
(ii) the period commencing from the date on which a
reference or first of the references for exchange of
information is made by an authority competent under an
agreement referred to in section 90 or section 90A and
ending with the date on which the information requested is
last received by the Principal Commissioner or
Commissioner or a period of one year, which
ever is less; or
58
(iii) the time taken in reopening the whole or any part of
the proceeding or giving an opportunity to the assessee to be
re-heard under the proviso to section 129; or
(iv) the period commencing from the date on which the
Assessing Officer directs the assessee to get his accounts
audited or inventory valued under sub-section (2A)
of section 142 and—
(a) ending with the last date on which the assessee
is required to furnish a report of such audit or inventory
valuation under that sub-section; or
(b) where such direction is challenged before a
court, ending with the date on which the order setting
aside such direction is received by the Principal
Commissioner or Commissioner; or
(v) the period commencing from the date on which the
Assessing Officer makes a reference to the Valuation
Officer under sub-section (1) of section 142A and ending
with the date on which the report of the Valuation Officer is
received by the Assessing Officer; or
(vi) the period commencing from the date on which the
Assessing Officer intimates the Central Government or the
prescribed authority, the contravention of the provisions of
clause (21) or clause (22B) or clause (23A) or clause (23B)
of section 10, under sub-clause (i) of the first proviso to sub-
section (3) of section 143 and ending with the date on which
the copy of the order withdrawing the approval or rescinding
the notification, as the case may be, under those clauses is
received by the Assessing Officer; or
(vii) the period commencing from the date on which the
Assessing Officer makes a reference to the Principal
Commissioner or Commissioner under the second proviso
to sub-section (3) of section 143 and ending with the date on
which the copy of the order under clause (ii) or clause (iii)
of the fifteenth proviso to clause (23C) of section 10 or
clause (ii) or clause (iii) of sub-section (4) of section 12AB,
as the case may be, is received by the Assessing Officer; or
(viii) the period commencing from the date on which a
reference for declaration of an arrangement to be an
impermissible avoidance arrangement is received by the
Principal Commissioner or Commissioner under sub-section
(1) of section 144BA and ending on the date on which a
direction under sub
-
section (3
) or sub
-
section (6) or an order
59
under sub-section (5) of the said section is received by the
Assessing Officer; or
(ix) the period commencing from the date on which an
application is made before the Authority for Advance
Rulings or before the Board for Advance Rulings under sub-
section (1) of section 245Q and ending with the date on
which the order rejecting the application is received by the
Principal Commissioner or Commissioner under sub-section
(3) of section 245R; or
(x) the period commencing from the date on which an
application is made before the Authority for Advance
Rulings or before the Board for Advance Rulings under sub-
section (1) of section 245Q and ending with the date on
which the advance ruling pronounced by it is received by the
Principal Commissioner or Commissioner under sub-section
(7) of section 245R:
Provided that where immediately after the exclusion of
the aforesaid period, the period of limitation referred to in
sub-section (1) or sub-section (3) available to the Assessing
Officer for making an order under clause (c) of sub-section
(1) of section 158BC is less than sixty days, such remaining
period shall be extended to sixty days and the aforesaid
period of limitation shall be deemed to be extended
accordingly:
Provided further that where after extension of the period
referred to in the first proviso, the period of limitation for
making an order of assessment or reassessment, as the case
may be, expires before the end of a month, such period shall
be extended to the end of such month.
Certain interests
and penalties
not to be levied
or imposed.
158BF. No interest under section 234A, 234B or 234C or
penalty under section 270A shall be levied or imposed upon the
assessee in respect of the undisclosed income assessed or
reassessed for the block period.
Levy of interest
and penalty in
certain cases.
158BFA. (1) Where 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
60
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.
(2) 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
undisclosed income determined by the Assessing Officer under
clause (c) of sub-section (1) of section 158BC:
Provided that no order imposing penalty under this section
or sub-section (1) of section 271AAD or section 271D or
section 271DA or section 271E shall be made for the block
period in respect of a person if—
(i) such person has furnished a return under clause (a)
of sub-section (1) of section 158BC;
(ii) the tax payable on the basis of such return has been
paid or, if the assets seized consist of money, the assessee
offers the money so seized to be adjusted against the tax
payable;
(iii) evidence of tax paid is furnished along with the
return; and
(iv) an appeal is not filed against the assessment of that
part of income which is shown in the return:
Provided further that the provisions of the first proviso shall
not apply where the undisclosed income determined by the
Assessing Officer is in excess of the income shown in the return
and in such cases the penalty shall be imposed on that portion
of undisclosed income determined which is in excess of the
amount of income shown in the return.
(3) No order imposing a penalty under sub-section (2) shall
be made,—
(a) unless an assessee has been given a reasonable
opportunity of being heard;
(b) by the Deputy Commissioner or Assistant
Commissioner or the Deputy Director or Assistant Director,
as the case may be, where the amount of penalty exceeds
two lakh rupees except with the previous approval of the
Additional Commissioner or the Additional Director or the
61
Joint Commissioner or the Joint Director, as the case may
be;
(c) in a case where the assessment is the subject-matter
of an appeal to the Commissioner (Appeals) under
section 246A or an appeal to the Appellate Tribunal
under section 253, after the expiry of the financial year in
which the proceedings, in the course of which action for the
imposition of penalty has been initiated, are completed, or
six months from the end of the financial year in which the
order of the Commissioner (Appeals) or, as the case may be,
the Appellate Tribunal is received by the Principal
Commissioner or Commissioner, whichever period expires
later;
(d) in a case where the assessment is the subject-matter
of revision under section 263, after the expiry of six months
from the end of the financial year in which such order of
revision is passed;
(e) in any case other than those mentioned in clause (c)
and clause (d), after the expiry of the financial year in which
the proceedings, in the course of which notice for the
imposition of penalty has been issued, are completed, or six
months from the end of the financial year in which notice for
imposition of penalty is issued, whichever period expires
later.
(4) In computing the period of limitation under this
section, the following period shall be excluded––
For the purposes of this section,—
(i) the time taken in giving an opportunity to the
assessee to be reheard under the proviso to section 129; or
(ii) the period during which the proceedings under sub-
section (2) are stayed by an order or injunction of any court:
Provided that where immediately after the exclusion of
the aforesaid period, the period of limitation referred to in sub-
section (3) available to the Assessing Officer for making an
order under sub-section (2) of this section is less than sixty
days, such remaining period shall be extended to sixty days and
the aforesaid period of limitation shall be deemed to be
extended accordingly:
Provided further that where after exclusion of the period
referred to in the first proviso, the period of limitation for
making of an order for imposition of penalty expires before the
62
end of a month, such period shall be extended to the end of such
month.
(5) An income-tax authority on making an order under sub-
section (2) imposing a penalty, unless he is himself an
Assessing Officer, shall forthwith send a copy of such order to
the Assessing Officer.
Authority
competent to
make
assessment of
block period.
158BG. The order of assessment for the block period shall
be passed by an Assessing Officer not below the rank of a
Deputy Commissioner or an Assistant Commissioner or a
Deputy Director or an Assistant Director, as the case may be:
Provided that no such order shall be passed without the
previous approval of the Additional Commissioner or the
Additional Director or the Joint Commissioner or the Joint
Director, as the case may be, 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 .
Application of
other provisions
of this Act.
158BH. Save as otherwise provided in this Chapter, all other
provisions of this Act shall apply to assessment made under this
Chapter.
Chapter not to
apply in certain
circumstances.
158BI. The provisions of this Chapter shall not apply where
a search was initiated under section 132, or books of account,
other documents or any assets were requisitioned under section
132A, before the 1st day of September, 2024, and proceedings
in relation to such search or requisition, as the case may be,
shall be governed by the other provisions of this Act.’.
Amendment of
section 192.
50. In section 192 of the Income-tax Act, with effect from
the 1st day of October, 2024,—
(I) in sub-section (1C), for the words, brackets and
figures “clause (vi) of sub-section (2)”, the words, brackets
and figures “sub-clause (vi) of clause (2)” shall be
substituted;
(II) in sub-section (2A), the words, brackets and figure
“sub-section (1) of” shall be omitted;
(III) for sub-section (2B), the following sub-section shall
be substituted, namely:––
‘(2B) Where an assessee who receives any income
chargeable under the head “Salaries” has, in addition, —
63
(i) any income chargeable under any other head
of income (not being a loss under any such head
other than the loss under the head “Income from
house property”); or
(ii) any tax deducted or collected under the
provisions of Part B or Part BB of this Chapter, as
the case may be,
for the same financial year, he may send to the person
responsible for making the payment referred to in sub-
section (1), the particulars of—
(a) such other income;
(b) any tax deducted or collected under any other
provision of Part B or Part BB of this Chapter, as the
case may be; and
(c) the loss, if any, under the head “Income from
house property”,
in such form and verified in such manner as may be
prescribed, and thereupon the person responsible as
aforesaid shall take into account the particulars referred
to in clauses (a), (b) and (c) for the purposes of making
the deduction under sub- section (1):
Provided that this sub-section shall not in any case
have the effect of reducing the tax deductible except
where the loss under the head “Income from house
property” has been taken into account, from income
under the head “Salaries” below the amount that would
be so deductible if the other income and the tax deducted
in accordance with other provisions of Part B and
collected in accordance with the provisions of Part BB,
of this Chapter, had not been taken into account.’.
Amendment of
section 193.
51. In section 193 of the Income-tax Act, in the proviso, in
clause (iv), for the proviso, the following proviso shall be
substituted with effect from the 1st day of October, 2024,
namely:––
“Provided that nothing in this clause shall apply to the
interest exceeding ten thousand rupees payable during the
financial year on 8 per cent. Savings (Taxable) Bonds, 2003
or 7.75 per cent. Savings (Taxable) Bonds, 2018 or Floating
Rate Savings Bonds, 2020 (Taxable) or any other security of
the
Central
Govern
ment
or
State
Government
as
the
Central
64
Government may, by notification in the Official Gazette,
specify in this behalf;”.
Amendment of
section 194.
52. In section 194 of the Income-tax Act, after the word,
brackets and letter “sub-clause (e)”, the words, brackets and
letter “or sub-clause (f)” shall be inserted with effect from the
1st day of October, 2024.
Amendment of
section 194C.
53. In section 194C of the Income-tax Act, in the
Explanation, in clause (iv), for the long line, the following long
line shall be substituted with effect from 1st day of October,
2024, namely:—
“but does not include—
(A) manufacturing or supplying a product according
to the requirement or specification of a customer by
using material purchased from a person, other than such
customer or associate of such customer; or
(B) any sum referred to in sub-section (1) of section
194J.”.
Amendment of
section 194DA.
54. In section 194DA of the Income-tax Act, for the words
“five per cent.”, the words “two per cent.” shall be substituted
with effect from the 1st day of October, 2024.
Omission of
section 194F.
55. Section 194F of the Income-tax Act shall be omitted with
effect from the 1st day of October, 2024.
Amendment of
section 194G.
56. In section 194G of the Income-tax Act, for the words
“five per cent.”, the words “two per cent.” shall be substituted
with effect from the 1st day of October, 2024.
Amendment of
section 194H.
57. In section 194H of the Income-tax Act, for the words
“five per cent.”, the words “two per cent.” shall be substituted
with effect from the 1st day of October, 2024.
Amendment of
section 194-IA.
58. In section 194-IA of the Income-tax Act, in sub-section
(2), the following proviso shall be inserted with effect from the
1st day of October, 2024, namely:––
“Provided that where there is more than one transferor
or transferee in respect of any immovable property, then the
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.”.
Amendment of
section 194-IB.
59. In section 194-IB of the Income-tax Act, in sub-section
(1),
for the words “
five
per cent
.
”, the words “
two
per cent
.
”
65
shall be substituted with effect from the 1st day of October,
2024.
Amendment of
section 194M.
60. In section 194M of the Income-tax Act, in sub-section
(1), for the words “five per cent.”, the words “two per cent.”
shall be substituted with effect from the 1st day of October,
2024.
Amendment of
section 194-O.
61. In section 194-O of the Income-tax Act, in sub-section
(1), for the words “one per cent.”, the figures and word “0.1 per
cent.” shall be substituted with effect from the 1st day of
October, 2024.
Insertion of new
section 194T.
62. After section 194S of the Income-tax Act, the following
section shall be inserted with effect from the 1st day of April,
2025, namely:––
Payments to
partners of
firms.
“194T. (1) Any person, being a firm, responsible for
paying any sum in the nature of salary, remuneration,
commission, bonus or interest to a partner of the firm, shall,
at the time of credit of such sum to the account of the partner
(including the capital account) or at the time of payment
thereof, whichever is earlier shall, deduct income-tax
thereon at the rate of ten per cent.
(2) 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.”.
Amendment of
section 196B.
63. In section 196B the Income-tax Act, for the words “at
the rate of ten per cent.”, the following shall be substituted and
shall be deemed to have been substituted with effect from the
23rd day of July, 2024, namely:–
“at the rate of––
(a) ten per cent.in respect of income from units referred
to in clause (i) of sub-section (1) of section 115AB;
(b) ten per cent.in respect of long-term capital gains
arising from transfer of units referred to in section 115AB,
which takes place before the 23
rd
day of July, 2024;
(c) twelve and one-half per cent. in respect of long-term
capital gains arising from transfer of units referred to in
section 115AB, which takes place on or after the 23
rd
day of
July, 2024.”.
66
Amendment of
section 196C.
64. In section 196C of the Income-tax Act, for the words “at
the rate of ten per cent.”, the following shall be substituted and
shall be deemed to have been substituted with effect from the
23rd day of July, 2024, namely:––
“at the rate of––
(a) ten per cent. in respect of income by way of interest
or dividends in respect of bonds or Global Depository
Receipts referred to in section 115AC;
(b) ten 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
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.”.
Amendment of
section 197.
65. In section 197 of the Income-tax Act, in sub-section (1),
for the figures and letter “194-O”, the figures and letters “194-
O, 194Q” shall be substituted with effect from the 1st day of
October, 2024.
Amendment of
section 198.
66. In section 198 of the Income-tax Act, after the words
“this Chapter”, the words “and income tax paid outside India,
by way of deduction, in respect of which an assessee is allowed
a credit against the tax payable under this Act,” shall be inserted
with effect from the 1st day of April, 2025.
Amendment of
section 200.
67. In section 200 of the Income-tax Act, in sub-section (3),
after the proviso, the following proviso shall be inserted with
effect from the 1st day of April, 2025, namely:––
“Provided further that no correction statement shall be
delivered after the expiry of six years from the end of the
financial year in which the statement referred to in sub-
section (3) is required to be delivered.”.
Amendment of
section 200A.
68. In section 200A of the Income-tax Act, with effect from
the 1st day of April, 2025,—
(a) in the marginal heading, for the word “source”, the
words “source and other statements” shall be substituted;
(b) after sub-section (2), the following sub-section shall
be inserted, namely:—
67
“(3) The Board may make a scheme for processing
of statements made by any other person, not being a
deductor.”.
Amendment of
section 201.
69. In section 201 of the Income-tax Act, in sub-section
(3), with effect from the 1st day of April, 2025,—
(i) for the words “a person resident in India, at any
time after the expiry of seven years”, the words “any
person, at any time after the expiry of six years” shall be
substituted;
(ii) for the words “under the proviso”, the words
“under the first proviso” shall be substituted.
Amendment of
section 206C.
70. In section 206C of the Income-tax Act, ––
(a) for sub-section (1F), the following sub-section shall
be substituted with effect from the 1
st
day of January, 2025,
namely:––
“(1F) Every person, being a seller, who receives any
amount as consideration for sale of–
(i) a motor vehicle; or
(ii) any other goods, as may be specified by the
Central Government by notification in the Official
Gazette,
of the value exceeding ten lakh rupees, shall, at the time
of receipt of such amount, collect from the buyer, a sum
equal to one per cent. of the sale consideration as
income-tax.”;
(b) in sub-section (3B), the following proviso shall be
inserted with effect from the 1st day of April, 2025,
namely:––
“Provided that no correction statement shall be
delivered after the expiry of six years from the end of the
financial year in which the statement referred to in the
proviso to sub-section (3) is required to be delivered.”;
(c) in sub-section (4), after the words “such person”, the
words “or any other person eligible for credit” shall be
inserted with effect from the 1st day of January, 2025;
(d) with effect from the 1st day of April, 2025,––
68
(i) in sub-section (7), for the words “interest at the
rate of one per cent. per month or part thereof on the
amount of such tax from the date on which such tax was
collectible to the date on which the tax was actually paid
and such interest shall be paid”, the following shall be
substituted, namely:––
“interest–
(a) at the rate of one per cent. for every month or
part thereof on the amount of such tax from the date
on which such tax was collectible to the date on
which such tax is collected; and
(b) at the rate of one and one-half per cent. for
every month or part thereof on the amount of such
tax from the date on which such tax was collected to
the date on which such tax is actually paid,
and such interest shall be paid”;
(ii) after sub-section (7), the following sub-section
shall be inserted, namely: —
“(7A) 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.”;
(e) with effect from the 1st day of October, 2024,––
(i) in sub-section (9), for the words, brackets, figures
and letter “sub-section (1) or sub-section (1C)” at both
the places where they occur, the words, brackets, figures
and letters “sub-section (1), sub-section (1C) or sub-
section (1H)” shall be substituted;
(ii) after sub-section (11), the following sub-section
shall be inserted, namely:––
“(12) Notwithstanding anything contained in
this section, no collection of tax shall be made or
collection of tax shall be made at such lower rate in
respect of specified transaction, from such person or
class of persons, including institution, association
or
69
body or class of institutions, associations or bodies,
as the Central Government may, by notification in
the Official Gazette specify in this behalf.”.
Amendment of
section 230.
71. In section 230 of the Income-tax Act, in sub-section
(1A), in the proviso, in the long line, after the words and figures
“the Expenditure-tax Act, 1987,”, the words, brackets and
figures “or the Black Money (Undisclosed Foreign Income and
Assets) and Imposition of Tax Act, 2015,” shall be inserted with
effect from the 1st day of October, 2024.
35 of 1987.
22 of 2015.
Amendment of
section 244A.
72. In section 244A of the Income-tax Act, in sub-section
(1A), in the proviso, for the words “with the date on which such
assessment or reassessment is made”, the words “with the date
up to which such refund is withheld” shall be substituted with
effect from the 1st day of October, 2024.
Amendment of
section 245.
73. In section 245 of the Income-tax Act, in sub-section (2),
with effect from the 1st day of October, 2024,––
(a) the words “is of the opinion that the grant of refund
is likely to adversely affect the revenue,” shall be omitted;
(b) after the words “withhold the refund up to”, the
words “sixty days from” shall be inserted.
Amendment of
section 245Q.
74. In section 245Q of the Income-tax Act, in sub-section
(4), the following proviso shall be inserted with effect from the
1st day of October, 2024, namely:––
“Provided that the applicant may, on or before the 31st
day of October, 2024, request the Board for Advance
Rulings in writing that the application so transferred may not
be proceeded with, if up to the date of such request, the
Board for Advance Rulings has not passed an order under
sub-section (2) of section 245R.”.
Amendment of
section 245R.
75. In section 245R of the Income-tax Act, in sub-section
(2), after the third proviso, the following proviso shall be
inserted with effect from the 1st day of October, 2024,
namely:―
“Provided also that on receipt of an application under the
proviso to sub-section (4) of section 245Q, the Board for
Advance Rulings may, by an order, reject the application
referred to in sub-section (1) thereof as withdrawn on or
before the 31st day of December, 2024.”.
70
Amendment of
section 246A.
76. In section 246A of the Income-tax Act, in sub-section
(1), after clause (k), the following clause shall be inserted, with
effect from the 1st day of September, 2024, namely:––
“(ka) an order of assessment made by an Assessing
Officer under clause (c) of sub-section (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, on or after the 1st day of
September, 2024;”.
Amendment of
section 251.
77. In section 251 of the Income-tax Act, in sub-section (1),
in clause (a), the following proviso shall be inserted with effect
from the 1st day of October, 2024, namely:––
“Provided that where such appeal is against an order of
assessment made under section 144, he may set aside the
assessment and refer the case back to the Assessing Officer
for making a fresh assessment;”.
Amendment of
section 253.
78. In section 253 of the Income-tax Act, with effect from
the 1st day of October, 2024,––
(a) in sub-section (1), in clause (a), after word and
figures “section 154,”, the word, figures and letters “section
158BFA,” shall be inserted;
(b) in sub-section (3), for the words “sixty days of the
date on”, the words “two months from the end of the month
in” shall be substituted.
Amendment of
section
271FAA.
79. In section 271FAA of the Income-tax Act, for sub-
section (1), the following sub-section shall be substituted with
effect from the 1st day of October, 2024, namely:––
“(1) If a person referred to in sub-section (1) of section
285BA, who is required to furnish a statement under that
section,––
(a) provides inaccurate information in the statement
or fails to furnish correct information within the period
specified under sub-section (6) of the said section; or
(b) fails to comply with the due diligence
requirement prescribed under sub-section (7) of the said
section,
then, the prescribed income-tax authority referred to in sub-
section (1) thereof may direct that such person shall pay, by
way of penalty, a sum of fifty thousand rupees
.
”.
71
Insertion of new
section 271GC.
80. After section 271GB of the Income-tax Act, the
following section shall be inserted with effect from the 1
st
day
of April, 2025, namely:––
Penalty for
failure to
submit
statement under
section 285.
“271GC. 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––
(a) one thousand rupees for every day for which the
failure continues, if the period of failure does not exceed
three months; or
(b) one lakh rupees in any other case.”.
Amendment of
section 271H.
81. In section 271H of the Income-tax Act, in sub-section
(3), for the words “one year”, the words “one month” shall be
substituted with effect from the 1st day of April, 2025.
Amendment of
section 273B.
82. In section 273B of the Income-tax Act,––
(a) after the word, figures and letters “section 271FA,”,
the word, figures and letters “section 271FAA,” shall be
inserted with effect from the 1st day of October, 2024;
(b) after the word, figures and letters “section 271GB,”,
the words, figures and letters “section 271GC,” shall be
inserted with effect from the 1st day of April, 2025.
Amendment of
section 275.
83. In section 275 of the Income-tax Act, with effect from
the 1st day of October, 2024,––
(a) in sub-section (1), in clause (a), the words “Principal
Chief Commissioner or Chief Commissioner or” at both the
places where they occur shall be omitted;
(b) in sub-section (1A), the words “Principal Chief
Commissioner or Chief Commissioner or the” at both the
places where they occur shall be omitted.
Amendment of
section 276B.
84. In section 276B of the Income-tax Act, the following
proviso shall be inserted with effect from the 1st day of
October, 2024, namely:––
“Provided 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
72
before the time prescribed for filing the statement for such
payment under sub-section (3) of section 200.”.
Amendment of
section
276CCC.
85. In section 276CCC of the Income-tax Act, after the
words, brackets and letter “clause (a) of”, the words, brackets
and figure “sub-section (1) of” shall be inserted with effect
from the 1st day of September, 2024.
Amendment of
section 285.
86. In section 285 of the Income-tax Act, for the words
“sixty days from the end of such financial year, a statement”,
the words “such period, a statement” shall be substituted with
effect from the 1
st
day of April, 2025.
Amendment of
First Schedule.
87. In the First Schedule to the Income-tax Act, in rule 2, the
following proviso shall be inserted with effect from the 1st day
of April, 2025, namely:––
“Provided that any expenditure which is not admissible
under section 37 in computing the profits and gains of a
business, shall be included to the profits and gains of life
insurance business.”.
CHAPTER IV
THE DIRECT TAX VIVAD SE VISHWAS SCHEME, 2024
Short title and
commencement.
88. (1) This Scheme may be called the Direct Tax Vivad Se
Vishwas Scheme, 2024.
(2) It shall come into force on such date as the Central
Government may by notification in the Official Gazette,
appoint.
Definitions.
89. (1) In this Scheme, unless the context otherwise
requires,—
(a) “appellant” means—
(i) a person in whose case an appeal or a writ
petition or special leave petition has been filed either by
him or by the income-tax authority or by both, before an
appellate forum and such appeal or petition is pending
as on the specified date; or
(ii) a person who has filed his objections before the
Dispute Resolution Panel under section 144C of the
Income-tax Act and the Dispute Resolution Panel has not
issued any direction on or before the specified date; or
73
(iii) a person in whose case the Dispute Resolution
Panel has issued direction under sub-section (5) of
section 144C of the Income-tax Act and the Assessing
Officer has not completed the assessment under sub-
section (13) of that section on or before the specified
date; or
(iv) a person who has filed an application for revision
under section 264 of the Income-tax Act and such
application is pending as on the specified date;
(b) “appellate forum” means the Supreme Court or the
High Court or the Income Tax Appellate Tribunal or the
Commissioner (Appeals) or Joint Commissioner (Appeals),
as the case may be;
(c) “declarant” means a person who files declaration
under section 91;
(d) “declaration” means the declaration filed under
section 91;
(e) “designated authority” means an officer not below the
rank of a Commissioner of Income-tax notified by the
Principal Chief Commissioner for the purposes of this
Scheme;
(f) “disputed fee” means the fee determined under the
provisions of the Income-tax Act in respect of which appeal
has been filed by the appellant;
(g) “disputed income” in relation to an assessment year,
means the whole or so much of the total income as is
relatable to the disputed tax;
(h) “disputed interest” means the interest determined
in any case under the provisions of the Income-tax Act,
where—
(i) such interest is not charged or chargeable on
disputed tax;
(ii) an appeal has been filed by the appellant in
respect of such interest;
(i) “disputed penalty” means the penalty determined
in any case under the provisions of the Income-tax Act,
where—
74
(i) such penalty is not levied or leviable in respect
of disputed income or disputed tax, as the case may be;
(ii) an appeal has been filed by the appellant in
respect of such penalty;
(j) “disputed tax”, in relation to an assessment year or
financial year, as the case may be, means the income-tax
including surcharge and cess (hereafter in this Chapter
referred to as the amount of tax) payable by the appellant
under the provisions of the Income-tax Act, as computed
hereunder:—
(A) in a case where any appeal, writ petition or
special leave petition is pending before the appellate
forum as on the specified date, the amount of tax that is
payable by the appellant if such appeal or writ petition
or special leave petition was to be decided against him;
(B) in a case where objection filed by the appellant
is pending before the Dispute Resolution Panel under
section 144C of the Income-tax Act, as on the
specified date, the amount of tax payable by the
appellant if the Dispute Resolution Panel was to
confirm the variation proposed in the draft order;
(C) in a case where Dispute Resolution Panel has
issued any direction under sub-section (5) of section
144C of the Income-tax Act, and the Assessing Officer
has not completed the assessment under sub-section
(13) of that section on or before the specified date, the
amount of tax payable by the appellant as per the
assessment order to be passed by the Assessing Officer
in pursuance of the said assessment under sub-section
(13) thereof;
(D) in a case where an application for revision under
section 264 of the Income-tax Act, is pending as on the
specified date, the amount of tax payable by the appellant
if such application for revision was not to be accepted:
Provided that in a case where the dispute in relation
to an assessment year relates to reduction of tax credit
under section 115JAA or section 115JD of the Income-tax
Act, or any loss or depreciation computed thereunder, the
appellant shall have an option either to include the amount
of tax related to such tax credit or loss or depreciation in the
amount of disputed tax, or to carry forward the reduced tax
credit or loss or depreciation, in such manner as may be
prescribed
.
75
(k) “Income-tax Act” means the Income-tax Act, 1961;
43 of 1961.
(l) “last date” means such date as may be notified by the
Central Government in the Official Gazette;
(m) “prescribed” means prescribed by rules made under
this Act;
(n) “specified date” means the 22
nd
day of July, 2024;
(o) “tax arrear” means—
(i) the aggregate amount of disputed tax, interest
chargeable or charged on such disputed tax, and penalty
leviable or levied on such disputed tax; or
(ii) disputed interest; or
(iii) disputed penalty; or
(iv) disputed fee.
(2) The words and expressions used herein and not defined
but defined in the Income-tax Act shall have the meanings
respectively assigned to them in that Act.
Amount
payable by
declarant.
90. Subject to the provisions of this Scheme, where a
declarant files under the provisions of this Scheme on or before
the last date, a declaration to the designated authority in
accordance with the provisions of section 91 in respect of tax
arrear, then, notwithstanding anything contained in the
Income-tax Act or any other law for the time being in force, the
amount payable by the declarant under this Scheme shall be as
mentioned in the Table below, namely:—
TABLE
Sl.
No.
Nature of
tax arrear.
Amount
payable under
this Scheme
on or before
the
31st day of
December, 2024.
Amount
payable
under this
Scheme on or
after the 1st
day of
January, 2025
but on or
before the
last
date.
(1)
(2) (3) (4)
76
(a)
where the
tax arrear is
the
aggregate
amount of
disputed tax,
interest
chargeable
or charged
on such
disputed tax
and penalty
leviable or
levied on
such
disputed tax
in a case
where the
declarant is
an appellant
after the 31
st
day of
January,
2020 but on
or before the
specified
date.
Amount of
the disputed
tax
the aggregate
of the amount
of disputed tax
and ten per
cent. Of
disputed tax.
(b)
where the
tax arrear is
the
aggregate
amount of
disputed tax,
interest
chargeable
or charged
on such
disputed tax
and penalty
leviable or
levied on
such
disputed tax
in a case
where the
declarant is
an appellant
on or before
the
31st
day
The
aggregate of
the amount of
disputed tax
and ten per
cent. Of
disputed tax
the aggregate
of the amount
of disputed tax
and twenty per
cent. Of
disputed tax.
