FINANCE ACT, 2020
[27th March, 2020]
PREAMBLE
An Act to give effect to the financial proposals of the Central Government for the financial year 2020-2021.
Be it enacted by Parliament in the Seventy-first Year of the Republic of India as follows:--
(1) This Act may be called the Finance Act, 2020.
(2) Save as otherwise provided in this Act,--
(a) sections 2 to 104 shall come into force on the 1st day of April, 2020;
(b) sections 1[118 to 131 and section 134] shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
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1. Substituted by Finance Act, 2020 (12 of 2020) as published in the gazette of India, Extraordinary, Part II, Section 1, issue No. 20 dated 27.03.2020, for the following:-
"116 to 129 and section 132"
(1) Subject to the provisions of sub-sections (2) and (3), for the assessment year commencing on the 1st day of April, 2020, 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) In the cases to which Paragraph A of Part I of the First Schedule applies, 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,--
(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
In Section 2 of the Income-tax Act,--
(i) in clause (13A), with effect from the 1st day of April, 2021,--
(a) in sub-clause (ii), the word "and" occurring at the end shall be omitted;
(b) the long line shall be omitted;
(ii) in clause (15A),--
(a) after the words "Chief Commissioner of Income-tax", the words "or a Director General of Income-tax" shall be inserted;
(b) after the words "Principal Chief Commissioner of Income-tax", the words "or a Principal Director General of Income-tax" shall be inserted.
(iii) in clause (42A), in Explanation 1, in clause (i), after sub-clause (hg), the following sub-clause shall be inserted, namely:--
"(hh) in the case of a capital asset, being a unit or units in a segregated portfolio referred to in sub-section (2AG) of Section 49, there shall be include
In Section 6 of the Income-tax Act, with effect from the 1st day of April, 2021,--
(a) in clause (1), in Explanation 1, in clause (b), for the words "substituted" occurring at the end, the words "substituted and in case of the citizen or person of Indian origin having total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the previous year," for the words "sixty days" occurring therein, the words "one hundred and twenty days" had been substituted;
(b) after clause (1), the following clause shall be inserted, namely:--
"(1A) Notwithstanding anything contained in clause (1), an individual, being a citizen of India, having total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the previous year shall be deemed to be resident in India in that previous year, if he is not liable to tax in any other country or territory by r
In Section 9 of the Income-tax Act, in sub-section (1),--
(a) in clause (i),--
(i) in Explanation 1, in clause (a), for the words "in the case of a business", the words "in the case of a business, other than the business having business connection in India on account of significant economic presence," shall be substituted with effect from the 1st day of April, 2022;
(ii) Explanation 2A shall be omitted with effect from the 1st day of April, 2021 and the following Explanation shall be inserted with effect from the 1st day of April, 2022, namely:--
'Explanation 2A.--For the removal of doubts, it is hereby declared that the significant economic presence of a non-resident in India shall constitute "business connection" in India and "significant economic presence" for this purpose, shall mean--
(a) transaction in respect of any goods, services or property ca
In Section 9A of the Income-tax Act, in sub-section (3),--
(a) in clause (c), the following proviso shall be inserted, namely:--
"Provided that for the purposes of calculation of the said aggregate participation or investment in the fund, any contribution made by the eligible fund manager during the first three years of operation of the fund, not exceeding twenty-five crore rupees, shall not be taken into account;";
(b) in clause (j), in the first proviso, for the words "six months from the last day of the month of its establishment or incorporation, or at the end of such previous year, whichever is later", the words "twelve months from the last day of the month of its establishment or incorporation" shall be substituted.
In Section 10 of the Income-tax Act,--
(I) in clause (23C),--
(A) for the first and second provisos, the following provisos shall be substituted with effect from the 1st day of June, 2020, namely:--
"Provided that the 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 Commissioner or Commissioner, for grant of approval,--
(i) where such fund or trust or institution or university or other educational institution or hospital or other medical instituti
In Section 10A of the Income-tax Act, in sub-section (5),--
(i) the words "along with the return of income," shall be omitted;
(ii) after the word and figures "section 288", the words, figures and letters "before the specified date referred to in section 44AB" shall be inserted.
In Section 11 of the Income-tax Act,--
(I) in sub-section (1), in Explanation 2, for the words, figures and letters " to any other trust or institution registered under section 12AA, being contribution with a specific direction that they shall form part of the corpus of the trust or institution", the words, brackets, figures and letters "to any fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 or other trust or institution registered under section 12AA, being contribution with a specific direction that it shall form part of the corpus" shall be substituted;
(II) in sub-section (7), with effect the 1st day of June, 2020--
(a) for the words, brackets, letters and figures "under clause (b) of sub-section (1) o
In Section 12A of the Income-tax Act,--
(I) in sub-section (1),--
(A) after clause (ab), the following clause shall be inserted with effect from the 1st day of June, 2020, namely:--
"(ac) notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income has made an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for registration of the trust or institution,--
(i) where the trust or institution is registered under section 12A [as it stood immediately before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] or under section 12AA, [as it stood immediately before its amendment by the Finance Act, 2020] within three months from the date on which this clause has come into force;
(ii) where the trust or institution is registered under section 12AB and the period of the said re
In Section 12AA of the Income-tax Act, after sub-section (4), the following sub-section shall be inserted with effect from the 1st day of June, 2020, namely:--
"(5) Nothing contained in this section shall apply on or after the 1st day of June, 2020.".
After Section 12AA of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2020, namely:--
"12AB. Procedure for fresh registration
(1) The Principal Commissioner or Commissioner, on receipt of an application made under clause (ac) of sub-section (1) of section 12A, shall,--
(a) where the application is made under sub-clause (i) of the said clause, pass an order in writing registering the trust or institution for a period of five years;
(b) where the application is made under sub-clause (ii) or sub-clause (iii) or sub-clause (iv) or sub-clause (v) of the said clause,--
(i) call for such documents or information from the trust or institution or make such inquiries as he thinks necessary in order to satisfy himself about--
(A) the genuineness of activities of the trust or institution; and
In Section 17 of the Income-tax Act, in clause (2), for sub-clause (vii), the following sub-clauses shall be substituted with effect from the 1st day of April, 2021, namely:--
"(vii) the amount or the aggregate of amounts of any contribution made to the account of the assessee by the employer--
(a) in a recognised provident fund;
(b) in the scheme referred to in sub-section (1) of section 80CCD; and
(c) in an approved superannuation fund, to the extent it exceeds seven lakh and fifty thousand rupees in a previous year;
(viia) the annual accretion by way of interest, dividend or any other amount of similar nature during the previous year to the balance at the credit of the fund or scheme referred to in sub-clause (vii) to the extent it relates to the contribution referred to in the said sub-clause which is included in total income under the said sub-clau
In Section 32AB of the Income-tax Act, in sub-section (5), for the words "and the assessee furnishes, along with his return of income,", the words, figures and letters "before the specified date referred to in section 44AB and the assessee furnishes by that date" shall be substituted.
In Section 33AB of the Income-tax Act, in sub-section (2), for the words "and the assessee furnishes, along with his return of income,", the words, figures and letters "before the specified date referred to in section 44AB and the assessee furnishes by that date" shall be substituted.
In Section 33ABA of the Income-tax Act, in sub-section (2), for the words "and the assessee furnishes, along with his return of income,", the words, figures and letters "before the specified date referred to in section 44AB and the assessee furnishes by that date" shall be substituted.
In Section 35 of the Income-tax Act, with effect from the 1st day of June, 2020,--
(i) in sub-section (1),--
(a) after sub-clause (iii), in the Explanation, for the words, brackets and figures,--
(A) "to which clause (ii) or clause (iii)", the words, brackets, figures and letter "to which clause (ii) or clause (iii) or to a company to which clause (iia)" shall be substituted;
(B) "clause (ii) or clause (iii)", the words, brackets, figures and letter "clause (ii) or clause (iii) or to a company referred to in clause (iia)" shall be substituted;
(b) after the fourth proviso occurring after clause (iv), the following provisos shall be inserted, namely:--
"Provided also that every notification under clause (ii) or clause (iii) in respect of the research association, university, college or other institution or under clause (iia) in resp
In Section 35AD of the Income-tax Act,--
(i) in sub-section (1), for the words "An assessee shall", the words "An assessee shall, if he opts," shall be substituted;
(ii) in sub-section (4), after the words "in any other previous year", the words, "if the deduction has been claimed or opted by the assessee and allowed to him under this section" shall be inserted.
