© The Institute of Chartered Accountants of India

ii

This Study Material has been prepared by the faculty of the Board of Studies
(Academic). The objective of the Study Material is to provide teaching material to
the students to enable them to obtain knowledge in the subject. In case students
need any clarification or have any suggestion for further improvement of the
material contained herein, they may write to the Director of Studies.
All care has been taken to provide interpretations and discussions in a manner
useful for the students. However, the Study Material has not been specifically
discussed by the Council of the Institute or any of its committees and the views
expressed herein may not be taken to necessarily represent the views of the
Council or any of its Committees.
Permission of the Institute is essential for reproduction of any portion of this
material.

© THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

All rights reserved. No part of this book may be reproduced, stored in a retrieval
system, or transmitted, in any form, or by any means, electronic, mechanical,
photocopying, recording, or otherwise, without prior permission, in writing, from the
publisher.

Basic draft of this publication was prepared by CA. Vandana D Nagpal

Edition : June, 2023

Committee/Department : Board of Studies (Academic)

E-mail : [email protected]

Website : www.icai.org

Price : ` /- (For All Modules)

ISBN No. : 978-81-19472-00-0

Published by : The Publication & CDS Directorate on behalf of

The Institute of Chartered Accountants of India,
ICAI Bhawan, Post Box No. 7100,
Indraprastha Marg, New Delhi 110 002 (India)

Printed by :

© The Institute of Chartered Accountants of India

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BEFORE WE BEGIN…..

BoS (Academic) – Value added Study Materials

The Board of Studies (Academic) is the department which serves as the Institute’s
interface with its students. BoS (Academic) leaves no stone unturned to provide
the best-in-class services to you in terms of value-added study materials wherein
the concepts and provisions are explained in lucid language with illustrations and
examples to aid understanding the application of concepts and provisions. Test
Your Knowledge Questions at the end of each chapter contain questions which
will hone your analytical skills. BoS (Academic) also publishes Revision Test Papers
to assist you in revising your concepts and updating yourself and Mock Test Papers
to enable you to assess your level of preparedness for the examination.

Professional Knowledge and Skills required at Intermediate Level

At the Intermediate Level, you are expected to not only acquire professional
knowledge but also the ability to apply such knowledge in problem solving. The
process of learning should also help you inculcate the requisite professional skills,
i.e., the intellectual skills and communication skills, necessary for achieving the
desired professional competence.

Significant Components of Income-tax Law

Taxation is one of the core competence areas of chartered accountants. The

subject of “Taxation” at the Intermediate level is divided into two sections, namely,
Section A: Income-tax law and Section B: Goods and Services Tax. Income-tax is a
direct tax i.e., it is a tax levied directly on the income of a person. Income-tax law,
at the Intermediate level, largely involves application of provisions of the Income-
tax Act, 1961 in problem solving. The tax laws of the country undergo significant
changes every year on the passing of the Finance Act of that year. Apart from these
significant amendments ushered in every year through the Finance Act,
notifications and circulars are also issued from time to time by the Central Board
of Direct Taxes (CBDT), the statutory authority in charge with the administration
of direct taxes, to implement the provisions of the Act and clarify issues regarding
the meaning and scope of certain provisions. Thus, the Income-tax Act, 1961, the

© The Institute of Chartered Accountants of India

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Income-tax Rules, 1962, circulars and notifications issued by the CBDT are the
significant components of income-tax law.
Scope of Coverage of the subject – Read the Syllabus along with Study
Guidelines

The syllabus of the subject “Income-tax law” has to be read along with the Study
Guidelines which would be webhosted separately. The Study Guidelines specify
the topic-wise exclusions from the syllabus. The provisions of the excluded
sections are not discussed in the Study Material. However, a reference may have
been made to these sections at certain places either by way of a footnote or
otherwise, wherever required. As regards section 10, the Study Guidelines specify
the topic-wise inclusions.

Know the relevant Finance Act and Assessment Year applicable for Examination

This Study Material on Income-tax law is based on the provisions of income-tax

law as amended by the Finance Act, 2023, and the significant notifications and
circulars issued and legislative amendments made upto 30th April, 2023. The
computational problems have been solved on the basis of the provisions of
income-tax law applicable for A.Y.2024-25. The Study Material is, therefore,
relevant for May, 2024 and November, 2024 examinations. The amendments made
by the Finance Act, 2023, latest notifications/circulars are indicated in italics/bold
italics in the Study Material.
The significant notifications/circulars issued and other legislative amendments, if
any, made between 1.5.2023 and 31.10.2023, relevant for May, 2024 examination,
will be webhosted as Statutory Update for May, 2024 examination at the BoS
Knowledge Portal. Likewise, the significant notifications/circulars issued and other
legislative amendments, if any, made between 1.5.2023 and 30.4.2024, relevant for
November, 2024 examination, will be webhosted as Statutory Update for
November, 2024 examination at the BoS Knowledge Portal.

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Framework of the Study Material – Two Modules with Five Sections comprising
of Nine Chapters

Efforts have been made to present the complex law of income-tax in a lucid
manner. Care has been taken to present the chapters in a logical sequence to
facilitate easy understanding by the students. The nine Chapters in the Study
Material are grouped into five Sections, namely, Sections I to V and weightages
are assigned to each Section. The Section-wise weightages and Skill-wise
weightages would be webhosted separately at the BOS Knowledge Portal. The
Study Material is divided into two modules - Module 1 comprises of chapters
covered in Sections I and II and Module 2 comprises of chapters covered in
Sections III, IV and V.

Module Section Chapters

1 Section I Chapter 1 Basic Concepts

Chapter 2 Residential Status and Scope of Total

Income

Section II Chapter 3 Heads of Income

2 Section III Chapter 4 Income of other persons included in

assessee’s total income

Chapter 5 Aggregation of Income, Set-off and Carry

Forward of Losses

Chapter 6 Deductions from Gross Total Income

Section IV Chapter 7 Advance Tax, Tax Deduction at Source and

Tax Collection at Source

Chapter 8 Provisions for filing Return of Income and

Self-assessment

Section V Chapter 9 Income-tax Liability - Computation and

Optimisation

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Special features of the Study Material – Section Overview, Scenario and

Crossword Puzzle

Each of the five Sections begin with a Section Overview followed by an interesting
Scenario. Crossword Puzzles have been included in Sections I to IV. These are the
special features of this Study Material.

Elements of About each Element

each Section

1. Section In order to ensure that you have an enhanced learning

Overview experience, Overview of each Section is given before the
chapters in that section. The Section Overview contains a
broad description of the provisions which would be
covered in the chapters comprised therein.

2. Scenario In each Section, learning commences with a Scenario which

is essentially a story which is later divided into components
and "Points to Ponder" are raised in respect of each
component thereof to instill curiosity and interest in you.
After reading the Scenario and the “Points to Ponder”
raised in respect thereof, you are expected to read the
chapters in that Section, analyze the tax consequences and
write your responses in the space provided in the last
column of the table against the respective Scenario
component. By relating the various components of the
Scenario to the relevant provisions of income-tax law, you
would be able to grasp the provisions quickly and
appreciate the application of the provisions in different
situations.

The Scenario in Section V comprising of “Chapter 9

Income-tax Liability – Computation and Optimisation”
requires integration of your learning in the first eight
chapters to compute the total income and tax liability of
an individual under the alternative tax regimes by filling up
the blank spaces in the income computation sheet and tax
computation sheet forming part thereof. Thereafter, based
on the computation, you are required to write your
response as to which tax regime is more beneficial for the

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individual. Through this exercise, you will be able to

effectively comprehend the manner of computation of
total income and tax liability under the alternative tax
regimes.

3. Crossword There is no doubt that use of gamification will make

Puzzle learning more interesting. In order to make learning of
income-tax law more engaging and enjoyable, Crossword
puzzles have been included in Sections I to IV, which you
have to solve after reading the Chapters in the Section.

Framework of Chapters – Uniform Structure comprising of specific components

The various chapters/units of each subject at the Intermediate level have been
structured uniformly and comprises of the following components:

Components of About the component

each Chapter

1. Learning Learning outcomes which you need to demonstrate after

Outcomes learning each topic have been detailed in the first page of
each chapter/unit. Demonstration of these learning
outcomes would help you to achieve the desired level of
technical competence

2. Chapter As the name suggests, the flow chart/table/diagram given

Overview at the beginning of each chapter would give a broad
outline of the contents covered in the chapter.

3. Proforma for Chapter 3 Heads of Income has five units, each unit dealing
computation of with a particular head of income. Units 1,3,4 and 5 begin
income under with a detailed proforma for computation of income under
different heads that head. The proforma has been given separately for
computation under the default tax regime and optional tax
regime in Units 1 and 3.

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4. Content The concepts and provisions of income-tax law are

explained in a student-friendly manner with the aid of
examples/illustrations/diagrams/flow charts. Diagrams
and Flow charts would help you understand and retain the
concept/provision learnt in a better manner. Examples and
illustrations would help you understand the application of
concepts/provisions. These value additions would, thus,
help you develop conceptual clarity and get a good grasp
of the topic.

5. Let us A summary of the chapter is given at the end to help you

Recapitulate revise what you have learnt. It would especially facilitate
quick revision of the chapter the day before the
examination.

6. Test Your The questions and answers at the end of each chapter
Knowledge would help you to apply what you have learnt in problem
solving, and, thus, sharpen your application skills. In effect,
it would test your understanding of concepts/provisions as
well as your ability to apply the concepts/provisions learnt
in solving problems and addressing issues.

We hope that these student-friendly features in the Study Material makes your
learning process more enjoyable, enriches your knowledge and sharpens your
application skills.
Happy Reading and Best Wishes!

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SYLLABUS

PAPER – 3 : TAXATION
(One paper ─ Three hours – 100 Marks)

SECTION A: INCOME TAX LAW (50 MARKS)

Objective:
(a) To develop an understanding of the provisions of income-tax law
(b) To acquire the ability to apply such provisions to solve problems and address
application-oriented issues.
Contents:
1. Basic Concepts
(i) Income-tax law: An introduction
(ii) Significant concepts in income-tax law, including person, assessee,
previous year, assessment year, income, agricultural income
(iii) Basis of Charge
(iv) Procedure for computation of total income and tax payable in case of
individuals
2. Residential status and scope of total income
(i) Residential status
(ii) Scope of total income
3. Heads of income and the provisions governing computation of income
under different heads
(i) Salaries
(ii) Income from house property
(iii) Profits and gains of business or profession
(iv) Capital gains
(v) Income from other sources

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4. Provisions relating to clubbing of income, set-off or carry forward and set-

off of losses, deductions from gross total income
5. Advance Tax, Tax deduction at source and tax collection at source
6. Provisions for filing return of income and self-assessment
7. Computation of total income and income-tax payable by an individual under
the alternative tax regimes under the Income-tax Act, 1961 to optimise tax
liability
Note: If any new legislation(s) are enacted in place of an existing legislation(s), the
syllabus will accordingly include the corresponding provisions of such new
legislation(s) in the place of the existing legislation(s) with effect from the date to
be notified by the Institute. Similarly, if any existing legislation(s) on income tax
law ceases to be in force, the syllabus will accordingly exclude such legislation(s)
with effect from the date to be notified by the Institute.
Further, the specific inclusions/exclusions in any topic covered in the syllabus will
be effected by way of Study Guidelines every year, if required. Specific
inclusions/exclusions in a topic may also arise due to additions/deletions made
every year by the Annual Finance Act.

SECTION B: GOODS AND SERVICES TAX (50 MARKS)

Objective:
(a) To develop an understanding of the provisions of goods and services tax
law.
(b) To acquire the ability to apply such provisions to address/solve issues in
moderately complex scenarios.
Contents:
1. GST Laws: An introduction including Constitutional aspects
2. Levy and collection of CGST and IGST
(i) Application of CGST/IGST law
(ii) Concept of supply including composite and mixed supplies
(iii) Charge of tax including reverse charge
(iv) Exemption from tax
(v) Composition levy

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3. Basic concepts of:

(i) Classification
(ii) Place of supply
(iii) Time of supply
(iv) Value of supply
(v) Input tax credit
4. Computation of GST liability
5. Registration
6. Tax invoice; Credit and Debit Notes; Electronic way bill
7. Accounts and Records
8. Returns
9. Payment of tax
Note – If any new legislation(s) is enacted in place of an existing legislation(s), the
syllabus will accordingly include the corresponding provisions of such new
legislation(s) in place of the existing legislation(s) with effect from the date to be
notified by the Institute. Similarly, if any existing legislation ceases to have effect,
the syllabus will accordingly exclude such legislation with effect from the date to
be notified by the Institute. Students shall not be examined with reference to any
particular State GST Law.
Consequential/corresponding amendments made in the provisions of the Goods
and Services Tax laws covered in the syllabus of this paper which arise out of the
amendments made in the provisions not covered in the syllabus will not form part
of the syllabus. Further, the specific inclusions/exclusions in the various topics
covered in the syllabus will be effected every year by way of Study Guidelines. The
specific inclusions/exclusions may also arise due to additions/ deletions every year
by the annual Finance Act.

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CONTENTS

MODULE - 1
Chapter 1 : Basic Concepts
Chapter 2 : Residence and Scope of Total Income
Chapter 3 : Heads of Income

MODULE – 2
Chapter 4 : Income of Other Persons included in Assessee’s Total Income
Chapter 5 : Aggregation of Income, Set-off and Carry Forward of Losses
Chapter 6 : Deductions from Gross Total Income
Chapter 7 : Advance Tax, Tax Deduction at Source and Tax
Collection at Source
Chapter 8 : Provisions for filing Return of Income and Self-assessment
Chapter 9 : Income-tax Liability - Computation and Optimisation

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DETAILED CONTENTS: MODULE – 1

SECTION I............................................................................................................ 1 – 12

Overview ..................................................................................................................... 1

Scenario ..................................................................................................................... 2

Crossword Puzzle ..................................................................................................... 10

CHAPTER – 1: BASIC CONCEPTS

Learning Outcomes ......................................................................................................................... 1.1

Chapter Overview ............................................................................................................................. 1.3

Contents:

1. Introduction............................................................................................................................ 1.4

1.1 What is the meaning of tax? ............................................................................. 1.4

1.2 Why are taxes levied? .......................................................................................... 1.4

1.3 Power to levy taxes ............................................................................................... 1.5

1.4 Overview of Income-tax law in India ............................................................. 1.5

2. Charge of Income-tax ..................................................................................................... 1.10

3. Important Definitions ....................................................................................................... 1.20

3.1 Assessee [Section 2(7)] ...................................................................................... 1.21

3.2 Assessment [Section 2(8)] ................................................................................ 1.21

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3.3 Person [Section 2(31)] ....................................................................................... 1.22

3.4 Income [Section 2(24)] ...................................................................................... 1.28

3.5 India [Section 2(25A)] ........................................................................................ 1.34

3.6 Agricultural Income [Section 2(1A)] ............................................................. 1.35

4. Previous Year and Assessment Year............................................................................ 1.45

4.1 Assessment year [Section 2(9)] ...................................................................... 1.45

4.2 Previous year [Section 3] .................................................................................. 1.46

4.3 Certain cases when income of a previous year

will be assessed in the previous year itself ................................................ 1.46

5. Undisclosed source of Income ...................................................................................... 1.48

6. Rates of Tax, Surcharge & Cess .................................................................................... 1.51

6.1 Individual/HUF/AoP/BoI/Artificial Juridical Person ................................ 1.51

6.2 Firm/LLP/Local authority .................................................................................. 1.75

6.3 Co-operative Society.......................................................................................... 1.76

6.4 Domestic Company ........................................................................................... 1.78

6.5 Foreign Company .............................................................................................. 1.79

7. Rebate for Resident Individuals [Section 87A] ........................................................ 1.80

8. Partial integration of agricultural income

with non agricultural income ................................................................................ 1.83

Let us Recapitulate ......................................................................................................................... 1.88

Test Your Knowledge .................................................................................................................... 1.95

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CHAPTER – 2: RESIDENCE AND SCOPE OF TOTAL INCOME

Learning Outcomes ......................................................................................................................... 2.1

Chapter Overview ............................................................................................................................. 2.2

Contents:

1. Residential Status [Section 6] .......................................................................................... 2.3

1.1 Residential status of Individuals ...................................................................... 2.4

1.2 Residential status of HUF ................................................................................. 2.11

1.3 Residential status of firms, AoPs and BoIs ................................................. 2.14

1.4 Residential status of companies .................................................................... 2.15

1.5 Residential status of local authorities and

artificial juridical persons ........................................................................ 2.15

2. Scope of Total Income ..................................................................................................... 2.15

2.1 Meaning of “Income received or deemed to be received” ................. 2.19

2.2 Meaning of income ‘accruing’ and ‘arising’ .............................................. 2.19

2.3 Income deemed to accrue or arise in India [Section 9] ........................ 2.20

Let us Recapitulate ......................................................................................................................... 2.34

Test Your Knowledge .................................................................................................................... 2.37

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SECTION II .......................................................................................................... 1 – 17

Overview ..................................................................................................................... 1
Scenario ..................................................................................................................... 3
Crossword Puzzle-I .................................................................................................. 13

Crossword Puzzle-II ................................................................................................. 15

CHAPTER – 3: HEADS OF INCOME

UNIT 1 : SALARIES

Learning Outcomes ......................................................................................... 3.1

Proforma for computation of income under the head “Salaries” as per
default tax regime under section 115BAC ..................................................... 3.2
Proforma for computation of income under the head “Salaries” under
the optional tax regime (i.e., the normal provisions of the Act) ................. 3.6
Proforma for computation of income under the head “Salaries” under
optional tax regime taking Salaries computed as per default tax
regime under section 115BAC as the starting point ...................................3.10

Contents:

1.1 Introduction. ............................................................................................................ 3.12

1.2 Basis of Charge [Section 15] ................................................................................ 3.17

1.3 Salary, Perquisite and Profits in lieu of Salary [Section 17] ........................ 3.18

1.4 Deductions from Salary [Section 16]................ ...............................................3.101

1.5. Relief under section 89 ...................................................................................... 3.105

Let us Recapitulate ......................................................................................................... 3.108

Test Your Knowledge .................................................................................................... 3.120

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UNIT 2 : INCOME FROM HOUSE PROPERTY

Learning Outcomes ........................................................................................................ 3.135

Contents:

2.1 Chargeability [Section 22] ................................................................................. 3.136

2.2 Conditions for Chargeability ............................................................................ 3.136

2.3 Composite Rent ................................................................................................... 3.138

2.4 Income from house property situated outside India................................. 3.139

2.5 Determination of Annual Value [Section 23] ............................................... 3.139

2.6 Deductions from Annual Value [Section 24] ................................................ 3.146

2.7 Computation of “Income from house property” for different

categories of property ...................................................................................... 3.151

2.8 Inadmissible Deductions [Section 25]............................................................ 3.164

2.9 Provision for Arrears of Rent and Unrealized Rent received

subsequently [Section 25A] .............................................................................. 3.164

2.10 Treatment of income from Co-owned Property [Section 26] ................. 3.166

2.11 Deemed Ownership [Section 27] .................................................................... 3.168

Let us Recapitulate................................................ ....................... ....................................3.170

Test Your Knowledge .................................................................................................... 3.175

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UNIT 3 : PROFITS AND GAINS OF BUSINESS OR PROFESSION

Learning Outcomes............................................................................................. 3.185

Proforma for computation of income under head “Profits and

Gains of Business or Profession” under default tax regime
under section 115BAC ....................................................................................... 3.186

Proforma for computation of income under head “Profits and

Gains of Business or Profession” under optional tax regime taking
business income computed under default tax regime
under section 115BAC as the starting point .................................................... 3.189

Contents:

3.1 Meaning of ‘Business’ and ‘Profession’ ......................................................... 3.192

3.2 Method of Accounting ....................................................................................... 3.193

3.3 Income chargeable under this Head [Section 28] ...................................... 3.195

3.4 Speculation Business...................................... ..................................... .................3.198

3.5 Computation of Profits and Gains from

Business or Profession [Section 29]................................................................ 3.200

3.6 Admissible Deductions [Sections 30 to 37]............... ................ ....................3.201

3.7 Inadmissible Deductions [Section 40]............................................................ 3.261

3.8 Expenses or Payments Not Deductible in certain

circumstances [Section 40A]............................................................................. 3.272

3.9 Profits chargeable to tax [Section 41] ........................................................... 3.281

3.10 Changes in the Rate of Exchange of Currency [Section 43A].................. 3.282

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3.11 Certain Deductions to be made only on

Actual Payment [Section 43B] .......................................................................... 3.283

3.12 Stamp Duty Value of Land and Building to be taken as the full
value of consideration in respect of transfer [Section 43CA].................. 3.288

3.13 Compulsory Maintenance of Accounts [Section 44AA] ............................ 3.292

3.14 Audit of Accounts of certain persons carrying on business or

profession [Section 44AB] ................................................................................. 3.297

3.15 Special provisions for computing profits and gains of business on

Presumptive Basis [Sections 44AD/ 44ADA/44AE] ..................................... 3.301

3.16 Computation of business income in cases where income is

partly agricultural and partly business in nature ........................................ 3.309

Let us Recapitulate ......................................................................................................... 3.312

Test Your Knowledge .................................................................................................... 3.334

UNIT 4: CAPITAL GAINS

Learning Outcomes............................................................................................. 3.357

Proforma for computation of income under the head “Capital Gains”........ 3.358

Contents:

4.1 Introduction................................................................. ...................................................... 3.361

4.2 Capital Asset....................................................................... ............................................... 3.362

4.3 Short Term and Long Term Capital Assets...................... ..................................... .3.367

4.4 Transfer: What it Means? [Section 2(47)] ............................................................... 3.371

4.5 Scope and year of Chargeability [Section 45] ...................................................... 3.373

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4.6 Capital Gains on distribution of assets by companies in

liquidation [Section 46] ................................................................................................. 3.377

4.7 Capital Gains on Buyback of shares or

specified securities [Section 46A]................................................................................. 3.378

4.8 Transactions not regarded as transfer [Section 47] ........................................... 3.380

4.9 Important Definitions .................................................................................................... 3.386

4.10 Mode of computation of Capital Gains [Section 48]. ........................................ 3.389

4.11 Ascertainment of cost in specified circumstances [Section 49] ..................... 3.393

4.12 Cost of Acquisition [Section 55(2)]. .......................................................................... 3.396

4.13 Cost of Improvement [Section 55(1)] ...................................................................... 3.406

4.14 Computation of Capital Gains in case of Depreciable Assets

[Sections 50 & 50A] ........................................................................................................ 3.407

4.15 Computation of Capital Gains in case of Market

Linked Debentures [Section 50AA] .............................................................................. 3.411

4.16 Capital Gains in respect of Slump Sale [Section 50B]........................................ 3.412

4.17 Deemed Full Value of Consideration for Computing Capital Gains

[Section 50C, 50CA & 50D]............................................................................. ............. 3.418

4.18 Advance money received [Section 51] .................................................................... 3.421

4.19 Exemption of Capital Gains [Sections 54 to 54F] ................................................ 3.422

4.20 Reference to Valuation Officer [Section 55A]................... .................................... 3.435

4.21 Tax on short-term capital gains in respect of equity shares/units of

an equity oriented fund [Section 111A] ................................................................. 3.436

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4.22 Tax on long-term capital gains [Section 112]................................ ....................... 3.437

4.23 Tax on long-term capital gains on certain assets [Section 112A]. ................ 3.439

Let us Recapitulate......................................................................... ............................................. 3.448

Test Your Knowledge................................................................................ ................................. 3.466

UNIT 5: INCOME FROM OTHER SOURCES

Learning Outcomes...................................... ....................................................... 3.481

Proforma for computation of “Income from Other Sources”........................ 3.482

Contents:

5.1 Introduction.................................................... ................................................................... 3.485

5.2 Method of Accounting [Section 145] ...................................................................... 3.486

5.3 Incomes chargeable under this head [Section 56] ............................................. 3.486

5.4 Applicable rate of tax in respect of Casual Income

other than winnings from any online games [Section 115BB] ....................... 3.514

5.5 Applicable rate of tax in respect of winnings from any

online games [Section 115BBJ] .................................................................................. 3.514

5.6 Deductions Allowable [Section 57]........................................ ................................... 3.515

5.7 Deductions Not Allowable [Section 58]........................................ .......................... 3.517

5.8 Deemed Income chargeable to tax [Section 59]......................... ........................ 3.518

Let us Recapitulate......................... ............................................................................................. 3.519

Test Your Knowledge.......................... ....................................................................................... 3.524

© The Institute of Chartered Accountants of India

2/2/24, 1:31 PM Income Tax Department

INCOME-TAX ACT, 1961*

[43 OF 1961]
[AS AMENDED BY FINANCE ACT, 2023]
An Act to consolidate and amend the law relating to income-tax and super-tax
BE it enacted by Parliament in the Twelfth Year of the Republic of India as follows :—
CHAPTER I
PRELIMINARY
Short title, extent and commencement.
1. (1) This Act may be called the Income-tax Act, 1961.
(2) It extends to the whole of India.
(3) Save as otherwise provided in this Act, it shall come into force on the 1st day of April, 1962.

about:blank 1/1
2/2/24, 1:31 PM Income Tax Department

Definitions.
2. In this Act, unless the context otherwise requires,—
(1) "advance tax" means the advance tax payable in accordance with the provisions of Chapter
XVII-C;
(1A) 1"agricultural income"2 means—
(a) any rent or revenue derived from land which is situated in India and is used for
agricultural purposes;
(b) any income derived from such land by—
(i) agriculture; or
(ii) the performance by a cultivator or receiver of rent-in-kind of any process
ordinarily employed by a cultivator or receiver of rent-in-kind to render the
produce raised or received by him fit to be taken to market; or
(iii) the sale by a cultivator or receiver of rent-in-kind of the produce raised or received
by him, in respect of which no process has been performed other than a process of
the nature described in paragraph (ii) of this sub-clause;
(c) any income derived from any building owned and occupied by the receiver of the rent
or revenue of any such land, or occupied by the cultivator or the receiver of rent-in-
kind, of any land with respect to which, or the produce of which, any process
mentioned in paragraphs (ii) and (iii) of sub-clause (b) is carried on :
Provided that—
(i) the building is on or in the immediate vicinity of the land, and is a building which
the receiver of the rent or revenue or the cultivator, or the receiver of rent-in-kind,
by reason of his connection with the land, requires as a dwelling house, or as a
store-house, or other out-building, and
(ii) the land is either assessed to land revenue in India or is subject to a local rate
assessed and collected by officers of the Government as such or where the land is
not so assessed to land revenue or subject to a local rate, it is not situated—
(A) in any area which is comprised within the jurisdiction of a municipality
(whether known as a municipality, municipal corporation, notified area
committee, town area committee, town committee or by any other name) or a
cantonment board and which has a population of not less than ten thousand;
or
(B) in any area within the distance, measured aerially,—
(I) not being more than two kilometres, from the local limits of any
municipality or cantonment board referred to in item (A) and which has a
population of more than ten thousand but not exceeding one lakh; or
(II) not being more than six kilometres, from the local limits of any
municipality or cantonment board referred to in item (A) and which has a
population of more than one lakh but not exceeding ten lakh; or
(III) not being more than eight kilometres, from the local limits of any
municipality or cantonment board referred to in item (A) and which has a
population of more than ten lakh.
Explanation 1.—For the removal of doubts, it is hereby declared that revenue derived from
land shall not include and shall be deemed never to have included any income arising from

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the transfer of any land referred to in item (a) or item (b) of sub-clause (iii) of clause (14) of
this section.
Explanation 2.—For the removal of doubts, it is hereby declared that income derived from
any building or land referred to in sub-clause (c) arising from the use of such building or land
for any purpose (including letting for residential purpose or for the purpose of any business
or profession) other than agriculture falling under sub-clause (a) or sub-clause (b) shall not
be agricultural income.
Explanation 3.—For the purposes of this clause, any income derived from saplings or
seedlings grown in a nursery shall be deemed to be agricultural income.
Explanation 4.—For the purposes of clause (ii) of the proviso to sub-clause (c), "population"
means the population according to the last preceding census of which the relevant figures
have been published before the first day of the previous year;
(1B) "amalgamation", in relation to companies, means the merger of one or more companies with
another company or the merger of two or more companies to form one company (the
company or companies which so merge being referred to as the amalgamating company or
companies and the company with which they merge or which is formed as a result of the
merger, as the amalgamated company) in such a manner that—
(i) all the property of the amalgamating company or companies immediately before the
amalgamation becomes the property of the amalgamated company by virtue of the
amalgamation;
(ii) all the liabilities of the amalgamating company or companies immediately before the
amalgamation become the liabilities of the amalgamated company by virtue of the
amalgamation;
(iii) shareholders holding not less than three-fourths in value of the shares in the
amalgamating company or companies (other than shares already held therein
immediately before the amalgamation by, or by a nominee for, the amalgamated
company or its subsidiary) become shareholders of the amalgamated company by
virtue of the amalgamation,
otherwise than as a result of the acquisition of the property of one company by another
company pursuant to the purchase of such property by the other company or as a result of the
distribution of such property to the other company after the winding up of the first-mentioned
company;
(1C) "Additional Commissioner" means a person appointed to be an Additional Commissioner of
Income-tax under sub-section (1) of section 117;
(1D) "Additional Director" means a person appointed to be an Additional Director of Income-tax
under sub-section (1) of section 117;
(2) "annual value", in relation to any property, means its annual value as determined under
section 23;
(3) [***]
(4) "Appellate Tribunal" means the Appellate Tribunal constituted under section 252 ;
(5) "approved gratuity fund" means a gratuity fund which has been and continues to be approved
by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or
Commissioner in accordance with the rules contained in Part C of the Fourth Schedule;
(6) "approved superannuation fund" means a superannuation fund or any part of a
superannuation fund which has been and continues to be approved by the Principal Chief
Commissioner or Chief Commissioner or Principal Commissioner or Commissioner in
accordance with the rules contained in Part B of the Fourth Schedule;
(7) "assessee" means a person by whom any tax or any other sum of money is payable under this
Act, and includes—
(a) every person in respect of whom any proceeding under this Act has been taken for the
assessment of his income or assessment of fringe benefits or of the income of any other
person in respect of which he is assessable, or of the loss sustained by him or by such
other person, or of the amount of refund due to him or to such other person;
(b) every person who is deemed to be an assessee under any provision of this Act;
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(c) every person who is deemed to be an assessee in default under any provision of this
Act;
(7A) "Assessing Officer" means the Assistant Commissioner or Deputy Commissioner or
Assistant Director or Deputy Director or the Income-tax Officer who is vested with the
relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-
section (2) of section 120 or any other provision of this Act, and the Additional
Commissioner or Additional Director or Joint Commissioner or Joint Director who is
directed under clause (b) of sub-section (4) of that section to exercise or perform all or any of
the powers and functions conferred on, or assigned to, an Assessing Officer under this Act ;
(8) "assessment" includes reassessment ;
(9) "assessment year" means the period of twelve months commencing on the 1st day of April
every year ;
(9A) "Assistant Commissioner" means a person appointed to be an Assistant Commissioner of
Income-tax or a Deputy Commissioner of Income-tax under sub-section (1) of section 117 ;
(9B) "Assistant Director" means a person appointed to be an Assistant Director of Income-tax
under sub-section (1) of section 117 ;
(10) "average rate of income-tax" means the rate arrived at by dividing the amount of income-tax
calculated on the total income, by such total income ;
(11) "block of assets" means a group of assets falling within a class of assets comprising—
(a) tangible assets, being buildings, machinery, plant or furniture ;
(b) intangible assets, being know-how, patents, copyrights, trade-marks, licences,
franchises or any other business or commercial rights of similar nature, 3[not being
goodwill of a business or profession,]
in respect of which the same percentage of depreciation is prescribed ;
(12) "Board" means the Central Board of Direct Taxes constituted under the Central Boards of
Revenue Act, 1963 (54 of 1963) ;
(12A) "books or books of account" includes ledgers, day-books, cash books, account-books and
other books, whether kept 4[in the written form or in electronic form or in digital form or as
print-outs of data stored in such electronic form or in digital form or in] a floppy, disc, tape or
any other form of electro-magnetic data storage device;
(13) "business" includes any trade, commerce or manufacture or any adventure or concern in the
nature of trade, commerce or manufacture;
(13A) "business trust" means a trust registered as,—
(i) an Infrastructure Investment Trust under the Securities and Exchange Board of India
(Infrastructure Investment Trusts) Regulations, 2014 made under the Securities and
Exchange Board of India Act, 1992 (15 of 1992); or
(ii) a Real Estate Investment Trust under the Securities and Exchange Board of India (Real
Estate Investment Trusts) Regulations, 2014 made under the Securities and Exchange
Board of India Act, 1992 (15 of 1992),
(14) "capital asset" means—
(a) property of any kind held by an assessee, whether or not connected with his business or
profession;
(b) any securities held by a Foreign Institutional Investor which has invested in such
securities in accordance with the regulations made under the Securities and Exchange
Board of India Act, 1992 (15 of 1992);
5[(c) any unit linked insurance policy to which exemption under clause (10D) of section 10
does not apply on account of the applicability of the fourth and fifth provisos thereof,]
but does not include—
(i) any stock-in-trade [other than the securities referred to in sub-clause (b)], consumable
stores or raw materials held for the purposes of his business or profession ;
(ii) personal effects, that is to say, movable property (including wearing apparel and
furniture) held for personal use by the assessee or any member of his family dependent
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on him, but excludes—

(a) jewellery;
(b) archaeological collections;
(c) drawings;
(d) paintings;
(e) sculptures; or
(f) any work of art.
Explanation.—For the purposes of this sub-clause, "jewellery" includes—
(a) ornaments made of gold, silver, platinum or any other precious metal or any alloy
containing one or more of such precious metals, whether or not containing any
precious or semi-precious stone, and whether or not worked or sewn into any
wearing apparel;
(b) precious or semi-precious stones, whether or not set in any furniture, utensil or
other article or worked or sewn into any wearing apparel;
(iii) agricultural land in India, not being land situate—
(a) in any area which is comprised within the jurisdiction of a municipality (whether
known as a municipality, municipal corporation, notified area committee, town
area committee, town committee, or by any other name) or a cantonment board
and which has a population of not less than ten thousand ; or
(b) in any area within the distance, measured aerially,—
(I) not being more than two kilometres, from the local limits of any municipality
or cantonment board referred to in item (a) and which has a population of
more than ten thousand but not exceeding one lakh; or
(II) not being more than six kilometres, from the local limits of any municipality
or cantonment board referred to in item (a) and which has a population of
more than one lakh but not exceeding ten lakh; or
(III) not being more than eight kilometres, from the local limits of any
municipality or cantonment board referred to in item (a) and which has a
population of more than ten lakh.
Explanation.—For the purposes of this sub-clause, "population" means the
population according to the last preceding census of which the relevant figures
have been published before the first day of the previous year;
(iv) 6½ per cent Gold Bonds, 1977, or 7 per cent Gold Bonds, 1980, or National Defence
Gold Bonds, 1980, issued by the Central Government;
(v) Special Bearer Bonds, 1991, issued by the Central Government ;
(vi) Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 or deposit
certificates issued under the Gold Monetisation Scheme, 2015 notified by the Central
Government.
Explanation 1.—For the removal of doubts, it is hereby clarified that "property" includes and
shall be deemed to have always included any rights in or in relation to an Indian company,
including rights of management or control or any other rights whatsoever.
Explanation 2.—For the purposes of this clause—
(a) the expression "Foreign Institutional Investor" shall have the meaning assigned to it in
clause (a) of the Explanation to section 115AD;
(b) the expression "securities" shall have the meaning assigned to it in clause (h) of section
2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(15) "charitable purpose" includes relief of the poor, education, yoga, medical relief, preservation
of environment (including watersheds, forests and wildlife) and preservation of monuments
or places or objects of artistic or historic interest, and the advancement of any other object of
general public utility:
Provided that the advancement of any other object of general public utility shall not be a
charitable purpose, if it involves the carrying on of any activity in the nature of trade,

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commerce or business, or any activity of rendering any service in relation to any trade,
commerce or business, for a cess or fee or any other consideration, irrespective of the nature
of use or application, or retention, of the income from such activity, unless—
(i) such activity is undertaken in the course of actual carrying out of such advancement of
any other object of general public utility; and
(ii) the aggregate receipts from such activity or activities during the previous year, do not
exceed twenty per cent of the total receipts, of the trust or institution undertaking such
activity or activities, of that previous year;
(15A) "Chief Commissioner" means a person appointed to be a Chief Commissioner of Income-tax
or a Director General of Income-tax or a Principal Chief Commissioner of Income-tax or a
Principal Director General of Income-tax under sub-section (1) of section 117;
(15B) "child", in relation to an individual, includes a step-child and an adopted child of that
individual;
(16) "Commissioner" means a person appointed to be a Commissioner of Income-tax or a
Director of Income-tax or a Principal Commissioner of Income-tax or a Principal Director of
Income-tax under sub-section (1) of section 117;
(16A) "Commissioner (Appeals)" means a person appointed to be a Commissioner of Income-tax
(Appeals) under sub-section (1) of section 117 ;
(17) "company" means—
(i) any Indian company, or
(ii) any body corporate incorporated by or under the laws of a country outside India, or
(iii) any institution, association or body which is or was assessable or was assessed as a
company for any assessment year under the Indian Income-tax Act, 1922 (11 of 1922)
or which is or was assessable or was assessed under this Act as a company for any
assessment year commencing on or before the 1st day of April, 1970, or
(iv) any institution, association or body, whether incorporated or not and whether Indian or
non-Indian, which is declared by general or special order of the Board to be a company
:
Provided that such institution, association or body shall be deemed to be a company
only for such assessment year or assessment years (whether commencing before the 1st
day of April, 1971 or on or after that date) as may be specified in the declaration ;
(18) "company in which the public are substantially interested"—a company is said to be a
company in which the public are substantially interested—
(a) if it is a company owned by the Government or the Reserve Bank of India or in which
not less than forty per cent of the shares are held (whether singly or taken together) by
the Government or the Reserve Bank of India or a corporation owned by that bank ; or
(aa) if it is a company which is registered under section 25 of the Companies Act, 1956 (1
of 1956)6 ; or
(ab) if it is a company having no share capital and if, having regard to its objects, the nature
and composition of its membership and other relevant considerations, it is declared by
order of the Board to be a company in which the public are substantially interested :
Provided that such company shall be deemed to be a company in which the public are
substantially interested only for such assessment year or assessment years (whether
commencing before the 1st day of April, 1971, or on or after that date) as may be
specified in the declaration ; or
(ac) if it is a mutual benefit finance company, that is to say, a company which carries on, as
its principal business, the business of acceptance of deposits from its members and
which is declared by the Central Government under section 620A7 of the Companies
Act, 1956 (1 of 1956), to be a Nidhi or Mutual Benefit Society ; or
(ad) if it is a company, wherein shares (not being shares entitled to a fixed rate of dividend
whether with or without a further right to participate in profits) carrying not less than
fifty per cent of the voting power have been allotted unconditionally to, or acquired

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unconditionally by, and were throughout the relevant previous year beneficially held
by, one or more co-operative societies ;
(b) if it is a company which is not a private company as defined in the Companies Act,
1956 (1 of 1956)8, and the conditions specified either in item (A) or in item (B) are
fulfilled, namely :—
(A) shares in the company (not being shares entitled to a fixed rate of dividend
whether with or without a further right to participate in profits) were, as on the last
day of the relevant previous year, listed in a recognised stock exchange in India in
accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and
any rules made thereunder ;
(B) shares in the company (not being shares entitled to a fixed rate of dividend
whether with or without a further right to participate in profits) carrying not less
than fifty per cent of the voting power have been allotted unconditionally to, or
acquired unconditionally by, and were throughout the relevant previous year
beneficially held by—
(a) the Government, or
(b) a corporation established by a Central, State or Provincial Act, or
(c) any company to which this clause applies or any subsidiary company of such
company if the whole of the share capital of such subsidiary company has
been held by the parent company or by its nominees throughout the previous
year.
Explanation.—In its application to an Indian company whose business consists
mainly in the construction of ships or in the manufacture or processing of goods or
in mining or in the generation or distribution of electricity or any other form of
power, item (B) shall have effect as if for the words "not less than fifty per cent",
the words "not less than forty per cent" had been substituted ;
(19) "co-operative society" means a co-operative society registered under the Co-operative
Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any
State for the registration of co-operative societies ;
(19A) "Deputy Commissioner" means a person appointed to be a Deputy Commissioner of Income-
tax under sub-section (1) of section 117 ;
(19AA) "demerger", in relation to companies, means the transfer, pursuant to a scheme of
arrangement under sections 391 to 3949 of the Companies Act, 1956 (1 of 1956), by a
demerged company of its one or more undertakings to any resulting company in such a
manner that—
(i) all the property of the undertaking, being transferred by the demerged company,
immediately before the demerger, becomes the property of the resulting company by
virtue of the demerger;
(ii) all the liabilities relatable to the undertaking, being transferred by the demerged
company, immediately before the demerger, become the liabilities of the resulting
company by virtue of the demerger;
(iii) the property and the liabilities of the undertaking or undertakings being transferred by
the demerged company are transferred at values appearing in its books of account
immediately before the demerger:
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;
(iv) the resulting company issues, in consideration of the demerger, its shares to the
shareholders of the demerged company on a proportionate basis except where the
resulting company itself is a shareholder of the demerged company;

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(v) the shareholders holding not less than three-fourths in value of the shares in the
demerged company (other than shares already held therein immediately before the
demerger, or by a nominee for, the resulting company or, its subsidiary) become
shareholders of the resulting company or companies by virtue of the demerger,
otherwise than as a result of the acquisition of the property or assets of the demerged
company or any undertaking thereof by the resulting company;
(vi) the transfer of the undertaking is on a going concern basis;
(vii) the demerger is in accordance with the conditions, if any, notified under sub-section (5)
of section 72A by the Central Government in this behalf.
Explanation 1.—For the purposes of this clause, "undertaking" shall include any part of an
undertaking, or a unit or division of an undertaking or a business activity taken as a whole,
but does not include individual assets or liabilities or any combination thereof not
constituting a business activity.
Explanation 2.—For the purposes of this clause, the liabilities referred to in sub-clause (ii),
shall include—
(a) the liabilities which arise out of the activities or operations of the undertaking;
(b) the specific loans or borrowings (including debentures) raised, incurred and utilised
solely for the activities or operations of the undertaking; and
(c) in cases, other than those referred to in clause (a) or clause (b), so much of the amounts
of general or multipurpose borrowings, if any, of the demerged company as stand in the
same proportion which the value of the assets transferred in a demerger bears to the
total value of the assets of such demerged company immediately before the demerger.
Explanation 3.—For determining the value of the property referred to in sub-clause (iii), any
change in the value of assets consequent to their revaluation shall be ignored.
Explanation 4.—For the purposes of this clause, the splitting up or the reconstruction of any
authority or a body constituted or established under a Central, State or Provincial Act, or a
local authority or a public sector company, into separate authorities or bodies or local
authorities or companies, as the case may be, shall be deemed to be a demerger if such split
up or reconstruction fulfils such conditions as may be notified in the Official Gazette, by the
Central Government.
Explanation 5.—For the purposes of this clause, the reconstruction or splitting up of a
company, which ceased to be a public sector company as a result of transfer of its shares by
the Central Government, into separate companies, shall be deemed to be a demerger, if such
reconstruction or splitting up has been made to give effect to any condition attached to the
said transfer of shares and also fulfils such other conditions as may be notified by the Central
Government in the Official Gazette.
10[Explanation 6.—For the purposes of this clause, the reconstruction or splitting up of a
public sector company into separate companies shall be deemed to be a demerger, if such
reconstruction or splitting up has been made to transfer any asset of the demerged company
to the resulting company and the resulting company—
(i) is a public sector company on the appointed day indicated in such scheme, as may be
approved by the Central Government or any other body authorised under the provisions
of the Companies Act, 2013 (18 of 2013) or any other law for the time being in force
governing such public sector companies in this behalf; and
(ii) fulfils such other conditions as may be notified by the Central Government in the
Official Gazette in this behalf;]
(19AAA) "demerged company" means the company whose undertaking is transferred, pursuant to a
demerger, to a resulting company;
(19B) "Deputy Commissioner (Appeals)" means a person appointed to be a Deputy Commissioner
of Income-tax (Appeals) 11[***] under sub-section (1) of section 117 ;
(19C) "Deputy Director" means a person appointed to be a Deputy Director of Income-tax under
sub-section (1) of section 117 ;

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(20) "director", "manager" and "managing agent", in relation to a company, have the meanings
respectively assigned to them in the Companies Act, 195612 (1 of 1956) ;
(21) "Director General or Director" means a person appointed to be a Director General of Income-
tax or a Principal Director General of Income-tax or, as the case may be, a Director of
Income-tax or a Principal Director of Income-tax, under sub-section (1) of section 117, and
includes a person appointed under that sub-section to be an Additional Director of Income-
tax or a Joint Director of Income-tax or an Assistant Director or Deputy Director of Income-
tax;
(22) "dividend" includes—
(a) any distribution by a company of accumulated profits, whether capitalised or not, if
such distribution entails the release by the company to its shareholders of all or any part
of the assets of the company ;
(b) any distribution to its shareholders by a company of debentures, debenture-stock, or
deposit certificates in any form, whether with or without interest, and any distribution
to its preference shareholders of shares by way of bonus, to the extent to which the
company possesses accumulated profits, whether capitalised or not ;
(c) any distribution made to the shareholders of a company on its liquidation, to the extent
to which the distribution is attributable to the accumulated profits of the company
immediately before its liquidation, whether capitalised or not ;
(d) any distribution to its shareholders by a company on the reduction of its capital, to the
extent to which the company possesses accumulated profits which arose after the end
of the previous year ending next before the 1st day of April, 1933, whether such
accumulated profits have been capitalised or not ;
(e) any payment by a company, not being a company in which the public are substantially
interested, of any sum (whether as representing a part of the assets of the company or
otherwise) made after the 31st day of May, 1987, by way of advance or loan to a
shareholder, being a person who is the beneficial owner of shares (not being shares
entitled to a fixed rate of dividend whether with or without a right to participate in
profits) holding not less than ten per cent of the voting power, or to any concern in
which such shareholder is a member or a partner and in which he has a substantial
interest (hereafter in this clause referred to as the said concern) or any payment by any
such company on behalf, or for the individual benefit, of any such shareholder, to the
extent to which the company in either case possesses accumulated profits ;
but "dividend" does not include—
(i) a distribution made in accordance with sub-clause (c) or sub-clause (d) in respect of
any share issued for full cash consideration, where the holder of the share is not entitled
in the event of liquidation to participate in the surplus assets ;
(ia) a distribution made in accordance with sub-clause (c) or sub-clause (d) in so far as such
distribution is attributable to the capitalised profits of the company representing bonus
shares allotted to its equity shareholders after the 31st day of March, 1964, and before
the 1st day of April, 1965 ;
(ii) any advance or loan made to a shareholder or the said concern by a company in the
ordinary course of its business, where the lending of money is a substantial part of the
business of the company ;
(iii) any dividend paid by a company which is set off by the company against the whole or
any part of any sum previously paid by it and treated as a dividend within the meaning
of sub-clause (e), to the extent to which it is so set off;
(iv) any payment made by a company on purchase of its own shares from a shareholder in
accordance with the provisions of section 77A13 of the Companies Act, 1956 (1 of
1956);
(v) any distribution of shares pursuant to a demerger by the resulting company to the
shareholders of the demerged company (whether or not there is a reduction of capital in
the demerged company).

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Explanation 1.—The expression "accumulated profits", wherever it occurs in this clause,

shall not include capital gains arising before the 1st day of April, 1946, or after the 31st day
of March, 1948, and before the 1st day of April, 1956.
Explanation 2.—The expression "accumulated profits" in sub-clauses (a), (b), (d) and (e),
shall include all profits of the company up to the date of distribution or payment referred to
in those sub-clauses, and in sub-clause (c) shall include all profits of the company up to the
date of liquidation, but shall not, where the liquidation is consequent on the compulsory
acquisition of its undertaking by the Government or a corporation owned or controlled by the
Government under any law for the time being in force, include any profits of the company
prior to three successive previous years immediately preceding the previous year in which
such acquisition took place.
Explanation 2A.—In the case of an amalgamated company, the accumulated profits, whether
capitalised or not, or loss, as the case may be, shall be increased by the accumulated profits,
whether capitalised or not, of the amalgamating company on the date of amalgamation.
Explanation 3.—For the purposes of this clause,—
(a) "concern" means a Hindu undivided family, or a firm or an association of persons or a
body of individuals or a company ;
(b) a person shall be deemed to have a substantial interest in a concern, other than a
company, if he is, at any time during the previous year, beneficially entitled to not less
than twenty per cent of the income of such concern ;
(22A) "domestic company" means an Indian company, or any other company which, in respect of
its income liable to tax under this Act, has made the prescribed arrangements for the
declaration and payment, within India, of the dividends (including dividends on preference
shares) payable out of such income ;
(22AA) "document" includes an electronic record as defined in clause (t) of sub-section (1) of section
2 of the Information Technology Act, 2000 (21 of 2000);
(22AAA) "electoral trust" means a trust so approved by the Board in accordance with the scheme made
in this regard by the Central Government;
(22B) "fair market value", in relation to a capital asset, means—
(i) the price that the capital asset would ordinarily fetch on sale in the open market on the
relevant date ; and
(ii) where the price referred to in sub-clause (i) is not ascertainable, such price as may be
determined in accordance with the rules made under this Act ;
(23) (i) "firm" shall have the meaning assigned to it in the Indian Partnership Act, 1932 (9 of
1932), and shall include a limited liability partnership as defined in the Limited Liability
Partnership Act, 2008 (6 of 2009);
(ii) "partner" shall have the meaning assigned to it in the Indian Partnership Act, 1932 (9 of
1932), and shall include,—
(a) any person who, being a minor, has been admitted to the benefits of partnership;
and
(b) a partner of a limited liability partnership as defined in the Limited Liability
Partnership Act, 2008 (6 of 2009);
(iii) "partnership" shall have the meaning assigned to it in the Indian Partnership Act, 1932 (9
of 1932), and shall include a limited liability partnership as defined in the Limited Liability
Partnership Act, 2008 (6 of 2009);
(23A) "foreign company" means a company which is not a domestic company;
(23B) "fringe benefits" means any fringe benefits referred to in section 115WB;
(23C) "hearing" includes communication of data and documents through electronic mode;
(24) "income" includes—
(i) profits and gains ;
(ii) dividend ;
(iia) voluntary contributions received by a trust created wholly or partly for charitable or
religious purposes or by an institution established wholly or partly for such purposes or
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by an association or institution referred to in clause (21) or clause (23), or by a fund or

trust or institution referred to in sub-clause (iv) or sub-clause (v) or by any university or
other educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or by any
hospital or other institution referred to in sub-clause (iiiae) or sub-clause (via) of clause
(23C) of section 10 or by an electoral trust.
Explanation.—For the purposes of this sub-clause, "trust" includes any other legal
obligation ;
(iii) the value of any perquisite or profit in lieu of salary taxable under clauses (2) and (3)
of section 17 ;
(iiia) any special allowance or benefit, other than perquisite included under sub-clause (iii),
specifically granted to the assessee to meet expenses wholly, necessarily and
exclusively for the performance of the duties of an office or employment of profit ;
(iiib) any allowance granted to the assessee either to meet his personal expenses at the place
where the duties of his office or employment of profit are ordinarily performed by him
or at a place where he ordinarily resides or to compensate him for the increased cost of
living;
(iv) the value of any benefit or perquisite, whether convertible into money or not, obtained
from a company either by a director or by a person who has a substantial interest in the
company, or by a relative of the director or such person, and any sum paid by any such
company in respect of any obligation which, but for such payment, would have been
payable by the director or other person aforesaid ;
(iva) the value of any benefit or perquisite, whether convertible into money or not, obtained
by any representative assessee mentioned in clause (iii) or clause (iv) of sub-section (1)
of section 160 or by any person on whose behalf or for whose benefit any income is
receivable by the representative assessee (such person being hereafter in this sub-clause
referred to as the "beneficiary") and any sum paid by the representative assessee in
respect of any obligation which, but for such payment, would have been payable by the
beneficiary ;
(v) any sum chargeable to income-tax under clauses (ii) and (iii) of section 28 or section 41
or section 59 ;
(va) any sum chargeable to income-tax under clause (iiia) of section 28 ;
(vb) any sum chargeable to income-tax under clause (iiib) of section 28 ;
(vc) any sum chargeable to income-tax under clause (iiic) of section 28 ;
(vd) the value of any benefit or perquisite taxable under clause (iv) of section 28 ;
(ve) any sum chargeable to income-tax under clause (v) of section 28 ;
(vi) any capital gains chargeable under section 45 ;
(vii) the profits and gains of any business of insurance carried on by a mutual insurance
company or by a co-operative society, computed in accordance with section 44 or any
surplus taken to be such profits and gains by virtue of provisions contained in the First
Schedule ;
(viia) the profits and gains of any business of banking (including providing credit facilities)
carried on by a co-operative society with its members;
(viii) [Omitted by the Finance Act, 1988, w.e.f. 1-4-1988. Original sub-clause (viii) was
inserted by the Finance Act, 1964, w.e.f. 1-4-1964;]
(ix) any winnings from lotteries, crossword puzzles, races including horse races, card
games and other games of any sort or from gambling or betting of any form or nature
whatsoever.
Explanation.—For the purposes of this sub-clause,—
(i) "lottery" includes winnings from prizes awarded to any person by draw of lots or
by chance or in any other manner whatsoever, under any scheme or arrangement
by whatever name called;
(ii) "card game and other game of any sort" includes any game show, an entertainment
programme on television or electronic mode, in which people compete to win

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prizes or any other similar game ;

(x) any sum received by the assessee from his employees as contributions to any provident
fund or superannuation fund or any fund set up under the provisions of the Employees'
State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such
employees ;
(xi) any sum received under a Keyman insurance policy including the sum allocated by way
of bonus on such policy.
Explanation.—For the purposes of this clause*, the expression "Keyman insurance
policy" shall have the meaning assigned to it in the Explanation to clause (10D) of
section 10 ;
(xii) any sum referred to in clause (va) of section 28;
(xiia) the fair market value of inventory referred to in clause (via) of section 28;
(xiii) any sum referred to in clause (v) of sub-section (2) of section 56;
(xiv) any sum referred to in clause (vi) of sub-section (2) of section 56;
(xv) any sum of money or value of property referred to in clause (vii) or clause (viia) of sub-
section (2) of section 56;
(xvi) any consideration received for issue of shares as exceeds the fair market value of the
shares referred to in clause (viib) of sub-section (2) of section 56;
(xvii) any sum of money referred to in clause (ix) of sub-section (2) of section 56;
(xviia) any sum of money or value of property referred to in clause (x) of sub-section (2) of
section 56;
(xviib) any compensation or other payment referred to in clause (xi) of sub-section (2) of
section 56;
Following sub-clauses (xviic) and (xviid) shall be inserted after sub-clause (xviib) of
clause (24) of section 2 by the Finance Act, 2023, w.e.f. 1-4-2024:
(xviic) any sum referred to in clause (xii) of sub-section (2) of section 56;
(xviid) any sum referred to in clause (xiii) of sub-section (2) of section 56;
(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 assessee 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;
(25) "Income-tax Officer" means a person appointed to be an Income-tax Officer under section
117 ;
(25A) "India" means the territory of India as referred to in article 1 of the Constitution, its
territorial waters, seabed and subsoil underlying such waters, continental shelf, exclusive
economic zone or any other maritime zone as referred to in the Territorial Waters,
Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (80 of
1976), and the air space above its territory and territorial waters;
(26) "Indian company" means a company formed and registered under the Companies Act, 195614
(1 of 1956), and includes—
(i) a company formed and registered under any law relating to companies formerly in
force in any part of India (other than the State of Jammu and Kashmir and the Union
territories specified in sub-clause (iii) of this clause) ;
(ia) a corporation established by or under a Central, State or Provincial Act ;
(ib) any institution, association or body which is declared by the Board to be a company
under clause (17) ;