77
of January,
2020 at the
same
appellate
forum in
respect of
the such tax
arrear.
(c)
where the
tax arrear
relates to
disputed
interest or
disputed
penalty or
disputed fee
where the
declarant is
an appellant
after the 31st
day of
January,
2020 but on
or before the
specified
date.
Twenty-five
per cent. Of
disputed
interest or
disputed
penalty or
disputed fee.
Thirty per
cent. Of
disputed
interest or
disputed
penalty or
disputed fee.
(d)
where the
tax arrear
relates to
disputed
interest or
disputed
penalty or
disputed fee
where the
declarant is
an appellant
on or before
the 31st day
of January,
2020 at the
same
appellate
forum in
respect of
the such tax
arrear.
Thirty per
cent. Of
disputed
interest or
disputed
penalty or
disputed fee.
Thirty-five per
cent. Of
disputed
interest or
disputed
penalty or
disputed fee:
78
Provided that in a case where an appeal or writ petition or
special leave petition is filed by the income-tax authority on any
disputed issue before the appellate forum, the amount payable
shall be one-half of the amount in the Table above calculated on
such issue, in such manner, as may be prescribed:
Provided further that in a case where an appeal is filed before
the Commissioner (Appeals) or Joint Commissioner (Appeals) or
objections is filed before the Dispute Resolution Panel by the
appellant on any issue on which he has already got a decision
in his favour from the Income Tax Appellate Tribunal (where
the decision on such issue is not reversed by the High Court or
the Supreme Court) or the High Court (where the decision on
such issue is not reversed by the Supreme Court), the amount
payable shall be one-half of the amount in the Table above
calculated on such issue, in such manner, as may be prescribed:
Provided also that in a case where an appeal is filed by the
appellant on any issue before the Income Tax Appellate
Tribunal on which he has already got a decision in his favour
from the High Court (where the decision on such issue is not
reversed by the Supreme Court), the amount payable shall be
one-half of the amount in the Table above calculated on such
issue, in such manner as may be prescribed.
Filing of
declaration and
particulars to be
furnished.
91. (1) The declaration referred to in section 90 shall be
filed by the declarant before the designated authority in such
form and verified in such manner, as may be prescribed.
(2) Upon filing the declaration, any appeal pending before
the Income Tax Appellate Tribunal or Commissioner
(Appeals) or Joint Commissioner (Appeals), in respect of the
disputed income or disputed interest or disputed penalty or
disputed fee and tax arrear, shall be deemed to have been
withdrawn from the date on which certificate under sub-section
(1) of section 92 is issued by the designated authority.
(3) Where the declarant has filed any appeal before the
appellate forum or any writ petition before the High Court or
the Supreme Court against any order in respect of tax arrear, he
shall withdraw such appeal or writ petition with the leave of the
Court wherever required after issuance of certificate under sub-
section (1) of section 92 and furnish proof of such withdrawal
along with the intimation of payment to the designated
authority under sub- section (2) of that section.
(4) Without prejudice to the provisions of sub- section (2)
and sub-section (3), the declarant shall furnish an undertaking
waiving his right, whether direct or indirect, to seek or pursue
any remedy or any claim in relation to the tax arrear which may
79
otherwise be available to him under any law for the time being
in force and the undertaking shall be made in such form and
manner, as may be prescribed.
(5) The declaration under sub-section (1) shall be deemed
not to have been made if,––
(a) any material particular furnished in the declaration
is found to be false at any stage; or
(b) the declarant violates any of the conditions referred
to in this Scheme; or
(c) the declarant acts in any manner which is not in
accordance with the undertaking given by him under sub-
section (4),
and in such cases, all the proceedings and claims which were
withdrawn under section 91 and all the consequences under the
Income-tax Act against the declarant shall be deemed to have
been revived.
(6) No appellate forum shall proceed to decide any issue
relating to the tax arrear mentioned in the declaration in respect
of which an order has been made under sub- section (1) of
section 92 by the designated authority or in respect of payment
of sum determined under that section.
Time and
manner of
payment.
92. (1) The designated authority shall, within a period of
fifteen days from the date of receipt of the declaration, by order,
determine the amount payable by the declarant in accordance
with the provisions of this Scheme and grant a certificate to the
declarant containing particulars of the tax arrear and the
amount payable after such determination, in such form as may
be prescribed.
(2) The declarant shall pay the amount determined under
sub-section (1) within a period of fifteen days of the date of
receipt of the certificate and intimate the details of such
payment to the designated authority in the prescribed form and
thereupon the designated authority shall pass an order stating
that the declarant has paid the amount.
(3) Every order passed under sub-section (1), determining
the amount payable under this Scheme, shall be conclusive as
to the matters stated therein and no matter covered by such
order shall be reopened in any other proceeding under the
Income-tax Act or under any other law for the time being in
force.
80
(4) Making a declaration under this Scheme shall not
amount to conceding the tax position and it shall not be lawful
for the income-tax authority or the declarant being a party in
appeal or writ petition or special leave petition to contend that
the declarant or the income-tax authority, as the case may be,
has acquiesced in the decision on the disputed issue by settling
the dispute.
Immunity from
initiation of
proceedings in
respect of
offence and
imposition of
penalty in
certain cases.
93. Subject to the provisions of section 92, the designated
authority shall not institute any proceeding in respect of an
offence; or impose or levy any penalty; or charge any interest
under the Income-tax Act in respect of tax arrear.
No refund of
amount paid.
94. (1) Any amount paid in pursuance of a declaration made
under section 91 shall not be refundable under any
circumstances.
(2) Where the declarant had, before filing the declaration
under sub-section (1) of section 91, paid any amount under the
Income-tax Act in respect of his tax arrear which exceeds the
amount payable under section 90, he shall be entitled to a
refund of such excess amount, but shall not be entitled to
interest on such excess amount under section 244A of the
Income-tax Act.
No benefit,
concession or
immunity to
declarant.
95. Save as otherwise expressly provided in sub-section (3)
of section 92 or section 93, nothing contained in this Scheme
shall be construed as conferring any benefit, concession or
immunity on the declarant in any proceedings other than those
in relation to which the declaration has been made.
Scheme not to
apply in certain
cases.
96. The provisions of this Scheme shall not apply—
(a) in respect of tax arrear,—
(i) relating to an assessment year in respect of
which an assessment has been made under sub-section
(3) of section 143 or section 144 or section 147 or
section 153A or section 153C of the Income-tax Act on
the basis of search initiated under section 132 or section
132A of the Income-tax Act;
(ii) relating to an assessment year in respect of
which prosecution has been instituted on or before the
date of filing of declaration;
(iii) relating to any undisclosed income from a
81
source located outside India or undisclosed asset
located outside India;
(iv) relating to an assessment or reassessment made
on the basis of information received under an agreement
referred to in section 90 or section 90A of the Income-
tax Act, if it relates to any tax arrear;
(b) to any person in respect of whom an order of
detention has been made under the provisions of the
Conservation of Foreign Exchange and Prevention of
Smuggling Activities Act, 1974 on or before the date of
filing of declaration:
52 of 1974.
Provided that—
(i) such order of detention, being an order to which
the provisions of section 9 or section 12A of the said
Act do not apply, has not been revoked on the report of
the Advisory Board under section 8 of the said Act or
before the receipt of the report of the Advisory Board;
or
(ii) such order of detention, being an order to which
the provisions of section 9 of the said Act apply, has not
been revoked before the expiry of the time for, or on the
basis of, the review under sub-section (3) of section 9,
or on the report of the Advisory Board under section 8,
read with sub-section (2) of section 9, of the said Act;
or
(iii) such order of detention, being an order to which
the provisions of section 12A of the said Act apply, has
not been revoked before the expiry of the time for, or on
the basis of, the first review under sub-section (3) of that
section, or on the basis of the report of the Advisory
Board under section 8 read with sub-section (6) of
section 12A, of the said Act; or
(iv) such order of detention has not been set aside
by a court of competent jurisdiction;
(c) to any person in respect of whom prosecution for any
offence punishable under the provisions of the Unlawful
Activities (Prevention) Act, 1967, the Narcotic Drugs and
Psychotropic Substances Act, 1985, the Prohibition of
Benami Property Transactions Act, 1988, the Prevention of
Corruption Act, 1988, the Prevention of Money-
Laundering Act, 2002, has been instituted on or before the
filing of the declaration or such person has been convicted
37 of 1967.
61 of 1985.
45 of 1988.
49 of 1988.
15 of 2003.
82
of any such offence punishable under any of those Acts;
(d) to any person in respect of whom prosecution has
been initiated by an Income-tax authority for any offence
punishable under the provisions of the Bharatiya Nyaya
Sanhita, 2023 or for the purpose of enforcement of any civil
liability under any law for the time being in force, on or
before the filing of the declaration or such person has been
convicted of any such offence consequent to the
prosecution initiated by an Income- tax authority;
45 of 2023.
(e) to any person notified under section 3 of the Special
Court (Trial of Offences Relating to Transactions in
Securities) Act, 1992 on or before the date of filing of
declaration.
27 of 1992.
Power of Board
to issue
directions, etc.
97. (1) The Central Board of Direct Taxes may, from time
to time, issue such directions or orders to the income-tax
authorities, as it may deem fit:
Provided that no direction or order shall be issued so as to
require any designated authority to dispose of a particular case
in a particular manner.
(2) Without prejudice to the generality of the foregoing
power, the said Board may, if it considers necessary or
expedient so to do, for the purpose of this Scheme, including
collection of revenue, issue from time to time, general or
special orders in respect of any class of cases, setting forth
directions or instructions as to the guidelines, principles or
procedures to be followed by the authorities in any work
relating to this Act, including collection of revenue and issue
such order, by way of relaxation of any provision of this
Chapter or otherwise, if the Board is of the opinion that it is
necessary in the public interest so to do.
Power to
remove
difficulties.
98. (1) If any difficulty arises in giving effect to the
provisions of this Scheme, the Central Government may, by
order, not inconsistent with the provisions of this Scheme,
remove the difficulty:
Provided that no such order shall be made after the expiry
of a period of two years from the date on which the provisions
of this Scheme come into force.
(2) Every order made under sub-section (1) shall, as soon
as may be after it is made, be laid before each House of
Parliament.
83
Power to make
rules.
99. (1) The Central Government may, by notification in the
Official Gazette, make rules for carrying out the provisions of
this Scheme.
(2) Without prejudice to the generality of the foregoing
power, such rules may provide for all or any of the following
matters, namely:—
(a) determination of disputed tax including the manner
of set-off in respect of brought forward or carry forward of
tax credit under section 115JAA or section 115JD of the
Income-tax Act or set-off in respect of brought forward or
carry forward of loss or allowance of depreciation under the
provisions of the Income-tax Act;
(b) manner of calculating one half of the amount in the
Table under the First, Second and Third provisos to section
90;
(c) the form in which a declaration may be made, and
the manner of its verification under section 91;
(d) the form and manner in which declarant shall furnish
undertaking under sub-section (4) of section 91;
(e) the form in which certificate shall be granted under
sub- section (1) of section 92;
(f) the form in which payment shall be intimated under
sub-section (2) of section 92;
(g) the manner of calculating the amount payable under
this Scheme;
(h) any other matter which is to be, or may be,
prescribed, or in respect of which provision is to be made,
by rules.
(3) Every rule made by the Central Government under this
Scheme shall be laid, as soon as may be after it is made, before
each House of Parliament, while it is in session, for a total
period of thirty days, which may be comprised in one session
or in two or more successive sessions, and if, before the expiry
of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making any
modification in the rule or both Houses agree that the rule
should not be made, the rule shall thereafter have effect only in
such modified form or be of no effect, as the case may be; so,
however, that any such modification or annulment shall be without
prejudice to the validity of anything previously done under that rule.
84
CHAPTER V
INDIRECT TAXES
Customs
Amendment of
section 28DA.
100. In the Customs Act, 1962 (hereinafter referred to as the
Customs Act), in section 28 DA,––
52 of 1962.
(a) in sub-section (2) and clauses (ii), (iii) and (iv) of sub-
section (10), for the word “certificate”, the word “proof”
shall be substituted;
(b) in Chapter V-AA, in the Explanation,––
(i) for clause (a), the following clause shall be
substituted, namely:––
‘(a) “proof of origin” means a certificate or
declaration issued in accordance with a trade
agreement certifying or declaring, as the case may be,
that the goods fulfil the country of origin criteria and
other requirements specified in the said agreement;’;
(ii) for clause (c), the following clause shall be
substituted, namely:––
‘(c) “Issuing Authority” means an authority or
person designated for the purposes of issuing proof
of origin under a trade agreement;’.
Amendment of
section 65.
101. In section 65 of the Customs Act, in sub-section (1),
the following proviso shall be inserted, namely:––
“Provided that the Central Government may, if satisfied
that it is necessary in the public interest so to do, by
notification in the Official Gazette, specify the
manufacturing processes and other operations in relation to
a class of goods that shall not be permitted in a warehouse.”.
Amendment of
section 143AA.
102. In the Customs Act, in section 143AA, after the words
“importers or exporters”, the words “or any other persons,”
shall be inserted.
Amendment of
section 157.
103. In the Customs Act, in section 157, in sub-section (2),
in clause (m), after the words “importers or exporters”, the
words “or any other persons,” shall be inserted.
85
Retrospective
effect to
notification
issued under
sub-section (1)
of section 25 of
Customs Act,
read with sub-
section (12) of
section 3 of
Customs Tariff
Act.
104. The notification of the Government of India in the
Ministry of Finance (Department of Revenue) number G.S.R.
394 (E), dated the 12th July, 2024 issued by the Central
Government, in exercise of the powers conferred by sub-section
(1) of section 25 of the Customs Act, 1962 read with sub-
section (12) of section 3 of the Customs Tariff Act, 1975, shall
be deemed to have, and always to have, for all purposes, come
into force on and from the 1st day of July, 2017.
52 of 1962.
51 of 1975.
Retrospective
amendment of
notification
issued under
sub-section (1)
of section 25 of
Customs Act
read with
section 124 of
Finance Act.
105. (1) Subject to the provisions of sub-section (2), the
notification of the Government of India in the Ministry of
Finance (Department of Revenue) number G.S.R.356(E), dated
the 10th May, 2023, issued by the Central Government, on
being satisfied that it is necessary in the public interest so to do,
under sub-section (1) of section 25 of the Customs Act read
with section 124 of the Finance Act, 2021 (hereinafter referred
to as the Finance Act), shall be deemed to have, and always to
have, for all purposes, come into force with effect from the 1st
day of April, 2023, and remain in force during the period from
the 1st day of April, 2023 and ending with the 30th day of June,
2023 (both days inclusive).
(2) The notification of the Government of India in the
Ministry of Finance (Department of Revenue) number G.S.R.
356(E), dated the 10th May, 2023, issued by the Central
Government, on being satisfied that it is necessary in the public
interest so to do, under sub-section (1) of section 25 of the
Customs Act read with section 124 of the Finance Act shall
stand amended in the manner specified in column (2) of the
Second Schedule and shall be deemed to have been amended
retrospectively on and from and upto the corresponding date
specified in column (3) of that Schedule against the notification
number to be amended as specified in column (1) of that
Schedule.
(3) For the purposes of sub-section (2), the Central
Government shall have and shall be deemed to have the power
to amend the notification referred to in the said sub-section with
retrospective effect as if the Central Government had the power
to amend the said notification under sub-section (1) of section
25 of the Customs Act read with section 124 of the Finance Act
at all material times.
(4) Refund shall be made of the whole of duty and cess,
which has been collected, but which would not have been so
collected, had the notification referred to in sub-section (1) been
in force in the manner and to the extent specified in sub-sections
86
(1) and (2), in accordance with the provisions of sub-section (2)
of section 27 of the Customs Act:
Provided that the person claiming the refund of such duty and
cess makes an application in this behalf to the jurisdictional
Assistant Commissioner of Customs or Deputy Commissioner
of Customs, as the case may be, on or before the 31st day of
March, 2025.
Customs Tariff
Omission of
section 6.
106. In the Customs Tariff Act, 1975 (hereinafter referred to
as the Customs Tariff Act), section 6 shall be omitted.
51 of 1975.
Amendment of
First Schedule.
107. In the Customs Tariff Act, the First Schedule shall,––
(a) be amended in the manner specified in the Third
Schedule;
(b) be also amended in the manner specified in the Fourth
Schedule, with effect from the 1st day of October, 2024.
Excise
Amendment of
notification
issued under
section 5A of
Central Excise
Act
retrospectively.
108. (1) Notwithstanding the supersession of the notification
of the Government of India in the Ministry of Finance
(Department of Revenue) number G.S.R 163 (E), dated the 17th
March, 2012, issued under sub-section (1) of section 5A of the
Central Excise Act, 1944, the said notification shall stand
amended and shall be deemed to have been amended
retrospectively, in the manner specified in column (2) of the
Fifth Schedule, on and from the corresponding date specified in
column (3) of that Schedule, against the said notification
specified in column (1) of that Schedule.
1 of 1944.
(2) For the purposes of sub-section (1), the Central
Government shall have and shall be deemed to have the power
to amend the said notification with retrospective effect as if the
Central Government had the power to amend the said
notification under sub-section (1) of section 5A of the Central
Excise Act, 1944, retrospectively, at all material times.
1 of 1944.
Explanation.—For the removal of doubts, it is hereby
declared that no act or omission on the part of any person shall
be punishable as an offence which would not have been so
punishable had this section not come into force.
87
Amendment of
notification
issued under
section 5A of
Central Excise
Act,
retrospectively.
109. (1) The notification of the Government of India in the
Ministry of Finance (Department of Revenue) number
G.S.R.794(E), dated the 30th June, 2017 issued under sub-
section (1) of section 5A of the Central Excise Act, 1944 shall
stand amended in the manner specified in column (3) of the
Sixth Schedule and shall be deemed to have been amended
retrospectively on and from the corresponding date specified in
column (4) of that Schedule against the notification number to
be amended as specified in column (2) of that Schedule.
1 of 1944.
(2) Notwithstanding anything contained in any judgment,
decree or order of any court, tribunal or other authority, any
action taken or anything done or purported to have been taken
or done, at any time during the period commencing on and from
the 1st day of July, 2017, relating to the provisions as amended
by sub-section (1), shall be deemed to be, and deemed always
to have been, for all purposes, as validly and effectively taken
or done as if the amendment made by sub-section (1) had been
in force at all material times.
(3) Notwithstanding the repeal of the Chapter VII of the
Finance Act, 2010 as amended by the Finance Act, 2016, for
the purposes of sub-section (1), the Central Government shall
have and shall be deemed to have the power to amend the
notification referred to in sub-section (1) with retrospective
effect as if the Central Government had the power to amend the
said notification under section 5A of the Central Excise
Act,1944, retrospectively, at all material times.
14 of 2010.
28 of 2016.
Explanation.—For the removal of doubts, it is hereby
declared that no act or omission on the part of any person shall
be punishable as an offence which would not have been so
punishable had this section not come into force.
Central Goods and Services Tax
Amendment of
section 9.
110. In the Central Goods and Services Tax Act, 2017
(hereinafter referred to as the Central Goods and Services Tax
Act), in section 9, in sub-section (1), after the words “alcoholic
liquor for human consumption”, the words “and un-denatured
extra neutral alcohol or rectified spirit used for manufacture of
alcoholic liquor, for human consumption” shall be inserted.
12 of 2017.
Amendment of
section 10.
111. In section 10 of the Central Goods and Services Tax
Act, in sub-section (5), after the words and figures “section 73
or section 74”, the words, figures and letter “or section 74A”
shall be inserted.
Insertion of new
section 11A.
112. After section 11 of the Central Goods and Services Tax
Act, the
following section shall be inserted, namely:
––
88
Power not to
recover Goods
and Services
Tax not levied
or short-levied
as a result of
general
practice.
“11A. Notwithstanding anything contained in this Act, if
the Government is satisfied that ––
(a) a practice was, or is, generally prevalent regarding
levy of central tax (including non-levy thereof) on any supply
of goods or services or both; and
(b) such supplies were, or are, liable to, –
(i) central tax, in cases where according to the said
practice, central tax was not, or is not being, levied, or
(ii) a higher amount of central tax than what was, or
is being, levied, in accordance with the said practice,
the Government may, on the recommendation of the Council,
by notification in the Official Gazette, direct that the whole
of the central tax payable on such supplies, or, as the case
may be, the central tax in excess of that payable on such
supplies, but for the said practice, shall not be required to be
paid in respect of the supplies on which the central tax was
not, or is not being levied, or was, or is being, short-levied,
in accordance with the said practice.”.
Amendment of
section 13.
113. In section 13 of the Central Goods and Services Tax
Act, in sub-section (3),––
(i) in clause (b), for the words “by the supplier:”, the
words “by the supplier, in cases where invoice is required to
be issued by the supplier; or” shall be substituted;
(ii) after clause (b), the following clause shall be inserted,
namely:––
“(c) the date of issue of invoice by the recipient, in
cases where invoice is to be issued by the recipient:”;
(iii) in the first proviso, after the words, brackets and
letter “or clause (b)”, the words, brackets and letter “or clause
(c)” shall be inserted.
Amendment of
section 16.
114. In section 16 of the Central Goods and Services Tax
Act, with effect from the 1st day of July, 2017, after sub-section
(4), the following sub-sections shall be inserted, namely:––
“(5) Notwithstanding anything contained in sub-section
(4), in respect of an invoice or debit note for supply of goods
or services or both pertaining to the Financial Years 2017-
18, 2018
-
19, 2019
-
20 and 2020
-
21, the registered person
89
shall be entitled to take input tax credit in any return under
section 39 which is filed upto the thirtieth day of November,
2021.
(6) Where registration of a registered person is cancelled
under section 29 and subsequently the cancellation of
registration is revoked by any order, either under section 30
or pursuant to any order made by the Appellate Authority or
the Appellate Tribunal or court and where availment of input
tax credit in respect of an invoice or debit note was not
restricted under sub-section (4) on the date of order of
cancellation of registration, the said person shall be entitled
to take the input tax credit in respect of such invoice or debit
note for supply of goods or services or both, in a return under
section 39,––
(i) filed upto thirtieth day of November following the
financial year to which such invoice or debit note pertains
or furnishing of the relevant annual return, whichever is
earlier; or
(ii) for the period from the date of cancellation of
registration or the effective date of cancellation of
registration, as the case may be, till the date of order of
revocation of cancellation of registration, where such
return is filed within thirty days from the date of order of
revocation of cancellation of registration,
whichever is later.”.
Amendment of
section 17.
115. In section 17 of the Central Goods and Services Tax
Act, in sub-section (5), in clause (i), for the words and figures
“sections 74, 129 and 130”, the words and figures “section 74
in respect of any period upto Financial Year 2023-24” shall be
substituted.
Amendment of
section 21.
116. In section 21 of the Central Goods and Services Tax
Act, after the words and figures “section 73 or section 74”, the
words, figures and letter “or section 74A” shall be inserted.
Amendment of
section 30.
117. In section 30 of the Central Goods and Services Tax
Act, in sub-section (2), after the proviso, the following proviso
shall be inserted, namely:––
“Provided further that such revocation of cancellation of
registration shall be subject to such conditions and
restrictions, as may be prescribed.”.
Amendment of
section 31.
118. In section 31 of the Central Goods and Services Tax
Act,
––
90
(a) in sub-section (3), in clause (f), after the words and
figure “of section 9 shall”, the words “, within the period as
may be prescribed,” shall be inserted;
(b) after clause (g), the following Explanation shall be
inserted, namely:––
‘Explanation.––For the purposes of clause (f), the
expression “supplier who is not registered” shall include
the supplier who is registered solely for the purpose of
deduction of tax under section 51.’.
Amendment of
section 35.
119. In section 35 of the Central Goods and Services Tax
Act, in sub-section (6), after the words and figures “section 73
or section 74”, the words, figures and letter “or section 74A”
shall be inserted.
Amendment of
section 39.
120. In section 39 of the Central Goods and Services Tax
Act, for sub-section (3), the following sub-section shall be
substituted, namely: ––
“(3) Every registered person required to deduct tax at
source under section 51 shall electronically furnish a return
for every calendar month of the deductions made during the
month in such form and manner and within such time as may
be prescribed:
Provided that the said registered person shall furnish a
return for every calendar month whether or not any
deductions have been made during the said month.”.
Amendment of
section 49.
121. In section 49 of the Central Goods and Services Tax
Act, in sub-section (8), in clause (c), after the words and figures
“section 73 or section 74”, the words, figures and letter “or
section 74A” shall be inserted.
Amendment of
section 50.
122. In section 50 of the Central Goods and Services Tax
Act, in sub-section (1), in the proviso, after the words and
figures “section 73 or section 74”, the words, figures and letter
“or section 74A” shall be inserted.
Amendment of
section 51.
123. In section 51 of the Central Goods and Services Tax
Act, in sub-section (7), after the words and figures “section 73
or section 74”, the words, figures and letter “or section 74A”
shall be inserted.
Amendment of
section 54.
124. In section 54 of the Central Goods and Services Tax
Act,––
91
(a) in sub-section (3), the second proviso shall be
omitted;
(b) after sub-section (14) and before the Explanation, the
following sub-section shall be inserted, namely: ––
“(15) Notwithstanding anything contained in this
section, no refund of unutilised input tax credit on
account of zero rated supply of goods or of integrated tax
paid on account of zero rated supply of goods shall be
allowed where such zero rated supply of goods is
subjected to export duty.”.
Amendment of
section 61.
125. In section 61 of the Central Goods and Services Tax
Act, in sub-section (3), after the words and figures “section 73
or section 74”, the words, figures and letter “or section 74A”
shall be inserted.
Amendment of
section 62.
126. In section 62 of the Central Goods and Services Tax
Act, in sub-section (1), after the words and figures “section 73
or section 74”, the words, figures and letter “or section 74A”
shall be inserted.
Amendment of
section 63.
127. In section 63 of the Central Goods and Services Tax
Act, after the words and figures “section 73 or section 74”, the
words, figures and letter “or section 74A” shall be inserted.
Amendment of
section 64.
128. In section 64 of the Central Goods and Services Tax
Act, in sub-section (2), after the words and figures “section 73
or section 74”, the words, figures and letter “or section 74A”
shall be inserted.
Amendment of
section 65.
129. In section 65 of the Central Goods and Services Tax
Act, in sub-section (7), after the words and figures “section 73
or section 74”, the words, figures and letter “or section 74A”
shall be inserted.
Amendment of
section 66.
130. In section 66 of the Central Goods and Services Tax
Act, in sub-section (6), after the words and figures “section 73
or section 74”, the words, figures and letter “or section 74A”
shall be inserted.
Amendment of
section 70.
131. In section 70 of the Central Goods and Services Tax
Act, after sub-section (1), the following sub-section shall be
inserted, namely: ––
“(1A) All persons summoned under sub-section (1) shall
be bound to attend, either in person or by an authorised
representative, as such officer may direct, and the person so
appearing shall state the truth during examination or make
92
statements or produce such documents and other things as
may be required.”.
Amendment of
section 73.
132. In section 73 of the Central Goods and Services Tax
Act,––
(i) in the marginal heading, after the words
“Determination of tax”, the words and figures “, pertaining
to the period upto Financial Year 2023-24,” shall be inserted;
(ii) after sub-section (11), the following sub-section shall
be inserted, namely:––
“(12) The provisions of this section shall be
applicable for determination of tax pertaining to the
period upto Financial Year 2023-24.”.
Amendment of
section 74.
133. In section 74 of the Central Goods and Services Tax
Act, –
(i) in the marginal heading, after the words
“Determination of tax”, the words and figures “, pertaining
to the period upto Financial Year 2023-24,” shall be inserted;
(ii) after sub-section (11) and before Explanation 1, the
following sub-section shall be inserted, namely:––
“(12) The provisions of this section shall be
applicable for determination of tax pertaining to the
period upto Financial Year 2023-24.”;
(iii) the Explanation 2 shall be omitted.
Insertion of new
section 74A.
134. After section 74 of the Central Goods and Services Tax
Act, the following section shall be inserted, namely: ––
Determination
of tax not paid
or short paid or
erroneously
refunded or
input tax credit
wrongly availed
or utilised for
any reason
pertaining to
Financial Year
2024-25
onwards.
“74A. (1) Where it appears to the proper officer that any
tax has not been paid or short paid or erroneously refunded,
or where input tax credit has been wrongly availed or
utilised, he shall serve notice on the person chargeable with
tax which has not been so paid or which has been so short
paid or to whom the refund has erroneously been made, or
who has wrongly availed or utilised input tax credit,
requiring him to show cause as to why he should not pay the
amount specified in the notice along with interest payable
thereon under section 50 and a penalty leviable under the
provisions of this Act or the rules made thereunder:
Provided that no notice shall be issued, if the tax which
has not been paid or short paid or erroneously refunded or
93
where input tax credit has been wrongly availed or utilised
in a financial year is less than one thousand rupees.
(2) The proper officer shall issue the notice under sub-
section (1) within forty-two months from the due date for
furnishing of annual return for the financial year to which the
tax not paid or short paid or input tax credit wrongly availed
or utilised relates to or within forty-two months from the date
of erroneous refund.
(3) Where a notice has been issued for any period under
sub-section (1), the proper officer may serve a statement,
containing the details of tax not paid or short paid or
erroneously refunded or input tax credit wrongly availed or
utilised for such periods other than those covered under sub-
section (1), on the person chargeable with tax.
