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1 INCOME TAX

2 Section / Rule No.: Amendment Effective Date: Assessment Year Section Existing Provision Amendment in Existing / New Provision Bizsol Analysis 2(14) (vi) Gold Deposit Bonds issued under the Gold Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 notified by the Central Deposit Scheme, 1999 or deposit certificates Government. issued under the Gold Monetisation Scheme 2015 notified by the Central Government. Definition of Capital Asset under Section 2(14) shall now include certificates issued under the Gold Monetisation Scheme (23C) w.e.f Nil hearing includes communication of data and documents through electronic mode Move towards Digital India. Even in the case of hearing under 143(2), the electronic hearing can be made. It is also towards ease of doing business.

3 2 (24)(xviii) assistance in the form of a subsidy or grant or cash incentive or duty drawback or waiver or concession or reimbursement (by whatever name called) by the Central Government or a State Government or any authority or body or agency in cash or kind to the assesse other than the subsidy or grant or reimbursement which is taken into account for determination of the actual cost of the asset in accordance with the provisions of Explanation 10 to clause (1) of section 43 assistance in the form of a subsidy or grant or cash incentive or duty drawback or waiver or concession or reimbursement (by whatever name called) by the Central Government or a State Government or any authority or body or agency in cash or kind to the assesse Other than, (a) the subsidy or grant or reimbursement which is taken into account for determination of the actual cost of the asset in accordance with the provisions of Explanation 10 to clause (1) of section 43; or (b) the subsidy or grant by the Central Government for the purpose of the corpus of a trust or institution established by the Central Government or a State Government, as the case may be Definition of Income shall not include the subsidy or grant by the Central Government for the purpose of the corpus of a trust or institution established by the Central Government or a State Government

4 6(3) w.e.f A company is said to be resident in India in any A company is said to be a resident in India in any previous year, if previous year, if (i) it is an Indian company; or (ii) Its place of effective management, in that (i) it is an Indian company; or year, is in India. (ii) Its place of effective management, in that Explanation. For the purposes of this clause year, is in India. place of effective management means a place where key management and commercial Explanation. For the purposes of this clause decisions that are necessary for the conduct of "place of effective management" means a place business of an entity as a whole are, in where key management and commercial substance made. decisions that are necessary for the conduct of the business of an entity as a whole, are in substance made. This is welcome step. The applicability of place of effective management(poem) is deferred and shall be applicable from and provide transitional provision for companies Explanation 1 Nil clause e of Section 9(1) (i) (e) in the case of a foreign company engaged in the business of mining of diamonds, no income shall be deemed to accrue or arise in India to it through or from the activities which are confined to the display of uncut and unassorted diamond in any special zone notified by the Central Government In the Official Gazette in this behalf. Income from Display of uncut or unassorted diamond in a notified SEZ shall not be income accrued to a foreign company

5 Proviso to Nil Section 10(12) w.e.f (12A) w.e.f Nil Provided that nothing contained in this clause shall apply in respect of any amount of accumulated balance, attributable to any contributions made on or after the 1st day of April, 2016 by an employee other than an excluded employee, exceeding forty per cent. of such accumulated balance due and payable in accordance with provisions of rule 8 of Part A of the Fourth Schedule. Explanation. For the purposes of this clause, the term excluded employee means an employee whose monthly salary does not exceed such amount, as may be prescribed (12A) any payment from the National Pension System Trust to an employee on closure of his account or on his opting out of the pension scheme referred to in section 80CCD, to the extent it does not exceed forty per cent. of the total amount payable to him at the time of such closure or his opting out of the scheme Now, withdrawal from recognized provident fund is exempted up to 40% of accumulated balance. This provision defeats the basic principle of social security and hence needs to be withdrawn. Number of salaried people shall be badly affected New provision to provide 40% exemption from withdrawal from National Pension Scheme introduced to bring in parity for tax treatment for withdrawal from recognized provident fund. This will give marginal relief to Senior Citizens.

6 Proviso to Nil Section 10(13)(ii) w.e.f Provided that any payment in lieu of or in commutation of an annuity purchased out Of contributions made on or after the 1st day of April, 2016, where it exceeds forty percent. of the annuity, shall be taken into account in computing the total income; Payment from Superannuation fund is exempted up to 40% of such sum on his retirement. This will give marginal relief to Senior Citizens 10(13)(v) w.e.f Nil By way of transfer to the account of theexemption shall be given for transfer of amount from employee under a pension scheme referred an approved superannuation fund to notified to in section 80-CCD and notified by the Central National Pension Scheme Government 10(15)(vi) w.e.f interest on Gold Deposit Bonds issued under the Gold Deposit Bonds issued under the Gold Interest from Gold Monetisation Scheme 2015 is Gold Deposit Scheme, 1999 notified by the Deposit Scheme, 1999 or deposit certificatesalso exempt. Central Government; issued under the Gold Monetisation Scheme 2015 notified by the Central Government. 10(23FC) w.e.f Any income of a business trust by way of Any income of a business trust by way of For special purpose vehicle, along with interest interest received or receivable from a special (a) interest received or receivable from a special dividend shall also be exempt purpose vehicle. purpose vehicle; or (b) dividend referred to in sub-section (7) of section 115-O ;