In Section 35D of the Income-tax Act, in sub-section (4), for the words "and the assessee furnishes, along with his return of income for the first year in which the deduction under this section is claimed, the report of such audit", the words, figures and letters "before the specified date referred to in section 44AB and the assessee furnishes for the first year in which the deduction under this section is claimed, the report of such audit by that date" shall be substituted.
In Section 35E of the Income-tax Act, in sub-section (6), for the words "and the assessee furnishes, along with his return of income for the first year in which the deduction under this section is claimed, the report of such audit", the words, figures and letters "before the specified date referred to in section 44AB and the assessee furnishes for the first year in which the deduction under this section is claimed, the report of such audit by that date" shall be substituted.
In Section 43 of the Income-tax Act, in clause (5),--
(a) for the words "recognised association" wherever they occur, the words "recognised stock exchange" shall be substituted;
(b) in Explanation 2, for clause (iii), the following clause shall be substituted, namely:--
'(iii) "recognised stock exchange" means a recognised stock exchange as referred to in clause (f) of Section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and which fulfils such conditions as may be prescribed and notified by the Central Government for this purpose;'.
In Section 43CA of the Income-tax Act, in sub-section (1), in the proviso, for the words "five per cent.", the words "ten per cent." shall be substituted with effect from the 1st day of April, 2021.
In Section 44AB of the Income-tax Act,--
(A) in clause (a),--
(i) the word "or" occurring at the end shall be omitted;
(ii) the following proviso shall be inserted, namely:--
'Provided that in the case of a person whose--
(a) aggregate of all amounts received including amount received for sales, turnover or gross receipts during the previous year, in cash, does not exceed five per cent. of the said amount; and
(b) aggregate of all payments made including amount incurred for expenditure, in cash, during the previous year does not exceed five per cent. of the said payment, this clause shall have effect as if for the words "one crore rupees", the words "five crore rupees" had been substituted; or';
(B) in the Explanation, in clause (ii), after the word "means", the words "date one month prior to" shall be inserte
In Section 44DA of the Income-tax Act, in sub-section (2), for the words "and furnish along with the return of income,", the words, figures and letters "before the specified date referred to in section 44AB and furnish by that date" shall be substituted.
In Section 49 of the Income-tax Act, after sub-section (2AF), the following shall be inserted, namely:--
'(2AG) The cost of acquisition of a unit or units in the segregated portfolio shall be the amount which bears, to the cost of acquisition of a unit or units held by the assessee in the total portfolio, the same proportion as the net asset value of the asset transferred to the segregated portfolio bears to the net asset value of the total portfolio immediately before the segregation of portfolios.
(2AH) The cost of the acquisition of the original units held by the unit holder in the main portfolio shall be deemed to have been reduced by the amount as so arrived at under sub-section (2AG).
Explanation.--For the purposes of sub-section (2AG) and sub-section (2AH), the expressions "main portfolio", "segregated portfolio" and "total portfolio" shall have the meanings respectively assigned to them i
In Section 50B of the Income-tax Act, in sub-section (3), for the words, brackets and figures "along with the return of income, a report of an accountant as defined in the Explanation below sub-section (2) of section 288,", the words, brackets, figures and letters "a report of an accountant as defined in the Explanation below sub-section (2) of section 288 before the specified date referred to in section 44AB" shall be substituted.
In Section 50C of the Income-tax Act, in sub-section (1), in the third proviso, for the words "five per cent.", the words "ten per cent." shall be substituted with effect from the 1st day of April, 2021.
In Section 55 of the Income-tax Act, in sub-section (2), in clause (b), after sub-clause (ii), the following shall be inserted with effect from the 1st day of April, 2021, namely:--
'Provided that in case of a capital asset referred to in sub-clauses (i) and (ii), being land or building or both, the fair market value of such asset on the 1st day of April, 2001 for the purposes of the said sub-clauses shall not exceed the stamp duty value, wherever available, of such asset as on the 1st day of April, 2001.
Explanation.--For the purposes of this proviso, "stamp duty value" means the value adopted or assessed or assessable by any authority of the Central Government or a State Government for the purpose of payment of stamp duty in respect of an immovable property.'.
In Section 56 of the Income-tax Act, in sub-section (2),--
(A) with effect from the 1st day of June, 2020,--
(i) in clause (v), in the proviso, in clause (g), for the word, figures and letters "section 12AA", the words, figures and letters "section 12AA or section 12AB" shall be substituted;
(ii) in clause (vi), in the proviso, in clause (g), for the word, figures and letters "section 12AA", the words, figures and letters "section 12AA or section 12AB" shall be substituted;
(iii) in clause (vii), in the second proviso, in clause (g), for the word, figures and letters "section 12AA", the words, figures and letters "section 12AA or section 12AB" shall be substituted;
(B) in clause (x),--
(i) in sub-clause (b), in item (B), in sub-item (ii), for the words "five per cent.", the words "ten per cent." shall be substituted with effect fro
In Section 57 of the Income-tax Act, with effect from the 1st day of April, 2021,--
(a) in clause (i), for the words, figures and letter "dividends, other than dividends referred to in section 115-O", the word "dividends" shall be substituted;
(b) the following proviso shall be inserted, namely:--
"Provided that no deduction shall be allowed from the dividend income, or income in respect of units of a Mutual Fund specified under clause (23D) of section 10 or income in respect of units from a specified company defined in the Explanation to clause (35) of section 10, other than deduction on account of interest expense, and in any previous year such deduction shall not exceed twenty per cent. of the dividend income, or income in respect of such units, included in the total income for that year, without deduction under this section.".
For Section 72AA of the Income-tax Act, the following section shall be substituted, namely:--
'72AA. Carry forward and set off of accumulated loss and unabsorbed depreciation allowance in scheme of amalgamation in certain cases
Notwithstanding anything contained in sub-clauses (i) to (iii) of clause (1B) of section 2 or section 72A, where there has been an amalgamation of--
(i) one or more banking company with any other banking institution under a scheme sanctioned and brought into force by the Central Government under sub-section (7) of Section 45 of the Banking Regulation Act, 1949 (10 of 1949); or
(ii) one or more corresponding new bank or banks with any other corresponding new bank under a scheme brought into force by the Central Government under Section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) or under Section 9 of the
In Section 80EEA of the Income-tax Act, in sub-section (3), in clause (i), for the figures "2020", the figures "2021" shall be substituted with effect from the 1st day of April, 2021.
In Section 80G of the Income-tax Act, with effect from the 1st day of June, 2020,--
(i) in sub-section (5),--
(a) in clause (vi), for the words "approved by the Commissioner in accordance with the rules made in this behalf; and", the words "approved by the Principal Commissioner or Commissioner;" shall be substituted;
(b) after sub-clause (vii), the following shall be inserted, namely:--
"(viii) the institution or fund prepares such statement for such period as may be prescribed and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed:
Provided that the institution or fund may also deliver to the said prescribed authority a correction statement for rectification
In Section 80GGA of the Income-tax Act, with effect from the 1st day of June, 2020,--
(i) in sub-section (2A), for the words "ten thousand rupees", the words "two thousand rupees" shall be substituted;
(ii) after sub-section (4), the following Explanation shall be inserted, namely:--
"Explanation.--For the removal of doubts, it is hereby declared that the claim of the assessee for a deduction in respect of any sum referred to in sub-section (2) in the return of income for any assessment year filed by him, shall be allowed on the basis of information relating to such sum furnished by the payee to the prescribed income-tax authority or the person authorised by such authority, subject to verification in accordance with the risk management strategy formulated by the Board from time to time.".
In Section 80-IA of the Income-tax Act, in sub-section (7), for the words "and the assessee furnishes, along with his return of income", the words, figures and letters "before the specified date referred to in section 44AB and the assessee furnishes by that date" shall be substituted.
In Section 80-IAC of the Income-tax Act, with effect from the 1st day of April, 2021,--
(i) in sub-section (2), for the word "seven", the word "ten" shall be substituted;
(ii) in the Explanation, in clause (ii), in sub-clause (b), for the word "twenty-five", the words "one hundred" shall be substituted.