(4) The service of such statement shall be deemed to be
service of notice on such person under sub-section (1),
subject to the condition that the grounds relied upon for such
tax periods other than those covered under sub-section (1)
are the same as are mentioned in the earlier notice.
(5) The penalty in case where any tax which has not been
paid or short paid or erroneously refunded, or where input
tax credit has been wrongly availed or utilised,––
(i) for any reason, other than the reason of fraud or
any wilful-misstatement or suppression of facts to evade
tax, shall be equivalent to ten per cent. of tax due from
such person or ten thousand rupees, whichever is higher;
(ii) for the reason of fraud or any wilful-misstatement
or suppression of facts to evade tax shall be equivalent to
the tax due from such person.
(6) The proper officer shall, after considering the
representation, if any, made by the person chargeable with
tax, determine the amount of tax, interest and penalty due
from such person and issue an order.
(7) The proper officer shall issue the order under sub-
section (6) within twelve months from the date of issuance
of notice specified in sub-section (2):
Provided that where the proper officer is not able to issue
the order within the specified period, the Commissioner, or
an officer authorised by the Commissioner senior in rank to
the proper officer but not below the rank of Joint
Commissioner of Central Tax, may, having regard to the
94
reasons for delay in issuance of the order under sub-section
(6), to be recorded in writing, before the expiry of the
specified period, extend the said period further by a
maximum of six months.
(8) The person chargeable with tax where any tax has not
been paid or short paid or erroneously refunded, or where
input tax credit has been wrongly availed or utilised for any
reason, other than the reason of fraud or any wilful-
misstatement or suppression of facts to evade tax, may, ––
(i) before service of notice under sub-section (1), pay
the amount of tax along with interest payable under
section 50 of such tax on the basis of his own
ascertainment of such tax or the tax as ascertained by the
proper officer and inform the proper officer in writing of
such payment, and the proper officer, on receipt of such
information shall not serve any notice under sub-section
(1) or the statement under sub-section (3), as the case
may be, in respect of the tax so paid or any penalty
payable under the provisions of this Act or the rules made
thereunder;
(ii) pay the said tax along with interest payable under
section 50 within sixty days of issue of show cause
notice, and on doing so, no penalty shall be payable and
all proceedings in respect of the said notice shall be
deemed to be concluded.
(9) The person chargeable with tax, where any tax has
not been paid or short paid or erroneously refunded or where
input tax credit has been wrongly availed or utilised by
reason of fraud, or any wilful-misstatement or suppression of
facts to evade tax, may,––
(i) before service of notice under sub-section (1), pay
the amount of tax along with interest payable under
section 50 and a penalty equivalent to fifteen per cent. of
such tax on the basis of his own ascertainment of such
tax or the tax as ascertained by the proper officer and
inform the proper officer in writing of such payment, and
the proper officer, on receipt of such information, shall
not serve any notice under sub-section (1), in respect of
the tax so paid or any penalty payable under the
provisions of this Act or the rules made thereunder;
(ii) pay the said tax along with interest payable under
section 50 and a penalty equivalent to twenty-five per
cent. of such tax within sixty days of issue of the notice,
95
and on doing so, all proceedings in respect of the said
notice shall be deemed to be concluded;
(iii) pay the tax along with interest payable thereon
under section 50 and a penalty equivalent to fifty per
cent. of such tax within sixty days of communication of
the order, and on doing so, all proceedings in respect of
the said notice shall be deemed to be concluded.
(10) Where the proper officer is of the opinion that the
amount paid under clause (i) of sub-section (8) or clause (i)
of sub-section (9) falls short of the amount actually payable,
he shall proceed to issue the notice as provided for in sub-
section (1) in respect of such amount which falls short of the
amount actually payable.
(11) Notwithstanding anything contained in clause (i) or
clause (ii) of sub-section (8), penalty under clause (i) of sub-
section (5) shall be payable where any amount of self-
assessed tax or any amount collected as tax has not been paid
within a period of thirty days from the due date of payment
of such tax.
(12) The provisions of this section shall be applicable for
determination of tax pertaining to the Financial Year 2024-
25 onwards.
Explanation 1.––For the purposes of this section,––
(i) the expression “all proceedings in respect of the
said notice” shall not include proceedings under section
132;
(ii) where the notice under the same proceedings is
issued to the main person liable to pay tax and some other
persons, and such proceedings against the main person
have been concluded under this section, the proceedings
against all the persons liable to pay penalty under
sections 122 and 125 are deemed to be concluded.
Explanation 2.––For the purposes of this Act, the
expression “suppression” shall mean non-declaration of facts
or information which a taxable person is required to declare
in the return, statement, report or any other document
furnished under this Act or the rules made thereunder, or
failure to furnish any information on being asked for, in
writing, by the proper officer.
Amendment of
section 75.
135. In section 75 of the Central Goods and Services Tax
Act,
––
96
(a) in sub-section (1), after the word and figures “section
74”, the words, brackets, figures and letter “or sub-sections
(2) and (7) of section 74A” shall be inserted;
(b) after sub-section (2), the following sub-section shall
be inserted, namely: ––
“(2A) Where any Appellate Authority or Appellate
Tribunal or court concludes that the penalty under clause
(ii) of sub-section (5) of section 74A is not sustainable
for the reason that the charges of fraud or any wilful-
misstatement or suppression of facts to evade tax has not
been established against the person to whom the notice
was issued, the penalty shall be payable by such person,
under clause (i) of sub-section (5) of section 74A.”;
(c) for sub-section (10), the following sub-section shall
be substituted, namely:––
“(10) The adjudication proceedings shall be deemed
to be concluded, if the order is not issued within the
period specified in sub-section (10) of section 73 or in
sub-section (10) of section 74 or in sub-section (7) of
section 74A.”;
(d) in sub-section (11), after the word and figures
“section 74”, the words, brackets, figures and letter “or sub-
section (7) of section 74A” shall be inserted;
(e) in sub-section (12), after the words and figures
“section 73 or section 74”, the words, figures and letter “or
section 74 A” shall be inserted;
(f) in sub-section (13), after the words and figures
“section 73 or section 74”, the words, figures and letter “or
section 74 A” shall be inserted.
Amendment of
section 104.
136. In section 104 of the Central Goods and Services Tax
Act, in sub-section (1), in the Explanation, after the word and
figures “section 74”, the words, brackets, figures and letter “or
sub-sections (2) and (7) of section 74A” shall be inserted.
Amendment of
section 107.
137. In section 107 of the Central Goods and Services Tax
Act, ––
(a) in sub-section (6), in clause (b), for the word “twenty-
five”, the word “twenty” shall be substituted;
97
(b) in sub-section (11), in the second proviso, after the
words and figures “section 73 or section 74”, the words,
figures and letter “or section 74 A” shall be inserted.
Amendment of
section 109.
138. In section 109 of the Central Goods and Services Tax
Act, ––
(a) in sub-section (1), after the words “Revisional
Authority”, the words “, or for conducting an examination or
adjudicating the cases referred to in sub-section (2) of section
171, if so notified under the said section” shall be inserted;
(b) in sub-section (5), after the proviso, the following
provisos shall be inserted, namely:––
“Provided further that the matters referred to in sub-
section (2) of section 171 shall be examined or
adjudicated only by the Principal Bench:
Provided also that the Government may, on the
recommendations of the Council, notify other cases or
class of cases which shall be heard only by the Principal
Bench.”;
(c) in sub-section (6), for the words “The President”, the
words, brackets and figure “Subject to the provisions of sub-
section (5), the President” shall be substituted.
Amendment of
section 112.
139. In section 112 of the Central Goods and Services Tax
Act, ––
(a) with effect from the 1st day of August, 2024, in sub-
section (1), after the words “from the date on which the order
sought to be appealed against is communicated to the person
preferring the appeal”, the words “; or the date, as may be
notified by the Government, on the recommendations of the
Council, for filing appeal before the Appellate Tribunal
under this Act, whichever is later.” shall be inserted;
(b) with effect from the 1st day of August, 2024, in sub-
section (3), after the words “from the date on which the said
order has been passed”, the words “; or the date, as may be
notified by the Government, on the recommendations of the
Council, for the purpose of filing application before the
Appellate Tribunal under this Act, whichever is later,” shall
be inserted;
(c) in sub-section (6), after the words, brackets and figure
“after the expiry of the period referred to in sub-section (1)”,
the words, brackets and figure “or permit the filing of an
98
application within three months after the expiry of the period
referred to in sub-section (3)” shall be inserted;
(d) in sub-section (8), in clause (b),––
(i) for the words “twenty per cent.”, the words “ten
per cent.” shall be substituted;
(ii) for the words “fifty crore rupees”, the words
“twenty crore rupees” shall be substituted.
Amendment of
section 122.
140. In section 122 of the Central Goods and Services Tax
Act, with effect from the 1st day of October, 2023, in sub-
section (1B), for the words “Any electronic commerce operator
who”, the words and figures “Any electronic commerce
operator, who is liable to collect tax at source under section 52,”
shall be substituted.
Amendment of
section 127.
141. In section 127 of the Central Goods and Services Tax
Act, after the words and figures “section 73 or section 74”, the
words, figures and letter “or section 74A” shall be inserted.
Insertion of new
section 128A.
142. After section 128 of the Central Goods and Services
Tax Act, the following section shall be inserted, namely:––
Waiver of
interest or
penalty or both
relating to
demands raised
under section
73, for certain
tax periods.
“128A. (1) Notwithstanding anything to the contrary
contained in this Act, where any amount of tax is payable by
a person chargeable with tax in accordance with,––
(a) a notice issued under sub-section (1) of section 73
or a statement issued under sub-section (3) of section 73,
and where no order under sub-section (9) of section 73
has been issued; or
(b) an order passed under sub-section (9) of section
73, and where no order under sub-section (11) of section
107 or sub-section (1) of section 108 has been passed; or
(c) an order passed under sub-section (11) of section
107 or sub-section (1) of section 108, and where no order
under sub-section (1) of section 113 has been passed,
pertaining to the period from 1st July, 2017 to 31st March,
2020, or a part thereof, and the said person pays the full
amount of tax payable as per the notice or statement or the
order referred to in clause (a), clause (b) or clause (c), as the
case may be, on or before the date, as may be notified by the
Government on the recommendations of the Council, no
interest under section 50 and penalty under this Act, shall be
payable and all the p
roceedings in respect of the said notice
99
or order or statement, as the case may be, shall be deemed to
be concluded, subject to such conditions as may be
prescribed:
Provided that where a notice has been issued under sub-
section (1) of section 74, and an order is passed or required
to be passed by the proper officer in pursuance of the
direction of the Appellate Authority or Appellate Tribunal or
a court in accordance with the provisions of sub-section (2)
of section 75, the said notice or order shall be considered to
be a notice or order, as the case may be, referred to in clause
(a) or clause (b) of this sub-section:
Provided further that the conclusion of the proceedings
under this sub-section, in cases where an application is filed
under sub-section (3) of section 107 or under sub-section (3)
of section 112 or an appeal is filed by an officer of central
tax under sub-section (1) of section 117 or under sub-section
(1) of section 118 or where any proceedings are initiated
under sub-section (1) of section 108, against an order
referred to in clause (b) or clause (c) or against the directions
of the Appellate Authority or the Appellate Tribunal or the
court referred to in the first proviso, shall be subject to the
condition that the said person pays the additional amount of
tax payable, if any, in accordance with the order of the
Appellate Authority or the Appellate Tribunal or the court or
the Revisional Authority, as the case may be, within three
months from the date of the said order:
Provided also that where such interest and penalty has
already been paid, no refund of the same shall be available.
(2) Nothing contained in sub-section (1) shall be
applicable in respect of any amount payable by the person on
account of erroneous refund.
(3) Nothing contained in sub-section (1) shall be
applicable in respect of cases where an appeal or writ petition
filed by the said person is pending before Appellate
Authority or Appellate Tribunal or a court, as the case may
be, and has not been withdrawn by the said person on or
before the date notified under sub-section (1).
(4) Notwithstanding anything contained in this Act,
where any amount specified under sub-section (1) has been
paid and the proceedings are deemed to be concluded under
the said sub-section, no appeal under sub-section (1) of
section 107 or sub-section (1) of section 112 shall lie against
an order referred to in clause (b) or clause (c) of sub-section
(1), as the case may be.”.
100
Amendment of
section 140.
143. In section 140 of the Central Goods and Services
Tax Act, with effect from the 1st day of July, 2017, in sub-
section (7), for the words “even if the invoices relating to
such services are received on or after the appointed day”, the
words “whether the invoices relating to such services are
received prior to, on or after, the appointed day” shall be
substituted.
Amendment of
section 171.
144. In section 171 of the Central Goods and Services Tax
Act,––
(a) in sub-section (2), the following proviso and
Explanation shall be inserted, namely: ––
‘Provided that the Government may by notification, on
the recommendations of the Council, specify the date from
which the said Authority shall not accept any request for
examination as to whether input tax credits availed by any
registered person or the reduction in the tax rate have actually
resulted in a commensurate reduction in the price of the
goods or services or both supplied by him.
Explanation.––For the purposes of this sub-section,
“request for examination” shall mean the written application
filed by an applicant requesting for examination as to
whether input tax credits availed by any registered person or
the reduction in the tax rate have actually resulted in a
commensurate reduction in the price of the goods or services
or both supplied by him.’;
(b) the Explanation shall be renumbered as Explanation 1
thereof, and after Explanation 1 as so renumbered, the
Explanation shall be inserted, namely: ––
‘Explanation 2.––For the purposes of this section, the
expression “Authority” shall include the “Appellate
Tribunal”.’.
Amendment of
Schedule III.
145. In Schedule III to the Central Goods and Services Tax
Act, after paragraph 8 and before Explanation 1, the following
paragraphs shall be inserted, namely: ––
“9. Activity of apportionment of co-insurance premium
by the lead insurer to the co-insurer for the insurance services
jointly supplied by the lead insurer and the co-insurer to the
insured in coinsurance agreements, subject to the condition
that the lead insurer pays the central tax, the State tax, the
Union territory tax and the integrated tax on the entire
amount of premium paid by the insured.
101
10. Services by insurer to the reinsurer for which ceding
commission or the reinsurance commission is deducted from
reinsurance premium paid by the insurer to the reinsurer,
subject to the condition that the central tax, the State tax, the
Union territory tax and the integrated tax is paid by the
reinsurer on the gross reinsurance premium payable by the
insurer to the reinsurer, inclusive of the said ceding
commission or the reinsurance commission.”.
No refund of tax
paid or input tax
credit reversed.
146. 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 section 114 been in force at all material times.
Integrated Goods and Services Tax
Amendment of
section 5.
147. In the Integrated Goods and Services Tax Act, 2017
(hereinafter referred to as the Integrated Goods and Services
Tax Act), in section 5, in sub-section (1), after the words
“alcoholic liquor for human consumption”, the words “and un-
denatured extra neutral alcohol or rectified spirit used for
manufacture of alcoholic liquor, for human consumption” shall
be inserted.
13 of 2017.
Insertion of new
section 6A.
148. After section 6 of the Integrated Goods and Services
Tax Act, the following section shall be inserted, namely:––
Power not to
recover Goods
and Services
Tax not levied
or short-levied
as a result of
general
practice.
“6A. Notwithstanding anything contained in this Act, if
the Government is satisfied that––
(a) a practice was, or is, generally prevalent regarding
levy of integrated tax (including non-levy thereof) on any
supply of goods or services or both; and
(b) such supplies were, or are, liable to ––
(i) integrated tax, in cases where according to the
said practice, integrated tax was not, or is not being,
levied; or
(ii) a higher amount of integrated tax than what
was, or is being, levied, in accordance with the said
practice,
the Government may, on the recommendation of the Council,
by notification in the Official Gazette, direct that the whole
of the integrated tax payable on such supplies, or, as the case
may be, the integrated tax in excess of that payable on such
supplies, but for the said practice, shall not be required to be
paid in respect of the supplies on which the integrated tax
102
was not, or is not being, levied, or was, or is being, short-
levied, in accordance with the said practice.”.
Amendment of
section 16.
149. In section 16 of the Integrated Goods and Services Tax
Act,––
(a) in sub-section (4), ––
(i) in clause (i), after the words “claim refund of the
tax so paid”, the words and figures “in accordance with
the provisions of section 54 of the Central Goods and
Services Tax Act or the rules made thereunder” shall be
inserted;
(ii) in clause (ii), for the words “which may be
exported on payment of integrated tax and the supplier of
such goods or services may claim the refund of tax so
paid”, the words and figure “or both, on zero rated supply
of which, the supplier may pay integrated tax and claim
the refund of tax so paid, in accordance with the
provisions of section 54 of the Central Goods and
Services Tax Act or the rules made thereunder” shall be
substituted;
(b) after sub-section (4), the following sub-section shall
be inserted, namely:––
“(5) Notwithstanding anything contained in sub-
sections (3) and (4), no refund of unutilised input tax
credit on account of zero rated supply of goods or of
integrated tax paid on account of zero rated supply of
goods shall be allowed where such zero rated supply of
goods are subjected to export duty.”.
Amendment of
section 20.
150. In section 20 of the Integrated Goods and Services Tax
Act, for the fifth proviso, the following proviso shall be
substituted, namely:––
“Provided also that a maximum amount of forty crore
rupees shall be payable for each appeal to be filed before the
Appellate Authority or the Appellate Tribunal.”.
Union Territory Goods and Services Tax
Amendment of
section 7.
151. In the Union Territory Goods and Services Tax Act,
2017 (hereinafter referred as the Union Territory Goods and
Services Tax Act), in section 7, in sub-section (1), after the
words “alcoholic liquor for human consumption”, the words
“and un
-
denatured ext
ra neutral alcohol or rectified spirit which
14 of 2017.
103
is used for manufacture of alcoholic liquor, for human
consumption” shall be inserted.
Insertion of new
section 8A.
152. After section 8 of the Union Territory Goods and
Services Tax Act, the following section shall be inserted,
namely: ––
Power not to
recover Goods
and Services
Tax not levied
or short-levied
as a result of
general
practice.
“8A. Notwithstanding anything contained in this Act, if
the Government is satisfied that––
(a) a practice was, or is, generally prevalent regarding
levy of Union territory tax (including non-levy thereof)
on any supply of goods or services or both; and
(b) such supplies were, or are, liable to––
(i) Union territory tax, in cases where according
to the said practice, Union territory tax was not, or is
not being, levied; or
(ii) a higher amount of Union territory tax than
what was, or is being, levied, in accordance with the
said practice,
the Government may, on the recommendation of the Council,
by notification in the Official Gazette, direct that the whole
of the Union territory tax payable on such supplies, or, as the
case may be, the Union territory tax in excess of that payable
on such supplies, but for the said practice, shall not be
required to be paid in respect of the supplies on which the
Union territory tax was not, or is not being, levied, or was, or
is being, short-levied, in accordance with the said practice.”.
Goods and Services Tax
(Compensation to States)
Insertion of new
section 8A.
153. In the Goods and Services Tax (Compensation to States)
Act, 2017, after section 8, the following section shall be
inserted, namely: ––
15 of 2017.
Power not to
recover cess not
levied or short-
levied as a
result of general
practice.
“8A. Notwithstanding anything contained in this Act, if
the Government is satisfied that––
(a) a practice was, or is, generally prevalent regarding
levy of cess (including non-levy thereof) on any supply
of goods or services or both; and
(b) such supplies were, or are, liable to, –
104
(i) cess, in cases where according to the said
practice, cess was not, or is not being, levied; or
(ii) a higher amount of cess than what was, or is
being, levied, in accordance with the said practice,
the Government may, on the recommendation of the Council,
by notification in the Official Gazette, direct that the whole
of the cess payable on such supplies, or, as the case may be,
the cess in excess of that payable on such supplies, but for
the said practice, shall not be required to be paid in respect
of the supplies on which the cess was not, or is not being,
levied, or was, or is being, short-levied, in accordance with
the said practice.”.
CHAPTER VI
MISCELLANEOUS
PART I
AMENDMENT TO THE PROHIBITION OF BENAMI
PROPERTY TRANSACTIONS ACT, 1988
Amendment of
Act 45 of 1988.
154. In the Prohibition of Benami Property Transactions
Act, 1988, with effect from the 1st day of October, 2024,––
(a) in section 24,––
(i) after sub-section (2), the following sub-section
shall be inserted, namely:––
“(2A) The benamidar, to whom a notice has been
issued under sub-section (1), or the beneficial owner
to whom a copy of such notice has been issued under
sub-section (2), shall furnish the explanation or
submissions, if any, within the period specified in the
said notice or such period as may be extended by the
Initiating Officer, not exceeding three months from
the end of the month in which the said notice is
issued.”;
(ii) in sub-section (3), for the words “ninety days”,
the words “four months” shall be substituted;
(iii) in sub-section (4), for the words “ninety days”,
the words “four months” shall be substituted;
(iv) in sub-section (5), for the words “fifteen days
from the date of the attachment”, the words “
one month
105
from the end of the month in which the said order has
been passed” shall be substituted;
(b) after section 55, the following section shall be
inserted, namely:––
Power to tender
Immunity from
prosecution.
“55A. (1) The Initiating Officer may, with a view to
obtaining the evidence of the benamidar or any other
person as referred to in section 53, other than the
beneficial owner, tender immunity from prosecution for
any offence under the said section to the benamidar or
such other person, with the previous sanction of the
competent authority as referred to in section 55, on the
condition that the benamidar or such other person makes
a full and true disclosure of the whole circumstances
relating to the benami transaction.
(2) The tender of immunity made to, and accepted
by, the benamidar or such other person, shall, to the
extent to which the immunity extends, render him
immune from prosecution for the offence in respect of
which the tender was made and from the imposition of
any penalty under section 53.
(3) If it appears to the Initiating Officer that any
person to whom immunity has been tendered under this
section has not complied with the conditions subject to
which the tender was made, or is wilfully concealing
anything, or is giving false evidence, the Initiating
Officer may record a finding to that effect, and with the
previous sanction of the competent authority as referred
to in section 55, withdraw the immunity tendered.
(4) Any person against whom the immunity tendered
is withdrawn in accordance with sub-section (3), may be
tried for the offence in respect of which the tender of
immunity was made or for any other offence of which he
appears to have committed in connection with the same
transaction and shall also be liable to any penalty under
this Act to which he would otherwise have been liable.”.
PART II
AMENDMENT TO THE FINANCE (NO. 2) ACT, 2004
Amendment of
Act 23 of 2004.
155. In the Finance (No.2) Act, 2004, in Chapter VII, in
section 98, in the Table, in serial number 4, in column (3), with
effect from the 1st day of October, 2024,––
106
(i) against entry (a) relating to sale of an option in
securities, for the figures and word “0.0625 per cent.”, the
figures and word “0.1 per cent.” shall be substituted; and
(ii) against entry (c) relating to sale of a futures in
securities, for the figures and word “0.0125 per cent.”, the
figures and word “0.02 per cent.” shall be substituted.
PART III
AMENDMENT TO THE BLACK MONEY
(UNDISCLOSED OF FOREIGN INCOME AND ASSETS)
AND IMPOSITION OF TAX ACT, 2015
Amendment of
Act 22 of 2015.
156. In the Black Money (Undisclosed Foreign Income and
Assets) and Imposition of Tax Act, 2015, with effect from the
1st day of October, 2024,––
(a) in section 42, for the proviso, the following proviso
shall be substituted, namely:––
“Provided that this section shall not apply in respect
of an asset or assets (other than immovable property)
where the aggregate value of such asset or assets does
not exceed twenty lakh rupees.”.
(b) in section 43, for the proviso, the following proviso
shall be substituted, namely:––
“Provided that this section shall not apply in respect
of an asset or assets (other than immovable property),
where the aggregate value of such asset or assets does
not exceed twenty lakh rupees.”.
PART IV
AMENDMENT TO THE FINANCE ACT, 2016
Amendment of
Act 28 of 2016.
157. In the Finance Act, 2016,––
(a) in section 163, for sub-section (3), the following
sub-section shall be substituted and shall be deemed to have
been substituted with effect from the 1st day of August,
2024, namely:––
“(3) It shall apply to consideration received or
receivable for––
107
(a) specified services provided on or after the
commencement of this Chapter; and
(b) e-commerce supply or services made or provided
or facilitated on or after the 1st day of April, 2020 but
before the 1st day of August, 2024:”;
(b) in section 165A, after sub-section (3), the following
sub-section shall be inserted and shall be deemed to have
been inserted with effect from 1st day of August, 2024,
namely:––
“(4) The provisions of this section shall not apply to
any consideration received or receivable by an e-
commerce operator from e-commerce supply or
services made or provided or facilitated by it on or after
the 1st day of August, 2024.”.
_____________
Declaration under the Provisional Collection of Taxes Act, 2023
It is hereby declared that it is expedient in the public interest that
the provisions of sub-clause (a) of clause 107 of this Bill shall have
immediate effect under the Provisional Collection of Taxes Act, 2023.
50 of 2023.
________________
108
THE FIRST SCHEDULE
(See section 2)
PART I
INCOME-TAX
Paragraph A
(I) In the case of every individual other than the individual
referred to in items (II) and (III) of this Paragraph or Hindu
undivided family or association of persons or body of
individuals, whether incorporated or not, or every artificial
juridical person referred to in sub-clause (vii) of clause (31)
of section 2 of the Income-tax Act, not being a case to which
any other Paragraph of this Part applies,—
Rates of income-tax
(1) where the total income
does not exceed Rs.
2,50,000
Nil;
(2) where the total income
exceeds Rs. 2,50,000 but
does not exceed Rs.
5,00,000
5 per cent. of the amount by
which the total income
exceeds Rs. 2,50,000;
(3) where the total income
exceeds Rs. 5,00,000 but
does not exceed Rs.
10,00,000
Rs.12,500 plus 20 per cent.
of the amount by which the
total income exceeds Rs.
5,00,000;
(4) where the total income
exceeds Rs. 10,00,000
Rs. 1,12,500 plus 30 per
cent. of the amount by which
the total income exceeds
Rs.10,00,000.
(II) In the case of every individual, being a resident in
India, who is of the age of sixty years or more but less than
eighty years at any time during the previous year,—
Rates of income-tax
(1) where the total income
does not exceed Rs.
3,00
,000
Nil;
109
(2) where the total income
exceeds Rs. 3,00,000 but
does not exceed Rs.
5,00,000
5 per cent. of the amount by
which the total income
exceeds Rs. 3,00,000;
(3) where the total income
exceeds Rs. 5,00,000 but
does not exceed Rs.
10,00,000
Rs.10,000 plus 20 per cent.
of the amount by which the
total income exceeds Rs.
5,00,000;
(4) where the total income
exceeds Rs. 10,00,000
Rs. 1,10,000 plus 30 per
cent. of the amount by which
the total income exceeds
Rs.10,00,000.
(III) In the case of every individual, being a resident in
India, who is of the age of eighty years or more at any time
during the previous year,—
Rates of income-tax
(1) where the total income
does not exceed Rs.
5,00,000
Nil;
(2) where the total income
exceeds Rs. 5,00,000 but
does not exceed Rs.
10,00,000
20 per cent. of the amount
by which the total income
exceeds Rs. 5,00,000;
(3) where the total income
exceeds Rs. 10,00,000
Rs. 1,00,000 plus 30 per
cent. of the amount by
which the total income
exceeds Rs. 10,00,000.
Surcharge on income-tax
The amount of income-tax computed in accordance with
the preceding provisions of this Paragraph, or the provisions
of section 111A or section 112 or section 112A of the Income-
tax Act, shall be increased by a surcharge for the purposes of
the Union, calculated, in the case of every individual or Hindu
undivided family or association of persons or body of
individuals, whether incorporated or not, or every artificial
juridical person referred to in sub-clause (vii) of clause (31)
of section 2 of the Income-tax Act,—
110
(a) having a total income (including the income by way
of dividend or income under the provisions of section
111A, section 112 and section 112A of the Income-tax
Act) exceeding fifty lakh rupees but not exceeding one
crore rupees, at the rate of ten per cent. of such income-
tax;
(b) having a total income (including the income by way
of dividend or income under the provisions of section
111A, section 112 and section 112A of the Income-tax
Act) exceeding one crore rupees, but not exceeding two
crore rupees, at the rate of fifteen per cent. of such income-
tax;
(c) having a total income (excluding the income by way
of dividend or income under the provisions of section
111A, section 112 and section 112A of the Income-tax
Act) exceeding two crore rupees but not exceeding five
crore rupees, at the rate of twenty-five per cent. of such
income-tax;
(d) having a total income (excluding the income by way
of dividend or income under the provisions of section
111A, section 112 and section 112A of the Income-tax
Act) exceeding five crore rupees, at the rate of thirty-seven
per cent. of such income-tax; and
(e) having a total income (including the income by way
of dividend or income under the provisions of section
111A, section 112 and section 112A of the Income-tax
Act) exceeding two crore rupees but is not covered under
clauses (c) and (d), at the rate of fifteen per cent. of such
income-tax:
Provided that in case where the total income includes
any income by way of dividend or income under the
provisions of section 111A, section 112 and section 112A
of the Income-tax Act, the rate of surcharge on the amount
of income-tax computed in respect of that part of income
shall not exceed fifteen per cent.:
Provided further that in case of an association of
persons consisting of only companies as its members, the
rate of surcharge on the amount of income-tax shall not
exceed fifteen per cent.:
Provided also that in the case of persons mentioned
above having total income exceeding,—
111
(a) fifty lakh rupees but not exceeding one crore
rupees, the total amount payable as income-tax and
surcharge on such income shall not exceed the total
amount payable as income-tax on a total income of fifty
lakh rupees by more than the amount of income that
exceeds fifty lakh rupees;
(b) one crore rupees but does not exceed two crore
rupees, the total amount payable as income-tax and
surcharge on such income shall not exceed the total
amount payable as income-tax and surcharge on a total
income of one crore rupees by more than the amount of
income that exceeds one crore rupees;
(c) two crore rupees but does not exceed five crore
rupees, the total amount payable as income-tax and
surcharge on such income shall not exceed the total
amount payable as income-tax and surcharge on a total
income of two crore rupees by more than the amount of
income that exceeds two crore rupees;
(d) five crore rupees, the total amount payable as
income-tax and surcharge on such income shall not
exceed the total amount payable as income-tax and
surcharge on a total income of five crore rupees by more
than the amount of income that exceeds five crore
rupees.