7 Proviso to Nil Section 10 (34) w.e.f Proviso to Nil Section 10(35A) w.e.f Provided that nothing in this clause shall applyblanket exemption for dividend received is amended to any income by way of dividend chargeable to that in case dividend income is exceeding Rs. 10 tax in accordance with the provisions of sectionlakhs for Individual, HUF or Firm, the same shall be 115BBDA; ; taxable at 10% even though Dividend distribution tax (DDT) under Section 115-O has been paid on the same. It will be double taxation in the hands of receiver and payer. Provided that nothing contained in this clause Income to investor from Securitization Trust shall shall apply to any income by way of now be taxable distributed income referred to in the said section, received on or after the 1st day of June, 2016 Proviso to Section 10(38) Nil Provided also that nothing contained in sub-conditioclause (b) shall apply to a transaction not applicable for claiming exemption on transaction of payment of Security Transaction Tax is undertaken on a recognized stock exchange in any International Financial located in any International Financial Services Centre and consideration in foreign Services Centre and where the consideration forcurrency. such transaction is paid or payable in foreign currency

8 Explanation b Nil and c to Section 10(38) (b) International Financial Services Centre Definitions clarified. shall have the same meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005; (c) recognized stock exchange shall have the meaning assigned to it in clause (ii) of the Explanation 1 to sub-section (5) of section 43 Section 10(48A) Nil any income accruing or arising to a foreignexemption to foreign companies for income on company on account of storage of crude account of storage and sale of crude oil to any oil in a facility in India and sale of crude oil person resident in India. This provision is inserted to therefrom to any person resident in India: encourage foreign National Oil Companies and Provided that Multi-national Companies to invest in such avenues. (i) the storage and sale by the foreign company is pursuant to an agreement or an arrangement entered into by the Central Government or approved by the Central Government; and (ii) having regard to the national interest, the foreign company and the agreement or arrangement are notified by the Central Government in this behalf;

9 10AA w.e.f Subject to the provisions of this section, in Subject to the provisions of this section, in In order to avail the exemption SEZ unit should computing the total income of an assesse, being computing the total income of an assesse, being commence it s production or start providing services an entrepreneur as referred to in clause (j) ofan entrepreneur as referred to in clause (j) of up to 31 st March section 2 of the Special Economic Zones Act, section 2 of the Special Economic Zones Act, With the Government focused on Make in India 2005, from his Unit, who begins to manufacture 2005, from his Unit, who begins to manufacture concept, such kind of sunset clause defeats the or produce articles or things or provide any or produce articles or things or provide any purpose. services during the previous year relevant to anyservices during the previous year relevant to assessment year commencing on or after the 1stany assessment year commencing on or after It is the promissory estoppel and it will add to day of April, 2006, a deduction of the 1st day of April, 2006 but before the 1st day litigation since Section 51 of the SEZ act, 2005 has of April, 2021, a deduction of not been amended which has the overriding effect over Income Tax Act, (2)(vii) w.e.f the amount of any contribution to an approved for the words one lakh Perquisite value shall now be calculated in excess of superannuation fund by the employer in respect Rupees, the words one lakh and fifty Rs. 1,50,000/- for contribution to approved of the assesse, to the extent it exceeds one lakh thousand rupees shall be substituted withsuperannuation fund. rupees effect from the 1st day of April, b w.e.f Provided further that where the property For the words three years, the words five A very welcome move for the assesse since in some referred to in the first proviso is acquired or years shall be substituted with effect from thecases, there might be considerable delay in obtaining constructed with capital borrowed on or after 1st day of April, permissions from local authorities and assesses were the 1st day of April, 1999 and such acquisition or losing benefits. construction is completed within three years from the end of the financial year in which Now Assessees can invest and buy / construct capital was borrowed another house within period of 5 years than that of three years.