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(ii) in the case of the State of Jammu and Kashmir, a company formed and registered under
any law for the time being in force in that State ;
(iii) in the case of any of the Union territories of Dadra and Nagar Haveli, Goa†, Daman
and Diu, and Pondicherry, a company formed and registered under any law for the time
being in force in that Union territory :
Provided that the registered or, as the case may be, principal office of the company,
corporation, institution, association or body in all cases is in India ;
(26A) "infrastructure capital company" means such company which makes investments by way of
acquiring shares or providing long-term finance to any enterprise or undertaking wholly
engaged in the business referred to in sub-section (4) of section 80-IA or sub-section (1) of
section 80-IAB or an undertaking developing and building a housing project referred to in
sub-section (10) of section 80-IB or a project for constructing a hotel of not less than three-
star category as classified by the Central Government or a project for constructing a hospital
with at least one hundred beds for patients;
(26B) "infrastructure capital fund" means such fund operating under a trust deed registered under
the provisions of the Registration Act, 1908 (16 of 1908) established to raise monies by the
trustees for investment by way of acquiring shares or providing long-term finance to any
enterprise or undertaking wholly engaged in the business referred to in sub-section (4) of
section 80-IA or sub-section (1) of section 80-IAB or an undertaking developing and building
a housing project referred to in sub-section (10) of section 80-IB or a project for constructing
a hotel of not less than three-star category as classified by the Central Government or a
project for constructing a hospital with at least one hundred beds for patients;
(27) [***]
(28) "Inspector of Income-tax" means a person appointed to be an Inspector of Income-tax under
sub-section (1) of section 117 ;
(28A) "interest" means interest payable in any manner in respect of any moneys borrowed or debt
incurred (including a deposit, claim or other similar right or obligation) and includes any
service fee or other charge in respect of the moneys borrowed or debt incurred or in respect
of any credit facility which has not been utilised ;
(28B) "interest on securities" means,—
(i) interest on any security of the Central Government or a State Government ;
(ii) interest on debentures or other securities for money issued by or on behalf of a local
authority or a company or a corporation established by a Central, State or Provincial
Act ;
(28BB) "insurer" means an insurer, being an Indian insurance company, as defined under clause (7A)
of section 2 of the Insurance Act, 1938 (4 of 1938), which has been granted a certificate of
registration under section 3 of that Act;
(28C) "Joint Commissioner" means a person appointed to be a Joint Commissioner of Income-tax
or an Additional Commissioner of Income-tax under sub-section (1) of section 117;
15[(28CA) "Joint Commissioner (Appeals)" means a person appointed to be a Joint Commissioner of
Income-tax (Appeals) or an Additional Commissioner of Income-tax (Appeals) under sub-
section (1) of section 117;]
(28D) "Joint Director" means a person appointed to be a Joint Director of Income-tax or an
Additional Director of Income-tax under sub-section (1) of section 117;
(29) "legal representative" has the meaning assigned to it in clause (11) of section 2 of the Code of
Civil Procedure, 1908 (5 of 1908) ;
16[(29A) "liable to tax", in relation to a person and with reference to a country, means that there is an
income-tax liability on such person under the law of that country for the time being in force
and shall include a person who has subsequently been exempted from such liability under the
law of that country;]
17[(29AA)] "long-term capital asset" means a capital asset which is not a short-term capital asset ;
(29B) "long-term capital gain" means capital gain arising from the transfer of a long-term capital
asset ;
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(29BA) "manufacture", with its grammatical variations, means a change in a non-living physical
object or article or thing,—
(a) resulting in transformation of the object or article or thing into a new and distinct
object or article or thing having a different name, character and use; or
(b) bringing into existence of a new and distinct object or article or thing with a different
chemical composition or integral structure;
(29C) "maximum marginal rate" means the rate of income-tax (including surcharge on income-tax,
if any) applicable in relation to the highest slab of income in the case of an individual,
association of persons or, as the case may be, body of individuals as specified in the Finance
Act of the relevant year;
(29D) "National Tax Tribunal" means the National Tax Tribunal established under section 3 of the
National Tax Tribunal Act, 2005;
(30) "non-resident" means a person who is not a "resident", and for the purposes of sections 92,
93 and 168, includes a person who is not ordinarily resident within the meaning of clause (6)
of section 6 ;
(31) "person" includes—
(i) an individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of individuals, whether incorporated or not,
(vi) a local authority, and
(vii) every artificial juridical person, not falling within any of the preceding sub-clauses.
Explanation.—For the purposes of this clause, an association of persons or a body of
individuals or a local authority or an artificial juridical person shall be deemed to be a person,
whether or not such person or body or authority or juridical person was formed or established
or incorporated with the object of deriving income, profits or gains;
(32) "person who has a substantial interest in the company", in relation to a company, means a
person who is the beneficial owner of shares, not being shares entitled to a fixed rate of
dividend whether with or without a right to participate in profits, carrying not less than
twenty per cent of the voting power ;
(33) "prescribed" means prescribed by rules made under this Act ;
(34) "previous year" means the previous year as defined in section 3 ;
(34A) "Principal Chief Commissioner of Income-tax" means a person appointed to be a Principal
Chief Commissioner of Income-tax under sub-section (1) of section 117;
(34B) "Principal Commissioner of Income-tax" means a person appointed to be a Principal
Commissioner of Income-tax under sub-section (1) of section 117;
(34C) "Principal Director of Income-tax" means a person appointed to be a Principal Director of
Income-tax under sub-section (1) of section 117;
(34D) "Principal Director General of Income-tax" means a person appointed to be a Principal
Director General of Income-tax under sub-section (1) of section 117;
(35) "principal officer", used with reference to a local authority or a company or any other public
body or any association of persons or any body of individuals, means—
(a) the secretary, treasurer, manager or agent of the authority, company, association or
body, or
(b) any person connected with the management or administration of the local authority,
company, association or body upon whom the Assessing Officer has served a notice of
his intention of treating him as the principal officer thereof ;
(36) "profession" includes vocation ;
(36A) "public sector company" means any corporation established by or under any Central, State or
Provincial Act or a Government company as defined in section 61718 of the Companies Act,
1956 (1 of 1956) ;
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(37) "public servant" has the same meaning as in section 21 of the Indian Penal Code (45 of 1860)
;
(37A) "rate or rates in force" or "rates in force", in relation to an assessment year or financial year,
means—
(i) for the purposes of calculating income-tax under the first proviso to sub-section (5) of
section 132, or computing the income-tax chargeable under sub-section (4) of section
172 or sub-section (2) of section 174 or section 175 or sub-section (2) of section 176 or
deducting income-tax under section 192 from income chargeable under the head
"Salaries" or computation of the "advance tax" payable under Chapter XVII-C in a case
not falling under section 115A or section 115B or section 115BB or section 115BBB or
section 115E or section 164 or section 164A or section 167B, the rate or rates of
income-tax specified in this behalf in the Finance Act of the relevant year, and for the
purposes of computation of the "advance tax" payable under Chapter XVII-C in a case
falling under section 115A or section 115B or section 115BB or section 115BBB or
section 115E or section 164 or section 164A or section 167B, the rate or rates specified
in section 115A or section 115B or section 115BB or section 115BBB or section 115E
or section 164 or section 164A or section 167B, as the case may be, or the rate or rates
of income-tax specified in this behalf in the Finance Act of the relevant year, whichever
is applicable ;
(ii) for the purposes of deduction of tax under sections 193, 194, 194A, 194B, 19[194BA],
194BB and 194D, the rate or rates of income-tax specified in this behalf in the Finance
Act of the relevant year ;
(iii) for the purposes of deduction of tax under section 194LBA or section 194LBB or
section 194LBC or section 195, the rate or rates of income-tax specified in this behalf
in the Finance Act of the relevant year or the rate or rates of income-tax specified in an
agreement entered into by the Central Government under section 90, or an agreement
notified by the Central Government under section 90A, whichever is applicable by
virtue of the provisions of section 90, or section 90A, as the case may be;
(38) "recognised provident fund" means a provident fund which has been and continues to be
recognised by the Principal Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner in accordance with the rules contained in Part A of the
Fourth Schedule, and includes a provident fund established under a scheme framed under the
Employees' Provident Funds Act, 1952 (19 of 1952) ;
(39) [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993;]
(40) "regular assessment" means the assessment made under sub-section (3) of section 143 or
section 144 ;
(41) "relative", in relation to an individual, means the husband, wife, brother or sister or any lineal
ascendant or descendant of that individual ;
(41A) "resulting company" means one or more companies (including a wholly owned subsidiary
thereof) to which the undertaking of the demerged company is transferred in a demerger and,
the resulting company in consideration of such transfer of undertaking, issues shares to the
shareholders of the demerged company and includes any authority or body or local authority
or public sector company or a company established, constituted or formed as a result of
demerger;
(42) "resident" means a person who is resident in India within the meaning of section 6 ;
(42A) "short-term capital asset" means a capital asset held by an assessee for not more than thirty-
six months immediately preceding the date of its transfer :
Provided that in the case of a security (other than a unit) listed in a recognized stock
exchange in India or a unit of the Unit Trust of India established under the Unit Trust of India
Act, 1963 (52 of 1963) or a unit of an equity oriented fund or a zero coupon bond, the
provisions of this clause shall have effect as if for the words "thirty-six months", the words
"twelve months" had been substituted:
Provided further that in case of a share of a company (not being a share listed in a
recognised stock exchange) or a unit of a Mutual Fund specified under clause (23D) of
section 10, which is transferred during the period beginning on the 1st day of April, 2014 and
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ending on the 10th day of July, 2014, the provisions of this clause shall have effect as if for
the words "thirty-six months", the words "twelve months" had been substituted:
Provided also that in the case of a share of a company (not being a share listed in a
recognised stock exchange in India), or an immovable property, being land or building or
both, the provisions of this clause shall have effect as if for the words "thirty-six months", the
words "twenty-four months" had been substituted.
Explanation 1.—(i) In determining the period for which any capital asset is held by the
assessee—
(a) in the case of a share held in a company in liquidation, there shall be excluded the
period subsequent to the date on which the company goes into liquidation ;
(b) in the case of a capital asset which becomes the property of the assessee in the
circumstances mentioned in sub-section (1) of section 49, there shall be included the
period for which the asset was held by the previous owner referred to in the said
section ;
(ba) in the case of a capital asset referred to in clause (via) of section 28, the period shall be
reckoned from the date of its conversion or treatment;
(c) in the case of a capital asset being a share or shares in an Indian company, which
becomes the property of the assessee in consideration of a transfer referred to in clause
(vii) of section 47, there shall be included the period for which the share or shares in
the amalgamating company were held by the assessee ;
(d) in the case of a capital asset, being a share or any other security (hereafter in this clause
referred to as the financial asset) subscribed to by the assessee on the basis of his right
to subscribe to such financial asset or subscribed to by the person in whose favour the
assessee has renounced his right to subscribe to such financial asset, the period shall be
reckoned from the date of allotment of such financial asset ;
(e) in the case of a capital asset, being the right to subscribe to any financial asset, which is
renounced in favour of any other person, the period shall be reckoned from the date of
the offer of such right by the company or institution, as the case may be, making such
offer ;
(f) in the case of a capital asset, being a financial asset, allotted without any payment and
on the basis of holding of any other financial asset, the period shall be reckoned from
the date of the allotment of such financial asset ;
(g) in the case of a capital asset, being a share or shares in an Indian company, which
becomes the property of the assessee in consideration of a demerger, there shall be
included the period for which the share or shares held in the demerged company were
held by the assessee ;
(h) in the case of a capital asset, being trading or clearing rights of a recognised stock
exchange in India acquired by a person pursuant to demutualisation or corporatisation
of the recognised stock exchange in India as referred to in clause (xiii) of section 47,
there shall be included the period for which the person was a member of the recognised
stock exchange in India immediately prior to such demutualisation or corporatisation;
(ha) in the case of a capital asset, being equity share or shares in a company allotted
pursuant to demutualisation or corporatisation of a recognised stock exchange in India
as referred to in clause (xiii) of section 47, there shall be included the period for which
the person was a member of the recognised stock exchange in India immediately prior
to such demutualisation or corporatisation;
(hb) in the case of a capital asset, being any specified security or sweat equity shares
allotted or transferred, directly or indirectly, by the employer free of cost or at
concessional rate to his employees (including former employee or employees), the
period shall be reckoned from the date of allotment or transfer of such specified
security or sweat equity shares;
(hc) in the case of a capital asset, being a unit of a business trust, allotted pursuant to
transfer of share or shares as referred to in clause (xvii) of section 47, there shall be
included the period for which the share or shares were held by the assessee;

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(hd) in the case of a capital asset, being a unit or units, which becomes the property of the
assessee in consideration of a transfer referred to in clause (xviii) of section 47, there
shall be included the period for which the unit or units in the consolidating scheme of
the mutual fund were held by the assessee;
(he) in the case of a capital asset, being share or shares of a company, which is acquired by
the non-resident assessee on redemption of Global Depository Receipts referred to in
clause (b) of sub-section (1) of section 115AC held by such assessee, the period shall
be reckoned from the date on which a request for such redemption was made;
(hf) in the case of a capital asset, being equity shares in a company, which becomes the
property of the assessee in consideration of a transfer referred to in clause (xb) of
section 47, there shall be included the period for which the preference shares were held
by the assessee;
(hg) in the case of a capital asset, being a unit or units, which becomes the property of the
assessee in consideration of a transfer referred to in clause (xix) of section 47, there
shall be included the period for which the unit or units in the consolidating plan of a
mutual fund scheme were held by the assessee;
(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 included the period for which the
original unit or units in the main portfolio were held by the assessee;
Following sub-clause (hi) shall be inserted after sub-clause (hh) of clause (i) of
Explanation 1 to clause (42A) of section 2 by the Finance Act, 2023, w.e.f. 1-4-2024
:
(hi) in the case of a capital asset, being—
(a) Electronic Gold Receipt issued in respect of gold deposited as referred to in clause
(viid) of section 47, there shall be included the period for which such gold was
held by the assessee prior to conversion into the Electronic Gold Receipt;
(b) gold released in respect of an Electronic Gold Receipt as referred to in clause
(viid) of section 47, there shall be included the period for which such Electronic
Gold Receipt was held by the assessee prior to its conversion into gold;
(ii) In respect of capital assets other than those mentioned in clause (i), the period for which
any capital asset is held by the assessee shall be determined subject to any rules20 which the
Board may make in this behalf.
Explanation 2.—For the purposes of this clause, the expression "security" shall have the
meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act,
1956 (42 of 1956).
Explanation 3.—For the purposes of this clause, the expressions "specified security" and
"sweat equity shares" shall have the meanings respectively assigned to them in the
Explanation to clause (d) of sub-section (1) of section 115WB.
Explanation 4.—For the purposes of this clause, the expression "equity oriented fund" shall
have the meaning assigned to it in clause (a) of the Explanation to section 112A;
(42B) "short-term capital gain" means capital gain arising from the transfer of a short-term capital
asset ;
(42C) "slump sale" means the transfer of one or more 21[undertaking, by any means,] for a lump
sum consideration without values being assigned to the individual assets and liabilities in
such 22[transfer].
Explanation 1.—For the purposes of this clause, "undertaking" shall have the meaning
assigned to it in Explanation 1 to clause (19AA).
Explanation 2.—For the removal of doubts, it is hereby declared that the determination of the
value of an asset or liability for the sole purpose of payment of stamp duty, registration fees
or other similar taxes or fees shall not be regarded as assignment of values to individual
assets or liabilities.
23[Explanation 3.—For the purposes of this clause, "transfer" shall have the meaning
assigned to it in clause (47);]
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(43) "tax" in relation to the assessment year commencing on the 1st day of April, 1965, and any
subsequent assessment year means income-tax chargeable under the provisions of this Act,
and in relation to any other assessment year income-tax and super-tax chargeable under the
provisions of this Act prior to the aforesaid date and in relation to the assessment year
commencing on the 1st day of April, 2006, and any subsequent assessment year includes the
fringe benefit tax payable under section 115WA ;
(43A) "tax credit certificate" means a tax credit certificate granted to any person in accordance with
the provisions of Chapter XXII-B and any scheme made thereunder ;
(43B) [***]
(44) "Tax Recovery Officer" means any Income-tax Officer who may be authorised by the
Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or
Commissioner, by general or special order in writing, to exercise the powers of a Tax
Recovery Officer and also to exercise or perform such powers and functions which are
conferred on, or assigned to, an Assessing Officer under this Act and which may be
prescribed;
(45) "total income" means the total amount of income referred to in section 5, computed in the
manner laid down in this Act ;
(46) [***]
(47) "transfer", in relation to a capital asset, includes,—
(i) the sale, exchange or relinquishment of the asset ; or
(ii) the extinguishment of any rights therein ; or
(iii) the compulsory acquisition thereof under any law ; or
(iv) in a case where the asset is converted by the owner thereof into, or is treated by him as,
stock-in-trade of a business carried on by him, such conversion or treatment ; or
(iva) the maturity or redemption of a zero coupon bond; or
(v) any transaction involving the allowing of the possession of any immovable property to
be taken or retained in part performance of a contract of the nature referred to in
section 53A of the Transfer of Property Act, 1882 (4 of 1882) ; or
(vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a
co-operative society, company or other association of persons or by way of any
agreement or any arrangement or in any other manner whatsoever) which has the effect
of transferring, or enabling the enjoyment of, any immovable property.
Explanation 1.—For the purposes of sub-clauses (v) and (vi), "immovable property" shall
have the same meaning as in clause (d) of section 269UA.
Explanation 2.—For the removal of doubts, it is hereby clarified that "transfer" includes and
shall be deemed to have always included disposing of or parting with an asset or any interest
therein, or creating any interest in any asset in any manner whatsoever, directly or indirectly,
absolutely or conditionally, voluntarily or involuntarily, by way of an agreement (whether
entered into in India or outside India) or otherwise, notwithstanding that such transfer of
rights has been characterised as being effected or dependent upon or flowing from the
transfer of a share or shares of a company registered or incorporated outside India;
24[(47A) "virtual digital asset" means—
(a) any information or code or number or token (not being Indian currency or foreign
currency), generated through cryptographic means or otherwise, by whatever name
called, providing a digital representation of value exchanged with or without
consideration, with the promise or representation of having inherent value, or functions
as a store of value or a unit of account including its use in any financial transaction or
investment, but not limited to investment scheme; and can be transferred, stored or
traded electronically;
(b) a non-fungible token or any other token of similar nature, by whatever name called;
(c) any other digital asset, as the Central Government may, by notification in the Official
Gazette specify:

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Provided that the Central Government may, by notification in the Official Gazette,
exclude any digital asset from the definition of virtual digital asset subject to such
conditions as may be specified therein.
Explanation.—For the purposes of this clause,—
(a) "non-fungible token" means such digital asset as the Central Government may, by
notification in the Official Gazette, specify;
(b) the expressions "currency", "foreign currency" and "Indian currency" shall have the
same meanings as respectively assigned to them in clauses (h), (m) and (q) of section 2
of the Foreign Exchange Management Act, 1999 (42 of 1999);]
(48) "zero coupon bond" means a bond—
(a) issued by any infrastructure capital company or infrastructure capital fund or
25[infrastructure debt fund or] public sector company or scheduled bank on or after the
1st day of June, 2005;
(b) in respect of which no payment and benefit is received or receivable before maturity or
redemption from infrastructure capital company or infrastructure capital fund or
25[infrastructure debt fund or] public sector company or scheduled bank; and

(c) which the Central Government may, by notification25a in the Official Gazette, specify
in this behalf.
25b[Explanation 1.]—For the purposes of this clause, the expression "scheduled bank" shall
have the meaning assigned to it in clause (ii) of the Explanation to sub-clause (c) of clause
(viia) of sub-section (1) of section 36.
25c[Explanation 2.—For the purposes of this clause, the expression "infrastructure debt fund"
shall mean the infrastructure debt fund notified by the Central Government in the Official
Gazette under clause (47) of section 10.]

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Scope of total income.

5. (1) Subject to the provisions of this Act, the total income of any previous year of a person who is a
resident includes all income from whatever source derived which—
(a) is received or is deemed to be received in India in such year by or on behalf of such person ; or
(b) accrues or arises or is deemed to accrue or arise to him in India during such year ; or
(c) accrues or arises to him outside India during such year :
Provided that, in the case of a person not ordinarily resident in India within the meaning of sub-
section (6)* of section 6, the income which accrues or arises to him outside India shall not be so
included unless it is derived from a business controlled in or a profession set up in India.
(2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non-
resident includes all income from whatever source derived which—
(a) is received or is deemed to be received in India in such year by or on behalf of such person ; or
(b) accrues or arises or is deemed to accrue or arise to him in India during such year.
Explanation 1.—Income accruing or arising outside India shall not be deemed to be received in India
within the meaning of this section by reason only of the fact that it is taken into account in a balance sheet
prepared in India.
Explanation 2.—For the removal of doubts, it is hereby declared that income which has been included in
the total income of a person on the basis that it has accrued or arisen or is deemed to have accrued or
arisen to him shall not again be so included on the basis that it is received or deemed to be received by
him in India.

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Deductions from income from house property.

24. Income chargeable under the head "Income from house property" shall be computed after making the
following deductions, namely:—
(a) a sum equal to thirty per cent of the annual value;
90(b) where the property has been acquired, constructed, repaired, renewed or reconstructed with
borrowed capital, the amount of any interest payable on such capital:
Provided that in respect of property referred to in sub-section (2) of section 23, the amount of
deduction or, as the case may be, the aggregate of the amount of deduction shall not exceed thirty
thousand rupees :
Provided further that where the property referred to in the first proviso is acquired or constructed
with capital borrowed on or after the 1st day of April, 1999 and such acquisition or construction is
completed within five years from the end of the financial year in which capital was borrowed, the
amount of deduction or, as the case may be, the aggregate of the amounts of deduction under this
clause shall not exceed two lakh rupees.
Explanation.—Where the property has been acquired or constructed with borrowed capital, the
interest, if any, payable on such capital borrowed for the period prior to the previous year in which
the property has been acquired or constructed, as reduced by any part thereof allowed as deduction
under any other provision of this Act, shall be deducted under this clause in equal instalments for the
said previous year and for each of the four immediately succeeding previous years:
Provided also that no deduction shall be made under the second proviso unless the assessee
furnishes a certificate, from the person to whom any interest is payable on the capital borrowed,
specifying the amount of interest payable by the assessee for the purpose of such acquisition or
construction of the property, or, conversion of the whole or any part of the capital borrowed which
remains to be repaid as a new loan.
Explanation.—For the purposes of this proviso, the expression "new loan" means the whole or any
part of a loan taken by the assessee subsequent to the capital borrowed, for the purpose of repayment
of such capital:
Provided also that the aggregate of the amounts of deduction under the first and second provisos
shall not exceed two lakh rupees.

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 GOVERNMENT OF INDIA

BUDGET 2023-2024

SPEECH
OF
NIRMALA SITHARAMAN
MINISTER OF FINANCE

February 1, 2023
 CONTENTS
PART-A

Page No.
 Introduction 1
 Achievements since 2014: Leaving no one behind 2
 Vision for Amrit Kaal – an empowered and inclusive economy 3
 Priorities of this Budget 5
i. Inclusive Development
ii. Reaching the Last Mile
iii. Infrastructure and Investment
iv. Unleashing the Potential
v. Green Growth
vi. Youth Power
vii. Financial Sector

 Fiscal Management 24
PART B

Indirect Taxes 27
 Green Mobility
 Electronics
 Electrical
 Chemicals and Petrochemicals
 Marine products
 Lab Grown Diamonds
 Precious Metals
 Metals
 Compounded Rubber
 Cigarettes

Direct Taxes 30
 MSMEs and Professionals
 Cooperation
 Start-Ups
 Appeals
 Better targeting of tax concessions
 Rationalisation
 Others
 Personal Income Tax

Annexures 35
 Annexure to Part B of the Budget Speech 2023-24
i. Amendments relating to Direct Taxes
ii. Amendments relating to Indirect Taxes
 Budget 2023-2024

Speech of
Nirmala Sitharaman
Minister of Finance

February 1, 2023

Hon’ble Speaker,

I present the Budget for 2023-24. This is the first Budget in Amrit
Kaal.

Introduction

1. This Budget hopes to build on the foundation laid in the previous

Budget, and the blueprint drawn for India@100. We envision a prosperous
and inclusive India, in which the fruits of development reach all regions and
citizens, especially our youth, women, farmers, OBCs, Scheduled Castes and
Scheduled Tribes.

2. In the 75th year of our Independence, the world has recognised the
Indian economy as a ‘bright star’. Our current year’s economic growth is
estimated to be at 7 per cent. It is notable that this is the highest among all
the major economies. This is in spite of the massive slowdown globally
caused by Covid-19 and a war. The Indian economy is therefore on the right
track, and despite a time of challenges, heading towards a bright future.

3. Today as Indians stands with their head held high, and the world
appreciates India’s achievements and successes, we are sure that elders
who had fought for India’s independence, will with joy, bless us our
endeavors going forward.

Resilience amidst multiple crises

4. Our focus on wide-ranging reforms and sound policies, implemented

through Sabka Prayas resulting in Jan Bhagidari and targeted support to
those in need, helped us perform well in trying times. India’s rising global
 2

profile is because of several accomplishments: unique world class digital

public infrastructure, e.g., Aadhaar, Co-Win and UPI; Covid vaccination drive
in unparalleled scale and speed; proactive role in frontier areas such as
achieving the climate related goals, mission LiFE, and National Hydrogen
Mission.

5. During the Covid-19 pandemic, we ensured that no one goes to bed

hungry, with a scheme to supply free food grains to over 80 crore persons
for 28 months. Continuing our commitment to ensure food and nutritional
security, we are implementing, from 1st January 2023, a scheme to supply
free food grain to all Antyodaya and priority households for the next one
year, under PM Garib Kalyan Anna Yojana (PMGKAY). The entire
expenditure of about ` 2 lakh crore will be borne by the Central
Government.

G20 Presidency: Steering the global agenda through challenges

6. In these times of global challenges, the G20 Presidency gives us a

unique opportunity to strengthen India’s role in the world economic order.
With the theme of ‘Vasudhaiva Kutumbakam’, we are steering an
ambitious, people-centric agenda to address global challenges, and to
facilitate sustainable economic development.

Achievements since 2014: Leaving no one behind

7. The government’s efforts since 2014 have ensured for all citizens a
better quality of living and a life of dignity. The per capita income has more
than doubled to ` 1.97 lakh.

8. In these nine years, the Indian economy has increased in size from
being 10th to 5th largest in the world. We have significantly improved our
position as a well-governed and innovative country with a conducive
environment for business as reflected in several global indices. We have
made significant progress in many Sustainable Development Goals.
 3

9. The economy has become a lot more formalised as reflected in the

EPFO membership more than doubling to 27 crore, and 7,400 crore digital
payments of ` 126 lakh crore through UPI in 2022.

10. The efficient implementation of many schemes, with

universalisation of targeted benefits, has resulted in inclusive development.
Some of the schemes are:

i. 11.7 crore household toilets under Swachh Bharat Mission,

ii. 9.6 crore LPG connections under Ujjawala,

iii. 220 crore Covid vaccination of 102 crore persons,

iv. 47.8 crore PM Jan Dhan bank accounts,

v. Insurance cover for 44.6 crore persons under PM Suraksha

Bima and PM Jeevan Jyoti Yojana, and

vi. Cash transfer of ` 2.2 lakh crore to over 11.4 crore farmers
under PM Kisan Samman Nidhi.

Vision for Amrit Kaal – an empowered and inclusive economy

11. Our vision for the Amrit Kaal includes technology-driven and
knowledge-based economy with strong public finances, and a robust
financial sector. To achieve this, Jan Bhagidari through Sabka Saath Sabka
Prayas is essential.

12. The economic agenda for achieving this vision focuses on three
things: first, facilitating ample opportunities for citizens, especially the
youth, to fulfil their aspirations; second, providing strong impetus to growth
and job creation; and third, strengthening macro-economic stability.

13. To service these focus areas in our journey to India@100, we believe

that the following four opportunities can be transformative during Amrit
Kaal.
 4

1) Economic Empowerment of Women: Deendayal Antyodaya Yojana

National Rural Livelihood Mission has achieved remarkable success
by mobilizing rural women into 81 lakh Self Help Groups. We will
enable these groups to reach the next stage of economic
empowerment through formation of large producer enterprises or
collectives with each having several thousand members and
managed professionally. They will be helped with supply of raw
materials and for better design, quality, branding and marketing of
their products. Through supporting policies, they will be enabled to
scale up their operations to serve the large consumer markets, as
has been the case with several start-ups growing into ‘Unicorns’.

2) PM VIshwakarma KAushal Samman (PM VIKAS): For centuries,

traditional artisans and craftspeople, who work with their hands
using tools, have brought renown for India. They are generally
referred to as Vishwakarma. The art and handicraft created by them
represents the true spirit of Atmanirbhar Bharat. For the first time, a
package of assistance for them has been conceptualized. The new
scheme will enable them to improve the quality, scale and reach of
their products, integrating them with the MSME value chain. The
components of the scheme will include not only financial support
but also access to advanced skill training, knowledge of modern
digital techniques and efficient green technologies, brand
promotion, linkage with local and global markets, digital payments,
and social security. This will greatly benefit the Scheduled Castes,
Scheduled Tribes, OBCs, women and people belonging to the weaker
sections.

3) Tourism: The country offers immense attraction for domestic as well

as foreign tourists. There is a large potential to be tapped in tourism.
The sector holds huge opportunities for jobs and entrepreneurship
for youth in particular. Promotion of tourism will be taken up on
mission mode, with active participation of states, convergence of
government programmes and public-private partnerships.
 5

4) Green Growth: We are implementing many programmes for green

fuel, green energy, green farming, green mobility, green buildings,
and green equipment, and policies for efficient use of energy across
various economic sectors. These green growth efforts help in
reducing carbon intensity of the economy and provides for large-
scale green job opportunities.

Priorities of this Budget

14. The Budget adopts the following seven priorities. They complement
each other and act as the ‘Saptarishi’ guiding us through the Amrit Kaal.

1) Inclusive Development
2) Reaching the Last Mile
3) Infrastructure and Investment
4) Unleashing the Potential
5) Green Growth
6) Youth Power
7) Financial Sector

Priority 1: Inclusive Development

15. The Government’s philosophy of Sabka Saath Sabka Vikas has

facilitated inclusive development covering in specific, farmers, women,
youth, OBCs, Scheduled Castes, Scheduled Tribes, divyangjan and
economically weaker sections, and overall priority for the underprivileged
(vanchiton ko variyata). There has also been a sustained focus on Jammu &
Kashmir, Ladakh and the North-East. This Budget builds on those efforts.

Agriculture and Cooperation

Digital Public Infrastructure for Agriculture

16. Digital public infrastructure for agriculture will be built as an open

source, open standard and inter operable public good. This will enable
 6

inclusive, farmer-centric solutions through relevant information services for

crop planning and health, improved access to farm inputs, credit, and
insurance, help for crop estimation, market intelligence, and support for
growth of agri-tech industry and start-ups.

Agriculture Accelerator Fund

17. An Agriculture Accelerator Fund will be set-up to encourage agri-

startups by young entrepreneurs in rural areas. The Fund will aim at
bringing innovative and affordable solutions for challenges faced by
farmers. It will also bring in modern technologies to transform agricultural
practices, increase productivity and profitability.

Enhancing productivity of cotton crop

18. To enhance the productivity of extra-long staple cotton, we will

adopt a cluster-based and value chain approach through Public Private
Partnerships (PPP). This will mean collaboration between farmers, state and
industry for input supplies, extension services, and market linkages.

Atmanirbhar Horticulture Clean Plant Program

19. We will launch an Atmanirbhar Clean Plant Program to boost

availability of disease-free, quality planting material for high value
horticultural crops at an outlay of ` 2,200 crore.

Global Hub for Millets: ‘Shree Anna’

20. “India is at the forefront of popularizing Millets, whose consumption

furthers nutrition, food security and welfare of farmers,” said Hon’ble Prime
Minister.

21. We are the largest producer and second largest exporter of ‘Shree
Anna’ in the world. We grow several types of 'Shree Anna' such as jowar,
ragi, bajra, kuttu, ramdana, kangni, kutki, kodo, cheena, and sama. These
have a number of health benefits, and have been an integral part of our
food for centuries. I acknowledge with pride the huge service done by small
 7

farmers in contributing to the health of fellow citizens by growing these

‘Shree Anna’.

22. Now to make India a global hub for 'Shree Anna', the Indian Institute
of Millet Research, Hyderabad will be supported as the Centre of Excellence
for sharing best practices, research and technologies at the international
level.

Agriculture Credit

23. The agriculture credit target will be increased

to ` 20 lakh crore with focus on animal husbandry, dairy and fisheries.

Fisheries

24. We will launch a new sub-scheme of PM Matsya Sampada Yojana

with targeted investment of ` 6,000 crore to further enable activities of
fishermen, fish vendors, and micro & small enterprises, improve value chain
efficiencies, and expand the market.

Cooperation

25. For farmers, especially small and marginal farmers, and other
marginalised sections, the government is promoting cooperative-based
economic development model. A new Ministry of Cooperation was formed
with a mandate to realise the vision of ‘Sahakar Se Samriddhi’. To realise
this vision, the government has already initiated computerisation of 63,000
Primary Agricultural Credit Societies (PACS) with an investment of ` 2,516
crore. In consultation with all stakeholders and states, model bye-laws for
PACS were formulated enabling them to become multipurpose PACS. A
national cooperative database is being prepared for country-wide mapping
of cooperative societies.

26. With this backdrop, we will implement a plan to set up massive

decentralised storage capacity. This will help farmers store their produce
and realize remunerative prices through sale at appropriate times. The
government will also facilitate setting up of a large number of multipurpose
 8

cooperative societies, primary fishery societies and dairy cooperative

societies in uncovered panchayats and villages in the next 5 years.

Health, Education and Skilling

Nursing Colleges

27. One hundred and fifty-seven new nursing colleges will be

established in co-location with the existing 157 medical colleges established
since 2014.

Sickle Cell Anaemia Elimination Mission

28. A Mission to eliminate Sickle Cell Anaemia by 2047 will be launched.

It will entail awareness creation, universal screening of 7 crore people in the
age group of 0-40 years in affected tribal areas, and counselling through
collaborative efforts of central ministries and state governments.

Medical Research

29. Facilities in select ICMR Labs will be made available for research by
public and private medical college faculty and private sector R&D teams for
encouraging collaborative research and innovation.

Pharma Innovation

30. A new programme to promote research and innovation in

pharmaceuticals will be taken up through centers of excellence. We shall
also encourage industry to invest in research and development in specific
priority areas.

Multidisciplinary courses for medical devices

31. Dedicated multidisciplinary courses for medical devices will be

supported in existing institutions to ensure availability of skilled manpower
for futuristic medical technologies, high-end manufacturing and research.
 9

Teachers’ Training

32. Teachers’ training will be re-envisioned through innovative

pedagogy, curriculum transaction, continuous professional development,
dipstick surveys, and ICT implementation. The District Institutes of
Education and Training will be developed as vibrant institutes of excellence
for this purpose.

National Digital Library for Children and Adolescents

33. A National Digital Library for children and adolescents will be set-up
for facilitating availability of quality books across geographies, languages,
genres and levels, and device agnostic accessibility. States will be
encouraged to set up physical libraries for them at panchayat and ward
levels and provide infrastructure for accessing the National Digital Library
resources.

34. Additionally, to build a culture of reading, and to make up for

pandemic-time learning loss, the National Book Trust, Children’s Book Trust
and other sources will be encouraged to provide and replenish non-
curricular titles in regional languages and English to these physical libraries.
Collaboration with NGOs that work in literacy will also be a part of this
initiative. To inculcate financial literacy, financial sector regulators and
organizations will be encouraged to provide age-appropriate reading
material to these libraries.

Priority 2: Reaching the Last Mile

35. Prime Minister Vajpayee’s government had formed the Ministry of

Tribal Affairs and the Department of Development of North-Eastern Region.
To provide a sharper focus to the objective of ‘reaching the last mile’, our
government has formed the ministries of AYUSH, Fisheries, Animal
Husbandry and Dairying, Skill Development, Jal Shakti and Cooperation.
 10

Aspirational Districts and Blocks Programme

36. Building on the success of the Aspirational Districts Programme, the

Government has recently launched the Aspirational Blocks Programme
covering 500 blocks for saturation of essential government services across
multiple domains such as health, nutrition, education, agriculture, water
resources, financial inclusion, skill development, and basic infrastructure.

Pradhan Mantri PVTG Development Mission

37. To improve socio-economic conditions of the particularly vulnerable

tribal groups (PVTGs), Pradhan Mantri PVTG Development Mission will be
launched. This will saturate PVTG families and habitations with basic
facilities such as safe housing, clean drinking water and sanitation,
improved access to education, health and nutrition, road and telecom
connectivity, and sustainable livelihood opportunities. An amount
of ` 15,000 crore will be made available to implement the Mission in the
next three years under the Development Action Plan for the Scheduled
Tribes.

Eklavya Model Residential Schools

38. In the next three years, centre will recruit 38,800 teachers and
support staff for the 740 Eklavya Model Residential Schools, serving 3.5 lakh
tribal students.

Water for Drought Prone Region

39. In the drought prone central region of Karnataka, central assistance

of ` 5,300 crore will be given to Upper Bhadra Project to provide
sustainable micro irrigation and filling up of surface tanks for drinking
water.

PM Awas Yojana

40. The outlay for PM Awas Yojana is being enhanced

by 66 per cent to over ` 79,000 crore.
 11

Bharat Shared Repository of Inscriptions (Bharat SHRI)

41. ‘Bharat Shared Repository of Inscriptions’ will be set up in a digital

epigraphy museum, with digitization of one lakh ancient inscriptions in the
first stage.

Support for poor prisoners

42. For poor persons who are in prisons and unable to afford the
penalty or the bail amount, required financial support will be provided.

Priority 3: Infrastructure & Investment

43. Investments in Infrastructure and productive capacity have a large

multiplier impact on growth and employment. After the subdued period of
the pandemic, private investments are growing again. The Budget takes the
lead once again to ramp up the virtuous cycle of investment and job
creation.

Capital Investment as driver of growth and jobs

44. Capital investment outlay is being increased steeply for the third
year in a row by 33 per cent to ` 10 lakh crore, which would be 3.3 per cent
of GDP. This will be almost three times the outlay in 2019-20.

45. This substantial increase in recent years is central to the

government’s efforts to enhance growth potential and job creation, crowd-
in private investments, and provide a cushion against global headwinds.

Effective Capital Expenditure

46. The direct capital investment by the Centre is complemented by the

provision made for creation of capital assets through Grants-in-Aid to
States. The ‘Effective Capital Expenditure’ of the Centre is budgeted at
` 13.7 lakh crore, which will be 4.5 per cent of GDP.
 12

Support to State Governments for Capital Investment

47. I have decided to continue the 50-year interest free loan to state
governments for one more year to spur investment in infrastructure and to
incentivize them for complementary policy actions, with a significantly
enhanced outlay of ` 1.3 lakh crore.

Enhancing opportunities for private investment in Infrastructure

48. The newly established Infrastructure Finance Secretariat will assist

all stakeholders for more private investment in infrastructure, including
railways, roads, urban infrastructure and power, which are predominantly
dependent on public resources.

Harmonized Master List of Infrastructure

49. The Harmonized Master List of Infrastructure will be reviewed by an

expert committee for recommending the classification and financing
framework suitable for Amrit Kaal.

Railways

50. A capital outlay of ` 2.40 lakh crore has been provided for the
Railways. This highest ever outlay is about 9 times the outlay made in 2013-
14.

Logistics

51. One hundred critical transport infrastructure projects, for last and
first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors
have been identified. They will be taken up on priority with investment of
` 75,000 crore, including ` 15,000 crore from private sources.

Regional Connectivity

52. Fifty additional airports, heliports, water aerodromes and advance

landing grounds will be revived for improving regional air connectivity.
 13

Sustainable Cities of Tomorrow

53. States and cities will be encouraged to undertake urban planning

reforms and actions to transform our cities into ‘sustainable cities of
tomorrow’. This means efficient use of land resources, adequate resources
for urban infrastructure, transit-oriented development, enhanced
availability and affordability of urban land, and opportunities for all.

Making Cities ready for Municipal Bonds

54. Through property tax governance reforms and ring-fencing user

charges on urban infrastructure, cities will be incentivized to improve their
credit worthiness for municipal bonds.

Urban Infrastructure Development Fund

55. Like the RIDF, an Urban Infrastructure Development Fund (UIDF) will
be established through use of priority sector lending shortfall. This will be
managed by the National Housing Bank, and will be used by public agencies
to create urban infrastructure in Tier 2 and Tier 3 cities. States will be
encouraged to leverage resources from the grants of the 15th Finance
Commission, as well as existing schemes, to adopt appropriate user charges
while accessing the UIDF. We expect to make
available ` 10,000 crore per annum for this purpose.

Urban Sanitation

56. All cities and towns will be enabled for 100 per cent mechanical
desludging of septic tanks and sewers to transition from manhole to
machine-hole mode. Enhanced focus will be provided for scientific
management of dry and wet waste.

Priority 4: Unleashing the Potential

57. “Good Governance is the key to a nation’s progress. Our government

is committed to providing a transparent and accountable administration
which works for the betterment and welfare of the common citizen,” said
Hon’ble Prime Minister.
 14

Mission Karmayogi

58. Under Mission Karmayogi, Centre, States and Union Territories are
making and implementing capacity-building plans for civil servants. The
government has also launched an integrated online training platform, iGOT
Karmayogi, to provide continuous learning opportunities for lakhs of
government employees to upgrade their skills and facilitate people-centric
approach.

59. For enhancing ease of doing business, more than

39,000 compliances have been reduced and more than
3,400 legal provisions have been decriminalized. For furthering the trust-
based governance, we have introduced the Jan Vishwas Bill to amend 42
Central Acts. This Budget proposes a series of measures to unleash the
potential of our economy.

Centres of Excellence for Artificial Intelligence

60. For realizing the vision of “Make AI in India and Make AI work for
India”, three centres of excellence for Artificial Intelligence will be set-up in
top educational institutions. Leading industry players will partner in
conducting interdisciplinary research, develop cutting-edge applications and
scalable problem solutions in the areas of agriculture, health, and
sustainable cities. This will galvanize an effective AI ecosystem and nurture
quality human resources in the field.

National Data Governance Policy

61. To unleash innovation and research by start-ups and academia, a

National Data Governance Policy will be brought out. This will enable access
to anonymized data.

Simplification of Know Your Customer (KYC) process

62. The KYC process will be simplified adopting a ‘risk-based’ instead of

‘one size fits all’ approach. The financial sector regulators will also be
 15

encouraged to have a KYC system fully amenable to meet the needs of

Digital India.

One stop solution for identity and address updating

63. A one stop solution for reconciliation and updating of identity and
address of individuals maintained by various government agencies,
regulators and regulated entities will be established using DigiLocker service
and Aadhaar as foundational identity.

Common Business Identifier

64. For the business establishments required to have a Permanent

Account Number (PAN), the PAN will be used as the common identifier for
all digital systems of specified government agencies. This will bring ease of
doing business; and it will be facilitated through a legal mandate.

Unified Filing Process

65. For obviating the need for separate submission of same information
to different government agencies, a system of ‘Unified Filing Process’ will be
set-up. Such filing of information or return in simplified forms on a common
portal, will be shared with other agencies as per filer’s choice.

Vivad se Vishwas I – Relief for MSMEs

66. In cases of failure by MSMEs to execute contracts during the Covid

period, 95 per cent of the forfeited amount relating to bid or performance
security, will be returned to them by government and government
undertakings. This will provide relief to MSMEs.

Vivad se Vishwas II – Settling Contractual Disputes

67. To settle contractual disputes of government and government

undertakings, wherein arbitral award is under challenge in a court, a
voluntary settlement scheme with standardized terms will be introduced.
This will be done by offering graded settlement terms depending on
pendency level of the dispute.
 16

State Support Mission

68. The State Support Mission of NITI Aayog will be continued for three
years for our collective efforts towards national priorities.

Result Based Financing

69. To better allocate scarce resources for competing development

needs, the financing of select schemes will be changed, on a pilot basis,
from ‘input-based’ to ‘result-based’.

E-Courts

70. For efficient administration of justice, Phase-3 of the

E-Courts project will be launched with an outlay
of ` 7,000 crore.

Fintech Services

71. Fintech services in India have been facilitated by our digital public
infrastructure including Aadhaar, PM Jan Dhan Yojana, Video KYC, India
Stack and UPI. To enable more Fintech innovative services, the scope of
documents available in DigiLocker for individuals will be expanded.

Entity DigiLocker

72. An Entity DigiLocker will be set up for use by MSMEs, large business
and charitable trusts. This will be towards storing and sharing documents
online securely, whenever needed, with various authorities, regulators,
banks and other business entities.

5G Services

73. One hundred labs for developing applications using

5G services will be set up in engineering institutions to realise a new range
of opportunities, business models, and employment potential. The labs will
cover, among others, applications such as smart classrooms, precision
farming, intelligent transport systems, and health care applications.
 17

Lab Grown Diamonds

74. Lab Grown Diamonds (LGD) is a technology-and innovation-driven

emerging sector with high employment potential. These environment-
friendly diamonds which have optically and chemically the same properties
as natural diamonds. To encourage indigenous production of LGD seeds and
machines and to reduce import dependency, a research and development
grant will be provided to one of the IITs for five years.

75. To reduce the cost of production, a proposal to review the custom

duty rate on LGD seeds will be indicated in Part B of the speech.

Priority 5: Green Growth

76. Hon’ble Prime Minister has given a vision for “LiFE”, or Lifestyle for
Environment, to spur a movement of environmentally conscious lifestyle.
India is moving forward firmly for the ‘panchamrit’ and net-zero carbon
emission by 2070 to usher in green industrial and economic transition. This
Budget builds on our focus on green growth.

Green Hydrogen Mission

77. The recently launched National Green Hydrogen Mission, with an

outlay of ` 19,700 crores, will facilitate transition of the economy to low
carbon intensity, reduce dependence on fossil fuel imports, and make the
country assume technology and market leadership in this sunrise sector.
Our target is to reach an annual production of 5 MMT by 2030.

Energy Transition

78. This Budget provides ` 35,000 crore for priority capital investments
towards energy transition and net zero objectives, and energy security by
Ministry of Petroleum & Natural Gas.

Energy Storage Projects

79. To steer the economy on the sustainable development path, Battery

Energy Storage Systems with capacity of 4,000 MWH will be supported with
 18

Viability Gap Funding. A detailed framework for Pumped Storage Projects

will also be formulated.

Renewable Energy Evacuation

80. The Inter-state transmission system for evacuation and grid

integration of 13 GW renewable energy from Ladakh will be constructed
with investment of ` 20,700 crore including central support of ` 8,300 crore.

Green Credit Programme

81. For encouraging behavioural change, a Green Credit Programme will

be notified under the Environment (Protection) Act. This will incentivize
environmentally sustainable and responsive actions by companies,
individuals and local bodies, and help mobilize additional resources for such
activities.

PM-PRANAM

82. “PM Programme for Restoration, Awareness, Nourishment and

Amelioration of Mother Earth” will be launched to incentivize States and
Union Territories to promote alternative fertilizers and balanced use of
chemical fertilizers.

GOBARdhan scheme

83. 500 new ‘waste to wealth’ plants under GOBARdhan (Galvanizing

Organic Bio-Agro Resources Dhan) scheme will be established for promoting
circular economy. These will include 200 compressed biogas (CBG) plants,
including 75 plants in urban areas, and 300 community or cluster-based
plants at total investment of ` 10,000 crore. I will refer to this in Part B. In
due course, a 5 per cent CBG mandate will be introduced for all
organizations marketing natural and bio gas. For collection of bio-mass and
distribution of bio-manure, appropriate fiscal support will be provided.
 19

Bhartiya Prakritik Kheti Bio-Input Resource Centres

84. Over the next 3 years, we will facilitate 1 crore farmers to adopt
natural farming. For this, 10,000 Bio-Input Resource Centres will be set-up,
creating a national-level distributed micro-fertilizer and pesticide
manufacturing network.

MISHTI

85. Building on India’s success in afforestation, ‘Mangrove Initiative for

Shoreline Habitats & Tangible Incomes’, MISHTI, will be taken up for
mangrove plantation along the coastline and on salt pan lands, wherever
feasible, through convergence between MGNREGS, CAMPA Fund and other
sources.

Amrit Dharohar

86. Wetlands are vital ecosystems which sustain biological diversity. In

his latest Mann Ki Baat, the Prime Minister said, “Now the total number of
Ramsar sites in our country has increased to 75. Whereas, before 2014,
there were only 26…” Local communities have always been at the forefront
of conservation efforts. The government will promote their unique
conservation values through Amrit Dharohar, a scheme that will be
implemented over the next three years to encourage optimal use of
wetlands, and enhance bio-diversity, carbon stock,
eco-tourism opportunities and income generation for local communities.

Coastal Shipping

87. Coastal shipping will be promoted as the energy efficient and lower
cost mode of transport, both for passengers and freight, through PPP mode
with viability gap funding.

Vehicle Replacement

88. Replacing old polluting vehicles is an important part of greening our

economy. In furtherance of the vehicle scrapping policy mentioned in
Budget 2021-22, I have allocated adequate funds to scrap old vehicles of
 20

the Central Government. States will also be supported in replacing old

vehicles and ambulances.

Priority 6: Youth Power

89. To empower our youth and help the ‘Amrit Peedhi’ realize their
dreams, we have formulated the National Education Policy, focused on
skilling, adopted economic policies that facilitate job creation at scale, and
have supported business opportunities.

Pradhan Mantri Kaushal Vikas Yojana 4.0

90. Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched to skill
lakhs of youth within the next three years. On-job training, industry
partnership, and alignment of courses with needs of industry will be
emphasized. The scheme will also cover new age courses for Industry 4.0
like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft
skills. To skill youth for international opportunities, 30 Skill India
International Centres will be set up across different States.

Skill India Digital Platform

91. The digital ecosystem for skilling will be further expanded with the
launch of a unified Skill India Digital platform for:

 enabling demand-based formal skilling,

 linking with employers including MSMEs, and

 facilitating access to entrepreneurship schemes.

National Apprenticeship Promotion Scheme

92. To provide stipend support to 47 lakh youth in three years, Direct

Benefit Transfer under a pan-India National Apprenticeship Promotion
Scheme will be rolled out.
 21

Tourism

93. With an integrated and innovative approach, at

least 50 destinations will be selected through challenge mode. In addition to
aspects such as physical connectivity, virtual connectivity, tourist guides,
high standards for food streets and tourists’ security, all the relevant
aspects would be made available on an App to enhance tourist experience.
Every destination would be developed as a complete package. The focus of
development of tourism would be on domestic as well as foreign tourists.

94. Sector specific skilling and entrepreneurship development will be

dovetailed to achieve the objectives of the ‘Dekho Apna Desh’ initiative.
This was launched as an appeal by the Prime Minister to the middle class to
prefer domestic tourism over international tourism. For integrated
development of theme-based tourist circuits, the ‘Swadesh Darshan
Scheme’ was also launched. Under the Vibrant Villages Programme, tourism
infrastructure and amenities will also be facilitated in border villages.

Unity Mall

95. States will be encouraged to set up a Unity Mall in their state capital
or most prominent tourism centre or the financial capital for promotion and
sale of their own ODOPs (one district, one product), GI products and other
handicraft products, and for providing space for such products of all other
States.

Priority 7: Financial Sector

96. Our reforms in the financial sector and innovative use of technology
have led to financial inclusion at scale, better and faster service delivery,
ease of access to credit and participation in financial markets. This Budget
proposes to further these measures.

Credit Guarantee for MSMEs

97. Last year, I proposed revamping of the credit guarantee scheme for
MSMEs. I am happy to announce that the revamped scheme will take effect
 22

from 1st April 2023 through infusion of ` 9,000 crore in the corpus. This will
enable additional collateral-free guaranteed credit of ` 2 lakh crore.
Further, the cost of the credit will be reduced by about 1 per cent.

National Financial Information Registry

98. A national financial information registry will be set up to serve as the

central repository of financial and ancillary information. This will facilitate
efficient flow of credit, promote financial inclusion, and foster financial
stability. A new legislative framework will govern this credit public
infrastructure, and it will be designed in consultation with the RBI.

Financial Sector Regulations

99. To meet the needs of Amrit Kaal and to facilitate optimum

regulation in the financial sector, public consultation, as necessary and
feasible, will be brought to the process of regulation-making and issuing
subsidiary directions.

100. To simplify, ease and reduce cost of compliance, financial sector

regulators will be requested to carry out a comprehensive review of existing
regulations. For this, they will consider suggestions from public and
regulated entities. Time limits to decide the applications under various
regulations will also be laid down.

GIFT IFSC

101. To enhance business activities in GIFT IFSC, the following measures

will be taken:

 Delegating powers under the SEZ Act to IFSCA to avoid dual

regulation,

 Setting up a single window IT system for registration and

approval from IFSCA, SEZ authorities, GSTN, RBI, SEBI and
IRDAI,
 23

 Permitting acquisition financing by IFSC Banking Units of

foreign banks,

 Establishing a subsidiary of EXIM Bank for trade

re-financing,

 Amending IFSCA Act for statutory provisions for arbitration,

ancillary services, and avoiding dual regulation under SEZ Act,
and

 Recognizing offshore derivative instruments as valid contracts.

Data Embassy

102. For countries looking for digital continuity solutions, we will

facilitate setting up of their Data Embassies in GIFT IFSC.

Improving Governance and Investor Protection in Banking Sector

103. To improve bank governance and enhance investors’ protection,

certain amendments to the Banking Regulation Act, the Banking Companies
Act and the Reserve Bank of India Act are proposed.

Capacity Building in Securities Market

104. To build capacity of functionaries and professionals in the securities

market, SEBI will be empowered to develop, regulate, maintain and enforce
norms and standards for education in the National Institute of Securities
Markets and to recognize award of degrees, diplomas and certificates.

Central Data Processing Centre

105. A Central Processing Centre will be setup for faster response to

companies through centralized handling of various forms filed with field
offices under the Companies Act.
 24

Reclaiming of shares and dividends

106. For investors to reclaim unclaimed shares and unpaid dividends

from the Investor Education and Protection Fund Authority with ease, an
integrated IT portal will be established.

Digital Payments

107. Digital payments continue to find wide acceptance. In 2022, they

show increase of 76 per cent in transactions
and 91 per cent in value. Fiscal support for this digital public infrastructure
will continue in 2023-24.

Azadi Ka Amrit Mahotsav Mahila Samman Bachat Patra

108. For commemorating Azadi Ka Amrit Mahotsav, a one-time new small

savings scheme, Mahila Samman Savings Certificate, will be made available
for a two-year period up to March 2025. This will offer deposit facility upto
` 2 lakh in the name of women or girls for a tenor of 2 years at fixed
interest rate of 7.5 per cent with partial withdrawal option.

Senior Citizens

109. The maximum deposit limit for Senior Citizen Savings Scheme will be
enhanced from ` 15 lakh to ` 30 lakh.

110. The maximum deposit limit for Monthly Income Account Scheme
will be enhanced from ` 4.5 lakh to ` 9 lakh for single account and from ` 9
lakh to ` 15 lakh for joint account.

Fiscal Management

Fifty-year interest free loan to States

111. The entire fifty-year loan to states has to be spent on capital

expenditure within 2023-24. Most of this will be at the discretion of states,
but a part will be conditional on states increasing their actual capital
 25

expenditure. Parts of the outlay will also be linked to, or allocated for, the
following purposes:

 Scrapping old government vehicles,

 Urban planning reforms and actions,

 Financing reforms in urban local bodies to make them

creditworthy for municipal bonds,

 Housing for police personnel above or as part of police stations,

 Constructing Unity Malls,

 Children and adolescents’ libraries and digital infrastructure,

and

 State share of capital expenditure of central schemes.

Fiscal Deficit of States

112. States will be allowed a fiscal deficit of 3.5 per cent of GSDP of which
0.5 per cent will be tied to power sector reforms.

Revised Estimates 2022-23

113. The Revised Estimate of the total receipts other than borrowings is
` 24.3 lakh crore, of which the net tax receipts
are ` 20.9 lakh crore. The Revised Estimate of the total expenditure is
` 41.9 lakh crore, of which the capital expenditure is about ` 7.3 lakh crore.

114. The Revised Estimate of the fiscal deficit is 6.4 per cent of GDP,
adhering to the Budget Estimate.

Budget Estimates 2023-24

115. Coming to 2023-24, the total receipts other than borrowings and the
total expenditure are estimated at ` 27.2 lakh crore and ` 45 lakh crore
respectively. The net tax receipts are estimated at ` 23.3 lakh crore.
 26

116. The fiscal deficit is estimated to be 5.9 per cent of GDP. In my

Budget Speech for 2021-22, I had announced that we plan to continue the
path of fiscal consolidation, reaching a fiscal deficit below 4.5 per cent by
2025-26 with a fairly steady decline over the period. We have adhered to
this path, and I reiterate my intention to bring the fiscal deficit below 4.5
per cent of GDP by 2025-26.

117. To finance the fiscal deficit in 2023-24, the net market borrowings
from dated securities are estimated at ` 11.8 lakh crore. The balance
financing is expected to come from small savings and other sources. The
gross market borrowings are estimated at ` 15.4 lakh crore.

I will, now, move to Part B.

 27

PART B

Indirect Taxes

118. My indirect tax proposals aim to promote exports, boost domestic

manufacturing, enhance domestic value addition, encourage green energy
and mobility.

119. A simplified tax structure with fewer tax rates helps in reducing
compliance burden and improving tax administration. I propose to reduce
the number of basic customs duty rates on goods, other than textiles and
agriculture, from 21 to 13. As a result, there are minor changes in the basic
custom duties, cesses and surcharges on some items including toys,
bicycles, automobiles and naphtha.

Green Mobility

120. To avoid cascading of taxes on blended compressed natural gas, I

propose to exempt excise duty on GST-paid compressed bio gas contained
in it. To further provide impetus to green mobility, customs duty exemption
is being extended to import of capital goods and machinery required for
manufacture of lithium-ion cells for batteries used in electric vehicles.

Electronics

121. As a result of various initiatives of the Government, including the

Phased Manufacturing programme, mobile phone production in India has
increased from 5.8 crore units valued at about ` 18,900 crore in 2014-15 to
31 crore units valued at over ` 2,75,000 crore in the last financial year. To
further deepen domestic value addition in manufacture of mobile phones, I
propose to provide relief in customs duty on import of certain parts and
inputs like camera lens and continue the concessional duty on lithium-ion
cells for batteries for another year.
 28

122. Similarly, to promote value addition in manufacture of televisions, I

propose to reduce the basic customs duty on parts of open cells of TV
panels to 2.5 per cent.

Electrical

123. To rectify inversion of duty structure and encourage manufacturing

of electric kitchen chimneys, the basic customs duty on electric kitchen
chimney is being increased from 7.5 per cent to 15 per cent and that on
heat coils for these is proposed to be reduced from 20 per cent to 15 per
cent.

Chemicals and Petrochemicals

124. Denatured ethyl alcohol is used in chemical industry.

I propose to exempt basic customs duty on it. This will also support the
Ethanol Blending Programme and facilitate our endeavour for energy
transition. Basic customs duty is also being reduced on acid grade fluorspar
from 5 per cent to 2.5 per cent to make the domestic fluorochemicals
industry competitive. Further, the basic customs duty on crude glycerin for
use in manufacture of epicholorhydrin is proposed to be reduced from 7.5
per cent to 2.5 per cent.

Marine products

125. In the last financial year, marine products recorded the highest
export growth benefitting farmers in the coastal states of the country. To
further enhance the export competitiveness of marine products,
particularly shrimps, duty is being reduced on key inputs for domestic
manufacture of shrimp feed.

Lab Grown Diamonds

126. India is a global leader in cutting and polishing of natural diamonds,

contributing about three-fourths of the global turnover by value. With the
depletion in deposits of natural diamonds, the industry is moving towards
Lab Grown Diamonds (LGDs) and it holds huge promise. To seize this
 29

opportunity, I propose to reduce basic customs duty on seeds used in their

manufacture.

Precious Metals

127. Customs Duties on dore and bars of gold and platinum were
increased earlier this fiscal. I now propose to increase the duties on articles
made therefrom to enhance the duty differential. I also propose to increase
the import duty on silver dore, bars and articles to align them with that on
gold and platinum.

Metals

128. To facilitate availability of raw materials for the steel sector,

exemption from Basic Customs Duty on raw materials for manufacture of
CRGO Steel, ferrous scrap and nickel cathode is being continued.

129. Similarly, the concessional BCD of 2.5 per cent on copper scrap is
also being continued to ensure the availability of raw materials for
secondary copper producers who are mainly in the MSME sector.

Compounded Rubber

130. The basic customs duty rate on compounded rubber is being

increased from 10 per cent to ‘25 per cent or ` 30/kg whichever is lower’, at
par with that on natural rubber other than latex, to curb circumvention of
duty.

Cigarettes

131. National Calamity Contingent Duty (NCCD) on specified cigarettes

was last revised three years ago. This is proposed to be revised upwards by
about 16 per cent.
 30

Direct Taxes

132. I now come to my direct tax proposals. These proposals aim to

maintain continuity and stability of taxation, further simplify and rationalise
various provisions to reduce the compliance burden, promote the
entrepreneurial spirit and provide tax relief to citizens.

133. It has been the constant endeavour of the Income Tax Department
to improve Tax Payers Services by making compliance easy and smooth. Our
tax payers’ portal received a maximum of 72 lakh returns in a day;
processed more than 6.5 crore returns this year; average processing period
reduced from 93 days in financial year 13-14 to 16 days now;
and 45 per cent of the returns were processed within 24 hours. We intend
to further improve this, roll out a next-generation Common IT Return Form
for tax payer convenience, and also plan to strengthen the grievance
redressal mechanism.

MSMEs and Professionals

134. MSMEs are growth engines of our economy. Micro enterprises with
turnover up to ` 2 crore and certain professionals with turnover of up to
` 50 lakh can avail the benefit of presumptive taxation. I propose to provide
enhanced limits of ` 3 crore and ` 75 lakh respectively, to the tax payers
whose cash receipts are no more than 5 per cent. Moreover, to support
MSMEs in timely receipt of payments, I propose to allow deduction for
expenditure incurred on payments made to them only when payment is
actually made.

Cooperation

135. Cooperation is a value to be cherished. In realizing our Prime

Minister’s goal of “Sahkar se Samriddhi”, and his resolve to “connect the
spirit of cooperation with the spirit of Amrit Kaal”, in addition to the
measures proposed in Part A, I have a slew of proposals for the co-operative
sector.
 31

136. First, new co-operatives that commence manufacturing activities till

31.3.2024 shall get the benefit of a lower tax rate of 15 per cent, as is
presently available to new manufacturing companies.

137. Secondly, I propose to provide an opportunity to sugar co-operatives

to claim payments made to sugarcane farmers for the period prior to
assessment year 2016-17 as expenditure. This is expected to provide them
with a relief of almost ` 10,000 crore.

138. Thirdly, I am providing a higher limit of ` 2 lakh per member for cash
deposits to and loans in cash by Primary Agricultural Co-operative Societies
(PACS) and Primary Co-operative Agriculture and Rural Development Banks
(PCARDBs).

139. Similarly, a higher limit of ` 3 crore for TDS on cash withdrawal is

being provided to co-operative societies.

Start-Ups

140. Entrepreneurship is vital for a country’s economic development. We

have taken a number of measures for start-ups and they have borne results.
India is now the third largest ecosystem for start-ups globally, and ranks
second in innovation quality among middle-income countries. I propose to
extend the date of incorporation for income tax benefits to start-ups from
31.03.23 to 31.3.24. I further propose to provide the benefit of carry
forward of losses on change of shareholding of start-ups from seven years
of incorporation to ten years.

Appeals

141. To reduce the pendency of appeals at Commissioner level, I propose

to deploy about 100 Joint Commissioners for disposal of small appeals. We
shall also be more selective in taking up cases for scrutiny of returns already
received this year.
 32

Better targeting of tax concessions

142. For better targeting of tax concessions and exemptions,

I propose to cap deduction from capital gains on investment in residential
house under sections 54 and 54F to ` 10 crore. Another proposal with
similar intent is to limit income tax exemption from proceeds of insurance
policies with very high value.

Rationalisation

143. There are a number of proposals relating to rationalisation and

simplification. Income of authorities, boards and commissions set up by
statutes of the Union or State for the purpose of housing, development of
cities, towns and villages, and regulating, or regulating and developing an
activity or matter, is proposed to be exempted from income tax. Other
major measures in this direction are:

 Removing the minimum threshold of ` 10,000/- for TDS and

clarifying taxability relating to online gaming;
 Not treating conversion of gold into electronic gold receipt and vice
versa as capital gain;
 Reducing the TDS rate from 30 per cent to 20 per cent on taxable
portion of EPF withdrawal in non-PAN cases; and
 Taxation on income from Market Linked Debentures.

Others

144. Other major proposals in the Finance Bill relate to the following:

 Extension of period of tax benefits to funds relocating to IFSC, GIFT

City till 31.03.2025;
 Decriminalisation under section 276A of the Income Tax Act;
 Allowing carry forward of losses on strategic disinvestment including
that of IDBI Bank; and
 Providing EEE status to Agniveer Fund.
 33

Personal Income Tax

145. Now, I come to what everyone is waiting for -- personal income tax. I
have five major announcements to make in this regard. These primarily
benefit our hard-working middle class.

146. The first one concerns rebate. Currently, those with income up to
` 5 lakh do not pay any income tax in both old and new tax regimes. I
propose to increase the rebate limit to ` 7 lakh in the new tax regime. Thus,
persons in the new tax regime, with income up to ` 7 lakh will not have to
pay any tax.

147. The second proposal relates to middle-class individuals.

I had introduced, in the year 2020, the new personal income tax regime
with six income slabs starting from ` 2.5 lakh. I propose to change the tax
structure in this regime by reducing the number of slabs to five and
increasing the tax exemption limit to ` 3 lakh. The new tax rates are:

` 0-3 lakh Nil

` 3-6 lakh 5 per cent
` 6-9 lakh 10 per cent
` 9-12 lakh 15 per cent
` 12-15 lakh 20 per cent
Above ` 15 lakh 30 per cent

148. This will provide major relief to all tax payers in the new regime. An
individual with an annual income of ` 9 lakh will be required to pay only
` 45,000/-. This is only 5 per cent of his or her income. It is a reduction of 25
per cent on what he or she is required to pay now, ie, ` 60,000/-. Similarly,
an individual with an income of ` 15 lakh would be required to pay only
` 1.5 lakh or 10 per cent of his or her income, a reduction of 20 per cent
from the existing liability of ` 1,87,500/.