Paragraph B
In the case of every co-operative society,—
Rates of income-tax
(1) where the total income
does not exceed Rs.10,000
10 per cent. of the total
income;
(2) where the total income
exceeds Rs.10,000 but does
not exceed Rs. 20,000
Rs. 1,000 plus 20 per cent.
of the amount by which the
total income exceeds
Rs.10,000;
(3) where the total income
exceeds Rs. 20,000
Rs. 3,000 plus 30 per cent.
of the amount by which the
total income exceeds Rs.
20,000.
112
Surcharge on income-tax
The amount of income-tax computed in accordance with
the preceding provisions of this Paragraph, or the provisions
of section 111A or section 112 or section 112A of the Income-
tax Act, shall, be increased by a surcharge for the purposes of
the Union, calculated in the case of every co-operative
society,––
(a) having a total income exceeding one crore rupees
but not exceeding ten crore rupees, at the rate of seven
per cent. of such income-tax;
(b) having a total income exceeding ten crore rupees,
at the rate of twelve per cent. of such income-tax:
Provided that in the case of every co-operative
society having total income exceeding one crore rupees
but not exceeding ten crore rupees, the total amount
payable as income-tax and surcharge on such income
shall not exceed the total amount payable as income-tax
on a total income of one crore rupees by more than the
amount of income that exceeds one crore rupees:
Provided further that in the case of every co-
operative society having a total income exceeding ten
crore rupees, the total amount payable as income-tax and
surcharge on such income shall not exceed the total
amount payable as income-tax and surcharge on a total
income of ten crore rupees by more than the amount of
income that exceeds ten crore rupees.
Paragraph C
In the case of every firm,—
Rate of income-tax
On the whole of the total income 30 per cent.
Surcharge on income-tax
The amount of income-tax computed in accordance
with the preceding provisions of this Paragraph, or the
provisions of section 111A or section 112 or section 112A of
the Income-tax Act, shall, in the case of every firm, having a
total income exceeding one crore rupees, be increased by a
surcharge for the purposes of the Union calculated at the rate
of twelve per cent. of such income-tax:
113
Provided that in the case of every firm mentioned
above having total income exceeding one crore rupees, the
total amount payable as income-tax and surcharge on such
income shall not exceed the total amount payable as income-
tax on a total income of one crore rupees by more than the
amount of income that exceeds one crore rupees.
Paragraph D
In the case of every local authority,—
Rate of income-tax
On the whole of the total income 30 per cent.
Surcharge on income-tax
The amount of income-tax computed in accordance with
the preceding provisions of this Paragraph, or the provisions
of section 111A or section 112 or section 112A of the Income-
tax Act, shall, in the case of every local authority, having a
total income exceeding one crore rupees, be increased by a
surcharge for the purposes of the Union calculated at the rate
of twelve per cent. of such income-tax:
Provided that in the case of every local authority
mentioned above having total income exceeding one crore
rupees, the total amount payable as income-tax and surcharge
on such income shall not exceed the total amount payable as
income-tax on a total income of one crore rupees by more
than the amount of income that exceeds one crore rupees.
Paragraph E
In the case of a company,—
Rates of income-tax
I. In the case of a domestic company,—
(i) where its total turnover
or the gross receipt in the
previous year 2021-22 does
not exceed four hundred
crore rupees
25 per cent. of the total
income;
(ii) other than that referred
to in item (
i
)
30 per cent. of the total
i
ncome.
114
II. In the case of a company other than a domestic
company,—
(i) on so much of the total income
as consists of,—
50 per cent.;
(a) royalties received from
Government or an Indian
concern in pursuance of an
agreement made by it with the
Government or the Indian
concern after the 31st day of
March, 1961 but before the 1st
day of April, 1976; or
(b) fees for rendering
technical services received
from Government or an Indian
concern in pursuance of an
agreement made by it with the
Government or the Indian
concern after the 29th day of
February, 1964 but before the
1st day of April, 1976,
and where such agreement has, in
either case, been approved by the
Central Government
(ii) on the balance, if any, of the
total income
40 per cent.
Surcharge on income-tax
The amount of income-tax computed in accordance with
the preceding provisions of this Paragraph, or the provisions
of section 111A or section 112 or section 112A of the Income-
tax Act, shall, be increased by a surcharge for the purposes of
the Union calculated,—
(i) in the case of every domestic company,––
(a) having a total income exceeding one crore rupees
but not exceeding ten crore rupees, at the rate of seven per
cent. of such income-tax; and
(b) having a total income exceeding ten crore rupees,
at the rate of twelve per cent. of such income-tax;
115
(ii) in the case of every company other than a domestic
company,––
(a) having a total income exceeding one crore rupees
but not exceeding ten crore rupees, at the rate of two per
cent. of such income-tax; and
(b) having a total income exceeding ten crore rupees,
at the rate of five per cent. of such income-tax:
Provided that in the case of every company having a
total income exceeding one crore rupees but not exceeding
ten crore rupees, the total amount payable as income-tax
and surcharge on such income shall not exceed the total
amount payable as income-tax on a total income of one
crore rupees by more than the amount of income that
exceeds one crore rupees:
Provided further that in the case of every company
having a total income exceeding ten crore rupees, the total
amount payable as income-tax and surcharge on such
income shall not exceed the total amount payable as
income-tax and surcharge on a total income of ten crore
rupees by more than the amount of income that exceeds ten
crore rupees.
PART II
RATES FOR DEDUCTION OF TAX AT SOURCE IN CERTAIN
CASES
In every case in which under the provisions of sections
193, 194A, 194B, 194BA, 194BB, 194D, 194LBA, 194LBB,
194LBC and 195 of the Income-tax Act, tax is to be deducted
at the rates in force, deduction shall be made from the income
subject to the deduction at the following rates:––
Rate of
income
-
tax
1. In the case of a person other than a
company—
(a) where the person is resident in
India—
(i) on income by way of interest
other than “Interest on securities”
10 per cent.;
(ii) on income by way of winnings
from lotteries, puzzles, card games and
30 per cent.;
116
other games of any sort (other than
winnings from online games)
(iii) on income by way of winnings
from horse races
30 per cent.;
(iv) on income by way of net
winnings from online games
30 per cent.;
(v) on income by way of insurance
commission
5 per cent.;
(vi) on income by way of interest
payable on—
10 per cent.;
(A) any debentures or
securities for money issued by or
on behalf of any local authority or
a corporation established by a
Central, State or Provincial Act;
(B) any debentures issued by a
company where such debentures
are listed on a recognised stock
exchange in India in accordance
with the Securities Contracts
(Regulation) Act, 1956 (42 of
1956) and the rules made
thereunder;
(C) any security of the Central
or State Government;
(vii) on any other income
10 per cent.;
(b) where the person is not resident in
India—
(i) in the case of a non-resident
Indian—
(A) on any investment income
20 per cent.;
(B) on income by way of long-
term capital gains referred to in
section 115E, for any transfer which
takes place––
(I) before the 23rd day of
July, 2024
10 per cent.;
117
(II) on or after the 23rd day
of July, 2024
12.5 per
cent.;
(BA) on income by way of long-
term capital gains referred to in sub-
clause (iii) of clause (c) of sub-
section (1) of section 112, for any
transfer which takes place before the
23rd day of July, 2024
10 per cent.;
(C) on income by way of long-
term capital gains referred to in
section 112A exceeding one lakh
twenty-five thousand rupees, for any
transfer which takes place––
(I) before the 23rd day of
July, 2024
10 per cent.;
(II) on or after the 23rd day
of July, 2024
12.5 per
cent.;
(D) on other income by way of
long-term capital gains [not being
long-term capital gains referred to in
clauses (33) and (36) of section 10],
for any transfer which takes place––
(I) before the 23rd day of
July, 2024
20 per cent.;
(II) on or after the 23rd day
of July, 2024
12.5 per
cent.;
(E) on income by way of short-
term capital gains referred to in
section 111A, for any transfer which
takes place––
(I) before the 23rd day of
July, 2024
15 per cent.;
(II) on or after the 23rd day
of July, 2024
20 per cent.;
(F) on income by way of interest
payable by Government or an Indian
concern on moneys borrowed or
debt incurred by
Government or the
20 per cent.;
118
Indian concern in foreign currency
(not being income by way of interest
referred to in section 194LB or
section 194LC)
(G) on income by way of royalty
payable by Government or an Indian
concern in pursuance of an
agreement made by it with the
Government or the Indian concern
where such royalty is in
consideration for the transfer of all
or any rights (including the granting
of a licence) in respect of copyright
in any book on a subject referred to
in the first proviso to sub-section
(1A) of section 115A of the Income-
tax Act, to the Indian concern, or in
respect of any computer software
referred to in the second proviso to
sub-section (1A) of section 115A of
the Income-tax Act, to a person
resident in India
20 per cent.;
(H) on income by way of royalty
[not being royalty of the nature
referred to in sub-item (b)(i)(G)]
payable by Government or an Indian
concern in pursuance of an
agreement made by it with the
Government or the Indian concern
and where such agreement is with an
Indian concern, the agreement is
approved by the Central
Government or where it relates to a
matter included in the industrial
policy, for the time being in force, of
the Government of India, the
agreement is in accordance with that
policy
20 per cent.;
(I) on income by way of fees for
technical services payable by
Government or an Indian concern in
pursuance of an agreement made by
it with the Government or the Indian
concern and where such agreement
is with an Indian concern, the
agreement is approved by the
Central Government or where it
20 per cent.;
119
relates to a matter included in the
industrial policy, for the time being
in force, of the Government of India,
the agreement is in accordance with
that policy
(J) on income by way of
winnings from lotteries, crossword
puzzles, card games and other games
of any sort (other than winnings
from online games)
30 per cent.;
(K) on income by way of
winnings from horse races
30 per cent.;
(L) on income by way of net
winnings from online games
30 per cent.;
(M) on the income by way of
dividend, referred to in the proviso
to sub-clause (A) of clause (a) of
sub-section (1) of section 115A
10 per cent.;
(N) on income by way of
dividend other than the income
referred to in sub-item (b)(i)(M)
20 per cent.;
(O) on the whole of the other
income
30 per cent.;
(ii) in the case of any other
person—
(A) on income by way of interest
payable by Government or an Indian
concern on moneys borrowed or
debt incurred by Government or the
Indian concern in foreign currency
(not being income by way of interest
referred to in section 194LB or
section 194LC)
20 per cent.;
(B) on income by way of royalty
payable by Government or an Indian
concern in pursuance of an
agreement made by it with the
Government or the Indian concern
where such royalty is in
consideration for the transfer of all
or any rights
(including the granting
20 per cent.;
120
of a licence) in respect of copyright
in any book on a subject referred to
in the first proviso to sub-section
(1A) of section 115A of the Income-
tax Act, to the Indian concern, in
respect of any computer software
referred to in the second proviso to
sub-section (1A) of section 115A of
the Income-tax Act, to a person
resident in India
(C) on income by way of royalty
[not being royalty of the nature
referred to in sub-item (b)(ii)(B)]
payable by Government or an Indian
concern in pursuance of an
agreement made by it with the
Government or the Indian concern
and where such agreement is with an
Indian concern, the agreement is
approved by the Central
Government or where it relates to a
matter included in the industrial
policy, for the time being in force, of
the Government of India, the
agreement is in accordance with that
policy
20 per cent.;
(D) on income by way of fees for
technical services payable by
Government or an Indian concern in
pursuance of an agreement made by
it with the Government or the Indian
concern and where such agreement
is with an Indian concern, the
agreement is approved by the
Central Government or where it
relates to a matter included in the
industrial policy, for the time being
in force, of the Government of India,
the agreement is in accordance with
that policy
20 per cent.;
(E) on income by way of
winnings from lotteries, crossword
puzzles, card games and other games
of any sort (other than winnings
from online games)
30 per cent.;
121
(F) on income by way of
winnings from horse races
30 per cent.;
(G) on income by way of net
winnings from online games
30 per cent.;
(H) on income by way of short-
term capital gains referred to in
section 111A, for any transfer which
takes place––
(I) before the 23rd day of
July, 2024
15 per cent.;
(II) on or after the 23rd day
of July, 2024
20 per cent.;
(I) on income by way of long-
term capital gains referred to in sub-
clause (iii) of clause (c) of sub-
section (1) of section 112, for any
transfer which takes place before the
23rd day of July, 2024
10 per cent.;
(J) on income by way of long-
term capital gains referred to in
section 112A exceeding one lakh
twenty-five thousand rupees, for any
transfer which takes place––
(I) before the 23rd day of
July, 2024
10 per cent.;
(II) on or after the 23rd day
of July, 2024
12.5 per
cent.;
(K) on income by way of other
long-term capital gains [not being
long-term capital gains referred to in
clauses (33) and (36) of section 10],
for any transfer which takes place–
(I) before the 23rd day of
July, 2024
20 per cent.;
(II) on or after the 23rd day
of July, 2024
12.5 per
cent.;
(L) on income by way of
dividend, referred to in the proviso
10 per cent.;
122
to sub-clause (A) of clause (a) of
sub-section (1) of section 115A
(M) on income by way of
dividend other than the income
referred to in sub-item (b)(ii)(L)
20 per cent.;
(N) on the whole of the other
income
30 per cent.
2. In the case of a company—
(a) where the company is a domestic
company—
(i) on income by way of interest
other than “Interest on securities”
10 per cent.;
(ii) on income by way of
winnings from lotteries, puzzles,
card games and other games of any
sort (other than winnings from
online games)
30 per cent.;
(iii) on income by way of
winnings from horse races
30 per cent.;
(iv) on income by way of net
winnings from online games
30 per cent.;
(v) on any other income 10 per cent.;
(b) where the company is not a
domestic company—
(i) on income by way of
winnings from lotteries, crossword
puzzles, card games and other games
of any sort (other than winnings from
online games)
30 per cent.;
(ii) on income by way of
winnings from horse races
30 per cent.;
(iii) on income by way of net
winnings from online games
30 per cent.;
(iv) on income by way of interest
payable by Government or an Indian
concern on moneys borrowed or debt
20 per cent.;
123
incurred by Government or the
Indian concern in foreign currency
(not being income by way of interest
referred to in section 194LB or
section 194LC)
(v) on income by way of royalty
payable by Government or an Indian
concern in pursuance of an
agreement made by it with the
Government or the Indian concern
after the 31st day of March, 1976
where such royalty is in
consideration for the transfer of all or
any rights (including the granting of
a licence) in respect of copyright in
any book on a subject referred to in
the first proviso to sub-section (1A)
of section 115A of the Income-tax
Act, to the Indian concern, or in
respect of any computer software
referred to in the second proviso to
sub-section (1A) of section 115A of
the Income-tax Act, to a person
resident in India
20 per cent.;
(vi) on income by way of royalty
[not being royalty of the nature
referred to in item (b)(v)] payable by
Government or an Indian concern in
pursuance of an agreement made by
it with the Government or the Indian
concern and where such agreement
is with an Indian concern, the
agreement is approved by the
Central Government or where it
relates to a matter included in the
industrial policy, for the time being
in force, of the Government of India,
the agreement is in accordance with
that policy—
(A) where the agreement is
made after the 31st day of
March, 1961 but before the 1st
day of April, 1976
50 per cent.;
(B) where the agreement is
made after the 31st day of
March, 1976
20 per cent.;
124
(vii) on income by way of fees
for technical services payable by
Government or an Indian concern in
pursuance of an agreement made by
it with the Government or the Indian
concern and where such agreement
is with an Indian concern, the
agreement is approved by the
Central Government or where it
relates to a matter included in the
industrial policy, for the time being
in force, of the Government of India,
the agreement is in accordance with
that policy—
(A) where the agreement is
made after the 29th day of
February, 1964 but before the 1st
day of April, 1976
50 per cent.;
(B) where the agreement is
made after the 31st day of
March, 1976
20 per cent.;
(viii) on income by way of short-
term capital gains referred to in
section 111A, for any transfer which
takes place––
(I) before the 23rd day of
July, 2024
15 per cent.;
(II) on or after the 23rd day
of July, 2024
20 per cent.;
(ix) on income by way of long-
term capital gains referred to in sub-
clause (iii) of clause (c) of sub-
section (1) of section 112, for any
transfer which takes place before the
23rd day of July, 2024
10 per cent.;
(x) on income by way of long-
term capital gains referred to in
section 112A exceeding one lakh
twenty-five thousand rupees, for any
transfer which takes place––
125
(I) before the 23rd day of
July, 2024
10 per cent.;
(II) on or after the 23rd day
of July, 2024
12.5 per
cent.;
(xi) on income by way of other
long-term capital gains [not being
long-term capital gains referred to in
clauses (33) and (36) of section 10],
for any transfer which takes place––
(I) before the 23rd day of
July, 2024
20 per cent.;
(II) on or after the 23rd day
of July, 2024
12.5 per
cent.;
(xii) on income by way of
dividend, referred to in the proviso to
sub-clause (A) of clause (a) of sub-
section (1) of section 115A
10 per cent.;
(xiii) on income by way of
dividend other than the income
referred to in item (b)(xii)
20 per cent.;
(xiv) on any other income 35 per cent.
Explanation.—For the purposes of item 1(b)(i) of this Part,
“investment income” and “non-resident Indian” shall have the
meanings respectively assigned to them in Chapter XII-A of
the Income-tax Act.
Surcharge on income-tax
The amount of income-tax deducted in accordance with
the provisions of––
(i) item 1 of this Part, shall be increased by a
surcharge, for the purposes of the Union,––
(a) in the case of every individual or Hindu
undivided family or association of persons, except in
case of an association of persons consisting of only
companies as its members, or body of individuals,
whether incorporated or not, or every artificial
juridical person referred to in
sub
-
clause (
vii
) of
126
clause (31) of section 2 of the Income-tax Act, being
a non-resident, calculated,––
I. at the rate of ten per cent. of such tax, where
the income or the aggregate of such incomes
(including the income by way of dividend or
income under the provisions of sections 111A,
112 and 112A of the Income-tax Act) paid or
likely to be paid and subject to the deduction
exceeds fifty lakh rupees but does not exceed one
crore rupees;
II. at the rate of fifteen per cent. of such tax,
where the income or the aggregate of such
incomes (including the income by way of
dividend or income under the provisions of
sections 111A, 112 and 112A of the Income-tax
Act) paid or likely to be paid and subject to the
deduction exceeds one crore rupees but does not
exceed two crore rupees;
III. at the rate of twenty-five per cent. of such
tax, where the income or the aggregate of such
incomes (excluding the income by way of
dividend or income under the provisions of
sections 111A, 112 and 112A of the Income-tax
Act) paid or likely to be paid and subject to the
deduction exceeds two crore rupees but does not
exceed five crore rupees;
IV. at the rate of thirty-seven per cent. of such
tax, where the income or the aggregate of such
incomes (excluding the income by way of
dividend or income under the provisions of
sections 111A, 112 and 112A of the Income-tax
Act) paid or likely to be paid and subject to the
deduction exceeds five crore rupees; and
V. at the rate of fifteen per cent. of such tax,
where the income or the aggregate of such
incomes (including the income by way of
dividend or income under the provisions of
sections 111A, 112 and 112A of the Income-tax
Act) paid or likely to be paid and subject to the
deduction exceeds two crore rupees, but is not
covered under sub-clauses III and IV:
Provided that in case where the total income
includes any income by way of dividend or income
under the provisions of
sections
111A, 112 and 112A
127
of the Income-tax Act, the rate of surcharge on the
amount of Income-tax deducted in respect of that part
of income shall not exceed fifteen per cent.:
Provided further that where the income of such
person is chargeable to tax under sub-section (1A) of
section 115BAC of the Income-tax Act, the rate of
surcharge shall not exceed twenty-five per cent.;
(b) in the case of every co-operative society, being
a non-resident, calculated,––
I. at the rate of seven per cent. of such tax,
where the income or the aggregate of such
incomes paid or likely to be paid and subject to the
deduction exceeds one crore rupees but does not
exceed ten crore rupees;
II. at the rate of twelve per cent. where the
income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction
exceeds ten crore rupees;
(c) in the case of an association of persons being a
non-resident, and consisting of only companies as its
members, calculated,––
I. at the rate of ten per cent. of such tax, where
the income or the aggregate of such incomes paid
or likely to be paid and subject to the deduction
exceeds fifty lakh rupees but does not exceed one
crore rupees;
II. at the rate of fifteen per cent. of such tax,
where the income or the aggregate of such
incomes paid or likely to be paid and subject to the
deduction exceeds one crore rupees;
(d) in the case of every firm, being a non-resident,
calculated at the rate of twelve per cent., where the
income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
one crore rupees;
(ii) item 2 of this Part shall be increased by a
surcharge, for the purposes of the Union, in the case of
every company other than a domestic company,
calculated,––
128
(a) at the rate of two per cent. of such tax where
the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
one crore rupees but does not exceed ten crore rupees;
and
(b) at the rate of five per cent. of such tax where
the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
ten crore rupees.’;
PART III
RATES FOR CHARGING INCOME-TAX IN CERTAIN CASES,
DEDUCTING INCOME-TAX FROM INCOME CHARGEABLE
UNDER THE HEAD “SALARIES” AND COMPUTING
“ADVANCE TAX”
In cases in which income-tax has to be charged under
sub-section (4) of section 172 of the Income-tax Act or sub-
section (2) of section 174 or section 174A or section 175 or
sub-section (2) of section 176 of the said Act or deducted
from, or paid on, from income chargeable under the head
“Salaries” under section 192 of the said Act or deducted under
section 194P of the said Act or in which the “advance tax”
payable under Chapter XVII-C of the said Act has to be
computed at the rate or rates in force, such income-tax or, as
the case may be, “advance tax” [not being “advance tax” in
respect of any income chargeable to tax under Chapter XII or
Chapter XII-A or income chargeable to tax under section
115JB or section 115JC or Chapter XII-FA or Chapter XII-
FB or sub-section (1A) of section 161 or section 164 or
section 164A or section 167B of the said Act at the rates as
specified in that Chapter or section or surcharge, wherever
applicable, on such “advance tax” in respect of any income
chargeable to tax under section 115A or section 115AB or
section 115AC or section 115ACA or section 115AD or
section 115B or section 115BA or section 115BAA or section
115BAB or section 115BAC or section 115BAD or section
115BAE or section 115BB or section 115BBA or section
115BBC or section 115BBE or section 115BBF or section
115BBG or section 115BBH or section 115BBI or section
115BBJ or section 115E or section 115JB or section 115JC]
shall be charged, deducted or computed at the following rate
or rates:—
129
Paragraph A
(I) In the case of every individual other than the
individual referred to in items (II) and (III) of this Paragraph
or Hindu undivided family or association of persons or body
of individuals, whether incorporated or not, or every artificial
juridical person referred to in sub-clause (vii) of clause (31)
of section 2 of the Income-tax Act, not being a case to which
any other Paragraph of this Part applies,—
Rates of income-tax
(1) where the total income
does not exceed Rs.
2,50,000
Nil;
(2) where the total income
exceeds Rs. 2,50,000 but
does not exceed Rs.
5,00,000
5 per cent. of the amount by
which the total income
exceeds Rs. 2,50,000;
(3) where the total income
exceeds Rs. 5,00,000 but
does not exceed Rs.
10,00,000
Rs. 12,500 plus 20 per cent.
of the amount by which the
total income exceeds Rs.
5,00,000;
(4) where the total income
exceeds Rs. 10,00,000
Rs. 1,12,500 plus 30 per
cent. of the amount by which
the total income exceeds
Rs.10,00,000.
(II) In the case of every individual, being a resident in India,
who is of the age of sixty years or more but less than eighty
years at any time during the previous year,—
Rates of income-tax
(1) where the total income
does not exceed Rs.
3,00,000
Nil;
(2) where the total income
exceeds Rs. 3,00,000 but
does not exceed Rs.
5,00,000
5 per cent. of the amount by
which the total income
exceeds Rs.3,00,000;
130
(3) where the total income
exceeds Rs. 5,00,000 but
does not exceed Rs.
10,00,000
Rs. 10,000 plus 20 per cent.
of the amount by which the
total income exceeds
Rs.5,00,000;
(4) where the total income
exceeds Rs. 10,00,000
Rs. 1,10,000 plus 30 per
cent. of the amount by which
the total income exceeds
Rs.10,00,000;
(III) In the case of every individual, being a resident
in India, who is of the age of eighty years or more at any time
during the previous year,—
Rates of income-tax
where the total income does
not exceed Rs. 5,00,000
Nil;
where the total income
exceeds Rs. 5,00,000 but
does not exceed Rs.
10,00,000
20 per cent. of the amount
by which the total income
exceeds Rs. 5,00,000;
where the total income
exceeds Rs.10,00,000
Rs. 1,00,000 plus 30 per
cent. of the amount by
which the total income
exceeds Rs. 10,00,000;
Surcharge on income-tax
The amount of income-tax computed in accordance with
the preceding provisions of this Paragraph, or the provisions
of section 111A or section 112 or section 112A of the Income-
tax Act, shall be increased by a surcharge for the purposes of
the Union, calculated, in the case of every individual or Hindu
undivided family or association of persons or body of
individuals, whether incorporated or not, or every artificial
juridical person referred to in sub-clause (vii) of clause (31)
of section 2 of the Income-tax Act,—
(a) having a total income (including the income by way
of dividend or income under the provisions of section
111A, section 112 and section 112A of the Income-tax
Act) exceeding fifty lakh rupees but not exceeding one
crore rupees, at the rate of ten per cent. of such income-
tax; and
131
(b) having a total income (including the income by way
of dividend or income under the provisions of section
111A, section 112 and section 112A of the Income-tax
Act) exceeding one crore rupees but not exceeding two
crore rupees, at the rate of fifteen per cent. of such income-
tax;
(c) having a total income (excluding the income by way
of dividend or income under the provisions of section
111A, section 112 and section 112A of the Income-tax
Act) exceeding two crore rupees but not exceeding five
crore rupees, at the rate of twenty-five per cent. of such
income-tax;
(d) having a total income (excluding the income by way
of dividend or income under the provisions of section
111A, section 112 and section 112A of the Income-tax
Act) exceeding five crore rupees, at the rate of thirty-seven
per cent. of such income-tax; and
(e) having a total income (including the income by way
of dividend or income under the provisions of section
111A, section 112 and section 112A of the Income-tax
Act) exceeding two crore rupees, but is not covered under
clauses (c) and (d), shall be applicable at the rate of fifteen
per cent. of such income-tax:
Provided that in case where the total income includes
any income by way of dividend or income under the
provisions of section 111A, section 112 and section 112A
of the Income-tax Act, the rate of surcharge on the amount
of Income-tax computed in respect of that part of income
shall not exceed fifteen per cent.:
Provided further that in case of an association of
persons consisting of only companies as its members, the
rate of surcharge on the amount of Income-tax shall not
exceed fifteen per cent.:
Provided also that in the case of persons mentioned
above having total income exceeding,—
(a) fifty lakh rupees but not exceeding one crore rupees,
the total amount payable as income-tax and surcharge on
such income shall not exceed the total amount payable as
income-tax on a total income of fifty lakh rupees by more
than the amount of income that exceeds fifty lakh rupees;
132
(b) one crore rupees but does not exceed two crore
rupees, the total amount payable as income-tax and
surcharge on such income shall not exceed the total
amount payable as income-tax and surcharge on a total
income of one crore rupees by more than the amount of
income that exceeds one crore rupees;
(c) two crore rupees but does not exceed five crore
rupees, the total amount payable as income-tax and
surcharge on such income shall not exceed the total
amount payable as income-tax and surcharge on a total
income of two crore rupees by more than the amount of
income that exceeds two crore rupees;
(d) five crore rupees, the total amount payable as
income-tax and surcharge on such income shall not
exceed the total amount payable as income-tax and
surcharge on a total income of five crore rupees by more
than the amount of income that exceeds five crore rupees;
Paragraph B
In the case of every co-operative society,—
Rates of income-tax
(1) where the total income
does not exceed Rs.10,000
10 per cent. of the total
income;
(2) where the total income
exceeds Rs.10,000 but does
not exceed Rs. 20,000
Rs. 1,000 plus 20 per cent.
of the amount by which the
total income exceeds Rs.
10,000;
(3) where the total income
exceeds Rs. 20,000
Rs. 3,000 plus 30 per cent.
of the amount by which the
total income exceeds Rs.
20,000.