10 25A, 25 AA, 25 25A:Where a deduction has been made under The amount of arrears of rent received from asection 25A, 25AA and 25B have been clubbed in B w.e.f clause (x) of sub-section (1) of section 24 as it tenant or the unrealized rent realized section 25A and simplified provision for arrears of stood immediately before its substitution by the subsequently from a tenant, as the case may be, rent and unrealized rent made. Finance Act, 2001 in the assessment for any year by an assesse shall be deemed to be the income in respect of rent from property let to a tenant from house property in respect of the financial which the assesse cannot realize and year in which such rent is received or realized, subsequently during any previous year the and shall be included in the total income of the assesse has realized any amount in respect of assesse under the head Income from house such rent, the amount so realized shall be property, whether the assesse is the owner of deemed to be income chargeable under the the property or not in that financial year. head "Income from house property" and accordingly charged to income-tax (without (2) A sum equal to thirty per cent. of the arrears making any deduction under section 23 or of rent or the unrealized rent referred to in section 24 as it stood immediately before its Sub-section (1) shall be allowed as deduction. substitution by the Finance Act, 2001) as the income of that previous year, whether the assesse is the owner of that property in that year or not. 25AA. Where the assesse cannot realize rent from a property let to a tenant and subsequently the assesse has realized any amount in respect of such rent, the amount so realized shall be deemed to be income chargeable under the head "Income from house property" and accordingly charged to incometax as the income of that previous year in which such rent is realized whether is the owner of that property in that previous year

11 Or not the assesse is the owner of that property in that previous year. 25B. Where the assesse (a) is the owner of any property consisting of any buildings or lands appurtenant thereto which has been let to a tenant; and (b) has received any amount, by way of arrears of rent from such property, not charged to income-tax for any previous year, the amount so received, after deducting a sum equal to thirty per cent of such amount, shall be deemed to be the income chargeable under the head "Income from house property" and accordingly charged to income-tax as the income of that previous year in which such rent is received, whether the assesse is the owner of that property in that year or not.

12 32(1)(iia) w.e.f in the case of assets of an undertaking engaged or in the business of generation or generation Depreciation will be allowed on assets engaged in in generation or generation and distribution of and distribution, the words or in the businesstransmission of Power. Litigations in future will be power, such percentage on the actual cost of generation, transmission or distribution shallavoided. thereof to the assesse as may be prescribed be substituted with effect from the 1st day of April, AC(1A)(i) Where an assesse, being a company, engaged in for the words acquired and installed during anysunset clause inserted for installation of new plant the business of manufacture or production of previous year exceeds twenty-five crore and machinery. any article or thing, acquires and installs new rupees, the words, figures and letters assets and the amount of actual cost of such acquired during any previous year exceeds new assets acquired and installed during any twenty-five crore rupees and such assets are previous year exceeds twenty-five crore rupees, installed on or before the 31st day of March, then, there shall be allowed a deduction of a 2017 shall be substituted; sum equal to fifteen per cent of the actual cost of such new assets for the assessment year relevant to that previous year: Proviso to Nil 32AC(1A)(ii) Provided that where the installation of the newclarificatory provision. assets are in a year other than the year of acquisition, the deduction under this subsection shall be allowed in the year in which the new assets are installed.

13 35(1)(ii) w.e.f Weighted deduction from the business incomeweighted deduction shall be restricted to 150Deduction on expenditure on Scientific Research to the extent of 175 per cent of any sum paid toper cent from to (i.e. reduced from specific period. an approved scientific research associationfrom previous year to previous year which has the object of undertaking scientific ) and deduction shall be restricted to This should have been deferred till the time the research. Similar deduction is also available if 100 per cent from (i.e. fromcorporate tax has not been reduced. a sum is paid to an approved university, college previous year onwards). Or other institution and if such sum is used for scientific research. 35(1)(iia) w.e.fweighted deduction from the business incomededuction shall be restricted to 100 per centdeduction on expenditure on Scientific Research to the extent of 125 per cent of any sum paid aswith effect from (i.e. from previous reduced from specific period. contribution to an approved scientific researchyear and subsequent years). company. This should have been deferred till the time the corporate tax has not been reduced. 35(1)(iii) w.e.fweighted deduction from the business incomededuction shall be restricted to 100 per cent Deduction on expenditure on Scientific Research to the extent of 125 per cent of contribution towith effect from (i.e. from previous reduced from specific period. an approved research association or university year and subsequent years). or college or other institution to be used for This should have been deferred till the time the research corporate tax has not been reduced. In social science or statistical research.