149. My third proposal is for the salaried class and the pensioners
including family pensioners, for whom I propose to extend the benefit of
 34

standard deduction to the new tax regime. Each salaried person with an
income of ` 15.5 lakh or more will thus stand to benefit by ` 52,500.

150. My fourth announcement in personal income tax is regarding the

highest tax rate which in our country is 42.74 per cent. This is among the
highest in the world. I propose to reduce the highest surcharge rate from 37
per cent to 25 per cent in the new tax regime. This would result in reduction
of the maximum tax rate to 39 per cent.

151. Lastly, the limit of ` 3 lakh for tax exemption on leave encashment
on retirement of non-government salaried employees was last fixed in the
year 2002, when the highest basic pay in the government was ` 30,000/-
pm. In line with the increase in government salaries, I am proposing to
increase this limit to ` 25 lakh.

152. We are also making the new income tax regime as the default tax
regime. However, citizens will continue to have the option to avail the
benefit of the old tax regime.

153. Apart from these, I am also making some other changes as given in
the annexure.

154. As a result of these proposals, revenue of about ` 38,000 crore –

` 37,000 crore in direct taxes and ` 1,000 crore in indirect taxes – will be
forgone while revenue of about ` 3,000 crore will be additionally mobilized.
Thus, the total revenue forgone is about ` 35,000 crore annually.

155. Mr. Speaker Sir, with these words, I commend the Budget to this
august House.

*****
 35

Annexure to Part B of the Budget Speech 2023-24

Amendments relating to Direct Taxes
A. PROVIDING TAX RELIEF UNDER NEW PERSONAL TAX REGIME
A.1 The new tax regime for Individual and HUF, introduced by the
Finance Act 2020, is now proposed to be the default regime.
A.2 This regime would also become the default regime for AOP (other
than co-operative), BOI and AJP.
A.3 Any individual, HUF, AOP (other than co-operative), BOI or AJP not
willing to be taxed under this new regime can opt to be taxed
under the old regime. For those person having income under the
head “profit and gains of business or profession” and having opted
for old regime can revoke that option only once and after that
they will continue to be taxed under the new regime. For those
not having income under the head “profit and gains of business or
profession”, option for old regime may be exercised in each year.
A.4 Substantial relief is proposed under the new regime with new slabs
and tax rates as under:
Total Income (`) Rate (per cent)

Upto 3,00,000 Nil

From 3,00,001 to 6,00,000 5

From 6,00,001 to 9,00,000 10

From 9,00,001 to 12,00,000 15

From 12,00,001 to 15,00,000 20

Above 15,00,000 30

A.5 Resident individual with total income up to ` 5,00,000 do not pay

any tax due to rebate under both old and new regime. It is
proposed to increase the rebate for the resident individual under
the new regime so that they do not pay tax if their total income is
up to ` 7,00,000.
A.6 Standard deduction of ` 50,000 to salaried individual, and
 36

deduction from family pension up to ` 15,000, is currently allowed

only under the old regime. It is proposed to allow these two
deductions under the new regime also.
A.7 Surcharge on income-tax under both old regime and new regime is
10 per cent if income is above ` 50 lakh and up to ` 1 crore, 15 per
cent if income is above `1 crore and up to ` 2 crore, 25 per cent if
income is above ` 2 crore and up to ` 5 crore, and 37 per cent if
income is above ` 5 crore. It is proposed that the for those
individuals, HUF, AOP (other than co-operative), BOI and AJP
under the new regime, surcharge would be same except that the
surcharge rate of 37 per cent will not apply. Highest surcharge
shall be 25 per cent for income above
` 2 crore. This would reduce the maximum rate from about 42.7
per cent to about 39 per cent. No change in surcharge is proposed
for those who opt to be under the old regime.
A.8 Encashment of earned leave up to 10 months of average salary, at
the time of retirement in case of an employee (other than an
employee of the Central Government or State Government), is
exempt under sub-clause (ii) of clause (10AA) of section 10 of the
Income-tax Act (“the Act”) to the extent notified. The maximum
amount which can be exempted is ` 3 lakh at present. It is
proposed to issue notification to extend this limit to ` 25 lakh.
B. SOCIO-ECONOMIC WELFARE MEASURES

B.1 Promoting timely payments to Micro and Small Enterprises

In order to promote timely payments to micro and small
enterprises, it is proposed to include payments made to such
enterprises within the ambit of section 43B of the Act. Thus,
deduction for such payments would be allowed only when actually
paid. It will be allowed on accrual basis only if the payment is
within the time mandated under the Micro, Small and Medium
Enterprises Development Act.
B.2 Agnipath Scheme, 2022
The payment received from the Agniveer Corpus Fund by the
Agniveers enrolled in Agnipath Scheme, 2022 is proposed to be
exempt from taxes. Deduction in the computation of total income
is proposed to be allowed to the Agniveer on the contribution
 37

made by him or the Central Government to his Seva Nidhi

account.
B.3 Relief to sugar co-operatives from past demand
It is proposed that for sugar co-operatives, for years prior to A.Y.
2016-17, if any deduction claimed for expenditure made on
purchase of sugar has been disallowed, an application may be
made to the Assessing Officer, who shall recompute the income of
the relevant previous year after allowing such deduction up to the
price fixed or approved by the Government for such previous year.
B.4 Increasing threshold limit for Co-operatives to withdraw cash
without TDS
It is proposed to enable co-operatives to withdraw cash up to ` 3
crore in a year without being subjected to TDS on such
withdrawal.
B.5 Penalty for cash loan/transactions against primary co-operatives
It is proposed to amend section 269SS of the Act to provide that
where a deposit is accepted by a primary agricultural credit
society or a primary co-operative agricultural and rural
development bank from its member or a loan is taken from a
primary agricultural credit society or a primary co-operative
agricultural and rural development bank by its member in cash, no
penal consequence would arise, if the amount of such loan or
deposit in cash is less than ` 2 lakh. Further, section 269T of the
Act is proposed to be amended to provide that where a deposit is
repaid by a primary agricultural credit society or a primary co-
operative agricultural and rural development bank to its member
or such loan is repaid to a primary agricultural credit society or a
primary co-operative agricultural and rural development bank by
its member in cash, no penal consequence shall arise, if the
amount of such loan or deposit in cash is less than ` 2 lakh.
B.6 Relief to start-ups in carrying forward and setting off of losses
The condition of continuity of at least 51 per cent shareholding for
setting off of carried forward losses is relaxed for an eligible start
up if all the shareholders of the company continue to hold those
shares. At present this relaxation applies for losses incurred during
the period of 7 years from incorporation of such start-up. It is
 38

proposed to increase this period to 10 years.

B.7 Extension of date of incorporation for eligible start up for
exemption
Certain start-ups are eligible for some tax benefit if they are
incorporated before 1st April, 2023. The period of incorporation of
such eligible start-ups is proposed to be extended by one year to
before 1st April, 2024.
B.8 Gold to Electronic Gold Receipt
The conversion of physical gold to Electronic Gold Receipt and vice
versa is proposed not to be treated as a transfer and not to attract
any capital gains. This would promote investments in electronic
equivalent of gold.
B.9 Incentives to IFSC
Relocation of funds to IFSC has certain tax exemptions, if the
relocation is before 31.03.2023. This date is proposed to be
extended to 31.03.2025. Further, any distributed income from the
offshore derivative instruments entered into with an offshore
banking unit is also proposed to be exempted subject to certain
conditions.
B.10 Exemption to development authorities etc.
It is proposed to provide exemption to any income arising to a
body or authority or board or trust or commission, (not being a
company) which has been established or constituted by or under
a Central or State Act with the purposes of satisfying the need for
housing or for planning, development or improvement of cities,
towns and villages or for regulating any activity or matter,
irrespective of whether it is carrying out commercial activity.
B.11 Facilitating certain strategic disinvestments
To facilitate certain strategic disinvestments, it is proposed to
allow carry forward of accumulated losses and unabsorbed
depreciation allowance in the case of amalgamation of one or
more banking company with any other banking institution or a
company subsequent to a strategic disinvestment, if such
amalgamation takes place within 5 years of strategic
disinvestment. It is also proposed to modify the definition of
‘strategic disinvestment’.
 39

B.12 15 per cent concessional tax to promote new manufacturing co-

operative society
In order to promote the growth of manufacturing in co-operative
sector, a new co-operative society formed on or after 01.04.2023,
which commences manufacturing or production by 31.03.2024
and do not avail of any specified incentive or deduction, is
proposed to be allowed an option to pay tax at a concessional rate
of 15 per cent similar to what is available to new manufacturing
companies.

C. EASE OF COMPLIANCE
C.1 Ease in claiming deduction on amortization of preliminary
expenditure
At present for claiming amortization of certain preliminary
expenses, the activity is to be carried out either by the assessee or
by a concern approved by the Board. In order to ease the process
of claiming amortization of these expenses it is proposed to
remove the condition of activity in connection with these
expenses to be carried out by a concern approved by the Board.
Format for reporting of such expenses by the assessee shall be
prescribed.
C.2 Increasing threshold limits for presumptive taxation schemes
In order to ease compliance and to promote non-cash
transactions, it is proposed to increase the threshold limits for
presumptive scheme of taxation for eligible businesses from ` 2
crore to ` 3 crore and for specified professions from ` 50 lakh to
` 75 lakh. The increased limit will apply only in case the amount or
aggregate of the amounts received during the year, in cash, does
not exceed five per cent of the total gross receipts/turnover.
C.3 Extending the scope for deduction of tax at source at lower or nil
rate
It is proposed to allow a taxpayer to obtain certificate of
deduction of tax at source to lower or nil rate on sums on which
tax is required to be deducted under section 194LBA of the Act by
Business Trusts.
 40

D. WIDENING & DEEPENING OF TAX BASE AND ANTI AVOIDANCE

D.1 It is proposed to extend the deemed income accrual provision
relating to sums of money exceeding fifty thousand rupees,
received from residents without consideration to a not ordinarily
resident with effect from 1st April, 2023.
D.2 It is proposed to omit the provision to allow tax exemption to
news agencies set up in India solely for collection and distribution
of news from the financial year 2023-24.
D.3 It is proposed to tax distributed income by business trusts in the
hands of a unit holder (other than dividend, interest or rent which
is already taxable) on which tax is currently avoided both in the
hands of unit holder as well as in the hands of business trust.
D.4 It is proposed to withdraw the exemption from TDS currently
available on interest payment on listed debentures.
D.5 With respect to presumptive schemes for non-residents, it is
proposed to disallow carried forward and set off of loss computed
as per books of account with presumptive income.
D.6 For online games, it is proposed to provide for TDS and taxability
on net winnings at the time of withdrawal or at the end of the
financial year. Moreover, TDS would be without the threshold of
` 10,000. For lottery, crossword puzzles games, etc threshold limit
` 10,000 for TDS shall continue but shall apply to aggregate
winnings during a financial year.
D.7 The rate of TCS for foreign remittances for education and for
medical treatment is proposed to continue to be 5 per cent for
remittances in excess of ` 7 lakh. Similarly, the rate of TCS on
foreign remittances for the purpose of education through loan
from financial institutions is proposed to continue to be 0.5 per
cent in excess of `7 lakh. However, for foreign remittances for
other purposes under LRS and purchase of overseas tour program,
it is proposed to increase the rates of TCS from 5 per cent to 20
per cent.
D.8 Tax on capital gains can be avoided by investing proceeds of such
gains in residential property. This is proposed to be capped at ` 10
crore.
 41

D.9 The income from market linked debentures is proposed to be

taxed as short-term capital gains at the applicable rates.
D.10 It is proposed to provide for some provisions to minimise risk to
revenue due to undervaluation of inventory.
D.11 It is proposed to provide that where aggregate of premium for life
insurance policies (other than ULIP) issued on or after 1st April,
2023 is above ` 5 lakh, income from only those policies with
aggregate premium up to ` 5 lakh shall be exempt. This will not
affect the tax exemption provided to the amount received on the
death of person insured. It will also not affect insurance policies
issued till 31st March, 2023.
D.12 It is proposed to amend provisions for computing capital gains in
case of joint development of property to include the amount
received through cheque etc. as consideration.
D.13 While interest paid on borrowed capital for acquiring or improving
a property can, subject to certain conditions, be claimed as
deduction from income, it can also be included in the cost of
acquisition or improvement on transfer, thereby reducing capital
gains. It is proposed to provide that the cost of acquisition or
improvement shall not include the amount of interest claimed
earlier as deduction.
D.14 There are certain assets like intangible assets or rights for which
no consideration has been paid for acquisition and the transfer of
which may result in generation of income. Their cost of acquisition
is proposed to be defined to be NIL.
E. IMPROVING COMPLIANCE AND TAX ADMINISTRATION
E.1 With respect to rectification of orders by the Interim Board of
Settlement, it is proposed to provide that where the time-limit for
amending an order by it or for making an application to it expires
on or after 01.02.2021 but before 01.02.2022, such time-limit shall
stand extended to 30.09.2023.
E.2 To expedite the disposal of certain appeals pending with
Commissioner (Appeals), it is proposed to introduce a new
authority in the rank of Joint Commissioner/ Additional
Commissioner [JCIT(Appeals)], for appeals against certain orders
 42

passed by or with the approval of an authority below the rank of

Joint Commissioner. Certain related and consequential
amendments are also proposed in this regard.
E.3 It is proposed to reduce the minimum time period required to be
provided by the transfer pricing officer to assessee for production
of documents and information from 30 days to 10 days.
E.4 It is proposed to provide for appeal against penalty orders passed
by Commissioner (Appeals) under certain sections of the Act
before the Appellate Tribunal. It is also proposed to provide that
an order under section 263 of the Act passed by the Principal
Chief Commissioner or Chief Commissioner and any rectification
order for the same shall also be appealable before the Appellate
Tribunal. Further, it is proposed to enable filing of memorandum
of cross-objections in all classes of cases against which appeal can
be made to the Appellate Tribunal.
E.5 It is proposed to amend section 132 of the Act, dealing with
search and seizure, to allow the authorised officer to take
assistance of specific domain experts like digital forensic
professionals, valuers and services of other professionals like
locksmiths, carpenters etc. during the course of search and also to
aid in accurate estimation of undisclosed income held in the form
of property by the assessee.
E.6 Section 170A of the Act, inserted vide Finance Act, 2022 is
proposed to be substituted to clarify that a modified return shall
be furnished by an entity to whom the order of the business
reorganisation applies, and to introduce provisions for assessment
or reassessment in cases where such modified return is furnished.
E.7 It is proposed that an order of assessment may be passed within a
period of 12 months from the end of the relevant assessment year
or the financial year in which updated return is filed, as the case
may be. It is also proposed that in cases where search under
section 132 of the Act or requisition under section 132A of the Act
has been made, the period of limitation of pending assessments
shall be extended by twelve months.
E.8 It is proposed to make amendments to empower the Central
Government to make modifications in the already notified
 43

schemes regarding e-Verification, Dispute Resolution, Advance

Rulings, Appeal and Penalty, at any time to enable better
implementation of such schemes.
E.9 It is proposed to limit the time for furnishing of a return for
reassessment. Further, it is also proposed to provide that in cases
where search related information is available after 15th March of
any financial year, an additional period of fifteen days shall be
allowed for issuance of notice, for assessment/reassessments etc,
under section 148 of the Act. It is also proposed to clarify that the
specified authority for granting approval shall be Principal Chief
Commissioner or Principal Director General or Chief Commissioner
or Director General.
E.10 It is proposed to provide a penalty of ` 5,000 if there is any
inaccuracy in the statement of financial transactions submitted by
a prescribed reporting financial institution due to false or
inaccurate information submitted by the account holder.
E.11 It is proposed to amend section 271C and section 276B of the Act
to provide for penalty and prosecution where default in TDS
relates to transaction in kind.
E.12. It is proposed to amend the time period for filing of appeal against
the order of the Adjudicating authority under Benami Act within a
period of 45 days from the date when such order is received by
the Initiating Officer or the aggrieved person. The definition of
‘High Court’ is also proposed to be modified to allow
determination of jurisdiction for filing appeal in the case of non-
residents.
F. RATIONALISATION
F.1 The restriction on interest deductibility on interest payment to
overseas associated enterprise does not apply to those in the
business of banking and insurance. It is proposed to extend this
benefit to non-banking financial companies, as may be notified.
F.2 TDS on payment of certain income to a non-resident is currently at
the rate of 20 per cent, but the tax rate in treaties may be lower. It
is proposed to allow the benefit of tax treaty at the time of TDS on
such income under section 196A of the Act.
 44

F.3 At present the TDS rate on withdrawal of taxable component from

Employees’ Provident Fund Scheme in non-PAN cases is 30 per
cent. It is proposed to reduce it to 20 per cent, as in other non-
PAN cases.
F.4 Sometimes, tax for income of an earlier year is deducted later,
while tax thereon has already been paid in the earlier year.
Amendment is proposed to facilitate such taxpayers to claim
credit of this TDS in the earlier year.
F.5 Higher TDS/TCS rate applies, if the recipient is a non-filer i.e. who
has not furnished his return of income of preceding previous year
and has aggregate of TDS and TCS of ` 50,000 or more. It is
proposed to exclude a person who is not required to furnish the
return of income for such previous year and who is notified by the
Central Government in the Official Gazette in this behalf.
F.6 It is proposed to clarify that the amount of advance tax paid is
reduced only once for computing the interest payable u/s 234B in
the case of an updated return.
F.7 It is proposed to extend taxability of the consideration (share
application money/ share premium) for shares exceeding the face
value of such shares to all investors including non-residents.
F.8 It is proposed to enable prescription of a uniform methodology for
computing the value of perquisite with respect to accommodation
provided by employers to their employees.
F.9 It is proposed to provide a time limit for an SEZ unit to bring the
proceeds from exports of goods or services into India. The filing of
income-tax return is also proposed to be made mandatory for
claiming deduction on export income.
F.10 Due to changes in classification of non-banking financial
companies by the Reserve Bank of India, it is proposed to make
necessary amendments to align such classifications in the Act with
the same.
F.11 It is proposed to clarify that for taxability under section 28 of the
Act as well for tax deduction at source under section 194R of the
Act, the benefit could also be in cash.
F.12 It is proposed to make amendments relating to exemption
 45

provided to charitable trusts and institution to

 provide clarity on tax treatment on replenishment of corpus
and on repayment of loans/borrowings;
 treat only 85 per cent of donation made to another trust as
application;
 omit the redundant provisions related to rolling back of
exemption;
 combine provisional and regular registration in some cases;
 modify the scope of specified violation;
 provide for payment of tax on assets if a trust does not apply
for exemption after getting provisional exemption and for re-
exemption after expiry of exemption;
 align of time for furnishing of certain forms;
 clarify that the time provided for furnishing return of income
for claiming exemption shall not include the time provided for
furnishing updated return.
F.13 It is proposed to omit certain name-based funds from section 80G
of the Act, which provides for deduction of donation to such funds
from the income of the donor.
F.14 It is proposed to provide that where refund is due to a person,
such refund shall be set off against existing demand, and if
proceedings for assessment or reassessment are pending in such
case, the refund due will be withheld by the Assessing Officer till
the date of assessment or reassessment.
G. OTHERS
G.1 It is proposed to omit section 88 and some of the clauses of
section 10 of the Act which are no longer in force.
G.2 It is proposed to extend tax exemption to Specified Undertaking of
Unit Trust of India (SUUTI) till 30th September, 2023. It is also
proposed to enable the Central Government to notify the date of
vacation of office of administrator of SUUTI.
G.3 It is proposed to decriminalize certain acts of omission of
liquidators under section 276A of the Act with effect from 1st
April, 2023.
 46

Annexure to Part B of the Budget Speech 2023-24

Amendments relating to Indirect Taxes

A. LEGISLATIVE CHANGES IN CUSTOMS LAWS

A.1 Amendments in the Customs Act, 1962
Section 25 (4A) is being amended to exclude certain categories of
conditional customs duty exemptions from the validity period of
two years, such as, notifications issued in relation to multilateral
or bilateral trade agreements; obligations under international
agreements, treaties, conventions including with respect to UN
agencies, diplomats, international organizations; privileges of
constitutional authorities; schemes under Foreign Trade Policy;
Central Government schemes having a validity of more than two
years; re-imports, temporary imports, goods imported as gifts or
personal baggage; any other duties of Customs under any other
law in force including IGST levied under section 3(7) of Customs
Tariff Act, 1975, other than duty of customs levied under section
12 of the Customs Act 1962.
Section 127C is being amended to specify a time limit of nine
months from date of filing application for passing final order by
Settlement Commission.
A.2 Amendments in the provisions relating to Anti-Dumping Duty
(ADD), Countervailing Duty (CVD), and Safeguard Measures
Sections 9, 9A, 9C of the Customs Tariff Act are being amended to
clarify the intent and scope of these provisions. They are also
being validated retrospectively with effect from 1st January 1995.
A.3 Amendments in the First Schedule to the Customs Tariff Act, 1975
The First Schedule to the Customs Tariff Act, 1975 is being
amended to increase the rates on certain tariff items with effect
from 02.02.2023 and also modify the rates on certain other tariff
items as part of rate rationalisation with effect from date of
assent.
The First Schedule to the Customs Tariff Act is being proposed to
be amended in accordance with HSN 2022 amendments.
New tariff lines are also proposed to be created, which will help in
better identification of millet-based products, mozzarella cheese,
medicinal plants and their parts, certain pesticides, telecom
 47

products, synthetic diamonds, cotton, fertilizer grade urea etc.

This will also help in trade facilitation by better identification of
the above items, getting clarity on availing concessional import
duty through various notifications and thus reducing dwell time.
These changes shall come into effect from 01.05.2023.
A.4 Amendment in the Second Schedule to the Customs Tariff Act,
1975
The Second Schedule (Export Tariff) is being amended to align the
entries under heading 1202 with that of the First Schedule (Import
Tariff) .
B. LEGISLATIVE CHANGES IN GST LAWS
B.1 Decriminalisation
Section 132 and section 138 of CGST Act are being amended, inter
alia, to -
 raise the minimum threshold of tax amount for launching
prosecution under GST from ` one crore to ` two crore,
except for the offence of issuance of invoices without supply
of goods or services or both;
 reduce the compounding amount from the present range of
50 per cent to 150 per cent of tax amount to the range of 25
per cent to 100 per cent;
 decriminalize certain offences specified under clause (g), (j)
and (k) of sub-section (1) of section 132 of CGST Act, 2017,
viz.-
o obstruction or preventing any officer in discharge of his
duties;
o deliberate tempering of material evidence;
o failure to supply the information.
B.2 Facilitate e-commerce for micro enterprises
Amendments are being made in section 10 and section 122 of the
CGST Act to enable unregistered suppliers and composition
taxpayers to make intra-state supply of goods through E-
Commerce Operators (ECOs), subject to certain conditions.
B.3 Amendment to Schedule III of CGST Act, 2017
Paras 7, 8 (a) and 8 (b) were inserted in Schedule III of CGST Act,
2017 with effect from 01.02.2019 to keep certain transactions/
activities, such as supplies of goods from a place outside the
taxable territory to another place outside the taxable territory,
high sea sales and supply of warehoused goods before their home
 48

clearance, outside the purview of GST. In order to remove the

doubts and ambiguities regarding taxability of such transactions/
activities during the period 01.07.2017 to 31.01.2019, provisions
are being incorporated to make the said paras effective from
01.07.2017. However, no refund of tax paid shall be available in
cases where any tax has already been paid in respect of such
transactions/ activities during the period 01.07.2017 to
31.01.2019.
B.4 Return filing under GST
Sections 37, 39, 44 and 52 of CGST Act, 2017 are being amended
to restrict filing of returns/ statements to a maximum period of
three years from the due date of filing of the relevant return /
statement.
B.5 Input Tax Credit for expenditure related to CSR
Section 17(5) of CGST Act is being amended to provide that input
tax credit shall not be available in respect of goods or services or
both received by a taxable person, which are used or intended to
be used for activities relating to his obligations under corporate
social responsibility referred to in section 135 of the Companies
Act, 2013.
B.6 Sharing of information
A new section 158A in CGST Act is being inserted to enable sharing
of the information furnished by the registered person in his return
or application of registration or statement of outward supplies, or
the details uploaded by him for generation of electronic invoice or
E-way bill or any other details on the common portal, with other
systems in a manner to be prescribed
B.7 Amendments in section 2 clause (16) of IGST Act, 2017
Clause (16) of section 2 of IGST Act is amended to revise the
definition of “non-taxable online recipient” by removing the
condition of receipt of online information and database access or
retrieval services for purposes other than commerce, industry or
any other business or profession so as to provide for taxability of
OIDAR service provided by any person located in non-taxable
territory to an unregistered person receiving the said services and
located in the taxable territory. Further, it also seeks to clarify that
the persons registered solely in terms of clause (vi) of Section 24
of CGST Act shall be treated as unregistered person for the
purpose of the said clause.
 49

B.8 Online information and database access or retrieval services

Clause (17) of section 2 of IGST Act is being amended to revise the
definition of “online information and database access or retrieval
services” to remove the condition of rendering of the said supply
being essentially automated and involving minimal human
intervention.
B.9 Place of supply in certain cases
Proviso to sub-section (8) of section 12 of the IGST Act is being
omitted so as to specify the place of supply, irrespective of
destination of the goods, in cases where the supplier of services
and recipient of services are located in India.
 50

C. CUSTOMS DUTY RATE CHANGES

C.1. Reduction in basic customs duty to reduce input costs, deepen value
addition, to promote export competitiveness, correct inverted duty
structure so as to boost domestic manufacturing etc [with effect
from 02.02.2023]

S. From To
Commodity
No. (per cent) (per cent)
I. Agricultural Products
1. Pecan Nuts 100 30
2. Fish meal for manufacture of aquatic
15 5
feed
3. Krill meal for manufacture of aquatic
15 5
feed
4. Fish lipid oil for manufacture of aquatic
30 15
feed
5. Algal Prime (flour) for manufacture of
30 15
aquatic feed
6. Mineral and Vitamin Premixes for
15 5
manufacture of aquatic feed
7 Crude glycerin for use in manufacture 7.5 2.5
of Epichlorohydrin
8 Denatured ethyl alcohol for use in 5 Nil
manufacture of industrial chemicals.
II. Minerals
1 Acid grade fluorspar (containing by 5 2.5
weight more than 97 per cent of
calcium fluoride)
III. Gems and Jewellery Sector
1. Seeds for use in manufacturing of 5 Nil
rough lab-grown diamonds
 51

IV. Capital Goods

1. Specified capital goods/machinery for As Nil
manufacture of lithium-ion cell for use applicable (up to
in battery of electrically operated 31.03.2024)
vehicle (EVs)
V. IT and Electronics

1. Specified chemicals/items for 7.5 Nil

manufacture of Pre-calcined Ferrite (up to
Powder 31.03.2024)
2. Palladium Tetra Amine Sulphate for 7.5 Nil
manufacture of parts of connectors (up to
31.03.2024)
3. Camera lens and its inputs/parts for 2.5 Nil
use in manufacture of camera module
of cellular mobile phone
4. Specified parts for manufacture of 5 2.5
open cell of TV panel
VI. Electronic Appliances
1. Heat coil for manufacture of electric 20 15
kitchen chimneys
VII. Others
1. Warm blood horse imported by sports 30 Nil
person of outstanding eminence for
training purpose
2. Vehicles, specified automobile As Nil
parts/components, sub-systems and applicable
tyres when imported by notified
testing agencies, for the purpose of
testing and/ or certification, subject to
conditions.
 52

C.2. Increase in Customs duty [with effect from 02.02.2023]

S. No. Commodity Rate of duties
From To
(per cent) (per cent)
I. Chemicals
1. Styrene 2 2.5
(+0.2 SWS) (+0.25
SWS)
2. Vinyl chloride monomer 2 2.5
(+0.2 SWS) (+0.25
SWS)
II Petrochemical
1 Naphtha 1 2.5
(+ 0.1 SWS) (+0.25 SWS)
III. Precious Metals
1. Silver (including silver plated with gold 7.5 10
or platinum), unwrought or in semi- (+ 2.5 (+ 5 AIDC+
manufactured forms, or in powder AIDC+ 0.75 Nil SWS)
form SWS)
2. Silver dore 6.1 10
(+ 2.5 (+ 4.35
AIDC+ 0.61 AIDC+ Nil
SWS) SWS)
IV. Gems and Jewellery Sector
1. Articles of Precious Metals such as 20 25
gold/silver/platinum (+Nil AIDC (+Nil AIDC
+2 SWS) +Nil SWS)
2. Imitation Jewellery 20 or ` 25 or `
400/kg., 600/kg.,
whichever is whichever is
higher higher

(+Nil AIDC +2 (+Nil AIDC

or ` 40 per +Nil SWS)
Kg SWS)
 53

S. No. Commodity Rate of duties

From To
(per cent) (per cent)
V. Automobiles
1 Vehicle (including electric vehicles) in 30 35
Semi-Knocked Down (SKD) form . (+3 SWS) (+Nil SWS)
2 Vehicle in Completely Built Unit (CBU) 60 70
form, other than with CIF more than (+6 SWS) (+Nil SWS)
USD 40,000 or with engine capacity
more than 3000 cc for petrol-run
vehicle and more than 2500 cc for
diesel-run vehicles, or with both
3 Electrically operated Vehicle in 60 70
Completely Built Unit (CBU) form, (+ 6 SWS) (+Nil SWS)
other than with CIF value more than
USD 40,000
VI. Others
1. Bicycles 30 35

(+ Nil AIDC (+ Nil AIDC

+3 SWS) +Nil SWS)
2. Toys and parts of toys (other than 60 70
parts of electronic toys)
(+Nil AIDC+ (+Nil AIDC+
6 SWS) Nil SWS)
3. Compounded Rubber 10 25 or `
30/kg.,
whichever is
lower
4. Electric Kitchen Chimney 7.5 15

* AIDC -Agriculture Infrastructure Development Cess; SWS – Social Welfare

Surcharge
 54

D. CHANGES IN CENTRAL EXCISE

D.1. NCCD Duty rate on Cigarettes [with effect from 02.02.2023]

Rate of excise duty

From To
Description of goods
(` per 1000 (` per 1000
sticks) sticks)
Other than filter cigarettes, of length not 200 230
exceeding 65 mm
Other than filter cigarettes, of length exceeding 250 290
65 mm but not exceeding 70 mm
Filter cigarettes of length not exceeding 65 mm 440 510
Filter cigarettes of length exceeding 65 mm but 440 510
not exceeding 70 mm
Filter cigarettes of length exceeding 70 mm but 545 630
not exceeding 75 mm
Other cigarettes 735 850
Cigarettes of tobacco substitutes 600 690

D.2. Other changes in Central Excise [with effect from 02.02.2023]

In order to promote green fuel, central excise duty exemption is being
provided to blended Compressed Natural Gas from so much of the amount
as is equal to the GST paid on Bio Gas/Compressed Bio Gas contained in the
blended CNG.
E. OTHERS
There are few other changes of minor nature. For details of the budget
proposals, the Explanatory Memorandum and other relevant budget
documents may be referred to.
*****
 BILL No. 17 OF 2023

THE FINANCE BILL, 2023

(AS INTRODUCED IN LOK SABHA)

 THE FINANCE BILL, 2023
_______

ARRANGEMENT OF CLAUSES
______

CHAPTER I

PRELIMINARY

CLAUSES

1. Short title and commencement.

CHAPTER II

RATES OF INCOME-TAX
2. Income-tax.

CHAPTER III

DIRECT TAXES

Income-tax
3. Amendment of section 2.
4. Amendment of section 9.
5. Amendment of section 10.
6. Amendment of section 10AA.
7. Amendment of section 11.
8. Amendment of section 12A.
9. Amendment of section 12AB.
10. Amendment of section 17.
11. Amendment of section 28.
12. Amendment of section 35D.
13. Amendment of section 43B.
14. Amendment of section 43D.
15. Amendment of section 44AB.
16. Amendment of section 44AD.
17. Amendment of section 44ADA.
18. Amendment of section 44BB.
19. Amendment of section 44BBB.
20. Amendment of section 45.
21. Amendment of section 47.
 ii

CLAUSES

22. Amendment of section 48.

23. Amendment of section 49.
24. Insertion of new section 50AA.
25. Amendment of section 54.
26. Amendment of section 54EA.
27. Amendment of section 54EB.
28. Amendment of section 54EC.
29. Amendment of section 54ED.
30. Amendment of section 54F.
31. Amendment of section 55.
32. Amendment of section 56.
33. Amendment of section 72A.
34. Amendment of section 72AA.
35. Amendment of section 79.
36. Amendment of section 80C.
37. Amendment of section 80CCC.
38. Amendment of section 80CCD.
39. Insertion of new section 80CCH.
40. Amendment of section 80G.
41. Amendment of section 80-IAC.
42. Amendment of section 87.
43. Amendment of section 87A.
44. Omission of section 88.
45. Amendment of section 92BA.
46. Amendment of section 92D.
47. Amendment of section 94B.
48. Amendment of section 111A.
49. Amendment of section 112.
50. Amendment of section 115BAC.
51. Amendment of section 115BAD.
52. Insertion of new section 115BAE.
53. Amendment of section 115BB.
54. Insertion of new section 115BBJ.
55. Amendment of section 115JC.
56. Amendment of section 115JD.
57. Amendment of section 115TD.
58. Amendment of section 115UA.
59. Amendment of section 115UB.
60. Amendment of section 116.
61. Amendment of section 119.
62. Amendment of section 131.
63. Amendment of section 132.
64. Amendment of section 133.
65. Amendment of section 134.
 iii

CLAUSES

66. Amendment of section 135A.

67. Amendment of section 140B.
68. Amendment of section 142.
69. Amendment of section 148.
70. Amendment of section 149.
71. Amendment of section 151.
72. Amendment of section 153.
73. Amendment of section 154.
74. Amendment of section 155.
75. Amendment of section 158A.
76. Amendment of section 158AB.
77. Substitution of new section for section 170A.
78. Amendment of section 177.
79. Amendment of section 189.
80. Amendment of section 192A.
81. Amendment of section 193.
82. Amendment of section 194B.
83. Insertion of new section 194BA.
84. Amendment of section 194BB.
85. Amendment of section 194N.
86. Amendment of section 194R.
87. Amendment of section 196A.
88. Amendment of section 197.
89. Amendment of section 206AB.
90. Amendment of section 206C.
91. Amendment of section 206CCA.
92. Amendment of section 241A.
93. Amendment of section 244A.
94. Substitution of new section for section 245.
95. Amendment of section 245D.
96. Amendment of section 245MA.
97. Amendment of section 245R.
98. Amendment of Chapter XX.
99. Amendment of section 249.
100. Amendment of section 250.
101. Amendment of section 251.
102. Amendment of section 253.
103. Amendment of section 264.
104. Amendment of section 267.
105. Amendment of section 269SS.
106. Amendment of section 269T.
107. Amendment of section 270A.
108. Amendment of section 270AA.
109. Amendment of section 271.
 iv

CLAUSES

110. Amendment of section 271A.

111. Amendment of section 271AAC.
112. Amendment of section 271AAD.
113. Amendment of section 271C.
114. Amendment of section 271FAA.
115. Amendment of section 271J.
116. Amendment of section 274.
117. Amendment of section 275.
118. Amendment of section 276A.
119. Amendment of section 276B.
120. Amendment of section 279.
121. Amendment of section 287.
122. Amendment of section 295.

CHAPTER IV

INDIRECT TAXES

Customs

123. Amendment of section 25.

124. Amendment of section 127C.

Customs Tariff

125. Amendment of sections 9, 9A and 9C.

126. Amendment of First Schedule.
127. Amendment of Second Schedule.

Central Goods and Service Tax

128. Amendment of section 10.

129. Amendment of section 16.
130. Amendment of section 17.
131. Substitution of new section for section 23.
132. Amendment of section 37.
133. Amendment of section 39.
134. Amendment of section 44.
135. Amendment of section 52.
136. Amendment of section 54.
137. Amendment of section 56.
 v

CLAUSES

138. Amendment of section 122.

139. Amendment of section 132.
140. Amendment of section 138.
141. Insertion of new section 158A.
142. Retrospective exemption to certain activities and transactions in Schedule III to the
Central Goods and Services Tax Act.

Integrated Goods and Services Tax

143. Amendment of section 2.

144. Amendment of section 12.

CHAPTER V

MISCELLANEOUS

PART I

AMENDMENTS TO THE GOVERNMENT SAVINGS PROMOTION ACT, 1873

145. Commencement of this Part.

146. Amendment of Act 5 of 1873.

PART II

AMENDMENT TO THE INDIAN STAMP ACT, 1899

147. Amendment of Act 2 of 1899.

PART III

AMENDMENT TO THE SECUTIES CONTRACTS (REGULATION) ACT, 1956

148. Amendment of Act 42 of 1956.

PART IV

AMENDMENTS TO THE CENTRAL SALES TAX ACT, 1956

149. Substitution of new section for section 19.

 vi

CLAUSES

150. Omission of section 24.

151. Amendment of section 25.

PART V

AMENDMENTS TO THE PROHIBITION OF BENAMI PROPERTY TRANSACTIONS ACT, 1988

152. Amendment of Act 45 of 1988.

PART VI

AMENDMENT TO THE FINANCE ACT, 2001.

153. Amendment of Seventh Schedule.

PART VII

AMENDMENTS TO THE UNIT TRUST OF INDIA (TRANSFER OF UNDERTAKING AND

REPEAL) ACT, 2002

154. Amendment of Act 58 of 2002.

THE FIRST SCHEDULE.

THE SECOND SCHEDULE.
THE THIRD SCHEDULE.
THE FOURTH SCHEDULE.
THE FIFTH SCHEDULE.
THE SIXTH SCHEDULE.
 AS INTRODUCED IN LOK SABHA
ON 1ST FEBRUARY, 2023

Bill No. 17 of 2023

THE FINANCE BILL, 2023

BILL

to give effect to the financial proposals of the Central

Government for the financial year 2023-2024.

BE it enacted by Parliament in the Seventy-fourth Year of the

Republic of India as follows:––

CHAPTER I

PRELIMINARY

Short title and 1. (1) This Act may be called the Finance Act, 2023.
commencement.

(2) Save as otherwise provided in this Act, sections 2 to 122

shall come into force on the 1st day of April, 2023.

CHAPTER II

RATES OF INCOME-TAX

Income-tax. 2. (1) Subject to the provisions of sub-sections (2) and (3), for
the assessment year commencing on the 1st day of April, 2023,
income-tax shall be charged at the rates specified in Part I of the
First Schedule and such tax shall be increased by a surcharge, for
the purposes of the Union, calculated in each case in the manner
provided therein.
 2

(2) In the cases to which Paragraph A of Part I of the First

Schedule applies, 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 of charging income-tax in respect of the total
income; and

(b) the income-tax chargeable shall be computed as

follows:—

(i) the total income and the net agricultural

income shall be aggregated and the amount of
income-tax shall be determined in respect of the
aggregate income at the rates specified in the said
Paragraph A, as if such aggregate income were the
total income;

(ii) the net agricultural income shall be

increased by a sum of two lakh fifty thousand
rupees, and the amount of income-tax shall be
determined in respect of the net agricultural
income as so increased at the rates specified in the
said Paragraph A, as if the net agricultural income
as so increased were the total income;

(iii) the amount of income-tax determined in

accordance with sub-clause (i) shall be reduced by
the amount of income-tax determined in
accordance with sub-clause (ii) and the sum so
arrived at shall be the income-tax in respect of the
total income:

Provided that in the case of every individual,

being a resident in India, who is of the age of sixty
years or more but less than eighty years at any time
during the previous year, referred to in item (II) of
Paragraph A of Part I of the First Schedule, the
provisions of this sub-section shall have effect as
if for the words “two lakh fifty thousand rupees”,
the words “three lakh rupees” had been
substituted:
 3

Provided further that in the case of every

individual, being a resident in India, who is of the
age of eighty years or more at any time during the
previous year, referred to in item (III) of Paragraph
A of Part I of the First Schedule, the provisions of
this sub-section shall have effect as if for the
words “two lakh fifty thousand rupees”, the words
“five lakh rupees” had been substituted.

(3) In cases to which the provisions of Chapter XII or Chapter

XII-A or section 115JB or section 115JC or Chapter XII-FA or
Chapter XII-FB or sub-section (1A) of section 161 or section 164
43 of 1961.
or section 164A or section 167B of the Income-tax Act, 1961
(hereinafter referred to as the Income-tax Act) apply, the tax
chargeable shall be determined as provided in that Chapter or that
section, and with reference to the rates imposed by sub-section
(1) or the rates as specified in that Chapter or section, as the case
may be:

Provided that the amount of income-tax computed in

accordance with the provisions of section 111A or section 112 or
section 112A of the Income-tax Act shall be increased by a
surcharge, for the purposes of the Union, as provided in
Paragraph A, B, C, D or E, as the case may be, of Part I of the
First Schedule, except in case of a domestic company whose
income is chargeable to tax under section 115BAA or section
115BAB of the Income-tax Act or in case of co-operative society
whose income is chargeable to tax under section 115BAD of the
Income-tax Act:

Provided further that in respect of any income chargeable to

tax under section 115A, 115AB, 115AC, 115ACA, 115AD,
115B, 115BA, 115BB, 115BBA, 115BBC, 115BBF, 115BBG,
115BBH, 115BBI, 115E, 115JB or 115JC of the Income-tax Act,
the amount of income-tax computed under this sub-section shall
be increased by a surcharge, for the purposes of the Union,
calculated,—

(a) in the case of every individual or Hindu undivided

family or association of persons except in a case of an
association of persons consisting of only companies as its
members, or body of individuals, whether incorporated or
not, or every artificial juridical person referred to in sub-
clause (vii) of clause (31) of section 2 of the Income-tax
Act, not having any income under section 115AD of the
Income-tax Act,—

(i) having a total income exceeding fifty lakh

rupees but not exceeding one crore rupees, at the
rate of ten per cent. of such income-tax;
 4

(ii) having a total income exceeding one crore

rupees, but not exceeding two crore rupees, at the
rate of fifteen per cent. of such income-tax;

(iii) having a total income exceeding two crore

rupees, but not exceeding five crore rupees, at the
rate of twenty-five per cent. of such income-tax;
and

(iv) having a total income exceeding five crore

rupees, at the rate of thirty-seven per cent. of such
income-tax;

(b) in the case of every individual or association of

person except in a case of an association of persons
consisting of only companies as its members or body of
individuals, whether incorporated or not, or every artificial
juridical person referred to in sub-clause (vii) of clause (31)
of section 2 of the Income-tax Act, having income under
section 115AD of the Income-tax Act,––

(i) having a total income exceeding fifty lakh

rupees but not exceeding one crore rupees, at the
rate of ten per cent. of such income-tax;

(ii) having a total income exceeding one crore

rupees, but not exceeding two crore rupees, at the
rate of fifteen per cent. of such income-tax;

(iii) having a total income [excluding the

income by way of dividend or income of the nature
referred to in clause (b) of sub-section (1) of
section 115AD of the Income-tax Act] exceeding
two crore rupees but not exceeding five crore
rupees, at the rate of twenty-five per cent. of such
income-tax;

(iv) having a total income [excluding the

income by way of dividend or income of the nature
referred to in clause (b) of sub-section (1) of
section 115AD of the Income-tax Act] exceeding
five crore rupees, at the rate of thirty-seven per
cent. of such income-tax; and

(v) having a total income [including the

income by way of dividend or income of the nature
referred to in clause (b) of sub-section (1) of
section 115AD of the Income-tax Act] exceeding
two crore rupees, but is not covered in sub-clauses
 5

(iii) and (iv), at the rate of fifteen per cent. of such

income-tax:

Provided that in case where the total income

includes any income by way of dividend or income
chargeable under clause (b) of sub-section (1) of
section 115AD of the Income-tax Act, the rate of
surcharge on the income-tax calculated on that
part of income shall not exceed fifteen per cent.;

(c) in the case of an association of persons consisting of

only companies as its members,––

(i) at the rate of ten per cent. of such income-tax,

where the total income exceeds fifty lakh rupees but
does not exceed one crore rupees;

(ii) at the rate of fifteen per cent. of such income-

tax, where the total income exceeds one crore rupees;

(d) in the case of every co-operative society except a

cooperative society whose income is chargeable to tax
under section 115BAD of the Income-tax Act,––

(i) at the rate of seven per cent. of such income-tax,

where the total income exceeds one crore rupees but
does not exceed ten crore rupees;

(ii) at the rate of twelve per cent. of such income-

tax, where the total income exceeds ten crore rupees;

(e) in the case of every firm or local authority, at the

rate of twelve per cent. of such income-tax, where the total
income exceeds one crore rupees;

(f) in the case of every domestic company except such

domestic company whose income is chargeable to tax under
section 115BAA or section 115BAB of the Income-tax
Act,—

(i) at the rate of seven per cent. of such

income-tax, where the total income exceeds one
crore rupees but does not exceed ten crore rupees;

(ii) at the rate of twelve per cent. of such

income-tax, where the total income exceeds ten
crore rupees;

(g) in the case of every company, other than a domestic

company,—
 6

(i) at the rate of two per cent. of such income-

tax, where the total income exceeds one crore
rupees but does not exceed ten crore rupees;

(ii) at the rate of five per cent. of such income-

tax, where the total income exceeds ten crore
rupees:

Provided also that in the case of persons

mentioned in (a) and (b) above, having total
income chargeable to tax under section 115JC of
the Income-tax Act, and such income exceeds,—

(i) fifty lakh rupees but does not exceed

one crore rupees, the total amount payable
as income-tax and surcharge thereon shall
not exceed the total amount payable as
income-tax on a total income of fifty lakh
rupees by more than the amount of income
that exceeds fifty lakh rupees;

(ii) one crore rupees but does not exceed

two crore rupees, the total amount payable
as income-tax and surcharge thereon shall
not exceed the total amount payable as
income-tax and surcharge on a total income
of one crore rupees by more than the amount
of income that exceeds one crore rupees;

(iii) two crore rupees but does not

exceed five crore rupees, the total amount
payable as income-tax and surcharge
thereon shall not exceed the total amount
payable as income-tax and surcharge on a
total income of two crore rupees by more
than the amount of income that exceeds two
crore rupees;

(iv) five crore rupees, the total amount

payable as income-tax and surcharge
thereon shall not exceed the total amount
payable as income-tax and surcharge on a
total income of five crore rupees by more
than the amount of income that exceeds five
crore rupees:

Provided also that in the case of

association of persons mentioned in (c)
above, having total income chargeable to tax
 7

under section 115JC of the Income-tax Act

exceeds,––

(i) fifty lakh rupees but does not

excced one crore rupees, the total
amount payable as income-tax and
surcharge thereon shall not exceed the
total amount payable as income-tax on
a total income of fifty lakh rupees by
more than the amount of income that
exceeds fifty lakh rupees;

(ii) one crore rupees, the total

amount payable as income-tax and
surcharge thereon shall not exceed the
total amount payable as income-tax and
surcharge on a total income of one crore
rupees by more than the amount of
income that exceeds one crore rupees:

Provided also that in the case of a co-

operative society mentioned in (d) above,
having total income chargeable to tax under
section 115JC of the Income-tax Act, and
such income exceeds,––

(i) one crore rupees but does not

exceed ten crore rupees, the total amount
payable as income-tax and surcharge
thereon shall not exceed the total amount
payable as income-tax on a total income
of one crore rupees by more than the
amount of income that exceeds one crore
rupees;

(ii) ten crore rupees, the total amount

payable as income-tax and surcharge
thereon shall not exceed the total amount
payable as income-tax and surcharge on
a total income of ten crore rupees by
more than the amount of income that
exceeds ten crore rupees:

Provided also that in the case of

persons mentioned in (e) above, having
total income chargeable to tax under
section 115JC of the Income-tax Act,
and such income exceeds one crore
rupees, the total amount payable as
income-tax on such income and
 8

surcharge thereon shall not exceed the

total amount payable as income-tax on a
total income of one crore rupees by more
than the amount of income that exceeds
one crore rupees:

Provided also that in the case of every

company having total income chargeable to
tax under section 115JB of the Income-tax
Act, and such income exceeds one crore
rupees but does not exceed ten crore rupees,
the total amount payable as income-tax on
such income and surcharge thereon, shall
not exceed the total amount payable as
income-tax on a total income of one crore
rupees by more than the amount of income
that exceeds one crore rupees:

Provided also that in the case of every

company having total income chargeable to
tax under section 115JB of the Income-tax
Act, and such income exceeds ten crore
rupees, the total amount payable as income-
tax on such income and surcharge thereon,
shall not exceed the total amount payable as
income-tax and surcharge on a total income
of ten crore rupees by more than the amount
of income that exceeds ten crore rupees:

Provided also that in respect of any

income chargeable to tax under clause (i) of
sub-section (1) of section 115BBE of the
Income-tax Act, the amount of income-tax
computed under this sub-section shall be
increased by a surcharge, for the purposes of
the Union, calculated at the rate of twenty-
five per cent. of such income-tax:

Provided also that in case of every

domestic company whose income is
chargeable to tax under section 115BAA or
section 115BAB of the Income-tax Act, the
income-tax computed under this sub-section
shall be increased by a surcharge, for the
purposes of the Union, calculated at the rate
of ten per cent. of such income-tax:

Provided also that in case of every

individual or Hindu Undivided Family,
whose income is chargeable to tax under
 9

section 115BAC of the Income-tax Act, the

income-tax computed under this sub-section
shall be increased by a surcharge, for the
purposes of the Union, as provided in
Paragraph A of Part I of the First Schedule:

Provided also that in case of every

resident co-operative society, whose income
is chargeable to tax under section 115BAD
of the Income-tax Act, the income tax
computed under this sub-section shall be
increased by a surcharge, for the purposes of
the Union, calculated at the rate of ten per
cent. of such income-tax.

(4) In cases in which tax has to be charged and paid under

sub-section (2A) of section 92CE or section 115QA or section
115TD of the Income-tax Act, the tax shall be charged and paid
at the rates as specified in those sections and shall be increased
by a surcharge, for the purposes of the Union, calculated at the
rate of twelve per cent. of such tax.

(5) In cases in which tax has to be deducted under sections

193, 194A, 194B, 194BA, 194BB, 194D, 194LBA, 194LBB,
194LBC and 195 of the Income-tax Act, at the rates in force, the
deductions shall be made at the rates specified in Part II of the
First Schedule and shall be increased by a surcharge, for the
purposes of the Union, calculated in cases wherever prescribed,
in the manner provided therein.

(6) In cases in which tax has to be deducted under sections

192A, 194, 194C, 194DA, 194E, 194EE, 194F, 194G, 194H,
194-I, 194-IA, 194-IB, 194-IC, 194J, 194LA, 194LB, 194LBA,
194LBB, 194LBC, 194LC, 194LD, 194K, 194M, 194N, 194-O,
194Q, 194R, 194S, 196A, 196B, 196C and 196D of the Income-
tax Act, the deductions shall be made at the rates specified in
those sections and shall be increased by a surcharge, for the
purposes of the Union,—

(a) in the case of every individual or Hindu undivided

family or association of persons, except in case of an
association of persons consisting of only companies as its
members, or body of individuals, whether incorporated or
not, or every artificial juridical person referred to in sub-
clause (vii) of clause (31) of section 2 of the Income-tax
Act, being a non-resident except in case of deduction on
income by way of dividend under section 196D of the
Income-tax Act, calculated,—
 10

(i) at the rate of ten per cent. of such tax, where

the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
fifty lakh rupees but does not exceed one crore
rupees;

(ii) at the rate of fifteen per cent. of such tax,

where the income or the aggregate of such incomes
paid or likely to be paid and subject to the deduction
exceeds one crore rupees but does not exceed two
crore rupees;

(iii) at the rate of twenty-five per cent. of such tax,

where the income or the aggregate of such incomes
paid or likely to be paid and subject to the deduction
exceeds two crore rupees but does not exceed five
crore rupees;

(iv) at the rate of thirty-seven per cent. of such tax,

where the income or the aggregate of such incomes
paid or likely to be paid and subject to the deduction
exceeds five crore rupees:

Provided that where the income of such person is

chargeable to tax under sub-section (1A) of section
115BAC of the Income-tax Act, the rate of surcharge
shall not exceed twenty-five per cent.;

(b) in the case of every individual or Hindu undivided

family or association of persons except in case of
association of persons consisting of only companies as its
members, or body of individuals, whether incorporated or
not, or every artificial juridical person referred to in sub-
clause (vii) of clause (31) of section 2 of the Income-tax
Act, being a non-resident, in case of deduction on income
by way of dividend under section 196D of the Act,
calculated,—

(i) at the rate of ten per cent. of such tax, where

the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
fifty lakh rupees but does not exceed one crore rupees;

(ii) at the rate of fifteen per cent. of such tax,

where the income or the aggregate of such incomes
paid or likely to be paid and subject to the deduction
exceeds one crore rupees;
 11

(c) in the case of an association of persons being a

non-resident, and consisting of only companies as its
members, calculated,—

(i) at the rate of ten per cent. of such tax, where

the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
fifty lakh rupees but does not exceed one crore rupees;

(ii) at the rate of fifteen per cent. of such tax,

where the income or the aggregate of such incomes
paid or likely to be paid and subject to the deduction
exceeds one crore rupees;

(d) in the case of every co-operative society, being a

non-resident, calculated,––

(i) at the rate of seven per cent. of such tax, where

the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
one crore rupees but does not exceed ten crore rupees;

(ii) at the rate of twelve per cent. of such tax, where

the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
ten crore rupees;

(e) in the case of every firm, being a non-resident,

calculated at the rate of twelve per cent. of such tax, where
the income or the aggregate of such incomes paid or likely
to be paid and subject to the deduction exceeds one crore
rupees;

(f) in the case of every company, other than a domestic

company, calculated,—

(i) at the rate of two per cent. of such tax, where

the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
one crore rupees but does not exceed ten crore rupees;

(ii) at the rate of five per cent. of such tax, where

the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
ten crore rupees.

(7) In cases in which tax has to be collected under the proviso

to section 194B of the Income-tax Act, the collection shall be
made at the rates specified in Part II of the First Schedule, and
shall be increased by a surcharge, for the purposes of the Union,
 12

calculated, in cases wherever prescribed, in the manner provided

therein.

(8) In cases in which tax has to be collected under section

206C of the Income-tax Act, the collection shall be made at the
rates specified in that section and shall be increased by a
surcharge, for the purposes of the Union,—

(a) in the case of every individual or Hindu undivided

family or association of persons, except in case of an
association of persons consisting of only companies as its
members, or body of individuals, whether incorporated or
not, or every artificial juridical person referred to in sub-
clause (vii) of clause (31) of section 2 of the Income-tax
Act, being a non-resident, calculated,—

(i) at the rate of ten per cent. of such tax, where

the amount or the aggregate of such amounts
collected or likely to be collected and subject to the
collection exceeds fifty lakh rupees but does not
exceed one crore rupees;

(ii) at the rate of fifteen per cent. of such tax,

where the amount or the aggregate of such amounts
collected or likely to be collected and subject to the
collection exceeds one crore rupees but does not
exceed two crore rupees;

(iii) at the rate of twenty-five per cent. of such tax,

where the income or the aggregate of such amounts
collected or likely to be collected and subject to the
collection exceeds two crore rupees but does not
exceed five crore rupees;

(iv) at the rate of thirty-seven per cent. of such tax,

where the income or the aggregate of such amounts
collected or likely to be collected and subject to the
collection exceeds five crore rupees:

Provided that where the income of such person is

chargeable to tax under sub-section (1A) of section
115BAC of the Income-tax Act, the rate of surcharge
shall not exceed twenty-five per cent.;

(b) in the case of an association of persons, being a non-

resident, and consisting of only companies as its members,
calculated,—

(i) at the rate of ten per cent. of such tax, where

the amount or the aggregate of such amounts
 13

collected or likely to be collected and subject to the

collection exceeds fifty lakh rupees but does not
exceed one crore rupees;

(ii) at the rate of fifteen per cent. of such tax,

where the amount or the aggregate of such amounts
collected or likely to be collected and subject to the
collection exceeds one crore rupees;

(c) in the case of every co-operative society, being a

non-resident, calculated,––

(i) at the rate of seven per cent. of such tax, where

the amount or the aggregate of such amounts collected
or likely to be collected and subject to the collection
exceeds one crore rupees but does not exceed ten crore
rupees;

(ii) at the rate of twelve per cent. of such tax, where

the amount or the aggregate of such amounts collected
or likely to be collected and subject to the collection
exceeds ten crore rupees;

(d) in the case of every firm, being a non-resident,

calculated at the rate of twelve per cent. of such tax, where
the amount or the aggregate of such amounts collected or
likely to be collected and subject to the collection exceeds
one crore rupees;

(e) in the case of every company, other than a domestic

company, calculated,—

(i) at the rate of two per cent. of such tax, where

the amount or the aggregate of such amounts
collected or likely to be collected and subject to the
collection exceeds one crore rupees but does not
exceed ten crore rupees;

(ii) at the rate of five per cent. of such tax, where

the amount or the aggregate of such amounts
collected or likely to be collected and subject to the
collection exceeds ten crore rupees.