Surcharge on income-tax
The amount of income-tax computed in accordance with
the preceding provisions of this Paragraph, or the provisions
of section 111A or section 112 or section 112A of the Income-
tax Act, shall, be increased by a surcharge for the purpose of
the Union, calculated in the case of every co-operative
society,––
133
(a) having a total income exceeding one crore rupees but
not exceeding ten crore rupees, at the rate of seven per cent.
of such income-tax;
(b) having a total income exceeding ten crore rupees, at
the rate of twelve per cent.:
Provided that in the case of every co-operative society
having total income exceeding one crore rupees but not
exceeding ten crore rupees, the total amount payable as
income-tax and surcharge on such income shall not exceed
the total amount payable as income-tax on a total income of
one crore rupees by more than the amount of income that
exceeds one crore rupees:
Provided further that in the case of every co-operative
society having total income exceeding ten crore rupees, the
total amount payable as income-tax and surcharge on such
income shall not exceed the total amount payable as income-
tax and surcharge on a total income of ten crore rupees by
more than the amount of income that exceeds ten crore
rupees.
Paragraph C
In the case of every firm,—
Rate of income-tax
On the whole of the total income 30 per cent.
Surcharge on income-tax
The amount of income-tax computed in accordance
with the preceding provisions of this Paragraph, or the
provisions of section 111A or section 112 or section 112A of
the Income-tax Act, shall, in the case of every firm, having a
total income exceeding one crore rupees, be increased by a
surcharge for the purposes of the Union calculated at the rate
of twelve per cent. of such income-tax:
Provided that in the case of every firm mentioned above
having total income exceeding one crore rupees, the total
amount payable as income-tax and surcharge on such income
shall not exceed the total amount payable as income-tax on a
total income of one crore rupees by more than the amount of
income that exceeds one crore rupees.
134
Paragraph D
In the case of every local authority,—
Rate of income-tax
On the whole of the total income 30 per cent.
Surcharge on income-tax
The amount of income-tax computed in accordance
with the preceding provisions of this Paragraph, or the
provisions of section 111A or section 112 or section 112A of
the Income-tax Act, shall, in the case of every local authority,
having a total income exceeding one crore rupees, be
increased by a surcharge for the purposes of the Union
calculated at the rate of twelve per cent. of such income-tax:
Provided that in the case of every local authority
mentioned above having total income exceeding one crore
rupees, the total amount payable as income-tax and surcharge
on such income shall not exceed the total amount payable as
income-tax on a total income of one crore rupees by more
than the amount of income that exceeds one crore rupees.
Paragraph E
In the case of a company,—
Rates of income-tax
(I) In the case of a domestic company,—
(i) where its total turnover or
the gross receipt in the
previous year 2022-2023
does not exceed four
hundred crore rupees;
25 per cent. of the total
income;
(ii) other than that referred
to in item (i)
30 per cent. of the total
income.
(II) In the case of a company other than a domestic
company,—
(i) on so much of the total income
as consists of,
—
50 per cent.,
135
(a) royalties received from Government or
an Indian concern in pursuance of an
agreement made by it with the Government
or the Indian concern after the 31st day of
March, 1961 but before the 1st day of April,
1976; or
(b) fees for rendering technical services
received from Government or an Indian
concern in pursuance of an agreement made
by it with the Government or the Indian
concern after the 29th day of February,
1964 but before the 1st day of April, 1976,
and where such agreement has, in either case, been approved
by the Central Government;
(ii) on the balance, if any, of the total income 35 per cent.
Surcharge on income-tax
The amount of income-tax computed in accordance with
the preceding provisions of this Paragraph, or the provisions
of section 111A or section 112 or section 112A of the Income-
tax Act, shall, be increased by a surcharge for the purposes of
the Union, calculated,––
(i) in the case of every domestic company,––
(a) having a total income exceeding one crore
rupees but not exceeding ten crore rupees, at the rate
of seven per cent. of such income-tax; and
(b) having a total income exceeding ten crore
rupees, at the rate of twelve per cent. of such income-
tax;
(ii) in the case of every company other than a domestic
company,––
(a) having a total income exceeding one crore
rupees but not exceeding ten crore rupees, at the rate
of two per cent. of such income-tax; and
(b) having a total income exceeding ten crore
rupees, at the rate of five per cent. of such income-tax:
136
Provided that in the case of every company having a total
income exceeding one crore rupees but not exceeding ten
crore rupees, the total amount payable as income-tax and
surcharge on such income shall not exceed the total amount
payable as income-tax on a total income of one crore rupees
by more than the amount of income that exceeds one crore
rupees:
Provided further that in the case of every company having
a total income exceeding ten crore rupees, the total amount
payable as income-tax and surcharge on such income shall not
exceed the total amount payable as income-tax and surcharge
on a total income of ten crore rupees by more than the amount
of income that exceeds ten crore rupees.
PART IV
[See section 2(13)(c)]
RULES FOR COMPUTATION OF NET
AGRICULTURAL INCOME
Rule 1.—Agricultural income of the nature referred to in
sub-clause (a) of clause (1A) of section 2 of the Income-tax
Act shall be computed as if it were income chargeable to
income-tax under that Act under the head “Income from other
sources” and the provisions of sections 57 to 59 of that Act
shall, so far as may be, apply accordingly:
Provided that sub-section (2) of section 58 shall apply
subject to the modification that the reference to section 40A
therein shall be construed as not including a reference to sub-
sections (3), (3A) and (4) of section 40A.
Rule 2.—Agricultural income of the nature referred to in
sub-clause (b) or sub-clause (c) of clause (1A) of section 2 of
the Income-tax Act [other than income derived from any
building required as a dwelling-house by the receiver of the
rent or revenue of the cultivator or the receiver of rent-in-kind
referred to in the said sub-clause (c)] shall be computed as if
it were income chargeable to income-tax under that Act under
the head “Profits and gains of business or profession” and the
provisions of sections 30, 31, 32, 36, 37, 38, 40, 40A [other
than sub-sections (3), (3A) and (4) thereof], 41, 43, 43A, 43B
and 43C of the Income-tax Act shall, so far as may be, apply
accordingly.
Rule 3.—Agricultural income of the nature referred to in
sub
-
clause (c) of clause (1A) of section 2 of the Income
-
tax
137
Act, being income derived from any building required as a
dwelling-house by the receiver of the rent or revenue or the
cultivator or the receiver of rent-in-kind referred to in the said
sub-clause (c) shall be computed as if it were income
chargeable to income-tax under that Act under the head
“Income from house property” and the provisions of sections
23 to 27 of that Act shall, so far as may be, apply accordingly.
Rule 4.—Notwithstanding anything contained in any
other provisions of these rules, in a case—
(a) where the assessee derives income from sale of tea
grown and manufactured by him in India, such income
shall be computed in accordance with rule 8 of the
Income-tax Rules, 1962, and sixty per cent. of such
income shall be regarded as the agricultural income of the
assessee;
(b) where the assessee derives income from sale of
centrifuged latex or cenex or latex based crepes (such as
pale latex crepe) or brown crepes (such as estate brown
crepe, re-milled crepe, smoked blanket crepe or flat bark
crepe) or technically specified block rubbers
manufactured or processed by him from rubber plants
grown by him in India, such income shall be computed in
accordance with rule 7A of the Income-tax Rules, 1962,
and sixty-five per cent. of such income shall be regarded
as the agricultural income of the assessee;
(c) where the assessee derives income from sale of
coffee grown and manufactured by him in India, such
income shall be computed in accordance with rule 7B of
the Income-tax Rules, 1962, and sixty per cent. or
seventy-five per cent., as the case may be, of such income
shall be regarded as the agricultural income of the
assessee.
Rule 5.—Where the assessee is a member of an
association of persons or a body of individuals (other than a
Hindu undivided family, a company or a firm) which in the
previous year has either no income chargeable to tax under
the Income-tax Act or has total income not exceeding the
maximum amount not chargeable to tax in the case of an
association of persons or a body of individuals (other than a
Hindu undivided family, a company or a firm) but has any
agricultural income then, the agricultural income or loss of
the association or body shall be computed in accordance with
these rules and the share of the assessee in the agricultural
income or loss so computed shall be regarded as the
agricultural income or loss of the assessee.
138
Rule 6.—Where the result of the computation for the
previous year in respect of any source of agricultural income
is a loss, such loss shall be set off against the income of the
assessee, if any, for that previous year from any other source
of agricultural income:
Provided that where the assessee is a member of an
association of persons or a body of individuals and the share
of the assessee in the agricultural income of the association or
body, as the case may be, is a loss, such loss shall not be set
off against any income of the assessee from any other source
of agricultural income.
Rule 7.—Any sum payable by the assessee on account of
any tax levied by the State Government on the agricultural
income shall be deducted in computing the agricultural
income.
Rule 8.—(1) Where the assessee has, in the previous year
relevant to the assessment year commencing on the 1st day of
April, 2024, any agricultural income and the net result of the
computation of the agricultural income of the assessee for any
one or more of the previous years relevant to the assessment
years commencing on the 1st day of April, 2016 or the 1st day
of April, 2017 or the 1st day of April, 2018 or the 1st day of
April, 2019 or the 1st day of April, 2020 or the 1st day of
April, 2021, or the 1st day of April, 2022, or the 1st day of
April, 2023, is a loss, then, for the purposes of sub-section (2)
of section 2 of this Act,––
(i) the loss so computed for the previous year
relevant to the assessment year commencing on the 1st
day of April, 2016, to the extent, if any, such loss has
not been set off against the agricultural income for the
previous year relevant to the assessment year
commencing on the 1st day of April, 2017 or the 1st day
of April, 2018 or the 1st day of April, 2019 or the 1st
day of April, 2020 or the 1st day of April, 2021 or the
1st day of April, 2022, or the 1st day of April, 2023,
(ii) the loss so computed for the previous year
relevant to the assessment year commencing on the 1st
day of April, 2017, to the extent, if any, such loss has
not been set off against the agricultural income for the
previous year relevant to the assessment year
commencing on the 1st day of April, 2018 or the 1st day
of April, 2019 or the 1st day of April, 2020 or the 1st
day of April, 2021 or the 1st day of April, 2022, or the
1st day of April, 2023,
139
(iii) the loss so computed for the previous year
relevant to the assessment year commencing on the 1st
day of April, 2018, to the extent, if any, such loss has
not been set off against the agricultural income for the
previous year relevant to the assessment year
commencing on the 1st day of April, 2019 or the 1st day
of April, 2020 or the 1st day of April, 2021 or the 1st
day of April, 2022, or the 1st day of April, 2023,
(iv) the loss so computed for the previous year
relevant to the assessment year commencing on the 1st
day of April, 2019, to the extent, if any, such loss has
not been set off against the agricultural income for the
previous year relevant to the assessment year
commencing on the 1st day of April, 2020 or the 1st day
of April, 2021 or the 1st day of April, 2022, or the 1st
day of April, 2023,
(v) the loss so computed for the previous year
relevant to the assessment year commencing on the 1st
day of April, 2020, to the extent, if any, such loss has
not been set off against the agricultural income for the
previous year relevant to the assessment year
commencing on the 1st day of April, 2021 or the 1st day
of April, 2022, or the 1st day of April, 2023,
(vi) the loss so computed for the previous year
relevant to the assessment year commencing on the 1st
day of April, 2021, to the extent, if any, such loss has
not been set off against the agricultural income for the
previous year relevant to the assessment year
commencing on the 1st day of April, 2022, or the 1st
day of April, 2023,
(vii) the loss so computed for the previous year
relevant to the assessment year commencing on the 1st
day of April, 2022, to the extent, if any, such loss has
not been set off against the agricultural income for the
previous year relevant to the assessment year
commencing on the 1st day of April, 2023,
(viii) the loss so computed for the previous year
relevant to the assessment year commencing on the 1st
day of April, 2023,
shall be set off against the agricultural income of the assessee
for the previous year relevant to the assessment year
commencing on the 1st day of April, 2024.
140
(2) Where the assessee has, in the previous year relevant
to the assessment year commencing on the 1st day of April,
2025, or, if by virtue of any provision of the Income-tax Act,
income-tax is to be charged in respect of the income of a
period other than the previous year, in such other period, any
agricultural income and the net result of the computation of
the agricultural income of the assessee for any one or more
of the previous years relevant to the assessment years
commencing on the 1st day of April, 2017 or the 1st day of
April, 2018 or the 1st day of April, 2019 or the 1st day of
April, 2020 or the 1st day of April, 2021 or the 1st day of
April, 2022 or the 1st day of April, 2023, or the 1st day of
April, 2024, is a loss, then, for the purposes of sub-section
(10) of section 2 of this Act,––
(i) the loss so computed for the previous year relevant
to the assessment year commencing on the 1st day of
April, 2017, to the extent, if any, such loss has not been
set off against the agricultural income for the previous
year relevant to the assessment year commencing on the
1st day of April, 2018 or the 1st day of April, 2019 or the
1st day of April, 2020 or the 1st day of April, 2021 or the
1st day of April, 2022 or the 1st day of April, 2023, or the
1st day of April, 2024,
(ii) the loss so computed for the previous year relevant
to the assessment year commencing on the 1st day of
April, 2018, to the extent, if any, such loss has not been
set off against the agricultural income for the previous
year relevant to the assessment year commencing on the
1st day of April, 2019 or the 1st day of April, 2020 or the
1st day of April, 2021 or the 1st day of April, 2022 or the
1st day of April, 2023, or the 1st day of April, 2024,
(iii) the loss so computed for the previous year
relevant to the assessment year commencing on the 1st
day of April, 2019, to the extent, if any, such loss has not
been set off against the agricultural income for the
previous year relevant to the assessment year
commencing on the 1st day of April, 2020 or the 1st day
of April, 2021 or the 1st day of April, 2022 or the 1st day
of April, 2023, or the 1st day of April, 2024,
(iv) the loss so computed for the previous year
relevant to the assessment year commencing on the 1st
day of April, 2020, to the extent, if any, such loss has not
been set off against the agricultural income for the
previous year relevant to the assessment year
commencing on the 1st day of April, 2021 or the 1st day
141
of April, 2022 or the 1st day of April, 2023, or the 1st day
of April, 2024,
(v) the loss so computed for the previous year relevant
to the assessment year commencing on the 1st day of
April, 2021, to the extent, if any, such loss has not been
set off against the agricultural income for the previous
year relevant to the assessment year commencing on the
1st day of April, 2022 or the 1st day of April, 2023, or the
1st day of April, 2024,
(vi) the loss so computed for the previous year
relevant to the assessment year commencing on the 1st
day of April, 2022, to the extent, if any, such loss has not
been set off against the agricultural income for the
previous year relevant to the assessment year
commencing on the 1st
day of April, 2023, or the 1st day
of April, 2024,
(vii) the loss so computed for the previous year
relevant to the assessment year commencing on the 1st
day of April, 2023, to the extent, if any, such loss has not
been set off against the agricultural income for the
previous year relevant to the assessment year
commencing on the 1st day of April, 2024,
(viii) the loss so computed for the previous year
relevant to the assessment year commencing on the 1st
day of April, 2024,
shall be set off against the agricultural income of the assessee
for the previous year relevant to the assessment year
commencing on the 1st day of April, 2025.
(3) Where any person deriving any agricultural income
from any source has been succeeded in such capacity by
another person, otherwise than by inheritance, nothing in
sub-rule (1) or sub-rule (2) shall entitle any person, other
than the person incurring the loss, to have it set off under
sub-rule (1) or, as the case may be, sub-rule (2).
(4) Notwithstanding anything contained in this rule, no
loss which has not been determined by the Assessing Officer
under the provisions of these rules or the rules contained in
the First Schedule to the Finance Act, 2016 (28 of 2016) or
the First Schedule to the Finance Act, 2017 (7 of 2017) or
the First Schedule to the Finance Act, 2018 (13 of 2018) or
the First Schedule to the Finance (No. 2) Act, 2019 (23 of
2019) or the First Schedule to the Finance Act, 2020 (12 of
2020) or the First Schedule
to
the Finance Act, 2021 (13 of
142
2021) or the First Schedule to the Finance Act, 2022 (6 of
2022) or the First Schedule to the Finance Act, 2023 (8 of
2023) shall be set off under sub-rule (1) or, as the case may
be, sub-rule (2).”.
Rule 9.––Where the net result of the computation made
in accordance with these rules is a loss, the loss so computed
shall be ignored and the net agricultural income shall be
deemed to be nil.
Rule 10.––The provisions of the Income-tax Act
relating to procedure for assessment (including the
provisions of section 288A relating to rounding off of
income) shall, with the necessary modifications, apply in
relation to the computation of the net agricultural income of
the assessee as they apply in relation to the assessment of the
total income.
Rule 11.––For the purposes of computing the net
agricultural income of the assessee, the Assessing Officer
shall have the same powers as he has under the Income-tax
Act for the purposes of assessment of the total income.
143
THE SECOND SCHEDULE
(See section 105)
Notification
number to be
amended
Amendment
Period of effect of
amendment
(1)
(2)
(3)
G.S.R. number
356(E), dated
10th May,
2023
[37/2023-
Customs, dated
10th May,
2023].
In the said notification, in the Annexure, for the
conditions, the following conditions shall be
substituted, namely:––
Conditions
“(a) Importer produces to the Deputy Commissioner
or the Assistant Commissioner of Customs, as the case
may be, a valid Tariff Rate Quota (TRQ) authorisation
for the Financial Year 2022-23 allotted by Directorate
General of Foreign Trade;
(b) The duty and cess benefit under the afore-said
valid TRQ authorisation shall be restricted only to the
extent of unutilised quota which is not used to claim
such benefit under notification No. 30/2022-Customs,
dated the 24th May, 2022, or under this notification
from 11th May, 2023 and up to 30th June, 2023 (both
days inclusive);
(c) Bill of lading for concerned import consignment
is issued on or before 31st March, 2023;
(d) The TRQ is allotted to the importer by the
Directorate General of Foreign Trade, in accordance
with the relevant procedure as specified in the Hand
Book of Procedures, 2015-20 or 2023, as applicable;
and
(e) The TRQ authorisation shall contain the name
and address of the importer, IEC code, Customs
notification No., sub-heading or tariff item as
applicable, quantity and validity period of certificate.”.
1st day of April,
2023 to 10
th
day
of May, 2023
(both days
inclusive).
144
THE THIRD SCHEDULE
[See section 107(a)]
In the First Schedule to the Customs Tariff Act,––
(i) in Chapter 39, for the entry in column (4) occurring against all the tariff items of headings
3920 and 3921, the entry “25%” shall be substituted;
(ii) in Chapter 66, for the entry in column (4) occurring against the tariff item 6601 10 00,
the entry “20% or Rs. 60 per piece, whichever is higher” shall be substituted;
(iii) in Chapter 98, for the entry in column (4) occurring against tariff item 9802 00 00, the
entry “150%” shall be substituted.
145
THE FOURTH SCHEDULE
[See section 107(b)]
In the Customs Tariff Act, in the First Schedule,––
Tariff
Item
Description of goods Unit Rate of duty
Standard
Preferential
(1)
(2)
(3)
(4)
(5)
(1) in Chapter 19, in heading 1905,
(i) for sub-heading 1905 32, tariff item 1905 32 11 and tariff item 1905 32 19 and the entries
relating thereto, the following shall be substituted, namely:—
“1905 32
--
Waffles and wafers :
1905 32 11 ---
Coated with chocolate or containing
chocolate
kg. 30% -”;
(ii) in sub-heading 1905 90, after tariff item 1905 90 40 and the entries relating thereto, the
following shall be inserted, namely:—
“
-
--
Communion wafers :
1905
90 51
----
Coated with chocolate or containing chocolate
kg.
30%
-
1905
90 59
----
Other
kg.
30%
-
”;
(2) in Chapter 20, for the entry in column (4) occurring against tariff items 2008 19 20 and 2008 19 30,
the entry “150%” shall be substituted;
(3) in Chapter 27, ––
(i) in Supplementary Note, after sub-note (k), the following sub-note shall be inserted,
namely:—
‘(l) for the purposes of tariff item 2710 19 33, the term “Blended Aviation turbine fuel”
means any Aviation turbine fuel containing by weight 70% or more of Petroleum Oils or
Oils obtained from Bituminous Minerals, blended with Synthesized Hydrocarbons
conforming to Indian Standards Specification of Bureau of Indian Standards IS
17081:2019.’;
(ii) after tariff item 2710 19 32 and the entries relating thereto, the following shall be inserted,
namely:—
“
2710 19 33
---
-
B
lend
ed
A
viation
t
urbine
f
uel
kg.
5%
-
”;
(4) in Chapter 29, ––
(i) after sub-heading note 2, the following Supplementary Note shall be inserted, namely:—
‘Supplementary Note :
146
For the purposes of tariff item 2906 11 10, the term “Natural Menthol” means an organic
compound (C
10
H
20
O) which is obtained from the distillation of the Japanese type oil of mint
or menthol mint known as Mentha arvensis but does not include those made synthetically
through any chemical routes.’;
(ii) for tariff item 2906 11 00 and the entries relating thereto, the following shall be substituted,
namely:—
“
2906 11
--
Menthol
:
2906 11 10
---
Natural Menthol
kg.
7.5
%
-
2906 11 90
---
Other
kg.
7.5
%
-
”;
(iii) tariff item 2922 29 33 and the entries relating thereto shall be omitted;
(iv) after tariff item 2924 29 70 and the entries relating thereto, the following shall be inserted,
namely:—
“
2924 29 80
-
--
Paracetamol
kg.
7.5
%
-
”;
(5) in Chapter 38, ––
(i) for the entry in column (2) occurring against tariff item 3818 00 10, the following shall be
substituted, namely:—
“
---
Undiffused silicon wafers
”;
(ii) after tariff item 3818 00 10 and the entries relating thereto, the following shall be inserted,
namely:—
“
3818 00 20
-
--
Silicon carbide epitaxial thin film on substrate
kg.
Free
-
3818 00 30
---
Gallium nitride epitaxial thin film on substrate
kg.
Free
-
”;
(6) in Chapter 39, ––
(i) after tariff item 3920 10 92 and the entries relating thereto, the following shall be inserted,
namely:—
“
3920 10 93
-
---
Armour for ballistic protection
kg.
25
%
-
”;
(ii) after tariff item 3921 90 26 and the entries relating thereto, the following shall be inserted,
namely:—
“
3921 90 27
-
---
Architectural
m
embrane
kg.
25
%
-
”;
(7) in Chapter 57, ––
(i) after Note 2, the following Supplementary Note shall be inserted, namely:—
‘Supplementary Note :
For the purposes of tariff items 5703 29 22, 5703 39 31, 5703 39 32, 5703 39 33 and 5703
39 39, the term “Special Finishes” means process of making the product with any one or
more of the following properties
such
as
fire resistan
t
, fire retardant, chemical resistan
t
,
147
anti-static, dust resistant, anti-stain, anti-microbial, anti-odor, UV stabilized, heat resistant,
etc.’;
(ii) in heading 5703, ––
(a) for tariff item 5703 29 20 and the entries relating thereto, the following shall be substituted,
namely: —
“---
100% polyamide tufted velour, cut pile
or
loop pile carpet mats
:
5703 29 21 ---- With jute, rubber latex or PU foam
backing
m
2
20% or Rs.70 per sq.
metre, whichever is
higher
-
5703 29 22 ---- With ethylene vinyl acetate or vinyl
acetate ethylene or latex coating and/or
extruded polyvinyl chloride or
thermoplastic polyolefin, with special
finishes
m
2
20% or Rs.70 per sq.
metre, whichever is
higher
-
5703 29 29 ---- Other m
2
20% or Rs.70 per sq.
metre, whichever is
higher
-”;
(b) after tariff item 5703 39 20 and the entries relating thereto, the following shall be inserted,
namely:—
“---
Tufted velour, cut pile or loop pile carpet
mats with ethylene vinyl acetate or vinyl
acetate ethylene or latex coating and/or
extruded polyvinyl chloride or
thermoplastic polyolefin, with special
finishes:
5703 39 31 ---- Of 100% polypropylene
m
2
20% or Rs. 55 per
sq. metre, whichever
is higher
-
5703 39 32 ---- Of 100% polyester
m
2
20% or Rs. 55 per
sq. metre, whichever
is higher
-
5703 39 33 ---- Of 100% polyethylene
m
2
20% or Rs. 55 per
sq. metre, whichever
is higher
-
5703 39 39 ---- Other m
2
20% or Rs.55 per sq.
metre, whichever is
higher
-”;
(8) in Chapter 63, after tariff item 6307 90 91 and the entries relating thereto, the following shall be
inserted, namely:—
“
6307 90 92
-
---
Armour for ballistic protection
u
10
%
-
”;
148
(9) in Chapter 65, after tariff item 6506 10 10 and the entries relating thereto, the following shall be
inserted, namely:—
“
6506 10 20
-
--
Headgear for ballistic protection
u
10
%
-
”;
(10) in Chapter 69, for tariff item 6914 90 00 and the entries relating thereto, the following shall be
substituted, namely:—
“
6914 90
-
Other
:
6914 90 10
---
Armour for ballistic protection
kg.
10
%
-
6914 90 90
---
Other
kg.
10
%
-
”;
(11) in Chapter 73, for tariff item 7308 10 00 and the entries relating thereto, the following shall be
substituted, namely:—
“
7308 10
-
Bridges and bridge
-
sections
:
7308 10 10
---
Portable bridge
u
15
%
-
7308 10 90
---
Other
u
15
%
-
”;
(12) in Chapter 76, for tariff item 7610 90 20 and the entries relating thereto, the following shall be
substituted, namely: —
“
-
--
Parts of structures, not elsewhere specified
:
7610 90 21
----
Portable bridge
kg.
10
%
-
7610 90 29
----
Other
kg. 10% -”;
(13) in Chapter 84, ––
(i) after tariff item 8412 29 10 and the entries relating thereto, the following shall be inserted,
namely: —
“8412 29 20 --- Hydraulic systems for use in goods of
Chapter 89
u 7.5% -”;
(ii) for tariff item 8430 69 00 and the entries relating thereto, the following shall be substituted,
namely:—
“
8430 69
-
-
Other
:
8430 69 10
---
Mine plough machinery
u
7.5
%
-
8430 69 90
---
Other
u
7.5
%
-
”;
(iii) in sub-heading 8443 99, ––
(a) for the entry in column (2) occurring against tariff item 8443 99 51, the entry
“----Cartridges or toners, with print head assembly” shall be substituted;
(b) for the entry in column (2) occurring against tariff item 8443 99 52, the entry
“---- Cartridges or toners, with print head assembly” shall be substituted;
(iv) after tariff item 8479 89 70 and the entries relating thereto, the following shall be inserted,
namely: —
149
“8479 89 80 --- Machinery for use in goods of Chapter 88
or 89
u 7.5% -”;
(14) in Chapter 85, for tariff item 8537 10 00 and the entries relating thereto, the following shall be
substituted, namely:—
“
8537 10
-
For a voltage not exceeding 1,000 V
:
8537 10 10
---
For use in goods of Chapter 88 or 89 or 93
kg.
15
%
-
8537 10 90
---
Other
kg.
15
%
-
”;
(15) in Chapter 87, ––
(i) after sub-heading note 1, the following Supplementary Note shall be inserted, namely:—
‘Supplementary Note:
For the purposes of tariff item 8711 60 80, the term “E-bicycle or battery operated pedal
assisted vehicle” means vehicle equipped with an auxiliary electric motor having a thirty-
minute power less than 0.25 kW and maximum speed not exceeding 25 km/h and
conforming to the provisions of the Motor Vehicles Act, 1988 (59 of 1988) and the rules
made thereunder.’;
(ii) for tariff item 8705 90 00 and the entries relating thereto, the following shall be substituted,
namely:—
“
8705 90
-
Other
:
8705 90 10
---
Lorries (Trucks) fitted with bridging systems
u
10
%
-
8705 90 90
---
Other
u
10
%
-
”;
(iii) after tariff item 8711 60 30 and the entries relating thereto, the following shall be inserted,
namely:—
“8711 60 80 --- E-bicycle or battery-operated pedal assisted
vehicle
u 100% -”;
(16) in Chapter 88, for tariff item 8807 30 00 and the entries relating thereto, the following shall be
substituted, namely:—
“8807 30 -
Other parts of aeroplanes, helicopters or
unmanned aircraft
:
8807 30 10
---
O
f aeroplanes, helicopters
kg.
2.5
%
-
8807 30 20
---
Of unmanned aircraft
kg.
2.5
%
-
”;
(17) in Chapter 89, for tariff item 8906 90 00 and the entries relating thereto, the following shall be
substituted, namely:—
“
8906 90
-
Other
:
8906 90 10
---
Patrol or surveillance boat, air-cushion
vehicle, remote
-
operated vehicle
u 10% -
8906 90 90
---
Other u 10% -”;
150
(18) in Chapter 93, for tariff item 9305 99 00 and the entries relating thereto, the following shall be
substituted, namely:—
“
9305 99
-
-
Other
:
9305 99 10
---
O
f
goods of heading 9304
kg.
10
%
-
9305 99 90
---
Other
kg.
10
%
-
”
.
151
THE FIFTH SCHEDULE
(See section 108)
Notification
number and
date
Amendment Date of
effect of
amendment
(1)
(2)
(3)
G.S.R. 163(E),
dated the 17th
March, 2012
[12/2012-
Central Excise,
dated 17th
March, 2012]
In the said notification, in the ANNEXURE, in Condition
No.43, under heading “Conditions”, in clause (b),––
(i) for the words “a term of one hundred and twenty-six
months”, the words “a term of one hundred and sixty-two
months” shall be substituted; and
(ii) for the words “with in a period of one hundred and
twenty months”, the words “within a period of one hundred
and fifty-six months” shall be substituted.
29th day of
June, 2017
152
THE SIXTH SCHEDULE
(See section 109)
Sl.