14 35(2AA) w.e.f Weighted deduction from the business incomeweighted deduction shall be restricted to 150Deduction on expenditure on Scientific Research to the extent of 200 per cent of any sum paid toper cent with effect from to a National Laboratory or a university or an (i.e. from previous year reduced from specific period. Indian Institute of Technology or a specified To previous year ). This should have been deferred till the time the Person for the purpose of approved scientificdeduction shall be restricted to 100 per centcorporate tax has not been reduced. research programme. from (i.e. from previous year onwards). 35(2AB) w.e.f Weighted deduction of 200 per cent of the Weighted deduction shall be restricted to 150Deduction on expenditure on Scientific Research expenditure (not being expenditure in the per cent from to (i.e. reduced from specific period. nature of cost of any land or building) incurred from previous year to previous year by a company, engaged in the business of bio )technology or in the business of manufacture or Deduction shall be restricted to 100 per centcorporate tax has not been reduced. This should have been deferred till the time the production of any article or thing except some from (i.e. from previous year Items appearing in the negative list specified in 21 onwards). Schedule-XI, on scientific research on approved in-house research and development facility.

15 35 ABA w.e.f Nil (1) In respect of any expenditure, being in the In order to avoid litigation and controversy with nature of capital expenditure, incurred forrespect to spectrum fees for auction of Airwaves, acquiring any right to use spectrum for new section has been introduced to provide the tax telecommunication services either before thetreatment with effect from 1 st April 2017 i.e. AY commencement of the business or thereafter at any time during any previous year and for which payment has actually been made to obtain a right to use spectrum, there shall, subject to and in accordance with the provisions of this section, be allowed for each of the relevant previous years, a deduction equal to the appropriate fraction of the amount of such expenditure. (2) The provisions contained in sub-sections (2) to (8) of section 35ABB, shall apply as if for the word license, the word spectrum had been substituted. Explanation. For the purposes of this section, (i) relevant previous years means, (A) in a case where the spectrum fee is actually paid before the commencement of the business to operate telecommunication services, the previous years beginning with the previous year in which such business commenced;

16 (B) in any other case, the previous years beginning with the previous year in which the spectrum fee is actually paid, and the subsequent previous year or years during which the spectrum, for which the fee is paid, shall be in force; (ii) appropriate fraction means the fraction, the numerator of which is one and the denominator of which is the total number of the relevant previous years; (iii) Payment has actually been made means the actual payment of expenditure irrespective of the previous year in which the liability for the expenditure was incurred according to the method of accounting regularly employed by the assesse.

17 35AC w.e.f Deduction for expenditure incurred by way of payment of any sum to a public sector company or a local authority or to an approved association or institution, etc. on certain eligible social development project or a scheme, approved by National Committee No deduction shall be available with effect from (i.e. from previous year and Subsequent years). Phasing out deductions This should have been deferred till the time the corporate tax has not been reduced. 35AD w.e.f In case of a cold chain facility, warehousing In case of a cold chain facility, warehousing Phasing out deductions Facility for storage of agricultural produce, anfacility for storage of agricultural produce, affordable housing project, production ofhospital, an affordable housing project, This should have been deferred till the time the fertilizer and hospital weighted deduction of 150production of fertilizer, deduction shall be corporate tax has not been reduced. per cent of capital expenditure (other thanrestricted to 100 per cent of capital expenditure expenditure on land, goodwill and financial w.e.f (i.e. from previous year assets) is allowed. 18 onwards). 35CCC w.e.fweighted deduction of 150 per cent of expenditure incurred on notified agricultural Extension project. 35CCD w.e.f Weighted deduction of 150 per cent on any expenditure incurred (not being expenditure in the nature of cost of any land or building) on any notified skill Development project by a company. Deduction shall be restricted to 100 per centphasing out deductions from (i.e. from previous year onwards). This should have been deferred till the time the corporate tax has not been reduced. Deduction shall be restricted to 100 per cent from (i.e. from previous year Onwards). Phasing out deductions This should have been deferred till the time the corporate tax has not been reduced.

18 36(1)(viia)(d) w.e.f Nil (d) a non-banking financial company, an Deduction of provision for bad and doubtful debts amount not exceeding five per cent. of the total has now been extended to Non-Banking Financial income (computed before making any Companies (NBFCs) in parity with Public Financial deduction under this clause and Chapter VI-A). ; Institutions, State Financial Corporations and State (ii) in the Explanation, after clause (vi), the Industrial Investment Corporations. following clause shall be inserted, namely: (vii) non-banking financial company shall have the meaning assigned to it in clause (f) of section 45-I of the Reserve Bank of India Act, 1934;