In Section 80-IB of the Income-tax Act,--
(a) in sub-section (7A), in clause (b), for sub-clause (iii), the following sub-clause shall be substituted, namely:--
"(iii) the assessee furnishes the report of audit in such form and containing such particulars, as may be prescribed, duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, before the specified date referred to in section 44AB, certifying that the deduction has been correctly claimed.";
(b) in sub-section (7B), in clause (b), for sub-clause (iii), the following sub-clause shall be substituted, namely:--
"(iii) the assessee furnishes the report of audit in such form and containing such particulars, as may be prescribed, duly signed and verified by an accountant, as defined in the Explanation below sub-section (2) of section 288, before the specified date referred
In Section 80-IBA of the Income-tax Act, in sub-section (2), in clause (a), for the figures "2020", the figures "2021" shall be substituted with effect from the 1st day of April, 2021.
In Section 80JJAA of the Income-tax Act, in sub-section (2), in clause (c), for the words, brackets and figures "along with the return of income the report of the accountant as defined in the Explanation below sub-section (2) of section 288", the words, brackets, figures and letters "the report of the accountant, as defined in the Explanation below sub-section (2) of section 288, before the specified date referred to in section 44AB" shall be substituted.
After Section 80LA of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 2021, namely:--
'80M. Deduction in respect of certain intercorporate dividends
(1) Where the gross total income of a domestic company in any previous year includes any income by way of dividends from any other domestic company or a foreign company or a business trust, there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of such domestic company, a deduction of an amount equal to so much of the amount of income by way of dividends received from such other domestic company or foreign company or business trust as does not exceed the amount of dividend distributed by it on or before the due date.
(2) Where any deduction, in respect of the amount of dividend distributed by the domestic company, has been allowed under
In Section 90 of the Income-tax Act, in sub-section (1), in clause (b), after the words "as the case may be,", the words and brackets "without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in the said agreement for the indirect benefit to residents of any other country or territory)," shall be inserted with effect from the 1st day of April, 2021.
In Section 90A of the Income-tax Act, in sub-section (1), in clause (b), after the words "specified territory outside India,", the words and brackets "without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in the said agreement for the indirect benefit to residents of any other country or territory)," shall be inserted with effect from the 1st day of April, 2021.
In Section 92CB of the Income-tax Act,--
(I) for sub-section (1), the following sub-section shall be substituted, namely:--
"(1) The determination of--
(a) income referred to in clause (i) of sub-section (1) of section 9; or
(b) arm's length price under section 92C or section 92CA, shall be subject to safe harbour rules.";
(II) in sub-section (2), in the Explanation, for the words "the transfer price declared by the assessee", the words, brackets and figures "the transfer price or income, deemed to accrue or arise under clause (i) of sub-section (1) of section 9, as the case may be, declared by the assessee" shall be substituted.
In Section 92CC of the Income-tax Act,--
(a) for sub-section (1), sub-section (2) and sub-section (3), the following sub-sections shall be substituted, namely:--
"(1) The Board, with the approval of the Central Government, may enter into an advance pricing agreement with any person, determining the--
(a) arm's length price or specifying the manner in which the arm's length price is to be determined, in relation to an international transaction to be entered into by that person;
(b) income referred to in clause (i) of sub-section (1) of section 9, or specifying the manner in which said income is to be determined, as is reasonably attributable to the operations carried out in India by or on behalf of that person, being a non-resident.
(2) The manner of determination of the arm's length price referred to in clause (a) or the income referred to in clause (b)
In Section 92F of the Income-tax Act, for clause (iv), the following clause shall be substituted, namely:--
'(iv) "specified date" means the date one month prior to the due date for furnishing the return of income under sub-section (1) of section 139 for the relevant assessment year;'.
In Section 94B of the Income-tax Act, after sub-section (1), the following sub-section shall be inserted with effect from the 1st day of April, 2021, namely:--
"(1A) Nothing contained in sub-section (1) shall apply to interest paid in respect of a debt issued by a lender which is a permanent establishment in India of a non-resident, being a person engaged in the business of banking.".
In Section 115A of the Income-tax Act,--
(I) in sub-section (1), in clause (a), with effect from the 1st day of April, 2021,--
(i) the words, figures and letter "other than dividends referred to in section 115-O" at both the places where they occur, shall be omitted;
(ii) in the long line, for clause (BA), the following clause shall be substituted, namely:--
"(BA) the amount of income-tax calculated on the amount of income by way of interest referred to in,--
(i) sub-clause (iia), if any, included in the total income, at the rate of five per cent.;
(ii) sub-clause (iiaa) or sub-clause (iiab) or sub-clause (iiac), if any, included in the total income, at the rate provided in the respective sections referred to in the said sub-clauses;";
(II) in sub-section (5),--
(i) in clause (a), for the
In Section 115AC of the Income-tax Act, for the words, figures and letter "dividends, other than dividends referred to in section 115-O" wherever they occur, the word "dividends" shall be substituted with effect from the 1st day of April, 2021.
In Section 115ACA of the Income-tax Act, for the words, figures and letter "dividends, other than dividends referred to in section 115-O" wherever they occur, the word "dividends" shall be substituted with effect from the 1st day of April, 2021.
In Section 115AD of the Income-tax Act, in sub-section (1), in clause (a), the words, figures and letter "other than income by way of dividends referred to in section 115-O" shall be omitted with effect from the 1st day of April, 2021.
In Section 115BAA of the Income-tax Act, in sub-section (2), in clause (i), for the words, figures and letters 'Chapter VI-A under the heading "C.--
Deductions in respect of certain incomes" other than the provisions of Section 80JJAA', the words, figures and letters "Chapter VI-A other than the provisions of section 80JJAA or section 80M" shall be substituted with effect from the 1st day of April, 2021.
In Section 115BAB of the Income-tax Act, in sub-section (2),--
(i) in clause (c), in sub-clause (i), for the words, figures and letters 'Chapter VI-A under the heading "C.--
Deductions in respect of certain incomes" other than the provisions of section 80JJAA', the words, figures and letters "Chapter VI-A other than the provisions of section 80JJAA or section 80M" shall be substituted with effect from the 1st day of April, 2021;
(ii) after clause (c), the following Explanation shall be inserted, namely:--
'Explanation.--For the purposes of clause (b), the "business of manufacture or production of any article or thing" shall include the business of generation of electricity.'.
After Section 115BAB of the Income-tax Act, the following sections shall be inserted with effect from the 1st day of April, 2021, namely:--
'115BAC. Tax on income of individuals and Hindu undivided family
(1) 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 a Hindu undivided family, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2021, shall, at the option of such person, be computed at the rate of tax given in the following Table, if the conditions contained in sub-section (2) are satisfied, namely:--
TABLE
Sl. No. Total income Rate of tax
(1) (2) (3)
1. Up to Rs. 2,50,000 Nil
2. From Rs. 2,50,001 to Rs. 5,00,000 5 per cent.
In Section 115BBDA of the Income-tax Act,--
(a) in sub-section (1), for the words "or companies", the words, figures and letters "or companies on or before the 31st day of March, 2020" shall be substituted with effect from the 1st day of April, 2021;
(b) in the Explanation, in clause (b), in sub-clause (iii), for the words, figures and letters "under section 12A or section 12AA", the words, figures and letters "under section 12A or section 12AA or section 12AB" shall be substituted with effect from the 1st day of June, 2020.
In Section 115C of the Income-tax Act, in clause (c), the words, figures and letter "other than dividends referred to in section 115-O" shall be omitted with effect from the 1st day of April, 2021.
In Section 115JB of the Income-tax Act, in sub-section (4), for the words, brackets and figures "along with the return of income filed under sub-section (1) of section 139", the words, figures and letters "before the specified date referred to in section 44AB" shall be substituted.
In Section 115JC of the Income-tax Act,--
(i) in sub-section (3), for the portion beginning with the words "in such form" and ending with the word and figures "section 139", the words, figures and letters "before the specified date referred to in section 44AB, in such form as may be prescribed, from an accountant referred to in the Explanation below sub-section (2) of section 288, certifying that the adjusted total income and the alternate minimum tax have been computed in accordance with the provisions of this Chapter and furnish such report by that date" shall be substituted;
(ii) after sub-section (4), the following sub-section shall be inserted, with effect from the 1st day of April, 2021, namely:--
"(5) The provisions of this section shall not apply to a person who has exercised the option referred to in section 115BAC or section 115BAD.".
In Section 115JD of the Income-tax Act, after sub-section (6), the following sub-section shall be inserted, with effect from the 1st day of April, 2021, namely:--
"(7) The provisions of this section shall not apply to a person who has exercised the option referred to in section 115BAC or section 115BAD.".
In Section 115-O of the Income-tax Act, in sub-section (1), after the words, figures and letters "on or after the 1st day of April, 2003", the words, figures and letters "but on or before the 31st day of March, 2020" shall be inserted with effect from the 1st day of April, 2021.