No.
Notification
number and date
Amendment Date of effect of
amendment
(1)
(2)
(3)
(4)
1. G.S.R.794(E),
dated the 30th
June, 2017
[12/2017-
Central Excise,
dated the 30th
June, 2017].
In the said Notification,––
(i) in the preamble,––
(a) after the words, figures and brackets
“the Central Excise Act, 1944 (1 of 1944)”,
the words, figures and brackets “read with
section 83 of the Finance Act, 2010 (14 of
2010)” shall be inserted;
(b) after the words “Central Excise Act”,
the words “and Clean Environment Cess
leviable thereon under the said Finance Act”
shall be inserted;
(ii) after clause (b), the following clause shall be
inserted, namely:––
“(c) the appropriate goods and services tax
compensation cess, wherever applicable,
shall be payable on such goods, if cleared on
or after the 1st July, 2017 as leviable on such
goods under the Goods and Services Tax
(Compensation to States) Act, 2017 (15 of
2017).”.
30th day of
June, 2017.
153
STATEMENT OF OBJECTS AND REASONS
The object of the Bill is to give effect to the financial proposals of the Central
Government for the financial year 2024-2025. The notes on clauses explain the various
provisions contained in the Bill.
NIRMALA SITHARAMAN.
NEW DELHI;
The 22nd July, 2024.
_________________
PRESIDENT’S RECOMMENDATION UNDER ARTICLES 117 AND 274 OF THE
CONSTITUTION OF INDIA
[Copy of letter No. 2(6)-B(D)2024, dated the 22nd July, 2024 from Smt. Nirmala
Sitharaman, Minister of Finance, to the Secretary-General, Lok Sabha].
The President, having been informed of the subject matter of the proposed Bill,
recommends under clauses (1) and (3) of article 117, read with clause (1) of article 274, of the
Constitution of India, the introduction of the Finance (No.2) Bill, 2024 to the Lok Sabha and
also recommends to the Lok Sabha the consideration of the Bill.
2. The Bill will be introduced in the Lok Sabha immediately after the presentation of the
Budget on the 23rd July, 2024.
154
Notes on Clauses
Clause 2 read with the First Schedule to the Bill, seeks to specify the rates at which
income-tax is to be levied on income chargeable to tax for the assessment year 2024-2025.
Further, it lays down the rates at which tax is to be deducted at source during the financial
year under the Income-tax Act; and the rates at which “advance tax” is to be paid, tax is to
be deducted at source from, or paid on, income chargeable under the head “Salaries” or
deducted under section 194P of the Income-tax Act and tax is to be calculated and charged
in special cases for the financial year 2024-2025.
Clause 3 of the Bill seeks to amend section 2 of the Income-tax Act relating to definitions.
Clause (22) of the said section provides the definition of dividend which, inter alia, does
not include any payment made by a company on purchase of its own shares from a
shareholder in accordance with the provisions of section 77A of the Companies Act, 1956.
It is proposed to amend the said clause so as to insert sub-clause (f) therein and omit item
(iv) to provide that dividend, inter alia, include any 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 land or building or
both, the period of holding for the purposes of the clause would be twenty-four months.
It is proposed to amend the said clause so as to provide that a “short-term capital asset"
would mean a capital asset held by an assessee for not more than twenty-four months
immediately preceding the date of its transfer.
It is further proposed to amend the first proviso so as to substitute the period of thirty-six
months to twenty-four months in order to align the proviso with the amendment proposed
above.
It is also proposed to amend the second proviso to insert the words, brackets, letters and
figures “as it stood immediately prior to the commencement of the Finance (No.2) Act,
2024” after the words “had been substituted”. It is also proposed to omit the third proviso
thereof.
This amendment will take effect retrospectively from 23rd July, 2024.
155
Clause 4 of the Bill seeks to amend section 10 of the Income-tax Act relating to incomes
not included in total income.
Clause (4D) of the said section, inter alia, provides that any income accrued or arisen
to, or received by a specified fund, shall not be included in computing the total income of a
previous year subject to the conditions mentioned therein.
It is proposed to insert a new sub-item in item (I) of sub-clause (i) of clause (c) of the
Explanation to said clause (4D) to expand the scope of specified fund so as to include a fund
established or incorporated in India in the form of a trust or a company or a limited liability
partnership or a body corporate, which has been granted a certificate as a retail scheme or an
Exchange Traded Fund and is regulated under the International Financial Services Centres
Authority (Fund Management) Regulations, 2022, made under the International Financial
Services Centres Authority Act, 2019 and satisfies such conditions as may be provided by
rules.
It is further proposed to insert a new clause (15B) in the said section to provide that any
income of a foreign company from lease rentals by whatever name called, of cruise ships,
received from a specified company which operates such ship or ships in India, where such
foreign company and the specified company are the subsidiaries of the same holding
company, and such income is received or accrues or arises in India for any assessment year
beginning on the 1st day of April, 2030.
The Explanation proposed to the said clause provides 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 form and manner to the Principal
Commis
sioner or Commissioner, for grant of approval within the time as provided under the
said proviso and the said fund or trust or institution or university or other educational
institution or hospital or other medical institution is approved under the second proviso.
Second proviso to clause (23C) of the said section, provides for the procedure for granting
approval to by the Principal Commissioner or Commissioner, on receipt of an application
made under the first proviso.
156
It is also proposed to amend the first and second provisos to clause (23C) of the said
section to restrict their applicability to the applications made before the 1st October, 2024.
It is also proposed to insert a new proviso to clause (23C) of the said section so as to
provide that no approval under second proviso shall be granted in relation to any application
made on or after the 1st October, 2024.
These amendments will take effect from 1st October, 2024.
Clause (23EE) of the said section provides exemption to the specified income of Core
Settlement Guarantee Fund, set up by a recognised clearing corporation in accordance with
the regulations.
Clause (i) of the Explanation to the said clause defines the expression “recognised
clearing corporation” and clause (ii) thereof defines the expression “regulations”.
It is also proposed to amend clause (i) of the said Explanation to expand the definition of
the expression “recognised clearing corporation” by including the recognised clearing
corporation as defined in clause (n) of sub-regulation (1) of regulation 2 of the International
Financial Services Centres Authority (Market Infrastructure Institutions) Regulations, 2021
made under the International Financial Services Centres Authority Act, 2019 also within its
scope.
It is also proposed to amend clause (ii) of the said Explanation to expand the definition
of the term “regulations” by including the International Financial Services Centres Authority
(Market Infrastructure Institutions) Regulations, 2021 made under the International
Financial Services Centres Authority Act, 2019 also within its scope.
Clause (23FB) of the said section, inter alia, provides that any income of a venture
capital company or venture capital fund from investment in a venture capital undertaking,
shall not be included in computing the total income of a previous year.
It is also proposed to 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.
157
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 any income arising from any
specified service provided on or after the date on which the provisions of Chapter VIII of the
Finance Act, 2016 comes into force, or arising from any e-commerce supply or services
made or provided or facilitated on or after the 1st day of April, 2020 and chargeable to
equalisation levy under that Chapter.
It is also proposed to amend the said clause so as to exempt the income arising from any
e-commerce supply or services made or provided or facilitated on or after the 1st day of
April, 2020 till the 1st day of August, 2024.
This amendment will take effect retrospectively from 1st August, 2024.
Clause 5 of the Bill seeks to amend section 11 of the Income-tax Act relating to income
from property held for charitable or religious purposes.
Sub-section (7) of the said section provides that where a trust or an institution has been
granted registration under section 12AA or section 12AB or has obtained registration at any
time under section 12A and the said registration is in force for any previous year, then,
nothing contained in section 10 [other than clause (1), clause (23C), clause (23EC), clause
(46) and clause (46A) thereof] shall operate to exclude any income derived from the property
held under trust from the total income of the person in receipt thereof for that previous year.
It is proposed to amend the sub-section of the said section so as to provide the reference
of clause (23EA), clause (23ED) and clause (46B) of section 10 therein.
First proviso to sub-section (7) of the said section provides that registration shall become
inoperative from the date on which the trust or institution is approved under clause (23C) of
section 10 or is notified under clause (23EC) or clause (46) or clause (46A) of section 10, as
the case may be, or the date on which this proviso has come into force, whichever is later.
It is further proposed to amend the first proviso to said sub-section of the said section so
as to provide that such registration shall become inoperative from the date on which the trust
or institution is approved under clause (23C) of section 10 or is notified under clause (23EA),
clause (23EC), clause (23ED), clause (46) or clause (46A) of the said section, as the case
may be, or the date on which this proviso has come into force, whichever is later, or, the 1st
day of April of the previous year relevant to the assessment year 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
158
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 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.
These amendments will take effect from 1st April, 2025.
Clause 6 of the Bill seeks to amend section 12A of the Income-tax Act relating to
conditions for applicability of sections 11 and 12.
Sub-section (1) of the said section provides the conditions for applicability of sections 11
and 12 in respect of income of any trust or institution.
Clause (ac) of the said sub-section provides that the provisions of section 11 and section
12 shall not apply in relation to the income of any trust or institution unless, inter alia, such
trust or institution has made an application in the prescribed form and manner to the Principal
Commissioner or Commissioner, for registration of the trust or institution within the time
period specified under the said clause and such trust or institution is registered under section
12AB.
Sub-clause (ii) of clause (ac) of sub-section (1) of the said section provides that where
the trust or institution is registered under section 12AB and the period of the said registration
is due to expire, such trust or institution shall make an application for registration at least six
months prior to expiry of the said period.
Sub-clause (iii) of clause (ac) of sub-section (1) of the said section provides that where
the trust or institution has been provisionally registered under section 12AB, such trust or
institution shall make an application for registration at least six months prior to expiry of
period of the provisional registration or within six months of commencement of its activities,
whichever is earlier.
It is proposed to amend said sub-clauses (ii) and (iii) of clause (ac) of the said sub-section
to allow trust or institution approved or provisionally approved as the case may be, under
sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of
section 10 to apply under the said sub-clauses with similar conditions.
It is further proposed to insert proviso to clause (ac) of sub-section (1) of the said section
to provide that where the application is filed beyond the time allowed in sub-clauses (i) to
(vi), the Principal Commissioner or Commissioner may, if he considers that there is a
reasonable cause for delay in filing the 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.
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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 section provides that any trust or institution registered under section
12AB or approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause
(via) of clause (23C) of section 10, as the case may be, merges with another trust or
institution, the provisions of Chapter XII-EB shall not apply if––
(i) the other trust or institution has same or similar objects;
(ii) the other trust or institution is registered under section 12AA or section 12AB or
approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of
clause (23C) of section 10, as the case may be; and
(iii) the said merger fulfils such conditions as may be provided by rules.
This amendment will take effect from 1st April, 2025.
Clause 9 of the Bill seeks to amend section 13 of the Income-tax Act relating to section
11 not to apply in certain cases.
Clause (d) of sub-section (1) of the said section provides that, in the case of a trust for
charitable or religious purposes or a charitable or religious institution, nothing contained in
section 11 or section 12 shall operate so as to exclude any income, from the total income of
the previous year of such trust or institution, if for any period during the previous year, any
funds of the trust or institution are, inter alia, invested or deposited otherwise than in any
one or more of the forms or modes specified in sub-section (5) of section 11.
It is proposed to insert clause (iv) in the first proviso to clause (d) of sub-section (1) of
the said section to exclude any asset referred to in sub-clauses (i), (ia) and (ii) of clause (b)
of the third proviso to clause (23C) of section 10 or any accretion to the shares, forming part
of the corpus mentioned in the said sub-clauses (i) and (ia) and voluntary contributions
referred to in sub
-
clause (iv) of clause (b) of the said proviso.
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This amendment will take effect from 1st October, 2024.
Clause 10 of the Bill seeks to amend section 16 of the Income-tax Act relating to
deductions from salaries.
The provisions of clause (ia) of the said section provides that a deduction of fifty thousand
rupees or the amount of the salary, whichever is less, shall be made before computing the
income under the head “Salaries”.
It is proposed to insert a new proviso in the said clause to provide that in a case where
income-tax is computed under clause (ii) of sub-section (1A) of section 115BAC, 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 provides for various deductions allowed while computing
the income under the head ‘Profits and gains of business or profession’. Clause (iva) of the
said sub-section provides that any sum paid by the assessee as an employer by way of
contribution towards a pension scheme, as referred to in section 80CCD, on account of an
employee to the extent it does not exceed ten per cent. of the salary of the employee in the
previous year, shall be allowed as a deduction to the assessee.
It is proposed to amend the said clause so as to increase the amount of such employer
contribution allowed as deduction to the employer, from ten per cent. to fourteen per cent.
of the salary of the employee in the previous year.
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
13
of the Bill seeks to amend section 37 of the Income
-
tax Act relating to general.
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Sub-section (1) of said section, inter alia, provides that any expenditure not being the
expenditure described under section 30 to 36 or of capital or personal nature, shall be allowed
in computing the income chargeable under the head “profits and gains of business or
profession”.
Explanation 1 to the said sub-section provides that if any expenditure incurred by an
assessee for any purpose which is an offence or which is prohibited by law shall not be
deemed to have been incurred for the purpose of business or profession and no deduction or
allowance shall be made in respect of such expenditure. Explanation 3 to the said sub-
section, clarifies the expression “expenditure incurred by an assessee for any purpose which
is an offence or which is prohibited by law” for the purposes of Explanation 1.
It is proposed to amend the said Explanation 3 to include any expenditure incurred by an
assessee to settle proceedings initiated in relation to contravention under such law as may be
notified by the Central Government in the Official Gazette in this behalf within the scope of
its clarification.
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 14 of the Bill seeks to amend section 40 of the Income-tax Act relating to amounts
not deductible.
Sub-clause (v) of clause (b) of the said section provides for disallowance of remuneration
paid 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 of the said section.
It is further proposed to omit clause (b) of the said section and clauses (a) and (b) of the
Explanation thereof.
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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 16 of the Bill seeks to amend section 44B of the Income-tax Act relating to special
provision for computing profits and gains of shipping business in the case of non-residents.
It is proposed to amend the marginal heading and sub-section (1) of the said section so
as to provide that the same shall be applicable in the case of non-resident assessee engaged
in the business of operation of ships other than cruise ships referred to in section 44BBC.
Sub-section (1) of the said section provides that notwithstanding anything to the contrary
contained in sections 28 to 43A, in the case of an assessee, being a non-resident, engaged in
the business of operation of ships, a sum equal to seven and a half per cent. of the aggregate
of the amounts specified in sub-section (2) of the said section shall be deemed to be the
profits and gains of such business chargeable to tax under the head “Profits and gains of
business or profession”.
It is further proposed to amend the said sub-section to exclude the application of cruise
ships referred to in section 44BBC from the said section.
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 17 of the Bill seeks to insert new section 44BBC in the Income-tax Act relating
to special provision for computing profits and gains of the business of operation of cruise
ships in the case of non-residents.
Sub-section (1) of the said section seeks to provide that notwithstanding anything to the
contrary contained in sections 28 to 43A, in the case of an assessee, being a non-resident,
engaged in the business of operation of cruise ships subject to the conditions, a sum equal to
twenty per cent. of the aggregate of the amounts specified in sub-section (2) shall be deemed
to be the profits and gains of such business chargeable to tax under the head “Profits and
gains of business or profession”.
Sub-section (2) of the said section further proposes to provide that the amounts referred
to in sub-section (1) shall be the following, namely:—
(i) the amount paid or 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.
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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 other specified securities were purchased by the company.
It is proposed to insert a proviso to the said section so as to provide that where the
shareholder receives any consideration of the nature referred to in sub-clause (f) of clause
(22) of section 2 from any company, in respect of any buy-back of shares, that takes place
on or after the 1st day of October, 2024, then for the purposes of this section, the value of
consideration received by the shareholder shall be deemed to be nil.
This amendment will take effect from 1st October, 2024.
Clause 19 of the Bill seeks to amend section 47 of the Income-tax Act relating to
transactions not regarded as transfer.
The provisions of clause (iii) of the said section provide that any transfer of a capital
asset, under a gift or will or an irrevocable trust shall not be regarded as a transfer. The
proviso to the said clause makes an exception to the clause in respect of specified Employees’
Stock Option Plan or Scheme of a company.
It is proposed to substitute the said clause so as to provide that nothing contained in
section 45 shall apply to any transfer of a capital asset by an individual or a Hindu undivided
family under a gift or will or an irrevocable trust.
This amendment will take effect from 1st April, 2025 and will, accordingly, apply to
assessment year 2025-2026 and subsequent years.
Clause 20 of the Bill seeks to amend section 48 of the Income-tax Act relating to mode
of computation.
The second proviso to the said section provides that where long-term capital gain arises
from the transfer of a long-term capital asset, other than capital gain arising to a non-resident
from the transfer of shares in, or debentures of, an Indian company referred to in the first
proviso, the provisions of clause (ii) of the section shall have effect as if for the words "cost
of acquisition" and "cost of any improvement", the words "indexed cost of acquisition" and
"indexed cost of any improvement" had respectively been substituted.
It is proposed to amend the said proviso so as to limit its applicability to cases where
long-term capital gain arises from the transfer which takes place before the 23rd day of July,
2024, of a long-term capital asset, other than capital gain arising to a non-resident from the
transfer of shares in, or debentures of, an Indian company referred to in the first proviso.
This amendment will take effect retrospectively from 23rd July, 2024.
164
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 section provides that for the purposes of the
section, “Specified Mutual Fund” means a Mutual Fund by whatever name called, where not
more than thirty-five per cent. of its total proceeds is invested in the equity shares of domestic
companies, provided that the percentage of equity shareholding held in respect of the
Specified Mutual Fund shall be computed with reference to the annual average of the daily
closing figures.
It is further proposed to substitute the clause (ii) of the Explanation and its proviso
to provide that "Specified Mutual Fund" means a Mutual Fund by whatever name called,
which invests more than sixty-five per cent. of its total proceeds in debt and money market
instruments, or a fund which invests sixty-five per cent. or more of its total proceeds in units
of a fund referred to in sub-clause (a), provided that the percentage of investment in debt and
money market instruments or in units of a fund, as the case may be, in respect of the Specified
Mutual Fund, shall be computed with reference to the annual average of the daily closing
figures, and provided further that for the purposes of this clause, “debt and money market
instruments” shall include any securities, by whatever name called, classified or regulated as
debt and money market instruments by the Securities and Exchange Board of India.
This amendment will take effect from 1st April, 2026 and will, accordingly, apply in
relation to the assessment year 2026-2027 and subsequent years.
Clause 22 of the Bill seeks to amend section 55 of the Income-tax Act relating to meaning
of “adjusted, “cost of improvement” and “cost of acquisition”.
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Sub-clause (iii) of clause (a) of the Explanation to clause (ac) of sub-section (2) of
the said section, inter alia, provides that where the capital asset is an equity share in a
company, the “fair market value” means 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.
It is proposed to insert item (AA) in the said sub-clause to provide that in a case where
the capital asset is an equity share in a company which is not listed on a recognised stock
exchange as on the 31st day of January, 2018, or which became the property of 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 previous year, from any person, 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 also provides that this clause shall not apply where the consideration for issue of
shares is received (i) by a venture capital undertaking from a venture capital company or a
venture capital fund or a specified fund; or (ii) by a company from a class or classes of
persons as may be notified by the Central Government in this behalf.
It is proposed to amend the said clause so as to provide that the provisions of the said
clause shall not apply on or after 1st April, 2025.
This amendment will take effect from 1st April, 2025.
Clause 24 of the Bill seeks to amend section 57 of the Income-tax Act relating to
deductions.
Clause (i) of the said section provides that the income chargeable under the head
"Income from other sources" in the case of dividends, or interest on securities, shall be
computed after making the deductions, of any reasonable sum paid by way of commission
or remuneration to a banker or any other person for the purpose of realising such dividend
or interest on behalf of the assessee.
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It is proposed to amend the said clause to exclude the dividend referred in sub-clause (f)
of clause (22) of section 2 for the purposes of the said clause.
It is also proposed to insert a new proviso to the said section to provide that that no
deduction shall be allowed in case of dividend income of the nature referred to in sub-clause
(f) of clause (22) of section 2.
These amendments will take effect from 1st October, 2024.
Clause (iia) of the said section provides that in the case of income in the nature of
family pension, a deduction of a sum equal to thirty-three and one-third per cent. of such
income or fifteen thousand rupees, whichever is less, shall be made before computing the
income chargeable under the head “Income from other sources”.
It is proposed to insert a new proviso in the said clause so as to provide that in a case
where income-tax is computed under clause (ii) of sub-section (1A) of section 115BAC of
the Act, the provisions of clause (iia) of section 57 shall have effect as if for the words
“fifteen thousand rupees”, the words “twenty-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 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 salary in previous year.
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 26 of the Bill seeks to amend section 80G of the Income-tax Act relating to
deduction in respect of donations to certain funds, charitable institutions, etc.
Sub-clause (iiihg) of clause (a) of sub-section (2) of the said section provides that in
computing the total income of an assessee, there shall be deducted, in accordance with and
subject to the provisions of this section, any sums paid by the assessee in the previous year
as donations to the National Sports Fund to be set up by the Central Government.
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Since, the Central Government had already set up the said fund by the name National
Sports Development Fund with effect from 12th November, 1998, it is proposed to amend
sub-clause (iiihg) of clause (a) of the said sub-section so as to substitute the expression “The
National Sports Fund to be set up” with the expression “The National Sports Development
Fund set up”.
This amendment will take effect from 1st April, 2025, and will, accordingly, apply in
relation to the assessment year 2025-2026 and subsequent years.
First proviso to sub-section (5) of the said section provides that the institution or fund
referred to in clause (vi) shall make an application in the prescribed form and manner to the
Principal Commissioner or Commissioner, for grant of approval.
It is further proposed to amend the first proviso to sub-section (5) of the said section so
as to insert “or” between the clause (iii) and (iv) of the said first proviso and to amend clause
(iv) of first proviso thereof to provide that, where activities of the institution or fund have
not commenced, at least one month prior to the commencement of the previous year relevant
to the assessment year from which the said approval is sought; or commenced, at any time
after the commencement of such activities shall make an application for grant of approval.
Item (B) of sub-clause (b) of clause (ii) of second proviso to sub-section (5) of the said
section, inter alia, provides that the Principal Commissioner or Commissioner, on receipt of
an application made under the first proviso, shall where the application is made under clause
(ii) or clause (iii) or sub-clause (B) of clause (iv) of the first proviso, after satisfying himself
about 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 form and manner as may be provided by rules, before expiry of the period of
six months, calculated from the end of the month in which the application was received.
It is also proposed to insert a proviso after the third proviso to sub-section (5) of the said
section to provide that the order under sub-clause (b) of clause (ii) of the second proviso
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.
These amendments will take effect from 1st October, 2024.
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Clause 27 of the Bill seeks to amend section 92CA of the Income-tax Act relating to
reference to Transfer Pricing Officer.
Sub-section (2A) of the said section provides that where any other international
transaction [other than an international transaction referred under sub-section (1)], comes to
the notice of the Transfer Pricing Officer during the course of the proceedings before him,
the provisions of Chapter X shall apply as if such other international transaction is an
international transaction referred to him under sub-section (1).
Sub-section (2B) of the said section provides that where in respect of an international
transaction, the assessee has not furnished the report under section 92E and such transaction
comes to the notice of the Transfer Pricing Officer during the course of the proceeding before
him, the provisions of Chapter X shall apply as if such transaction is an international
transaction referred to him under sub-section (1).
It is proposed to amend the said sub-section so as to include reference of specified
domestic transaction in them.
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 28 of the Bill seeks to amend section 94B of the Income-tax Act relating to
limitation on interest deduction in certain cases.
Sub-section (3) of the said section provides that nothing contained in sub-section (1) shall
apply to an Indian company or a permanent establishment of a foreign company which is
engaged in the business of banking or insurance or such class of non-banking financial
companies as may be notified by the Central Government in the Official Gazette in this
behalf.
It is proposed to amend the said sub-section so as to include reference of a Finance
Company 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—
169
(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-term capital gains at the
rate of fifteen per cent; and
(ii) the amount of income-tax payable on the balance amount of the total
income as if such balance amount were the total income of the assessee:
Provided that in the case of an individual or a Hindu undivided family, being a resident,
where the total income as reduced by such short-term capital gains is below the maximum
amount which is not chargeable to income-tax, then, such short-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 short-term
capital gains shall be computed at the rate of fifteen per cent
It is proposed to substitute longline so as to provide that 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 term capital gains:––
(a) at the rate of fifteen per cent. for any transfer which takes place before the
23rd day of July, 2024 ; and
(b) at the rate of twenty per cent. for any transfer which takes place on or after
the 23rd day of July, 2024;
(ii) the amount of income-tax payable on the balance amount of the total income as if
such balance amount were the total income of the assessee.
It is further proposed that in the case of an individual or a Hindu undivided family, being
a resident, where the total income as reduced by such short-term capital gains is below the
maximum amount which is not chargeable to income-tax, then, such short-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
short-term capital gains shall be computed at the rate as applicable in clause (i).
These amendments will take effect retrospectively from 23rd July, 2024.
Clause 30 of the Bill seeks to amend section 112 of the Income-tax Act relating to tax on
long-term capital gains.
The said section provides that where the total income of an assessee includes any income,
arising from the transfer of a long-term capital asset, which is chargeable under the head
“Capital gains”, the tax payable by the assessee on the total income shall be the aggregate
of,
—
170
(a) in the case of an individual or a Hindu undivided family, being a resident,—
(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
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 gains, had the total income as so reduced been
its total income; and
(ii) the amount of income-tax calculated on long-term capital gains [except
where such gain arises from transfer of capital asset referred to in sub-clause
(iii)] at the rate of twenty per cent.; and
(iii) the amount of income-tax on long-term capital gains arising from the
transfer of a capital asset, being unlisted securities or shares of a company not
being a company in which the public are substantially interested, calculated at
the rate of ten per cent. on the capital gains in respect of such asset as computed
without giving effect to the first and second proviso to section 48;
(d) in any other case of a resident,—
(i) the amount of income-tax payable on the total income as reduced by the
amount of 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.
171
Provided that where the tax payable in respect of any income arising from the transfer of
a long-term capital asset, being listed securities (other than a unit) or zero coupon bond,
exceeds ten per cent. of the amount of capital gains before giving effect to the provisions of
the second proviso to section 48, then, such excess shall be ignored for the purpose of
computing the tax payable by the assessee:
It is proposed to substitute clauses (a), (b), (c), (d) and the first proviso of said section so
as to provide that where the total income of an assessee includes any income, arising from
the transfer of a long-term capital asset, which is chargeable under the head “Capital gains”,
the tax payable by the assessee on the total income shall be the aggregate of,—
(a) in the case of an individual or a Hindu undivided family, being a resident,—
(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
his 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:
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 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,—
172
(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 [other than transfer referred
to in sub-clause (iii)] 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:
(iii) the amount of income-tax on long-term capital gains arising from the
transfer of a capital asset which takes place before the 23rd day of July, 2024,
being unlisted securities or shares of a company not being a company in which
the public are substantially interested, calculated at the rate of ten per cent. on
the capital gains in respect of such asset as computed without giving effect to
the first and second proviso to section 48;
(d) in any other case of a resident,—
(i) the amount of income-tax payable on the total income as reduced by the
amount of 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:
Provided that where the tax payable in respect of any income arising from the transfer of
a long-term capital asset which takes place before the 23rd day of July, 2024, being listed
securities (other than a unit) or zero coupon bond, exceeds ten per cent of the amount of
capital gains before giving effect to the provisions of the second proviso to section 48, then,
such excess shall be ignored for the purpose of computing the tax payable by the assessee:
This amendment will take effect retrospectively from 23rd July, 2024.
Clause 31 of the Bill seeks to amend section 112A of the Income-tax Act relating to tax
on long-term capital gains in certain cases.
The sub-section (2) of said section, inter alia, 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 rupees at the rate of ten
per cent.; and
173
(ii) the amount of income-tax payable on the total income as reduced by the
amount of long-term capital gains referred to in sub-section (1) as if the total income
so 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 September, 2024.
Clause 33 of the Bill seeks to amend section 115AB of the Income-tax Act relating to tax
on income from units purchased in foreign currency or capital gains arising from their
transfer.
The sub-section (1) of said section provides that where the total income of an assessee,
being an overseas financial organisation (hereinafter referred to as Offshore Fund)
includes—
(a) income received in respect of units purchased in foreign currency; or
(b) income by way of long-term capital gains arising from the transfer of units
purchased in foreign currency,
the income-tax payable shall be the aggregate of—
(i) the amount of income-tax calculated on the income in respect of units referred to
in clause (a), if any, included in the total income, at the rate of ten per cent.;
174
(ii) 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, at the rate of ten per
cent.; and
(iii) the amount of income-tax with which the Offshore Fund would have been
chargeable had its total income been reduced by the amount of income referred to in
clause (a) and clause (b).
It is proposed to substitute clause (ii) 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 34 of the Bill seeks to amend section 115AC of the Income-tax Act relating to tax
on income from bonds or Global Depository Receipts purchased in foreign currency or
capital gains arising from their transfer.
The sub-section (1) of said section provides that where the total income of an assessee,
being a non-resident, includes—
(a) income by way of interest on bonds of an Indian company issued in accordance
with such scheme as the Central Government may, by notification in the Official Gazette,
specify in this behalf, or on bonds of a public sector company sold by the Government,
and purchased by him in foreign currency; or
(b) income by way of dividends on Global Depository Receipts—
(i) issued 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—
175
(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
per cent.;
(ii) the amount of income-tax calculated on the income by way of long-term capital
gains referred to in clause (c), if any, at the rate of ten per cent.; and
(iii) the amount of income-tax with which the non-resident would have been
chargeable had his total income been reduced by the amount of income referred to in
clauses (a), (b) and (c).