19 40(a)(ib) w.e.f Nil any consideration paid or payable to a non-iresident for a specified service on which parallel provision for disallowance of consideration line with the provisions for non-deduction of TDS, equalization levy is deductible under the paid for failure to deduct and deposit equalization provisions of Chapter VIII of the Finance Act, levy has been introduced. 2016, and such levy has not been deducted or after deduction, has not been paid on or before the due date specified in sub-section (1) of section 139: Provided that where in respect of any such consideration, the equalization levy has been deducted in any subsequent year or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such levy has been paid; 43B(g) w.e.f Nil (g) any sum payable by the assesse to the Payment to Railways has been included under Indian Railways for the use of railway assets,. section 43B for the allowance. 44AB(b) w.e.f carrying on profession shall, if his gross receiptsfor the words twenty-five lakh rupees, the Limit for Tax Audit considering Ease of doing in profession exceed twenty-five lakh rupees in words fifty lakh rupees shall be Business any previous year substituted;

20 44AB(e) w.e.f Nil carrying on the business shall, if the provisionstax audit applicable in case assesse is having of sub-section (4) of section 44AD are applicableturnover less than 2 Crores and declares profit less in his case and his income exceeds the than 8% maximum amount which is not chargeable to income-tax in any previous year,

21 44AD w.e.f (1) Notwithstanding anything to the contrary (a) in sub-section (2), the proviso shall be Presumptive taxation is amended as under: contained in sections 28 to 43C, in the case of an omitted; 1. Limit exceeded from 1 Crore to 2 crores eligible assesse engaged in an eligible business, (b) for sub-sections (4) and (5), the following 2. Salary, remuneration to partner shall not be a sum equal to eight per cent of the total sub-sections shall be substituted, namely: deductible turnover or gross receipts of the assesse in the (4) Where an eligible assesse declares profit for 3. TDS provisions shall not apply previous year on account of such business or, as any previous year in accordance with the 4. Advance tax is required to be paid by 15 th the case may be, a sum higher than the provisions of this section and he declares profit March aforesaid sum claimed to have been earned by for any of the five assessment years relevant toin case the assesse declares profit less than specified the eligible assesse, shall be deemed to be the the previous year succeeding such previous yearin the section, he shall not be eligible to claim the profits and gains of such business chargeable to not in accordance with the provisions of sub-benefisection (1), he shall not be eligible to claim the assessment years. of the said provisions for five subsequent tax under the head "Profits and gains of business or profession". benefit of the provisions of this section for five assessment years (2) Any deduction allowable under the subsequent to the assessment year relevant to provisions of sections 30 to 38 shall, for the the previous year in which the profit has not purposes of sub-section (1), be deemed to have been declared in accordance with the provisions been already given full effect to and no further of sub-section (1). deduction under those sections shall be allowed (5) Notwithstanding anything contained in the : foregoing provisions of this section, an eligible assesse to whom the provisions of sub-section Provided that where the eligible assesse is a(4) are applicable and whose total income firm, the salary and interest paid to its partnersexceeds the maximum amount which is not shall be deducted from the income computed chargeable to income-tax, shall be required to under sub-section (1) subject to the conditionskeep and maintain such books of account and and limits specified in clause (b) of section 40. other documents as

22 (3) The written down value of any asset of an required under sub-section (2) of section eligible business shall be deemed to have been 44AA and get them audited and furnish a report calculated as if the eligible assesse had claimed of such audit as required under section 44AB. ; and had been actually allowed the deduction in (c) in the Explanation, in clause (b), in sub-clause respect of the depreciation for each of the (ii), for the words one crore rupees occurring relevant assessment years. at the end, the words two crore rupees shall be substituted. (4) The provisions of Chapter XVII-C shall not apply to an eligible assesse in so far as they relate to the eligible business.(5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assesse who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.(6) The provisions of this section, notwithstanding anything contained in the foregoing provisions, shall not apply to (i) a person carrying on profession as referred to in sub-section (1) of section 44AA;(ii) a person earning income in the nature of commission or brokerage; or(iii) a person carrying on any agency business.

23 44ADA w.e.f Nil Notwithstanding anything contained in sections Introduction of Presumptive taxation 50% of Gross 28 to 43C, in the case of an assesse, being a receipts for professionals. resident in India, who is engaged in a profession referred to in sub-section (1) of section 44AA and whose total gross receipts do not exceed fifty lakh rupees in a previous year, a sum equal to fifty per cent. of the total gross receipts of the assesse in the previous year on account of such profession or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the assesse, shall be deemed to be the profits and gains of such profession chargeable to tax under the head Profits and gains of business or profession. (2) Any deduction allowable under the provisions of sections 30 to 38 shall, for the purposes of sub-section (1), be deemed to have been already given full effect to and no further deduction under those sections shall be allowed.

24 (3) The written down value of any asset used for the purposes of profession shall be deemed to have been calculated as if the assesse had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years. (4) Notwithstanding anything contained in the foregoing provisions of this section, an assesse who claims that his profits and gains from the profession are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (1) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB..