In Section 115R of the Income-tax Act, in sub-section (2), after the words "or a Mutual Fund to its unit holders", the words, figures and letters "on or before the 31st day of March, 2020" shall be inserted with effect from the 1st day of April, 2021.
In Section 115TD of the Income-tax Act, for the words, figures and letters "under section 12AA" wherever they occur, the words, figures and letters "under section 12AA or section 12AB" shall be substituted with effect from the 1st day of June, 2020.
In Section 115UA of the Income-tax Act, in sub-section (3), the words, brackets and letter "sub-clause (a) of" shall be omitted with effect from the 1st day of April, 2021.
In Section 115VW of the Income-tax Act, in clause (ii), for the words "along with the return of income for that previous year", the words, figures and letters "before the specified date referred to in section 44AB" shall be substituted.
After Section 119 of the Income-tax Act, the following section shall be inserted, namely:--
"119A. Taxpayer's Charter
The Board shall adopt and declare a Taxpayer's Charter and issue such orders, instructions, directions or guidelines to other income-tax authorities as it may deem fit for the administration of such Charter.".
In Section 133A of the Income-tax Act, after sub-section (6), for the proviso, the following proviso shall be substituted, namely:--
"Provided that--
(a) in a case where the information has been received from such authority, as may be prescribed, no action under sub-section (1) shall be taken by an Assistant Director or a Deputy Director or an Assessing Officer or a Tax Recovery Officer or an Inspector of Income-tax without obtaining the approval of the Joint Director or the Joint Commissioner, as the case may be;
(b) in any other case, no action under sub-section (1) shall be taken by a Joint Director or a Joint Commissioner or an Assistant Director or a Deputy Director or an Assessing Officer or a Tax Recovery Officer or an Inspector of Income-tax without obtaining the approval of the Director or the Commissioner, as the case may be.".
In Section 139 of the Income-tax Act, in sub-section (1), in Explanation 2, in clause (a),--
(a) in sub-clause (iii), the word "working" shall be omitted;
(b) in the long line, for the figures, letters and words "30th day of September", the figures, letters and words "31st day of October" shall be substituted.
In Section 140 of the Income-tax Act,--
(i) in clause (c), after the words "by any director thereof", the words "or any other person, as may be prescribed for this purpose" shall be inserted;
(ii) in clause (cd), after the words "by any partner thereof", the words "or any other person, as may be prescribed for this purpose" shall be inserted.
In Section 140A of the Income-tax Act, in sub-section (1),--
(a) in clause (iv), the word "and" occurring at the end shall be omitted;
(b) in clause (v), for the word, figures and letters "section 115JD,", the words, figures and letters "section 115JD; and" shall be substituted;
(c) after clause (v), the following clause shall be inserted, namely:--
"(vi) any tax or interest payable according to the provisions of sub-section (2) of section 191,".
In Section 143 of the Income-tax Act,--
(a) in sub-section (3A), after the word, brackets and figure "sub-section (3)", the words and figures "or section 144" shall be inserted;
(b) in sub-section (3B), in the proviso, for the figures, letters and words "31st day of March, 2020", the figures, letters and words "31st day of March, 2022" shall be substituted.
In Section 144C of the Income-tax Act,--
(a) in sub-section (1), the words "in the income or loss returned" shall be omitted;
(b) in sub-section (15), in clause (b), for sub-clause (ii), the following sub-clause shall be substituted, namely:--
"(ii) any non-resident not being a company, or any foreign company.".
Section 156 of the Income-tax Act shall be renumbered as sub-section (1) thereof and after sub-section (1) as so renumbered, the following sub-section shall be inserted, namely:--
"(2) Where the income of the assessee of any assessment year, beginning on or after the 1st day of April, 2021, includes income of the nature specified in clause (vi) of sub-section (2) of section 17 and such specified security or sweat equity shares referred to in the said clause are allotted or transferred directly or indirectly by the current employer, being an eligible start-up referred to in section 80-IAC, the tax or interest on such income included in the notice of demand referred to in sub-section (1) shall be payable by the assessee within fourteen days--
(i) after the expiry of forty-eight months from the end of the relevant assessment year; or
(ii) from the date of the sale of such specified security or sweat
Section 191 of the Income-tax Act shall be renumbered as sub-section (1) thereof and after sub-section (1) as so renumbered, the following sub-section shall be inserted, namely:--
"(2) For the purposes of paying income-tax directly by the assessee under sub-section (1), if the income of the assessee in any assessment year, beginning on or after the 1st day of April, 2021, includes income of the nature specified in clause (vi) of sub-section (2) of section 17 and such specified security or sweat equity shares referred to in the said clause are allotted or transferred directly or indirectly by the current employer, being an eligible start-up referred to in section 80-IAC, the income-tax on such income shall be payable by the assessee within fourteen days--
(i) after the expiry of forty-eight months from the end of the relevant assessment year; or
(ii) from the date of the sale of such specified sec
In Section 192 of the Income-tax Act, after sub-section (1B), the following sub-section shall be inserted, namely:--
"(1C) For the purposes of deducting or paying tax under sub-section (1) or sub-section (1A), as the case may be, a person, being an eligible start-up referred to in section 80-IAC, responsible for paying any income to the assessee being perquisite of the nature specified in clause (vi) of sub-section (2) of section 17 in any previous year relevant to the assessment year, beginning on or after the 1st day of April, 2021, shall deduct or pay, as the case may be, tax on such income within fourteen days--
(i) after the expiry of forty-eight months from the end of the relevant assessment year; or
(ii) from the date of the sale of such specified security or sweat equity share by the assessee; or
(iii) from the date of the assessee ceasing to be the employee of the p
In Section 194 of the Income-tax Act,--
(A) for the words "in cash or before issuing any cheque or warrant", the words "by any mode" shall be substituted;
(B) for the words "at the rates in force", the words "at the rate of ten per cent." shall be substituted;
(C) in the first proviso,--
(i) in clause (a), for the words "an account payee cheque", the words "any mode other than cash" shall be substituted;
(ii) in clause (b), for the words "two thousand five hundred rupees", the words "five thousand rupees" shall be substituted;
(D) the third proviso shall be omitted.
In Section 194A of the Income-tax Act,--
(I) in sub-section (1), in the proviso, for the words, brackets, letters and figures "the monetary limits specified under clause (a) or clause (b) of section 44AB", the words "one crore rupees in case of business or fifty lakh rupees in case of profession" shall be substituted;
(II) in sub-section (3),--
(A) in clause (i), the Explanation shall be omitted;
(B) in clause (iii), after sub-clause (f), the following proviso shall be inserted, namely:--
"Provided that no notification under this sub-clause shall be issued on or after the 1st day of April, 2020.";
(C) after clause (xi) and before Explanation 1, the following proviso shall be inserted, namely:--
"Provided that a co-operative society referred to in clause (v) or clause (viia) shall be liable to deduct income-tax
In Section 194C of the Income-tax Act, in the Explanation,--
(I) in clause (i), in sub-clause (l), in item (B), for the words, brackets, letters and figures "is liable to audit of accounts under clause (a) or clause (b) of section 44AB", the words "has total sales, gross receipts or turnover from business or profession carried on by him exceeding one crore rupees in case of business or fifty lakh rupees in case of profession" shall be substituted;
(II) in clause (iv),--
(i) for sub-clause (e), the following sub-clause shall be substituted, namely:--
"(e) manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer or its associate, being a person placed similarly in relation to such customer as is the person placed in relation to the assessee under the provisions contained in clause (b) of sub
In Section 194H of the Income-tax Act, in the second proviso, for the words, brackets, letters and figures "the monetary limits specified under clause (a) or clause (b) of section 44AB", the words "one crore rupees in case of business or fifty lakh rupees in case of profession" shall be substituted.
In Section 194-Iof the Income-tax Act, in the second proviso, for the words, brackets, letters and figures "the monetary limits specified under clause (a) or clause (b) of section 44AB", the words "one crore rupees in case of business or fifty lakh rupees in case of profession" shall be substituted.
In Section 194J of the Income-tax Act, in sub-section (1),--
(a) in the long line, for the words "ten per cent. of such sum", the words and brackets "two per cent. of such sum in case of fees for technical services (not being a professional services, or royalty where such royalty is in the nature of consideration for sale, distribution or exhibition of cinematographic films and ten per cent. of such sum in other cases," shall be substituted;
(b) in the second proviso, for the words, brackets, letters and figures "the monetary limits specified under clause (a) or clause (b) of section 44AB", the words "one crore rupees in case of business or fifty lakh rupees in case of profession" shall be substituted.