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 (c), 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 35 of the Bill seeks to amend section 115ACA of the Income-tax Act relating to
tax on income from Global Depository Receipts purchased in foreign currency or capital
gains arising from their transfer.
The sub-section (1) of said section provides that where the total income of an assessee,
being an individual, who is a resident and an employee of an Indian company engaged in
specified knowledge based industry or service, or an employee of its subsidiary engaged in
specified knowledge based industry or service (hereafter in this section referred to as the
resident employee), includes—
(a) income by way of dividends on Global Depository Receipts of an Indian
company engaged in specified knowledge based industry or service, issued in accordance
with such Employees' Stock Option Scheme as the Central Government may, by
notification in the Official Gazette, specify in this behalf and purchased by him in foreign
currency; or
(b) income by way of long-term capital gains arising from the transfer of Global
Depository Receipts referred to in clause (a),
the income-tax payable shall be the aggregate of—
(i) the amount of income-tax calculated on the income by way of dividends in respect
of Global Depository Receipts referred to in clause (a), if any, included in the total
income, at the rate of ten per cent.;
(ii) the amount of income-tax calculated on the income by way of long-term capital
gains referred to in clause (b), if any, at the rate of ten per cent.; and
176
(iii) the amount 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 income-tax payable shall be calculated as follows—
(i) the amount of income-tax calculated on the income by way of short-term capital
gains, if any, included in the total income, at the rate of thirty per cent, provided that
the amount of income-tax calculated on the income by way of short-term capital gains
referred to in section 111A shall be at the rate of fifteen per cent;
(ii) the amount of income-tax calculated on the income by way of long-term
capital gains, if any, included in the total income, at the rate of ten per cent, provided
that in case of income arising from the transfer of a long-term capital asset referred
to in section 112A, income-tax at the rate of ten per cent shall be calculated on such
income exceeding one lakh rupees.
It is proposed to substitute proviso to clause of longline of said sub-section so as to provide
that the amount of income-tax calculated on the income by way of short-term capital gains
referred to in section 111A shall be at the rate of––
(a) fifteen per cent. for any transfer which takes place before the 23rd day of July,
2024; and
(b) twenty per cent. for any transfer which takes place on or after the 23rd day of
July, 2024;
It is further proposed to substitute proviso to clause (iii) of longline of said sub-section so
as to provide that in case of income arising from the transfer of a long-term capital asset
referred to in section 112A which exceeds one lakh and twenty-five thousand rupees,
income-tax shall be calculated at the rate of––
(a) ten per cent. where transfer of such asset takes place before the 23rd day of
July, 2024; and
177
(b) twelve and one-half per. cent where transfer of such asset takes place on or
after the 23rd day of July, 2024;
It is proposed to further provide that the limit of one lakh twenty-five thousand rupees
mentioned shall apply on aggregate of the long-term capital gains referred to in clause (a)
and (b).
These amendments will take effect retrospectively from 23rd July, 2024.
Clause 37 of the Bill seeks to amend section 115BAC of the Income-tax Act relating to
tax on income of individuals and Hindu undivided family.
It is proposed to amend sub-section (1A) of the said section to provide that
notwithstanding anything contained in this Act but subject to the provisions of Chapter XII,
the income-tax payable in respect of the total income of a person, being an individual or
Hindu undivided family 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
(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. 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.;
Sl. No.
Total income
Rate of tax
(1)
(2)
(3)
1.
Upto Rs. 3,00,000
Nil
178
These amendments will take effect from 1st April, 2025 and will, accordingly, apply in
relation to the assessment year 2025-2026 and subsequent years.
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. 12,00,001 to Rs. 15,00,000
20 per cent.
6.
Above Rs. 15,00,000
30 per cent.
Clause 38 of the Bill seeks to amend section 115E of the Income-tax Act relating to tax
on investment income and long-term capital gains.
The said section provides that where the total income of an assessee, being a non-resident
Indian, includes—
(a) any income from investment or income from long-term capital gains of an asset
other than a specified asset;
(b) income by way of long-term capital gains,
the tax payable by him shall be the aggregate of—
(i) the amount of income-tax calculated on the income in respect of investment
income referred to in clause (a), if any, included in the total income, at the rate of
twenty per cent.;
(ii) 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, at the rate of ten
per cent.; and
(iii) the amount of income-tax with which he 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 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 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 39 of the Bill seeks to amend section 115QA of the Income-tax Act relating to
tax on distributed income to shareholders.
Sub-section (1) of the said section, inter alia, provides that notwithstanding anything
contained in any other provision of this Act, in addition to the income-tax chargeable in
respect of the total income of a domestic company for any assessment year, any amount of
distributed income by the company on buy
-
back of shares from a shareholder shall be
179
charged to tax and such company shall be liable to pay additional income-tax at the rate of
twenty per cent on the distributed income.
It is proposed to insert a new proviso to the 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 undisclosed foreign income and value of undisclosed
foreign asset is taxed under the said Act instead of the Income-tax Act.
It is proposed to amend the clause (i) of sub-section (1) of the said section to provide the
reference of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of
Tax Act, 2015 so as to recover the existing liabilities under the said out of seized assets.
This amendment will take effect from 1st October, 2024.
Clause 41 of the Bill seeks to amend section 139 of the Income-tax Act relating to return
of income.
The said section provides that every person, being a company or a firm, or being a person
other than a company or a firm whose total income exceeds the maximum amount which is
not chargeable to income-tax, shall, furnish a return of his income.
It is proposed to insert a new sub-section (9A) in the said section to provide that return
of income furnished in pursuance of an order under clause (b) of sub-section (2) of section
119, the provisions of section 139 shall apply.
This amendment will take effect from 1st October, 2024.
Clause 42 of the Bill seeks to amend section 139AA of the Income-tax Act relating to
quoting of Aadhaar number.
The said section provides that every person who is eligible to obtain Aadhaar number
shall, on or after the 1st day of July, 2017, quote Aadhaar number—
(i) in the application form for al
lotment of permanent account number;
180
(ii) in the return of income.
The proviso to the said sub-section provides that where the person does not possess the
Aadhaar Number, the Enrolment ID of Aadhaar application form issued to him at the time
of enrolment shall be quoted in the application for permanent account number or in the return
of income furnished by him.
It is proposed to amend the said sub-section (1) so as to insert a second proviso providing
that the first proviso shall not apply in respect of any application form for allotment of
permanent account number or return of income furnished on or after the 1st day of October,
2024.
It is further proposed to insert a new sub-section in the said section specifying that every
person who has been allotted permanent account number on the basis of Enrolment ID of
Aadhaar application form filed prior to the 1st day of October, 2024, shall intimate his
Aadhaar number on or before a notified date to the specified authority.
These amendments will take effect 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 Assessing Officer before making the assessment,
reassessment or recomputation shall issue a notice to the assessee, along with a copy of the
order passed under sub-section (3) of section 148A requiring him to furnish within such
period as may be specified, not exceeding a period of three months from the end of the month
in which such notice is issued, a return of his income or the income of any other person in
respect of whom he is assessable under this Act.
It further provides that the return of income required to be furnished under sub-section
(1) shall be furnished in the such form and verified in such manner and setting for
th such
181
other particulars as may be provided by rules, and the provisions of this Act shall apply
accordingly as if such return were a return required to be furnished under section 139.
It is also proposed to provide that where the Assessing Officer has received information
under the scheme notified under section 135A, no notice shall be issued under section 148
without prior approval of the specified authority.
It also provides that any return of income required to be furnished by an assessee under
this section and furnished beyond the period specified in the notice under sub-section (1),
shall not be deemed to be a return under section 139.
It also clarifies the information with the Assessing Officer about the income chargeable
to tax which has escaped assessment.
The existing provisions of the section 148A, inter alia, provides certain procedures to be
followed by Assessing Officer before issuing notice under section 148.
It is proposed to substitute the said section so as to provide that where the Assessing
Officer has information which suggests that income chargeable to tax has escaped
assessment in the case of an assessee for the relevant assessment year, he shall, before issuing
any notice under section 148, provide an opportunity of being heard to such assessee who
shall furnish his reply, within such time, as may be specified in such notice.
The Assessing Officer shall, on the basis of material available on record and taking into
account the reply of the assessee furnished under sub-section (2), if any, pass an order with
the prior approval of the specified authority, determining whether or not it is a fit case to
issue notice under section 148.
It also proposed that the provisions of the section 148A shall not apply to income
chargeable 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.
182
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 section 148 or 148A shall be the Additional Commissioner or the Additional
Director or the Joint Commissioner or the Joint Director, as the case may be.
This amendment will take effect from 1st September, 2024.
Clause 47 of the Bill seeks to amend section 152 of the Income-tax Act relating to other
provisions.
It is proposed to insert a new sub-section (3) in the said section so as to provide that
where a search has been initiated under section 132, or requisition is made under section
132A, or a survey is conducted under section 133A [other than under sub-section (2A)], on
or after the 1st day of April, 2021 but before the 1st day of September, 2024, the provisions
of sections 147 to 151 shall apply as they stood immediately before the commencement of
the Finance (No. 2) Act, 2024.
It is further proposed to insert a new sub-section (4) in the said section so as to provide
that where a notice under section 148 has been issued or an order under clause (d) of section
148A has been passed, prior to the 1st day of September, 2024, the assessment, reassessment
or recomputation in such case shall be governed as per the provisions of sections 147 to 151,
as they stood immediately before the commencement of the Finance (No. 2) Act, 2024.
These amendments will take effect from 1st September, 2024.
Clause 48 of the Bill seeks to amend section 153 of the Income-tax Act relating to time-
limit for completion of assessment, reassessment and recomputation.
Sub-section (1) of the said section provides that assessment under section 143 or section
144 shall be completed within twelve months from the end of the assessment year in which
the income was first assessable.
It is proposed to insert a new sub-section (1B) in the said section to provide that order of
assessment of cases where return of income is furnished in consequence of an order under
clause (b) of sub-section (2) of section 119 may be completed within twelve months from
the end of the financial year in which such return is furnished.
Sub-section (3) of the said section provides the time-limit for passing the fresh
assessment order in pursuance of an order under section 254 or section 263 or section 264
setting aside or cancelling an assessment. It further provides that such fresh assessment order
shall be passed at any time before the expiry of twelve months from the end of the financial
year in which the order under 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.
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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, provides that the period (not
exceeding one hundred and eighty days) commencing from the date of initiation of search
and ending on the date on which the books of accounts or documents or seized materials are
handed over to the Assessing Officer is excluded while computing the period of limitation.
It is proposed to insert sixth proviso in the said Explanation to provide that the date of
limitation in such cases falls at the end of the month, after taking into account the exclusion
provided in the said Explanation.
These amendments will take effect from 1st October, 2024.
Clause 49 of the Bill seeks to substitute Chapter XIV-B of the Income-tax Act
relating to special procedure for assessment of search cases.
Proposed section 158B provides definition for expressions “block period” and
“undisclosed income”.
Proposed section 158BA relates to Assessment of total income as a result of
search.
Sub-section (1) of said section provides that notwithstanding anything contained
in any other provisions of the Act, where on or after the 1st day of September, 2024,
a search is initiated under section 132, or books of account, other documents or any
assets are requisitioned under section 132A, in the case of any person, then, the
Assessing Officer shall proceed to assess or reassess the total income of the block
period in accordance with the provisions of the said Chapter.
Sub-section (2) of said section provides that the assessment or reassessment or
recomputation under the provisions of this Act, if any, pertaining to any assessment
year falling in the block period, pending on the date of initiation of the search
under section 132, or making of requisition under section 132A, as the case may be,
shall abate and shall be deemed to have abated on the date of initiation of search or
making the requisition.
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Sub-section (3) of said section provides that assessment or reassessment or
recomputation or order passed shall also abate with reference to sub-section (1) and
sub-section (3) of section 92CA.
Sub-section (4) of said section provides that where any assessment under the
provisions of this Chapter is pending in the case of an assessee in whose case a
subsequent search is initiated, or a requisition is made, such assessment shall be duly
completed, and thereafter, the assessment in respect of such subsequent search or
requisition shall be made under the provisions of the said Chapter.
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 block
period shall be charged to tax, at the rate specified in section 113, as income of the
block period irrespective of the previous year or years to which such income relates.
Proposed section 158BB relates to computation of total income of block period.
Sub-section (1) of said section provides that the total income referred to in sub-
section (1) of section 158BA of the block period shall be the aggregate of certain
incomes.
Sub-section (2) of said section provides that the undisclosed income falling
within the block period, forming part of the total income referred to in sub-section (1)
of section 158BA, shall be computed in accordance with the provisions of the Act, on
the basis of evidence found as a result of search or survey or requisition of books of
account or other documents and such other materials or information as are either
available with the Assessing Officer or come to his notice during the course of
proceedings under this Chapter.
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Sub-section (3) of said section provides that where any evidence found as a result
of search or requisition of books of account or other documents and such other
materials or information as are either available with the Assessing Officer or come to
his notice during the course of proceedings under this Chapter, or determined on the
basis of entries relating to such income or transactions as recorded in books of account
and other documents maintained in the normal course on or before the date of the
search or requisition, relates to any international transaction or specified domestic
transaction referred to in section 92CA, pertaining to the period beginning from the
1st day of April of the previous year in which last of the authorisations was executed
and ending with the date on which last of the authorisations was executed, such
evidence shall not be considered for the purposes of determining the total income of
the block period and such income shall be considered in the assessment made under
the other provisions of the Act.
Sub-section (4) of said section provides that for the purposes of determination of
undisclosed income,––
(a) of a firm, such income assessed for each of the previous years falling within
the block period shall be the income determined before allowing deduction of
salary, interest, commission, bonus or remuneration by whatever name called
to any partner not being a working partner;
(b) the provisions 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 ignored.
Sub-section (7) of said section provides that for the purpose of assessment under
this Chapter, losses brought forward from the previous year (prior to the first previous
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year comprising the block period) under Chapter VI or unabsorbed depreciation under
sub-section (2) of section 32 shall not be set off against the undisclosed income
determined in the block assessment under this Chapter but may be carried forward
for being set off in the previous year subsequent to the assessment year in which the
block period ends, for the remaining period, taking into account the block period and
such assessment year, and in accordance with the provisions of the Act.
Proposed section 158BC relates to procedure for block assessment.
Sub-
section (1) of said section provides that where any search has been initiated
under section 132 or books of account, other documents or assets are requisitioned
under section 132A, in the case of any person, then,—
(a) the Assessing Officer shall, in respect of search initiated, or books of
account or other documents or any assets requisitioned, on or after the 1st day of
September, 2024, issue a notice to such person, requiring him to furnish within
such period, not exceeding a period of sixty days, as may be specified in the notice,
a return in the form and verified in the manner, as may be prescribed, setting forth
his total income, including the undisclosed income, for the block period.
Provisos to clause (a) deal with certain situations under section 139 and section
148 and deal with revised returns.
Clause (b) of said sub-section provides that Assessing Officer shall proceed
to determine the total income including the undisclosed income of the block period
in the manner laid down in section 158BB and the provisions of section 142, sub-
sections (2) and (3) of section 143, section 144, section 145, section 145A and section
145B shall, so far as may be, apply.
Clause (c) of said sub-section provides that Assessing Officer, on determination
of the total income of the block period in accordance with this Chapter, shall pass an
order of assessment or reassessment and determine the tax payable by him on the basis
of such assessment or reassessment.
Provisos of that sub-section deal with orders passed under section 144C and
section 158BD.
Clause (d) of said sub-section provides that the assets seized under section 132 or
requisitioned under 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.
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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 section 158BE relates to time-limit for completion of block
assessment.
Sub-section (1) of said section provides that notwithstanding the provisions of
section 153, the order under section 158BC shall be passed within twelve months
from the end of the month in which the last of the authorisations for search
under section 132, or requisition under section 132A, was executed or made, as the
case may be.
Proviso to the said sub-section provide for extension of period by twelve
months under certain circumstances.
Sub-section (2) of said section provides that in computing the period of
limitation under sub-section (1), the period (not exceeding one hundred and eighty
days) commencing from the date on which a search is initiated under section 132 or
a requisition is made under section 132A and ending on the date on which the books
of account, or other documents or money or bullion or jewellery or other valuable
article or thing seized under section 132 or requisitioned under section 132A, as the
case may be, are handed over to the Assessing Officer having jurisdiction over the
assessee, in whose case such search is initiated under section 132 or such requisition
is made under section 132A, as the case may be, shall be excluded.
Proviso to the said sub-section provide for extension of period by twelve
months under certain circumstances.
Sub-section (3) of said section provides that the period of limitation for
completion of assessment or reassessment for the block period in the case of the other
person referred to in section 158BD shall be twelve months from the end of the month
in which the notice under section 158BC in pursuance of section 158BD, was issued
to such other person.
Proviso to the said sub-section provide for extension of period by twelve
months under certain circumstances.
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Sub-section (4) of said section provides the periods which shall be excluded in
computing the period of limitation.
Proposed section 158BF relates to certain interests and penalties not to be
levied or imposed. The said section provides that no interest under the provisions
of section 234A, 234B or 234C or penalty under section 270A shall be levied or
imposed upon the assessee in respect of the undisclosed income assessed or
reassessed for the block period.
Proposed section 158BFA relates to levy of interest and penalty in certain
cases.
Sub-section (1) of said section provides that where 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
undisclosed income determined by the Assessing Officer under clause (c) of sub-
section (1) of section 158BC.
Sub-section (3) of said section provides the circumstance under which no order
imposing a penalty under sub-section (2) shall be made.
Sub-section (4) of said section provides the period which shall excluded in
computing the period of limitation under the said section.
Sub-section (5) of said section provides that an income-tax authority on making
an order under sub-section (2) imposing a penalty, unless he is himself an Assessing
Officer, shall forthwith send a copy of such order to the Assessing Officer.
Proposed section 158BG relates to authority competent to make assessment of
block period.
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The said section provides that the order of assessment for the block period shall
be passed by an Assessing Officer not below the rank of a Deputy Commissioner or
an Assistant Commissioner or a Deputy Director or an Assistant Director, as the case
may be.
Proviso to said section provides that no such order shall be passed without the
previous approval of the Additional Commissioner or the Additional Director or the
Joint Commissioner or the Joint Director, as the case may be, 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.
Proposed section 158BH relates to application of other provisions of the Act.
The said section provides that save as otherwise provided in this Chapter, all
other provisions of this Act shall apply to assessment made under this Chapter.
Proposed section 158BI relates to chapter not to apply in certain
circumstances.
The said section provides that the provisions of this Chapter shall not apply
where a search was initiated under section 132, or books of account, other documents
or any assets were requisitioned under section 132A, before the 1st day of September,
2024, and proceedings in relation to such search or requisition, as the case may be,
shall be governed by the other provisions of the Act.
These amendments will take effect from 1st
September, 2024.
Clause 50 of the Bill seeks to amend section 192 of the Income-tax Act relating to salary.
The said section provides for provisions relating to deduction of tax at source on salary
income.
It is proposed to amend sub-sections (1C) and (2A) of the said section for 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.
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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% Savings (Taxable) Bonds,
2018 shall be liable for deduction of tax at source, if the interest payable on such securities
exceeds ten thousand rupees during the financial year.
It is proposed to substitute the proviso to the said clause (iv) to also provide that the
interest payable on Floating Rate Savings Bonds, 2020 (Taxable) or any other security of the
Central Government or the State Government as may be notified by the Central Government
shall also be liable for deduction of tax, if the interest payable on such securities exceeds ten
thousand rupees during the financial year.
This amendment will take effect from 1st October, 2024.
Clause 52 of the Bill seeks to amend section 194 of the Income-tax Act relating to
dividends.
The said section, inter alia, provides that the principal officer of an Indian company or
a company which has made the prescribed arrangements for the declaration and payment of
dividends (including dividends on preference shares) within India, shall, before making any
payment by any mode in respect of any dividend or before making any distribution or
payment to a shareholder, who is resident in India, of any dividend within the meaning of
sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause (d) or sub-clause (e) of clause
(22) of section 2, deduct from the amount of such dividend, income-tax at the rate of ten per
cent.
It is proposed to amend the said section so as to make it applicable to for sub-clause (f)
of clause (22) of section 2.
This amendment will take effect from 1st October, 2024.
Clause 53 of the Bill seeks to amend section 194C of the Income-tax Act relating to
payments to contractors.
Clause (iv) of the Explanation to the said section provides the meaning for the term
“work”.
It is proposed to amend the said Clause (iv) to exclude any sum referred to in sub-section
(1) of section 194J from the definition of “work”.
This amendment will take effect from 1st October, 2024.
Clause 54 of the Bill seeks to amend section 194DA of the Income-tax Act relating to
payment in respect of life insurance policy.
191
The said section provides that any person responsible for paying to a resident any sum
under a life insurance policy, including the sum allocated by way of bonus on such policy,
other than the amount not includible in the total income under clause (10D) of section 10,
shall, at the time of payment thereof, deduct income-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 tickets in an amount exceeding fifteen thousand rupees shall,
at the time of credit of such income to the account of the payee or at the time of payment of
such income 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 five per cent.
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 57 of the Bill seeks to amend section 194H of the Income-tax Act relating to
commission or brokerage.
The said section, inter alia, provides that any person, not being an individual or a Hindu
undivided family, who is responsible for paying, on or after the 1st day of June, 2001, to a
resident, any income by way of commission (not being insurance commission referred to
in section 194D) or brokerage, shall, at the time of credit of such income to the account of
the payee or at the time of payment of such income 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
five per cent.
192
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 58 of the Bill seeks to amend section 194-IA of the Income-tax Act relating to
payment on transfer of certain immovable property other than agricultural land.
Sub-section (1) of the said section provides that any person, being a transferee,
responsible for paying to a resident transferor any sum by way of consideration for transfer
of any immovable property (other than agricultural land), shall, at the time of credit or
payment, whichever is earlier, of such sum to the transferor, deduct an amount equal to one
per cent. of such sum or the stamp duty value of such property, whichever is higher, as
income-tax thereon.
Sub-section (2) of the said section provides that no deduction of tax shall be made where
the consideration for the transfer of an immovable property and the stamp duty value of such
property, are both less than fifty lakh rupees.
It is proposed to insert a proviso to sub-section (2) of the said section so as to provide
that where there is more than one transferor or transferee in respect of any immovable
property, then the 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 person, being an individual or a
Hindu undivided family (other than those who are required to deduct income-tax as per the
provisions of section 194C, section 194H or section 194J) responsible for paying any sum to
any resident for carrying out any work (including supply of labour for carrying out any work)
in pursuance of a contract, by way of commission (not being insurance commission referred
to in section 194D) or brokerage or by way of fees for professional services during the
financial year, shall, at the time of credit of such sum or at the time of payment of such sum
193
in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an
amount equal to five per cent. of such sum 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 61 of the Bill seeks to amend section 194-O of the Income-tax Act relating to
payment of certain sums by e-commerce operator to e-commerce participant.
Sub-section (1) of the said section provides that notwithstanding anything to the contrary
contained in any of the provisions of Part B of this Chapter, where sale of goods or provision
of services of an e-commerce participant is facilitated by an e-commerce operator through
its digital or electronic facility or platform (by whatever name called), such e-commerce
operator shall, at the time of credit of amount of sale or services or both to the account of an
e-commerce participant or at the time of payment thereof to such e-commerce participant by
any mode, whichever is earlier, deduct income-tax at the rate of one per cent. of the gross
amount of such sales or services or both.
It is proposed to amend the said sub-section so as to reduce the said rate of tax deduction
from one per cent. to 0.1 per cent.
This amendment will take effect from 1st October, 2024.
Clause 62 of the Bill seeks to insert a new section 194T in the Income-tax Act relating to
payments to partners of firms.
Sub-section (1) of the said section provides that any person, being a firm, responsible for
paying any sum in the nature of salary, remuneration, commission, bonus or interest to a
partner of the firm, shall, at the time of credit of such amount to the account of the partner
(including the capital account) or at the time 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.
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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 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,-
(a) ten per cent.in respect of income from units referred to in clause (i) of sub-
section (1) of section 115AB;
(b) ten per cent.in respect of long-term capital gains arising from transfer of units
referred to in section 115AB, 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 units referred to in section 115AB, which takes place on or after the 23rd
day of July, 2024.
This amendment will take effect retrospectively from 23rd July, 2024.
Clause 64 of the Bill seeks to amend section 196C of the Income-tax Act relating to
income from foreign currency bonds or shares of Indian company.
The said section provides that where any income by way of interest or dividends in
respect of bonds or Global Depository Receipts referred to in section 115AC or by way of
long-term capital gains arising from the transfer of such bonds or Global Depository Receipts
is payable to a non-resident, 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 by any
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 by way
of interest or dividends in respect of bonds or Global Depository Receipts referred to in
section 115AC or by way of long-term capital gains arising from the transfer of such bonds
or Global Depository Receipts is payable to a non-resident, 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 by any mode, whichever is earlier, deduct income-tax
thereon at the rate of,––
(a) ten per cent. in respect of income by way of interest or dividends in respect of
bonds or Global Depository Receipts referred to in section 115AC;
(b) ten 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
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.
195
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, give to him such certificate as may be appropriate.
It is proposed to amend the said sub-section so as to include the provisions relating to
deduction of tax at source on payment of certain sum for purchase of goods under section
194Q also within its scope.
This amendment will take effect from 1st October, 2024.
Clause 66 of the Bill seeks to amend section 198 of the Income-tax Act relating to tax
deducted is income received. The said section provides that tax deducted as per provisions
of Chapter XVII-B shall, for the purpose of computing the income of an assessee, be deemed
to be income received.
It is proposed to amend the said section so as to provide that all sums deducted in
accordance with the foregoing provisions of the said Chapter and income tax paid outside
India by way of deduction and in respect of which an assessee is allowed a credit against the
tax payable under the said Act, shall for the purpose of computing the income of the assessee,
be deemed to be income received.
This amendment will take effect from 1st April, 2025.
Clause 67 of the Bill seeks to amend section 200 of the Income-tax Act relating to duty
of person deducting tax.
Sub-section (3) of the said section requires that a deductor, after paying the tax deducted
to the credit of the Central Government within the prescribed time, prepare such statement
for such period and furnish it within such period, as may be provided by rules, to the
prescribed authority.
The proviso to said sub-section states that a person may also deliver to the prescribed
authority a correction statement for rectification of any mistake or to add, delete or update
the information furnished in the statement delivered under this sub-section in such form and
verified in such manner as may be specified by the authority.
It is proposed to amend the said section to provide that no correction statement shall be
delivered after the expiry of six years from the end of the financial year in which the
statement referred to in sub-section (3) is required to be delivered.
This amendment will take effect from 1s
t April, 2025.
196
Clause 68 of the Bill seeks to amend section 200A of the Income-tax Act relating to
processing of statements of tax deducted at source.
The said section provides the manner in which statement of tax deduction at source or a
correction statement made by a person deducting any sum (deductor) under section 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 statement is delivered, whichever
is later.
This amendment will take effect from 1st April, 2025.
Clause 70 of the Bill seeks to amend section 206C of the Income-tax Act relating to
profits and gains from the business of trading in alcoholic liquor, forest produce, scrap, etc.
It is proposed to substitute sub-section (1F) of the said section to extend its scope to, inter
alia, provide that every person, being a seller, who receives any amount as consideration for
sale of any other goods of value exceeding ten lakh rupees, as may be notified by the Central
Government shall, at the time of receipt of such amount, collect from the buyer, a sum equal
to one per cent. of the sale consideration as income-tax.
This amendment will take effect from 1st January, 2025.
Sub-section (3B) of the said section requires that the person collecting tax may also
deliver to the prescribed authority, a correction statement for rectification of any mistake or
to add, delete or update the information furnished in the statement delivered under the
proviso to sub-section (3) in such form and verified in such manner, as may be specified by
the authority.
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It is further proposed to amend the said sub-section (3B) to provide that no correction
statement shall be delivered after the expiry of six years from the end of the financial year in
which the statement referred to in the proviso to sub-section (3) is required to be delivered.
This amendment will take effect from 1st April, 2025.
It is also proposed to amend the sub-section (4) of the said section, to provide that credit
for amount collected and paid to the Central Government shall also be given to any other
person eligible for credit for the amount so collected in a particular assessment year in
accordance with the rules as may be made under the said Act.
This amendment will take effect from 1st January, 2025.
Sub-section (7) of the said section provides that if any person who is liable to collect tax
at source does not collect it or after so collecting fails to pay the same to the credit of the
Central Government, then he shall be liable to pay interest at the rate of one per cent. for
every month or part of month on the amount of such tax from the date on which such tax
was collected to the date on which such tax is actually paid.
It is also proposed to amend the said sub-section so as to increase the rate of simple
interest from 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
specified in sub-section (1) or sub-section (1C).
It is also proposed to amend sub-section (9) of the said section so as to include sub-section
(1H) of that section under its purview.
It is also proposed to insert a new sub-section (12) in the said section so as to provide that
no collection of tax shall be made or collection of tax shall be made at such lower rate in
respect of specified transaction, from such person or class of persons, including institution,
association or body or class of institutions, associations or bodies, as the Central Government
may, by notification in the Official Gazette specify in this behalf.