25 47(viic) w.e.f Nil any transfer of Sovereign Gold Bond issued by Exemption has been provided for transfer of the Reserve Bank of India under the Sovereign Gold Bonds Sovereign Gold Bond Scheme, 2015, by way of redemption, by an assesse being an individual 47(xiiib)(ea) Nil the total value of the assets as appearing in theconversion of Company into LLP shall not be books of account of the company in considered as transfer and in addition to existing any of the three previous years preceding theconditions, one more condition has been specified as previous year in which the conversion takes under: place does not exceed five crore rupees; Total value of assets in previous 3 years shall not exceed Rs. 5 Crores.

26 47(xix) w.e.f Nil any transfer by a unit holder of a capital asset, In view of SEBI guidelines for consolidation of Mutual being a unit or units, held by him in the Fund Plans within a scheme, exemption has been consolidating plan of a mutual fund scheme, proposed for merger or consolidation for different made in consideration of the allotment to him plans in a scheme. of a capital asset, being a unit or units, in the consolidated plan of that scheme of the mutual fund. Explanation. For the purposes of this clause, (a) consolidating plan means the plan within a scheme of a mutual fund which merges under the process of consolidation of the plans within a scheme of mutual fund in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 made under the Securities and Exchange Board of India Act, 1992; (b) consolidated plan means the plan with which the consolidating plan merges or which is formed as a result of such merger; (c) mutual fund means a mutual fund specified under clause (23D) of section 10..

27 Proviso to Provided also that nothing contained in theprovided also that nothing contained in the Indexation benefit to Long term Capital Gains on Section 48 w.e.f second proviso shall apply to the long-termsecond proviso shall apply to the long-termtransfer of Sovereign Gold Bonds has been extended capital gain arising from the transfer of a long-capitaterm capital asset being bond or debenture gain arising from the transfer of a long-termproposed to Nonresident Investor who bears risk of Also, exemption from Capital Gains is being other than capital indexed bonds issued by thecapital asset, being a bond or debenture othercurrency fluctuation on Rupee denominated bonds Government : than issued outside India. (a) capital indexed bonds issued by the Government; or (b) Sovereign Gold Bond issued by the Reserve Bank of India under the Sovereign Gold Bond Scheme, 2015: Provided also that in case of an assesse being a non-resident, any gains arising on account of appreciation of rupee against a foreign currency at the time of redemption of rupee denominated bond of an Indian company subscribed by him, shall be ignored for the purposes of computation of full value of consideration under this section:.

28 50C w.e.f Nil Provided that where the date of the agreementclarification has been issued as per fixing the amount of consideration and the daterecommendations of Esawar Committee that in case of registration for the transfer of the capitalthe date of Agreement and Date of Registration are asset are not the same, the value adopted ornot same then the stamp duty value on the date of assessed Agreement may be considered for full value of or assessable by the stamp valuation authorityconsideration, subject to the condition that on the date of agreement may be taken for the consideration or part thereof has been received by purposes of computing full value of Account payee cheque or bank draft. consideration for such transfer: Provided further that the first proviso shall apply only in a case where the amount of consideration, or a part thereof, has been received by way of an account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account, on or before the date of the agreement for transfer..

29 54EE w.e.f Nil (1) Where the capital gain arises from theexemption from Capital Gains of Long Term asset transfer of a long-term capital asset (herein in under Start up Scheme if invested in Long Term this section referred to as the original asset) andspecified asset. the assesse has, at any time within a period of six months after the date of such transfer, invested the whole or any part of capital gains in the long-term specified asset, the capital gain shall be dealt with in accordance with the following provisions of this section, namely: (a) if the cost of the long-term specified asset is not less than the capital gain arising from the transfer of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the long-term specified asset is less than the capital gain arising from the transfer of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of acquisition of the long-term specified asset bears to the whole of the capital gain, shall not be charged under section 45: Provided that the investment made on or after the 1st day of April, 2016, in the long-term specified asset by an assesse during any financial year does not exceed fifty lakh rupees:

30 Provided further that the investment made by an assesse in the long-term specified asset, from capital gains arising from the transfer of one or more original assets, during the financial year in which the original asset or assets are transferred and in the subsequent financial year does not exceed fifty lakh rupees. (2) Where the long-term specified asset is transferred by the assesse at any time within a period of three years from the date of its acquisition, the amount of capital gains arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such long-term specified asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1) shall be deemed to be the income chargeable under the head Capital gains relating to longterm capital asset of the previous year in which the long-term specified asset is transferred. Explanation 1. In a case where the original asset is transferred and the assesse invests the whole or any part of the capital gain received or accrued as a result of transfer of the original asset in any long-term specified asset and such assesse takes any loan or advance on the security of such specified asset, he shall be