(9) Subject to the provisions of sub-section (10), in cases in

which income-tax has to be charged under sub-section (4) of
section 172 or sub-section (2) of section 174 or section 174A or
section 175 or sub-section (2) of section 176 of the Income-tax
Act or deducted from, or paid on, income chargeable under the
head “Salaries” under section 192 of the said Act or deducted
under section 194P of the said Act or in which the “advance tax”
 14

payable under Chapter XVII-C of the said Act has to be computed

at the rate or rates in force, such income-tax or, as the case may
be, “advance tax” shall be charged, deducted or computed at the
rate or rates specified in Part III of the First Schedule and such
tax shall be increased by a surcharge, for the purposes of the
Union, calculated in such cases and in such manner as provided
therein:

Provided that in cases to which the provisions of Chapter XII

or Chapter XII-A or section 115JB or section 115JC or Chapter
XII-FA or Chapter XII-FB or sub-section (1A) of section 161 or
section 164 or section 164A or section 167B of the Income-tax
Act apply, “advance tax” shall be computed with reference to the
rates imposed by this sub-section or the rates as specified in that
Chapter or section, as the case may be:

Provided further that the amount of “advance tax”

computed in accordance with the provisions of section 111A or
section 112 or 112A of the Income-tax Act shall be increased by
a surcharge, for the purposes of the Union, as provided in
Paragraph A, B, C, D or E, as the case may be, of Part III of the
First Schedule except in case of a domestic company whose
income is chargeable to tax under section 115BAA or section
115BAB of the Income-tax Act or in case of an individual or
Hindu undivided family or association of persons, or body of
individuals, whether incorporated or not, or an artificial juridical
person referred to in sub-clause (vii) of clause (31) of section 2 of
the Income-tax Act whose income is chargeable to tax under sub-
section (1A) of section 115BAC of the Income-tax Act, or in case
of a resident co-operative society whose income is chargeable to
tax under section 115BAD or under section 115BAE of the
Income-tax Act:

Provided also that in respect of any income chargeable to tax

under section 115A, 115AB, 115AC, 115ACA, 115AD, 115B,
115BA, 115BB, 115BBA, 115BBC, 115BBF, 115BBG,
115BBH, 115BBI, 115BBJ, 115E, 115JB or 115JC of the
Income-tax Act, “advance tax” computed in accordance with the
first proviso shall be increased by a surcharge, for the purposes
of the Union, calculated,—

(a) in the case of every individual or Hindu undivided

family or association of persons, except in a case of an
association of persons consisting of only companies as its
members, or body of individuals, whether incorporated or
not, or every artificial juridical person referred to in sub-
clause (vii) of clause (31) of section 2 of the Income-tax
Act, not having any income under section 115AD of the
Income-tax Act, and not having any income chargeable to
 15

tax under sub-section (1A) of section 115BAC of the

Income-tax Act,—

(i) at the rate of ten per cent. of such “advance

tax”, where the total income exceeds fifty lakh rupees
but does not exceed one crore rupees;

(ii) at the rate of fifteen per cent. of such “advance

tax”, where the total income exceeds one crore rupees
but does not exceed two crore rupees;

(iii) at the rate of twenty-five per cent. of such

“advance tax”, where the total income exceeds two
crore rupees but does not exceed five crore rupees;

(iv) at the rate of thirty-seven per cent. of such

“advance tax”, where the total income exceeds five
crore rupees;

(b) in the case of every individual or association of

persons, except in case of an association of persons
consisting of only companies as its members, or body of
individuals, whether incorporated or not, or every artificial
juridical person referred to in sub-clause (vii) of clause
(31) of section 2 of the Income-tax Act, having income
under section 115AD of the Income-tax Act, and not
having any income chargeable to tax under sub-section
(1A) of section 115BAC of the Income-tax Act,—

(i) at the rate of ten per cent. of such “advance tax”,

where the total income exceeds fifty lakh rupees, but
does not exceed one crore rupees;

(ii) at the rate of fifteen per cent. of such “advance

tax”, where the total income exceeds one crore rupees
but does not exceed two crore rupees;

(iii) at the rate of twenty-five per cent. of such

“advance tax”, where the total income [excluding the
income by way of dividend and income of the nature
referred to in clause (b) of sub-section (1) of section
115AD of the Income-tax Act] exceeds two crore
rupees but does not exceed five crore rupees;

(iv) at the rate of thirty-seven per cent. of such

“advance tax”, where the total income [excluding the
income by way of dividend or income of the nature
referred to in clause (b) of sub-section (1) of section
115AD of the Income-tax Act] exceeds five crore
rupees;
 16

(v) at the rate of fifteen per cent. of such “advance

tax”, where the total income [including the income by
way of dividend or income of the nature referred to in
clause (b) of sub-section (1) of section 115AD of the
Income-tax Act] exceeds two crore rupees but is not
covered in sub-clauses (iii) and (iv):

Provided that in case where the total income

includes any income by way of dividend or income
chargeable under clause (b) of sub-section (1) of
section 115AD of the Income-tax Act, the rate of
surcharge on the advance tax computed on that part of
income shall not exceed fifteen per cent.;

(c) in the case of an association of persons consisting of

only companies as its members,––

(i) at the rate of ten per cent. of such “advance

tax”, where the total income exceeds fifty lakh rupees
but does not exceed one crore rupees;

(ii) at the rate of fifteen per cent. of such “advance

tax”, where the total income exceeds one crore
rupees;

(d) in the case of every co-operative society except such

co-operative society whose income is chargeable to tax
under section 115BAD or section 115BAE of the Income-
tax Act,––

(i) at the rate of seven per cent. of such “advance

tax”, where the total income exceeds one crore rupees
but does not exceed ten crore rupees;

(ii) at the rate of twelve per cent. of such “advance

tax”, where the total income exceeds ten crore rupees;

(e) in the case of every firm or local authority at the rate

of twelve per cent. of such “advance tax”, where the total
income exceeds one crore rupees;

(f) in the case of every domestic company except such

domestic company whose income is chargeable to tax under
section 115BAA or section 115BAB of the Income-tax
Act,—

(i) at the rate of seven per cent. of such “advance

tax”, where the total income exceeds one crore rupees
but does not exceed ten crore rupees;
 17

(ii) at the rate of twelve per cent. of such “advance

tax”, where the total income exceeds ten crore rupees;

(g) in the case of every company, other than a domestic

company,—

(i) at the rate of two per cent. of such “advance

tax”, where the total income exceeds one crore rupees
but does not exceed ten crore rupees;

(ii) at the rate of five per cent. of such “advance

tax”, where the total income exceeds ten crore rupees:

Provided also that in the case of persons mentioned in (a) and

(b) above, having total income chargeable to tax under section
115JC of the Income-tax Act, and such income exceeds,—

(a) fifty lakh rupees but does not exceed one crore
rupees, the total amount payable as “advance tax” on such
income and surcharge thereon shall not exceed the total
amount payable as “advance tax” on a total income of fifty
lakh rupees by more than the amount of income that
exceeds fifty lakh rupees;

(b) one crore rupees but does not exceed two crore
rupees, the total amount payable as “advance tax” on such
income and surcharge thereon shall not exceed the total
amount payable as “advance tax” and surcharge on a total
income of one crore rupees by more than the amount of
income that exceeds one crore rupees;

(c) two crore rupees but does not exceed five crore
rupees, the total amount payable as “advance tax” on such
income and surcharge thereon shall not exceed the total
amount payable as “advance tax” and surcharge on a total
income of two crore rupees by more than the amount of
income that exceeds two crore rupees;

(d) five crore rupees, the total amount payable as

“advance tax” on such income and surcharge thereon shall
not exceed the total amount payable as “advance tax” and
surcharge on a total income of five crore rupees by more
than the amount of income that exceeds five crore rupees:

Provided also that in the case of persons mentioned in

(c) above, having total income chargeable to tax under
section 115JC of the Income-tax Act, and such income
exceeds,––
 18

(a) fifty lakh rupees, but does not exceed one crore
rupees, the total amount payable as “advance tax” on such
income and surcharge thereon shall not exceed the total
amount payable as “advance tax” on a total income of fifty
lakh rupees by more than the amount of income that
exceeds fifty lakh rupees;

(b) one crore rupees, the total amount payable as

“advance tax” on such income and surcharge thereon shall
not exceed the total amount payable as “advance tax” and
surcharge on a total income of one crore rupees by more
than the amount of income that exceeds one crore rupees:

Provided also that in the case of persons mentioned in

(d) above, having total income chargeable to tax under
section 115JC of the Income-tax Act, and such income
exceeds,––

(a) one crore rupees, but does not exceed ten crore
rupees, the total amount payable as “advance tax” on such
income and surcharge thereon, shall not exceed the total
amount payable as “advance tax” on a total income of one
crore rupees by more than the amount of income that
exceeds one crore rupees;

(b) ten crore rupees, the total amount payable as

“advance tax” on such income and surcharge thereon, shall
not exceed the total amount payable as “advance tax” and
surcharge on a total income of ten crore rupees by more
than the amount of income that exceeds ten crore rupees:

Provided also that in the case of persons mentioned in

(e) above, having total income chargeable to tax under
section 115JC of the Income-tax Act, and such income
exceeds one crore rupees, the total amount payable as
“advance tax” on such income and surcharge thereon, shall
not exceed the total amount payable as “advance tax” on a
total income of one crore rupees by more than the amount
of income that exceeds one crore rupees:

Provided also that in the case of every company having

total income chargeable to tax under section 115JB of the
Income-tax Act, and such income exceeds one crore rupees
but does not exceed ten crore rupees, the total amount
payable as “advance tax” on such income and surcharge
thereon, shall not exceed the total amount payable as
“advance tax” on a total income of one crore rupees by
more than the amount of income that exceeds one crore
rupees:
 19

Provided also that in the case of every company having

total income chargeable to tax under section 115JB of the
Income-tax Act, and such income exceeds ten crore rupees,
the total amount payable as “advance tax” on such income
and surcharge thereon, shall not exceed the total amount
payable as “advance tax” and surcharge on a total income
of ten crore rupees by more than the amount of income that
exceeds ten crore rupees:

Provided also that in respect of any income chargeable

to tax under clause (i) of sub-section (1) of section 115BBE
of the Income-tax Act, the “advance tax” computed in
accordance with the first proviso shall be increased by a
surcharge, for the purposes of the Union, calculated at the
rate of twenty-five per cent. of such “advance tax”;

Provided also that in case of every domestic company

whose income is chargeable to tax under section 115BAA
or section 115BAB of the Income-tax Act, the advance tax
computed in accordance with the first proviso shall be
increased by a surcharge, for the purposes of the Union,
calculated at the rate of ten per cent. of such “advance tax”:

Provided also that in respect of income chargeable to

tax under sub-section (1A) of section 115BAC of the
Income-tax Act, the “advance tax” computed in accordance
with the first proviso shall be increased by a surcharge, for
the purposes of the Union, calculated, in the case of an
individual or Hindu undivided family or association of
persons or body of individuals, whether incorporated or not,
or every artificial juridical person referred to in sub-clause
(vii) of clause (31) of section 2 of the Income-tax Act,––

(i) having a total income (including the income by

way of dividend or income under the provisions of
section 111A, section 112 and section 112A of the
Income-tax Act) exceeding fifty lakh rupees but not
exceeding one crore rupees, at the rate of ten per cent.
of such “advance-tax”;

(ii) having a total income (including the income by

way of dividend or income under the provisions of
section 111A, section 112 and section 112A of the
Income-tax Act) exceeding one crore rupees but not
exceeding two crore rupees, at the rate of fifteen per
cent. of such “advance-tax”;

(iii) having a total income (excluding the income by

way of dividend or income under the provisions of
section 111A, section 112 and section 112A of the
 20

Income-tax Act) exceeding two crore rupees, at the rate

of twenty-five per cent. of such “advance-tax”; and

(iv) having a total income (including the income by

way of dividend or income under the provisions of
section 111A, section 112 and section 112A of the
Income-tax Act) exceeding two crore rupees, but is not
covered under clause (iii) above, at the rate of fifteen
per cent. of such “advance-tax”:

Provided also that in case where the provisions of sub-

section (1A) of section 115BAC are applicable and the total
income includes any income by way of dividend or income
chargeable under section 111A, section 112 and section
112A of the Income-tax Act, the rate of surcharge on the
“advance-tax” in respect of that part of income shall not
exceed fifteen per cent.:

Provided also that in case an association of persons

consisting of only companies as its members, and having
its income chargeable to tax under sub-section (1A) of
section 115BAC, the rate of surcharge on the “advance-tax”
shall not exceed fifteen per cent.:

Provided also that in case of every individual or Hindu

undivided family or association of persons, or body of
individuals, whether incorporated or not, or every artificial
juridical person referred to in sub-clause (vii) of clause (31)
of section 2 of the Income-tax Act, whose income is
chargeable to tax under section 115BAC of the Income-tax
Act having total income exceeding,—

(a) fifty lakh rupees but does not exceed one crore
rupees, the total amount payable as “advance tax” on such
income and surcharge thereon shall not exceed the total
amount payable as "advance tax" on a total income of fifty
lakh rupees by more than the amount of income that
exceeds fifty lakh rupees;

(b) one crore rupees but does not exceed two crore
rupees, the total amount payable as “advance tax” on such
income and surcharge thereon shall not exceed the total
amount payable as “advance tax” and surcharge on a total
income of one crore rupees by more than the amount of
income that exceeds one crore rupees;

(c) two crore rupees, the total amount payable as

"advance tax" on such income and surcharge thereon shall
not exceed the total amount payable as “advance tax” and
 21

surcharge on a total income of two crore rupees by more

than the amount of income that exceeds two crore rupees;

Provided also that in case of every resident co-operative

society whose income is chargeable to tax under section
115BAD or section 115BAE of the Income-tax Act, the
“advance tax” computed in accordance with the first
proviso shall be increased by a surcharge, for the purposes
of the Union, calculated at the rate of ten per cent. of such
“advance tax”.

(10) In cases to which Paragraph A of Part III of the First

Schedule applies, or in case of an individual or Hindu undivided
family or association of persons or body of individuals, whether
incorporated or not, or every artificial juridical person referred to
in sub-clause (vii) of clause (31) of section 2 of the Income-tax
Act, being a resident, whose income is chargeable to tax under
sub-section (1A) of section 115BAC of the Income-tax Act,
where the assessee has, in the previous year or, if by virtue of any
provision of the Income-tax Act, income-tax is to be charged in
respect of the income of a period other than the previous year, in
such other period, any net agricultural income exceeding five
thousand rupees, in addition to total income and the total income
exceeds two lakh fifty thousand rupees, then, in charging income-
tax under sub-section (2) of section 174 or section 174A or
section 175 or sub-section (2) of section 176 of the said Act or in
computing the “advance tax” payable under Chapter XVII-C of
the said Act, at the rate or rates in force,—

(a) the net agricultural income shall be taken into

account, in the manner provided in clause (b) [that is to say,
as if the net agricultural income were comprised in the total
income after the first two lakh fifty thousand rupees of the
total income but without being liable to tax], only for the
purpose of charging or computing such income-tax or, as
the case may be, “advance tax” in respect of the total
income; and

(b) such income-tax or, as the case may be, “advance

tax” shall be so charged or computed as follows:—

(i) the total income and the net agricultural

income shall be aggregated and the amount of
income-tax or “advance tax” shall be determined in
respect of the aggregate income at the rates specified
in the said Paragraph A, or sub-section (1A) of section
115BAC, as if such aggregate income were the total
income;
 22

(ii) the net agricultural income shall be increased

by a sum of two lakh fifty thousand rupees, and the
amount of income-tax or “advance tax” shall be
determined in respect of the net agricultural income
as so increased at the rates specified in the said
Paragraph A, or sub-section (1A) of section 115BAC,
as if the net agricultural income were the total
income;

(iii) the amount of income-tax or “advance tax”

determined in accordance with sub-clause (i) shall be
reduced by the amount of income-tax or, as the case
may be, “advance tax” determined in accordance with
sub-clause (ii) and the sum so arrived at shall be the
income-tax or, as the case may be, “advance tax” in
respect of the total income:

Provided that in the case of every individual, being a resident

in India, who is of the age of sixty years or more but less than
eighty years at any time during the previous year, referred to in
item (II) of Paragraph A of Part III of the First Schedule, the
provisions of this sub-section shall have effect as if for the words
“two lakh fifty thousand rupees”, the words “three lakh rupees”
had been substituted:

Provided further that in the case of every individual, being a

resident in India, who is of the age of eighty years or more at any
time during the previous year, referred to in item (III) of
Paragraph A of Part III of the First Schedule, the provisions of
this sub-section shall have effect as if for the words “two lakh
fifty thousand rupees”, the words “five lakh rupees” had been
substituted:

Provided also that in the case of every individual or Hindu

undivided family or association of persons or body of individuals,
whether incorporated or not, or every artificial juridical person
referred to in sub-clause (vii) of clause (31) of section 2 of the
Income-tax Act, being a resident, whose income is chargeable to
tax under sub-section (1A) of section 115BAC of the Income-tax
Act, the provisions of this sub-section shall have effect as if for
the words “two lakh fifty thousand rupees”, the words “three lakh
rupees” had been substituted:

Provided also that the amount of income-tax or “advance tax”

so arrived at, shall be increased by a surcharge for the purposes
of the Union, calculated in each case, in the manner provided in
this section.

(11) The amount of income-tax as specified in sub-sections

(1) to (3) and as increased by the applicable surcharge, for the
 23

purposes of the Union, calculated in the manner provided therein,

shall be further increased by an additional surcharge, for the
purposes of the Union, to be called the “Health and Education
Cess on income-tax”, calculated at the rate of four per cent. of
such income-tax and surcharge so as to fulfil the commitment of
the Government to provide and finance quality health services
and universalised quality basic education and secondary and
higher education.

(12) The amount of income-tax as specified in sub-sections

(4) to (10) and as increased by the applicable surcharge, for the
purposes of the Union, calculated in the manner provided therein,
shall be further increased by an additional surcharge, for the
purposes of the Union, to be called the “Health and Education
Cess on income-tax”, calculated at the rate of four per cent. of
such income-tax and surcharge so as to fulfil the commitment of
the Government to provide and finance quality health services
and universalised quality basic education and secondary and
higher education:

Provided that nothing contained in this sub-section shall

apply to cases in which tax is to be deducted or collected under
the sections of the Income-tax Act mentioned in sub-sections (5),
(6), (7) and (8), if the income subjected to deduction of tax at
source or collection of tax at source is paid to a domestic company
and any other person who is resident in India.

(13) For the purposes of this section and the First Schedule,—

(a) “domestic company” means an Indian company or

any other company which, in respect of its income liable to
income-tax under the Income-tax Act, for the assessment
year commencing on the 1st day of April, 2023, has made
the prescribed arrangements for the declaration and
payment within India of the dividends (including dividends
on preference shares) payable out of such income;

(b) “insurance commission” means any remuneration or

reward, whether by way of commission or otherwise, for
soliciting or procuring insurance business (including
business relating to the continuance, renewal or revival of
policies of insurance);

(c) “net agricultural income” in relation to a person,

means the total amount of agricultural income, from
whatever source derived, of that person computed in
accordance with the rules contained in Part IV of the First
Schedule;
 24

(d) all other words and expressions used in this section

and the First Schedule but not defined in this sub-section
and defined in the Income-tax Act shall have the meanings,
respectively, assigned to them in that Act.

CHAPTER III

DIRECT TAXES

Income-tax

Amendment of 3. In section 2 of the Income-tax Act,––

section 2.

(a) in clause (19B), the words and brackets “or an

Additional Commissioner of Income-tax (Appeals)” shall be
omitted;

(b) in clause (24), after sub-clause (xviib), the following

sub-clauses shall be inserted with effect from the 1st day of
April, 2024, namely:––

“(xviic) any sum referred to in clause (xii) of sub-

section (2) of section 56;”;

“(xviid) any sum referred to in clause (xiii) of sub-

section (2) of section 56;”;

(c) after clause (28C), the following clause shall be

inserted, namely:––

‘(28CA) “Joint Commissioner (Appeals)” means a

person appointed to be a Joint Commissioner of Income-
tax (Appeals) or an Additional Commissioner of Income-
tax (Appeals) under sub-section (1) of section 117;’;

(d) in clause (42A), in Explanation 1, in clause (i), after

sub-clause (hh), the following sub-clause shall be inserted
with effect from the 1st day of April, 2024, namely:––

“(hi) in the case of a capital asset, being––

(a) Electronic Gold Receipt issued in respect of

gold deposited as referred to in clause (viid) of section
47, there shall be included the period for which such
gold was held by the assessee prior to conversion into
the Electronic Gold Receipt;

(b) gold released in respect of an Electronic Gold

Receipt as referred to in clause (viid) of section 47,
there shall be included the period for which such
 25

Electronic Gold Receipt was held by the assessee

prior to its conversion into gold.”.

Amendment of 4. In section 9 of the Income-tax Act, in sub-section (1), for

section 9. clause (viii), the following clause shall be substituted with effect
from the 1st day of April, 2024, namely:––

“(viii) income arising outside India, being any sum of

money referred to in sub-clause (xviia) of clause (24) of
section 2, paid by a person resident in India ––

(a) on or after the 5th day of July, 2019 to a non-

resident, not being a company, or to a foreign company;
or

(b) on or after the 1st day of April, 2023 to a person

not ordinarily resident in India within the meaning of
clause (6) of section 6.”.

Amendment of 5. In section 10 of the Income-tax Act,––

section 10.
(a) in clause (4D), in the Explanation, in clause (c), in
sub-clause (i), in item (I), after the words and figures
“Securities and Exchange Board of India Act, 1992, or”, the 15 of 1992.
words, brackets and figures “regulated under the International
Financial Services Centres Authority (Fund Management)
Regulations, 2022, made under the” shall be inserted;

(b) for clause (4E), the following shall be substituted with

effect from the 1st day of April, 2024,––

“(4E) any income accrued or arisen to, or received by

a non-resident as a result of––

(i) transfer of non-deliverable forward contracts

or offshore derivative instruments or over-the-counter
derivatives; or

(ii) distribution of income on offshore derivative

instruments,

entered into with an offshore banking unit of an

International Financial Services Centre referred to in sub-
section (1A) of section 80LA, which fulfils such
conditions as may be prescribed:

Provided that the amount of distributed income

referred to in sub-clause (ii) shall include only so much of
the amount which is chargeable to tax in the hands of the
offshore banking unit under section 115AD.”;
 26

(c) in clause (10D),––

(i) in the second proviso, the words, brackets, figures

and letter “or the Explanation to sub-section (2A) of
section 88, as the case may be” shall be omitted;

(ii) for the sixth proviso, the following provisos shall

be substituted with effect from the 1st day of April, 2024,
namely:––

“Provided also that nothing contained in this

clause shall apply with respect to any life insurance
policy other than a unit linked insurance policy, issued
on or after the 1st day of April, 2023, if the amount of
premium payable for any of the previous years during
the term of such policy exceeds five lakh rupees:

Provided also that if the premium is payable by a

person for more than one life insurance policy other
than unit linked insurance policy, issued on or after
the 1st day of April, 2023, the provisions of this clause
shall apply only with respect to those life insurance
policies other than unit linked insurance policies,
where the aggregate amount of premium does not
exceed the amount referred to in the sixth proviso in
any of the previous years during the term of any of
those policies:

Provided also that the provisions of the fourth,

fifth, sixth and seventh provisos shall not apply to any
sum received on the death of a person:”;

(d) after clause (12B), the following shall be inserted,

namely:––

‘(12C) any payment from the Agniveer Corpus Fund

to a person enrolled under the Agnipath Scheme, or to his
nominee.

Explanation.—For the purposes of this clause

“Agniveer Corpus Fund" and “Agnipath Scheme” shall
have the meanings respectively assigned to them in
section 80CCH;’;

(e) in clause (22B), after the third proviso, the following

proviso shall be inserted with effect from the 1st day of April,
2024, namely:––
 27

“Provided also that nothing contained in this clause

shall apply to any income of the news agency of the
previous year relevant to the assessment year beginning on
or after the 1st day of April, 2024;”;

(f) clause (23BBF) shall be omitted;

(g) in clause (23C),––

(I) with effect from the 1st day of October, 2023,––

(i) in the first proviso, for clause (iv), the

following clause shall be substituted, namely:––

“(iv) in any other case, where activities of the

fund or trust or institution or university or other
educational institution or hospital or other medical
institution have––

(A) not commenced, at least one month

prior to the commencement of the previous
year relevant to the assessment year from
which the said approval is sought;

(B) commenced and no income or part

thereof of the said fund or trust or institution
or university or other educational institution or
hospital or other medical institution has been
excluded from the total income on account of
applicability of sub-clause (iv) or sub-clause
(v) or sub-clause (vi) or sub-clause (via) or
section 11 or section 12 for any previous year
ending on or before the date of such
application, at any time after the
commencement of such activities,”;

(ii) in the second proviso,––

(a) in clause (ii),––

(A) in the opening portion, after the word,

brackets and figures “clause (iii)”, the words,
brackets, letter and figures “or sub-clause (B)
of clause (iv)” shall be inserted;

(B) in sub-clause (b), for item (B), the

following item shall be substituted, namely:–

“(B) if he is not so satisfied, pass an

order in writing,––
 28

(I) in a case referred to in clause

(ii) or clause (iii) of the first proviso,
rejecting such application and also
cancelling its approval;

(II) in a case referred to in sub-

clause (B) of clause (iv) of the first
proviso, rejecting such application,

after affording it a reasonable opportunity

of being heard;”;

(b) for clause (iii), the following clause shall

be substituted, namely:––

“(iii) where the application is made under

sub-clause (A) of clause (iv) of the said
proviso or the application made under clause
(iv) of the said proviso, as it stood immediately
before its amendment by the Finance Act,
2023, pass an order in writing granting
approval to it provisionally for a period of
three years from the assessment year from
which the approval is sought, and send a copy
of such order to the fund or trust or institution
or university or other educational institution or
hospital or other medical institution:”;

(II) in the third proviso,––

(i) in Explanation 2,––

(a) in clause (i),––

(A) in the proviso, the word “and” shall be

omitted;

(B) after the proviso, the following provisos

shall be inserted, namely:––

“Provided further that the provisions of the

first proviso shall apply only if there was no
violation of the conditions specified in the
twelfth, thirteenth and twenty-first provisos,
and those specified in Explanation 2 and
Explanation 3, of this clause, at the time the
application was made from the corpus:
 29

Provided also that the amount invested or

deposited back shall not be treated as
application for charitable or religious
purposes under the first proviso unless such
investment or deposit is made within a period
of five years from the end of the previous year
in which such application was made from the
corpus:

Provided also that nothing contained in the

first proviso shall apply where the application
from the corpus is made on or before the 31st
day of March, 2021;”;

(b) in clause (ii), after the proviso, the following

provisos shall be inserted, namely:––

“Provided further that the provisions of the

first proviso shall apply only if there was no
violation of the conditions specified in the twelfth,
thirteenth and twenty-first provisos, and those
specified in Explanation 2 and Explanation 3, of
this clause at the time the application was made
from loan or borrowing:

Provided also that the amount repaid shall not

be treated as application for charitable or religious
purposes under the first proviso unless such
repayment is made within a period of five years
from the end of the previous year in which such
application was made from loan or borrowing:

Provided also that nothing contained in the

first proviso shall apply where the application
from any loan or borrowing is made on or before
the 31st day of March, 2021; and”;

(c) after clause (ii), the following clause shall be

inserted with effect from the 1st day of April, 2024,
namely:–

“(iii) any amount credited or paid out of the

income of 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), other than the amount
referred to in the twelfth proviso, to any other
fund or trust or institution or any university or
other educational institution or any hospital or
 30

other medical institution referred to in sub-clause

(iv) or sub-clause (v) or sub-clause (vi) or sub-
clause (via), or trust or institution registered under
section 12AB, as the case may be, shall be treated
as application for charitable or religious purposes
only to the extent of eighty-five per cent. of such
amount credited or paid.”;

(ii) in Explanation 3, in clause (c), for the words

“furnished on or before”, the words “furnished at least
two months prior to” shall be substituted;

(III) in the fifteenth proviso, in Explanation 2,––

(A) in clause (d), for the words “attained finality.”,

the words “attained finality; or” shall be substituted;

(B) after clause (d), the following clause shall be

inserted, namely:––

“(e) the application referred to in the first

proviso of this clause is not complete or it contains
false or incorrect information.”;

(IV) in the nineteenth proviso, in the Explanation,

with effect from the 1st day of April, 2024,––

(a) after the words, brackets and figures “notified

under clause (46)”, the word, brackets, figures and
letter “or (46A)” shall be inserted;

(b) for the words, brackets and figures “under

clause (46)”, the words, brackets, figures and letter
“under clause (46) or clause (46A)” shall be
substituted;

(V) in the twentieth proviso, for the words “within the

time allowed under that section”, the words, brackets and
figures “within the time allowed under sub-section (1) or
sub-section (4) of that section” shall be substituted;

(h) clause (23EB) shall be omitted;

(i) clause (26A) shall be omitted;

(j) clause (41) shall be omitted;

(k) in clause (46), for the words “, or a class thereof” at

both the places where they occur, the words, figures and letter
“other than those covered under clause (46A), or a class
 31

thereof” shall be substituted with effect from the 1st day of

April, 2024;

(l) after clause (46), the following clause shall be inserted

with effect from the 1st day of April, 2024, namely:––

“(46A) any income arising to a body or authority or

Board or Trust or Commission, not being a company,
which —

(a) has been established or constituted by or under

a Central Act or State Act with one or more of the
following purposes, namely:––

(i) dealing with and satisfying the need for

housing accommodation;

(ii) planning, development or improvement of

cities, towns and villages;

(iii) regulating, or regulating and developing,

any activity for the benefit of the general public;
or

(iv) regulating any matter, for the benefit of

the general public, arising out of the object for
which it has been created; and

(b) is notified by the Central Government in the

Official Gazette for the purposes of this clause;”;

(m) clause (49) shall be omitted.

Amendment of 6. In section 10AA of the Income-tax Act, with effect from

section 10AA. the 1st day of April, 2024,––

(a) in sub-section (1), after clause (ii) and before the

Explanation, the following proviso shall be inserted,
namely:––

“Provided that no such deduction shall be allowed to

an assessee who does not furnish a return of income on or
before the due date specified under sub-section (1) of
section 139.”;

(b) after sub-section (4), the following shall be inserted,

namely:––

‘(4A) This section applies to a Unit, if the proceeds

from sale of goods or provision of services is received in,
 32

or brought into, India by the assessee in convertible

foreign exchange, within a period of six months from the
end of the previous year or, within such further period as
the competent authority may allow in this behalf.

Explanation 1.––For the purposes of this sub-section,

the expression “competent authority” means the Reserve
Bank of India or the authority authorised under any law
for the time being in force for regulating payments and
dealings in foreign exchange.

Explanation 2.––The sale of goods or provision of

services shall be deemed to have been received in India
where such export turnover is credited to a separate
account maintained for that purpose by the assessee with
any bank outside India with the approval of the Reserve
Bank of India.’;

(c) in Explanation 1, for clause (i), the following clause

shall be substituted, namely:––

‘(i) “convertible foreign exchange” shall have the

meaning assigned to it in clause (ii) of the Explanation 2
to section 10A;

(ia) “export turnover” means the consideration in

respect of export by the undertaking, being the Unit of
articles or things or services received in, or brought into,
India by the assessee in convertible foreign exchange in
accordance with the provisions of sub-section (4A), but
does not include freight, telecommunication charges or
insurance attributable to the delivery of the articles or
things outside India or expenses, if any, incurred in
foreign exchange in rendering of services (including
computer software) outside India;’.

Amendment of 7. In section 11 of the Income-tax Act,––

section 11.

(A) in sub-section (1),––

(a) in Explanation 1, in clause (2), in sub-clause

(ii), in the long line, for the words “before the expiry
of the time allowed”, the words “at least two months
prior to the due date specified” shall be substituted;

(b) in Explanation 4,––

(I) in clause (i),––

 33

(a) in the proviso, for the words “deposit;

and”, the word “deposit:” shall be substituted;

(b) after the proviso, the following provisos

shall be inserted, namely:––

“Provided further that provisions of the

first proviso shall apply only if there was no
violation of the conditions specified––

(a) in clause (c) of this sub-section;

(b) in Explanations 2, 3 and 5 of this

sub-section;

(c) in the Explanation to this section; and

(d) in clause (c) of sub-section (1) of

section 13,

at the time the application was made from the

corpus:

Provided also that the amount invested or

deposited back shall not be treated as
application for charitable or religious purposes
under the first proviso unless such investment
or deposit is made within a period of five years
from the end of the previous year in which
such application was made from the corpus:

Provided also that nothing contained in the

first proviso shall apply where application
from the corpus is made on or before the 31st
day of March, 2021;”;

(II) in clause (ii), after the proviso, the

following provisos shall be inserted, namely:––

“Provided further that provisions of the

first proviso shall apply only if there was no
violation of the conditions specified––

(a) in clause (c) of this sub-section;

(b) in Explanations 2, 3 and 5 of this sub-

section;

(c) in the Explanation to this section; and

 34

(d) in clause (c) of sub-section (1) of

section 13,

at the time the application was made from loan or

borrowing:

Provided also that the amount repaid shall

not be treated as application for charitable or
religious purposes under the first proviso
unless such repayment is made within a period
of five years from the end of the previous year
in which such application was made from loan
or borrowing:

Provided also that nothing contained in the

first proviso shall apply where application
from any loan or borrowing is made on or
before the 31st day of March, 2021; and”;

(III) after clause (ii), the following clause shall be inserted

with effect from the 1st day of April, 2024, namely:––

“(iii) any amount credited or paid, other than the

amount referred to in Explanation 2, 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, as the case may be, or other trust or institution
registered under section 12AB, as the case may be, shall
be treated as application for charitable or religious
purposes only to the extent of eighty-five per cent. of such
amount credited or paid.”;

(B) in sub-section (2), in clause (c), for the words “on

or before”, the words “at least two months prior to” shall
be substituted;

(C) in sub-section (7), with effect from the 1st day of

April, 2024,––

(a) for the words, brackets and figures “and clause (46)”,
the words, brackets, figures and letter “, clause (46) and clause
(46A)” shall be substituted;

(b) in the first proviso, for the words, brackets and figures
“under clause (46)”, the words, brackets, figures and letter
“under clause (46) or clause (46A)” shall be substituted;
 35

(c) in the second proviso, for the words, brackets and

figures “under clause (46)”, the words, brackets, figures and
letter “under clause (46) or clause (46A)” shall be substituted.

Amendment of 8. In section 12A of the Income-tax Act,––

section 12A.
(a) in sub-section (1),––

(I) in clause (ac), for sub-clause (vi), the following

sub-clause shall be substituted with effect from the 1st day
of October, 2023, namely:––

“(vi) in any other case, where activities of the trust

or institution have ––

(A) not commenced, at least one month prior

to the commencement of the previous year
relevant to the assessment year from which the
said registration is sought;

(B) commenced and no income or part thereof

of the said trust or institution has been excluded
from the total income on account of applicability
of sub-clause (iv) or sub-clause (v) or sub-clause
(vi) or sub-clause (via) of clause (23C) of section
10, or section 11 or section 12, for any previous
year ending on or before the date of such
application, at any time after the commencement
of such activities,”;

(II) in clause (ba), for the words “within the time

allowed under that section”, the words, brackets and
figures “within the time allowed under sub-section (1) or
sub-section (4) of that section” shall be substituted;

(b) in sub-section (2), the second, third and fourth

provisos shall be omitted.

Amendment of 9. In section 12AB of the Income-tax Act,––

section 12AB.
(a) in sub-section (1) with effect from the 1st day of
October, 2023,––

(A) in clause (b),––

(a) in the opening portion, after the word, brackets

and figure “sub-clause (v)”, the words, brackets, letter
and figures “or item (B) of sub-clause (vi)” shall be
inserted;
 36

(b) in sub-clause (ii), for item (B), the following

item shall be substituted, namely:––

“(B) if he is not so satisfied, pass an order in

writing,––

(I) in a case referred to in sub-clause (ii) or

sub-clause (iii) or sub-clause (v) of clause (ac)
of sub-section (1) of section 12A rejecting
such application and also cancelling its
registration;

(II) in a case referred to in sub-clause (iv)

or in item (B) of sub-clause (vi) of sub-section
(1) of section 12A, rejecting such application,

after affording a reasonable opportunity of being heard;”;

(B) for clause (c), the following clause shall be

substituted, namely:––

“(c) where the application is made under item

(A) of sub-clause (vi) of the said clause or the
application is made under sub-clause (vi) of the said
clause, as it stood immediately before its
amendment vide the Finance Act, 2023, pass an
order in writing provisionally registering the trust
or institution for a period of three years from the
assessment year from which the registration is
sought,”;

(b) in sub-section (4), in the Explanation, in clause (f), for

the words “attained finality.”, the words “attained finality; or”
shall be substituted;

(c) after clause (f), the following clause shall be inserted,

namely:––

“(g) the application referred to in clause (ac) of sub-

section (1) of section 12A is not complete or it contains
false or incorrect information.”.

Amendment of 10. In section 17 of the Income-tax Act,––

section 17.

(i) in clause (1), after sub-clause (viii), the following sub-

clause shall be inserted, namely:––

“(ix) the contribution made by the Central

Government in the previous year, to the Agniveer Corpus
 37

Fund account of an individual enrolled in the Agnipath

Scheme referred to in section 80CCH;”;

(ii) in clause (2), with effect from the 1st day of April,
2024,––

(a) in sub-clause (i), after the word “employer”, the

words “computed in such manner as may be prescribed”
shall be inserted;

(b) for sub-clause (ii) and Explanations 1 to 4 thereto,

the following shall be substituted, namely:––

“(ii) the value of any accommodation provided to

the assessee by his employer at a concessional rate.

Explanation.—For the purposes of this sub-clause, it is

clarified that accommodation shall be deemed to have been
provided at a concessional rate, if the value of
accommodation computed in such manner as may be
prescribed, exceeds the rent recoverable from, or payable by,
the assessee;”.

Amendment of 11. In section 28 of the Income-tax Act, for clause (iv), the
section 28. following clause shall be substituted with effect from the 1st day
of April, 2024, namely:––

“(iv) the value of any benefit or perquisite arising from

business or the exercise of a profession, whether––

(a) convertible into money or not; or

(b) in cash or in kind or partly in cash and partly in

kind;”.

Amendment of 12. In section 35D of the Income-tax Act, in sub-section (2),

section 35D. in clause (a), for the proviso, the following proviso shall be
substituted with effect from the 1st day of April, 2024, namely:–

“Provided that the assessee shall furnish a statement

containing the particulars of expenditure specified in this
clause within such period, to such income-tax authority, in
such form and manner, as may be prescribed.”.

Amendment of 13. In section 43B of the Income-tax Act, with effect from the
section 43B. 1st day of April, 2024,––

(i) in clause (da), for the words “a deposit taking non-

banking financial company or systemically important non-
deposit taking non-banking financial company”, the words
 38

“such class of non-banking financial companies as may be

notified by the Central Government in the Official Gazette in
this behalf” shall be substituted;

(ii) in clause (g), after the word “assets,”, the word “or”
shall be inserted;

(iii) after clause (g), the following clause shall be inserted,

namely:––

“(h) any sum payable by the assessee to a micro or

small enterprise beyond the time limit specified in section
15 of the Micro, Small and Medium Enterprises 27 of 2006.
Development Act, 2006,”;

(iv) in the proviso, after the words “nothing contained in

this section”, the brackets, words and letter “[except the
provisions of clause (h)]” shall be inserted;

(v) in Explanation 4,––

(I) for clause (e), the following clause shall be

substituted, namely:––

‘(e) “micro enterprise” shall have the meaning

assigned to it in clause (h) of section 2 of the Micro,
Small and Medium Enterprises Development Act, 27 of 2006.
2006;’;

(II) for clause (g), the following clause shall be

substituted, namely:––

‘(g) “small enterprise” shall have the meaning

assigned to it in clause (m) of section 2 of the Micro,
27 of 2006.
Small and Medium Enterprises Development Act,
2006.’.

Amendment of 14. In section 43D of the Income-tax Act, with effect from the
section 43D. 1st day of April, 2024,––

(i) in clause (a), for the words “a deposit taking non-

banking financial company or a systemically important non-
deposit taking non-banking financial company”, the words
“such class of non-banking financial companies as may be
notified by the Central Government in the Official Gazette in
this behalf” shall be substituted;

(ii) in the long line, for the words “a deposit taking non-
banking financial company or a systemically important non-
deposit taking non-banking financial company”, the words
 39

“such class of non-banking financial companies as may be

notified by the Central Government in the Official Gazette in
this behalf,” shall be substituted;

(iii) in the Explanation, for clause (h), the following clause

shall be substituted, namely:––

‘(h) the expression “non-banking financial company”

shall have the meaning assigned to it in clause (vii) of the
Explanation to clause (viia) of sub-section (1) of section
36.’.

Amendment of 15. In section 44AB of the Income-tax Act, for the first
section 44AB. proviso, the following proviso shall be substituted with effect
from the 1st day of April, 2024, namely:––

“Provided that this section shall not apply to a person,

who declares profits and gains for the previous year in
accordance with the provisions of sub-section (1) of section
44AD or sub-section (1) of section 44ADA:”.

Amendment of 16. In section 44AD of the Income-tax Act, in the

section 44AD. Explanation, in clause (b), after sub-clause (ii), the following
provisos shall be inserted with effect from the 1st day of April,
2024, namely:––

‘Provided that where the amount or aggregate of the

amounts received during the previous year, in cash, does not
exceed five per cent. of the total turnover or gross receipts of
such previous year, this sub-clause shall have effect as if for
the words “two crore rupees”, the words “three crore rupees”
had been substituted:

Provided further that for the purposes of the first

proviso, the receipt of amount or aggregate of amounts by a
cheque drawn on a bank or by a bank draft, which is not
account payee, shall be deemed to be the receipt in cash.’.

Amendment of 17. In section 44ADA of the Income-tax Act, after sub-

section 44ADA. section (1), the following provisos shall be inserted with effect
from the 1st day of April, 2024, namely:––

‘Provided that in case of an assessee where the amount

or aggregate of the amounts received during the previous
year, in cash, does not exceed five per cent. of the total gross
receipts of such previous year, this sub-section shall have
effect as if for the words “fifty lakh rupees”, the words
“seventy-five lakh rupees” had been substituted:
 40

Provided further that for the purposes of the first proviso,

the receipt of amount or aggregate of amounts by a cheque
drawn on a bank or by a bank draft, which is not account
payee, shall be deemed to be the receipt in cash.’.

Amendment of 18. In section 44BB of the Income-tax Act, after sub-section

section 44BB. (3) and before the Explanation, the following sub-section shall be
inserted with effect from the 1st day of April, 2024, namely:––

“(4) Notwithstanding anything contained in sub-section

(2) of section 32 and sub-section (1) of section 72, where an
assessee declares profits and gains of business for any
previous year in accordance with the provisions of sub-
section (1), no set off of unabsorbed depreciation and brought
forward loss shall be allowed to the assessee for such
previous year.”.

Amendment of 19. In section 44BBB of the Income-tax Act, after sub-

section 44BBB. section (2), the following sub-section shall be inserted with effect
from the 1st day of April, 2024, namely:––

“(3) Notwithstanding anything contained in sub-section

(2) of section 32 and sub-section (1) of section 72, where an
assessee declares profits and gains of business for any
previous year in accordance with the provisions of sub-
section (1), no set off of unabsorbed depreciation and brought
forward loss shall be allowed to the assessee for such
previous year.”.

Amendment of 20. In section 45 of the Income-tax Act, in sub-section (5A),

section for the words “the consideration received in cash, if any,”, the
45.
words “any consideration received in cash or by a cheque or draft
or by any other mode” shall be substituted with effect from the
1st day of April, 2024.

Amendment of 21. In section 47 of the Income-tax Act,––

section 47.

(a) in clause (viiad), in the Explanation,––

(i) in clause (b), for the figures “2023”, the figures

“2025” shall be substituted;

(ii) in clause (c), in sub-clause (i), after the words

and figures “Securities and Exchange Board of India
Act, 1992 or”, the words, brackets and figures 15 of 1992.
“regulated under the International Financial Services
Centres Authority (Fund Management) Regulations,
2022, made under the” shall be inserted;
 41

(b) after clause (viic), the following clause shall be

inserted with effect from the 1st day of April, 2024,
namely:––

‘(viid) any transfer of a capital asset, being

conversion of gold into Electronic Gold Receipt issued
by a Vault Manager, or conversion of Electronic Gold
Receipt into gold.

Explanation.—For the purposes of this clause, the

expressions “Electronic Gold Receipt” and “Vault
Manager” shall have the meanings respectively assigned
to them in clauses (h) and (l) of sub-regulation (1) of
regulation 2 of the Securities and Exchange Board of
India (Vault Managers) Regulations, 2021 made under
the Securities and Exchange Board of India Act, 1992.’. 15 of 1992.

Amendment of 22. In section 48 of the Income-tax Act, in clause (ii), the

section 48. following proviso shall be inserted with effect from the 1st day of
April, 2024, namely:––

“Provided that the cost of acquisition of the asset or the

cost of improvement thereto shall not include the deductions
claimed on the amount of interest under clause (b) of section
24 or under the provisions of Chapter VIA;”.

Amendment of 23. In section 49 of the Income-tax Act, after sub-section (9),

section 49. the following sub-section shall be inserted with effect from the
1st day of April, 2024, namely:––

“(10) Where the capital asset, being––

(i) an Electronic Gold Receipt issued by a Vault

Manager, became the property of the person as
consideration of a transfer, referred to in clause (viid) of
section 47, the cost of acquisition of the asset for the
purposes of the said transfer, shall be deemed to be the cost
of gold in the hands of the person in whose name Electronic
Gold Receipt is issued;

(ii) gold released against an Electronic Gold Receipt,

which became the property of the person as consideration
for a transfer, referred to in clause (viid) of section 47, the
cost of acquisition of the asset for the purposes of the said
transfer shall be deemed to be the cost of the Electronic
Gold Receipt in the hands of such person.”.

Insertion of new 24. After section 50A the Income-tax Act, the following
section 50AA. section shall be inserted with effect from the 1st day of April,
2024, namely:––
 42

Special ‘50AA. Notwithstanding anything contained in clause

provision for (42A) of section 2 or section 48, where the capital asset is a
computation of
capital gains in
Market Linked Debenture, the full value of consideration
case of Market received or accruing as a result of the transfer or redemption
Linked or maturity of such debenture as reduced by––
Debenture.
(i) the cost of acquisition of the debenture; and

(ii) the expenditure incurred wholly and exclusively in

connection with such transfer or redemption or maturity,

shall be deemed to be the capital gains arising from the

transfer of a short-term capital asset:

Provided that no deduction shall be allowed in computing

the income chargeable under the head “Capital gains” in respect
of any sum paid on account of securities transaction tax under the 23 of 2004.
provisions of Chapter VII of the Finance (No. 2) Act, 2004.

Explanation.–– For the purposes of this section “Market

Linked Debenture” means a security by whatever name
called, which has an underlying principal component in the
form of a debt security and where the returns are linked to the
market returns on other underlying securities or indices, and
includes any security classified or regulated as a market
linked debenture by the Securities and Exchange Board of
India.’.

Amendment of 25. In section 54 of the Income-tax Act, with effect from the
section 54. 1st day of April, 2024,––

(a) in sub-section (1), after the second proviso, the

following proviso shall be inserted, namely:––

“Provided also that where the cost of new asset

exceeds ten crore rupees, the amount exceeding ten crore
rupees shall not be taken into account for the purposes of
this sub-section.”;

(b) in sub-section (2),––

(i) after the words “amount so deposited shall”, the

words, brackets and figure “, subject to the third proviso
to sub-section (1)” shall be inserted;

(ii) after the proviso, the following proviso shall be

inserted, namely:––
 43

“Provided further that the capital gains in excess

of ten crore rupees shall not be taken into account for
the purposes of this sub-section.”.

Amendment of 26. In section 54EA of the Income-tax Act, sub-section (3)

section 54EA. shall be omitted.

Amendment of 27. In section 54EB of the Income-tax Act, sub-section (3)

section 54EB. shall be omitted.

Amendment of 28. In section 54EC of the Income-tax Act, in sub-section (3),

section 54EC. clause (a) shall be omitted.

Amendment of 29. In section 54ED of the Income-tax Act, in sub-section (3),

section 54ED. clause (a) shall be omitted.

Amendment of 30. In section 54F of the Income-tax Act, with effect from
section 54F. the 1st day of April, 2024,––

(a) in sub-section (1), after the proviso and before the

Explanation, the following proviso shall be inserted,
namely:––

“Provided further that where the cost of new asset

exceeds ten crore rupees, the amount exceeding ten crore
rupees shall not be taken into account for the purposes of
this sub-section.”;

(b) in sub-section (4),––

(i) after the words “amount so deposited shall”, the

words, brackets and figure “, subject to the second proviso
to sub-section (1)” shall be inserted;

(ii) after the proviso, the following proviso shall be

inserted, namely:––

“Provided further that the net consideration in

excess of ten crore rupees shall not be taken into
account for the purposes of this sub-section.”.

Amendment of 31. In section 55 of the Income-tax Act, with effect from the
section 55. 1st day of April, 2024,––

(a) in sub-section (1), in clause (b), in sub-clause (1),––

(i) after the word “goodwill”, the words “or any other
intangible asset” shall be inserted;
 44

(ii) after the word “profession”, the words “or any

other right” shall be inserted;

(b) in sub-section (2), in clause (a),––

(i) for the words “profession, or a right”, the words

“profession, or any other intangible asset or a right” shall
be substituted;

(ii) for the word “hour,”, the words “hour, or any other
right” shall be substituted.

Amendment of 32. In section 56 of the Income-tax Act, in sub-section (2),

section 56. with effect from the 1st day of April, 2024,––

(a) in clause (viib), the words “being a resident” shall be

omitted;

(b) after clause (xi), the following clauses shall be

inserted, namely:––

‘(xii) any sum received by a unit holder from a

business trust which––

(a) is not in the nature of income referred to in

clause (23FC) or clause (23FCA) of section 10; and

(b) is not chargeable to tax under sub-section (2)

of section 115UA:

Provided that where the sum received by a unit

holder from a business trust is for redemption of unit
or units held by him, the sum so received shall be
reduced by the cost of acquisition of the unit or units
to the extent such cost does not exceed the sum
received;

(xiii) where any sum is received, including the

amount allocated by way of bonus, at any time during a
previous year, under a life insurance policy, other than the
sum,––

(a) received under a unit linked insurance policy;

(b) being the income referred to in clause (iv),

which is not to be excluded from the total income of the

previous year in accordance with the provisions of clause
(10D) of section 10, the sum so received as exceeds the
aggregate of the premium paid, during the term of such
 45

life insurance policy, and not claimed as deduction under

any other provision of this Act, computed in such manner
as may be prescribed.

Explanation.—For the purposes of this clause “unit

linked insurance policy” shall have the meaning assigned
to it in Explanation 3 to clause (10D) of section 10.’.

Amendment of 33. In section 72A of the Income-tax Act, in sub-section (1),

section 72A. in clause (d), in the Explanation, for clause (iii), the following
clause shall be substituted, namely:––

‘(iii) “strategic disinvestment” means sale of

shareholding by the Central Government or any State
Government or a public sector company, in a public sector
company or in a company, which results in––

(a) reduction of its shareholding to below fifty-one

per cent.; and

(b) transfer of control to the buyer:

Provided that the condition laid down in sub-

clause (a) shall apply only in a case where
shareholding of the Central Government or the State
Government or the public sector company was above
fifty-one per cent. before such sale of shareholding:

Provided further that requirement of transfer of

control referred to in sub-clause (b) may be carried out
by the Central Government or the State Government
or the public sector company or any two of them or all
of them.’.

Amendment of 34. In section 72AA of the Income-tax Act,––

section 72AA.
(a) for clause (i), the following clause shall be substituted,
namely:––

“(i) one or more banking company with––

(a) 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
10 of 1949.
Banking Regulation Act, 1949; or

(b) any other banking institution or a company

subsequent to a strategic disinvestment, wherein the
amalgamation is carried out within a period of five
 46

years from the end of the previous year during which

such strategic disinvestment is carried out; or”;

(b) in the long line, after the words “such banking

institution or”, the words “company or” shall be inserted;

(c) in the Explanation, after clause (vi), the following

clause shall be inserted, namely:––

‘(via) “strategic disinvestment” shall have the

meaning assigned to it in clause (iii) of the Explanation to
clause (d) of sub-section (1) of section 72A;’.

Amendment of 35. In section 79 of the Income-tax Act, in sub-section (1),

section 79. in the proviso, for the word “seven”, the word “ten” shall be
substituted.

Amendment of 36. In section 80C of the Income-tax Act, sub-section (7) shall
section 80C. be omitted.

Amendment of 37. In section 80CCC of the Income-tax Act, in sub-section

section 80CCC. (3), clause (a) shall be omitted.

Amendment of 38. In section 80CCD of the Income-tax Act, in sub-section

section 80CCD. (4), clause (a) shall be omitted.

Insertion of new 39. After section 80CCG of the Income-tax Act, the
section 80CCH. following section shall be inserted, namely:––

Deduction in ‘80CCH. (1) Where an assessee, being an individual

respect of enrolled in the Agnipath Scheme and subscribing to the
contribution to
Agnipath
Agniveer Corpus Fund on or after the 1st day of November,
Scheme. 2022, has in the previous year paid or deposited any amount in
his account in the said Fund, he shall be allowed a deduction in
the computation of his total income, of the whole of the amount
so paid or deposited.

(2) Where the Central Government makes any contribution

to the account of an assessee in the Agniveer Corpus Fund
referred to in sub-section (1), the assessee shall be allowed a
deduction in the computation of his total income of the whole
of the amount so contributed.

Explanation.—For the purposes of this section,––

(a) “Agnipath Scheme” means the scheme for

enrolment in Indian Armed Forces introduced vide letter
No.1(23)2022/D(Pay/Services), dated the 29th December,
2022 of the Government of India in the Ministry of
Defence;
 47

(b) “Agniveer Corpus Fund” means a fund in which

consolidated contributions of all the Agniveers and
matching contributions of the Central Government along
with interest on both these contributions are held.’.

Amendment of 40. In section 80G of the Income-tax Act,––

section 80G.
(I) in sub-section (2), in clause (a), sub-clauses (ii), (iiic)
and (iiid) shall be omitted with effect from the 1st day of
April, 2024;

(II) in sub-section (5),––

(A) with effect from the 1st day of October, 2023,––

(i) in the first proviso, for clause (iv), the

following clause shall be substituted, namely:––

“(iv) in any other case, where activities of the

institution or fund have––

(A) not commenced, at least one month

prior to the commencement of the previous
year relevant to the assessment year from
which the said approval is sought;

(B) commenced and where no income or

part thereof of the said institution or fund has
been excluded from the total income on
account of applicability of sub-clause (iv) or
sub-clause (v) or sub-clause (vi) or sub-clause
(via) of clause (23C) of section 10 or section
11 or section 12 for any previous year ending
on or before the date of such application, at
any time after the commencement of such
activities:”;

(ii) in the second proviso,––

(a) in clause (ii),––

(1) in the opening portion, after the word,

brackets and figures “clause (iii)”, the words,
brackets, figures and letter “or sub-clause (B)
of clause (iv)” shall be inserted;

(2) in sub-clause (b), for item (B), the

following shall be substituted, namely:––
 48

“(B) if he is not so satisfied, pass an

order in writing,––

(I) in a case referred to in clause

(ii) or clause (iii) of the first proviso,
rejecting such application and
cancelling its approval; or

(II) in a case referred to in sub-

clause (B) of clause (iv) of the first
proviso, rejecting such application,

after affording it a reasonable opportunity

of being heard;”;

(b) for clause (iii), the following clause shall

be substituted, namely:––

“(iii) where the application is made under

sub-clause (A) of clause (iv) of the said
proviso or the application is made under
clause (iv) of the said proviso as it stood
immediately before its amendment vide the
Finance Act, 2023, pass an order in writing
granting it approval provisionally for a period
of three years from the assessment year from
which the approval is sought,”;

(B) in the third proviso, for the words “first proviso”,

the words “second proviso” shall be substituted.

Amendment of 41. In section 80-IAC of the Income-tax Act, in the

section Explanation, in clause (ii), in sub-clause (a), for the figures
80-IAC.
“2023”, the figures “2024” shall be substituted.

Amendment of 42. In section 87 of the Income-tax Act,––

section 87.
(a) in sub-section (1), the figures and letters “, 88, 88A,
88B, 88C, 88D” shall be omitted;

(b) in sub-section (2), the words, figures and letters “or

section 88 or section 88A or section 88B or section 88C or
section 88D” shall be omitted.

Amendment of 43. In section 87A of the Income-tax Act, the following

section 87A. proviso shall be inserted with effect from the 1st day of April,
2024, namely:––
 49

“Provided that where the income-tax payable on the total

income of the assessee is computed under sub-section (1A) of
section 115BAC, this section shall have the effect as if,––

(a) for the words “five hundred thousand rupees”, the

words “seven hundred thousand rupees”;

(b) for the words “twelve thousand and five hundred

rupees”, the words “twenty-five thousand rupees”

had been substituted.’.

Omission of 44. Section 88 of the Income-tax Act shall be omitted.

section 88.

Amendment of 45. In section 92BA of the Income-tax Act, after clause (va),
section 92BA. the following clause shall be inserted with effect from the 1st day
of April, 2024, namely:––

“(vb) any business transacted between the assessee and

other person as referred to in sub-section (4) of section
115BAE”.

Amendment of 46. In section 92D of the Income-tax Act, in sub-section (3),

section 92D. for the words “period of thirty days”, at both the places where
they occur, the words “period of ten days” shall be substituted.

Amendment of 47. In section 94B of the Income-tax Act, with effect from
section 94B. the 1st day of April 2024,––

(i) in sub-section (3), after the words “banking or

insurance”, the words “or such class of non-banking financial
companies as may be notified by the Central Government in
the Official Gazette in this behalf” shall be inserted;

(ii) in sub-section (5), after clause (ii), the following

clause shall be inserted, namely:––

‘(iia) “non-banking financial company” shall have

the meaning assigned to it in clause (vii) of the
Explanation to clause (viia) of sub-section (1) of section
36;’.

Amendment of 48. In section 111A of the Income-tax Act, sub-section (3)

section 111A. shall be omitted.

Amendment of 49. In section 112 of the Income-tax Act, sub-section (3) shall
section 112. be omitted.
 50

Amendment of 50. In section 115BAC of the Income-tax Act,––

section
115BAC.

(A) with effect from the 1st day of April, 2024,––

(a) in the marginal heading, for the words “and Hindu

undivided family”, the words “, Hindu undivided family and
others” shall be substituted;

(b) in sub-section (1), for the figures, letters and words

“1st day of April, 2021”, the figures, letters and words “1st
day of April, 2021 but before the 1st day of April, 2024” shall
be substituted;

(c) after sub-section (1), the following sub-section shall be

inserted, namely:––

“(1A) Notwithstanding anything contained in this Act

but subject to the provisions of this Chapter, the income-
tax payable in respect of the total income of a person,
being an individual or Hindu undivided family or
association of persons (other than a co-operative society),
or body of individuals, whether incorporated or not, or an
artificial juridical person referred to in sub-clause (vii) of
clause (31) of section 2, other than a person who has
exercised an option under sub-section (6), for any
previous year relevant to the assessment year beginning
on or after the 1st day of April, 2024, shall be computed
at the rate of tax given in the following Table, namely:—

TABLE

Sl. No. Total income Rate of tax

(1) (2) (3)
1. Upto Rs.3,00,000 Nil
2. From Rs.3,00,001 to Rs.6,00,000 5 per cent.
3. From Rs.6,00,001 to Rs.9,00,000 10 per cent.
4. From Rs.9,00,001 to Rs.12,00,000 15 per cent.
5. From Rs.12,00,001 to Rs.15,00,000 20 per cent.
6. Above Rs.15,00,000 30 per cent.”;

(B) with effect from the 1st day of April, 2023, in sub-section
(2), in clause (i), after the words, figures and letters “section
80CCD or”, the words, brackets, figures and letters “sub-section
(2) of section 80CCH or” shall be inserted;
 51

(C) with effect from the 1st day of April, 2024,––

(a) in sub-section (2), for the opening portion and clause

(i) thereof, the following shall be substituted, namely:––

“(2) For the purposes of sub-section (1A), the total

income of the person referred to therein, shall be
computed—

(i) without any exemption or deduction under the

provisions of clause (5) or clause (13A) or prescribed
under clause (14) (other than those as may be
prescribed for this purpose) or clause (17) or clause
(32), of section 10 or section 10AA or clause (ii) or
clause (iii) of section 16 or clause (b) of section 24 [in
respect of the property referred to in sub-section (2) of
section 23] or clause (iia) of sub-section (1) of section
32 or section 32AD or section 33AB or section
33ABA or sub-clause (ii) or sub-clause (iia) or sub-
clause (iii) of sub-section (1) or sub-section (2AA) of
section 35 or section 35AD or section 35CCC or
under any of the provisions of Chapter VI-A other than
the provisions of sub-section (2) of section 80CCD or
sub-section (2) of section 80CCH or section
80JJAA;”;

(b) in sub-section (3), after the proviso, the following

proviso shall be inserted, namely:––

“Provided further that in a case where,––

(i) the assessee has not exercised the option under

sub-section (5) for any previous year relevant to the
assessment year beginning on or before the 1st day of
April, 2023;

(ii) the income-tax on the total income of the

assessee is computed under sub-section (1A); and

(iii) there is a depreciation allowance in respect of

a block of assets which has not been given full effect
prior to the assessment year beginning on the 1st day
of April, 2024,

corresponding adjustment shall be made to the written

down value of such block of assets as on the 1st day of
April, 2023 in the manner as may be prescribed.”;

(c) for sub-section (4), the following sub-section shall be

substituted, namely:––
 52

‘(4) In case of a person, having a Unit in the

International Financial Services Centre, as referred to in
sub-section (1A) of section 80LA,––

(i) who has exercised option under sub-section (5)

for any previous year relevant to the assessment year
beginning on or after the 1st day of April, 2021 but
before the 1st day of April, 2024;

(ii) whose total income is computed under sub-

section (1A),

the conditions contained in sub-section (2) shall be

modified to the extent that the deduction under section
80LA shall be available to such Unit subject to fulfilment
of the conditions contained in the said section.

Explanation.—For the purposes of this sub-section, the

term “Unit” shall have the meaning assigned to it in clause
(zc) of section 2 of the Special Economic Zones Act, 2005’; 28 of 2005.

(d) in sub-section (5), after the proviso, the following

proviso shall be inserted, namely:––

“Provided further that the provisions of this sub-

section shall not apply for any previous year relevant to
the assessment year beginning on or after the 1st day of
April, 2024.”;

(e) after sub-section (5), the following sub-section shall be

inserted, namely:––

“(6) Nothing contained in sub- section (1A) shall apply

to a person where an option is exercised by such person,
in the manner as may be prescribed, for any assessment
year, and such option is exercised,––

(i) on or before the due date specified under sub-

section (1) of section 139 for furnishing the return of
income for such assessment year, in case of a person
having income from business or profession, and such
option once exercised shall apply to subsequent
assessment years; or

(ii) along with the return of income to be furnished

under sub-section (1) of section 139 for such
assessment year, in case of a person not having income
referred to in clause (i):
 53

Provided that the option under clause (i), once

exercised for any previous year can be withdrawn only
once for a previous year other than the year in which
it was exercised and thereafter, the person shall never
be eligible to exercise the option under this sub-
section, except where such person ceases to have any
income from business or profession in which case,
option under clause (ii) shall be available.”.

Amendment of 51. In section 115BAD of the Income-tax Act, in sub-section

section (1), after the words “provisions of this Chapter,”, the words,
115BAD.
figures and letters “other than those mentioned under section
115BAE,” shall be inserted with effect from the 1st day of April,
2024.

Insertion of new 52. After section 115BAD of the Income-tax Act, with effect
section from the 1st day of April, 2024, the following section shall be
115BAE.
inserted, namely:––

Tax on income “115BAE. (1) Notwithstanding anything contained in this

of certain new Act but subject to the provisions of this Chapter, other than
manufacturing
co-operative
those mentioned under section 115BAD, the income-tax
societies. payable in respect of the total income of an assessee, being a
co-operative society resident in India, for any previous year
relevant to the assessment year beginning on or after the 1st
day of April, 2024, shall, at the option of such assessee, be
computed at the rate of fifteen per cent. if the conditions
contained in sub-section (2) are satisfied:

Provided that where the total income of the assessee

includes any income, which has neither been derived from nor
is incidental to, manufacturing or production of an article or
thing and in respect of which no specific rate of tax has been
provided separately under this Chapter, such income shall be
taxed at the rate of twenty-two per cent. and no deduction or
allowance in respect of any expenditure or allowance shall be
made in computing such income:

Provided further that the income-tax payable in respect of

the income, of the assessee deemed so under the second proviso
to sub-section (4) shall be computed at the rate of thirty per
cent.:

Provided also that the income-tax payable in respect of

income, being short term capital gains derived from transfer of
a capital asset on which no depreciation is allowable under the
Act shall be computed at the rate of twenty-two per cent:

Provided also that where the assessee fails to satisfy the

conditions contained in sub-section (2) in any previous year,
 54

the option shall become invalid in respect of the assessment

year relevant to that previous year and subsequent assessment
years and other provisions of the Act shall apply to the assessee
as if the option had not been exercised for the assessment year
relevant to that previous year and subsequent assessment years.