After Section 194J of the Income-tax Act, the following section shall be inserted, namely:--
'194K. Income in respect of units
Any person responsible for paying to a resident any income in respect of--
(a) units of a Mutual Fund specified under clause (23D) of section 10; or
(b) units from the Administrator of the specified undertaking; or
(c) units from the specified company, 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.:
Provided that the provisions of this section shall not apply--
(i) where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year b
In Section 194LBA of the Income-tax Act,--
(a) the words, brackets and letter "sub-clause (a) of" at both the places where they occur shall be omitted;
(b) in sub-section (2), for the words "five per cent.", the words, brackets and letters "five per cent. in case of income of the nature referred to in sub-clause (a) and ten per cent. in case of income of the nature referred to in sub-clause (b), of the said clause" shall be substituted;
(c) after sub-section (2), the following sub-section shall be inserted, namely:--
"(2A) Nothing contained in sub-sections (1) and (2) shall apply in respect of income of the nature referred to in sub-clause (b) of clause (23FC) of section 10, if the special purpose vehicle referred to in the said clause has not exercised the option under section 115BAA.".
In Section 194LC of the Income-tax Act,--
(i) in sub-section (1), the following proviso shall be inserted, namely:--
"Provided that in case of income by way of interest referred to clause (ib) of sub-section (2), the income-tax shall be deducted at the rate of four per cent.";
(ii) in sub-section (2),--
(a) in clause (i), in sub-clause (a) and sub-clause (c), for the figures "2020", the figures "2023" shall be substituted;
(b) in clause (ia), for the figures and word "2020, and", the figures and word "2023, or" shall be substituted;
(c) after clause (ia), the following clause shall be inserted, namely:--
"(ib) in respect of monies borrowed by it from a source outside India by way of issue of any long-term bond or rupee denominated bond on or after the 1st day of April, 2020 but before the 1st day of July, 2023
In Section 194LD of the Income-tax Act,--
(i) for sub-section (2), the following sub-section shall be substituted, namely:--
"(2) The income by way of interest referred to in sub-section (1) shall be the interest payable,--
(a) on or after the 1st day of June, 2013 but before the 1st day of July, 2023 in respect of the investment made by the payee in--
(i) a rupee denominated bond of an Indian company; or
(ii) a Government security;
(b) on or after the 1st day of April, 2020 but before the 1st day of July, 2023 in respect of the investment made by the payee in municipal debt securities:
Provided that the rate of interest in respect of bond referred to in sub-clause (i) of clause (a) shall not exceed the rate as the Central Government may, by notification in the Official Gazette, specify.";
For Section 194N of the Income-tax Act, the following section shall be substituted with effect from the 1st day of July, 2020, namely:--
"194N. Payment of certain amounts in cash
Every person, being,--
(i) a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in Section 51 of that Act);
(ii) a co-operative society engaged in carrying on the business of banking; or
(iii) a post office, who is responsible for paying any sum, being the amount or the aggregate of amounts, as the case may be, in cash exceeding one crore rupees during the previous year, to any person (herein referred to as the recipient) from one or more accounts maintained by the recipient with it shall, at the time of payment of such sum, deduct an amount equal to two per cent. of such sum, as income-tax:
<After Section 194N of the Income-tax Act, the following section shall be inserted with effect from the 1st day of October, 2020, namely:--
'194-O. Payment of certain sums by e-commerce operator to e-commerce participant
(1) 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.
Explanation.--For the purposes of this sub-sect
In Section 195 of the Income-tax Act, in sub-section (1), the second proviso shall be omitted.
In Section 196A of the Income-tax Act, in sub-section (1),--
(a) for the words "of the Unit Trust of India", the words, brackets and figures "from the specified company referred to in the Explanation to clause (35) of section 10" shall be substituted;
(b) for the words "in cash or by the issue of a cheque or draft or by any other mode", the words "by any mode" shall be substituted;
(c) the proviso shall be omitted.
In Section 196C of the Income-tax Act,--
(a) for the words "in cash or by the issue of a cheque or draft or by any other mode", the words "by any mode" shall be substituted;
(b) the proviso shall be omitted.
In Section 196D of the Income-tax Act, in sub-section (1),--
(a) for the words "in cash or by the issue of a cheque or draft or by any other mode", the words "by any mode" shall be substituted;
(b) the proviso shall be omitted.
In Section 197 of the Income-tax Act, in sub-section (1), for the figures and letter "194M", the figures and letters "194M, 194-O" shall be substituted.
In Section 197A of the Income-tax Act, for sub-section (1F), the following sub-section shall be substituted, namely:--
"(1F) Notwithstanding anything contained in this Chapter, no deduction of tax shall be made, or deduction of tax shall be made at such lower rate, from such payment to such person or class of persons, including institution, association or body or class of institutions, associations or bodies, as may be notified by the Central Government in the Official Gazette, in this behalf.".
Section 203AA of the Income-tax Act shall be omitted with effect from the 1st day of June, 2020.
In Section 204 of the Income-tax Act, after clause (iv) and before the Explanation, the following clause shall be inserted, namely:--
"(v) in the case of a person not resident in India, the person himself or any person authorised by such person or the agent of such person in India including any person treated as an agent under section 163.".
In Section 206AA of the Income-tax Act, in sub-section (1), the following proviso shall be inserted, namely:--
'Provided that where the tax is required to be deducted under section 194-O, the provisions of clause (iii) shall apply as if for the words "twenty per cent.", the words "five per cent." had been substituted.'.
In Section 206C of the Income-tax Act with effect from the 1st day of October, 2020,--
(I) after sub-section (1F), the following sub-sections shall be inserted, namely:--
'(1G) Every person,--
(a) being an authorised dealer, who receives an amount, for remittance out of India from a buyer, being a person remitting such amount out of India under the Liberalised Remittance Scheme of the Reserve Bank of India;
(b) being a seller of an overseas tour programme package, who receives any amount from a buyer, being the person who purchases such package, shall, at the time of debiting the amount payable by the buyer or at the time of receipt of such amount from the said buyer, by any mode, whichever is earlier, collect from the buyer, a sum equal to five per cent. of such amount as income-tax:
Provided that the authorised dealer shall not collect the sum, if the
After Section 234F of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2020, namely:--
"234G. Fee for default relating to statement or certificate
(1) Without prejudice to the provisions of this Act, where,--
(a) the research association, university, college or other institution referred to in clause (ii) or clause (iii) or the company referred to in clause (iia) of sub-section (1) of section 35 fails to deliver or cause to be delivered a statement within the time prescribed under clause (i), or furnish a certificate prescribed under clause (ii) of sub-section (1A) of that section; or
(b) the institution or fund fails to deliver or cause to be delivered a statement within the time prescribed under clause (viii) of sub-section (5) of section 80G, or furnish a certificate prescribed under clause (ix) of the said sub-section, it
In Section 250 of the Income-tax Act, after sub-section (6A), the following sub-sections shall be inserted, namely:--
"(6B) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of disposal of appeal by Commissioner (Appeals), so as to impart greater efficiency, transparency and accountability by--
(a) eliminating the interface between the Commissioner (Appeals) and the appellant in the course of appellate proceedings to the extent technologically feasible;
(b) optimising utilisation of the resources through economies of scale and functional specialisation;
(c) introducing an appellate system with dynamic jurisdiction in which appeal shall be disposed of by one or more Commissioner (Appeals).
(6C) The Central Government may, for the purposes of giving effect to the scheme made under sub-section (6B), by noti
In Section 253 of the Income-tax Act, in sub-section (1), in clause (c), for the words, figures and letters "under section 12AA", the words, figures and letters "under section 12AA or section 12AB" shall be substituted with effect from the 1st day of June, 2020.