31 transferred such specified asset on the date on which such loan or advance is taken. Explanation 2. For the purposes of this section, (a) cost, in relation to any long-term specified asset, means the amount invested in such specified asset out of capital gains received or accruing as a result of the transfer of the original asset; (b) long-term specified asset means a unit or units, issued before the 1st day of April, 2019, of such fund as may be notified by the Central Government in this behalf. 56(2)(vii)(h) w.e.f Nil by way of transaction not regarded as transferto bring parity, shares received by individual or HUF under clause (vicb) or clause (vid) or in excess of Rs, 50,000/- as a consequence of clause (vii) of section 47. demerger or amalgamation shall not be treated as Income under other sources. Proviso to Nil Section 80CCD w.e.f Provided that the amount received by the On death of assesse, 100% Deduction from amount nominee, on the death of the assesse, under the received under national Pension Scheme(NPS) circumstances referred to in clause (a), shall not be deemed to be the income of the nominee.

32 80EE w.e.f (1) In computing the total income of an assesse, (1) In computing the total income of an assesse, Incentive for First home buyers of Rs. 50,000/- for being an individual, there shall be deducted, in being an individual, there shall be interest in addition to interest deduction of Rs. 2 accordance with and subject to the provisions of deducted, in accordance with and subject to thelakhs for self-occupied property. this section, interest payable on loan taken by provisions of this section, interest payable on him from any financial institution for the loan taken by him from any financial institution purpose of acquisition of a residential house for the purpose of acquisition of a residential property. property. (2) The deduction under sub-section (1) shall (2) The deduction under sub-section (1) shall not not exceed fifty thousand rupees and shall be exceed one lakh rupees and shall be allowed in allowed in computing the total income of the computing the total income of the individual for individual for the assessment year beginning on the assessment year beginning on the 1st day ofthe 1 st day of April, 2017 and subsequent April, 2014 and in a case where the interestassessment years. payable for the previous year relevant to the (3) The deduction under sub-section (1) shall be said assessment year is less than one lakhsubject to the following conditions, namely: rupees, the balance amount shall be allowed in(i) the loan has been sanctioned by the financial the assessment year beginning on the 1st day ofinstitution during the period beginning on the April, st day of April, 2016 and ending on the 31st day of March, 2017; (ii) the amount of loan sanctioned for acquisition of the residential house property does not exceed thirty-five lakh rupees; (iii) the value of residential house property does not exceed fifty lakh rupees; (iv) the assesse does not own any residential house property on the date of sanction of loan.

33 (3) The deduction under sub-section (1) shall be 4) Where a deduction under this section is subject to the following conditions, namely: allowed for any interest referred to in subsection (1), deduction shall not be allowed in (i) the loan has been sanctioned by the financial institution during the period beginning respect of such interest under any other on the 1st day of April, 2013 and ending on the provision of this Act for the same or any other 31st day of March, 2014; assessment year. (5) For the purposes of this section, (ii) the amount of loan sanctioned for (a) financial institution means a banking acquisition of the residential house propertycompany to which the Banking Regulation Act, does not exceed twenty-five lakh rupees; 1949 applies, or any bank or banking institution referred to in section 51 of that Act or a housing (iii) the value of the residential house propertyfinance company; does not exceed forty lakh rupees; (b) housing finance company means a public company formed or registered in India with the (iv) the assesse does not own any residential main object of carrying on the business of house property on the date of sanction of the providing long-term finance for construction or loan. purchase of houses in India for residential (4) Where a deduction under this section is allowed for any interest referred to in subsection (1), deduction shall not be allowed in respect of such interest under any other provisions of the Act for the same or any other assessment year. (5) For the purposes of this section, (a) "financial institution" means 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 purposes

34 (b) "housing finance company" means a public company formed or registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes.