(2) For the purposes of sub-section (1), the following

conditions shall apply, namely:—

(a) the cooperative society has been set-up and

registered on or after the 1st day of April, 2023, and has
commenced manufacturing or production of an article or
thing on or before the 31st day of March, 2024 and,—

(i) the business is not formed by splitting up, or the

reconstruction, of a business already in existence;

(ii) does not use any machinery or plant previously

used for any purpose.

Explanation 1.—For the purposes of sub-clause

(ii), any machinery or plant which was used outside
India by any other person shall not be regarded as
machinery or plant previously used for any purpose, if
the following conditions are fulfilled, namely:—

(A) such machinery or plant was not, at any

time previous to the date of the installation, used in
India;

(B) such machinery or plant is imported into

India from any country outside India; and

(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 installation of machinery
or plant by the person.

Explanation 2.—Where any machinery or plant or

any part thereof previously used for any purpose is put
to use by the assessee and the total value of such
machinery or plant or part thereof does not exceed
twenty per cent. of the total value of the machinery or
plant used by the assessee, then, for the purposes of sub-
clause (ii), the condition specified therein shall be
deemed to have been complied with;
 55

(b) the assessee is not engaged in any business other

than the business of manufacture or production of any
article or thing and research in relation to, or distribution
of, such article or thing manufactured or produced by it.

Explanation.—For the removal of doubts, it is

hereby clarified that the business of manufacture or
production of any article or thing shall include the
business of generation of electricity, but not include a
business of,—

(i) development of computer software in any

form or in any media;

(ii) mining;

(iii) conversion of marble blocks or similar

items into slabs;

(iv) bottling of gas into cylinder;

(v) printing of books or production of

cinematograph film; or

(vi) any other business as may be notified by the

Central Government in this behalf;

(c) the total income of the assessee has been

computed,—

(i) without any deduction under the provisions of

section 10AA or clause (iia) of sub-section (1) of
section 32 or section 33AB or section 33ABA or sub-
clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-
section (1) or sub-section (2AA) of section 35 or section
35AD or section 35CCC or under any of the provisions
of Chapter VI-A other than the provisions of section
80JJAA;

(ii) without set off of any loss carried forward or

depreciation from any earlier assessment year, if such
loss or depreciation is attributable to any of the
deductions referred to in clause (i); and

(iii) by claiming the depreciation, if any, under

section 32, other than clause (iia) of sub-section (1) of
the said section, determined in such manner as may be
prescribed.
 56

(3) The loss and depreciation referred to in sub-clause (ii)

of clause (c) of sub-section (2) shall be deemed to have been
given full effect to and no further deduction for such loss shall
be allowed for any subsequent year.

(4) Where it appears to the Assessing Officer that, owing

to the close connection between the assessee to which this
section applies and any other person, or for any other reason,
the course of business between them is so arranged that the
business transacted between them produces to the assessee
more than the ordinary profits which might be expected to arise
in such business, the Assessing Officer shall, in computing the
profits and gains of such business for the purposes of this
section, take the amount of profits as may be reasonably
deemed to have been derived therefrom:

Provided that in case the aforesaid arrangement involves

a specified domestic transaction referred to in section 92BA,
the amount of profits from such transaction shall be determined
having regard to arm's length price as defined in clause (ii) of
section 92F:

Provided further that the amount, being profits in excess

of the amount of the profits determined by the Assessing
Officer, shall be deemed to be the income of the assessee.

(5) Nothing contained in this section shall apply unless the

option is exercised by the person in the prescribed manner on
or before the due date specified under sub-section (1) of section
139 for furnishing the first of the returns of income for any
previous year relevant to the assessment year commencing on
or after 1st day of April, 2024, and such option once exercised
shall apply to subsequent assessment years:

Provided that once the option has been exercised for any
previous year shall not be allowed to be withdrawn for the same
or any other previous year.”.

Amendment of 53. In section 115BB of the Income-tax Act, for the

section 115BB. Explanation, the following shall be substituted with effect from
the 1st day of April, 2024, namely:––

‘Provided that nothing contained in this section shall

apply to income by way of winnings from any online game for
the assessment year beginning on or after the 1st day of April,
2024.

Explanation.—For the purposes of this section,––

 57

(i) “horse race” shall have the meaning assigned to it

in section 74A;

(ii) “online game” shall have the meaning assigned to

it in section 115BBJ.’.

Insertion of new 54. After section 115BBI of the Income-tax Act, the
section 115BBJ. following section shall be inserted with effect from the 1st day of
April, 2024, namely:––

Tax on winnings ‘115BBJ. Notwithstanding anything contained in any

from online other provisions of this Act, where the total income of an
games.
assessee includes any income by way of winnings from any
online game, the income-tax payable shall be the aggregate
of—

(i) the amount of income-tax calculated on net

winnings from such online games during the previous
year, computed in the manner as may be prescribed, at the
rate of thirty per cent.; and

(ii) the amount of income-tax with which the assessee

would have been chargeable had his total income been
reduced by the net winnings referred to in clause (i).

Explanation.—For the purposes of this section,––

(i) “computer resource” shall have the same meaning

as assigned to it in clause (e) of the Explanation to section
144B;

(ii) “internet” means the combination of computer

facilities and electromagnetic transmission media, and
related equipment and software, comprising the
interconnected worldwide network of computer networks
that transmits information based on a protocol for
controlling such transmission;

(iii) “online game” means a game that is offered on

the internet and is accessible by a user through a computer
resource including any telecommunication device.’.

Amendment of 55. In section 115JC of the Income-tax Act, for sub-section

section 115JC. (5), the following sub-section shall be substituted with effect
from the 1st day of April, 2024, namely:––

“(5) The provisions of this section shall not apply to a

person, where––
 58

(i) such person has exercised the option referred to in

sub-section (5) of section 115BAC or sub-section (5) of
section 115BAD or sub-section (5) of section 115BAE; or

(ii) income-tax payable in respect of the total income

of such person is computed under sub-section (1A) of
section 115BAC.”.

Amendment of 56. In section 115JD of the Income-tax Act, for sub-section

section 115JD. (7), the following sub-section shall be substituted with effect
from the 1st day of April, 2024, namely:––

“(7) The provisions of this section shall not apply to a

person, where––

(i) such person has exercised the option referred to in

sub-section (5) of section 115BAC or sub-section (5) of
section 115BAD or sub-section (5) of section 115BAE; or

(ii) income-tax payable in respect of the total income

of such person is computed under sub-section (1A) of
section 115BAC.”.

Amendment of 57. In section 115TD of the Income-tax Act,––

section 115TD.

(i) in sub-section (3),––

(a) in clause (ii), in sub-clause (b), for the word

“rejected.”, the words “rejected; or” shall be substituted;

(b) after clause (ii), the following clause shall be

inserted, namely:––

“(iii) it fails to make an application in accordance

with the provisions of clause (i) or clause (ii) or clause
(iii) of the first proviso to clause (23C) of section 10 or
sub-clause (i) or sub-clause (ii) or sub-clause (iii) of
clause (ac) of sub-section (1) of section 12A, within the
period specified in the said clauses or sub-clauses, as
the case may be, which expires in the said previous
year.”;

(ii) in sub-section (5), in clause (ii), after the word, brackets

and figures “clause (ii)”, the words, brackets and figures
“clause (ii), or clause (iii),” shall be inserted;

(iii) in the Explanation, in clause (i),––

 59

(a) in sub-clause (b), after the word, brackets and figure

“sub-section (3);”, the word “or” shall be inserted;

(b) after sub-clause (b), the following sub-clause shall

be inserted, namely:––

“(c) the last date for making an application for

registration under sub-clause (i) or sub-clause (ii) or sub-
clause (iii) of clause (ac) of sub-section (1) of section 12A
or for making an application for approval under clause (i)
or clause (ii) or clause (iii) of the first proviso to clause
(23C) of section 10, as the case may be, in a case referred
to in clause (iii) of sub-section (3);”.

Amendment of 58. In section 115UA of the Income-tax Act, after sub-section

section 115UA. (3), the following sub-section shall be inserted with effect from
the 1st day of April, 2024, namely:––

“(3A) The provisions of sub- sections (1), (2) and (3) shall
not apply in respect of any sum referred to in clause (xii) of
sub-section (2) of section 56, received by a unit holder from a
business trust.”.

Amendment of 59. In section 115UB of the Income-tax Act, in Explanation

section 115UB. 1, in clause (a), after the words and figures “Securities and
15 of 1992.
Exchange Board of India Act, 1992 or”, the words, brackets and
figures “regulated under the International Financial Services
Centres Authority (Fund Management) Regulations, 2022 made”
shall be inserted.

Amendment of 60. In section 116 of the Income-tax Act, in clause (cca), after
section 116. the words “Joint Commissioners of Income-tax”, the words and
brackets “or Joint Commissioners of Income-tax (Appeals)” shall
be inserted.

Amendment of 61. In section 119 of the Income-tax Act, for the words and
section 119. brackets “the Commissioner (Appeals)” and “a Commissioner
(Appeals)”, the words and brackets “the Joint Commissioner
(Appeals) or the Commissioner (Appeals)” and “a Joint
Commissioner (Appeals) or a Commissioner (Appeals)” shall
respectively be substituted.

Amendment of 62. In section 131 of the Income-tax Act, for the words and
section 131. brackets “, Commissioner (Appeals)”, the words and brackets “,
Joint Commissioner (Appeals), Commissioner (Appeals)” shall
be substituted.

Amendment of 63. In section 132 of the Income-tax Act,––

section 132.
 60

(a) for sub-section (2), the following sub-section shall be

substituted, namely:––

“(2) The authorised officer may requisition the

services of––

(i) any police officer or of any officer of the Central

Government, or of both; or

(ii) any person or entity as may be approved by the

Principal Chief Commissioner or the Chief
Commissioner or the Principal Director General or the
Director General, in accordance with the procedure, as
may be prescribed, in this regard,

to assist him for all or any of the purposes specified in

sub-section (1) or sub-section (1A) and it shall be the duty
of every such officer or person or entity to comply with
such requisition.”;

(b) for sub-section (9D), the following sub-section shall

be substituted, namely:––

“(9D) The authorised officer may, during the course

of the search or seizure or within a period of sixty days
from the date on which the last of the authorisations for
search was executed, make a reference to,––

(i) a Valuation Officer referred to in section 142A;

or

(ii) any other person or entity or any valuer

registered by or under any law for the time being in
force, as may be approved by the Principal Chief
Commissioner or the Chief Commissioner or the
Principal Director General or the Director General, in
accordance with the procedure, as may be prescribed,
in this regard,

who shall estimate the fair market value of the property

in the manner as may be prescribed, and submit a report
of the estimate to the authorised officer or the Assessing
Officer, as the case may be, within a period of sixty days
from the date of receipt of such reference.”;

(c) for Explanation 1, the following Explanation shall be

substituted and shall be deemed to have been substituted with
effect from the 1st day of April, 2022, namely:––
 61

‘Explanation 1.––For the purposes of sub-sections

(9A), (9B) and (9D), the last of authorisation for search
shall be deemed to have been executed,––

(a) in the case of search, on the conclusion of

search as recorded in the last panchnama drawn in
relation to any person in whose case the warrant of
authorisation has been issued; or

(b) in the case of requisition under section 132A,

on the actual receipt of the books of account or other
documents or assets by the authorised officer.’.

Amendment of 64. In section 133 of the Income-tax Act, for the words and
section 133. brackets “the Commissioner (Appeals)” wherever they occur, the
words and brackets “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)” shall be substituted.

Amendment of 65. In section 134 of the Income-tax Act, for the words and
section 134. brackets “the Commissioner (Appeals)” at both the places where
they occur, the words and brackets “the Joint Commissioner
(Appeals) or the Commissioner (Appeals)” shall be substituted.

Amendment 66. In section 135A of the Income-tax Act, in sub-section (2),

of section 135A. after the proviso, the following proviso shall be inserted and shall
be deemed to have been inserted with effect from the 1st day of
April, 2022, namely:––

“Provided further that the Central Government may

amend any direction, issued under this sub-section on or
before the 31st day of March, 2022, by notification in the
Official Gazette.”.

Amendment of 67. In section 140B of the Income-tax Act, in sub-section (4),

section 140B. with effect from the 1st day of April, 2022,––

(i) in the opening portion, the words “or, as the case may
be, on the amount by which the advance tax paid falls short
of the assessed tax,” shall be omitted and shall be deemed to
have been omitted;

(ii) in clause (a), in sub-clause (i), after the words “earlier

return”, the words “, if any” shall be inserted and shall be
deemed to have been inserted.

Amendment of 68. In section 142 of the Income-tax Act,––

section 142.

(a) for sub-section (2A), the following sub-section shall

be substituted, namely:––
 62

“(2A) If, at any stage of the proceedings before him, the

Assessing Officer, having regard to the nature and
complexity of the accounts, volume of the accounts, doubts
about the correctness of the accounts, multiplicity of
transactions in the accounts or specialised nature of
business activity of the assessee, and the interests of the
revenue, is of the opinion that it is necessary so to do, he
may, with the previous approval of the Principal Chief
Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner, direct the assessee to get
either or both of the following, namely:––

(i) to get the accounts audited by an accountant, as

defined in the Explanation below sub-section (2) of section
288, nominated by the Principal Chief Commissioner or
Chief Commissioner or Principal Commissioner or
Commissioner in this behalf and to furnish a report of such
audit in the prescribed form duly signed and verified by
such accountant and setting forth such particulars, as may
be prescribed, and such other particulars as the Assessing
Officer may require;

(ii) to get the inventory valued by a cost accountant,

nominated by the Principal Chief Commissioner or Chief
Commissioner or Principal Commissioner or
Commissioner in this behalf and to furnish a report of such
inventory valuation in the prescribed form duly signed and
verified by such cost accountant and setting forth such
particulars, as may be prescribed, and such other particulars
as the Assessing Officer may require:

Provided that the Assessing Officer shall not direct the

assessee to get the accounts so audited or inventory so
valued unless the assessee has been given a reasonable
opportunity of being heard.”;

(b) in sub-section (2D),––

(i) for the words, brackets, figure and letter “audit

under sub-section (2A) (including the remuneration of the
accountant)”, the words, brackets, figure and letter “audit
or inventory valuation under sub-section (2A) (including
the remuneration of the accountant or the cost accountant,
as the case may be)” shall be substituted;

(ii) in the proviso,––

(I) for the words “audit under”, the words “audit or

inventory valuation under” shall be substituted;
 63

(II) for the words and brackets “such audit

(including remuneration of the accountant)”, the words
and brackets “such audit or inventory valuation
(including the remuneration of the accountant or the
cost accountant, as the case may be)” shall be
substituted;

(c) in sub-section (3), after the word “audit”, the words “or
inventory valuation” shall be inserted;

(d) after sub-section (4), the following Explanation shall be

inserted, namely:––

‘Explanation.––For the purposes of this section, “cost

accountant” means a cost accountant as defined in clause
(b) of sub-section (1) of section 2 of the Cost and Works
Accountants Act, 1959 and who holds a valid certificate of 23 of 1959.
practice under sub-section (1) of section 6 of the said Act.’.

Amendment 69. In section 148 of the Income-tax Act, ––

of section 148.

(a) for the words “such period, as may be specified in

such notice”, the words “a period of three months from the
end of the month in which such notice is issued, or such
further period as may be allowed by the Assessing Officer on
the basis of an application made in this regard by the
assessee” shall be substituted;

(b) after the second proviso and before Explanation 1, the

following proviso shall be inserted, namely:––

“Provided also that any return of income, required to

be furnished by an assessee under this section and
furnished beyond the period allowed shall not be deemed
to be a return under section 139.”.

Amendment 70. In section 149 of the Income-tax Act, in sub-section (1),–

of section 149.

(I) after the second proviso, the following provisos shall

be inserted, namely:––

“Provided also that for cases referred to in clauses (i),

(iii) and (iv) of Explanation 2 to section 148, where,––

(a) a search is initiated under section 132; or

(b) a search under section 132 for which the last

of authorisations is executed; or
 64

(c) requisition is made under section 132A,

after the 15th day of March of any financial year and the
period for issue of notice under section 148 expires on the
31st day of March of such financial year, a period of
fifteen days shall be excluded for the purpose of
computing the period of limitation as per this section and
the notice issued under section 148 in such case shall be
deemed to have been issued on the 31st day of March of
such financial year:

Provided also that where the information as referred

to in Explanation 1 to section 148 emanates from a
statement recorded or documents impounded under
section 131 or section 133A, as the case may be, on or
before the 31st day of March of a financial year, in
consequence of,––

(a) a search under section 132 which is initiated; or

(b) a search under section 132 for which the last of

authorisations is executed; or

(c) a requisition made under section 132A,

after the 15th day of March of such financial year, a

period of fifteen days shall be excluded for the purpose of
computing the period of limitation as per this section and
the notice issued under clause (b) of section 148A in such
case shall be deemed to have been issued on the 31st day
of March of such financial year:”;

(II) in the sixth proviso, for the words “less than seven
days”, the words “does not exceed seven days” shall be
substituted.

Amendment 71. In section 151 of the Income-tax Act,––

of section 151.

(a) in clause (ii), the words “where there is no Principal

Chief Commissioner or Principal Director General,” shall be
omitted;

(b) after clause (ii), the following proviso shall be

inserted, namely:––

“Provided that the period of three years for the

purposes of clause (i) shall be computed after taking into
account the period of limitation as excluded by the third
or fourth or fifth provisos or extended by the sixth proviso
to sub-section (1) of section 149.”.
 65

Amendment 72. In section 153 of the Income-tax Act,––

of section 153.
(I) in sub-section (1),––

(a) in the third proviso, the words “or after” shall be

omitted;

(b) after the third proviso, the following proviso shall

be inserted, namely:––

“Provided also that in respect of an order of

assessment relating to the assessment year
commencing on or after the 1st day of April, 2022, the
provisions of this sub-section shall have effect, as if
for the words “twenty-one months”, the words
“twelve months” had been substituted.”;

(II) in sub-section (1A), for the words “nine months”, the

words “twelve months” shall be substituted;

(III) in sub-section (3),––

(a) for the words, brackets and figures “sub-sections

(1) and (2)”, the words, brackets, figures and letter “sub-
sections (1), (1A) and (2)” shall be substituted;

(b) for the words “Principal Commissioner or

Commissioner” at both the places where they occur, the
words “Principal Chief Commissioner or Chief
Commissioner or Principal Commissioner or
Commissioner, as the case may be,” shall be substituted;

(IV) after sub-section (3), the following sub-section shall

be inserted, namely:––

“(3A) Notwithstanding anything contained in sub-

sections (1), (1A), (2) and (3), where an assessment or
reassessment is pending on the date of initiation of
search under section 132 or making of requisition
under section 132A, the period available for
completion of assessment or reassessment, as the case
may be, under the said sub-sections shall,––

(a) in a case where such search is initiated

under section 132 or such requisition is made
under section 132A;
 66

(b) in the case of an assessee, to whom any

money, bullion, jewellery or other valuable article
or thing seized or requisitioned belongs to;

(c) in the case of an assessee, to whom any

books of account or documents seized or
requisitioned pertains or pertain to, or any
information contained therein, relates to,

be extended by twelve months.”;

(V) in sub-section (4), for the words, brackets and figures

“sub-sections (1), (2) and (3)” at both the places where they
occur, the words, brackets, figures and letters “sub-sections
(1), (1A), (2), (3) and (3A)” shall be substituted;

(VI) in sub-section (5), for the words “the Principal

Commissioner or Commissioner”, the words “the Principal
Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner, as the case may be,” shall
be substituted;

(VII) in sub-section (6),––

(a) in the opening portion, for the words, brackets

and figures “sub-sections (1) and (2)”, the words,
brackets, figures and letter “sub-sections (1), (1A) and
(2)” shall be substituted;

(b) in clause (i), after the words “passed by the”, the

words “Principal Chief Commissioner or Chief
Commissioner or” shall be inserted;

(VIII) in Explanation 1,––

(a) in clause (iv),––

(i) in the opening portion, after the word

“audited”, the words “or inventory valued” shall be
inserted;

(ii) in sub-clause (a), after the words “such audit”,

the words “or inventory valuation” shall be inserted;

(b) in the first proviso, for the words, brackets and

figures “sub-sections (1), (2)”, the words, brackets,
figures and letter “sub-sections (1), (1A), (2)” shall be
substituted.
 67

Amendment of 73. In section 154 of the Income-tax Act, in sub-section (2),

section 154. in clause (b), for the words and brackets “the Commissioner
(Appeals)”, the words and brackets “the Joint Commissioner
(Appeals) or the Commissioner (Appeals)” shall be substituted.

Amendment of 74. In section 155 of the Income-tax Act,––

section 155.

(a) in sub-section (11A), after the words, figures and letter

“section 10A or” at both the places where they occur, the
words, figures and letters “section 10AA or” shall be inserted
with effect from the 1st day of April, 2024;

(b) after sub-section (18), the following sub-section shall

be inserted, namely:––

“(19) Where any deduction in respect of any

expenditure incurred for the purchase of sugarcane has
been claimed by an assessee, being a co-operative society
engaged in the business of manufacture of sugar, and such
deduction has been disallowed wholly or partly in any
previous year commencing on or before the 1st day of
April, 2014, the Assessing Officer shall, on the basis of
an application made by such assessee in this regard,
recompute the total income of the assessee for such
previous year after allowing deduction to the extent such
expenditure is incurred at a price which is equal to or less
than the price fixed or approved by the Government for
that previous year, and the provisions of section 154 shall,
so far as may be, apply thereto, and the period of four
years specified in sub-section (7) of that section shall be
reckoned from the end of previous year commencing on
the 1st day of April, 2022.”;

(c) after sub-section (19) and before the Explanation, the

following sub-section shall be inserted with effect from the
1st day of October, 2023, namely:––

‘(20) Where any income has been included in the

return of income furnished by an assessee under section
139 for any assessment year (herein referred to as the
relevant assessment year) and tax on such income has
been deducted at source and paid to the credit of the
Central Government in accordance with the provisions of
Chapter XVII-B in a subsequent financial year, the
Assessing Officer shall, on an application made by the
assessee in such form, as may be prescribed, within a
period of two years from the end of the financial year in
which such tax was deducted at source, amend the order
of assessment or any intimation allowing credit of such
tax deducted at source in the relevant assessment year,
 68

and the provisions of section 154 shall, so far as may be,

apply thereto and the period of four years specified in sub-
section (7) of that section shall be reckoned from the end
of the financial year in which such tax has been deducted:

Provided that the credit of such tax deducted at source

shall not be allowed in any other assessment year.’.

Amendment of 75. In section 158A of the Income-tax Act, in the

section 158A. Explanation, for the words and brackets “the Commissioner
(Appeals)”, the words and brackets “the Joint Commissioner
(Appeals) or the Commissioner (Appeals)” shall be substituted.

Amendment of 76. In section 158AB of the Income-tax Act, for the words
section 158AB. and brackets “the Commissioner (Appeals)” wherever they occur,
the words and brackets “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)” shall be substituted.

Substitution of 77. For section 170A of the Income-tax Act, the following
new section for section shall be substituted, namely:––
section 170A.

Effect of order ‘170A. (1) Notwithstanding anything to the contrary

of tribunal or contained in section 139, in a case of business reorganisation,
court in respect
of business
where prior to the date of order of a High Court or tribunal or
reorganisation. an Adjudicating Authority as defined in clause (1) of section
5 of the Insolvency and Bankruptcy Code, 2016 (hereinafter 31 of 2016.
referred to as order in respect of business reorganisation), as
the case may be, any return of income has been furnished by
an entity to which such order applies under the provisions
of section 139 for any assessment year relevant to the
previous year to which such order applies, the successor shall
furnish, within a period of six months from the end of the
month in which the order was issued, a modified return in
such form and manner, as may be prescribed, in accordance
with and limited to the said order.

(2) Where the assessment or reassessment proceedings for

an assessment year relevant to a previous year to which the
order in respect of the business reorganisation applies,––

(a) have been completed on the date of furnishing of

the modified return in accordance with the provisions of
sub-section (1), the Assessing Officer shall pass an order
modifying the total income of the relevant assessment
year determined in such assessment or reassessment, in
accordance with such order and taking into account the
modified return so furnished;

(b) are pending on the date of furnishing of the

modified return in accordance with the provisions of sub-
 69

section (1), the Assessing Officer shall pass an order

assessing or reassessing the total income of the relevant
assessment year in accordance with the order of the
business reorganisation and taking into account the
modified return so furnished.

(3) Save as otherwise provided in this section, in an

assessment or reassessment made in respect of an assessment
year under this section, all other provisions of this Act shall
apply and the tax shall be chargeable at the rate or rates as
applicable to such assessment year.

Explanation.—In this section, the expressions—

(i) “business reorganisation” means the

reorganisation of business involving the amalgamation or
demerger or merger of business of one or more persons;

(ii) “successor” means all resulting companies in a

business reorganisation, whether or not the company was
in existence prior to such business reorganisation.’.

Amendment of 78. In section 177 of the Income-tax Act, in sub-section (2),

section 177. for the words and brackets “the Commissioner (Appeals)”, the
words and brackets “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)” shall be substituted.

Amendment of 79. In section 189 of the Income-tax Act, in sub-section (2),

section 189. for the words and brackets “the Commissioner (Appeals)”, the
words and brackets “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)” shall be substituted.

Amendment of 80. In section 192A of the Income-tax Act, the second proviso
section 192A. shall be omitted.

Amendment of 81. In section 193 of the Income-tax Act, in the proviso,

section 193. clause (ix) shall be omitted.

Amendment of 82. In section 194B of the Income-tax Act, ––

section 194B.

(i) for the marginal heading, the following marginal

heading shall be substituted, namely:––

“Winnings from lottery or crossword puzzle, etc.”;

(ii) for the words “in an amount exceeding ten thousand

rupees”, the words “or from gambling or betting of any form or
nature whatsoever, being the amount or the aggregate of
amounts exceeding ten thousand rupees during the financial
year” shall be substituted;
 70

(iii) after the proviso, the following shall be inserted with

effect from the 1st day of July, 2023, namely:––

‘Provided further that nothing contained in this section

shall apply to deduction of income-tax on winnings from
any online game on or after the 1st day of July, 2023.

Explanation.—For the purposes of this section, “online

game” shall have the meaning assigned to it in clause (iii)
of the Explanation to section 115BBJ.’.

Insertion of new 83. After section 194B of the Income-tax Act, the following
section 194BA. section shall be inserted with effect from the 1st day of July, 2023,
namely:––

Winnings from ‘194BA. (1) Notwithstanding anything contained in any

online games. other provisions of this Act, any person responsible for paying
to any person any income by way of winnings from any online
game during the financial year shall deduct income-tax on the
net winnings in his user account, computed in the manner as
may be prescribed, at the end of the financial year at the rates
in force:

Provided that in a case where there is a withdrawal from

user account during the financial year, the income-tax shall be
deducted at the time of such withdrawal on the net winnings
comprised in such withdrawal, as well as on the remaining
amount of net winnings in the user account, computed in the
manner as may be prescribed, at the end of the financial year.

(2) In a case where the net winnings are wholly in kind or

partly in cash, and partly in kind but the part in cash is not
sufficient to meet the liability of deduction of tax in respect of
whole of the net winnings, the person responsible for paying
shall, before releasing the winnings, ensure that tax has been
paid in respect of the net winnings.

(3) If any difficulty arises in giving effect to the provisions

of this section, the Board may, with the previous approval of
the Central Government, issue guidelines for the purposes of
removing the difficulty.

(4) Every guideline issued by the Board under sub-section

(3) shall, as soon as may be after it is issued, be laid before
each House of Parliament, and shall be binding on the income-
tax authorities and on the person liable to deduct income-tax.

Explanation.–– For the purposes of this section––

 71

(a) “computer resource”, “internet” and “online

game” shall have the meanings respectively assigned to
them in section 115BBJ;

(b) “online gaming intermediary” means an

intermediary that offers one or more online games;

(c) “user” means any person who accesses or avails

any computer resource of an online gaming intermediary;

(d) “user account” means account of a user registered

with an online gaming intermediary.’.

Amendment of 84. In section 194BB of the Income-tax Act, for the words
section 194BB. “in an amount exceeding ten thousand rupees”, the words “, being
the amount or aggregate of amounts exceeding ten thousand
rupees during the financial year,” shall be substituted.

Amendment of 85. In section 194N of the Income-tax Act, after the second
section 194N. proviso, the following proviso shall be inserted, namely:––

“Provided also that where the recipient is a co-operative

society, the provisions of this section shall have effect, as if for
the words “one crore rupees”, the words “three crore rupees”
had been substituted.”.

Amendment of 86. In section 194R of the Income-tax Act, the Explanation

section 194R. shall be numbered as Explanation 1 thereof, and after
Explanation 1 as so numbered, the following Explanation shall
be inserted, namely:––

“Explanation 2.—For the removal of doubts, it is clarified

that the provisions of sub-section (1) shall apply to any
benefit or perquisite, whether in cash or in kind or partly in
cash and partly in kind.”.

Amendment of 87. In section 196A of the Income-tax Act, in sub-section (1),

section 196A. the following proviso shall be inserted, namely:––

“Provided that where an agreement referred to in sub-

section (1) of section 90 or sub-section (1) of section
90A applies to the payee and if the payee has furnished a
certificate referred to in sub-section (4) of section 90 or sub-
section (4) of section 90A, as the case may be, then, income-
tax thereon shall be deducted at the rate of twenty per cent. or
at the rate or rates of income-tax provided in such agreement
for such income, whichever is lower.”.
 72

Amendment of 88. In section 197 of the Income-tax Act, in sub-section (1),

section 197. after the figures and letters “194LA,”, the figures and letters
“194LBA,” shall be inserted.

Amendment of 89. In section 206AB of the Income-tax Act, in sub-section

section 206AB. (3), for the proviso, the following proviso shall be substituted,
namely:––

“Provided that the specified person shall not include––

(i) a non-resident who does not have a permanent

establishment in India; or

(ii) a person who is not required to furnish the return

of income for the assessment year relevant to the said
previous year and is notified by the Central Government
in the Official Gazette in this behalf.”.

Amendment of 90. In section 206C of the Income-tax Act, in sub-section

section 206C. (1G), with effect from the 1st day of July, 2023,––

(i) in the long line, for the word, “five”, the word
“twenty” shall be substituted;

(ii) in the first proviso, for the words, “and is for a purpose
other than purchase of overseas tour program package”, the
words “and is for the purposes of education or medical
treatment” shall be substituted;

(iii) in the second proviso, for the words “is for a purpose
other than purchase of overseas tour program package”, the
words “is for the purposes of education or medical treatment”
shall be substituted.

Amendment of 91. In section 206CCA of the Income-tax Act, in sub-section

section (3), for the proviso, the following proviso shall be substituted,
206CCA.
namely:––

“Provided that the specified person shall not include––

(i) a non-resident who does not have a permanent

establishment in India; or

(ii) a person who is not required to furnish the return

of income for the assessment year relevant to the said
previous year and is notified by the Central Government
in the Official Gazette in this behalf.”.

Amendment of 92. In section 241A of the Income-tax Act, the following

section 241A. proviso shall be inserted, namely:––
 73

“Provided that the provisions of this section shall not

apply from the 1st day of April, 2023.”.

Amendment of 93. In section 244A of the Income-tax Act,––

section 244A.
(a) in sub-section (1), in clause (a), after sub-clause (ii),
the following proviso shall be inserted with effect from the
1st day of October, 2023, namely:––

“Provided that where refund arises as a result of an

order passed by the Assessing Officer in consequence of
an application made by the assessee under sub-section
(20) of section 155, such interest shall be calculated at the
rate of one-half per cent. for every month or part of a
month comprised in the period from the date of such
application to the date on which the refund is granted;”;

(b) in sub-section (1A), the following proviso shall be

inserted, namely:––

“Provided that where proceedings for assessment or

reassessment are pending in respect of an assessee, in
computing the period for determining the additional
interest payable to such assessee under this sub-section,
the period beginning from the date on which such refund
is withheld by the Assessing Officer in accordance with
and subject to provisions of sub-section (2) of section 245
and ending with the date on which such assessment or
reassessment is made, shall be excluded.”.

Substitution of 94. For section 245 of the Income-tax Act, the following
new section for section shall be substituted, namely:––
section 245.

Set off and “245. (1) Where under any of the provisions of this Act,
withholding of a refund becomes due or is found to be due to any person, the
refunds in
certain cases.
Assessing Officer or Commissioner or Principal
Commissioner or Chief Commissioner or Principal Chief
Commissioner, as the case may be, may, in lieu of payment of
the refund, set off the amount to be refunded or any part of
that amount, against the sum, if any, remaining payable under
this Act by the person to whom the refund is due, after giving
an intimation in writing to such person of the action proposed
to be taken under this sub-section.

(2) Where a part of the refund is set off under the

provisions of sub-section (1), or where no such amount is set
off, and refund becomes due to a person, and the Assessing
Officer, having regard to the fact that proceedings for
assessment or reassessment are pending in the case of such
 74

person, is of the opinion that the grant of refund is likely to

adversely affect the revenue, he may, for reasons to be
recorded in writing and with the previous approval of the
Principal Commissioner or the Commissioner, as the case
may be, withhold the refund up to the date on which such
assessment or reassessment is made.”.

Amendment 95. In section 245D of the Income-tax Act, in sub-section (9),

of section 245D. for clause (iv), the following clause shall be substituted and shall
be deemed to have been substituted with effect from the 1st day
of February, 2021, namely:––

“(iv) where the time-limit for amending any order or

filing of rectification application under sub-section (6B)
expires on or after the 1st day of February, 2021, but before
the 1st day of February, 2022, such time-limit shall be
extended to the 30th day of September, 2023.”.

Amendment 96. In section 245MA of the Income-tax Act, in sub-section

of section (4), after the proviso, the following proviso shall be inserted,
245MA.
namely:––

“Provided further that the Central Government may

amend any direction, issued under this sub-section on or
before the 31st day of March, 2023, by notification in the
Official Gazette.”.

Amendment 97. In section 245R of the Income-tax Act, in sub-section

of section (10), after the proviso, the following proviso shall be inserted,
245R.
namely:––

“Provided further that the Central Government may amend

any direction, issued under this sub-section on or before the
31st day of March, 2023, by notification in the Official
Gazette.”.

Amendment of 98. In Chapter XX of Income-tax Act,––

Chapter XX.

(a) for the sub-heading “A.––Appeals to the Deputy

Commissioner (Appeals) and Commissioner (Appeals)”, the
sub-heading “A.––Appeals to the Joint Commissioner
(Appeals) and Commissioner (Appeals)” shall be substituted;

(b) for section 246, the following section shall be

substituted, namely:––

Appealable ‘246. (1) Any assessee aggrieved by any of the

orders before following orders of an Assessing Officer (below the rank
Joint
 75

Commissioner of Joint Commissioner) may appeal to the Joint

(Appeals). Commissioner (Appeals) against—

(a) an order being an intimation under sub-section

(1) of section 143, where the assessee objects to the
making of adjustments, or any order of assessment
under sub-section (3) of section 143 or section 144,
where the assessee objects to the amount of income
assessed, or to the amount of tax determined, or to the
amount of loss computed, or to the status under which
he is assessed;

(b) an order of assessment, reassessment or

recomputation under section 147;

(c) an order being an intimation under sub-

section (1) of section 200A;

(d) an order under section 201;

(e) an order being an intimation under sub-section

(6A) of section 206C;

(f) an order under sub-section (1) of section

206CB;

(g) an order imposing a penalty under Chapter

XXI; and

(h) an order under section 154 or section

155 amending any of the orders mentioned in clauses
(a) to (g):

Provided that no appeal shall be filed before the

Joint Commissioner (Appeals) if an order referred to
in this sub-section is passed by or with the prior
approval of, an income-tax authority above the rank
of Deputy Commissioner.

(2) Where any appeal filed against an order referred

to in sub-section (1) is pending before the Commissioner
(Appeals), the Board or an income-tax authority so
authorised by the Board in this regard, may transfer such
appeal and any matter arising out of or connected with
such appeal and which is so pending, to the Joint
Commissioner (Appeals) who may proceed with such
appeal or matter, from the stage at which it was before, it
was so transferred.
 76

(3) Notwithstanding anything contained in sub-

section (1) and sub-section (2), the Board or an income-
tax authority so authorised by the Board in this regard,
may transfer any appeal which is pending before a Joint
Commissioner (Appeals) and any matter arising out of or
connected with such appeal and which is so pending, to
the Commissioner (Appeals) who may proceed with such
appeal or matter, from the stage at which it was before, it
was so transferred.

(4) Where an appeal is transferred under the

provisions of sub-section (2) or sub-section (3), the
appellant shall be given an opportunity of being reheard.

(5) For the purposes of disposal of appeal by the Joint

Commissioner (Appeals), the Central Government may
make a scheme, by notification in the Official Gazette, so
as to dispose of appeals in an expedient manner with
transparency and accountability, by eliminating the
interface between the Joint Commissioner (Appeals) and
the appellant, in the course of appellate proceedings to the
extent technologically feasible and direct that any of the
provisions of this Act relating to jurisdiction and
procedure for disposal of appeals by the Joint
Commissioner (Appeals), shall not apply or shall apply
with such exceptions, modifications and adaptations as
may be specified in the notification.

(6) For the purposes of sub-section (1), the Board

may specify that the provisions of that sub-section shall
not apply to any case or any class of cases.

Explanation.—For the purposes of this section,

“status” means the category under which the assessee is
assessed as “individual”, “Hindu undivided family” and
so on.’.

Amendment of 99. In section 249 of the Income-tax Act,––

section 249.

(a) in sub-section (1), in the opening portion, after the

figures, letters and words “1st day of October, 1998”, the
words, brackets, figures and letters “or to the Joint
Commissioner (Appeals) on or after the 1st day of April,
2023,” shall be inserted;

(b) in sub-section (3), for the words and brackets

“Commissioner (Appeals)”, the words and brackets “Joint
Commissioner (Appeals) or the Commissioner (Appeals)”
shall be substituted;
 77

(c) in sub-section (4), in the proviso, for the words and

brackets “Commissioner (Appeals)”, the words and brackets
“Joint Commissioner (Appeals) or the Commissioner
(Appeals)” shall be substituted.

Amendment of 100. In section 250 of the Income-tax Act,––

section 250.

(a) in sub-sections (1), (3), (4), (5), (6) and (7), for the
words and brackets “Commissioner (Appeals)” wherever
they occur, the words and brackets “Joint Commissioner
(Appeals) or the Commissioner (Appeals)” shall be
substituted;

(b) for sub-section (6A), the following sub-section shall

be substituted, namely:––

“(6A) In every appeal, the Joint Commissioner

(Appeals) or the Commissioner (Appeals), as the case may
be, where it is possible, may hear and decide such appeal
within a period of one year from the end of the financial
year in which such appeal is filed before him under sub-
section (1) or transferred to him under sub-section (2) or
sub-section (3) of section 246 or filed before him under
sub-section (1) of section 246A, as the case may be.”;

(c) in sub-section (6C), after the proviso, the following

proviso shall be inserted and shall be deemed to have been
inserted with effect from the 1st day of April, 2022, namely:–

“Provided further that the Central Government may

amend any direction, issued under this sub-section on or
before the 31st day of March, 2022, by notification in the
Official Gazette.”.

Amendment of 101. In section 251 of the Income-tax Act,––

section 251.

(i) for the marginal heading, the following marginal

heading “Powers of the Joint Commissioner (Appeals) or the
Commissioner (Appeals)” shall be substituted;

(ii) after sub-section (1), the following sub-section shall

be inserted, namely:––

“(1A) In disposing of an appeal, the Joint

Commissioner (Appeals) shall have the following
powers—
 78

(a) in an appeal against an order of assessment, he

may confirm, reduce, enhance or annul the
assessment;

(b) in an appeal against an order imposing a

penalty, he may confirm or cancel such order or vary
it so as either to enhance or to reduce the penalty;

(c) in any other case, he may pass such orders in

the appeal as he thinks fit.”;

(iii) in sub-section (2), for the words and brackets

“Commissioner (Appeals)”, the words and brackets “Joint
Commissioner (Appeals) or the Commissioner (Appeals), as
the case may be,” shall be substituted;

(iv) in the Explanation,––

(a) for the words and brackets “an appeal, the

Commissioner (Appeals),”, the words and brackets “an
appeal, the Joint Commissioner (Appeals) or the
Commissioner (Appeals),” shall be substituted;

(b) for the words and brackets “raised before the

Commissioner (Appeals)”, the words and brackets “raised
before the Joint Commissioner (Appeals) or the
Commissioner (Appeals), as the case may be,” shall be
substituted.

Amendment 102. In section 253 of the Income-tax Act,––

of section 253.

(a) in sub-section (1),––

(A) in clause (a), after the word, figures and letter

“section 271A,”, the words, figures and letters “section
271AAB, section 271AAC, section 271AAD,” shall be
inserted;

(B) after clause (a), the following clause shall be

inserted, namely:––

“(aa) an order passed by a Joint Commissioner

(Appeals) under section 154, section 250, section
270A, section 271, section 271A, section 271AAC,
section 271AAD or section 271J; or”;

(C) for clause (c), the following clause shall be

substituted, namely:––
 79

“(c) an order passed by,––

(i) a Principal Commissioner or Commissioner

under section 12AA or section 12AB or under clause
(vi) of sub-section (5) of section 80G or under section
263 or under section 270A or under section 271 or
under section 272A or an order passed by him under
section 154 amending any such order; or

(ii) a Principal Chief Commissioner or Chief

Commissioner or a Principal Director General or
Director General or a Principal Director or Director
under section 263 or under section 272A or an order
passed by him under section 154 amending any such
order; or”;

(b) in sub-section (2), for the words and brackets

“Commissioner (Appeals)”, the words and brackets “the Joint
Commissioner (Appeals) or the Commissioner (Appeals)”
shall be substituted;

(c) in sub-section (4),––

(i) for the words and brackets “against the order of

the Commissioner (Appeals)”, the words “against an
order” shall be substituted;

(ii) for the words and brackets “any part of the order
of the Commissioner (Appeals)”, the words “any part of
such order” shall be substituted.

Amendment of 103. In section 264 of the Income-tax Act, in sub-section (4),

section 264. for the words and brackets “the Commissioner (Appeals)”
wherever they occur, the words and brackets “the Joint
Commissioner (Appeals) or the Commissioner (Appeals)” shall
be substituted.

Amendment of 104. In section 267 of the Income-tax Act, for the words and
section 267. brackets “the Commissioner (Appeals)”, the words and brackets
“the Joint Commissioner (Appeals) or the Commissioner
(Appeals)” shall be substituted.

Amendment 105. In section 269SS of the Income-tax Act,––

of section
269SS.

(a) after the second proviso and before the Explanation,

the following proviso shall be inserted, namely:––

“Provided also that the provisions of this section shall

have effect, as if for the words “twenty thousand rupees”,
 80

the words “two lakh rupees” had been substituted in the

case of any deposit or loan where,––

(a) such deposit is accepted by a primary agricultural

credit society or a primary co-operative agricultural and
rural development bank from its member; or

(b) such loan is taken from a primary agricultural

credit society or a primary co-operative agricultural and
rural development bank by its member.”;

(b) in the Explanation, for clause (ii), the following clause

shall be substituted, namely:––

‘(ii) “co-operative bank”, “primary agricultural credit

society” and “primary co-operative agricultural and rural
development bank” shall have the meanings respectively
assigned to them in the Explanation to sub-section (4) of
section 80P;’.

Amendment 106. In section 269T of the Income-tax Act,––

of section 269T.

(a) after the second proviso and before the Explanation,

the following proviso shall be inserted, namely:––

“Provided also that the provisions of this section shall

have effect, as if for the words “twenty thousand rupees”,
the words “two lakh rupees” had been substituted in the
case of any deposit or loan where,––

(a) such deposit is paid by a primary agricultural

credit society or a primary co-operative agricultural and
rural development bank to its member; or

(b) such loan is repaid to a primary agricultural credit

society or a primary co-operative agricultural and rural
development bank by its member.”;

(b) in the Explanation, for clause (ii), the following clause

shall be substituted, namely:––

‘(ii) “co-operative bank", “primary agricultural credit

society” and “primary co-operative agricultural and rural
development bank” shall have the meanings respectively
assigned to them in Explanation to sub-section (4) of
section 80P;’.

Amendment of 107. In section 270A of the Income-tax Act, for the words and
section 270A. brackets “the Commissioner (Appeals)” wherever they occur, the
 81

words and brackets “the Joint Commissioner (Appeals) or the

Commissioner (Appeals)” shall be substituted.

Amendment of 108. In section 270AA of the Income-tax Act, in sub-section

section 270AA. (6), after the words “No appeal under”, the words and figures
“section 246 or” shall be inserted.

Amendment of 109. In section 271 of the Income-tax Act, for the words and
section 271. brackets “the Commissioner (Appeals)” wherever they occur, the
words and brackets “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)” shall be substituted.

Amendment of 110. In section 271A of the Income-tax Act, for the words and
section 271A. brackets “the Commissioner (Appeals)”, the words and brackets
“the Joint Commissioner (Appeals) or the Commissioner
(Appeals)” shall be substituted.

Amendment of 111. In section 271AAC of the Income-tax Act, for the words
section and brackets “the Commissioner (Appeals)”, the words and
271AAC.
brackets “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)” shall be substituted.

Amendment of 112. In section 271AAD of the Income-tax Act, for the words
section and brackets “the Commissioner (Appeals)” at both the places
271AAD.
where they occur, the words and brackets “the Joint
Commissioner (Appeals) or the Commissioner (Appeals)” shall
be substituted.

Amendment 113. In section 271C of the Income-tax Act, in sub-section

of section (1), ––
271C.

(A) in clause (b),––

(I) for the words “pay the whole”, the words “pay or
ensure payment of, the whole” shall be substituted;

(II) in sub-clause (i), the word “or” shall be omitted;

(III) after sub-clause (ii), the following sub-clauses

shall be inserted, namely:––

“(iii) the first proviso to sub-section (1) of section

194R; or

(iv) the proviso to sub-section (1) of section 194S;

or”;

(IV) after sub-clause (iv) as inserted by the Finance

Act, 2023, the following sub-clause shall be inserted with
effect from the 1st day of July, 2023, namely:––
 82

“(v) sub-section (2) of section 194BA,”;

(B) in the long line, after the words “deduct or pay”, the
words “or ensure payment of,” shall be inserted.

Amendment of 114. Section 271FAA of the Income-tax Act shall be

section renumbered as sub-section (1) thereof and in sub-section (1) as
271FAA.
so renumbered, for the long line, the following shall be
substituted, namely:–––

“then, the prescribed income-tax authority under sub-

section (1) of section 285BA may direct that such person
shall pay, by way of penalty, a sum of fifty thousand
rupees.

(2) Where in the case of a person, referred to in clause (k)

of sub-section (1) of section 285BA, who is required to
furnish a statement under that section (herein referred to as
the reporting financial institution) provides inaccurate
information in the statement and the inaccuracy in such
statement is due to false or inaccurate information furnished
by the holder or holders of the relevant reportable account or
accounts, the prescribed income-tax authority under sub-
section (1) of section 285BA, shall direct that the reporting
financial institution shall, in addition to the penalty under
sub-section (1), if any, pay a sum of five thousand rupees for
every inaccurate reportable account and the reporting
financial institution shall be entitled to recover the sum so
paid on behalf of such reportable account holder, or to retain
out of any moneys that may be in its possession, or may come
to it from every such reportable account holder, an amount
equal to the sum so paid.”.

Amendment of 115. In section 271J of the Income-tax Act, for the words and
section 271J. brackets “the Commissioner (Appeals)” at both the places where
they occur, the words and brackets “the Joint Commissioner
(Appeals) or the Commissioner (Appeals)” shall be substituted.

Amendment 116. In section 274 of the Income-tax Act, in sub-section

of section 274. (2B), after the proviso, the following proviso shall be inserted and
shall be deemed to have been inserted with effect from the 1st day
of April, 2022, namely:––

“Provided further that the Central Government may

amend any direction, issued under this sub-section on or
before the 31st day of March, 2022, by notification in the
Official Gazette.”.
 83

Amendment of 117. In section 275 of the Income-tax Act,––

section 275.

(a) for the words and brackets “the Commissioner

(Appeals)” wherever they occur, the words and brackets “the
Joint Commissioner (Appeals) or the Commissioner
(Appeals)” shall be substituted;

(b) for the words and brackets “to the Commissioner

(Appeals)” wherever they occur, the words and brackets “to
the Joint Commissioner (Appeals) or to the Commissioner
(Appeals)” shall be substituted.

Amendment of 118. In section 276A of the Income-tax Act, after the proviso,
section 276A. the following proviso shall be inserted, namely:––

“Provided further that no proceeding shall be initiated

under this section on or after the 1st day of April, 2023.”.

Amendment 119. In section 276B of the Income-tax Act,––

of section 276B.

(A) in the opening portion, the words “pay to the credit of

the Central Government” shall be omitted;

(B) in clause (a), for the words “the tax deducted”, the
words “pay to the credit of the Central Government, the tax
deducted” shall be substituted;

(C) for clause (b), the following clause shall be

substituted, namely:––

‘(b) “pay tax or ensure payment of tax to the credit of

the Central Government, as required by or under––

(i) sub-section (2) of section 115-O;

(ii) the proviso to section 194B;

(iii) the first proviso to sub-section (1) of section

194R;

(iv) the proviso to sub-section (1) of section 194S;

or’;

(D) after sub-clause (iv) of clause (b) as substituted by

the Finance Act, 2023, the following sub-clause shall be
inserted with effect from the 1st day of July, 2023,
namely:––

“(v) sub-section (2) of section 194BA,”.

 84

Amendment of 120. In section 279 of the Income-tax Act, in sub-section (1),

section 279. for the words and brackets “or Commissioner (Appeals)”, the
words and brackets “or Joint Commissioner (Appeals) or
Commissioner (Appeals)” shall be substituted.

Amendment of 121. In section 287 of the Income-tax Act, in sub-section (2),

section 287. for the words and brackets “to the Commissioner (Appeals)”, the
words and brackets “to the Joint Commissioner (Appeals) or to
the Commissioner (Appeals)” shall be substituted.

Amendment of 122. In section 295 of the Income-tax Act, in sub-section (2),–

section 295.

(i) in clause (eec), after the word “audit”, the words “or
inventory valuation” shall be inserted;

(ii) in clause (mm), for the words and brackets “the

Commissioner (Appeals)”, the words and brackets “the Joint
Commissioner (Appeals) or the Commissioner (Appeals)”
shall be substituted.

CHAPTER IV

INDIRECT TAXES

Customs

Amendment of 123. In the Customs Act, 1962 (hereinafter referred to as the 52 of 1962.
section 25. Customs Act), in section 25, in sub-section (4A), after the
proviso, the following proviso shall be inserted, namely:––

“Provided further that nothing contained in this sub-

section shall apply to any such exemption granted to, or in
relation to,––

(a) any multilateral or bilateral trade agreement;

(b) obligations under international agreements,

treaties, conventions or such other obligations including
with respect to United Nations agencies, diplomats and
international organisations;

(c) privileges of constitutional authorities;

(d) schemes under the Foreign Trade Policy;

(e) the Central Government schemes having validity of

more than two years;
 85

(f) re-imports, temporary imports, goods imported as

gifts or personal baggage;

(g) any duty of customs under any law for the time
being in force, including integrated tax leviable under
sub-section (7) of section 3 of the Customs Tariff 51 of 1975.
Act,1975, other than duty of customs leviable under
section 12.”.

Amendment of 124. In the Customs Act, in section 127C, after sub-section

section 127C. (8), the following sub-section shall be inserted, namely: ––

“(8A) The order under sub-section (5) shall be passed

within a period of nine months from the last day of the month
in which the application under section 127B is made, and if,
no order is passed within the said period, the settlement
proceedings shall abate, and the adjudicating authority before
whom the proceeding at the time of making the application
was pending shall dispose of the application in accordance
with the provisions of this Act as if no application under the
said section had been made:

Provided that the period specified under this sub-section

may, for reasons to be recorded in writing, be extended by the
Settlement Commission for a further period not exceeding
three months:

Provided further that in respect of any application

pending under sub-section (5) as on the date on which the
Finance Bill, 2023 receives the assent of the President, the
said period of nine months shall be reckoned from the date on
which the said Finance Bill receives the assent of the
President.”.

Customs tariff

Amendment of 125. In the Customs Tariff Act, 1975, (hereinafter referred to 51 of 1975.
sections 9, 9A as the Customs Tariff Act), with effect from the 1st day of
and 9C.
January, 1995,––

(i) in section 9,––

(a) in sub-section (6), in the first proviso, for the

words “in a review”, the words “on consideration of a
review” shall be substituted;
 86

(b) in sub-section (7), the words “and determined”

shall be omitted;

(ii) in section 9A,––

(a) in sub-section (5), in the first proviso, for the

words “in a review”, the words “on consideration of a
review” shall be substituted;

(b) in sub-section (6), the words “and determined”

shall be omitted;

(iii) in section 9C,––

(a) in sub-section (1), the words “order of” shall be

omitted;

(b) in sub-section (2), for the word “order”, the words

“determination or review” shall be substituted;

(c) in sub-section (3), for the word “order”, the words

“determination or review” shall be substituted;

(d) after sub-section (5), the following Explanation

shall be inserted, namely:––

‘Explanation.––For the purposes of this section,

“determination” or “review” means the determination
or review done in such manner as may be specified in
the rules made under sections 8B, 9, 9A and 9B.’.

Amendment of 126. In the Customs Tariff Act, the First Schedule shall–– 51 of 1975.
First Schedule.

(a) be amended in the manner specified in the Second

Schedule;

(b) be also amended in the manner specified in the Third

Schedule;

(c) with effect from the 1st May, 2023, be also amended
in the manner specified in the Fourth Schedule.

Amendment of 127. In the Customs Tariff Act, the Second Schedule shall,
Second with effect from the 1st May, 2023, be amended in the manner
Schedule.
specified in the Fifth Schedule.
 87

Central Goods and Services Tax

Amendment of 128. In the Central Goods and Services Tax Act, 2017 12 of 2017.
section 10. (hereinafter referred to as the Central Goods and Services Tax
Act), in section 10,––

(a) in sub-section (2), in clause (d), the words “goods or”

shall be omitted;

(b) in sub-section (2A), in clause (c), the words “goods

or” shall be omitted.

Amendment of 129. In section 16 of the Central Goods and Services Tax Act,
section 16. in sub-section (2),––
(i) in the second proviso, for the words “added to his output
tax liability, along with interest thereon”, the words and figures
“paid by him along with interest payable under section 50” shall
be substituted;

(ii) in the third proviso, after the words “made by him”, the
words “to the supplier” shall be inserted.

Amendment of 130. In section 17 of the Central Goods and Services Tax

section 17. Act,––
(a) in sub-section (3), in the Explanation, for the words
and figure “except those specified in paragraph 5 of the said
Schedule”, the following shall be substituted, namely:––

“except,––

(i) the value of activities or transactions specified

in paragraph 5 of the said Schedule; and

(ii) the value of such activities or transactions as

may be prescribed in respect of clause (a) of
paragraph 8 of the said Schedule”;

(b) in sub-section (5), after clause (f), the following clause

shall be inserted, namely:––

“(fa) goods or services or both received by a taxable

person, which are used or intended to be used for
activities relating to his obligations under corporate social
18 of 2013.
responsibility referred to in section 135 of the Companies
Act, 2013;”.
 88

Substitution of 131. For section 23 of the Central Goods and Services Tax
new section for Act, the following section shall be substituted and shall be
section 23.
deemed to have been substituted with effect from the 1st day of
July, 2017, namely:––

Persons not “23. Notwithstanding anything to the contrary contained

liable for in sub-section (1) of section 22 or section 24,––
registration.

(a) the following persons shall not be liable to

registration, namely:––

(i) any person engaged exclusively in the business

of supplying goods or services or both that are not
liable to tax or wholly exempt from tax under this Act
or under the Integrated Goods and Services Tax Act, 13 of 2017.
2017;

(ii) an agriculturist, to the extent of supply of

produce out of cultivation of land;

(b) the Government may, on the recommendations of

the Council, by notification, subject to such conditions
and restrictions as may be specified therein, specify the
category of persons who may be exempted from obtaining
registration under this Act.”.

Amendment of 132. In section 37 of the Central Goods and Services Tax Act,
section 37. after sub-section (4), the following sub-section shall be inserted,
namely:––

“(5) A registered person shall not be allowed to furnish

the details of outward supplies under sub-section (1) for a tax
period after the expiry of a period of three years from the due
date of furnishing the said details:

Provided that the Government may, on the

recommendations of the Council, by notification, subject to
such conditions and restrictions as may be specified therein,
allow a registered person or a class of registered persons to
furnish the details of outward supplies for a tax period under
sub-section (1), even after the expiry of the said period of
three years from the due date of furnishing the said details.”.

Amendment of 133. In section 39 of the Central Goods and Services Tax Act,
section 39. after sub-section (10), the following sub-section shall be inserted,
namely:––
 89

“(11) A registered person shall not be allowed to furnish

a return for a tax period after the expiry of a period of three
years from the due date of furnishing the said return:

Provided that the Government may, on the

recommendations of the Council, by notification, subject to
such conditions and restrictions as may be specified therein,
allow a registered person or a class of registered persons to
furnish the return for a tax period, even after the expiry of the
said period of three years from the due date of furnishing the
said return.”.

Amendment of 134. Section 44 of the Central Goods and Services Tax Act
section 44. shall be re-numbered as sub-section (1) thereof, and after sub-
section (1) as so re-numbered, the following sub-section shall be
inserted, namely:––

“(2) A registered person shall not be allowed to furnish

an annual return under sub-section (1) for a financial year
after the expiry of a period of three years from the due date
of furnishing the said annual return:

Provided that the Government may, on the

recommendations of the Council, by notification, and subject
to such conditions and restrictions as may be specified
therein, allow a registered person or a class of registered
persons to furnish an annual return for a financial year under
sub-section (1), even after the expiry of the said period of
three years from the due date of furnishing the said annual
return.”.

Amendment of 135. In section 52 of the Central Goods and Services Tax Act,
section 52. after sub-section (14), the following sub-section shall be inserted,
namely:––

“(15) The operator shall not be allowed to furnish a

statement under sub-section (4) after the expiry of a period of
three years from the due date of furnishing the said statement:

Provided that the Government may, on the

recommendations of the Council, by notification, subject to
such conditions and restrictions as may be specified therein,
allow an operator or a class of operators to furnish a statement
under sub-section (4), even after the expiry of the said period
of three years from the due date of furnishing the said
statement.”.

Amendment of 136. In section 54 of the Central Goods and Services Tax Act,
section 54. in sub-section (6), the words “excluding the amount of input tax
credit provisionally accepted,” shall be omitted.
 90

Amendment of 137. In section 56 of the Central Goods and Services Tax Act,
section 56. for the words “from the date immediately after the expiry of sixty
days from the date of receipt of application under the said sub-
section till the date of refund of such tax”, the words “for the
period of delay beyond sixty days from the date of receipt of such
application till the date of refund of such tax, to be computed in
such manner and subject to such conditions and restrictions as
may be prescribed” shall be substituted.

Amendment of 138. In section 122 of the Central Goods and Services Tax
section 122. Act, after sub-section (1A), the following sub-section shall be
inserted, namely:––

“(1B) Any electronic commerce operator who––

(i) allows a supply of goods or services or both

through it by an unregistered person other than a person
exempted from registration by a notification issued under
this Act to make such supply;

(ii) allows an inter-State supply of goods or services

or both through it by a person who is not eligible to make
such inter-State supply; or

(iii) fails to furnish the correct details in the statement

to be furnished under sub-section (4) of section 52 of any
outward supply of goods effected through it by a person
exempted from obtaining registration under this Act,

shall be liable to pay a penalty of ten thousand rupees, or an

amount equivalent to the amount of tax involved had such
supply been made by a registered person other than a person
paying tax under section 10, whichever is higher.”.