In Section 254 of the Income-tax Act, in sub-section (2A),--
(a) in the first proviso, after the words "from the date of such order", the words "subject to the condition that the assessee deposits not less than twenty per cent. of the amount of tax, interest, fee, penalty, or any other sum payable under the provisions of this Act, or furnishes security of equal amount in respect thereof" shall be inserted;
(b) for the second proviso, the following proviso shall be substituted, namely:--
"Provided further that no extension of stay shall be granted by the Appellate Tribunal, where such appeal is not so disposed of within the said period of stay as specified in the order of stay, unless the assessee makes an application and has complied with the condition referred to in the first proviso and the Appellate Tribunal is satisfied that the delay in disposing of the appeal is not attributable to the asse
After Section 271AAC of the Income-tax Act, the following section shall be inserted, namely:--
'271AAD. Penalty for false entry, etc., in books of account
(1) Without prejudice to any other provisions of this Act, if during any proceeding under this Act, it is found that in the books of account maintained by any person there is--
(i) a false entry; or
(ii) an omission of any entry which is relevant for computation of total income of such person, to evade tax liability, the Assessing Officer may direct that such person shall pay by way of penalty a sum equal to the aggregate amount of such false or omitted entry.
(2) Without prejudice to the provisions of sub-section (1), the Assessing Officer may direct that any other person, who causes the person referred to in sub-section (1) in any manner to make a false entry or omits or causes to omit any entry ref
After Section 271J of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2020, namely:--
"271K. Penalty for failure to furnish statements, etc
Without prejudice to the provisions of this Act, the Assessing Officer may direct that a sum not less than ten thousand rupees but which may extend to one lakh rupees shall be paid by way of penalty by--
(i) the research association, university, college or other institution referred to in clause (ii) or clause (iii) or the company referred to in clause (iia), of sub-section (1) of section 35, if it fails to deliver or cause to be delivered a statement within the time prescribed under clause (i), or furnish a certificate prescribed under clause (ii) of sub-section (1A) of that section; or
(ii) the institution or fund, if it fails to deliver or cause to be delivered a statement within the t
In Section 274 of the Income-tax Act, after sub-section (2), the following sub-sections shall be inserted, namely:--
"(2A) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of imposing penalty under this Chapter so as to impart greater efficiency, transparency and accountability by--
(a) eliminating the interface between the Assessing Officer and the assessee in the course of proceedings to the extent technologically feasible;
(b) optimising utilisation of the resources through economies of scale and functional specialisation;
(c) introducing a mechanism for imposing of penalty with dynamic jurisdiction in which penalty shall be imposed by one or more income-tax authorities.
(2B) The Central Government may, for the purposes of giving effect to the scheme made under sub-section (2A), by notification in th
After Section 285BA of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2020, namely:--
'285BB. Annual information statement
The prescribed income-tax authority or the person authorised by such authority shall upload in the registered account of the assessee an annual information statement in such form and manner, within such time and along with such information, which is in the possession of an income-tax authority, as may be prescribed.
Explanation.--For the purposes of this section, "registered account" means the electronic filing account registered by the assessee in designated portal, that is, the web portal designated as such by the prescribed income-tax authority or the person authorised by such authority.'.
In Section 288 of the Income-tax Act, in sub-section (2), after clause (vii), the following clause shall be inserted, namely:--
"(viii) any other person as may be prescribed.".
In Section 295 of the Income-tax Act, in sub-section (2), in clause (b),--
(a) after sub-clause (ii), the following sub-clause shall be inserted with effect from the 1st day of April, 2021, namely:--
"(iia) operations carried out in India by a non-resident;";
(b) after sub-clause (iia) as so inserted, the following sub-clause shall be inserted with effect from the 1st day of April, 2022, namely:--
"(iib) transactions or activities of a non-resident;".
In the First Schedule to the Income-tax Act, in rule 5, after clause (c), the following proviso shall be inserted, namely:--
"Provided that any sum payable by the assessee under section 43B, which is added back in accordance with clause (a) of this rule, shall be allowed as deduction in computing the income under the said rule in the previous year in which such sum is actually paid.".
In Section 11 of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as the Customs Act), in sub-section (2), in clause (f), for the words "gold or silver", the words "gold, silver or any other goods" shall be substituted.
In Section 28 of the Customs Act (13 of 2018), for Explanation 4, the following Explanation shall be substituted and shall be deemed to have been substituted with effect from the 29th day of March, 2018, namely:--
"Explanation 4.--For the removal of doubts, it is hereby declared that notwithstanding anything to the contrary contained in any judgment, decree or order of the Appellate Tribunal or any Court or in any other provision of this Act or the rules or regulations made there under, or in any other law for the time being in force, in cases where notice has been issued for non-levy, short-levy, non-payment, short-payment or erroneous refund, prior to the 29th day of March, 2018, being the date of commencement of the Finance Act, 2018, such notice shall continue to be governed by the provisions of section 28 as it stood immediately before such date.".
In Section 28AAA of the Customs Act, in sub-section (1),--
(a) for the words "by such person", the words "or any other law, or any scheme of the Central Government, for the time being in force, by such person" shall be substituted;
(b) after the words "the rules", the words "or regulations" shall be inserted;
(c) in Explanation 1, for the words "with respect to", the words, figures and letter "or duty credit issued under section 51B, with respect to" shall be substituted.
After Chapter VA of the Customs Act, the following Chapter shall be inserted, namely:--
'CHAPTER VAA
Administration of Rules of Origin under Trade Agreement
28DA. Procedure regarding claim of preferential rate of duty
(1) An importer making claim for preferential rate of duty, in terms of any trade agreement, shall,--
(i) make a declaration that goods qualify as originating goods for preferential rate of duty under such agreement;
(ii) possess sufficient information as regards the manner in which country of origin criteria, including the regional value content and product specific criteria, specified in the rules of origin in the trade agreement, are satisfied;
(iii) furnish such information in such manner as may be provided by rules;
(iv) exercise reasonable care as to the accuracy and t
In Chapter VIIA of the Customs Act, in the heading, after the word "LEDGER", the words "AND ELECTRONIC DUTY CREDIT LEDGER" shall be inserted.
After Section 51A of the Customs Act, the following section shall be inserted, namely:--
"51B. Ledger for duty credit.
(1) The Central Government may, by notification in the Official Gazette, specify the manner in which it shall issue duty credit,--
(a) in lieu of remission of any duty or tax or levy, chargeable on any material used in the manufacture or processing of goods or for carrying out any operation on such goods in India that are exported; or
(b) in lieu of such other financial benefit subject to such conditions and restrictions as may be specified therein.
(2) The duty credit issued under sub-section (1) shall be maintained in the customs automated system in the form of an electronic duty credit ledger of the person who is the recipient of such duty credit, in such manner as may be prescribed.
(3) The duty credit availabl
In Section 111 of the Customs Act, after clause (p), the following clause shall be inserted, namely:--
"(q) any goods imported on a claim of preferential rate of duty which contravenes any provision of Chapter VAA or any rule made there under.".
In Section 156 of the Customs Act, in sub-section (2), after clause (h), the following clause shall be inserted, namely:--
"(i) the form, time limit, manner, circumstances, conditions, restrictions and such other matters for carrying out the provisions of Chapter VAA.".
In Section 157 of the Customs Act, in sub-section (2), after clause (j), the following clause shall be inserted, namely:--
"(ja) the manner of maintaining electronic duty credit ledger, making payment from such ledger, transfer of duty credit from ledger of one person to the ledger of another and the conditions, restrictions and time limit relating thereto;".
For Section 8B of the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the Customs Tariff Act), the following section shall be substituted, namely:--
'8B. Power of Central Government to apply safeguard measures
(1) If the Central Government, after conducting such enquiry as it deems fit, is satisfied that any article is imported into India in such increased quantity and under such conditions so as to cause or threaten to cause serious injury to domestic industry, it may, by notification in the Official Gazette, apply such safeguard measures on that article, as it deems appropriate.
(2) The safeguard measures referred to in sub-section (1) shall include imposition of safeguard duty, application of tariff-rate quota or such other measure, as the Central Government may consider appropriate, to curb the increased quantity of imports of an article to prevent serious injury to domestic
In the Customs Tariff Act, the First Schedule shall--
(a) be amended in the manner specified in the Second Schedule; and
(b) be also amended in the manner specified in the Third Schedule.
1[In Section 2 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the Central Goods and Services Tax Act), in clause (114), for sub-clauses (c) and (d), the following sub-clauses shall be substituted, namely:--
"(c) Dadra and Nagar Haveli and Daman and Diu;
(d) Ladakh;".]
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1. W.e.f. 30.06.2020, vide Notification No. 49/2020-Central Tax, dated 24.06.2020.
In Section 10 of the Central Goods and Services Tax Act, in sub-section (2), in clauses (b), (c) and (d), after the words "of goods", the words "or services" shall be inserted.
In Section 16 of the Central Goods and Services Tax Act, in sub-section (4), the words "invoice relating to such" shall be omitted.