35 80GG w.e.f In computing the total income of an assesse, notin computing the total income of an assesse, not Limit for deduction for rent paid increased from Rs being an assesse having any income falling being an assesse having any income falling 2,000 to 5,000- Relief to Individual Tax Payers. within clause (13A) of section 10, there shall bewithin clause (13A) of section 10, there shall be deducted any expenditure incurred by him in deducted any expenditure incurred by him in excess of ten per cent of his total incomeexcess of ten per cent of his total income towards payment of rent (by whatever name towards payment of rent (by whatever name called) in respect of any furnished or called) in respect of any furnished or unfurnished accommodation occupied by him unfurnished accommodation occupied by him for the purposes of his own residence, to thefor the purposes of his own residence, to the extent to which such excess expenditure does extent to which such excess expenditure does not exceed two thousand rupees per month or not exceed five thousand rupees per month or twenty-five per cent of his total income for the twenty-five per cent of his total income for the year, whichever is less, and subject to suchyear, whichever is less, and subject to such other conditions or limitations as may be other conditions or limitations as may be prescribed54, having regard to the area or place prescribed54, having regard to the area or place in which such accommodation is situated andin which such accommodation is situated and other relevant considerations : other relevant considerations : Provided that nothing in this section shall apply Provided that nothing in this section shall apply to an assesse in any case where any residentialto an assesse in any case where any residential accommodation is accommodation is (i) owned by the assesse or by his spouse or (i) owned by the assesse or by his spouse or minor child or, where such assesse is a member minor child or, where such assesse is a member of a Hindu undivided family, by such family at of a Hindu undivided family, by such family at the place where he ordinarily resides or the place where he ordinarily resides or performs duties of his office or employment or performs duties of his office or employment or carries on his business or profession; or carries on his business or profession; or

36 (ii) owned by the assesse at any other place, (ii) owned by the assesse at any other place, being accommodation in the occupation of the being accommodation in the occupation of the assesse, the value of which is to be determined assesse, the value of which is to be determined under clause (a) of sub-section (2) or, as theunder clause (a) of sub-section (2) or, as the case may be, clause (a) of sub-section (4) of case may be, clause (a) of sub-section (4) of section 23. section 23. Explanation. In this section, the expressions Explanation. In this section, the expressions "ten per cent of his total income" and "twenty-"tefive per cent of his total income" shall mean ten five per cent of his total income" shall mean ten per cent of his total income" and "twenty- per cent or twenty-five per cent, as the case per cent or twenty-five per cent, as the case may be, of the assessee's total income beforemay be, of the assessee's total income before allowing deduction for any expenditure under allowing deduction for any expenditure under this section. this section. 80IA w.e.f development, operation and maintenance of an insfrastructure facility (80-IA) 100 per cent profit linked deductions for specified period on eligible business carried on by industrial undertakings or enterprises referred in section 80IA; 80IAB, and 80IB. No deduction shall be available if the specified activity commences on or after 1st day April, (i.e. from previous year and subsequent years). It is the promissory estoppel and it will add to litigation since Section 51 of the SEZ act, 2005 has not been amended which has the overriding effect over Income Tax Act, 1961

37 80IAB w.e.f development of special economic zone (80-IAB) 100 per cent profit linked deductions for specified period on eligible business carried on by industrial undertakings or enterprises referred in section 80IA; 80IAB, and 80IB. No deduction shall be available if the specified activity commences on or after 1st day April, (i.e. from previous year and subsequent years). Phasing out deductions

38 80IAC w.e.fnil (1) Where the gross total income of an assesse, Deduction for Business under Start Up Action Plan being an eligible start-up, includes any profitsi.e. 100% deduction for Units which is set up prior to and gains derived from eligible business, there and holds eligibility certificate. shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assesse, a deduction of an amount equal to one hundred per cent. of the profits and gains derived from such business for three consecutive assessment years. (2) The deduction specified in sub-section (1) may, at the option of the assesse, be claimed by him for any three consecutive assessment years out of five years beginning from the year in which the eligible start-up is incorporated. (3) This section applies to a start-up which fulfills the following conditions, namely: (i) it is not formed by splitting up, or the reconstruction, of a business already in existence: Provided that this condition shall not apply in respect of a start-up which is formed as a result of the re-establishment, reconstruction or revival by the assesse of the business of any such undertaking as referred to in section 33B, in the circumstances and within the period specified in that section;

39 (ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose. Explanation 1. For the purposes of this clause, any machinery or plant which was Used outside India by any person other than the assesse shall not be regarded as machinery or plant previously used for any purpose, if all the following conditions are fulfilled, namely: (a) such machinery or plant was not, at any time previous to the date of the installation By the assesse, used in India; (b) such machinery or plant is imported into India; (c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assesse. Explanation 2. Where in the case of a start-up, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent.

40 Of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with. (4) The provisions of sub-section (5) and subsections (7) to (11) of section 80-IA shall apply to the start-ups for the purpose of allowing deductions under sub-section (1). Explanation. For the purposes of this section, (i) eligible business means a business which involves innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property; (ii) eligible start-up means a company engaged in eligible business which fulfills the following conditions, namely: (a) it is incorporated on or after the 1st day of April, 2016 but before the 1st day of April, 2019; (b) the total turnover of its business does not exceed twenty-five crore rupees in any of the previous years beginning on or after the 1st day of April, 2016 and ending on the 31st day of March, 2021; and (c) it holds a certificate of eligible business from the Inter-Ministerial Board of Certification as notified in the Official Gazette by the Central