Amendment of 139. In section 132 of the Central Goods and Services Tax
section 132. Act, in sub-section (1),––

(a) clauses (g), (j) and (k) shall be omitted;

(b) in clause (l), for the words, brackets and letters

“clauses (a) to (k)”, the words, brackets and letters “clauses
(a) to (f) and clauses (h) and (i)” shall be substituted;

(c) in clause (iii), for the words “any other offence”, the
words, brackets and letter “an offence specified in clause (b),”
shall be substituted;

(d) in clause (iv), the words, brackets and letters “or

clause (g) or clause (j)” shall be omitted.
 91

Amendment of 140. In section 138 of the Central Goods and Services Tax
section 138. Act,––

(a) in sub-section (1), in the first proviso,––

(i) for clause (a), the following clause shall be

substituted, namely:––

“(a) a person who has been allowed to compound

once in respect of any of the offences specified in
clauses (a) to (f), (h), (i) and (l) of sub-section (1) of
section 132;”;

(ii) clause (b) shall be omitted;

(iii) for clause (c), the following clause shall be

substituted, namely:––

“(c) a person who has been accused of committing

an offence under clause (b) of sub-section (1) of
section 132;”;

(iv) clause (e) shall be omitted;

(b) in sub-section (2), for the words “ten thousand rupees

or fifty per cent. of the tax involved, whichever is higher, and
the maximum amount not being less than thirty thousand
rupees or one hundred and fifty per cent. of the tax, whichever
is higher”, the words “twenty-five per cent. of the tax
involved and the maximum amount not being more than one
hundred per cent. of the tax involved” shall be substituted.

Insertion of new 141. After section 158 of the Central Goods and Services Tax
section 158A. Act, the following section shall be inserted, namely:––

Consent based “158A. (1) Notwithstanding anything contained in

sharing of sections 133, 152 and 158, the following details furnished by
information
furnished by
a registered person may, subject to the provisions of sub-
taxable person. section (2), and on the recommendations of the Council, be
shared by the common portal with such other systems as may
be notified by the Government, in such manner and subject to
such conditions as may be prescribed, namely:––

(a) particulars furnished in the application for

registration under section 25 or in the return filed under
section 39 or under section 44;

(b) the particulars uploaded on the common portal for

preparation of invoice, the details of outward supplies
 92

furnished under section 37 and the particulars uploaded

on the common portal for generation of documents under
section 68;

(c) such other details as may be prescribed.

(2) For the purposes of sharing details under sub-section

(1), the consent shall be obtained, of ––

(a) the supplier, in respect of details furnished under

clauses (a), (b) and (c) of sub-section (1); and

(b) the recipient, in respect of details furnished

under clause (b) of sub-section (1), and under clause (c)
of sub-section (1) only where such details include identity
information of the recipient,

in such form and manner as may be prescribed.

(3) Notwithstanding anything contained in any law for

the time being in force, no action shall lie against the
Government or the common portal with respect to any
liability arising consequent to information shared under this
section and there shall be no impact on the liability to pay tax
on the relevant supply or as per the relevant return.”.

Retrospective 142. (1) In Schedule III to the Central Goods and Services
exemption to Tax Act, paragraphs 7 and 8 and the Explanation 2 thereof (as
certain activities
and transactions
inserted vide section 32 of Act 31 of 2018) shall be deemed to
in Schedule III have been inserted therein with effect from the 1st day of July, 12 of 2017.
to the Central 2017.
Goods and
Services Tax
Act.

(2) No refund shall be made of all the tax which has been
collected, but which would not have been so collected, had sub-
section (1) been in force at all material times.

Integrated Goods and Services Tax

Amendment of 143. In the Integrated Goods and Services Tax Act, 2017 13 of 2017.
section 2. (hereinafter referred to as the Integrated Goods and Services Tax
Act), in section 2,––

(a) for clause (16), the following clause shall be

substituted, namely:––

‘(16) “non-taxable online recipient” means any

unregistered person receiving online information and
 93

database access or retrieval services located in taxable

territory.
Explanation.––For the purposes of this clause, the
expression “unregistered person” includes a person
registered solely in terms of clause (vi) of section 24 of
the Central Goods and Services Tax Act, 2017’; 12 of 2017.

(b) in clause (17), the words “essentially automated and

involving minimal human intervention and” shall be omitted.

Amendment of 144. In section 12 of the Integrated Goods and Services Tax

section 12. Act, in sub-section (8), the proviso shall be omitted.

CHAPTER V

MISCELLANEOUS

PART I
AMENDMENTS TO THE GOVERNMENT SAVINGS PROMOTION
ACT, 1873

Commencement 145. The provisions of this Part shall come into force on such
of this Part. date as the Central Government may, by notification in the
Official Gazette, appoint.

Amendment of 146. In the Government Savings Promotion Act, 1873,––

Act 5 of 1873.
(a) in section 4A, for sub-section (4), the following sub-
section shall be substituted, namely:––

“(4) If a depositor dies and no nomination is in force at

the time of his death, and the probate of his will or letters
of administration of estate or a succession certificate
granted under the Indian Succession Act, 1925, or legal 39 of 1925.
heir certificate issued by the revenue authority not below
the rank of Tahsildar having jurisdiction, is not produced
within six months from the date of death of the depositor
to the Authorised Officer, then, where the eligible balance
does not exceed such limit as may be prescribed, the
Authorised Officer may, for reasons to be recorded in
writing, pay the eligible balance to the person legally
entitled to receive it or to administer the estate of the
deceased in accordance with such procedure and manner as
may be prescribed.”;

(b) in section 15, in sub-section (2), for clause (i), the

following clause shall be substituted, namely:––
 94

“(i) the limit, procedure and manner under sub-section

(4) of section 4A;”;

(c) in the Schedule, in PART A, for serial numbers 7 and 8

and the entries relating thereto, the following shall be
substituted, namely:––

“7. Public Provident Fund Scheme

8. National Savings Certificates (VIII Issue) Scheme,

2019

9. Kisan Vikas Patra Scheme, 2019

10. PM CARES for Children Scheme, 2021”.

PART II
AMENDMENT TO THE INDIAN STAMP ACT, 1899

Amendment of 147. In the Indian Stamp Act, 1899, in Schedule I, in article

Act 2 of 1899. 47, in division D, under the heading “Exemption”, for the portion
beginning with “Policies of life-insurance” and ending with
“authority of the Central Government.”, the following shall be
substituted, namely:––

“Policies of life insurance––

(a) granted by the Director-General of Post Offices in

accordance with the rules for Postal Life-Insurance issued
under the authority of the Central Government; and

(b) under the Pradhan Mantri Jeevan Jyoti Bima

Yojana (PMJJBY).”.

PART III
AMENDMENT TO THE SECURITIES CONTRACTS (REGULATION)
ACT, 1956

Amendment of 148. In the Securities Contracts (Regulation) Act, 1956, in

Act 42 of 1956. section 18A, after clause (b), the following clause shall be
inserted, namely:––

‘(ba) regulated by the International Financial Services

Centres Authority established under section 4 of the
International Financial Services Centres Authority Act,
2019, in an International Financial Services Centre and 50 of 2019.
issued by a Foreign Portfolio Investor.
 95

Explanation.––For the purposes of this clause, the

expression “Foreign Portfolio Investor” shall have the meaning
assigned to it in clause (u) of rule 2 of the Foreign Exchange
Management (Non-debt Instruments) Rules, 2019 made under
section 46 of the Foreign Exchange Management Act, 1999;’. 42 of 1999.

PART IV

AMENDMENTS TO THE CENTRAL SALES TAX ACT, 1956

Substitution of 149. In the Central Sales Tax Act,1956 (hereinafter referred 74 of 1956.
new section for to as the Central Sales Tax Act), for section 19, the following
section 19.
section shall be substituted, namely:––

Customs, Excise “19. Notwithstanding anything to the contrary contained

and Service Tax in this Act or in any other law for the time being in force, the
Appellate
Tribunal to
Customs, Excise and Service Tax Appellate Tribunal
function as constituted under section 129 of the Customs Act, 1962 shall 52 of 1962.
Authority under be the Authority under this Act to settle inter-State disputes
this Act. falling under sections 6A and 9.”.

Omission of 150. Section 24 of the Central Sales Tax Act shall be omitted.
section 24.

Amendment of 151. In the Central Sales Tax Act, in section 25, after sub-
section 25. section (2), the following sub-section shall be inserted, namely:–

“(3) All appeals filed under section 20 and pending before

the erstwhile Authority for Advance Rulings as on the date
on which the Finance Bill, 2023 receives the assent of the
President shall stand transferred to the Authority referred to
in section 19.”.

PART V

AMENDMENTS TO THE PROHIBITION OF BENAMI PROPERTY

TRANSACTIONS ACT, 1988

Amendment of 152. In the Prohibition of Benami Property Transactions

Act 45 of 1988. Act, 1988, with effect from the 1st day of April, 2023,––

(a) in section 2, in clause (18),––

(I) in sub-clause (i), the word “and” occurring at the

end shall be omitted;

(II) in sub-clause (ii), the word “and” shall be

inserted at the end;

(III) after clause (ii), the following clause shall be

inserted, namely:––
 96

“(iii) the High Court within the jurisdiction of

which the office of the Initiating Officer is located,––

(a) where the aggrieved party does not

ordinarily reside or carry on business or personally
work for gain in the jurisdiction of any High Court;

(b) where the Government is the aggrieved

party and any of the respondents do not ordinarily
reside or carry on business or personally work for
gain in the jurisdiction of any High Court;”;

(b) in section 46,––

(i) in sub-section (1), for the words “of the order”, the
words “on which such order is received by the Initiating
Officer or received by such person,” shall be substituted;

(ii) in sub-section (1A), for the words “of that order”,

the words “on which such order is received by such
person” shall be substituted.

PART VI

AMENDMENT TO THE FINANCE ACT, 2001

Amendment of 153. In the Finance Act, 2001, the Seventh Schedule shall be
Seventh amended in the manner specified in the Sixth Schedule.
Schedule to Act
14 of 2001.
PART VII

AMENDMENTS TO THE UNIT TRUST OF INDIA (TRANSFER OF

UNDERTAKING AND REPEAL) ACT, 2002

Amendment of 154. In the Unit Trust of India (Transfer of Undertaking and

Act 58 of 2002. Repeal) Act, 2002, with effect from the 1st day of April, 2023,––

(a) in section 8, in sub-section (1), for the words

“investors, shall”, the words “investors or from such date as
may be notified by the Central Government in the Official
Gazette, whichever is earlier,” shall be substituted;

(b) in section 13, in sub-section (1), for the figures, letters

and words “31st day of March, 2023”, the figures, letters and
words “30th day of September, 2023” shall be substituted.

______________
 97

Declaration under the Provisional Collection of Taxes Act,

1931

It is hereby declared that it is expedient in the public

interest that the provisions of sub-clause (a) of clause 126 and
clause 153 of this Bill shall have immediate effect under the
Provisional Collection of Taxes Act, 1931. 16 of 1931.

_______________
 98

THE FIRST SCHEDULE

(See section 2)

PART I

INCOME-TAX

Paragraph A

(I) In the case of every individual other than the individual

referred to in items (II) and (III) of this Paragraph or Hindu undivided
family or association of persons or body of individuals, whether
incorporated or not, or every artificial juridical person referred to in
sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not
being a case to which any other Paragraph of this Part applies,—

Rates of income-tax

(1) where the total income does Nil;

not exceed Rs. 2,50,000

(2) where the total income 5 per cent. of the amount by

exceeds Rs. 2,50,000 but does which the total income exceeds
not exceed Rs. 5,00,000 Rs. 2,50,000;

(3) where the total income Rs.12,500 plus 20 per cent. of the
exceeds Rs. 5,00,000 but does amount by which the total
not exceed Rs. 10,00,000 income exceeds Rs. 5,00,000;

(4) where the total income Rs. 1,12,500 plus 30 per cent.
exceeds Rs. 10,00,000 of the amount by which the total
income exceeds Rs.10,00,000.

(II) In the case of every individual, being a resident in India,

who is of the age of sixty years or more but less than eighty years at
any time during the previous year,—

Rates of income-tax

(1) where the total income does Nil;

not exceed Rs. 3,00,000

(2) where the total income 5 per cent. of the amount by

exceeds Rs. 3,00,000 but does which the total income exceeds
not exceed Rs. 5,00,000 Rs. 3,00,000;
 99

(3) where the total income Rs.10,000 plus 20 per cent. of the
exceeds Rs. 5,00,000 but does amount by which the total
not exceed Rs. 10,00,000 income exceeds Rs. 5,00,000;

(4) where the total income Rs. 1,10,000 plus 30 per cent.
exceeds Rs. 10,00,000 of the amount by which the total
income exceeds Rs.10,00,000.

(III) In the case of every individual, being a resident in India, who

is of the age of eighty years or more at any time during the previous
year,—

Rates of income-tax

(1) where the total income does Nil;

not exceed Rs. 5,00,000

(2) where the total income 20 per cent. of the amount by

exceeds Rs. 5,00,000 but does which the total income exceeds
not exceed Rs. 10,00,000 Rs. 5,00,000;

(3) where the total income Rs. 1,00,000 plus 30 per cent. of
exceeds Rs. 10,00,000 the amount by which the total
income exceeds Rs. 10,00,000.

Surcharge on income-tax

The amount of income-tax computed in accordance with the

preceding provisions of this Paragraph, or the provisions of section
111A or section 112 or section 112A or the provisions of section
115BAC of the Income-tax Act, shall be increased by a surcharge for
the purposes of the Union, calculated, in the case of every individual
or Hindu undivided family or association of persons or body of
individuals, whether incorporated or not, or every artificial juridical
person referred to in sub-clause (vii) of clause (31) of section 2 of the
Income-tax Act,—

(a) having a total income (including the income by way of

dividend or income under the provisions of section 111A, section
112 and section 112A of the Income-tax Act) exceeding fifty lakh
rupees but not exceeding one crore rupees, at the rate of ten per cent.
of such income-tax;

(b) having a total income (including the income by way of

dividend or income under the provisions of section 111A, section
112 and section 112A of the Income-tax Act) exceeding one crore
rupees, but not exceeding two crore rupees, at the rate of fifteen per
cent. of such income-tax;
 100

(c) having a total income (excluding the income by way of

dividend or income under the provisions of section 111A, section
112 and section 112A of the Income-tax Act) exceeding two crore
rupees but not exceeding five crore rupees, at the rate of twenty-
five per cent. of such income-tax;

(d) having a total income (excluding the income by way of

dividend or income under the provisions of section 111A, section
112 and section 112A of the Income-tax Act) exceeding five crore
rupees, at the rate of thirty-seven per cent. of such income-tax; and

(e) having a total income (including the income by way of

dividend or income under the provisions of section 111A, section
112 and section 112A) exceeding two crore rupees but is not
covered under clauses (c) and (d), shall be applicable at the rate of
fifteen per cent. of such income-tax:

Provided that in case where the total income includes any income
by way of dividend or income under the provisions of section 111A,
section 112 and section 112A of the Income-tax Act, the rate of
surcharge on the amount of income-tax computed in respect of that
part of income shall not exceed fifteen per cent.:

Provided further that in case of an association of persons

consisting of only companies as its members, the rate of surcharge
on the amount of Income-tax shall not exceed fifteen per cent.:

Provided also that in the case of persons mentioned above having

total income exceeding,—

(a) fifty lakh rupees but not exceeding one crore rupees, the
total amount payable as income-tax and surcharge on such
income shall not exceed the total amount payable as income-tax
on a total income of fifty lakh rupees by more than the amount
of income that exceeds fifty lakh rupees;

(b) one crore rupees but does not exceed two crore rupees, the
total amount payable as income-tax and surcharge on such
income shall not exceed the total amount payable as income-tax
and surcharge on a total income of one crore rupees by more than
the amount of income that exceeds one crore rupees;

(c) two crore rupees but does not exceed five crore rupees, the
total amount payable as income-tax and surcharge on such
income shall not exceed the total amount payable as income-tax
and surcharge on a total income of two crore rupees by more than
the amount of income that exceeds two crore rupees;

(d) five crore rupees, the total amount payable as income-tax

and surcharge on such income shall not exceed the total amount
 101

payable as income-tax and surcharge on a total income of five

crore rupees by more than the amount of income that exceeds
five crore rupees.

Paragraph B

In the case of every co-operative society,—

Rates of income-tax

(1) where the total income does 10 per cent. of the total income;
not exceed Rs.10,000

(2) where the total income Rs. 1,000 plus 20 per cent. of the
exceeds Rs.10,000 but does not amount by which the total
exceed Rs. 20,000 income exceeds Rs.10,000;

(3) where the total income Rs. 3,000 plus 30 per cent. of the
exceeds Rs. 20,000 amount by which the total
income exceeds Rs. 20,000.

Surcharge on income-tax

The amount of income-tax computed in accordance with the

preceding provisions of this Paragraph, or the provisions of section
111A or section 112 or section 112A of the Income-tax Act, shall, be
increased by a surcharge for the purposes of the Union, calculated in
the case of every co-operative society,––

(a) having a total income exceeding one crore rupees but not
exceeding ten crore rupees, at the rate of seven per cent. of such
income-tax;

(b) having a total income exceeding ten crore rupees, at the

rate of twelve per cent.:

Provided that in the case of every co-operative society having

total income exceeding one crore rupees but not exceeding ten
crore rupees, the total amount payable as income-tax and
surcharge on such income shall not exceed the total amount
payable as income-tax on a total income of one crore rupees by
more than the amount of income that exceeds one crore rupees:

Provided further that in the case of every co-operative society

having a total income exceeding ten crore rupees, the total amount
payable as income-tax and surcharge on such income shall not
exceed the total amount payable as income-tax and surcharge on
a total income of ten crore rupees by more than the amount of
income that exceeds ten crore rupees.
 102

Paragraph C

In the case of every firm,—

Rate of income-tax

On the whole of the total income 30 per cent.

Surcharge on income-tax

The amount of income-tax computed in accordance with the

preceding provisions of this Paragraph, or the provisions of section
111A or section 112 or section 112A of the Income-tax Act, shall, in
the case of every firm, having a total income exceeding one crore
rupees, be increased by a surcharge for the purposes of the Union
calculated at the rate of twelve per cent. of such income-tax:

Provided that in the case of every firm mentioned above having

total income exceeding one crore rupees, the total amount payable as
income-tax and surcharge on such income shall not exceed the total
amount payable as income-tax on a total income of one crore rupees
by more than the amount of income that exceeds one crore rupees.

Paragraph D

In the case of every local authority,—

Rate of income-tax

On the whole of the total income 30 per cent.

Surcharge on income-tax

The amount of income-tax computed in accordance with the

preceding provisions of this Paragraph, or the provisions of section
111A or section 112 or section 112A of the Income-tax Act, shall, in
the case of every local authority, having a total income exceeding one
crore rupees, be increased by a surcharge for the purposes of the Union
calculated at the rate of twelve per cent. of such income-tax:

Provided that in the case of every local authority mentioned

above having total income exceeding one crore rupees, the total
amount payable as income-tax and surcharge on such income shall not
exceed the total amount payable as income-tax on a total income of
one crore rupees by more than the amount of income that exceeds one
crore rupees.
 103

Paragraph E

In the case of a company,—

Rates of income-tax

I. In the case of a domestic company,—

(i) where its total turnover or the 25 per cent. of the total income;
gross receipt in the previous year
2020-21 does not exceed four
hundred crore rupees;

(ii) other than that referred to in 30 per cent. of the total income.
item (i)

II. In the case of a company other than a domestic company,—

(i) on so much of the total income as 50 per cent.;

consists of,—

(a) royalties received from

Government or an Indian concern in
pursuance of an agreement made by it
with the Government or the Indian
concern after the 31st day of March,
1961 but before the 1st day of April,
1976; or

(b) fees for rendering technical

services received from Government or
an Indian concern in pursuance of an
agreement made by it with the
Government or the Indian concern after
the 29th day of February, 1964 but
before the 1st day of April, 1976,

and where such agreement has, in either

case, been approved by the Central
Government.

(ii) on the balance, if any, of the total 40 per cent..

income

Surcharge on income-tax

The amount of income-tax computed in accordance with the

preceding provisions of this Paragraph, or the provisions of section
 104

111A or section 112 or 112A of the Income-tax Act, shall, be increased

by a surcharge for the purposes of the Union calculated,—

(i) in the case of every domestic company,––

(a) having a total income exceeding one crore rupees but not
exceeding ten crore rupees, at the rate of seven per cent. of such
income-tax; and

(b) having a total income exceeding ten crore rupees, at the rate
of twelve per cent. of such income-tax;

(ii) in the case of every company other than a domestic company,–

(a) having a total income exceeding one crore rupees but not
exceeding ten crore rupees, at the rate of two per cent. of such
income-tax; and

(b) having a total income exceeding ten crore rupees, at the rate
of five per cent. of such income-tax:

Provided that in the case of every company having a total income

exceeding one crore rupees but not exceeding ten crore rupees, the total
amount payable as income-tax and surcharge on such income shall not
exceed the total amount payable as income-tax on a total income of
one crore rupees by more than the amount of income that exceeds one
crore rupees:

Provided further that in the case of every company having a total

income exceeding ten crore rupees, the total amount payable as
income-tax and surcharge on such income shall not exceed the total
amount payable as income-tax and surcharge on a total income of ten
crore rupees by more than the amount of income that exceeds ten crore
rupees.

PART II
RATES FOR DEDUCTION OF TAX AT SOURCE IN CERTAIN CASES

In every case in which under the provisions of sections 193,

194A, 194B, 194BA, 194BB, 194D, 194LBA, 194LBB, 194LBC and
195 of the Income-tax Act, tax is to be deducted at the rates in force,
deduction shall be made from the income subject to the deduction at
the following rates:––

Rate of
income-tax
1. In the case of a person other than a
company—

(a) where the person is resident in India—

 105

(i) on income by way of interest other than 10 per cent.;

“Interest on securities”

(ii) on income by way of winnings from 30 per cent.;

lotteries, puzzles, card games and other games
of any sort (other than winnings from online
games)

(iii) on income by way of winnings from 30 per cent.;

horse races

(iv) on income by way of winnings from 30 per cent.;

online games

(v) on income by way of insurance 5 per cent.;

commission

(vi) on income by way of interest payable 10 per cent.;

on—

(A) any debentures or securities for

money issued by or on behalf of any local
authority or a corporation established by a
Central, State or Provincial Act;

(B) any debentures issued by a

company where such debentures are listed
on a recognised stock exchange in India in
accordance with the Securities Contracts
(Regulation) Act, 1956 (42 of 1956) and
any rules made thereunder;

(C) any security of the Central or State

Government;

(vii) on any other income 10 per cent.;

(b) where the person is not resident in India—

(i) in the case of a non-resident Indian—

(A) on any investment income 20 per cent.;

(B) on income by way of long-term capital 10 per cent.;

gains referred to in section 115E or
sub-clause (iii) of clause (c) of sub-
section (1) of section 112
 106

(C) on income by way of long-term capital 10 per cent.;

gains referred to in section 112A
exceeding one lakh rupees

(D) on other income by way of long-term 20 per cent.;

capital gains [not being long-term
capital gains referred to in clauses
(33) and (36) of section 10]

(E) on income by way of short-term capital 15 per cent.;

gains referred to in section 111A

(F) on income by way of interest payable 20 per cent.;

by Government or an Indian concern
on moneys borrowed or debt incurred
by Government or the Indian concern
in foreign currency (not being income
by way of interest referred to in
section 194LB or section 194LC)

(G) on income by way of royalty payable 10 per cent.;

by Government or an Indian concern
in pursuance of an agreement made by
it with the Government or the Indian
concern where such royalty is in
consideration for the transfer of all or
any rights (including the granting of a
licence) in respect of copyright in any
book on a subject referred to in the
first proviso to sub-section (1A) of
section 115A of the Income-tax Act,
to the Indian concern, or in respect of
any computer software referred to in
the second proviso to sub-section
(1A) of section 115A of the Income-
tax Act, to a person resident in India

(H) on income by way of royalty [not 10 per cent.;

being royalty of the nature referred to
in sub-item (b)(i)(G)] payable by
Government or an Indian concern in
pursuance of an agreement made by it
with the Government or the Indian
concern and where such agreement is
with an Indian concern, the agreement
is approved by the Central
Government or where it relates to a
matter included in the industrial
policy, for the time being in force, of
the Government of India, the
 107

agreement is in accordance with that

policy

(I) on income by way of fees for technical 10 per cent.;

services payable by Government or an
Indian concern in pursuance of an
agreement made by it with the
Government or the Indian concern
and where such agreement is with an
Indian concern, the agreement is
approved by the Central Government
or where it relates to a matter included
in the industrial policy, for the time
being in force, of the Government of
India, the agreement is in accordance
with that policy

(J) on income by way of winnings from 30 per cent.;

lotteries, crossword puzzles, card
games and other games of any sort
(other than winnings from online
games)

(K) on income by way of winnings from 30 per cent.;

horse races

(L) on income by way of winnings from 30 per cent.;

online games

(M) on the income by way of dividend 20 per cent.;

(N) on the whole of the other income 30 per cent.;

(ii) in the case of any other person—

(A) on income by way of interest payable 20 per cent.;

by Government or an Indian concern
on moneys borrowed or debt incurred
by Government or the Indian concern
in foreign currency (not being income
by way of interest referred to in
section 194LB or section 194LC)

(B) on income by way of royalty payable 10 per cent.;

by Government or an Indian concern
in pursuance of an agreement made by
it with the Government or the Indian
concern where such royalty is in
consideration for the transfer of all or
any rights (including the granting of a
 108

licence) in respect of copyright in any

book on a subject referred to in the
first proviso to sub-section (1A) of
section 115A of the Income-tax Act,
to the Indian concern, in respect of
any computer software referred to in
the second proviso to sub-section
(1A) of section 115A of the Income-
tax Act, to a person resident in India

(C) on income by way of royalty [not 10 per cent.;

being royalty of the nature referred to
in sub-item (b)(ii)(B)] payable by
Government or an Indian concern in
pursuance of an agreement made by it
with the Government or the Indian
concern and where such agreement is
with an Indian concern, the agreement
is approved by the Central
Government or where it relates to a
matter included in the industrial
policy, for the time being in force, of
the Government of India, the
agreement is in accordance with that
policy

(D) on income by way of fees for technical 10 per cent.;

services payable by Government or an
Indian concern in pursuance of an
agreement made by it with the
Government or the Indian concern
and where such agreement is with an
Indian concern, the agreement is
approved by the Central Government
or where it relates to a matter included
in the industrial policy, for the time
being in force, of the Government of
India, the agreement is in accordance
with that policy

(E) on income by way of winnings from 30 per cent.;

lotteries, crossword puzzles, card
games and other games of any sort
(other than winnings from online
games)

(F) on income by way of winnings from 30 per cent.;

horse races
 109

(G) on income by way of winnings from 30 per cent.;

online games

(H) on income by way of short-term 15 per cent.;

capital gains referred to in section
111A

(I) on income by way of long-term capital 10 per cent.;

gains referred to in sub-clause (iii) of
clause (c) of sub-section (1) of section
112

(J) on income by way of long-term capital 10 per cent.;

gains referred to in section 112A
exceeding one lakh rupees

(K) on income by way of other long-term 20 per cent.;

capital gains [not being long-term
capital gains referred to in clauses (33)
and (36) of section 10]

(L) on income by way of dividend 20 per cent.;

(M) on the whole of the other income 30 per cent.;

2. In the case of a company—

(a) where the company is a domestic

company—

(i) on income by way of interest other 10 per cent.;

than “Interest on securities”

(ii) on income by way of winnings from 30 per cent.;

lotteries, puzzles, card games and other
games of any sort (other than winnings from
online games)

(iii) on income by way of winnings from 30 per cent.;

horse races

(iv) on income by way of winnings from 30 per cent.;

online games

(v) on any other income 10 per cent.;

(b) where the company is not a domestic

company—
 110

(i) on income by way of winnings from 30 per cent.;

lotteries, crossword puzzles, card games and
other games of any sort (other than winnings
from online games)

(ii) on income by way of winnings from 30 per cent.;

horse races

(iii) on income by way of winnings from 30 per cent.;

online games

(iv) on income by way of interest 20 per cent.;

payable by Government or an Indian
concern on moneys borrowed or debt
incurred by Government or the Indian
concern in foreign currency (not being
income by way of interest referred to in
section 194LB or section 194LC)

(v) on income by way of royalty payable 10 per cent.;

by Government or an Indian concern in
pursuance of an agreement made by it with
the Government or the Indian concern after
the 31st day of March, 1976 where such
royalty is in consideration for the transfer of
all or any rights (including the granting of a
licence) in respect of copyright in any book
on a subject referred to in the first proviso to
sub-section (1A) of section 115A of the
Income-tax Act, to the Indian concern, or in
respect of any computer software referred to
in the second proviso to sub-section (1A) of
section 115A of the Income-tax Act, to a
person resident in India

(vi) on income by way of royalty [not

being royalty of the nature referred to in
sub-item (b)(iv)] payable by Government or
an Indian concern in pursuance of an
agreement made by it with the Government
or the Indian concern and where such
agreement is with an Indian concern, the
agreement is approved by the Central
Government or where it relates to a matter
included in the industrial policy, for the time
being in force, of the Government of India,
the agreement is in with that policy—
 111

(A) where the agreement is made 50 per cent.;

after the 31st day of March, 1961 but
before the 1st day of April, 1976

(B) where the agreement is made 10 per cent.;

after the 31st day of March, 1976

(vii) on income by way of fees for

technical services payable by Government
or an Indian concern in pursuance of an
agreement made by it with the Government
or the Indian concern and where such
agreement is with an Indian concern, the
agreement is approved by the Central
Government or where it relates to a matter
included in the industrial policy, for the time
being in force, of the Government of India,
the agreement is in accordance with that
policy—

(A) where the agreement is made 50 per cent.;

after the 29th day of February, 1964 but
before the 1st day of April, 1976

(B) where the agreement is made 10 per cent.;

after the 31st day of March, 1976

(viii) on income by way of short-term 15 per cent.;

capital gains referred to in section 111A

(ix) on income by way of long-term 10 per cent.;

capital gains referred to in sub-clause (iii) of
clause (c) of sub-section (1) of section 112

(x) on income by way of long-term 10 per cent.;

capital gains referred to in section 112A
exceeding one lakh rupees

(xi) on income by way of other long- 20 per cent.;

term capital gains [not being long-term
capital gains referred to in clauses (33) and
(36) of section 10]

(xii) on income by way of dividend 20 per cent.;

(xiii) on any other income 40 per cent.

 112

Explanation.—For the purposes of item 1(b)(i) of this Part,

“investment income” and “non-resident Indian” shall have the
meanings assigned to them in Chapter XII-A of the Income-tax Act.

Surcharge on income-tax

The amount of income-tax deducted in accordance with the

provisions of––

(i) item 1 of this Part, shall be increased by a surcharge, for the

purposes of the Union,––

(a) in the case of every individual or Hindu undivided family

or association of persons or body of individuals, whether
incorporated or not, or every artificial juridical person referred to
in sub-clause (vii) of clause (31) of section 2 of the Income-tax
Act, being a non-resident, calculated,––

I. at the rate of ten per cent. of such tax, where the income
or the aggregate of such incomes (including the income by
way of dividend or income under the provisions of sections
111A, 112 and 112A of the Income-tax Act) paid or likely to
be paid and subject to the deduction exceeds fifty lakh rupees
but does not exceed one crore rupees;

II. at the rate of fifteen per cent. of such tax, where the
income or the aggregate of such incomes (including the
income by way of dividend or income under the provisions of
sections 111A, 112 and 112A of the Income-tax Act) paid or
likely to be paid and subject to the deduction exceeds one
crore rupees but does not exceed two crore rupees;

III. at the rate of twenty-five per cent. of such tax, where

the income or the aggregate of such incomes (excluding the
income by way of dividend or income under the provisions of
sections 111A, 112 and 112A of the Income-tax Act) paid or
likely to be paid and subject to the deduction exceeds two
crore rupees but does not exceed five crore rupees;

IV. at the rate of thirty-seven per cent. of such tax, where

the income or the aggregate of such incomes (excluding the
income by way of dividend or income under the provisions of
sections 111A, 112 and 112A of the Income-tax Act) paid or
likely to be paid and subject to the deduction exceeds five
crore rupees; and

V. at the rate of fifteen per cent. of such tax, where the

income or the aggregate of such incomes (including the
income by way of dividend or income under the provisions of
sections 111A, 112 and 112A of the Income-tax Act) paid or
 113

likely to be paid and subject to the deduction exceeds two

crore rupees, but is not covered under sub-clauses III and IV:

Provided that in case where the total income includes any

income by way of dividend or income under the provisions of
sections 111A, 112 and 112A of the Income-tax Act, the rate
of surcharge on the amount of Income-tax deducted in respect
of that part of income shall not exceed fifteen per cent.:

Provided further that where the income of such person is

chargeable to tax under sub-section (1A) of section 115BAC
of the Income-tax Act, the rate of surcharge shall not exceed
twenty-five per cent.;

(b) in the case of every co-operative society, being a non-

resident, calculated,––

I. at the rate of seven per cent. of such tax, where the

income or the aggregate of such incomes paid or likely to be
paid and subject to the deduction exceeds one crore rupees but
does not exceed ten crore rupees;

II. at the rate of twelve per cent. where the income or the
aggregate of such incomes paid or likely to be paid and subject
to the deduction exceeds ten crore rupees;

(c) in the case of every firm, being a non-resident, calculated

at the rate of twelve per cent., where the income or the aggregate
of such incomes paid or likely to be paid and subject to the
deduction exceeds one crore rupees;

(ii) Item 2 of this Part shall be increased by a surcharge, for the

purposes of the Union, in the case of every company other than a
domestic company, calculated,––

(a) at the rate of two per cent. of such income-tax where the
income or the aggregate of such incomes paid or likely to be paid
and subject to the deduction exceeds one crore rupees but does
not exceed ten crore rupees; and

(b) at the rate of five per cent. of such income-tax where the
income or the aggregate of such incomes paid or likely to be paid
and subject to the deduction exceeds ten crore rupees.

PART III

RATES FOR CHARGING INCOME-TAX IN CERTAIN CASES,

DEDUCTING INCOME-TAX FROM INCOME CHARGEABLE UNDER THE
HEAD “SALARIES” AND COMPUTING “ADVANCE TAX”
 114

In cases in which income-tax has to be charged under sub-

section (4) of section 172 of the Income-tax Act or sub-section (2) of
section 174 or section 174A or section 175 or sub-section (2) of section
176 of the said Act or deducted from, or paid on, from income
chargeable under the head “Salaries” under section 192 of the said Act
or deducted under section 194P of the said Act or in which the
“advance tax” payable under Chapter XVII-C of the said Act has to be
computed at the rate or rates in force, such income-tax or, as the case
may be, “advance tax” [not being “advance tax” in respect of any
income chargeable to tax under Chapter XII or Chapter XII-A or
income chargeable to tax under section 115JB or section 115JC or
Chapter XII-FA or Chapter XII-FB or sub-section (1A) of section 161
or section 164 or section 164A or section 167B of the said Act at the
rates as specified in that Chapter or section or surcharge, wherever
applicable, on such “advance tax” in respect of any income chargeable
to tax under section 115A or section 115AB or section 115AC or
section 115ACA or section 115AD or section 115B or section 115BA
or section 115BAA or section 115BAB or section 115BAC or section
115BAD or section 115BAE or section 115BB or section 115BBA or
section 115BBC or section 115BBE or section 115BBF or section
115BBG or section 115BBH or section 115BBI or section 115BBJ or
section 115E or section 115JB or section 115JC] shall be charged,
deducted or computed at the following rate or rates:—

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 Nil;

not exceed Rs. 2,50,000

(2) where the total income 5 per cent. of the amount by

exceeds Rs. 2,50,000 but does which the total income exceeds
not exceed Rs. 5,00,000 Rs. 2,50,000;

(3) where the total income Rs. 12,500 plus 20 per cent. of
exceeds Rs. 5,00,000 but does the amount by which the total
not exceed Rs. 10,00,000 income exceeds Rs. 5,00,000;

(4) where the total income Rs. 1,12,500 plus 30 per cent. of
exceeds Rs. 10,00,000 the amount by which the total
income exceeds Rs.10,00,000.
 115

(II) In the case of every individual, being a resident in India,

who is of the age of sixty years or more but less than eighty years at
any time during the previous year,—

Rates of income-tax

(1) where the total income does Nil;

not exceed Rs. 3,00,000

(2) where the total income 5 per cent. of the amount by

exceeds Rs. 3,00,000 but does which the total income exceeds
not exceed Rs. 5,00,000 Rs.3,00,000;

(3) where the total income Rs. 10,000 plus 20 per cent. of
exceeds Rs. 5,00,000 but does the amount by which the total
not exceed Rs. 10,00,000 income exceeds Rs.5,00,000;

(4) where the total income Rs. 1,10,000 plus 30 per cent. of
exceeds Rs. 10,00,000 the amount by which the total
income exceeds Rs.10,00,000;

(III) In the case of every individual, being a resident in India,

who is of the age of eighty years or more at any time during the
previous year,—

Rates of income-tax

where the total income does not Nil;

exceed Rs. 5,00,000

where the total income exceeds 20 per cent. of the amount by

Rs. 5,00,000 but does not exceed which the total income exceeds
Rs. 10,00,000 Rs. 5,00,000;

where the total income exceeds Rs. 1,00,000 plus 30 per cent. of
Rs.10,00,000 the amount by which the total
income exceeds Rs. 10,00,000;

Surcharge on income-tax

The amount of income-tax computed in accordance with the

preceding provisions of this Paragraph, or the provisions of section
111A or section 112 or section 112A of the Income-tax Act, shall be
increased by a surcharge for the purposes of the Union, calculated, in
the case of every individual or Hindu undivided family or association
of persons or body of individuals, whether incorporated or not, or
 116

every artificial juridical person referred to in sub-clause (vii) of clause

(31) of section 2 of the Income-tax Act,—

(a) having a total income (including the income by way of

dividend or income under the provisions of section 111A, section
112 and section 112A of the Income-tax Act) exceeding fifty lakh
rupees but not exceeding one crore rupees, at the rate of ten per cent.
of such income-tax; and

(b) having a total income (including the income by way of

dividend or income under the provisions of section 111A, section
112 and section 112A of the Income-tax Act) exceeding one crore
rupees but not exceeding two crore rupees, at the rate of fifteen per
cent. of such income-tax;

(c) having a total income (excluding the income by way of

dividend or income under the provisions of section 111A, section
112 and section 112A of the Income-tax Act) exceeding two crore
rupees but not exceeding five crore rupees, at the rate of twenty-
five per cent. of such income-tax;

(d) having a total income (excluding the income by way of

dividend or income under the provisions of section 111A, section
112 and section 112A of the Income-tax Act) exceeding five crore
rupees, at the rate of thirty-seven per cent. of such income-tax; and

(e) having a total income (including the income by way of

dividend or income under the provisions of section 111A, section
112 and section 112A of the Income-tax Act) exceeding two crore
rupees, but is not covered under clauses (c) and (d), shall be
applicable at the rate of fifteen per cent. of such income-tax:

Provided that in case where the total income includes any income
by way of dividend or income under the provisions of section 111A,
section 112 and section 112A of the Income-tax Act, the rate of
surcharge on the amount of Income-tax computed in respect of that
part of income shall not exceed fifteen per cent.:

Provided further that in case of an association of persons

consisting of only companies as its members, the rate of surcharge
on the amount of Income-tax shall not exceed fifteen per cent.:

Provided also that in the case of persons mentioned above

having total income exceeding,—

(a) fifty lakh rupees but not exceeding one crore rupees, the total
amount payable as income-tax and surcharge on such income shall
not exceed the total amount payable as income-tax on a total income
of fifty lakh rupees by more than the amount of income that exceeds
fifty lakh rupees;
 117

(b) one crore rupees but does not exceed two crore rupees, the
total amount payable as income-tax and surcharge on such income
shall not exceed the total amount payable as income-tax and
surcharge on a total income of one crore rupees by more than the
amount of income that exceeds one crore rupees;

(c) two crore rupees but does not exceed five crore rupees, the
total amount payable as income-tax and surcharge on such income
shall not exceed the total amount payable as income-tax and
surcharge on a total income of two crore rupees by more than the
amount of income that exceeds two crore rupees;

(d) five crore rupees, the total amount payable as income-tax and
surcharge on such income shall not exceed the total amount payable
as income-tax and surcharge on a total income of five crore rupees
by more than the amount of income that exceeds five crore rupees;

Paragraph B

In the case of every co-operative society,—

Rates of income-tax

(1) where the total income does 10 per cent. of the total income;
not exceed Rs.10,000

(2) where the total income Rs. 1,000 plus 20 per cent. of the
exceeds Rs.10,000 but does not amount by which the total
exceed Rs. 20,000 income exceeds Rs. 10,000;

(3) where the total income Rs. 3,000 plus 30 per cent. of the
exceeds Rs. 20,000 amount by which the total
income exceeds Rs. 20,000.

Surcharge on income-tax

The amount of income-tax computed in accordance with the

preceding provisions of this Paragraph, or the provisions of section
111A or section 112 or section 112A of the Income-tax Act, shall, be
increased by a surcharge for the purpose of the Union, calculated in
the case of every co-operative society,––

(a) having a total income exceeding one crore rupees but not
exceeding ten crore rupees, at the rate of seven per cent. of such
income-tax;

(b) having a total income exceeding ten crore rupees, at the rate of
twelve per cent.:
 118

Provided that in the case of every co-operative society having total

income exceeding one crore rupees but not exceeding ten crore rupees,
the total amount payable as income-tax and surcharge on such income
shall not exceed the total amount payable as income-tax on a total
income of one crore rupees by more than the amount of income that
exceeds one crore rupees:

Provided further that in the case of every co-operative society

having total income exceeding ten crore rupees, the total amount
payable as income-tax and surcharge on such income shall not exceed
the total amount payable as income-tax and surcharge on a total
income of ten crore rupees by more than the amount of income that
exceeds ten crore rupees:

Paragraph C

In the case of every firm,—

Rate of income-tax

On the whole of the total income 30 per cent.

Surcharge on income-tax

The amount of income-tax computed in accordance with the

preceding provisions of this Paragraph, or the provisions of section
111A or section 112 or section 112A of the Income-tax Act, shall, in
the case of every firm, having a total income exceeding one crore
rupees, be increased by a surcharge for the purposes of the Union
calculated at the rate of twelve per cent. of such income-tax:

Provided that in the case of every firm mentioned above having

total income exceeding one crore rupees, the total amount payable as
income-tax and surcharge on such income shall not exceed the total
amount payable as income-tax on a total income of one crore rupees
by more than the amount of income that exceeds one crore rupees.

Paragraph D

In the case of every local authority,—

Rate of income-tax

On the whole of the total income 30 per cent.;

Surcharge on income-tax

The amount of income-tax computed in accordance with the

preceding provisions of this Paragraph, or the provisions of section
 119

111A or section 112 or section 112A of the Income-tax Act, shall, in

the case of every local authority, having a total income exceeding one
crore rupees, be increased by a surcharge for the purposes of the Union
calculated at the rate of twelve per cent. of such income-tax:

Provided that in the case of every local authority mentioned

above having total income exceeding one crore rupees, the total
amount payable as income-tax and surcharge on such income shall not
exceed the total amount payable as income-tax on a total income of
one crore rupees by more than the amount of income that exceeds one
crore rupees.

Paragraph E

In the case of a company,—

Rates of income-tax

I. In the case of a domestic company,—

(i) where its total turnover or the 25 per cent. of the total income;
gross receipt in the previous year
2021-2022 does not exceed four
hundred crore rupees;

(ii) other than that referred to in 30 per cent. of the total income.
item (i)

II. In the case of a company other than a domestic company,—

(i) on so much of the total income

as consists of,— 50 per cent.,

(a) royalties received from Government or an Indian

concern in pursuance of an agreement made by it
with the Government or the Indian concern after the
31st day of March, 1961 but before the 1st day of
April, 1976; or

(b) fees for rendering technical services received

from Government or an Indian concern in pursuance
of an agreement made by it with the Government or
the Indian concern after the 29th day of February,
1964 but before the 1st day of April, 1976,

and where such agreement has, in either case, been

approved by the Central Government
 120

(ii) on the balance, if any, of the total income 40 per cent.

Surcharge on income-tax

The amount of income-tax computed in accordance with the

preceding provisions of this Paragraph, or the provisions of section
111A or section 112 or section 112A of the Income-tax Act, shall, be
increased by a surcharge for the purposes of the Union, calculated,––

(i) in the case of every domestic company,––

(a) having a total income exceeding one crore rupees but

not exceeding ten crore rupees, at the rate of seven per cent. of
such income-tax; and

(b) having a total income exceeding ten crore rupees, at the

rate of twelve per cent. of such income-tax;

(ii) in the case of every company other than a domestic

company,––

(a) having a total income exceeding one crore rupees but

not exceeding ten crore rupees, at the rate of two per cent. of
such income-tax; and

(b) having a total income exceeding ten crore rupees, at the

rate of five per cent. of such income-tax:

Provided that in the case of every company having a total income

exceeding one crore rupees but not exceeding ten crore rupees, the total
amount payable as income-tax and surcharge on such income shall not
exceed the total amount payable as income-tax on a total income of
one crore rupees by more than the amount of income that exceeds one
crore rupees:

Provided further that in the case of every company having a total

income exceeding ten crore rupees, the total amount payable as
income-tax and surcharge on such income shall not exceed the total
amount payable as income-tax and surcharge on a total income of ten
crore rupees by more than the amount of income that exceeds ten crore
rupees.

PART IV
[See section 2(13)(c)]
RULES FOR COMPUTATION OF NET AGRICULTURAL
INCOME

Rule 1.—Agricultural income of the nature referred to in sub-

clause (a) of clause (1A) of section 2 of the Income-tax Act shall be
computed as if it were income chargeable to income-tax under that Act
 121

under the head “Income from other sources” and the provisions of
sections 57 to 59 of that Act shall, so far as may be, apply accordingly:

Provided that sub-section (2) of section 58 shall apply subject to

the modification that the reference to section 40A therein shall be
construed as not including a reference to sub-sections (3), (3A) and (4)
of section 40A.

Rule 2.—Agricultural income of the nature referred to in sub-

clause (b) or sub-clause (c) of clause (1A) of section 2 of the Income-
tax Act [other than income derived from any building required as a
dwelling-house by the receiver of the rent or revenue of the cultivator
or the receiver of rent-in-kind referred to in the said sub-clause (c)]
shall be computed as if it were income chargeable to income-tax under
that Act under the head “Profits and gains of business or profession”
and the provisions of sections 30, 31, 32, 36, 37, 38, 40, 40A [other
than sub-sections (3), (3A) and (4) thereof], 41, 43, 43A, 43B and 43C
of the Income-tax Act shall, so far as may be, apply accordingly.

Rule 3.—Agricultural income of the nature referred to in sub-

clause (c) of clause (1A) of section 2 of the Income-tax Act, being
income derived from any building required as a dwelling-house by the
receiver of the rent or revenue or the cultivator or the receiver of rent-
in-kind referred to in the said sub-clause (c) shall be computed as if it
were income chargeable to income-tax under that Act under the head
“Income from house property” and the provisions of sections 23 to 27
of that Act shall, so far as may be, apply accordingly.

Rule 4.—Notwithstanding anything contained in any other

provisions of these rules, in a case—

(a) where the assessee derives income from sale of tea grown
and manufactured by him in India, such income shall be computed
in accordance with rule 8 of the Income-tax Rules, 1962, and sixty
per cent. of such income shall be regarded as the agricultural
income of the assessee;

(b) where the assessee derives income from sale of centrifuged

latex or cenex or latex based crepes (such as pale latex crepe) or
brown crepes (such as estate brown crepe, re-milled crepe,
smoked blanket crepe or flat bark crepe) or technically specified
block rubbers manufactured or processed by him from rubber
plants grown by him in India, such income shall be computed in
accordance with rule 7A of the Income-tax Rules, 1962, and sixty-
five per cent. of such income shall be regarded as the agricultural
income of the assessee;

(c) where the assessee derives income from sale of coffee

grown and manufactured by him in India, such income shall be
computed in accordance with rule 7B of the Income-tax Rules,
 122

1962, and sixty per cent. or seventy-five per cent., as the case may
be, of such income shall be regarded as the agricultural income of
the assessee.

Rule 5.—Where the assessee is a member of an association of

persons or a body of individuals (other than a Hindu undivided family,
a company or a firm) which in the previous year has either no income
chargeable to tax under the Income-tax Act or has total income not
exceeding the maximum amount not chargeable to tax in the case of
an association of persons or a body of individuals (other than a Hindu
undivided family, a company or a firm) but has any agricultural income
then, the agricultural income or loss of the association or body shall be
computed in accordance with these rules and the share of the assessee
in the agricultural income or loss so computed shall be regarded as the
agricultural income or loss of the assessee.

Rule 6.—Where the result of the computation for the previous

year in respect of any source of agricultural income is a loss, such loss
shall be set off against the income of the assessee, if any, for that
previous year from any other source of agricultural income:

Provided that where the assessee is a member of an association of

persons or a body of individuals and the share of the assessee in the
agricultural income of the association or body, as the case may be, is a
loss, such loss shall not be set off against any income of the assessee
from any other source of agricultural income.

Rule 7.—Any sum payable by the assessee on account of any tax

levied by the State Government on the agricultural income shall be
deducted in computing the agricultural income.

Rule 8.—(1) Where the assessee has, in the previous year relevant
to the assessment year commencing on the 1st day of April, 2023, any
agricultural income and the net result of the computation of the
agricultural income of the assessee for any one or more of the previous
years relevant to the assessment years commencing on the 1st day of
April, 2015 or the 1st day of April, 2016 or the 1st day of April, 2017
or the 1st day of April, 2018 or the 1st day of April, 2019 or the 1st
day of April, 2020 or the 1st day of April, 2021, or the 1st day of April,
2022, is a loss, then, for the purposes of sub-section (2) of section 2 of
this Act,––

(i) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2015, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
commencing on the 1st day of April, 2016 or the 1st day of April,
2017 or the 1st day of April, 2018 or the 1st day of April, 2019 or
the 1st day of April, 2020 or the 1st day of April, 2021 or the 1st
day of April, 2022,
 123

(ii) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2016, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
commencing on the 1st day of April, 2017 or the 1st day of April,
2018 or the 1st day of April, 2019 or the 1st day of April, 2020 or
the 1st day of April, 2021 or the 1st day of April, 2022,

(iii) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2017, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
commencing on the 1st day of April, 2018 or the 1st day of April,
2019 or the 1st day of April, 2020 or the 1st day of April, 2021 or
the 1st day of April, 2022,

(iv) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2018, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
commencing on the 1st day of April, 2019 or the 1st day of April,
2020 or the 1st day of April, 2021 or the 1st day of April, 2022,

(v) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2019, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
commencing on the 1st day of April, 2020 or the 1st day of April,
2021 or the 1st day of April, 2022,

(vi) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2020, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
commencing on the 1st day of April, 2021 or the 1st day of April,
2022,

(vii) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2021, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
commencing on the 1st day of April, 2022,

(viii) the loss so computed for the previous year relevant to

the assessment year commencing on the 1st day of April, 2022,

shall be set off against the agricultural income of the assessee for the
previous year relevant to the assessment year commencing on the 1st
day of April, 2023.
 124

(2) Where the assessee has, in the previous year relevant to the
assessment year commencing on the 1st day of April, 2024, or, if by
virtue of any provision of the Income-tax Act, income-tax is to be
charged in respect of the income of a period other than the previous
year, in such other period, any agricultural income and the net result
of the computation of the agricultural income of the assessee for any
one or more of the previous years relevant to the assessment years
commencing on the 1st day of April, 2016 or the 1st day of April, 2017
or the 1st day of April, 2018 or the 1st day of April, 2019 or the 1st
day of April, 2020 or the 1st day of April, 2021 or the 1st day of April,
2022 or the 1st day of April, 2023, is a loss, then, for the purposes of
sub-section (10) of section 2 of this Act,––

(i) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2016, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
commencing on the 1st day of April, 2017 or the 1st day of April,
2018 or the 1st day of April, 2019 or the 1st day of April, 2020 or
the 1st day of April, 2021 or the 1st day of April, 2022 or the 1st
day of April, 2023,

(ii) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2017, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
commencing on the 1st day of April, 2018 or the 1st day of April,
2019 or the 1st day of April, 2020 or the 1st day of April, 2021 or
the 1st day of April, 2022 or the 1st day of April, 2023,

(iii) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2018, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
commencing on the 1st day of April, 2019 or the 1st day of April,
2020 or the 1st day of April, 2021 or the 1st day of April, 2022 or
the 1st day of April, 2023,

(iv) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2019, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
commencing on the 1st day of April, 2020 or the 1st day of April,
2021 or the 1st day of April, 2022 or the 1st day of April, 2023,

(v) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2020, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
 125

commencing on the 1st day of April, 2021 or the 1st day of April,
2022 or the 1st day of April, 2023,

(vi) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2021, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
commencing on the or the 1st day of April, 2022 or the 1st day of
April, 2023,

(vii) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2022, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
commencing on the 1st day of April, 2023,

(viii) the loss so computed for the previous year relevant to

the assessment year commencing on the 1st day of April, 2023,

shall be set off against the agricultural income of the assessee for the
previous year relevant to the assessment year commencing on the 1st
day of April, 2024.

(3) Where any person deriving any agricultural income from any
source has been succeeded in such capacity by another person,
otherwise than by inheritance, nothing in sub-rule (1) or sub-rule (2)
shall entitle any person, other than the person incurring the loss, to
have it set off under sub-rule (1) or, as the case may be, sub-rule (2).

(4) Notwithstanding anything contained in this rule, no loss which

has not been determined by the Assessing Officer under the provisions
of these rules or the rules contained in the First Schedule to the First
Schedule to the Finance Act, 2015 (20 of 2015) or the First Schedule
to the Finance Act, 2016 (28 of 2016) or the First Schedule to the
Finance Act, 2017 (7 of 2017) or the First Schedule to the Finance act,
2018 ( 13 of 2018) or the First Schedule of the Finance (No. 2) Act,
2019 (23 of 2019) or the First Schedule of the Finance Act, 2020 (12
of 2020) or the First Schedule of the Finance Act, 2021 (13 of 2021)
or the First Schedule of the Finance Act, 2022 (6 of 2022) shall be set
off under sub-rule (1) or, as the case may be, sub-rule (2).

Rule 9.—Where the net result of the computation made in

accordance with these rules is a loss, the loss so computed shall be
ignored and the net agricultural income shall be deemed to be nil.

Rule 10.—The provisions of the Income-tax Act relating to

procedure for assessment (including the provisions of section 288A
relating to rounding off of income) shall, with the necessary
modifications, apply in relation to the computation of the net
 126

agricultural income of the assessee as they apply in relation to the

assessment of the total income.