In Section 29 of the Central Goods and Services Tax Act, in sub-section (1), for clause (c), the following clause shall be substituted, namely:--
"(c) the taxable person is no longer liable to be registered under section 22 or section 24 or intends to opt out of the registration voluntarily made under sub-section (3) of section 25:".
In Section 30 of the Central Goods and Services Tax Act, in sub-section (1), for the proviso, the following proviso shall be substituted, namely:--
"Provided that such period may, on sufficient cause being shown, and for reasons to be recorded in writing, be extended,--
(a) by the Additional Commissioner or the Joint Commissioner, as the case may be, for a period not exceeding thirty days;
(b) by the Commissioner, for a further period not exceeding thirty days, beyond the period specified in clause (a).".
In Section 31 of the Central Goods and Services Tax Act, in sub-section (2), for the proviso, the following proviso shall be substituted, namely:--
"Provided that the Government may, on the recommendations of the Council, by notification,--
(a) specify the categories of services or supplies in respect of which a tax invoice shall be issued, within such time and in such manner as may be prescribed;
(b) subject to the condition mentioned therein, specify the categories of services in respect of which--
(i) any other document issued in relation to the supply shall be deemed to be a tax invoice; or
(ii) tax invoice may not be issued.".
In Section 51 of the Central Goods and Services Tax Act,--
(a) for sub-section (3), the following sub-section shall be substituted, namely:--
"(3) A certificate of tax deduction at source shall be issued in such form and in such manner as may be prescribed.";
(b) sub-section (4) shall be omitted.
1[In Section 109 of the Central Goods and Services Tax Act, in sub-section (6),--
(a) the words "except for the State of Jammu and Kashmir" shall be omitted;
(b) the first proviso shall be omitted.]
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1. W.e.f. 30.06.2020, vide Notification No. 49/2020-Central Tax, dated 24.06.2020.
In Section 122 of the Central Goods and Services Tax Act, after sub-section (1), the following sub-section shall be inserted, namely:--
"(1A) Any person who retains the benefit of a transaction covered under clauses (i), (ii), (vii) or clause (ix) of sub-section (1) and at whose instance such transaction is conducted, shall be liable to a penalty of an amount equivalent to the tax evaded or input tax credit availed of or passed on.".
In Section 132 of the Central Goods and Services Tax Act, in sub-section (1),--
(i) for the words "Whoever commits any of the following offences", the words "Whoever commits, or causes to commit and retain the benefits arising out of, any of the following offences" shall be substituted;
(ii) for clause (c), the following clause shall be substituted, namely:--
"(c) avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input tax credit without any invoice or bill;";
(iii) in clause (e), the words ", fraudulently avails input tax credit" shall be omitted.
In Section 140 of the Central Goods and Services Tax Act, with effect from the 1st day of July, 2017,--
(a) in sub-section (1), after the words "existing law", the words "within such time and" shall be inserted and shall be deemed to have been inserted;
(b) in sub-section (2), after the words "appointed day", the words "within such time and" shall be inserted and shall be deemed to have been inserted;
(c) in sub-section (3), for the words "goods held in stock on the appointed day subject to", the words "goods held in stock on the appointed day, within such time and in such manner as may be prescribed, subject to" shall be substituted and shall be deemed to have been substituted;
(d) in sub-section (5), for the words "existing law", the words "existing law, within such time and in such manner as may be prescribed" shall be substituted and shall be deemed to have been substitu
1[In Section 168 of the Central Goods and Services Tax Act, in sub-section (2), for the words, brackets and figures "sub-section (5) of section 66, sub-section (1) of section 143", the words, brackets and figures "sub-section (1) of section 143, except the second proviso thereof" shall be substituted.]
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1. W.e.f. 30.06.2020, vide Notification No. 49/2020-Central Tax, dated 24.06.2020.
1[In Section 172 of the Central Goods and Services Tax Act, in sub-section (1), in the proviso, for the words "three years", the words "five years" shall be substituted.]
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1. W.e.f. 30.06.2020, vide Notification No. 49/2020-Central Tax, dated 24.06.2020.
In Schedule II to the Central Goods and Services Tax Act, in paragraph 4, the words "whether or not for a consideration," at both the places where they occur, shall be omitted and shall be deemed to have been omitted with effect from the 1st day of July, 2017.
(1) Notwithstanding anything contained in the notification of the Government of India in the Ministry of Finance (Department of Revenue) number G.S.R. 673(E), dated the 28th June, 2017, issued by the Central Government, on the recommendations of the Council, in exercise of the powers under sub-section (1) of Section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017),--
(i) no central tax shall be levied or collected in respect of supply of fish meal (falling under heading 2301), during the period commencing from the 1st day of July, 2017 and ending with the 30th day of September, 2019 (both days inclusive);
(ii) central tax at the rate of six per cent. shall be levied or collected in respect of supply of pulley, wheels and other parts (falling under heading 8483) and used as parts of agricultural machinery (falling under headings 8432, 8433 and 8436), during the period commencing from the 1st day of July,
The notification of the Government of India in the Ministry of Finance (Department of Revenue) number G.S.R. 708(E), dated the 30th September, 2019, issued by the Central Government, on the recommendations of the Council, in exercise of the powers under clause (ii) of the proviso to sub-section (3) of Section 54 of the Central Goods and Services Tax Act, 2017 (12 of 2017), read with sub-section (2) of Section 9 of the Goods and Services Tax (Compensation to States) Act, 2017 (15 of 2017), shall be deemed to have, and always to have, for all purposes, come into force on and from the 1st day of July, 2017.
1[In Section 25 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), in sub-section (1), in the proviso, for the words "three years", the words "five years" shall be substituted.]
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1. W.e.f. 30.06.2020, vide Notification No. 04/2020-Integrated Tax, dated 24.06.2020.
(1) Notwithstanding anything contained in the notification of the Government of India in the Ministry of Finance (Department of Revenue) number G.S.R. 666(E), dated the 28th June, 2017, issued by the Central Government, on the recommendations of the Council, in exercise of the power under sub-section (1) of Section 5 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017),--
(i) no integrated tax shall be levied or collected in respect of supply of fish meal (falling under heading 2301), during the period commencing from the 1st day of July, 2017 and ending with the 30th day of September, 2019 (both days inclusive);
(ii) integrated tax at the rate of twelve per cent. shall be levied or collected in respect of supply of pulley, wheels and other parts (falling under heading 8483) and used as parts of agricultural machinery (falling under headings 8432, 8433 and 8436), during the period commencing from the 1st da
In Section 1 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017) (hereinafter referred as the Union Territory Goods and Services Tax Act), in sub-section (2), for the words "Dadra and Nagar Haveli, Daman and Diu", the words "Dadra and Nagar Haveli and Daman and Diu, Ladakh" shall be substituted.
In Section 2 of the Union Territory Goods and Services Tax Act, in clause (8), for sub-clauses (iii) and (iv), the following sub-clauses shall be substituted, namely:--
"(iii) Dadra and Nagar Haveli and Daman and Diu;
(iv) Ladakh;".
In Section 26 of the Union Territory Goods and Services Tax Act, in sub-section (1), in the proviso, for the words "three years", the words "five years" shall be substituted.
(1) Notwithstanding anything contained in the notification of the Government of India in the Ministry of Finance (Department of Revenue) number G.S.R. 710(E), dated the 28th June, 2017, issued by the Central Government, on the recommendations of the Council, in exercise of the powers under sub-section (1) of Section 7 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017),--
(i) no Union territory tax shall be levied or collected in respect of supply of fish meal (falling under heading 2301), during the period commencing from the 1st day of July, 2017 and ending with the 30th day of September, 2019 (both days inclusive);
(ii) Union territory tax at the rate of six per cent. shall be levied or collected in respect of supply of pulley, wheels and other parts (falling under heading 8483) and used as parts of agricultural machinery (falling under headings 8432, 8433 and 8436), during the period commencing fr
In Section 14 of the Goods and Services Tax (Compensation to States) Act, 2017 (15 of 2017), in sub-section (1), in the proviso, for the words "three years", the words "five years" shall be substituted.
(1) In the case of goods specified in the Fourth Schedule being goods imported into India, there shall be levied and collected for the purposes of the Union, a duty of customs, to be called the Health Cess, at the rates specified in the said Schedule, for the purposes of financing the health infrastructure and services.
(2) The Central Government may, after due appropriation made by Parliament by law in this behalf, utilise such sums of money of the Health Cess levied under this Chapter for the purposes specified in sub-section (1), as it may consider necessary.