These amendments will take effect from 1st October, 2024.
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Clause 71 of the Bill seeks to amend section 230 of the Income-tax Act relating to tax
clearance certificate.
Sub-section (1A) of the said section, inter alia, provides that no person who is domiciled
in India, shall leave India, unless he obtains a certificate from the income-tax authorities
stating that he has no liabilities under the Income-tax Act, or the Wealth-tax Act, 1957, or
the Gift-tax Act, 1958, or the Expenditure-tax Act, 1987, or he makes satisfactory
arrangements for the payment of all or any of such taxes which are or may become payable
by that person. Such certificate is required to be obtained where circumstances exist which,
in the opinion of an income-tax authority render it necessary for such person to obtain the
same.
It is proposed to amend the proviso to the said sub-section by inserting the reference of
the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
therein, so as to impose the liabilities under the said Act for the purposes of obtaining the
certificate relating to no liabilities.
This amendment will take effect from 1st October, 2024.
Clause 72 of the Bill seeks to amend section 244A of the Income-tax Act relating to
interest on refunds.
The proviso to sub-section (1A) of the said section provides that 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 sub-section (2) of section 245 and ending
with the date on which such assessment or reassessment 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 affect the revenue.
It is proposed to amend the said sub
-
section to omit the said requirement.
199
Further, sub-section (2) of the said section provides that the refund can be withheld up
to the date of assessment or reassessment.
It is proposed to amend the said sub-section to provide that the refund can be withheld
up to sixty days from the date on which such assessment or reassessment is made.
These amendments will take effect from 1st
October, 2024.
Clause 74 of the Bill seeks to amend section 245Q of the Income-tax Act relating to
application for advance ruling.
Sub-section (4) of the said section provides that where an application for advance ruling
is made before the notified date, and in respect of which no order under sub-section (2) of
section 245R has been passed or no advance ruling under sub-section (4) of section 245R
has been pronounced before such date, such application pending on the file of the Authority
shall be transferred to the Board for Advance Rulings.
It is proposed to insert a proviso to the said sub-section to provide that the applicant
may, on or before 31st October, 2024, request the Board for Advance Rulings in writing that
the application so transferred may not be proceeded with, if up to the date of such request,
the Board for Advance Rulings has not passed an order under sub-section (2) of section
245R.
This amendment will take effect from 1st October, 2024.
Clause 75 of the Bill seeks to amend section 245R of the Income-tax Act relating to
procedure on receipt of application.
Sub-section (2) of the said section provides that the Authority may, after examining the
application and the records called for, by order, either allow or reject the application.
It is proposed to insert a new proviso to the said sub-section to provide that on receipt
of an application under the proviso to sub-section (4) of section 245Q, the Board for Advance
Rulings may, by an order under the said sub-section, reject the application referred to in sub-
section (1) thereof as withdrawn, on or before the 31st December, 2024.
This amendment will take effect from 1st October, 2024.
Clause 76 of the Bill seeks to amend section 246A of the Income-tax Act relating to
appealable orders before Commissioner (Appeals).
It is proposed to amend the said section so as to insert a new clause after clause (k) to
provide that an order passed under clause (c) of sub-section (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.
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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 sub-
section (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 1st October, 2024.
Clause 78 of the Bill seeks to amend section 253 of the Income-tax Act relating to
appeals to the Appellate Tribunal.
Sub-section (1) of the said section provides that any assessee aggrieved by any of the
orders passed under various provision specified therein may appeal to the Appellate Tribunal
against the said orders.
It is proposed to amend clause (a) of the said section 253 to provide the reference of
section 158BFA therein which provides for levy of interest and penalty in certain cases.
Sub-section (3) of the said section provides that every appeals to the Appellate Tribunal
is to be filed within sixty days of the date on which the order sought to be appealed against
is communicated to the assessee or to the Principal Commissioner or Commissioner, as the
case may be.
It is proposed to amend the said sub-section to provide that the appeal before the
Appellate Tribunal may be filed within two months from the end of the month in which the
order sought to be appealed against is communicated to the assessee or to the Principal
Commissioner or Commissioner, as the case may be.
These amendments will take effect from 1st
October, 2024.
Clause 79 of the Bill seeks to amend section 271FAA of the Income-tax Act, 1961
relating to penalty for furnishing inaccurate statement of financial transaction or reportable
account.
The sub-section (1) of the said section, inter alia, provide that if a person referred to in
sub-section (1) of section 285BA of the Act, who is required to furnish a statement under
that section, provides inaccurate information in the statement, and where such inaccuracy is
due to the circumstances specified in clauses (a) to (c) therein, then, the prescribed income-
tax authority under sub-section (1) of section 285BA may direct that such person shall pay,
by way of penalty, a sum of fifty thousand rupees.
201
It is proposed to substitute the said sub-section so as to provide that if a person who is
required to furnish a statement under section 285BA, provides inaccurate information in the
statement or fails to furnish correct information within the period specified under sub-section
(6) of the said section 285BA; or fails to comply with the due diligence requirement
prescribed under sub-section (7) of the said section, then, the prescribed income-tax
authority referred to in sub-section (1) thereof may direct that such person shall 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 incorrect information in the statement.
Sub-section (3) of the said section prescribed time limit of one year for delivering or
causing to be delivered the statements.
It is proposed to amend the sub-section (3) so as to reduce the time limit from one year
to one month.
This amendment will take effect from 1st April, 2025.
Clause 82 of the Bill seeks to amend section 273B of the Income-tax Act relating to
penalty not to be imposed in certain cases.
The said section, inter alia, provides that notwithstanding anything contained in the
provisions mentioned therein, no penalty shall be imposable on the person or the assessee,
as the case may be, for any failure referred to in the said provisions if he proves that there
was reasonable cause for the said failure.
It is proposed to amend the said section to give reference of section 271AA also therein
so as to allow non-imposition of penalty on any person or assessee for failure under section
271FAA if he proves that there was reasonable cause for such failure.
This amendment will take effect from 1st
October, 2024.
202
It is further proposed to amend the said section to provide the reference of section 271GC
also therein.
This amendment will take effect from 1st April, 2025.
Clause 83 of the Bill seeks to amend section 275 of the Income-tax Act relating to bar
of limitation for imposing penalties.
The said section, inter alia, provides that no penalty can be imposed in a case where
appeal is preferred before the Commissioner of Income tax (Appeal) under section 246 or
section 246A after the end of the financial year in which the proceedings, in the course of
which action for imposition of penalty has been initiated are completed, or six months from
the end of the month in which the order of the Commissioner of Income tax (Appeal) is
received by the Principal Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner, whichever period expires later.
It is proposed to amend sub-sections (1) and (1A) of the said section so as to omit the
reference of the Principal Chief Commissioner or Chief Commissioner from the said sub-
sections.
These amendments will take effect from 1st
October, 2024.
Clause 84 of the Bill seeks to amend 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.
The said section, inter alia, provides that 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 sub-
section (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.
203
The said section provides that every person, being a non-resident having a liaison office
in India set up in accordance with the guidelines issued by the Reserve Bank of India under
the Foreign Exchange Management Act, 1999, shall, in respect of its activities in a financial
year, prepare and deliver or cause to be delivered to the Assessing Officer having
jurisdiction, within sixty days from the end of such financial year, a statement in such form
and containing such particulars as may be provided by rules.
It is proposed to amend the said section to provide that the said statement shall be
delivered to the Assessing Officer within the period and containing such particulars as may
be provided by rules.
This amendment will take effect from 1st April, 2025.
Clause 87 of the Bill seeks to amend the First Schedule to the Income-tax Act relating
to insurance business.
Rule 2 of the said Schedule, states that the profits and gains of life insurance business
shall be taken to be the annual average of the surplus arrived at by adjusting the surplus or
deficit disclosed by the actuarial valuation made in accordance with the Insurance Act, 1938,
in respect of the last inter-valuation period ending before the commencement of the
assessment year and excluding from it such surplus or deficit included therein which was
made in any earlier inter-valuation period.
It is proposed to insert a proviso to the said rule, so as to provide that any expenditure
which is not admissible under the provisions of section 37 in computing the profits and gains
of a business, shall be included back to the profits and gains of the life insurance business.
This amendment will take effect from 1st April, 2025 and will, accordingly, apply in
relation to the assessment year 2025-2026 and subsequent years.
Clauses 88 to 99 of the Bill seek to insert a new Chapter to provide the Direct Tax Vivad
se Vishwas Scheme, 2024.
The Chapter, inter alia, provides––
(a) the definitions of certain expressions relating to “appellant”, “appellant forum”,
“declarant”, “declaration”, “designated authority”, “disputed fee”, “disputed income”,
“disputed interest”, “disputed penalty”, “disputed tax”, “last date”, “specified date” and
“tax arrear”;
(b) the provisions relating to the amount payable by the declarant;
(c) the provisions relating to the particulars to be furnished in the form of declaration;
(d) the provisions relating to the time and manner of payment 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;
204
(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) of section 65 of the
Customs Act, to empower the Central Government to specify certain manufacturing
processes and other operations in relation to a class of goods that shall not be permitted in a
warehouse.
Clause 102 of the Bill seeks to amend section 143AA of the Customs Act by inserting
the words “or any other persons,” after the words “importers or exporters” so as to facilitate
trade and encourage compliances.
Clause 103 of the Bill seeks to insert the words ‘or any other persons’ in clause (m) of
sub-section (2) of section 157 enabling the Board to make regulation on the measures and
separate procedure or documentation for such persons, apart from the existing class or
category specified therein.
Clause 104 of the Bill seeks to validate the notification of the Government of India in
the Ministry of Finance (Department of Revenue) number G.S.R. 394 (E), dated the 12th
July, 2024 issued by the Central Government, in exercise of the powers conferred by sub-
section (1) of section 25 of the Customs Act, read with sub-section (12) of section 3, of the
Customs Tariff Act, retrospectively with effect from the 1st day of July, 2017 so as to provide
exemption from compensation cess leviable on imports in SEZ by SEZ unit or developer for
authorised operations.
Clause 105 of the Bill seeks to amend notification number G.S.R. 356(E), dated the
10th May, 2023, to notify the amended conditions, retrospectively, with effect from the 1st
day of April, 2023 as specified in the Second Schedule.
205
The clause further seeks to provide consequential admissible refund if the person
claiming the refund makes an application on or before the 31st day of March, 2025.
Customs Tariff
Clause 106 of the Bill seeks to omit section 6 of the Customs Tariff Act as the tariff
commission has been wound up vide Resolution, dated 1st June, 2022 by the Government of
India.
Clause 107 of the Bill seeks to amend the First Schedule to the Customs Tariff Act so
as to create new tariff lines in the manner specified in,––
(a) the Third Schedule with a view to revise the rates in respect of certain tariff items;
(b) the Fourth Schedule so as to create new tariff lines, modify existing tariff lines and
revise the rates in respect of certain tariff items with effect from the 1st day of October, 2024;
Excise
Clause 108 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.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 reference to the
proposed new section 74A.
Clause 112 of the Bill seeks to insert a new section 11A in the Central Goods and
Services Tax Act, so as to empower the Government to regularise non-levy or short levy of
central tax where it is satisfied that such non-levy or short levy was a result of general
practice.
Clause 113 of the Bill seeks to amend sub-section (3) of section 13 of the Central
Goods and Services Tax Act, so as to specify the time of supply of services in cases where
the invoice is required to be issued by the recipient of services in reve
rse charge supplies.
206
Clause 114 of the Bill seeks to insert a new sub-section (5) in section 16 of the Central
Goods and Services Tax Act, so as to carve out an exception to the existing sub-section (4)
and to provide that in respect of an invoice or debit note for the Financial Years 2017-18,
2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit
in any return under section 39 which is filed upto the thirtieth day of November, 2021.
It also proposes to insert a new sub-section (6) in the said section so as to allow the
availment of input tax credit in respect of an invoice or debit note in a return filed for the
period from the date of cancellation of registration or the effective date of cancellation of
registration, as the case may be, till the date of order of revocation of cancellation of
registration, filed within thirty days of the date of order of revocation of cancellation of
registration, subject to the condition that the time-limit for availment of credit in respect of
the said invoice or debit note should not have already expired under sub-section (4) of the
said section on the date of order of cancellation of registration.
The aforesaid amendments are proposed to be made effective from the 1st day of July,
2017.
Further it is proposed that where the tax has been paid or the input tax credit has been
reversed, no refund of the same shall be admissible.
Clause 115 of the Bill seeks to amend sub-section (5) of section 17 of the Central
Goods and Services Tax Act, so as to restrict the non availability of input tax credit in respect
of tax paid under section 74 of the said Act only for demands upto Financial Year 2023-24.
It also proposes to remove reference to sections 129 and 130 in the said sub-section.
Clause 116 of the Bill seeks to make consequential amendment 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
proposed new section 74A.
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Clause 120 of the Bill seeks to substitute sub-section (3) of section 39 of the Central
Goods and Services Tax Act, so as to mandate the electronic furnishing of return for each
month by the registered person required to deduct tax at source, irrespective of whether any
deduction has been made in the said month or not.
It also empowers the Government to prescribe by rules, the form, manner and the time
within which such return shall be filed.
Clause 121 of the Bill seeks to make consequential amendments in sub-section (8) of
section 49 of the Central Goods and Services Tax Act, so as to incorporate a reference to the
proposed new section 74A.
Clause 122 of the Bill seeks to make consequential amendments in sub-section (1) of
section 50 in the Central Goods and Services Tax Act, so as to incorporate a reference to the
proposed new section 74A.
Clause 123 of the Bill seeks to make consequential amendments in sub-section (7) of
section 51 of the Central Goods and Services Tax Act, so as to incorporate a reference to the
proposed new section 74A.
Clause 124 of the Bill seeks to insert a new sub-section (15) in section 54 of the Central
Goods and Services Tax Act, so as to omit the second proviso to sub-section (3) and to
provide that no refund of unutilised input tax credit or of integrated tax shall be allowed in
cases of zero rated supply of goods where such goods are subjected to export duty.
Clause 125 of the Bill seeks to make consequential amendments in sub-section (3) of
section 61 of the Central Goods and Services Tax Act, so as to incorporate a reference to the
proposed new section 74A.
Clause 126 of the Bill seeks to make consequential amendments in sub-section (1) of
section 62 of the Central Goods and Services Tax Act, so as to incorporate a reference to the
proposed new section 74A.
Clause 127 of the Bill seeks to make consequential amendments in section 63 of the
Central Goods and Services Tax Act, so as to incorporate a reference to the proposed new
section 74A.
Clause 128 of the Bill seeks to make consequential amendments in sub-section (2) of
section 64 of the Central Goods and Services Tax Act, so as to incorporate a reference to the
proposed new section 74A.
Clause 129 of the Bill seeks to make consequential amendments in sub-section (7) of
section 65 of the Central Goods and Services Tax Act, so as to incorporate a reference 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.
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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.
Clause 134 of the Bill seeks to insert a new section 74A in the Central Goods and
Services Tax Act, so as to provide for determination of tax not paid or short paid or
erroneously refunded or input tax credit wrongly availed or utilised for any reason pertaining
to the Financial Year 2024-25 onwards.
It also provides for the same limitation period for issuing demand notices and orders in
respect of demands from the Financial Year 2024-25 onwards, irrespective of whether the
charges of fraud, wilful misstatement, or suppression of facts are invoked or not, while
keeping a higher penalty, for cases involving fraud, wilful misstatement, or suppression of
facts.
Clause 135 of the Bill seeks to insert a new sub-section (2A) in section 75 of the
Central Goods and Services Tax Act, so as to provide for redetermination of penalty
demanded in a notice invoking penal provisions under clause (ii) of sub-section (5) of the
proposed section 74A of the said Act to re-determine the penalty as per clause (i) of the sub-
section (5) of the said section, in cases where the charges of fraud, wilful misstatement, or
suppression of facts are not established.
It also seeks to make consequential amendments in section 75 of the said Act, so as to
incorporate a reference to the proposed section 74A or the relevant sub-sections thereof.
Clause 136 of the Bill seeks to make consequential amendments in sub-section (1) of
section 104 of the Central Goods and Services Tax Act, so as to incorporate a reference to
sub-sections (2) and (7) of the proposed new section 74A.
Clause 137 of the Bill seeks to amend sub-section (6) of section 107 of the Central
Goods and Services Tax Act, so as to reduce the maximum amount of pre-deposit for filing
appeal before the Appellate Authority from rupees twenty-five crores to rupees twenty crores
in central tax.
It also proposes to make consequential amendments in sub-section (11) of the said
section to incorporate a reference to the proposed new section 74A.
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Clause 138 of the Bill seeks to amend section 109 of the Central Goods and Services
Tax Act, so as to empower the Appellate Tribunal to examine the matters or adjudicate the
cases referred to in sub-section (2) of section 171, if so notified under the said section. Such
matters are proposed to be examined or adjudicated only by the Principal Bench.
It also empowers the Government to notify types of cases 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 the said sub-section to
electronic commerce operators, who are required to collect tax at source under section 52 of
the said Act.
The said amendment is proposed to be made effective from the 1st day of October,
2023 when the said sub-section had come into force.
Clause 141 of the Bill seeks to make consequential amendments in section 127 of the
Central Goods and Services Tax Act, so as to incorporate a reference to the proposed new
section 74A.
Clause 142 of the Bill seeks to insert a new section 128A in the Central Goods and
Services Tax Act, so as to provide for conditional waiver of interest and penalty in respect
of demand notices issued under section 73 of the said Act for the Financial Years 2017-18,
2018-19 and 2019-20, except the demand notices in respect of erroneous refund.
Further, it is proposed that in cases where interest and penalty have already been paid
in respect of any demand for the said financial years, no refund shall be admissible for the
same.
Clause 143 of the Bill seeks to amend sub-section (7) of section 140 of the Central
Goods and Services Tax Act, so as to enable availment of the transitional credit of eligible
CENVAT credit on account of input services received by an Input Services Distributor prior
to the appointed day, for which invoices were also received prior to the appointed date.
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The said amendment is proposed to be made effective from 1st day of July, 2017.
Clause 144 of the Bill seeks to amend sub-section (2) of section 171 of the Central
Goods and Services Tax Act, so as to empower the Government to notify the date from which
the Authority under the said section shall not accept any application for anti-profiteering
cases.
An Explanation is also proposed to be inserted so as to include the reference of
“Appellate Tribunal” in the expression “Authority” under the said section to enable the
Government to notify the Appellate Tribunal to act as an Authority to handle anti-
profiteering cases.
Clause 145 of the Bill seeks to amend Schedule III to the Central Goods and Services
Tax Act, so as to provide that the activity of apportionment of co-insurance premium by
the lead insurer to the co-insurer for the insurance services jointly supplied by the lead insurer
and the co-insurer to the insured in coinsurance agreements shall be treated as neither supply
of goods nor supply of services, provided that the lead insurer pays the tax 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
integrated tax where it is satisfied that such non-levy or short levy was a result of general
practice.
Clause 149 of the Bill seeks to amend sub-section (4) of section 16 of the Integrated
Goods and Services Tax Act, 2017, so as to empower the Government to notify the class of
persons who may make zero rated supplies of goods or services or both or the class of goods
or services which may be supplied on zero rated basis, and in respect of which refund of
integrated tax can be claimed under section 54 of the Central Goods and Services Tax Act,
subject to such conditions, safeguards and procedures as may be provided by rules.
Further, it proposes to insert a new sub-section (5) in the said section to provide that
no refund of unutilised input tax credit or of integrated tax paid on account of zero rated
supply of goods shall be allowed in cases where the zero rated supply of goods is subjected
to export duty.
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Clause 150 of the Bill seeks to amend section 20 of the Integrated Goods and Services
Tax Act, so as to reduce the maximum amount of pre-deposit payable for filing appeal before
the Appellate Authority from rupees fifty crores to rupees forty crores of integrated tax.
Further, it proposes to reduce the maximum amount payable as pre-deposit for filing
appeal before the Appellate Tribunal from rupees hundred crores to rupees forty crores of
integrated tax.
Union Territory Goods and Services Tax
Clause 151 of the Bill seeks to amend sub-section (1) of section 7 of the Union
Territory Goods and Services Tax Act, so as to not to levy Union territory tax on extra neutral
alcohol or rectified spirit used for manufacture of alcoholic liquor for human consumption.
Clause 152 of the Bill seeks to insert a new section 8A in the Union Territory Goods
and Services Tax Act, so as to empower the Government to regularise non-levy or short levy
of Union territory tax where it is satisfied that such non-levy or short levy was a result of
general practice.
Goods and Services Tax
(Compensation to States)
Clause 153 of the Bill seeks to insert a new section 8A in the Goods and Services Tax
(Compensation to States) Act, so as to empower the Government to regularise non-levy or
short levy of cess where it is satisfied that such non-levy or short levy was a result of general
practice.
Miscellaneous
Clause 154 of the Bill seeks to amend the Prohibition of Benami Property Transactions
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.
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Sub-section (5) of the said section allows for a time period of fifteen days from the date
of attachment order to the Initiating Officer to draw up a statement of the case and refer it to
the Adjudicating Authority.
It is also proposed to amend the said sub-section so as to increase the said time limit to
one month from the last day of the month in which the order under sub-clause (i) of clause
(a), or under sub-clause (i) of clause (b), of sub-section (4) of the said section, has been
passed.
It is also proposed to insert a new section 55A in the Prohibition of Benami Property
Transactions Act, 1988 relating to power to tender immunity from prosecution.
Sub-section (1) of the proposed new section provides that the Initiating Officer may, with
a view to obtaining the evidence of the benamidar or any other person as referred to in
section 53, other than the beneficial owner, tender immunity from prosecution under the said
section to the benamidar or such other person, with the previous sanction of the competent
authority as referred to in section 55, on condition that the benamidar or such other person
makes a full and true disclosure of the whole circumstances relating to the benami
transaction.
Sub-section (2) of proposed new section provides that the tender of immunity made to,
and accepted by, the person benamidar or such other person, shall, to the extent to which the
immunity extends, render him immune from prosecution for the offence in respect of which
the tender was made and from the imposition of any penalty under section 53.
Sub-section (3) of proposed new section provides that if it appears to the Initiating Officer
that any person to whom immunity has been tendered under this section has not complied
with the conditions subject to which the tender was made, or is wilfully concealing anything,
or is giving false evidence, the Initiating Officer may record a finding to that effect, and with
the previous sanction of the competent authority as referred to in section 55, withdraw the
immunity so tendered.
Sub-section (4) of the proposed new section provides that any person against whom the
immunity tendered is withdrawn in accordance with sub-section (3), may be tried for the
offence in respect of which the tender of immunity was made or for any other offence of
which he appears to have been guilty in connection with the same transaction and shall also
be liable for penalty under this Act to which he 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.
213
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. The said Act provides that an assessee being a resident and
ordinarily resident who has failed to furnish the return of income when such assessee has
held foreign assets as specified. Failure to furnish the return in relation to foreign income
and asset, may attract a penalty of an amount of ten lakh rupees. Proviso to the said section
makes an exemption in respect of an asset, being one or more bank accounts having an
aggregate balance which does not exceed a value equivalent to five hundred thousand rupees
at any time during the previous year.
It is proposed to substitute the proviso to the said section to provide that the provisions
of the said section shall not apply in respect of an asset or assets (other than immovable
property) where the aggregate value of such asset or assets does not exceed twenty lakh
rupees.
Section 43 of the said Act relating to penalty for failure to furnish in return of income,
an information or furnish inaccurate particulars about an asset (including financial interest
in any entity) located outside India. The said section provides for a penalty of ten lakh rupees
regardless of the value of asset located outside India when the assessee being a resident and
ordinarily resident fails to furnish the details of any specified foreign assets or furnishes
inaccurate particulars of such assets in the return of income filed by him. Proviso to the said
section makes an exemption in respect of an asset, being one or more bank accounts having
an aggregate balance which does not exceed a value equivalent to five hundred thousand
rupees at any time during the previous year.
It is proposed to substitute the said proviso to provide that the provisions of the said
section shall not apply in respect of an asset or assets (other than immovable property) where
the aggregate value of such asset or assets does not exceed twenty lakh rupees.
These amendments will take effect from 1st
October, 2024.
Clause 157 of the Bill seeks to amend the Finance Act, 2016.
Section 163 of the said Act provides the extent, commencement and application of
Chapter VIII of the said Act. Sub-section (3) of the said section provides that the said Chapter
shall apply to consideration received or receivable for specified services provided on or after
the commencement of this Chapter, and to consideration received or receivable for e-
commerce supply or services made or provided or facilitated on or after the 1st day of April,
2020.
214
It is proposed to amend the said sub-section to provide that the said Chapter shall also
apply to consideration received or receivable for e-commerce supply or services made or
provided or facilitated on or after the 1st day of April, 2020 but before the 1st day of August,
2024.
Section 165A of the said Act provides for charge of equalisation levy on e-commerce
supply of services.
It is proposed to insert sub-section (4) to the said section to provide that the provisions
of the said section shall not apply to any consideration received or receivable by an e-
commerce operator from e-commerce supply or services made or provided or facilitated by
it on or after the 1st day of August, 2024.
These amendments will take effect retrospectively from 1st August, 2024.
215
MEMORANDUM REGARDING DELEGATED LEGISLATION
The provisions of the Bill, inter alia, empower the Central Government to issue
notifications and the Board to make rules for various purposes as specified therein.
Clause 4 of the Bill seeks to amend section 10 of the Income-tax Act relating to income
not included in total income.
Sub-clause (a) seeks to insert a new sub-item (b) in item (I) of sub-clause (i) of clause (c)
of the Explanation to clause (4D) of section 10 relating to any income accrued or arisen to,
or received by a specified fund shall not be included in computing the total income. It
empowers the Board to specify the conditions by rules which a fund is required to satisfy for
the purposes of section 10.
Sub-clause (c)(ii) seeks to amend clause (23FB), inter alia, relating to any income of a
venture capital company or venture capital fund from investment in a venture capital
undertaking shall not be included in computing the total income of a previous year. It
empowers the Board to make rules to specify the conditions by rules which a venture capital
fund is required to satisfy for the purposes of section 10. It further empowers the Board to
make rules to provide conditions relating to procedure for fresh registration. It also
empowers the Board to make rules to provide the form and the manner in which the order
under clause (a) of sub-clause (ii) of clause (b) and clause (c) of sub-section (1) of section 3
shall be passed.
Clause 8 of the Bill seeks to insert in section 12AC in the Income-tax Act, relating to
merger of charitable trusts or institutions in certain cases. Proposed new section empowers
the Board to make rules to specify the conditions for the purpose of merger.
Clause 17 of the Bill seeks to insert section 44BBC in the Income-tax Act, relating to
special provision for computing profits and gains of the business of operation of cruise ships
in the case of non-residents. Proposed sub-section (1) of the said section empowers the Board
to make rules to specify the conditions for the purpose of charging the tax under the head
“profits and gains of business or profession”.
Clause 26 of the Bill seeks to amend section 80G of the Income-tax Act relating to
deduction in respect of donations to obtain funds, charitable institutions, etc. Third proviso
to sub-section (5) of section 80G empowers the Board to make rules to specify the form and
the manner of the order to be passed under clauses (ii) and (iii) of the second proviso to sub-
section (5) of said section. The proposed fourth proviso to sub-section (5) of section 80G,
empowers the Board to make rules to specify the form and the manner of order to be passed
under sub-clause (b) of clause (ii) of the second proviso of the said section.
Clause 42 of the Bill seeks to insert sub-section (2A) in section 139AA of the Income-
tax Act relating to quoting of Aadhaar number. Sub-section (2A) of the said section
empowers the Board to provide by rules, the authority, form and manner in which every
person who has been allotted permanent account number on the basis of enrolment ID of
Aadhaar application form filed prior to 1st October, 2024, shall intimate his Aadhar number.
216
Clause 44 of the Bill seeks to substitute section 148 of the Income-tax Act relating to
issue of notice where income has escaped assessment. Sub-section (2) of section 148
empowers the Board to provide by rules form, manner and particulars as to the return of
income required under sub-section (1) of section 148 shall be furnished.
Clause 50 of the Bill seeks to amend section 192 of the Income-tax Act relating to salary.
Sub-section (2B) of the said section empowers the Board to provide by rules the particulars
which is to be send by the assessee to the person responsible for making the payment referred
to in sub-section (1) of section 192 of the said Act.
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 to empower the Government to make rules prescribing
conditions for revocation of cancellation of registration of a taxpayer.
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 to empower the Government to make rules prescribing
the time period for issuance of invoice by the recipient in case of reverse charge mechanism
supplies.
Clause 120 of the Bill seeks to substitute sub-section (3) of section 39 of the Central
Goods and Services Tax Act to empower the Government to prescribe the form, manner and
the time within which return is to be filed by registered person required to deduct tax at
source under section 52 of the said Act.
Clause 142 of the Bill seeks to insert a new section 128A in the Central Goods and
Services Tax Act. Sub-section (1) of the said section empowers the Government to make
rules for prescribing the conditions subject to which the proceedings with regard to demand
notices issued under section 73 of the said Act shall be deemed to be concluded as per
provisions of sub-section (1) of the proposed section 128A of the said Act.
2. The matters in respect of which rules may be made and matters of procedure and details
and it is not practicable to provide for them in the Bill itself. The delegation of legislative
powers is, therefore, of a normal character.
LOK SABHA
_________________________
A
BILL
to give effect to the financial proposals of the Central Government for the financial year
2024-2025.
_________________________
(Smt. Nirmala Sitharaman,
Minister of Finance.)