Rule 11.—For the purposes of computing the net agricultural

income of the assessee, the Assessing Officer shall have the same
powers as he has under the Income-tax Act for the purposes of
assessment of the total income.
 127

THE SECOND SCHEDULE

[See section 126 (a)]

In the First Schedule to the Customs Tariff Act,––

Tariff Item Description of Unit Rate of duty

goods Standard Preferential
(1) (2) (3) (4) (5)

(1) in Chapter 29,––

(i) for the entry in column (4) occurring against tariff item 2902 50 00, the entry “2.5%” shall
be substituted;

(ii) for the entry in column (4) occurring against tariff item 2903 21 00, the entry “2.5%” shall
be substituted;

(2) in Chapter 40, for the entry in column (4) occurring against all the tariff items of heading 4005, the
entry “25% or Rs. 30 per kg., whichever is lower” shall be substituted;

(3) in Chapter 71,––

(i) for the entry in column (4) occurring against all the tariff items of headings 7113 and 7114,
the entry “25%” shall be substituted;
(ii) for the entry in column (4) occurring against all the tariff items of heading 7117, the entry
“25% or Rs. 600 per kg., whichever is higher” shall be substituted;

(4) in Chapter 84, for the entry in column (4) occurring against tariff item 8414 60 00, the entry "15%"
shall be substituted;

(5) in Chapter 87, for the entry in column (4) occurring against tariff item 8712 00 10, the entry “35%”
shall be substituted;

(6) in Chapter 95, for the entry in column (4) occurring against all the tariff items of heading 9503, the
entry “70%” shall be substituted.
 128

THE THIRD SCHEDULE

[See section 126 (b)]

In the First Schedule to the Customs Tariff Act,––

(1) in Chapter 40, for the entry in column (4) occurring against tariff item 4011 30 00, the entry
“2.5%” shall be substituted;
(2) in Chapter 71,––
(i) for the entry in column (4) occurring against all the tariff items of heading 7106, the
entry “10%” shall be substituted;
(ii) for the entry in column (4) occurring against tariff item 7107 00 00, the entry “10%”
shall be substituted;
(iii) for the entry in column (4) occurring against all the tariff items of heading 7108, the
entry “10%” shall be substituted;
(iv) for the entry in column (4) occurring against tariff item 7109 00 00, the entry “10%”
shall be substituted;
(v) for the entry in column (4) occurring against tariff items 7110 11 10, 7110 11 20, 7110
19 00, 7110 21 00, 7110 29 00, 7110 41 00 and 7110 49 00, the entry “10%” shall be
substituted;
(vi) for the entry in column (4) occurring against tariff item 7111 00 00, the entry “10%”
shall be substituted;
(vii) for the entry in column (4) occurring against all the tariff items of heading 7112, the
entry “10%” shall be substituted;
(viii) for the entry in column (4) occurring against all the tariff items of heading 7118, the
entry “10%” shall be substituted;
(3) in Chapter 88, for the entry in column (4) occurring against tariff items 8802 20 00, 8802 30 00
and 8802 40 00, the entry “2.5%” shall be substituted;
(4) in Chapter 98,––
(a) in heading 9801, in column (2),––
(i) for item (3), the following item shall be substituted, namely:––
“(3) Power project, other than solar power plant or solar power project”;
(ii) in item (6), for the words “Such other projects”, the words “Such other projects, other
than solar power plant or solar power project,” shall be substituted;
(b) in sub-heading 9801 00, in column (2), ––
(i) for item (3), the following item shall be substituted, namely:––
“(3) power project, other than solar power plant or solar power project”;

(ii) in item (6), for the words “such other projects”, the words “such other projects, other
than solar power plant or solar power project,” shall be substituted;
(c) for the entry in column (2) occurring against tariff item 9801 00 13, the following entry shall
be substituted, namely:––
“---- For power project, other than solar power plant or solar power project”;
 129

(d) for the entry in column (2) occurring against tariff item 9801 00 19, the following entry
shall be substituted, namely:––
“---- For other projects, other than solar power plant or solar power project”.
 130

THE FOURTH SCHEDULE

[See section 126 (c)]

In the First Schedule to the Customs Tariff Act,––

(1) in the General Explanatory Notes, in paragraph 1, after the portion beginning with the words
‘Where the description of an article or group of articles’ and ending with the words ‘the article or
group of articles which has “-” or “--”.’, the following shall be inserted, namely:—

‘Where the description of an article or group of articles is preceded by “----”, ‘in addition to
being a sub-classification of “-” or “--”, the said article or group of articles may also be taken to be a
sub-classification of the immediately preceding description of the article or group of articles which
has “---”.’;

(2) for the List of Abbreviations Used, the following shall be substituted, namely:––

“LIST OF ABBREVIATIONS USED

Abbreviations For
AC Alternating Current
Amps Ampere(s)
ASTM American Society for Testing Materials
Bq Becquerel(s)
Bq/g Becquerel(s) per gram
°C Degree(s) Celsius
cc Cubic centimetre(s)
cg Centigram(s)
Ci/g Curie per gram
C.I.F. Cost, Insurance and Freight
c/k Carats (1 metric carat = 2 x 10-4 kg)
cm Centimetre(s)
cm² Square centimetre(s)
cm³ Cubic centimetre(s)
cN Centinewton(s)
DC Direct Current
dyne/cm Dyne per centimetre
g Gram(s)
g/cm³ Gram per cubic centimetre
g/m² Gram per square metre
gi F/S Gram of fissile isotopes
g.v.w. Gross vehicle weight
Gy Gray
HP Horse Power
Hz Hertz
IR Infra-red
K Kelvin
kcal Kilocalorie(s)
kcal/kg Kilocalorie(s) per kilogram
kg Kilogram(s)
 131

kgf Kilogram force

kN Kilonewton(s)
kN/m Kilonewton(s) per metre
kPa Kilopascal(s)
kPa. m²/g Kilopascal square metre per gram
kV Kilovolt(s)
kVA Kilovolt(s) - ampere(s)
kvar Kilovolt(s) - ampere(s) - reactive
kW Kilowatt(s)
kWh Kilowatt hours
l Litre(s)
m Metre(s)
m- Meta-
m² Square metre(s)
m³ Cubic metre(s)
m³/h Cubic metre(s) per hour
µCi Microcurie
mm Millimetre
mN Millinewton(s)
mPa Millipascal(s)
mT Metric tonne
MW Megawatt(s)
N Newton(s)
N/m Newton(s) per metre
No. Number
o- Ortho-
p- Para-
pa Number of pairs
RAD Radiation absorbed dose
Rs. Rupees
sq. Square
SWG Standard wire gauge
t Tonne(s)
Tu Thousand in number
u Number
US$ US Dollar
UV Ultra-violet
V Volt(s)
vol. Volume
W Watt(s)
% Percent
x° X degree(s)
1000 kWh 1000 kilowatt hours”;
 132

Tariff Description of goods Unit Rate of duty

Item
Standard Preferential
(1) (2) (3) (4) (5)

(3) in Chapter 3,––

(i) in heading 0302,––

(a) for sub-heading 0302 91, tariff item 0302 91 10 and the entries relating thereto, the following shall
be substituted, namely:—
“0302 91 00 -- Livers, roes and milt kg. 30% -”;
(b) for sub-heading 0302 92, tariff item 0302 92 10 and the entries relating thereto, the following shall
be substituted, namely:—
“0302 92 00 -- Shark fins kg. 30% -”;
(ii) in heading 0303, for sub-heading 0303 92, tariff item 0303 92 10 and the entries relating thereto, the
following shall be substituted, namely:—
“0303 92 00 -- Shark fins kg. 30% -”;
(iii) in heading 0307, after tariff item 0307 43 30 and the entries relating thereto, the following
shall be inserted, namely:—
“0307 43 90 --- Other kg. 30% -”;
(iv) in heading 0308, after tariff item 0308 30 20 and the entries relating thereto, the following shall be
inserted, namely:—
“0308 30 90 --- Other kg. 30% -”;

(4) in Chapter 4, in heading 0406, for tariff item 0406 10 00 and the entries relating thereto, the following shall be
substituted, namely:—
“0406 10 - Fresh (unripened or uncured) cheese, including
whey cheese, and curd
0406 10 10 --- Mozzarella cheese kg. 30% -
0406 10 90 --- Other kg. 30% -”;
(5) in Chapter 9, in heading 0910, for tariff items 0910 99 29 to 0910 99 39 and the entries relating thereto, the
following shall be substituted, namely:—
“0910 99 29 ---- Other kg. 30% -
0910 99 30 --- Husk kg. 30% -”;

(6) in Chapter 10, in heading 1008,––

(i) after tariff item 1008 21 30 and the entries relating thereto, the following shall be inserted, namely:—

“1008 21 40 --- Barnyard (Echinochloa esculenta (L.)) kg. 50% -

1008 21 50 --- Proso (Panicum miliaceum (L.)) kg. 50% -
1008 21 60 --- Foxtail (Setaria italica (L.)) kg. 50% -
 133

1008 21 70 --- Kodo (Paspalum scrobiculatum (L.)) kg. 50% -

1008 21 80 --- Little (Panicum sumatrense (L.)) kg. 50% -
--- Other :
1008 21 91 ---- Amaranth (Amaranthus (L.)) kg. 50% -
1008 21 99 ---- Other kg. 50% -”;

(ii) after tariff item 1008 29 30 and the entries relating thereto, the following shall be inserted, namely:—
“1008 29 40 --- Barnyard (Echinochloa esculenta (L.)) kg. 50% -
1008 29 50 --- Proso (Panicum miliaceum (L.)) kg. 50% -
1008 29 60 --- Foxtail (Setaria italica (L.)) kg. 50% -
1008 29 70 --- Kodo (Paspalum scrobiculatum (L.)) kg. 50% -
1008 29 80 --- Little (Panicum sumatrense (L.)) kg. 50% -
--- Other :
1008 29 91 ---- Amaranth (Amaranthus (L.)) kg. 50% -
1008 29 99 ---- Other kg. 50% -”;

(7) in Chapter 12, in heading 1211, for sub-heading 1211 90, tariff items 1211 90 11 to 1211 90 99 and the entries
relating thereto, the following shall be substituted, namely:—
“1211 90 - Other :
--- Seeds, Kernel, Aril, Fruit, Pericarp, Fruit rind,
Endosperm, Mesocarp, Endocarp :
1211 90 11 ---- Ambrette seeds kg. 30% -
1211 90 12 ---- Nuxvomica, Dried ripe seeds kg. 30% -
1211 90 13 ---- Psyllium seeds (isobgul) kg. 30% -
1211 90 14 ---- Neem seeds kg. 30% -
1211 90 15 ---- Jojoba seeds kg. 30% -
1211 90 16 ---- Garcinia kg. 30% -
1211 90 19 ---- Other kg. 30% -
--- Leaves, Leaf bud, Galls, flowers, Inflorescence,
Spadix, Flower bud, Style and Stigma, Stamen
and pods :
1211 90 21 ---- Belladona leaves kg. 30% -
1211 90 22 ---- Senna leaves and pods kg. 30% -
1211 90 23 ---- Neem leaves kg. 30% -
1211 90 24 ---- Gymnema kg. 30% -
1211 90 25 ---- Cubeb kg. 30% -
1211 90 26 ---- Pyrethrum kg. 30% -
1211 90 29 ---- Other kg. 30% -
 134

--- Bark, Husk and Rind :

1211 90 31 ---- Cascara sagrada bark kg. 30% -
1211 90 32 ---- Psyllium husk (isobgol husk) kg. 30% -
1211 90 33 ---- Gamboge fruit rind kg. 30% -
1211 90 34 ---- Ashoka (Saraca asoca.) kg. 30% -
1211 90 35 ---- Arjuna (Terminalia arjuna) kg. 30% -
1211 90 39 ---- Other kg. 30% -
--- Roots, Root stalk, Bulb, Corn, Tuber, Stolon and
rhizome :
1211 90 41 ---- Belladona roots kg. 30% -
1211 90 42 ---- Galangal rhizomes and roots kg. 30% -
1211 90 43 ---- Ipecac dried rhizome and roots kg. 30% -
1211 90 44 ---- Serpentina roots (rowwalfia serpentina and other kg. 30% -
species of rowwalfias)
1211 90 45 ---- Zedovary roots kg. 30% -
1211 90 46 ---- Kuth root kg. 30% -
1211 90 47 ---- Sarasaparilla roots kg. 30% -
1211 90 48 ---- Sweet flag rhizomes kg. 30% -
1211 90 49 ---- Other kg. 30% -
--- Whole Plant, Aerial Part, Stem, Shoot and Wood :
1211 90 51 ---- Sandalwood chips and dust kg. 30% -
1211 90 52 ---- Vinca rosea herbs kg. 30% -
1211 90 53 ---- Mint kg. 30% -
1211 90 54 ---- Agarwood kg. 30% -
1211 90 55 ---- Chirata kg. 30% -
1211 90 56 ---- Basil, hyssop, rosemary, sage and savory kg. 30% -
1211 90 57 ---- Ashwagandha (Withania somnifera) kg. 30% -
1211 90 58 ---- Giloy (Tinospora cordifolia) kg. 30% -
1211 90 59 ---- Other kg. 30% -
1211 90 90 --- Other kg. 30% -”;
(8) In Chapter 13,––
(i) in the Note, in clause (g), for the brackets, word and figures “(heading 3006)”, the brackets, word and
figures “(heading 3822)” shall be substituted;

(ii) in heading 1302,––

(a) for tariff item 1302 32 30 and the entries relating thereto, the following shall be substituted,
namely:—
“--- Guargum:
1302 32 31 ---- Chemically treated kg. 30% -
 135

1302 32 39 ---- Other kg. 30% -”;

(b) tariff item 1302 32 40 and the entries relating thereto shall be omitted;

(c) for tariff item 1302 39 00 and the entries relating thereto, the following shall be substituted,
namely:—
“1302 39 -- Other :
1302 39 10 --- Tamarind Kernel Powder kg. 30% -
1302 39 20 --- Kappa carrageenan kg. 30% -
1302 39 90 --- Other kg. 30% -”;
(9) in Chapter 19, in heading 1904, for tariff item 1904 20 00 and the entries relating thereto, the following shall
be substituted, namely:—
“1904 20 - Prepared foods obtained from unroasted cereal
flakes or from mixtures of
1904 20 10 --- With millet content 15% or more by weight kg. 30% -
1904 20 90 --- Other kg. 30% -”;

(10) in Chapter 27, in heading 2701, for tariff item 2701 12 00 and the entries relating thereto, the following shall
be substituted, namely:—
“2701 12 -- Bituminous coal :
2701 12 10 --- Coking coal kg. 5% -
2701 12 90 --- Other kg. 5% -”;
(11) in Chapter 29, ––
(i) in heading 2916, after tariff item 2916 20 10 and the entries relating thereto, the following shall be
inserted, namely:—
“2916 20 20 --- Bifenthrin (ISO) kg. 7.5% -”;
(ii) in heading 2924, after tariff item 2924 29 60 and the entries relating thereto, the following shall be
inserted, namely:—
“2924 29 70 --- Pretilachlor (ISO) kg. 7.5% -”;
(iii) in heading 2930,––
(a) for tariff item 2930 20 00 and the entries relating thereto, the following shall be substituted namely:—

“2930 20 - Thiocarbamates and dithiocarbamates :

2930 20 10 --- Cartap Hydrochloride (ISO) kg. 7.5% -
2930 20 90 --- Other kg. 7.5% -”;

(b) after tariff item 2930 90 91 and the entries relating thereto, the following shall be inserted, namely:—
“2930 90 92 ---- Acephate (ISO) kg. 7.5% -”;
 136

(iv) in heading 2931, after tariff item 2931 49 20 and the entries relating thereto, the following shall be
inserted, namely:—
“2931 49 30 --- Glyphosate (ISO) kg. 7.5% -”;
(v) in heading 2932, after tariff item 2932 99 10 and the entries relating thereto, the following shall be
inserted, namely:—
“2932 99 20 --- Emamectin Benzoate (ISO) kg. 7.5% -”;
(vi) in heading 2933,––
(a) after tariff item 2933 29 50 and the entries relating thereto, the following shall be inserted, namely:—
“2933 29 60 --- Imidacloprid (ISO) kg. 7.5% -”;
(b) after tariff item 2933 39 16 and the entries relating thereto, the following shall be inserted, namely:—
“2933 39 17 ---- Chlorantraniliprole (ISO) kg. 7.5% -”;
(c) for tariff item 2933 39 19 and the entries relating thereto, the following shall be substituted, namely:—
“2933 39 21 ---- Acetamiprid (ISO) kg. 7.5% -
2933 39 22 ---- Imazethapyr (ISO) kg. 7.5% -
2933 39 29 ---- Other kg. 7.5% -”;
(d) after tariff item 2933 59 40 and the entries relating thereto, the following shall be inserted, namely:—
“2933 59 50 --- Bispyribac-sodium (ISO) kg. 7.5% -”;
(e) after tariff item 2933 99 10 and the entries relating thereto, the following shall be inserted, namely:—
“2933 99 20 --- Carbendazim (ISO) kg. 7.5% -”;
(vii) in heading 2934, after tariff item 2934 99 20 and the entries relating thereto, the following shall be
inserted, namely:—
“2934 99 30 --- Buprofezin (ISO) kg. 7.5% -”;
(viii) in heading 2935, for tariff item 2935 50 00 and the entries relating thereto, the following shall be
substituted, namely:—
“2935 50 - Other perfluorooctane sulphonamides :
2935 50 10 --- Flubendiamide (ISO) kg. 7.5% -
2935 50 90 --- Other kg. 7.5% -”;

(12) in Chapter 31,––

(i) after Note 6, the following Supplementary Note shall be inserted, namely:—

“Supplementary Note :

(1) In this Chapter, reference to any standard of the Bureau of Indian Standards refers to the last
published version of that standard.
Illustration : IS 1459 refers to IS 1459: 2018 and not to IS 1459: 1974.”;

(ii) in heading 3102, for tariff item 3102 10 00 and the entries relating thereto, the following shall be substituted,
namely:—
“3102 10 - Urea, whether or not in aqueous solution :
 137

3102 10 10 --- Fertilizer grade, conforming to Standard IS 5406 kg. 10% -

3102 10 90 --- Other kg. 10% -”;

(13) in Chapter 38,––

(i) after Sub-heading Note 4, the following Supplementary Notes shall be inserted, namely:—
“Supplementary Notes:
1. Tariff item 3808 91 41 covers one of the following goods of sub-heading 3808 91 : Acephate (ISO)
conforming to IS-12915; Cartap Hydrochloride (ISO) conforming to IS-14159; Imidachloprid (ISO)
conforming to IS-15443; Acetamiprid (ISO) conforming to IS-15981.

2. Tariff item 3808 91 42 covers one of the following goods of sub-heading 3808 91 with content by mass
greater than 90% : Chlorentraniliprole (ISO); Buprofezin (ISO); Flubendiamide (ISO); Imamectin
Benzoate (ISO).

3. Tariff item 3808 91 51 covers only mixtures and preparations of goods of sub-heading 3808 91,
containing one or more of the following : Acephate (ISO) conforming to IS-12916; Cartap
Hydrochloride (ISO) conforming to IS-14183; Imidachloprid (ISO) conforming to IS-15335;
Acetamiprid (ISO) conforming to IS-16328.

4. Tariff item 3808 91 52 covers only mixtures and preparations of goods of sub-heading 3808 91 with
content by mass greater than 90%, containing one or more of the following : Chlorentraniliprole (ISO);
Buprofezin (ISO); Flubendiamide (ISO); Imamectin Benzoate (ISO).

5. Tariff item 3808 92 60 covers one of the following goods of sub-heading 3808 92 : Carbendazim (ISO)
conforming to IS-8445.

6. Tariff item 3808 92 70 covers only mixtures and preparations of goods of sub-heading 3808 92,
containing one or more of the following : Carbendazim (ISO) conforming to IS-8446.

7. Tariff item 3808 93 61 covers one of the following goods of sub-heading 3808 93 : Pretilachlor (ISO)
conforming to IS-15158; Glyphosate (ISO) conforming to IS-12502.

8. Tariff item 3808 93 62 covers one of the following goods of sub-heading 3808 93 with content by mass
greater than 90% : Bispyribac sodium (ISO); Imazethapyr (ISO).

9. Tariff item 3808 93 71 covers only mixtures and preparations of goods of sub-heading 3808 93,
containing one or more of the following : Pretilachlor (ISO) conforming to IS-15160.

10. Tariff item 3808 93 72 covers only mixtures and preparations of goods of sub-heading 3808 93 with
content by mass greater than 90%, containing one or more of the following : Bispyribac sodium (ISO);
Imazethapyr (ISO).”;

(ii) in heading 3808,––

(a) after tariff item 3808 91 37 and the entries relating thereto, the following shall be inserted, namely:—
“--- Goods specified in Supplementary Note 1 and 2
to this Chapter :
3808 91 41 ---- Goods specified in Supplementary Note 1 to kg. 10% -
this Chapter
 138

3808 91 42 ---- Goods specified in Supplementary Note 2 to kg. 10% -

this Chapter
--- Goods specified in Supplementary Note 3 and 4
to this Chapter :
3808 91 51 ---- Goods specified in Supplementary Note 3 to kg. 10% -
this Chapter
3808 91 52 ---- Goods specified in Supplementary Note 4 to kg. 10% -”;
this Chapter
(b) after tariff item 3808 92 50 and the entries relating thereto, the following shall be inserted, namely:—
“3808 92 60 --- Goods specified in Supplementary Note 5 to kg. 10% -
this Chapter
3808 92 70 --- Goods specified in Supplementary Note 6 to kg. 10% -”;
this Chapter
(c) after tariff item 3808 93 50 and the entries relating thereto, the following shall be inserted, namely:—
“--- Goods specified in Supplementary Note 7 and 8
to this Chapter :
3808 93 61 ---- Goods specified in Supplementary Note 7 to kg. 10% -
this Chapter
3808 93 62 ---- Goods specified in Supplementary Note 8 to kg. 10% -
this Chapter
--- Goods specified in Supplementary Note 9 and 10
to this Chapter :
3808 93 71 ---- Goods specified in Supplementary Note 9 to kg. 10% -
this Chapter
3808 93 72 ---- Goods specified in Supplementary Note 10 to kg. 10% -”;
this Chapter

(14) in Chapter 39, in heading 3915, after tariff item 3915 90 75 and the entries relating thereto, the following shall
be inserted, namely:—
“3915 90 79 ---- Others kg. 7.5% -”;

(15) in Chapter 48, in heading 4811, for tariff item 4811 90 94 and the entries relating thereto, the following shall
be substituted, namely:—
“4811 90 94 ---- Thermal paper in jumbo rolls (of size 1 m and kg. 10% -
above in width and 5,000 m and above in length)
4811 90 95 ---- Thermal paper in jumbo rolls (of size 1 m and kg. 10% -
above in width and less than 5,000 m in length)
4811 90 96 ---- Thermal paper in rolls of size less than 1 m in kg. 10% -”;
width

(16) in Chapter 52, in heading 5201, for tariff item 5201 00 20 and the entries relating thereto, the following shall
be substituted, namely:—
 139

“--- Other :
5201 00 21 ---- Of staple length not exceeding 20.0 mm kg. 5% -
5201 00 22 ---- Of staple length exceeding 20.0 mm but not kg. 5% -
exceeding 24.5 mm
5201 00 23 ---- Of staple length exceeding 24.5 mm but not kg. 5% -
exceeding 27.0 mm
5201 00 24 ---- Of staple length exceeding 27.0 mm but not kg. 5% -
exceeding 32.0 mm
5201 00 25 ---- Of staple length exceeding 32.0 mm kg. 5% -”;
(17) in Chapter 54, in heading 5402,––
(i) for tariff item 5402 11 10 and the entries relating thereto, the following shall be substituted, namely:—
“5402 11 00 -- Of aramids kg. 5% -”;

(ii) for sub-heading 5402 59, tariff item 5402 59 90 and the entries relating thereto, the following shall be
substituted, namely:—
“5402 59 00 -- Other kg. 5% -”;

(18) in Chapter 57, in heading 5702, after tariff item 5702 39 20 and the entries relating thereto, the following shall
be inserted, namely:—
“5702 39 90 --- Other m2 20% -”;

(19) in Chapter 61, in heading 6115, for sub-heading 6115 21 and the entries relating thereto, the following shall be
substituted, namely:—
“- Other panty hose and tights :”;

(20) in Chapter 62,––

(i) in heading 6213,––
(a) for the entry in column (2) occurring against sub-heading 6213 90, the following shall be substituted,
namely:—
“- Of other textile materials :”;
(b) for the entry in column (2) occurring against tariff item 6213 90 90, the following shall be substituted,
namely:—
“--- Other” ;
(ii) in heading 6217,––
(a) for the entry in column (2) occurring against tariff item 6217 10 10, the following shall be substituted,
namely:—
“--- For articles of apparel, of cotton”;
(b) for the entry in column (2) occurring against tariff item 6217 10 20, the following shall be substituted,
namely:—
 140

“--- For articles of apparel, of synthetic fibres”;

(c) for the entry in column (2) occurring against tariff item 6217 10 30, the following shall be substituted,
namely:—
“--- For articles of apparel, of wool”;
(d) for the entry in column (2) occurring against tariff item 6217 10 40, the following shall be substituted,
namely:—
“--- For articles of apparel, of silk”;
(e) for the entry in column (2) occurring against tariff item 6217 10 50, the following shall be substituted,
namely:—
“--- For articles of apparel, of regenerated fibres”;
(f) for the entry in column (2) occurring against tariff item 6217 10 60, the following shall be substituted,
namely:—
“--- For articles of apparel, of other fibres”;
(g) for the entry in column (2) occurring against tariff item 6217 10 70, the following shall be substituted,
namely:—
“--- Stockings, socks, sockettes and the like, of cotton”;
(21) in Chapter 63,––
(i) in heading 6301, for the entry in column (2) occurring against tariff item 6301 20 00, the following shall
be substituted, namely:—
“- Blankets (other than electric blankets) and travelling rugs, of wool or of fine
animal hair”;

(ii) in heading 6304, for the entry in column (2) occurring against tariff item 6304 20 00, the following shall
be substituted, namely:—
“- Bed nets specified in Sub-heading Note 1 to this Chapter”;
(iii) in heading 6310, for tariff items 6310 10 90 to 6310 90 10 and the entries relating thereto, the following
shall be substituted, namely:—
“6310 10 90 --- Other kg. 20% -
6310 90 - Other :
6310 90 10 --- Woollen rags kg. 20% -”;

(22) in Chapter 69,––

(i) in Note 1, in introductive sentence, for the word “shaping:”, the word “shaping :” shall be substituted;
(ii) in heading 6907, for sub-heading 6907 30, tariff item 6907 30 10, sub-heading 6907 40, tariff item 6907 40
10 and the entries relating thereto, the following shall be substituted, namely:—
“6907 30 00 - Mosaic cubes and the like, other than those of m2 15% -
sub-heading 6907 40
6907 40 00 - Furnishing ceramics m2 15% -”;
 141

(23) in Chapter 71,––

(i) after Sub-heading Note 3, the following Supplementary Note shall be inserted, namely:—
“Supplementary Note:

For the purposes of heading 7104, “Diamonds” means-

(a) chemically produced stones which have essentially the same chemical composition and
crystal structure as a particular natural diamond and are produced using various methods
including High Pressure High Temperature method (HPHT) and Chemical Vapour Deposition
method (CVD); or
(b) stones obtained artificially by various means, e.g., agglomerating, pressing or fusing
together (usually with the aid of a blow pipe) fragments of natural diamonds which have
generally been reduced to a powder.”;
(ii) in heading 7104,––
(a) for tariff item 7104 21 00 and the entries relating thereto, the following shall be substituted,
namely:—
“7104 21 -- Diamonds :
7104 21 10 --- Industrial c/k 10% -
7104 21 20 --- Non-industrial c/k 10% -”;

(b) for tariff item 7104 91 00 and the entries relating thereto, the following shall be substituted,
namely:—
“7104 91 -- Diamonds :
7104 91 10 --- Industrial c/k 10% -
7104 91 20 --- Non-industrial c/k 10% -”;

(iii) in heading 7105, for tariff item 7105 10 00 and the entries relating thereto, the following shall be substituted,
namely:—
“7105 10 - Of diamonds :
7105 10 10 --- Of heading 7102 c/k 10% -
7105 10 20 --- Of heading 7104 c/k 10% -”;

(iv) in heading 7113,––

(a) for tariff items 7113 11 20 and 7113 11 30 and the entries relating thereto, the following shall be
substituted, namely:—
“--- Other jewellery :
7113 11 41 ---- Unstudded kg. 25% -
7113 11 42 ---- Studded with pearls kg. 25% -
7113 11 43 ---- Studded with diamonds of heading 7102 kg. 25% -
7113 11 44 ---- Studded with diamonds of heading 7104 kg. 25% -
 142

7113 11 45 ---- Studded with other precious and semi-precious kg. 25% -
stones
7113 11 49 ---- Other kg. 25% -”;
(b) for tariff items 7113 19 10 to 7113 19 50 and the entries relating thereto, the following shall be
substituted, namely:—
“--- Of gold :
7113 19 11 ---- Unstudded kg. 25% -
7113 19 12 ---- Studded with pearls kg. 25% -
7113 19 13 ---- Studded with diamonds of heading 7102 kg. 25% -
7113 19 14 ---- Studded with diamonds of heading 7104 kg. 25% -
7113 19 15 ---- Studded with other precious and semi-precious kg. 25% -
stones
7113 19 19 ---- Other kg. 25% -
--- Of platinum :
7113 19 21 ---- Unstudded kg. 25% -
7113 19 22 ---- Studded with pearls kg. 25% -
7113 19 23 ---- Studded with diamonds of heading 7102 kg. 25% -
7113 19 24 ---- Studded with diamonds of heading 7104 kg. 25% -
7113 19 25 ---- Studded with other precious and semi-precious kg. 25% -
stones
7113 19 29 ---- Other kg. 25% -”;

(24) in Chapter 84,––

(i) in heading 8414, for tariff item 8414 10 00 and the entries relating thereto, the following shall be substituted,
namely:—
“8414 10 - Vacuum pumps :
8414 10 10 --- with maximum flow-rate greater than 5 m³/h u 7.5% -
(under standard temperature (273 K (0 °C)) and
pressure (101.3 kPa) conditions)
8414 10 90 --- Other u 7.5% -”;
(ii) in heading 8419,––
(a) for tariff items 8419 50 10 to 8419 50 90 and the entries relating thereto, the following shall be
substituted, namely:—
“--- with a heat transfer surface area of greater than
0.15 m², and less than 20 m² :
8419 50 11 ---- Shell and tube type u 7.5% -
8419 50 12 ---- Plate type u 7.5% -
8419 50 13 ---- Spiral type u 7.5% -
8419 50 19 ---- Other u 7.5% -
--- Other :
 143

8419 50 91 ---- Shell and tube type u 7.5% -

8419 50 92 ---- Plate type u 7.5% -
8419 50 93 ---- Spiral type u 7.5% -
8419 50 99 ---- Other u 7.5% -”;

(b) for tariff item 8419 89 10 and the entries relating thereto, the following shall be substituted,
namely:—
“--- Pressure vessels, reactors, columns or towers
or chemical storage tanks :
8419 89 11 ---- Pressure vessels u 10% -
8419 89 12 ---- Reactors with total internal (geometric) volume u 10% -
greater than 0.1 m³ (100 l) and less than 20 m³
(20000 l)
8419 89 13 ---- Other reactors u 10% -
8419 89 14 ---- Distillation or absorption columns of internal u 10% -
diameter greater than 0.1 m
8419 89 15 ---- Other distillation or absorption columns u 10% -
8419 89 16 ---- Chemical storage tanks with a total internal u 10% -
(geometric) volume greater than 0.1 m³ (100 l)
8419 89 17 ---- Other chemical storage tanks u 10% -
8419 89 19 ---- Other u 10% -”;

(25) in Chapter 85,––

(i) in heading 8517,––
(a) for the entry in column (2) occurring against tariff item 8517 62 30, the following shall be substituted,
namely:—
“--- Modems (modulators-demodulators) for xDSL based Wireline Telephony”;
(b) tariff item 8517 62 40 and the entries relating thereto shall be omitted;
(c) for the entry in column (2) occurring against tariff item 8517 62 70, the following shall be substituted,
namely:—
“--- Multiplexers, statistical multiplexers for PDH based Wireline Telephony”;

(d) in sub-heading 8517 69,––

(A) tariff item 8517 69 50 and the entries relating thereto shall be omitted;
(B) for the entry in column (2) occurring against tariff item 8517 69 60, the following shall be
substituted, namely:—
“--- Set top boxes for gaining access to internet for Wireline Telephony”;
(ii) for heading 8524, tariff items 8524 11 00 to 8524 99 00 and the entries relating thereto, the following shall
be substituted, namely:—
 144

“8524 FLAT PANEL DISPLAY MODULES,

WHETHER OR NOT INCORPORATING
TOUCH-SENSITIVE SCREENS
- Without drivers or control circuits :
8524 11 -- Of liquid crystals :
8524 11 10 --- For the goods of sub-heading 8471 30 or 8471 41 u 15% -
8524 11 20 --- For the goods of sub-heading 8517 13 or 8517 14 u 15% -
8524 11 30 --- For the goods of sub-heading 8528 72 or 8528 73 u 15% -
8524 11 90 --- Other u 15% -
8524 12 -- Of organic light-emitting diodes (OLED) :
8524 12 10 --- For the goods of sub-heading 8471 30 or 8471 41 u 15% -
8524 12 20 --- For the goods of sub-heading 8517 13 or 8517 14 u 15% -
8524 12 30 --- For the goods of sub-heading 8528 72 or 8528 73 u 15% -
8524 12 90 --- Other u 15% -
8524 19 -- Other :
8524 19 10 --- For the goods of sub-heading 8471 30 or 8471 41 u 15% -
8524 19 20 --- For the goods of sub-heading 8517 13 or 8517 14 u 15% -
8524 19 30 --- For the goods of sub-heading 8528 72 or 8528 73 u 15% -
8524 19 90 --- Other u 15% -
- Other :
8524 91 -- Of liquid crystals :
8524 91 10 --- For the goods of sub-heading 8471 30 or 8471 41 u 15% -
8524 91 20 --- For the goods of sub-heading 8517 13 or 8517 14 u 15% -
8524 91 30 --- For the goods of sub-heading 8528 72 or 8528 73 u 15% -
8524 91 90 --- Other u 15% -
8524 92 -- Of organic light-emitting diodes (OLED) :
8524 92 10 --- For the goods of sub-heading 8471 30 or 8471 41 u 15% -
8524 92 20 --- For the goods of sub-heading 8517 13 or 8517 14 u 15% -
8524 92 30 --- For the goods of sub-heading 8528 72 or 8528 73 u 15% -
8524 92 90 --- Other u 15% -
8524 99 -- Other :
8524 99 10 --- For the goods of sub-heading 8471 30 or 8471 41 u 15% -
8524 99 20 --- For the goods of sub-heading 8517 13 or 8517 14 u 15% -
8524 99 30 --- For the goods of sub-heading 8528 72 or 8528 73 u 15% -
8524 99 90 --- Other u 15% -”;
 145

(26) in Chapter 87, in heading 8704, after tariff item 8704 10 10 and the entries relating thereto, the following shall
be inserted, namely:—
“8704 10 90 --- Other u 40% -”.
 146

THE FIFTH SCHEDULE

(See section 127)

In the Second Schedule to the Customs Tariff Act, for serial numbers 8 and 9 and the entries relating
thereto, the following serial numbers and entries shall be substituted, namely :—

Sl. No. Chapter/heading/ Description of goods Rate of duty

sub-heading/Tariff Item

(1) (2) (3) (4)

“8. 1202 41 Groundnut in shell Rs. 1,125 per tonne
9. 1202 42 Groundnut kernel Rs. 1,500 per tonne”.
 147

THE SIXTH SCHEDULE

(See section 153)

In the Seventh Schedule to the Finance Act, 2001, ––

(i) for the entry in column (4) occurring against tariff item 2402 20 10, the entry “Rs. 230 per
thousand” shall be substituted;
(ii) for the entry in column (4) occurring against tariff item 2402 20 20, the entry “Rs. 290 per
thousand” shall be substituted;
(iii) for the entry in column (4) occurring against tariff items 2402 20 30 and 2402 20 40, the
entry “Rs. 510 per thousand” shall be substituted;
(iv) for the entry in column (4) occurring against tariff item 2402 20 50, the entry “Rs. 630
per thousand” shall be substituted;
(v) for the entry in column (4) occurring against tariff item 2402 20 90, the entry “Rs. 850 per
thousand” shall be substituted;
(vi) for the entry in column (4) occurring against tariff item 2402 90 10, the entry “Rs. 690
per thousand” shall be substituted.
 148

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 2023-2024. The notes on clauses explain the various
provisions contained in the Bill.

NIRMALA SITHARAMAN.

NEW DELHI;
The 31st January, 2023.

_____________

PRESIDENT’S RECOMMENDATION UNDER ARTICLES 117 AND 274 OF THE

CONSTITUTION OF INDIA

[Copy of letter No. F.2(4)-B(D)/2023, dated the 31st January, 2023 from Smt. Nirmala
Sitharaman, Minister of Finance, to the Secretary-General, Lok Sabha.]

The President, having been informed of the subject matter of the proposed Bill,
recommends, under clauses (1) and (3) of article 117, read with clause (1) of article 274, of the
Constitution of India, the introduction of the Finance Bill, 2023 to the Lok Sabha and also
recommends to the Lok Sabha the consideration of the Bill.

2. The Bill will be introduced in the Lok Sabha immediately after the presentation of the
Budget on the 1st February, 2023.
 149

NOTES ON CLAUSES

Clause 2 read with the First Schedule to the Bill, seeks to specify the rates at which
income-tax is to be levied on income chargeable to tax for the assessment year 2023-2024.
Further, it lays down the rates at which tax is to be deducted at source during the financial
year under the Income-tax Act; and the rates at which “advance tax” is to be paid, tax is to
be deducted at source from, or paid on, income chargeable under the head “Salaries” or
deducted under section 194P of the Income-tax Act and tax is to be calculated and charged
in special cases for the financial year 2023-2024.

Clause 3 of the Bill seeks to amend section 2 of the Income-tax Act relating to
definitions.

It is proposed to amend clause (19B) of the said section to omit “Additional

Commissioner of Income-tax (Appeals)” from the definition.

This amendment will take effect from 1st April, 2023.

Clause (24) of the said section provides definition of income for the purposes of the Act.

It is further proposed to insert a new sub-clause (xviic) in clause (24) of the said section
to provide that any sum referred to in clause (xii) of sub-section (2) of section 56 shall also
be included within the definition of income.

It is also proposed to insert sub-clause (xviid) in the said clause so as to provide that
income shall include any sum referred to in clause (xiii) of sub-section (2) of section 56.

These amendments will take effect from 1st April, 2024 and will, accordingly, apply
in relation to the assessment year 2024-2025 and subsequent assessment years.

It is also proposed to insert a new clause (28CA) to provide for definition of “Joint
Commissioner (Appeals)” to mean a person appointed to be a Joint Commissioner of
Income-tax (Appeals) or an Additional Commissioner of Income-tax (Appeals) under sub-
section (1) of section 117.

This amendment will take effect from 1st April, 2023.

Clause (42A) of the said section defines “short-term capital asset” and the Explanation
1 of the said clause provides for determining the period for which any capital asset is held
by the assessee.

It is proposed to insert a new sub-clause (hi) in clause (i) to the Explanation 1 of the said
clause so as to provide that in the case of capital asset, being Electronic Gold Receipt or
gold being capital asset, the holding period for the purpose of capital gain shall include the
period for which the gold or Electronic Gold Receipt, was held by the assessee prior to
conversion into Electronic Gold Receipt or gold, as the case may be.
 150

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 4 seeks to amend section 9 of the Income-tax Act relating to income deemed to
accrue or arise in India.

Sub-section (1) of the said section provides for incomes which shall be deemed to accrue
or arise in India.

It is proposed to substitute clause (viii) of the said sub-section so as to provide that

income deemed to accrue or arise in India shall include income arising outside India, being
any sum of money referred to in sub-clause (xviia) of clause (24) of section 2, paid by a
person resident in India ––

(a) on or after the 5th day of July, 2019 to a non-resident, not being a company, or to a
foreign company; or

(b) on or after the 1st day of April, 2023 to a person not ordinarily resident in India
within the meaning of clause (6) of section 6.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 5 of the Bill seeks to amend section 10 of the Income-tax Act relating to
incomes not included in total income.

It is proposed to amend the Explanation to clause (4D) of the said section to give
reference of the International Financial Services Centres Authority (Fund Management)
Regulations, 2022 in the definition of “specified fund”.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

Clause (4E) of the said section provides that any income accrued or arisen to, or
received by a non-resident as a result of transfer of non-deliverable forward contracts or
offshore derivative instruments or over-the-counter derivatives entered into with an offshore
banking unit of an International Financial Services Centre as referred to in sub-section (1A)
of section 80LA, which fulfils such conditions as may be prescribed, shall not be included
in the total income.

It is further proposed to include distribution of income on offshore derivative

instruments also within the ambit of the said clause.

It is also proposed to insert a proviso to provide that the amount of distributed income
referred to in the said clause shall include only so much of the amount which is chargeable
to tax in the hands of the offshore banking unit under section 115AD.

These amendments will take effect from 1st April, 2024 and, will, accordingly apply
in relation to the assessment year 2024-2025 and subsequent assessment years.
 151

Clause (10D) of the said section, inter alia, provides exemption to any sum received
under a life insurance policy, including the sum allocated by way of bonus on such policy.

It is also proposed to omit the reference of Explanation to sub-section (2A) of section

88 in the second proviso to clause (10D) of the said section which is consequential due to
the omission of section 88.

This amendment will take effect from 1st April, 2023.

It is also proposed to substitute the sixth proviso in the said clause to the effect that
nothing contained in this clause shall apply with respect to any life insurance policy other
than a unit linked insurance policy, issued on or after 1st April, 2023, if the amount of
premium payable for any of the previous year during the term of such policy exceeds five
lakh rupees.

The proposed seventh proviso of the said clause provides that if the premium is
payable, by a person, for more than one life insurance policy other than unit linked insurance
policy, issued on or after 1st April, 2023, the provisions of this clause shall apply only with
respect to those life insurance policies other than unit linked insurance policies, where the
aggregate amount of premium does not exceed the amount referred to in the sixth proviso
in any of the previous years during the term of any of those policies.

The proposed eighth proviso of the said clause provides that the provisions of fourth,
fifth, sixth and seventh provisos shall not apply to any sum received on the death of a person.

These amendments will take effect from 1st April, 2024 and will, accordingly, apply
in relation to the assessment year 2024-2025 and subsequent assessment years.

It is also proposed to insert a new clause (12C) in the said section so as to provide that
any payment from the Agniveer Corpus Fund under the Agnipath Scheme to a person
enrolled under the said Scheme, or to his nominee, shall be exempted. It is further proposed
to give reference of the definitions for the expressions “Agniveer Corpus Fund” and
“Agnipath Scheme” as provided in section 80CCH.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

Clause (22B) of said section, inter alia, provides that any income of a notified news
agency set up in India solely for collection and distribution of news shall not be included in
total income, provided that the news agency applies its income or accumulates it for
application solely for collection and distribution of news and does not distribute its income
in any manner to its members. It has also been provided that the provisions of this clause are
applicable to a notified news agency for a specified period of time not exceeding three
assessment years.

It is also proposed to insert fourth proviso to clause (22B) of said section so as to

provide that nothing contained in this clause shall apply to any income of the news agency
of the previous year relevant to the assessment year beginning on or after 1st April, 2024.
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This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause (23BBF) of said section provides income tax exemption to any income of the
North-Eastern Development Finance Corporation Limited. This exemption has been
withdrawn for assessment year beginning on the 1st day of April, 2010 and any subsequent
assessment year or years.

It is proposed to omit the said clause with effect from 1st April, 2023.

Clause (23C) of the said section provides exemption to the income of certain entities.

Sub-clauses (iv), (v), (vi) and (via) of clause (23C) of said section provide exemption to
the income received by any person on behalf of any fund or trust or institution or university
or other educational institutions or hospital or other institutions which may be approved or
provisionally approved by the Principal Commissioner or Commissioner.

It is proposed to substitute clause (iv) of the first proviso to clause (23C) to provide that
the fund or trust or institution or any university or other educational institution or any
hospital or other institution, as is referred to in sub-clauses (iv), (v) , (vi) and (via) of the
said clause, which is not covered by clauses (i),(ii) or (iii) of the said proviso, can make an
application for approval, where activities of the fund or trust or institution or university or
other educational institution or hospital or other medical institution have,––

(A) not commenced, at least one month prior to the commencement of the previous year
relevant to the assessment year from which the said approval is sought;

(B) commenced and no income or part thereof of the said fund or trust or institution or
university or other educational institution or hospital or other medical institution has been
excluded from the total income on account of applicability of sub-clause (iv) or sub-clause
(v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, or section 11 or 12,
for any previous year ending on or before the date of such application, at any time after the
commencement of such activities.

It is further proposed to amend clause (ii) of the second proviso to clause (23C) so as to
provide that where the application is made under the proposed sub-clause (B) of clause (iv)
of the first proviso, the Principal Commissioner or Commissioner shall follow the procedure
provided under clause (ii) of the second proviso to clause (23C).

It is also proposed to substitute item (B) of sub-clause (b) of clause (ii) of the second
proviso to clause (23C) so as to provide that if the Principal Commissioner or Commissioner
is not so satisfied, about the objects and the genuineness of its activities under item (A), and
compliance of the requirements under item (B), of sub-clause (a) of clause (ii) of the said
proviso, pass an order in writing,––

(I) in a case referred to in clause (ii) or clause (iii) of the first proviso, rejecting such
application and also cancelling its approval; or

(II) in a case referred to in the proposed sub-clause (B) of clause (iv) of the first proviso,
rejecting such application,
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after affording it a reasonable opportunity of being heard.

It is also proposed to substitute clause (iii) of the second proviso so as to provide that
where the application is made under sub-clause (A) of clause (iv) of the first proviso or the
application made under clause (iv) of the first proviso as it stood immediately before its
amendment by the Finance Act, 2023, the Principal Commissioner or Commissioner shall
pass an order in writing granting approval to it provisionally for a period of three years from
the assessment year from which the approval is sought, and send a copy of such order to the
fund or trust or institution or university or other educational institution or hospital or other
medical institution

These amendments will take effect from 1st October, 2023.

It is also proposed to insert a second proviso to clause (i) of Explanation 2 to the third
proviso of clause (23C) so as to provide that the provisions of the first proviso shall apply
only if there was no violation of the conditions specified in the twelfth, thirteenth and
twenty- first proviso, and those specified in Explanation 2 and Explanation 3, of the said
clause, at the time the application was made from the corpus.

It is also proposed to insert a third proviso to clause (i) of Explanation 2 to the third
proviso of clause (23C) of the said section so as to provide that the amount invested or
deposited back shall not be treated as application for charitable or religious purposes under
the first proviso unless such investment or deposit is made within a period of five years from
the end of the previous year in which such application was made from corpus.

It is also proposed to insert a fourth proviso to clause (i) of Explanation 2 to the third
proviso of clause (23C) so as to provide that nothing contained in the first proviso, shall
apply where application from corpus is made on or before 31st March, 2021.

It is also proposed to insert a second proviso to clause (ii) of Explanation 2 to the third
proviso of clause (23C) to provide that the provisions of the first proviso shall apply only if
there was no violation of the conditions specified in the twelfth, thirteenth and twenty-first
provisos and those specified in Explanation 2 and Explanation 3, of the said clause, at the
time the application was made from loan or borrowing.

It is also proposed to insert a third proviso to clause (ii) of Explanation 2 to the third
proviso of clause (23C) to provide that the amount repaid shall not be treated as application
for charitable or religious purposes under the first proviso unless such repayment is made
within a period of five years from the end of the previous year in which such application
was made from loan or borrowing.

It is also proposed to insert a fourth proviso to clause (ii) of Explanation 2 to the third
proviso of clause (23C) to provide that nothing contained in the first proviso, shall apply
where the application, from any loan or borrowing is made on or before 31st March, 2021.

These amendments will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.
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It is also proposed to insert clause (iii) in Explanation 2 to the third proviso of clause
(23C) to provide that any amount credited or paid out of the income of 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), other than the amount referred to in the twelfth proviso, to any other 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), or trust or institution registered under section 12AB, as the case may be, shall be
treated as application for charitable or religious purposes only to the extent of eighty-five
per cent. of such amount credited or paid.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

It is also proposed to amend clause (c) of Explanation 3 to third proviso of clause (23C)
to provide that the statement of accumulation shall be furnished at least two months prior to
the due date specified under sub-section (1) of section 139 for furnishing the return of
income for the previous year.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

It is also proposed to insert clause (e) to Explanation 2 to the fifteenth proviso of clause
(23C) to provide that specified violation shall also include the case where the application
referred to in the first proviso is not complete or it contains false or incorrect information.

This amendment will take effect from 1st April, 2023.

It is also proposed to consequentially amend the Explanation to the nineteenth proviso

to clause (23C) of the said section so as to give the reference of newly inserted clause (46A)
therein.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

It is also proposed to amend the twentieth proviso of clause (23C) to provide that the
fund or institution or trust 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) shall furnish the return of income for the previous year in accordance
with the provisions of sub-section (4C) of section 139, within the time allowed under sub-
section (1) or sub-section (4) of that section.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

Clause (23EB) of the said section provides income tax exemption to any income of
the Credit Guarantee Fund Trust for Small Industries for five previous years relevant to the
assessment years beginning on the 1st day of April, 2002 and ending on the 31st day of
March, 2007.
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Clause (26A) of the said section provides income tax exemption to any income
accruing or arising to any person from any source in the district of Ladakh or outside India
in any previous year relevant to any assessment year commencing before the 1st day of
April, 1989, where such person is resident in the said district in that previous year.

Clause (41) of the said section provides income tax exemption to any income arising
from transfer of a capital asset, being an asset of an undertaking engaged in the business of
generation or transmission or distribution of power where such transfer is effected on or
before the 31st day of March, 2006, to the Indian company notified under sub-clause (a) of
clause (v) of sub-section (4) of section 80-IA.

It is also proposed to omit the said clauses (23EB), (26A) and (41) of the said section
with effect from 1st April, 2023.

It is also proposed to insert a new clause (46A) after clause (46) so as to provide that
any income arising to a body or authority or Board or Trust or Commission not being a
company, which –

(a) has been established or constituted by or under a Central Act or State Act with one
or more of the following purposes, namely:––

(i) dealing with and satisfying the need for housing accommodation;

(ii) planning, development or improvement of cities, towns and villages;

(iii) regulating, or regulating and developing, any activity for the benefit of the general
public; or

(iv) regulating any matter, for the benefit of the general public, arising out of the object
for which it has been created; and

(b) is notified by the Central Government in the Official Gazette for the purposes of
this clause,

shall not be included in total income;

Consequentially, it is proposed to amend clause (46) of the said section so as to

exclude any income arising to a body or authority or Board or Trust or Commission (by
whatever name called) that are covered under clause (46A) of the said section from the
provisions of the said clause.

These amendments will take effect from 1st April, 2024 and will, accordingly, apply
in relation to the assessment year 2024-2025 and subsequent assessment years.

Clause (49) of the said section provides income tax exemption to any income of the
National Financial Holdings Company Limited of any previous year relevant to any
assessment year commencing on or before the 1st day of April, 2014.

It is proposed to omit the said clause with effect from 1st April, 2023.
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Clause 6 of the Bill seeks to amend section 10AA of the Income-tax Act relating to
special provisions in respect of newly established Units in Special Economic Zones.

The said section, inter alia, provides fifteen years tax benefit to a Unit established in
a Special Economic Zone which begins to manufacture or produce articles or things or
provide any services on or after 1st April, 2005. The deduction is available for Units that
begin operations before 1st April, 2020, which has been extended to 30th September, 2020
through the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions)
Act, 2020 and is allowed in the manner specified therein.

The claiming of deduction under the said section for Units established in Special
Economic Zone is time bound as it is available to only those Units which begin to
manufacture or produce articles or things or provide any services on or after 1 st April, 2005
but before 1st April, 2020.

It is proposed to insert a proviso to sub-section (1) of the said section so as to provide

that no such deduction under that sub-section shall be allowed to an assessee who does not
furnish a return of his income on or before the due date specified under sub-section (1) of
section 139.

It is further proposed to insert a new sub-section (4A) to provide that the deduction
under section 10AA shall be available for such Unit, if the proceeds from sale of goods or
provision of services is received in, or brought into, India by the assessee in convertible
foreign exchange, within a period of six months from the end of the previous year or, within
such further period as the competent authority may allow in this behalf.

It is also proposed to provide an Explanation to define the expression “Competent

Authority” and to provide that the sale of goods or provision of services referred to in this
sub-section shall be deemed to have been received in India where such export turnover is
credited to a separate account maintained for the purpose by the assessee with any bank
outside India with the approval of the Reserve Bank of India.

It is also proposed to substitute clause (i) of Explanation 1 to define the term

“convertible foreign exchange” and give reference to new sub-section (4A) in the definition
of “Export Turnover”.

These amendments will take effect from 1st April, 2024 and will, accordingly, apply
in relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 7 seeks to amend section 11 of the Income-tax Act relating to income from
property held for charitable or religious purposes.

It is proposed to amend clause (2) of Explanation 1 of sub-section (1) of the said section
to provide that option by the person under the said Explanation shall be exercised at least
two months prior to the due date specified under sub-section (1) of section 139 for furnishing
the return of income.

It is further proposed to insert a second proviso to clause (i) of Explanation 4 of sub-

section (1) of the said section so as to provide that the provisions of the first proviso shall
apply only if there was no violation of the conditions, specified in
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(a) clause (c) and those specified in Explanations 2, 3 and 5, of the said sub-section; and

(b) in the Explanation to the said section; and

(c) in clause (c) of sub-section (1) of section 13,

at the time the application was made from the corpus.

It is also proposed to insert a third proviso to clause (i) of the said Explanation 4 so as to
provide that the amount invested or deposited back shall not be treated as application for
charitable or religious purposes under the first proviso unless such investment or deposit is
made within a period of five years from the end of the previous year in which such
application was made from corpus.

It is also proposed to insert a fourth proviso to clause (i) of the said Explanation 4 so as
to provide that nothing contained in the first proviso shall apply where application from the
corpus is made on or before 31st March, 2021.

It is also proposed to insert a second proviso to clause (ii) of the said Explanation 4 so
as to provide that the provisions of the first proviso shall apply only if there was no violation
of the conditions specified in

(a) clause (c) and those specified in Explanations 2, 3 and 5, of the said sub-section;

(b) in the Explanation to the said section; and

(c) in clause (c) of sub-section (1) of section 13,

at the time the application was made from loan or borrowing.

It is also proposed to insert a third proviso to clause (ii) of the said Explanation 4 so as
to provide that the amount repaid shall not be treated as application for charitable or religious
purposes under the first proviso, unless such repayment is made within a period of five years
from the end of the previous year in which such application was made form loan or
borrowing.

It is also proposed to insert a fourth proviso to clause (ii) of the said Explanation 4 so as
to provide that nothing contained in the first proviso shall apply where application from any
loan or borrowing is made on or before 31st March, 2021.

These amendments will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

It is also proposed to insert clause (iii) in Explanation 4 to sub-section (1) of the said
section to provide that any amount credited or paid, other than the amount referred to in
Explanation 2 of the said sub-section, 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, as the case may be, or other trust or institution registered under section 12AB shall be
 158

treated as application for charitable or religious purposes only to the extent of eighty-five
per cent. of such amount credited or paid.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

It is also proposed to amend clause (c) of sub-section (2) of the said section so as to
provide that the statement of accumulation shall be furnished at least two months prior to
the due date specified under sub-section (1) of section 139 for furnishing the return of
income for the previous year.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

Sub-section (7) of the said section, inter alia, provides that where a trust or an
institution has been granted registration under section 12AA or section 12AB and the said
registration is in force for any previous year, then, nothing contained in section 10 other than
clause (1) or clause (23C) or clause (46) of section 10, shall operate to exclude any income
derived from the property held under trust from the total income of the trust or institution
for that previous year.

Consequential to insertion of clause (46A) in section 10, it is proposed to give

reference of the said new clause in the said sub-section (7) and in the first and second
provisos thereof.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 8 seeks to amend section 12A of the Income-tax Act relating to conditions for
applicability of sections 11 and 12.

Sub-section (1) of section 12A provides the conditions for applicability of sections 11
and 12 in respect of income of any trust or institution under clauses (ac), (b) and (ba).

It is proposed to substitute sub-clause (vi) of clause (ac) of sub-section (1) of the said
section so as to provide that the trust or institution, which is not covered under sub-clauses
(i) to (v) of this clause, shall apply for registration where the activities of the said trust or
institution have ––

(A) not commenced, at least one month prior to the commencement of the previous year
relevant to the assessment year from which the said registration is sought;

(B) commenced and no income or part thereof of the said trust or institution has been
excluded from the total income on account of applicability of sub-clause (iv) or sub-clause
(v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, or section 11, or
section 12, for any previous year ending on or before the date of such application, at any
time after the commencement of such activities.

This amendment will take effect from 1st October, 2023.

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It is further proposed to amend clause (ba) of sub-section (1) of the said section to provide
that the person in receipt of the income shall furnish the return of income for the previous
year in accordance with the provisions of sub-section (4A) of section 139, within the time
allowed under sub-section (1) or sub-section (4) of that section.

This amendment will take effect from the 1st day of April, 2023 and will, accordingly,
apply in relation to the assessment year 2023-2024 and subsequent assessment years.

It is also proposed to omit the second, third and fourth provisos to sub-section (2) of
said section.

This amendment will take effect from 1st April, 2023.

Clause 9 seeks to amend section 12AB of the Income-tax Act relating to procedure for
fresh registration.

It is proposed to amend clause (b) of sub-section (1) of the said section so as to provide
that where the application is made under the item (B) of sub-clause (vi) of clause (ac) of
sub-section (1) of section 12A, the Principal Commissioner or Commissioner shall follow
the procedure provided under clause (b) of sub-section (1).

It is further proposed to substitute item (B) of sub-clause (ii) of clause (b) of sub-section
(1) of the said section to provide that where the Principal Commissioner or Commissioner
not so satisfied about the objects of the trust or institution and the genuineness of its activities
and compliance of the requirements, he shall pass an order in writing,––

(I) in a case referred to in sub-clause (ii) or sub-clause (iii) or sub-clause (v) of

clause (ac) of sub-section (1) of section 12A rejecting such application and also
cancelling its registration;

(II) in a case referred to in sub-clause (iv) or in item (B) of sub-clause (vi) of sub-
section (1) of section 12A, rejecting such application,

after affording a reasonable opportunity of being heard.

It is also proposed to substitute clause (c) of sub-section (1) of the said section to provide
that where the application is made under item (A) of sub-clause (vi) of clause (ac) of sub-
section (1) of section 12A or the application made under sub-clause (vi) of clause (ac) of
sub-section (1) of section 12A, as it stood immediately before its amendment vide the
Finance Act, 2023, pass an order in writing provisionally registering the trust or institution
for a period of three years from the assessment year from which the registration is sought,
and send a copy of such order to the trust or institution.

These amendments will take effect from 1st October, 2023.

It is also proposed to insert a new clause (g) to the Explanation to sub-section (4) of the
said section so as to provide that “specified violation” shall also include the case where the
application referred to in clause (ac) of sub-section (1) of section 12A is not complete or it
contains false or incorrect information.
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This amendment will take effect from 1st April, 2023.

Clause 10 of the Bill seeks to amend section 17 of the Income-tax Act relating to
“Salary”, “perquisite” and “profits in lieu of salary” defined.

It is proposed to insert a new sub-clause (ix) in clause (1) of the said section so as to
provide that the contribution made by the Central Government in the previous year to the
Agniveer Corpus Fund account of an individual enrolled in the Agnipath Scheme referred to
in section 80CCH shall be considered as salary of that individual.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

As per clause (2) of the said section, “perquisite”, inter alia, includes value of rent-free
accommodation or value of any accommodation provided to employees by the employer at
a concessional rate.

It is further proposed to amend sub-clause (i) and substitute sub-clause (ii) of clause
(2) of the said section so as to provide that the method of computation for the value of rent
free accommodation provided to the assessee by his employer and the value of any
accommodation provided to the assessee by his employer at a concessional rate shall be
computed in such manner as may be provided by rules.

It is also proposed to clarify that accommodation shall be deemed to have been

provided at a concessional rate if the value of accommodation computed in such manner as
may be provided by rules exceeds the rent recoverable from, or payable by, the assessee.

These amendments will take effect from 1st April, 2024 and will, accordingly, apply
in relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 11 of the Bill seeks to amend section 28 of the Income-tax Act relating to profits
and gains of business or profession.

Clause (iv) of the said section provides that the value of any benefit or perquisite,
whether convertible into money or not, arising from business or the exercise of a profession
shall be chargeable to income-tax under the head “Profits and gains of business or
profession”.

It is proposed to amend the said clause so as to apply to cases where benefit or perquisite
provided is in cash or in kind or partly in cash and partly in kind.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 12 of the Bill seeks to amend section 35D of the Income-tax Act relating to
amortisation of certain preliminary expenses.

Clause (a) of sub-section (2) of the said section includes expenditure in connection with
(i) preparation of feasibility report, (ii) preparation of project report, (iii) conducting
marketing survey or any other survey necessary for the business of the assessee; and (iv)
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engineering services related to the business of the assessee: within the scope of preliminary
expenses which are allowed to be amortised under sub-section (1). Proviso to the said clause
requires that the works regarding reports, surveys, etc., are to be carried out by the assessee
himself or by a concern which is approved in this behalf by the Board.

It is proposed to substitute the said proviso so as to provide that the assessee shall
furnish a statement containing the particulars of expenditure specified in this clause within
such period, to such income-tax authority, in such form and manner, as may be provided by
rules.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 13 of the Bill seeks to amend section 43B of the Income-tax Act relating to
certain deductions to be only on actual payment.

It is proposed to amend clause (da) of the said section, to substitute the expression “a
deposit taking non-banking financial company or systemically important non-deposit taking
non-banking financial company” with “such class of non-banking financial companies as
may be notified by the Central Government in the Official Gazette in this behalf”.

It is further proposed to insert a new clause (h) to the said section so as to provide that
any sum payable by the assessee to a micro or small enterprise beyond the time limit
specified in section 15 of the Micro, Small and Medium Enterprises Development Act, 2006
shall be allowed as deduction only on actual payment.

It is also proposed to amend the proviso to the said section so as to not allow the
deduction on accrual basis, if the amount is paid by due date of furnishing the return of
income in the case of micro or small enterprises.

It is also proposed to substitute clause (e) and clause (g) of Explanation 4 to define
the expressions “micro enterprise” and “small enterprise” for the purposes of the said
section.

These amendments will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 14 of the Bill seeks to amend section 43D of the Income-tax Act relating to
special provision in case of income of public financial institutions, public companies, etc.

It is proposed to amend the said section to substitute the expression “a deposit taking non-
banking financial company or a systemically important non-deposit taking non-banking
financial company” with “such class of non-banking financial companies as may be notified
by the Central Government in the Official Gazette in this behalf”.

It is further proposed to substitute clause (h) of the Explanation to the said section to define
the expression “non-banking financial company”.

These amendments will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.
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Clause 15 of the Bill seeks to amend section 44AB of the Income-tax Act relating to
audit of accounts of certain persons carrying on business or profession.

It is proposed to substitute the first proviso to provide that the provisions of the said
section shall not apply to a person, who declares profits and gains for the previous year in
accordance with the provisions of sub-section (1) of section 44AD or sub-section (1) of
section 44ADA, as the case may be.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 16 of the Bill seeks to amend section 44AD of the Income-tax Act relating to
special provision for computing profits and gains of business on presumptive basis.

The provisions of the said section, inter alia, provide for a presumption income scheme
for small businesses, under which a sum equal to eight per cent. or six per cent. of the total
turn over or gross receipts is deemed to be the profits and gains from business, in case of
certain assessees, that is, an individual, Hindu undivided family or a partnership firm other
than limited liability partnership, carrying on eligible business and having a turn over of two
crore rupees or less. If such assessee has claimed to have earned higher sum than that eight
per cent. or six per cent., then that higher sum is taxable.

Clause (b) of Explanation to the said section defines “eligible business” which can
avail the benefit of the provisions of the said section to mean any business except the
business of plying, hiring or leasing goods carriages referred to in section 44AE, whose total
turnover or gross receipts in the previous year does not exceed an amount of two crore
rupees.

It is proposed to insert two provisos to the said section to provide an increased

threshold limit of three crore rupees where the amount or aggregate of the amounts received
by the eligible assessee during the previous year, in cash, does not exceed five per cent. of
the total turnover or gross receipts of such previous year and also that the receipt of amount
or aggregate of the amounts by a cheque drawn on a bank or by a bank draft, which is not
account payee, shall be deemed to be the receipt in cash.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to assessment year 2024-2025 and subsequent assessment years.

Clause 17 of the Bill seeks to amend section 44ADA of the Income-tax Act relating to
special provision for computing profits and gains of profession on presumptive basis.

Sub-section (1) of the said section provides that notwithstanding anything contained in
sections 28 to 43C, in case of an assessee, being an individual or a partnership firm other
than a limited liability partnership, who is a resident in India, and 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 assessee 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 assessee, shall be
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deemed to be the profits and gains of such profession chargeable to tax under the head
“Profits and gains of business or profession”.

It is proposed to insert two provisos to the said sub-section to provide an increased

threshold limit of seventy-five lakh rupees where the amount or aggregate of the amounts
received by the assessee during the previous year, in cash, does not exceed five per cent. of
the total gross receipts of such previous year and also that the receipt of amount or aggregate
of amount by a cheque drawn on a bank or by a bank draft, which is not account payee, shall
be deemed to be receipt in cash.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 18 of the Bill seeks to amend section 44BB of the Income-tax Act relating to
special provision for computing profits and gains in connection with the business of
exploration, etc., of mineral oils.

Sub-section (1) of section 44BB of the Act provides that in the case of an assessee,
being a non-resident, engaged in the business of providing services or facilities in connection
with, or supplying plant and machinery on hire used, or to be used, in the prospecting for,
or extraction or production of, mineral oils, a sum equal to ten per cent. of the aggregate of
the amounts specified in sub-section (2) shall be deemed to be the profits and gains of such
business chargeable to tax under the head “Profits and gains of business or profession”.

It is proposed to insert a new sub-section (4) to provide that notwithstanding anything

contained in sub-section (2) of section 32 and sub-section (1) of section 72, where an
assessee declares profits and gains of business for any previous year in accordance with the
provisions of sub-section (1), no set off of unabsorbed depreciation and brought forward
loss shall be allowed to the assessee for such previous year.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 19 of the Bill seeks to amend section 44BBB of the Income-tax Act relating to
special provision for computing profits and gains of foreign companies engaged in the
business of civil construction, etc., in certain turnkey power projects.

Sub-section (1) of section 44BBB of the Act provides that in the case of an assessee,
being a foreign company, engaged in the business of civil construction or the business of
erection of plant or machinery or testing or commissioning thereof, in connection with a
turnkey power project approved by the Central Government in this behalf, a sum equal to
ten per cent. of the amount paid or payable (whether in or out of India) to the said assessee
or to any person on his behalf on account of such civil construction, erection, testing or
commissioning shall be deemed to be the profits and gains of such business chargeable to
tax under the head “Profits and gains of business or profession”.

It is proposed to insert a new sub-section (3) to provide that notwithstanding anything

contained in sub-section (2) of section 32 and sub-section (1) of section 72, where an
assessee declares profits and gains of business for any previous year in accordance with the
 164

provisions of sub-section (1), no set off of unabsorbed depreciation and brought forward
loss shall be allowed to the assessee for such previous year.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 20 of the Bill seeks to amend section 45 of the Income-tax Act relating to capital
gains.

