Finance Act 2019

THE FINANCE (NO. 2) ACT, 2019

No. 23 of 2019

1st August, 2019

An Act to give effect to the financial proposals of the Central Government for the financial year 2019-2020.

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1 Short title and commencement

This Act may be called the Finance (No. 2) Act, 2019.

Save as otherwise provided in this Act,—

sections 2 to 69 shall be deemed to have come into force on the 1st day of April, 2019;
sections 92 to 112 and section 114 shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

2 Income-tax

Subject to the provisions of sub-sections (2) and (3), for the assessment year commencing on the 1st day of April, 2019, 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.

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,—

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

3 Amendment of section 2

In section 2 of the Income-tax Act, in clause (19AA), in sub-clause (iii), the following proviso shall be inserted with effect from the 1st day of April, 2020, namely:

“Provided that the provisions of this sub-clause shall not apply where the resulting company records the value of the property and the liabilities of the undertaking or undertakings at a value different from the value appearing in the books of account of the demerged company, immediately before the demerger, in compliance to the Indian Accounting Standards specified in Annexure to the Companies (Indian Accounting Standards) Rules, 2015;”.

4 Amendment of section 9

In section 9 of the Income-tax Act, in sub-section (1), after clause (vii), the following clause shall be inserted with effect from the 1st day of April, 2020, namely:

“(viii) income arising outside India, being any sum of money referred to in sub-clause (xviia) of clause (24) of section 2, paid on or after the 5th day of July, 2019 by a person resident in India to a non-resident, not being a company, or to a foreign company.”

5 Amendment of section 9A

In section 9A of the Income-tax Act, in sub-section (3),

in clause (j), in the first proviso, for the words “at the end of such previous year”, the words “at the end of a period of 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” shall be substituted;
in clause (m), for the words “the arm’s length price of the said activity”, the words “the amount calculated in such manner as may be prescribed” shall be substituted.

6 Amendment of section 10

In section 10 of the Income-tax Act,

after clause (4B), the following clause shall be inserted, namely:

“(4C) any income by way of interest payable to a non-resident, not being a company, or to a foreign company, by any Indian company or business trust in respect of monies borrowed from a source outside India by way of issue of rupee denominated bond, as referred to in clause (ia) of sub-section (2) of section 194LC, during the period beginning from the 17th day of September, 2018 and ending on the 31st day of March, 2019;”;

after clause (4C) as so inserted, the following shall be inserted with effect from 1st day of April, 2020, namely:

(4D) any income accrued or arisen to, or received by a specified fund as a result of transfer of capital asset referred to in clause (viiab) or section 47, on a recognised stock exchange located in any International Financial Services Centre and where the consideration for such transaction is p