(3) For the purposes of calculating the Health Cess under this Chapter on the goods specified in the Fourth Schedule, where such duty is leviable at any percentage of its value, the value of such goods shall be calculated in the same manner as the value of goods is calculated for the purpose of customs duty under the provisions of Section 14 of the Customs Act
PART I
AMENDMENTS TO THE INDIAN STAMP ACT, 1899
The provisions of this Part shall come into force on the 1st day of April, 2020.
In Section 9A of the Indian Stamp Act, 1899 (2 of 1899) (hereafter in this Part referred to as the Stamp Act), in sub-section (2), the following proviso shall be inserted, namely:--
"Provided that no such duty shall be chargeable in respect of the instruments of transaction in stock exchanges and depositories established in any International Financial Services Centre set up under Section 18 of the Special Economic Zones Act, 2005 (28 of 2005).".
In the Stamp Act, after Section 73A, the following section shall be inserted, namely:--
"73B. Power to issue directions and to authorise certain authorities to issue instructions, etc
The Central Government may,--
(a) issue directions relating to such matters and subject to such conditions, as it deems necessary;
(b) in writing, authorise the Securities and Exchange Board of India established under Section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the Reserve Bank of India constituted under Section 3 of the Reserve Bank of India Act, 1934 (2 of 1934) to issue instructions, circulars or guidelines, for carrying out the provisions of Part AA of Chapter II and the rules made there under.".
PART II
AMENDMENT TO THE PROHIBITION OF BENAMI PROPERTY TRANSACTIONS ACT, 1988
In the Prohibition of Benami Property Transactions Act, 1988, in Section 9, in sub-section (1), for clause (b), the following clause shall be substituted with effect from the 1st day of April, 2020, namely:--
"(b) (i) has been a member of the Indian Legal Service and has held the post of Joint Secretary or equivalent post in that Service; or
(ii) is qualified for appointment as District Judge.".
PART III
AMENDMENT TO THE FINANCE ACT, 2001
For the Seventh Schedule to the Finance Act, 2001, the Schedule specified in the Fifth Schedule shall be substituted.
PART IV
AMENDMENT TO THE FINANCE ACT, 2002
In the Finance Act, 2002, in the Eighth Schedule,--
(a) against Item No. 1, for the entry in column (3), the entry "Rs. 18 per litre" shall be substituted;
(b) against Item No. 2, for the entry in column (3), the entry "Rs. 12 per litre" shall be substituted.
PART V
AMENDMENTS TO THE FINANCE ACT, 2013
In the Finance Act, 2013 (17 of 2013) (hereafter in this Part referred to as the principal Act), in Section 116, with effect from the 1st day of April, 2020,--
(a) in clause (7), for the words "sale of commodity derivatives or option on commodity derivatives in respect of commodities, other than agricultural commodities, traded in recognised associations", the words "sale of commodity derivatives or sale of commodity derivatives based on prices or indices of prices of commodity derivatives or option on commodity derivatives or option in goods in respect of commodities, other than agricultural commodities, traded in recognised stock exchange" shall be substituted;
(b) in clause (8),--
(A) for the words, brackets and figures "Forward Contracts (Regulation) Act, 1952 (74 of 1952)", the words, brackets and figures
In Section 117 of the principal Act, for the Table, the following Table shall be substituted with effect from the 1st day of April, 2020, namely:--
"TABLE
Sl. No. Taxable commodities transaction Rate Payable by
(1) (2) (3) (4)
1. Sale of commodity derivative 0.01 per cent. seller
2. Sale of commodity derivatives based on prices or indices of prices of commodity derivatives 0.01 per cent. seller
3. Sale of option on commodity derivative 0.05 per cent. seller
4. Sale of option in goods 0.05 per cent. seller
5. Sale of option on commodity derivative, where option is exercised 0.0001 per cent. purchaser
6. Sale of option in goods, where option is exercised resulting in actual delivery of goods 0.0001 per cent. purchaser
7. Sale of option in goods, w
In Section 118 of the principal Act, with effect from the 1st day of April, 2020,--
(i) in clause (a), for the words "commodity derivative" at both the places where they occur, the words "commodity derivative or commodity derivative based on prices or indices of prices of commodity derivatives" shall be substituted;
(ii) in clause (b),--
(A) after the words "an option on commodity derivative", the words "or option in goods" shall be inserted;
(B) in sub-clause (i), for the words and figure "serial number 2", the words and figures "serial numbers 3 and 4" shall be substituted;
(C) in sub-clause (ii), for the words and figure "serial number 3", the words and figures "serial numbers 5 and 6" shall be substituted;
(D) after sub-clause (ii), the following sub-clause shall be inserted, namely:--
"(iii) the differenc
In Sections 119, 120 and 132A of the principal Act, for the words "recognised association" wherever they occur, the words "recognised stock exchange" shall be substituted with effect from the 1st day of April, 2020.
PART VI
AMENDMENTS TO THE FINANCE ACT, 2016
The provisions of this Part shall come into force on the 1st day of April, 2020.
In the Finance Act, 2016,--
(i) in Section 163, in sub-section (3), for the word "Chapter", the words, letters and figures "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" shall be substituted;
(ii) in Section 164,--
(A) after clause ?, the following clause shall be inserted, namely:--
'(ca) "e-commerce operator" means a non-resident who owns, operates or manages digital or electronic facility or platform for online sale of goods or online provision of services or both;
(cb) "e-commerce supply or services" means--
(i) online sale of goods owned by the e-commerce operator; or
(ii) online provision of services provided by the e-commerce operator; or
(iii) online sale of goods or pr
PART VII
AMENDMENT TO THE FINANCE ACT, 2018
In the Finance Act, 2018, in the Sixth Schedule, against Item Nos. 1 and 2, for the entry in column (3), the entry "Rs. 18 per litre" shall be substituted.
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
In the Customs Tariff Act, in the First Schedule,--
(1) in Chapter 8, for the entry in column (4) occurring against tariff item 0802 32 00, the entry "100%" shall be substituted;
(2) in Chapter 38, for the entry in column (4) occurring against tariff item 3824 99 00, the entry "17.5%" shall be substituted;
(3) in Chapter 64,--
(i) for the entry in column (4) occurring against all the tariff items of headings 6401, 6402, 6403, 6404 and 6405, the entry "35%" shall be substituted;
(ii) for the entry in column (4) occurring against all the tariff items of heading 6406, the entry "20%" shall be substituted;
(4) in Chapter 67, for the entry in column (4) occurring against all the tariff items of heading 6702, the entry "20%" shall be substituted;
(5) in Chapter 69, for the entry in column (4) occurring against tarif
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 84, for tariff item 8414 51 90 and the entries relating thereto, the following shall be substituted, namely:--
"8414 51 50 ---Wall fans u 20% -
8414 51 90 ---Other u 20% -";
(2) in Chapter 85,--
(i) in heading 8529, after tariff item 8529 90 20 and the entries relating thereto, the following shall be inserted, namely:--
"8529 90 30 ---Open cell for television set u 15% -";
(ii) in heading 8541, for tariff item 8541 40 11 and the entries relating thereto, the following shall be substituted, namely:--
"8541 40 11 ----Solar cells, not assembled u 20% -
The rules for interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), the Section Notes, Chapter Notes and the General Explanatory Notes of the said First Schedule shall apply to the interpretation of this Schedule.
Item No. Description of goods Rate of duty
(1) (2) (3)
1. All goods falling under headings 9018, 9019, 9020, 9021 and 9022 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) 5%
"THE SEVENTH SCHEDULE
(See section 138)
NOTES
1. In this Schedule, "tariff item", "heading", "sub-heading" and "Chapter" mean respectively a tariff item, heading, sub-heading and Chapter in the Fourth Schedule to the Central Excise Act, 1944 (1 of 1944).
2. The rules for the interpretation of the Fourth Schedule to the Central Excise Act, 1944 (1 of 1944), the Section and Chapter Notes and the General Explanatory Notes of the Fourth Schedule shall apply to the interpretation of this Schedule.
Tariff Item Description of goods Unit Rate of duty
(1) (2) (3) (4)
2402 20 10--- Other than filter cigarettes, of length not exceeding 65 millimetres Tu Rs. 200 per thousand
2402 20 20--- Other than filter cigarettes, of length exceeding 65 millimetres but not exceeding 70 millimetres Tu Rs. 250 per
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 2020-2021. The notes on clauses explain the various provisions contained in the Bill.
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