Sub-section (5A) of the said section, inter alia, provides that on the capital gain arising
to an assessee, from the transfer of a capital asset, being land or building or both, under a
specified agreement, the capital gains shall be chargeable to income-tax as income of the
previous year in which the certificate of completion for the whole or part of the project is
issued by the competent authority. Further, for computing the capital gains amount on this
transaction, the full value of consideration shall be taken as the stamp duty value of his share,
as increased by the consideration received in cash.

It is proposed to include consideration received by cash or by a cheque or draft or by any

other mode shall be deemed to be full value of consideration of the capital asset as a result
of the transfer of the capital asset.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 21 of the Bill seeks to amend section 47 of the Income-tax Act relating to
transactions not regarded as transfers.

Clause (b) of the Explanation to clause (viiad) of the said section defines the term
"relocation" as transfer of assets of the original fund, or of its wholly owned special purpose
vehicle, to a resultant fund on or before the 31st day of March, 2023, where consideration
for such transfer is discharged in the form of share or unit or interest in the resulting fund in
the manner specified therein.

It is proposed to extend the said date for transfer of assets of the original fund, or of its
wholly owned special purpose vehicle, to a resultant fund in case of relocation from 31st
March, 2023 to 31st March, 2025.

It is further proposed to amend sub-clause (i) of clause (b) of the said Explanation to
clause (viiad) to give reference of the International Financial Services Centres Authority
(Fund Management) Regulations, 2022 in the definition of “resultant fund” of section 47 of
the Act.

These amendments will take effect from 1st April, 2023 and, will, accordingly apply
in relation to the assessment year 2023-2024 and subsequent assessment years.

It is proposed to insert a new clause (viid) in the said section so as to include conversion
of gold into Electronic Gold Receipt or Electronic Gold Receipt into gold which shall not
be regarded as transfer for the purposes of the said section.
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It is further proposed to define the expressions “Electronic Gold Receipt” and “Vault
Manager” to mean Electronic Gold Receipt and Vault Manager defined respectively in
clauses (h) and (l) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board
of India (Vault Managers) Regulations, 2021.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 22 of the Bill seeks to amend section 48 of the Income-tax Act relating to mode
of computation.

The said section, inter alia, provides that the income chargeable under the head “Capital
gains” shall be computed by deducting the cost of acquisition of the asset and the cost of
any improvement thereto from the full value of the consideration received or accruing as a
result of the transfer of such capital asset.

It is proposed to insert a proviso in clause (ii) of the said section so as to provide that the
cost of acquisition of the asset or the cost of improvement thereto shall not include the
deductions claimed on the amount of interest under clause (b) of section 24 or under the
provisions of Chapter VIA of the Act.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 23 of the Bill seeks to amend section 49 of the Income-tax Act relating to cost
with reference to certain modes of acquisition.

It is proposed to insert a new sub-section (10) so as to provide that the cost of acquisition
of Electronic Gold Receipt for the purpose of computing capital gain shall be deemed to be
the cost of gold in the hands of the person in whose name Electronic Gold Receipt is issued.

It is further proposed that the cost of acquisition of gold for the purpose of computing
capital gain shall be deemed to be the cost of Electronic Gold Receipt in the hands of such
person.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 24 of the Bill seeks to insert a new section 50AA in the Income-tax Act relating
to special provision for taxation of Market Linked Debentures.

It is proposed to insert a new section 50AA in the Income-tax Act to treat the full value
of the consideration received or accruing as a result of the transfer or redemption or maturity
of the “Market Linked Debentures” as reduced by the cost of acquisition of the debenture
and the expenditure incurred wholly or exclusively in connection with transfer or
redemption of such debenture, as capital gains arising from the transfer of a short term
capital asset.

It is further proposed to define the expression ‘Market linked Debenture’ to mean a

security by whatever name called, which has an underlying principal component in the form
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of a debt security and where the returns are linked to market returns on other underlying
securities or indices and includes any security classified or regulated as a Market Linked
Debenture by the Securities and Exchange Board of India.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 25 of the Bill seeks to amend section 54 of the Income-tax Act relating to profit
on sale of property used for residence.

Sub-section (1) of the said section, inter alia, allows deduction on the capital gains
arising from the transfer of long-term capital asset, being buildings or lands appurtenant
thereto, and being a residential house, if an assessee, within a period of one year before or
two years after the date on which the transfer took place, purchased one residential property
in India, or within a period of three years after that date, constructed one residential property
in India.

It is proposed to insert a third proviso to the said sub-section so as to provide that where
the cost of new asset exceeds ten crore rupees, the amount exceeding ten crore rupees shall
not be taken into account for the purposes of that sub-section.

It is further proposed to insert a proviso to provide that the amount of capital gain in
excess of rupees ten crores will not be taken into account for the purposes of sub-section
(2).

These amendments will take effect from 1st April, 2024 and shall accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 26 of the Bill seeks to amend section 54EA of the Income-tax Act relating to
capital gain on transfer of long-term capital assets not to be charged in the case of investment
in specified securities.

It is proposed to omit sub-section (3) of said section which is consequential due to the
omission of section 88.

This amendment will take effect from 1st April, 2023.

Clause 27 of the Bill seeks to amend section 54EB of the Income-tax Act relating to
capital gain on transfer of long-term capital assets not to be charged in certain cases.

It is proposed to omit sub-section (3) of the said section which is consequential due to
the omission of section 88.

This amendment will take effect from 1st April, 2023.

Clause 28 of the Bill seeks to amend section 54EC of the Income-tax Act relating to
capital gain not to be charged on investment in certain bonds.

It is proposed to omit clause (a) of sub-section (3) of the said section which is
consequential due to the omission of section 88.
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This amendment will take effect from 1st April, 2023.

Clause 29 of the Bill seeks to amend section 54ED of the Income-tax Act relating to
capital gain on transfer of certain listed securities or unit not to be charged in certain cases.

It is proposed to omit clause (a) of sub-section (3) of the said section which is
consequential due to the omission of section 88.

This amendment will take effect from 1st April, 2023.

Clause 30 of the Bill seeks to amend section 54F of the Income-tax Act relating to capital
gain on transfer of certain capital assets not to be charged in case of investment in residential
house.

Sub-section (1) of the said section, inter alia, allows deduction on the capital gains
arising from the transfer of long-term capital asset, not being a residential house, if an
assessee, within a period of one year before or two years after the date on which the transfer
took place purchased one residential property in India, or within a period of three years after
that date constructed one residential property in India.

It is proposed to insert a second proviso to the said sub-section so as to provide that

where the cost of new asset exceeds ten crore rupees, the amount exceeding ten crore rupees
shall not be taken into account for the purposes of that sub-section.

It is further proposed to insert a proviso to provide that the amount of net consideration
in excess of rupees ten crores will not be taken into account for the purposes of sub-section
(4).

These amendments will take effect from 1st April, 2024 and shall accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 31 of the Bill seeks to amend section 55 of the Income-tax Act relating to meaning
of “adjusted”, “cost of improvement” and “cost of acquisition”.

The provisions of the said section, inter alia, defines the expressions ‘cost of any
improvement’ and ‘cost of acquisition’ for the purposes of computing capital gains.
However, there are certain assets like intangible assets or any other right for which no
consideration has been paid for acquisition, and the transfer of which may result in
generation of any income or could be converted into any profit or gain, but the cost of
acquisition for such assets is not clearly defined as ‘nil’ in the present provision.

It is proposed to amend the said section to insert expression “or intangible asset or any
other right” in the definitions of “cost of any improvement” and “cost of acquisition”.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 32 of the Bill seeks to amend section 56 of the Income-tax Act relating to income
from other sources.
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Sub-section (2) of the said section provides for incomes that are chargeable to income-
tax under the head “Income from other sources”.

The provisions of clause (viib) of sub-section (2) of the said section, inter alia, provides
that where a company, not being a company in which the public are substantially interested,
receives, in any previous year, from any person being a resident, any consideration for issue
of shares that exceeds the face value of such shares, the aggregate consideration received
for such shares as exceeds the fair market value of the shares shall be chargeable to income-
tax under the head “Income from other sources”.

It is proposed to omit the words “being a resident” from the said clause (viib) so as to
cover all the investors within the ambit of the said clause of sub-section (2) of section 56,
irrespective of their residency.

It is further proposed to insert a new clause (xii) in the said sub-section (2) to provide
that income chargeable to income-tax under the head “income from other sources” shall also
include any sum received by a unit holder from a business trust which––

(a) is not in the nature of income referred to in clause (23FC) or clause (23FCA) of
section 10; and

(b) is not chargeable to tax under sub-section (2) of section 115UA.

It is also proposed to insert a proviso to the said clause (xii) of the said sub-section (2)
to provide that where the sum received by a unit holder from a business trust is for
redemption of unit or units held by him, the sum so received shall be reduced by the cost of
acquisition of the unit or units to the extent such cost does not exceed the sum received.

It is also proposed to insert clause (xiii) in the said sub-section (2) so as to provide that
where any sum is received, including the amount allocated by way of bonus, at any time
during a previous year, under a life insurance policy, other than the sum,––

(a) received under a unit linked insurance policy;

(b) being the income referred to in clause (iv),

which is not to be excluded from the total income of the previous year in accordance with
the provisions of clause (10D) of section 10, the sum so received as exceeds the aggregate
of the premium paid, during the term of such life insurance policy, and not claimed as
deduction in any other provision of the Act, computed in the manner as may be provided by
rules shall be chargeable to income-tax under the head “Income from other sources”.

It is also proposed to define the expression “unit linked insurance policy” for the
purposes of the said clause.

These amendments will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.
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Clause 33 of the Bill seeks to amend section 72A relating to carry forward and set off
of accumulated loss and unabsorbed depreciation allowance in amalgamation or demerger,
etc.

It is proposed to substitute clause (iii) of the Explanation to clause (d) of sub-section

(1) of the said section to provide that strategic disinvestment shall mean sale of shareholding
by the Central Government or any State Government or a public sector company in a public
sector company or in a company, which results in––

(a) reduction of its shareholding to below fifty-one per cent.; and

(b) transfer of control to the buyer.

It is further proposed to provide that the condition of reduction of its shareholding to

below fifty-one per cent. shall apply only in a case where shareholding of the Central
Government or the State Government or the public sector company was above fifty-one per
cent. before such sale of shareholding.

It is also proposed to provide that the requirement of transfer of control in relation to

such strategic disinvestment may be carried out by either the Central Government, or the
State Government or the public sector company or any two of them or all of them.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

Clause 34 of the Bill seeks to amend section 72AA of the Income-tax Act relating to
carry forward and set off of accumulated loss and unabsorbed depreciation allowance in
scheme of amalgamation in certain cases.

It is proposed to amend clause (i) of the said section to also allow carry forward of
accumulated losses and unabsorbed depreciation allowance in the case of amalgamation of
one or more banking company with any other banking institution or a company subsequent
to a strategic disinvestment, if such amalgamation takes place within five years of strategic
disinvestment.

It is further proposed to insert a new clause (via) in the Explanation to the said section
to define “strategic disinvestment” by giving reference to the meaning assigned to it in
clause (iii) of the Explanation to clause (d) of sub-section (1) of section 72A.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

Clause 35 of the Bill seeks to amend section 79 of the Income-tax Act relating to carry
forward and set off of losses in case of certain companies.

Sub-section (1) of the said section provides that where a change in shareholding has
taken place during the previous year in the case of a company, not being a company in which
the public are substantially interested, no loss incurred in any year prior to the previous year
shall be carried forward and set off against the income of the previous year, unless on the
last day of the previous year, the shares of the company carrying not less than fifty-one per
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cent. of the voting power were beneficially held by persons who beneficially held shares of
the company carrying not less than fifty-one per cent. of the voting power on the last day of
year or years in which the loss was incurred.

Proviso to sub-section (1) provides that even if the said condition is not satisfied in case
of an eligible start-up as referred to in section 80-IAC, the loss incurred in any year prior to
the previous year shall be allowed to be carried forward and set off against the income of
the previous year if all the shareholders of such company who held shares carrying voting
power on the last day of the year or years in which the loss was incurred, continue to hold
those shares on the last day of such previous year and such loss has been incurred during the
period of seven years beginning from the year in which such company is incorporated.

It is proposed to amend the said proviso so as to increase the period from seven years
to ten years.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

Clause 36 of the Bill seeks to amend section 80C of the Income-tax Act relating to
deduction in respect of life insurance premia, deferred annuity, contributions to provident
fund, subscription to certain equity shares or debentures, etc.

It is proposed to omit sub-section (7) of the said section which is consequential due to
the omission of section 88.

This amendment will take effect from 1st April, 2023.

Clause 37 of the Bill seeks to amend section 80CCC of the Income-tax Act relating to
deduction in respect of contribution to certain pension funds.

It is proposed to omit clause (a) of sub-section (3) of the said section which is
consequential due to the omission of section 88.

This amendment will take effect from 1st April, 2023.

Clause 38 of the Bill seeks to amend section 80CCD of the Income-tax Act relating to
deduction in respect of contribution to pension scheme of Central Government.

It is proposed to omit clause (a) of sub-section (4) of the said section which is
consequential due to the omission of section 88.

This amendment will take effect from 1st April, 2023.

Clause 39 of the Bill seeks to insert a new section 80CCH in the Income-tax Act
relating to deductions in respect of contribution to Agnipath Scheme.

It is proposed to insert a new section 80CCH to provide that where an assessee, being
an individual enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund
on or after 1st November, 2022, has in the previous year, paid or deposited any amount in
his account in the said Fund, he shall be allowed a deduction in the computation of his total
 171

income, of the whole of the amount so paid or deposited in accordance with the said Scheme;
and where the Central Government makes any contribution to the account in the Agniveer
Corpus Fund, the assessee shall be allowed a deduction in the computation of his total
income of the whole of the amount so contributed. It is further proposed to define the
expressions “Agnipath Scheme” and “Agniveer Corpus Fund” for the purposes of the said
section.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

Clause 40 seeks to amend section 80G in the Income-tax Act relating to deduction in
respect of donations to certain funds, charitable institutions, etc.

Sub-section (2) of the said section, inter alia, provides the names of the funds to which
any sum paid by the assessee in the previous year as donation is allowed as a deduction to
an extent of fifty per cent. of the amount so donated.

It is proposed to omit sub-clauses (ii), (iiic) and (iiid) of clause (a) of the said sub-section.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

First proviso to sub-section (5) of the said section, inter alia, provides for the time within
which institution or fund referred to in clause (vi) of the said sub-section is required to make
an application to the Principal Commissioner or Commissioner for approval.

It is proposed to substitute clause (iv) of the first proviso to sub-section (5) to provide
that the institution or fund, referred to in clause (vi) of the said sub-section, which is not
covered by clause (i), (ii) or (iii) of the said proviso, may make an application for approval,
where activities of the institution or fund have––

(A) not commenced, at least one month prior to the commencement of the previous year
relevant to the assessment year from which the said approval is sought;

(B) commenced and no income or part thereof of the said institution or fund has been
excluded from the total income on account of applicability of sub-clause (iv) or sub-clause
(v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 or section 11 or section
12 for any previous year ending on or before the date of such application, at any time after
the commencement of such activities.

Clause (ii) of the second proviso to sub-section (5) of the said section provides for the
procedure of granting approval by the Principal Commissioner or Commissioner where the
application has been made under clause (ii) or clause (iii) of the first proviso.

It is proposed to amend clause (ii) of the second proviso to sub-section (5) of the said
section so as to provide that where the application is made under the proposed sub-clause
(B) of clause (iv) of the first proviso, the Principal Commissioner or Commissioner shall
follow the procedure provided under clause (ii) of the second proviso.
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It is further proposed to substitute item (B) of sub-clause (b) of clause (ii) of the second
proviso to sub-section (5) of the said section so as to provide that if the Principal
Commissioner or Commissioner is not so satisfied, about the objects and the genuineness of
its activities under item (A) of sub-clause (a) of the said clause, and compliance of the
requirements under item (B) of sub-clause (a) of the said clause, pass an order in writing,––

(I) in a case referred to in clause (ii) or clause (iii) of the first proviso, rejecting such
application and also cancelling its approval; or

(II) in a case referred to in the proposed sub-clause (B) of clause (iv) of the first proviso,
rejecting such application.

after affording it a reasonable opportunity of being heard.

It is also proposed to amend clause (iii) of the second proviso of the said sub-section to
provide that where the application is made under sub-clause (A) of clause (iv) of the first
proviso or the application made under clause (iv) of the first proviso as it stood immediately
before its amendment vide the Finance Act, 2023, the Principal Commissioner or
Commissioner shall pass an order in writing granting approval to it provisionally for a period
of three years from the assessment year from which the approval is sought, and send a copy
of such order to institution or fund.

These amendments will take effect from 1st October, 2023.

Third proviso to sub-section (5) of the said section, inter alia, provides that time line
during which the order under the first proviso is required to be passed by the Principal
Commissioner or Commissioner.

It is proposed to amend the third proviso to sub-section (5) of the said section so as
substitute the reference of “first proviso” with “second proviso”.

This amendment will take effect from 1st April, 2023.

Clause 41 of the Bill seeks to amend section 80-IAC of the Income-tax Act relating
to special provision in respect of specified business.

The said section, inter alia, provides for a deduction of an amount equal to one
hundred per cent. of the profits and gains derived from an eligible business by an eligible
start-up for any three consecutive assessment years out of ten years, beginning from the year
of incorporation, at the option of the assessee subject to the conditions specified therein.

It is proposed to amend sub-clause (a) of clause (ii) of the Explanation to the said
section so as to extend the period of eligible start-ups before which they are to be
incorporated from “1st April, 2023” to “1st April, 2024”.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

Clause 42 of the Bill seeks to amend section 87 of the Income-tax Act relating to rebate
to be allowed in computing income-tax.
 173

It is proposed to omit reference of sections 88, 88A, 88B, 88C and 88D in sub-sections
(1) and (2) of the said section which is consequential in nature.

These amendments will take effect from 1st April, 2023.

Clause 43 of the Bill seeks to amend section 87A of the Income-tax Act relating to
rebate of income-tax in case of certain individuals.

The said section provides that an assessee, being an individual resident in India, whose
total income does not exceed five hundred thousand rupees, shall be entitled to a deduction,
from the amount of income-tax (as computed before allowing the deductions under this
Chapter) on his total income with which he is chargeable for any assessment year, of an
amount equal to hundred per cent. of such income-tax or an amount of twelve thousand and
five hundred rupees, whichever is less.

It is proposed to insert a proviso to the said section to provide that where the income-
tax payable on the total income of the assessee is computed under sub-section (1A) of section
115BAC, the said section shall have the effect as if,––

(i) for the words “five hundred thousand rupees”, the words “seven hundred thousand
rupees”;

(ii) for the words “twelve thousand and five hundred rupees”, the words “twenty-five
thousand rupees”,

had been substituted.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 44 of the Bill seeks to omit section 88 of the Income-tax Act relating to rebate
on life insurance premia, contribution to provident fund, etc.

It is proposed to omit the said section as it was sunset by Finance Act, 2005 and section
80C was introduced for allowing deduction on various instruments listed therein.

This amendment will take effect from 1st April, 2023.

Clause 45 of the Bill seeks to amend section 92BA of the Income-tax Act relating to
meaning of ‘specified domestic transaction’.

It is proposed to insert a new clause (vb) to the said section to include the transaction
between the cooperative society and the other person with close connection within the
meaning of ‘specified domestic transaction’. This is consequential to the insertion of new
section 115BAE.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.
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Clause 46 seeks to amend section 92D of the Income-tax Act relating to maintenance,
keeping and furnishing of information and document by certain persons.

Clause (i) of sub-section (1) of the said section provides that every person who has
entered into an international transaction or specified domestic transaction shall keep and
maintain such information and document in respect thereof as may be prescribed.

Sub-section (3) of said section provides that the Assessing Officer or the
Commissioner (Appeals) may, in the course of any proceeding under this Act, require any
person referred to in clause (i) of sub-section (1), to furnish any information or document
referred therein, within a period of thirty days from the date of receipt of a notice issued in
this regard. Proviso to sub-section (3) provides that the Assessing Officer or the
Commissioner (Appeals) may, on an application made by such person, extend the period of
thirty days by a further period not exceeding thirty days.

It is proposed to amend the said sub-section (3) and the proviso to reduce the said
period from thirty days to ten days for furnishing any information or document, extendable
by a further period of not exceeding thirty days.

This amendment will take effect from the 1st April, 2023.

Clause 47 of the Bill seeks to amend section 94B of the Income-tax Act relating to
limitation on interest deduction in certain cases.

The said section, inter alia, provides that notwithstanding anything contained in the
Act, where an Indian company, or a permanent establishment of a foreign company in India,
being the borrower, incurs any expenditure by way of interest or of similar nature exceeding
one crore rupees which is deductible in computing income chargeable under the head
"Profits and gains of business or profession" in respect of any debt issued by a non-resident,
being an associated enterprise of such borrower, the interest deductible in computation of
income under the said head shall be restricted only to the extent of thirty per cent., of its
earnings before interest, taxes, depreciation and amortisation or interest paid or payable to
associated enterprise, whichever is less.

It is proposed to amend sub-section (3) of the said section so as to provide that the
provision of said section shall not apply to such class of non-banking financial companies
as may be notified by the Central Government in the Official Gazette in this behalf.

It is further proposed to define the expression “non-banking financial company”.

These amendments will take effect from 1st April, 2024 and will, accordingly, apply
in relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 48 of the Bill seeks to amend section 111A of the Income-tax Act relating to
tax on short-term capital gains in certain cases.

It is proposed to omit sub-section (3) of the said section which is consequential due to
the omission of section 88.

This amendment will take effect from 1st April, 2023.

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Clause 49 of the Bill seeks to amend section 112 of the Income-tax Act relating to tax
on long-term capital gains.

It is proposed to omit sub-section (3) of the said section which is consequential due to
omission of section 88.

This amendment will take effect from 1st April, 2023.

Clause 50 of the Bill seeks to amend section 115BAC of the Income-tax Act relating to
tax on income of individuals and Hindu undivided family.

The provisions of the said section, inter alia, provides that 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 1st April, 2021,
shall, at the option of such person, be computed at the rate of tax given in the Table therein,
if the conditions contained in sub-section (2) are satisfied.

It is proposed to amend the marginal heading of the said section so as to provide that the
said section applies to tax on income of individuals, Hindu undivided family and others.

It is further proposed to insert a new sub-section (1A) in the said section so as to provide
that notwithstanding anything contained in this Act but subject to the provisions of Chapter
XII, the income-tax payable in respect of the total income of a person, being an individual
or Hindu undivided family or association of persons (other than a cooperative society), or
body of individuals, whether incorporated or not, or an artificial juridical person referred to
in sub-clause (vii) of clause (31) of section 2, other than a person who has exercised an
option under sub-section (6), for any previous year relevant to the assessment year beginning
on or after 1st April, 2024, shall be computed at the rate of tax given in the Table therein.

These amendments will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

It is also proposed to amend clause (i) of sub-section (2) of the said section to give
reference of sub-section (2) of section 80CCH therein to provide the benefit of concessional
tax regime to an individual enrolled in the Agnipath Scheme and subscribing to the Agniveer
Corpus Fund on or after 1st November, 2022.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

It is also proposed to amend sub-section (2) of the said section, inter alia, to provide that
for the purposes of sub-section (1A), the total income of the person referred to therein shall
be computed without any exemption or deduction under the provisions of clause (5) or
clause (13A) or prescribed under clause (14) (other than those as may be prescribed for this
purpose) or clause (17) or clause (32) of section 10 or section 10AA or clause (ii) or clause
(iii) of section 16 or clause (b) of section 24 [in respect of the property referred to in sub-
section (2) of section 23] or clause (iia) of sub-section (1) of section 32 or section 32AD or
section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of
sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or
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under any of the provisions of Chapter VI-A other than the provisions of sub-section (2) of
section 80CCD or sub-section (2) of section 80CCH or section 80JJAA.

It is also proposed to insert a second proviso in sub-section (3) of the said section so as
to provide that in a case where,––

(i) the assessee has not exercised the option under sub-section (5) for any previous
year relevant to the assessment year beginning on or before the 1st day of April, 2023;

(ii) the income-tax on the total income of the assessee is computed under sub-section
(1A); and

(iii) there is a depreciation allowance in respect of a block of assets which has not
been given full effect prior to the assessment year beginning on the 1st day of April,
2024,

corresponding adjustment shall be made to the written down value of such block of assets
as on 1st April, 2023 in the manner as may be prescribed.

It is also proposed to substitute sub-section (4) of the said section so as to provide that
in case of a person, having a Unit in the International Financial Services Centre, as referred
to in sub-section (1A) of section 80LA,––

(i) who has exercised option under sub-section (5) for any previous year relevant to
the assessment year beginning on or after 1st April, 2021 but before 1st April, 2024;

(ii) whose total income is computed under sub-section (1A),

the conditions contained in sub-section (2) shall be modified to the extent that the deduction
under section 80LA shall be available to such Unit subject to fulfilment of the conditions
contained in the said section.

It is also proposed to insert a proviso in sub-section (5) of the said section so as to provide
that the provisions of the sub-section shall not apply for any previous year relevant to the
assessment year beginning on or after 1st April, 2024, that is, a person, being an individual
or Hindu Undivided Family, shall not exercise the option for concessional rate of taxation
under sub-section (1) for any previous year relevant to the assessment year beginning on or
after 1st April, 2024.

It is also proposed to insert sub-section (6) in the said section so as to provide that nothing
contained in sub- section (1A) shall apply to a person where an option is exercised by such
person, in the manner as may be prescribed, for any assessment year, and where such option
is exercised––

(i) on or before the due date specified under sub-section (1) of section 139 for
furnishing the return of income for such assessment year, in case of a person having
income from business or profession, and such option once exercised shall apply to
subsequent assessment years; or
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(ii) along with the return of income to be furnished under sub-section (1) of section
139 for such assessment year, in case of a person not having income referred to in clause
(i).

However, the option under clause (i) of the said sub-section (6), once exercised for any
previous year can be withdrawn only once for a previous year other than the year in which
it was exercised and thereafter, the person shall never be eligible to exercise the option under
that sub-section, except where such person ceases to have any income from business or
profession in which case, option under clause (ii) of that sub-section shall be available.

These amendments will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 51 of the Bill seeks to amend section 115BAD of the Income-tax Act relating
to tax on income of certain resident co-operative societies.

The existing provisions of the section 115BAD of the Act, inter alia, provides a
concessional taxation regime for co-operative societies, wherein they can opt to pay tax at
the reduced rate of twenty-two per cent. if they do not avail of any specified incentives or
deductions.

It is proposed to make consequential amendments since new section 115BAE relating

to tax on income of new manufacturing co-operative societies is being inserted.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 52 of the Bill seeks to insert a new section 115BAE of the Income-tax Act
relating to tax on income of certain new manufacturing co-operative societies

The Taxation Laws (Amendment) Act, 2019, inter-alia, inserted section 115BAB to
Act which provides that new manufacturing domestic companies set up on or after 1st
October, 2019, which commence manufacturing or production by 31st March, 2023 and do
not avail of any specified incentive or deductions, may opt to pay tax at a concessional rate
of fifteen per cent. The time for commencing manufacturing or production has been
extended to 31st March, 2024 by the Finance Act, 2022. The same provision has not been
provided to new manufacturing co-operative societies.

It is proposed to insert a new section 115BAE so as to provide that new manufacturing

co-operative society set up on or after 1st April, 2023, which commence manufacturing or
production by 31st March, 2025 and do not avail of any specified incentive or deduction,
may opt to pay tax at a concessional rate of fifteen per cent.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 53 of the Bill seeks to amend section 115BB of the Income-tax Act relating to
tax on winnings from lotteries, crossword puzzles, races including horse races, card games
and other games of any sort or gambling or betting of any form or nature whatsoever.
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It is proposed to amend the said section to insert a proviso to provide that nothing
contained in said section shall apply to income by way of winnings from any online game
for the assessment year beginning on or after 1st April, 2024.

It is further proposed to substitute the Explanation to define the expression “horse race”
and “online game”.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 54 seeks to insert a new section 115BBJ in the Income-tax Act relating to tax
on winnings from online games.

The proposed section seeks to provide that notwithstanding anything contained in

any other provisions of this Act, where the total income of an assessee includes any income
by way of winnings from any online game, the income-tax payable shall be the aggregate
of—
(i) the amount of income-tax calculated on net winnings from such online games
during the previous year, computed in the manner as may be provided by rules, at the
rate of thirty per cent.; and

(ii) the amount of income-tax with which the assessee would have been chargeable
had his total income been reduced by the net winnings referred to in clause (i).

It is further proposed to define the expressions “computer resource”, “internet” and

“online game”.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply
in relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 55 of the Bill seeks to amend section 115JC of the Income-tax Act relating to
special provisions for payment of tax by certain persons other than a company.

It is proposed to amend sub-section (5) of the said section to provide that the provisions
of the said section shall not apply to a person, where––

(i) such person has exercised the option referred to in sub-section (5) of section
115BAC or sub-section (5) of section 115BAD or sub-section (5) of section 115BAE;
or

(ii) income-tax payable in respect of the total income of such person is computed
under sub-section (1A) of section 115BAC.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 56 of the Bill seeks to amend section 115JD of the Income-tax Act relating to tax
credit for alternate minimum tax.
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It is proposed to amend sub-section (7) of the said section to provide that the provisions
of the said section shall not apply to a person, where––

(i) such person has exercised the option referred to in sub-section (5) of section
115BAC or sub-section (5) of section 115BAD or sub-section (5) of section 115BAE; or

(ii) income-tax payable in respect of the total income of such person is computed under
sub-section (1A) of section 115BAC.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 57 seeks to amend section 115TD of the Income-tax Act relating to Tax on
accreted income.

It is proposed to insert a new clause (iii) in sub-section (3) of said section to provide that
a trust or institution registered under section 12AA or section 12AB or approved under sub-
clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section
10 shall be deemed to have been converted into any form not eligible for registration or
approval in a previous year, if the specified person fails to make an application in accordance
with the provisions of clause (i) or clause (ii) or clause (iii) of the first proviso to clause
(23C) of section 10 or sub-clause (i) or sub-clause (ii) or sub-clause (iii) of clause (ac) of
sub-section (1) of section 12A, within the period specified in the said clauses or sub-
clauses, as the case may be, which expires in the said previous year.

It is further proposed to amend clause (ii) of sub-section (5) of the said section to provide
that the principal officer or the trustee of the specified person or the specified person, as the
case may be, shall also be liable to pay the tax on accreted income to the credit of the Central
Government within fourteen days from the end of the previous year in a case referred to in
sub-clause (a) of clause (ii), or clause (iii) of sub-section (3) of the said section.

Clause (i) of Explanation to the section provides the definition of “date of conversion”
for the purposes of the said section.

It is also proposed to amend clause (i) of the said Explanation, which defines the
expression “date of conversion”, by inserting a new sub-clause (c) to the said clause to
provide that date of conversion shall also mean the last date for making an application for
registration under sub-clause (i) or sub-clause (ii) or sub-clause (iii) of clause (ac) of sub-
section (1) of section 12A or for making an application for approval under clause (i) or
clause (ii) or clause (iii) of the first proviso to clause (23C) of section 10, as the case may
be, in a case referred to in clause (iii) of sub-section (3).

These amendments will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

Clause 58 seeks to amend section 115UA of the Income-tax Act relating to tax on
income of unit holder and business trust.

It is proposed to insert sub-section (3A) in the said section to provide that the
provisions of sub- sections (1), (2) and (3) of the said section shall not apply in respect of
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any sum, referred to in clause (xii) of sub-section (2) of section 56, received by a unit holder
from a business trust.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply
in relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 59 of the Bill seeks to amend section 115UB of the Income-tax Act relating to
tax on income of investment fund and its unit holders

It is proposed to amend clause (a) of Explanation 1 to the said section to give reference
of the International Financial Services Centres Authority (Fund Management) Regulations,
2022 in the definition of “investment fund”.

This amendment will take effect from 1st April, 2023 and, will, accordingly apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

Clause 60 of the Bill seeks to amend section 116 of the Income-tax Act relating to
income-tax authorities.

It is proposed to consequentially amend clause (cca) of the said section to include

Joint Commissioners of Income-tax (Appeals) for the purposes of the said section.

This amendment will take effect from 1st April, 2023.

Clause 61 of the Bill seeks to amend section 119 of the Income-tax Act relating to
instructions to subordinate authorities.

It is proposed to consequentially amend the said section to substitute the expression

“Commissioner (Appeals)” with “Joint Commissioner (Appeals) or the Commissioner
(Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 62 of the Bill seeks to amend section 131 of the Income-tax Act relating to
power regarding discovery, production of evidence, etc.

It is proposed to consequentially amend the said section to substitute the expression

“Commissioner (Appeals)” with “Joint Commissioner (Appeals), Commissioner
(Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 63 of the Bill seeks to amend section 132 of the Income-tax Act relating to search
and seizure.

Sub-section (2) of said section provides that during the course of search, the authorised
officer may requisition the services of any police officer or any officer of the Central
Government to assist him for any of the action required to be performed during the course
of such search and it shall be duty of such officer to comply.
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It is proposed to substitute sub-section (2) of the said section so as to provide that the
authorised officer, during the course of search, may requisition the services of any police
officer or of any officer of the Central Government, or of both, or other person or entity, as
approved by the Principal Chief Commissioner or the Chief Commissioner, the Principal
Director General or the Director General, in accordance with the procedure as may be
provided by rules by the Board in this regard, to assist him for the purposes of the search
and it shall be the duty of such officer or person or entity to comply with such requisition.

Sub-section (9D) of said section provides that the authorised officer may take a
reference to a valuation officer for estimating the fair market value of the property and such
reference can be made during the search or within sixty days from the date of executing the
last authorisation for search.

It is further proposed to substitute sub-section (9D) of the said section to provide that,
the authorised officer, during the course of a search or within sixty days from the date of
the last authorisation, may make a reference to a Valuation Officer referred to in section
142A or any other person or entity or any valuer registered by or under any law for the time
being in force, as may be approved by the Principal Chief Commissioner, the Chief
Commissioner, the Principal Director General or the Director General, in accordance with
the procedure laid down by the Board in this regard, who shall estimate the fair market value
of the property in the manner as may be provided by rules, and submit a report of the
estimate to the authorised officer or the Assessing Officer, as the case may be, within sixty
days from the receipt of such reference.

These amendments will come into effect from 1st April, 2023.

It is also proposed to substitute Explanation 1 to the said section, so as to provide that

for the purposes of sub-sections (9A), (9B) and (9D), execution of an authorisation for
search shall be deemed to have been executed, in the case of search, on the conclusion of
search as recorded in the last panchnama drawn in relation to any person in whose case the
warrant of authorisation has been issued; and in the case of requisition under section 132A,
on the actual receipt of the books of account or other documents or assets by the authorised
officer.

This amendment will take effect retrospectively from 1st April, 2022.

Clause 64 of the Bill seeks to amend section 133 of the Income-tax Act relating to
power to call for information.

It is proposed to consequentially amend the said section to substitute the expression

“the Commissioner (Appeals)” with “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 65 of the Bill seeks to amend section 134 of the Income-tax Act relating to
power to inspect registers of companies.

It is proposed to consequentially amend the said section to substitute the expression

“the Commissioner (Appeals)” with “the Joint Commissioner (Appeals) or the
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Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 66 of the Bill seeks to amend the section 135A of the Income-tax Act, 1961
relating to faceless collection of information.

It is proposed to insert a second proviso in the said sub-section (2) of the said section
so as to provide that the Central Government may amend any direction issued under the
said sub-section on or before 31st March, 2022, by notification in the Official Gazette.

This amendment will take effect retrospectively from 1st April, 2022.

Clause 67 of the Bill seeks to amend the section 140B of the Income-tax Act relating
to tax on updated return.

Sub-section (4) of the said section provides that interest payable under section 234B
shall be computed on an amount equal to the assessed tax or the amount by which the
advance tax paid falls short of the assessed tax. Further, sub-clause (i) of clause (a) of the
said sub-section provides for reduction of advance tax which has been claimed in earlier
return of income.

It is proposed to amend the said sub-section to provide that interest payable under
section 234B shall be computed on an amount equal to the assessed tax as reduced by the
amount of advance tax, the credit for which has been claimed in the earlier return, if any.

These amendments will take effect retrospectively from 1st April, 2022.

Clause 68 of the Bill seeks to amend section 142 of the Income-tax Act relating to inquiry
before assessment.

Sub-section (2A) of the said section provides that if, at any stage of the proceedings
before him the Assessing Officer, having regard to the nature and complexity of the
accounts, volume of the accounts, doubts about the correctness of the accounts, multiplicity
of transactions in the accounts or specialised nature of business activity of the assessee, and
in the interests of revenue, is of the opinion that it is necessary, he may with the previous
approval of the Principal Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner, direct the assessee to get his accounts audited by an
accountant, and to furnish report as per rules.

It is proposed to amend the said sub-section (2A) so as to enable the Assessing Officer
to get the inventory of the assessee also valued by a cost accountant.

It is also proposed to insert an Explanation in the said section to define “cost accountant”
to mean a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost
and Works Accountants Act, 1959 and who holds a valid certificate of practice under sub-
section (1) of section 6 of the said Act.
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These amendments will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

Clause 69 of the Bill seeks to amend section 148 of the Income-tax Act relating to
issue of notice where income has escaped assessment.

The said section, inter alia, provides that before making the assessment,
reassessment or recomputation under section 147 of the Act, the Assessing Officer shall
serve on the assessee a notice requiring him to furnish within such period, as may be
specified in such notice, a return of his income or the income of any other person in respect
of which he is assessable.

It is proposed to amend the said section to provide that such return shall be furnished
in a period of three months from the end of the month in which such notice is issued, or
such further period as may be allowed by the Assessing Officer on the basis of an
application made in this regard by the assessee.

It is further proposed to insert a third proviso in the said section to provide that any return
of income, required to be furnished by an assessee under this section and furnished beyond
the period allowed shall not be deemed to be a return under section 139.

These amendments will take effect from 1st April, 2023.

Clause 70 of the Bill seeks to amend section 149 of the Income-tax Act relating to
time limit for notice.

It is proposed to amend sub-section (1) of the said section to insert the provisos after
the second proviso to provide that for cases referred to in clause (i), (iii) and (iv) of the
Explanation 2 to section 148 where a search is initiated under section 132 or a search
under section 132 for which the last of the authorisations is executed or requisition is made
under section 132A, after the 15th March of any financial year and the period for issue of
notice under section 148 expires on 31st March of such financial year, a period of fifteen
days shall be excluded for the purpose of computing the period of limitation as per this
section and the notice issued under section 148 in such case shall be deemed to have been
issued on the 31st March of such financial year.

The proposed fourth proviso provides that where the information as referred to in
Explanation 1 to section 148 emanates from a statement recorded or documents
impounded under section 131 or section 133A, as the case may be, on or before the 31st
March of a financial year, in consequence of, a search under section 132 which is initiated
or a search under section 132 for which the last of the authorisations is executed or a
requisition is made under section 132A, after the 15th March of such financial year, a
period of fifteen days shall be excluded for the purpose of computing the period of
limitation as per this section and the notice issued under clause (b) of section 148A in such
case shall be deemed to have been issued on the 31st March of such financial year.

It is also proposed to amend the sixth proviso in the said sub-section to provide that
where immediately after the exclusion of the period referred to in the fifth proviso, the
period of limitation available to the Assessing Officer for passing an order under clause
(d) of section 148A does not exceed seven days, such remaining period shall be extended
 184

to seven days and the period of limitation under this sub-section shall be deemed to be
extended accordingly.

These amendments will take effect from 1st April, 2023.

Clause 71 of the Bill seeks to amend the section 151 of the Income-tax Act relating to
sanction for issue of notice.

It is proposed to amend clause (ii) of the said section to provide that the specified
authority for the purposes of section 148 and section 148A shall be the Principal Chief
Commissioner or Principal Director General or Chief Commissioner or Director General,
if more than three years have elapsed from the end of the relevant assessment year.

It is further proposed to insert a proviso in the said section so as to provide that the
period of three years for the purposes of clause (i) shall be computed after taking into
account the period of limitation as excluded by the third or fourth or fifth provisos or
extended by the sixth proviso to sub-section (1) of section 149.

These amendments will take effect from 1st April, 2023.

Clause 72 of the Bill seeks to amend the section 153 of the Income-tax Act relating to
time limit for completion of assessment, reassessment and recomputation.

It is proposed to amend the third proviso to sub-section (1) to provide that the period of
nine months specified therein to pass an order of assessment shall be applicable only to the
assessment year commencing on 1st April, 2021.

It is further proposed to insert a new proviso, so that an order of assessment relating to

the assessment year commencing on or after 1st April, 2022 shall be passed within twelve
months from the end of the assessment year in which the income was first assessable.

It is also proposed to increase the said time limit to pass an order of assessment from
nine months to twelve months from the end of the financial year in which return under sub-
section (8A) of section 139 was furnished.

It is also proposed to amend sub-section (3) of the said section to provide that the
provisions of the said sub-section shall also be applicable to order under section 263 or
section 264, passed by the Principal Chief Commissioner or Chief Commissioner or
Principal Commissioner or Commissioner, as the case may be.

It is also proposed to insert a new sub-section (3A) in the said section to provide that
notwithstanding anything contained in sub-sections (1), (1A), (2) and (3) of the said section,
where an assessment or reassessment is pending on the date of initiation of search under
section 132 or making of requisition under section 132A, the period available for completion
of assessment or reassessment, as the case may be, under the said sub-sections (1), (1A), (2)
and (3) of the said section shall be extended by twelve months in a case where such search
is initiated under section 132 or such requisition is made under section 132A or in the case
of an assessee to whom any money, bullion, jewellery or other valuable article or thing
seized or requisitioned belongs to or in the case of an assessee to whom any books of account
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or documents seized or requisitioned pertains or pertain to, or any information contained

therein, relates to.

It is also proposed to amend sub-section (4) of the said section to provide that the
provisions thereof shall also be applicable to cases covered by sub-sections (1A) and (3A)
of section 153 of the Act.

It is also proposed to amend sub-section (5) of the said section to provide that the
provision of the said sub-section shall also be applicable to an order under section 263 or
section 264 passed by the Principal Chief Commissioner or Chief Commissioner or
Principal Commissioner or Commissioner, as the case may be.

It is also proposed to amend sub-section (6) of the said section to provide that nothing
contained in sub-section (1A) shall also apply to the classes of assessments, reassessments
and recomputation mentioned therein.

Clause (i) of the sub-section (6) of the said section provides that where the assessment,
reassessment or recomputation is made on the assessee or any person in consequence of or
to give effect to any finding or direction contained in an order under section 250, section
254, section 260, section 262, section 263, or section 264 or in an order of any court in a
proceeding otherwise than by way of appeal or reference under this Act, such assessment,
reassessment or recomputation shall be completed on or before the expiry of twelve months
from the end of the month in which such order is received or passed by the Principal
Commissioner or Commissioner, as the case may be.

It is also proposed to amend the said sub-section to provide that provisions of the said
sub-section shall also be applicable to an order under section 263 passed by the Principal
Chief Commissioner or Chief Commissioner.

It is also proposed to amend the first proviso to Explanation 1 of the said section so as
to also make it available to the period of limitation mentioned in sub-section (1A) of the
said section.

These amendments will take effect from 1st April, 2023.

It is also proposed to amend clause (iv) of Explanation 1 to the said section, so as to

exclude the period for inventory valuation through the cost accountant for the purposes of
computation of time limit.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in
relation to the assessment year 2023-2024 and subsequent assessment years.

Clause 73 of the Bill seeks to amend section 154 of the Income-tax Act relating to
rectification of mistake.

It is proposed to consequentially amend clause (b) of sub-section (2) of the said

section to substitute the expression “the Commissioner (Appeals)” with “the Joint
Commissioner (Appeals) or the Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

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Clause 74 of the Bill seeks to amend section 155 of the Income-tax Act relating to
other amendments.

Sub-section (11A) of the said section provides that where in the assessment for any
year, the deduction under section 10A or section 10B or section 10BA has not been allowed
on the ground that such income has not been or partly received in convertible foreign
exchange in India and subsequently such income or part thereof has been received in, or
brought into India, the Assessing Officer shall amend the order of assessment so as to allow
such deduction later.

It is proposed to amend the said sub-section to give reference of section 10AA to allow
the Assessing Officer to amend his assessment order later to provide deduction in respect of
any income or part thereof not received in, or brought into India, within prescribed time
limit, but has been subsequently realised.

This amendment will take effect from 1st April, 2024 and will, accordingly, apply in
relation to the assessment year 2024-2025 and subsequent assessment years.

It is proposed to insert a new sub-section (19) in the said section so as to provide that
where any deduction in respect of any expenditure incurred for the purchase of sugarcane
has been claimed by an assessee, being a co-operative society engaged in the business of
manufacture of sugar, and such deduction has been disallowed wholly or partly in any
previous year commencing on or before 1st April, 2014, the Assessing Officer shall, on the
basis of an application made by such assessee in this regard, recompute the total income of
such assessee for such previous year after allowing such deduction to the extent such
expenditure is incurred at a price which is equal to or less than the price fixed or approved
by the Government for that previous year, and the provisions of section 154 shall, so far as
may be, apply thereto, and the period of four years specified in sub-section (7) of section
154 shall be reckoned from the end of previous year commencing on the 1st April, 2022.

This amendment will take effect from 1st April, 2023.

It is proposed to insert a new sub-section (20) in the said section so as to provide that
where any income has been included in the return of income furnished by an assessee under
section 139 for any assessment year (herein referred to as the relevant assessment year) and
tax on such income has been deducted at source and paid to the credit of the Central
Government in accordance with the provisions of Chapter XVII-B in a subsequent financial
year, the Assessing Officer shall, on an application made by the assessee in the prescribed
form within a period of two years from the end of the financial year in which such tax was
deducted at source, amend the order of assessment or any intimation allowing credit of such
tax deducted at source in the relevant assessment year, and the provisions of section 154
shall, so far as may be, apply thereto and the period of four years specified in sub-section
(7) of that section shall be reckoned from the end of the financial year in which such tax has
been deducted. However, the credit of such tax deducted at source shall not be allowed in
any other assessment year.

This amendment will take effect from 1st October, 2023.

Clause 75 of the Bill seeks to amend section 158A of the Income-tax Act relating to
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procedure when assessee claims identical question of law is pending before High Court or
Supreme Court.

It is proposed to consequentially amend Explanation to the said section to substitute

the expression “the Commissioner (Appeals)” with “the Joint Commissioner (Appeals) or
the Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 76 of the Bill seeks to amend section 158AB of the Income-tax Act relating
to procedure where an identical question of law is pending before High Courts or Supreme
Court.

It is proposed to consequentially amend the said section to substitute the expression

“the Commissioner (Appeals)” with “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 77 of the Bill seeks to substitute section 170A of the Income-tax Act relating to
effect of order of tribunal or court in respect of business reorganisation.

The existing section provides that in case of business reorganisation where a return of
income has been filed by the successor under section 139 of the Act, such successor shall
furnish a modified return within six months from the end of the month in which such order
of business reorganisation was issued in accordance with limited to the said order.

The proposed sub-section (1) seeks to provide that notwithstanding anything contained
in section 139, in a case of business reorganisation, where prior to the date of order of a
High Court or tribunal or Adjudicating Authority, any return of income has been furnished
under the provisions of section 139 for any assessment year relevant to a previous year, by
an entity to which such order applies, the successor shall furnish, within a period of six
months from the end of the month in which the said order was issued, a modified return in
the form and manner, as may be provided by rules, in accordance with and limited to the
said order.

The proposed sub-section (2) seeks to provide that if proceedings of assessment or

reassessment for the relevant assessment year have been completed on the date of furnishing
of modified return under sub-section (1), the Assessing Officer shall pass an order
modifying the total income of the relevant assessment year in accordance with the order of
the business reorganisation and taking into account the modified return so furnished and it
is also proposed that if proceedings of assessment or reassessment for the relevant
assessment year are pending on the date of furnishing of modified return under sub-section
(1), the Assessing Officer shall pass an order assessing or reassessing the total income of
the relevant assessment year in accordance with the order of the business reorganisation
and taking into account the modified return so furnished.

The proposed sub-section (3) seeks to provide that unless otherwise provided, all other
provisions of the Income-tax Act shall apply to the assessment or reassessment made under
this section and in such cases, the tax shall be chargeable at the rate applicable to such
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assessment year.

The proposed Explanation seeks to define the expressions “business reorganisation” and
“successor” for the purposes of this section.

This amendment will take effect from 1st April, 2023.

Clause 78 of the Bill seeks to amend section 177 of the Income-tax Act relating to
association dissolved or business discontinued.

It is proposed to consequentially amend the said section to substitute the expression

“the Commissioner (Appeals)” with “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 79 of the Bill seeks to amend section 189 of the Income-tax Act relating to
firm dissolved or business discontinued.

It is proposed to consequentially amend sub-section (2) of the said section to

substitute the expression “the Commissioner (Appeals)” with “the Joint Commissioner
(Appeals) or the Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 80 of the Bill seeks to amend section 192A of the Income-tax Act relating to
payment of accumulated balance due to an employee.

The provisions of the said section provide for deduction of tax at the rate of ten per cent.
on payment of taxable component of accumulated balance due to an employee under the
Employees' Provident Fund Scheme, 1952. The second proviso to the said section provides
that any person entitled to receive any amount on which tax is deductible under the said
section shall furnish his Permanent Account Number to the person responsible for deducting
such tax, failing which tax shall be deducted at the maximum marginal rate.

It is proposed to omit the second proviso to the said section.

This amendment will take effect from 1st April, 2023.

Clause 81 of the Bill seeks to amend section 193 of the Income-tax Act relating to interest
on securities.

Clause (ix) of the proviso to the said section provides that no tax shall be deducted on
interest payable on any security issued by a company, where such security is in
dematerialised form and is listed on a recognised stock exchange in India in accordance with
the Securities Contracts (Regulation) Act, 1956 and the rules made thereunder.

It is proposed to omit the said clause.

This amendment will take effect from 1st April, 2023.

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Clause 82 of the Bill seeks to amend section 194B of the Income-tax Act relating to
winnings from lottery or crossword puzzle.

It is proposed to amend the said section so as to include winnings from gambling or

betting of any form or nature whatsoever within the ambit of section 194B and accordingly
proposed to amend the marginal heading.

It is further proposed to provide that deduction of tax under the said section shall be on
the amount or aggregate of the amounts exceeding ten thousand rupees during the financial
year.

These amendments will take effect from 1st April, 2023.

It is also proposed to insert a new proviso to provide that nothing contained in this
section shall apply to deduction of income-tax on winnings from any online game on or after
1st July, 2023 and also an Explanation to provide that “online game” shall have the meaning
assigned to it in clause (iii) of Explanation to the proposed section 115BBJ.

This amendment will take effect from 1st July, 2023.

Clause 83 of the Bill seeks to insert a new section 194BA in the Income-tax Act relating
to winnings from online game.

Sub-section (1) of the proposed section provides that notwithstanding anything

contained in any other provisions of this Act, any person responsible for paying to any
person any income by way of winnings from any online game during the financial year shall,
deduct income-tax on the net winnings in his user account, computed in the manner as may
be provided by rules, at the end of the financial year at the rates in force.

The proviso to the said sub-section provides that in a case where there is a withdrawal
from user account during the financial year, the income-tax shall be deducted at the time of
such withdrawal on net winnings comprised in such withdrawal, as well as on the remaining
amount of net winnings in the user account, computed in the manner as may be provided by
rules, at the end of the financial year.

Sub-section (2) of the proposed section provides that in a case where the net
winnings are wholly in kind or partly in cash and partly in kind but the part in cash is not
sufficient to meet the liability of deduction of tax in respect of whole of the net winnings,
the person responsible for paying shall, before releasing the winnings, ensure that tax has
been paid in respect of the net winnings.

Sub-section (3) of the proposed section provides that if any difficulty arises in giving
effect to the provisions of section 194BA, the Board may, with the prior approval of the
Central Government, issue guidelines for the purpose of removing the difficulty.

Sub-section (4) of the proposed section provides that every guideline issued by the
Board shall, as soon as may be after it is issued, be laid before each House of Parliament,
and shall be binding on the income-tax authorities and on the person liable to deduct income-
tax.
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It is also proposed to define the expressions “computer resource”, “internet”, “online

game”, “online gaming intermediary”, “user” and “user account”.

This amendment will take effect from 1st July, 2023.

Clause 84 of the Bill seeks to amend section 194BB of the Income-tax Act, 1961
relating to winning from horse race.

It is proposed to amend the said section so as to provide that deduction of tax under
section 194BB shall be on the amount or aggregate of the amounts exceeding ten thousand
rupees during the financial year.

This amendment will take effect from 1st April, 2023.

Clause 85 of the Bill seeks to amend section 194N of the Income-tax Act relating to
payment of certain amounts in cash.

The provisions of the said section provide that a banking company or a co-operative society
engaged in carrying on the business of banking or a post office, which is responsible for
paying any sum, being the amount or the aggregate of amounts, in excess of one crore rupees
in cash during the previous year to any person (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.

It is proposed to insert a third proviso in the said section so as to provide that where the
recipient is a co-operative society, the provisions of this section shall have effect, as if for
the words “one crore rupees” the words “three crore rupees” had been substituted.

This amendment will take effect from 1st April, 2023.

Clause 86 of the Bill seeks to amend section 194R of the Income-tax Act relating to
deduction of tax on benefit or perquisite in respect of business or profession.

Sub-section (1) of the said section provides that any person responsible for providing
to a resident, any benefit or perquisite, whether convertible into money or not, arising from
business or the exercise of a profession, by such resident, shall, before providing such benefit
or perquisite, as the case may be, to such resident, ensure that tax has been deducted in
respect of such benefit or perquisite at the rate of ten per cent. of the value or aggregate of
value of such benefit or perquisite.

It is proposed to insert a new Explanation 2 to the said section so as to clarify that the
provisions of sub-section (1) shall also apply to any benefit or perquisite, whether in cash or
in kind or partly in cash and partly in kind.

This amendment will take effect from 1st April, 2023.

Clause 87 of the Bill seeks to amend section 196A of the Income-tax Act relating to
income in respect of units of non-residents.
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Sub-section (1) of the said section provides for deduction of tax on payment of any
income to a non-resident, not being a company, or to a foreign company in respect of units
of a Mutual Fund specified under clause (23D) of the section 10 or from the specified
company referred to in the Explanation to clause (35) of the said section at the rate of twenty
per cent.

It is proposed to insert a proviso to the said sub-section so as to provide that where an

agreement referred to in sub-section (1) of section 90 or sub-section (1) of section
90A applies to the payee and if the payee has furnished a certificate referred to in sub-section
(4) of section 90 or sub-section (4) of section 90A, as the case may be, then, income-tax
thereon shall be deducted at the rate of twenty per cent. or at the rate or rates of income-tax
provided in such agreement for such income, whichever is lower.

This amendment will take effect from 1st April, 2023.

Clause 88 of the Bill seeks to amend section 197 of the Income-tax Act relating to
certificate for deduction at lower rate.

It is proposed to amend sub-section (1) of the said section to provide that the sums on
which tax is required to be deducted under section 194LBA shall also be eligible for
certificate for deduction at lower rate.

This amendment will take effect from 1st April, 2023.

Clause 89 of the Bill seeks to amend section 206AB of the Income-tax Act relating to
special provision for deduction of tax at source for non-filers of income-tax return.

Sub-section (3) of the said section defines “specified person” for the purpose of this
section to mean a person who has not furnished the return of income for the assessment year
relevant to the previous year immediately preceding the financial year in which tax is
required to be deducted. The proviso to the said sub-section excludes a non-resident from
the definition of specified person, if the non-resident does not have a permanent
establishment in India.

It is proposed to amend the said proviso to also exclude a person who is not required
to furnish the return of income for the assessment year relevant to the said previous year and
is notified by the Central Government in the Official Gazette in this behalf.

This amendment will take effect from 1st April, 2023.

Clause 90 of the Bill seeks to amend section 206C of the Income-tax Act relating to
tax collected at source from profits and gains from the business of trading in alcoholic liquor,
forest produce, scrap etc.

Sub-section (1G) of the said section, inter-alia, provides that every person being an
authorised dealer, who receives any amount, or an aggregate of amounts, of seven lakh
rupees or more in a financial year for remittance out of India under the Liberalised
Remittance Scheme of the Reserve Bank of India from a buyer, being a person remitting
such amount out of India; or being a seller of an overseas tour program package, who
receives any amount from a buyer, being the person who purchases such package, shall, at
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the time of debiting of the amount payable by the buyer to the account of 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.

It is proposed to amend the said sub-section (1G) so as to increase the rate of collection
of tax at source from “five per cent.” to “twenty per cent. if it is for a purpose other than for
education or medical treatment”.

It is further proposed to amend the first proviso to the said section to provide that
collection of tax at source is not applicable where amount or aggregate of amount is less
than seven lakh rupees is remitted for the purpose of education or medical treatment.

It is also proposed to amend the second proviso to provide that collection of tax at
source is applicable where amount or aggregate of amount in excess of seven lakh rupees is
remitted for the purpose of education or medical treatment.

These amendments will take effect from 1st July, 2023.

Clause 91 of the Bill seeks to amend section 206CCA of the Income-tax Act relating to
special provision for collection of tax at source for non-filers of income-tax return.

Sub-section (3) of the said section defines “specified person” to mean a person who has
not furnished the return of income for the assessment year relevant to the previous year
immediately preceding the financial year in which tax is required to be collected. The
proviso to said sub-section excludes a non-resident from the definition of specified person,
if the non-resident does not have a permanent establishment in India.

It is proposed to amend the said proviso to exclude a person who is not required to
furnish the return of income for the assessment year relevant to the said previous year and
is notified by the Central Government in the Official Gazette in this behalf.

This amendment will take effect from the 1st April, 2023.

Clause 92 of the Bill seeks to amend section 241A of the Income-tax Act relating to
withholding of refund in certain cases.

It is proposed to insert a new proviso in the said section to provide that the provisions
thereof shall not apply from 1st April, 2023.

This amendment will take effect from 1st April, 2023.

Clause 93 of the Bill seeks to amend section 244A of the Income-tax Act relating to
interest on refunds.

It is proposed to amend clause (a) of sub-section (1) of the said section to insert a proviso
to provide that where refund arises as a result of an order passed by the Assessing Officer
in consequence of an application made by the assessee under sub-section (20) of section
155, such interest shall be calculated at the rate of one-half per cent. for every month or part
of a month comprised in the period from the date of such application to the date on which
the refund is granted.
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This amendment will take effect from 1st October, 2023.

It is further proposed to insert a proviso to sub-section (1A) of the said section to

provide that where proceedings for assessment or reassessment are pending in respect of an
assessee, in computing the period for determining the additional interest payable to such
assessee under this sub-section, the period beginning from the date on which such refund is
withheld by the Assessing Officer in accordance with and subject to provisions of sub-
section (2) of section 245 and ending with the date on which such assessment or
reassessment is made shall be excluded.

This amendment will take effect from 1st April, 2023.

Clause 94 of the Bill seeks to substitute section 245 of the Income-tax Act with a new
section relating to set off and withholding of refunds in certain cases.

Sub-section (1) of the proposed section seeks to provide that where under any of the
provisions of this Act, a refund becomes due or is found to be due to any person, the
Assessing Officer or Commissioner or Principal Commissioner or Chief Commissioner or
Principal Chief Commissioner, as the case may be, may, in lieu of payment of the refund,
set off the amount to be refunded or any part of that amount, against the sum, if any,
remaining payable under this Act by the person to whom the refund is due, after giving an
intimation in writing to such person of the action proposed to be taken under this sub-
section.

Sub-section (2) of the proposed section seeks to provide that where a part of the refund
has been set off as per sub-section (1) or where no amount is set off, and refund becomes
due to a person, then, the Assessing Officer, having regard to the fact that proceedings of
assessment or reassessment are pending in such case and grant of refund is likely to
adversely affect the revenue, and for reasons to be recorded in writing and with the previous
approval of the Principal Commissioner or Commissioner, may withhold the refund till the
date of such assessment or reassessment.

This amendment will take effect from 1st April, 2023.

Clause 95 of the Bill seeks to amend the section 245D of the Income-tax Act relating
to procedure on receipt of an application under section 245C.

It is proposed to substitute clause (iv) of sub-section (9) of the said section so as to

provide that where the time-limit for amending any order or filing of rectification
application under sub-section (6B) of the said section expires on or after the 1st February,
2021, but before the 1st February, 2022, such time-limit shall be extended to 30th
September, 2023.

This amendment will take effect retrospectively from 1st February, 2021.

Clause 96 of the Bill seeks to amend the section 245MA of the Income-tax Act,
relating to Dispute Resolution Committee.

It is proposed to insert a second proviso in sub-section (4) of the said section so as

 194

to provide that the Central Government may amend any direction issued under sub-section
(4) of that section on or before 31st March, 2023, by notification in the Official Gazette.

This amendment will take effect from 1st April, 2023.

Clause 97 of the Bill seeks to amend the section 245R of the Income-tax Act relating
to procedure on receipt of application.

It is proposed to insert a new proviso in sub-section (10) of the said section so as to

provide that the Central Government may amend any direction issued under sub-section
(10) of that section on or before 31st March, 2023, by notification in the Official Gazette.

This amendment will take effect from 1st April, 2023.

Clause 98 of the Bill seeks to amend Chapter XX of the Income-tax Act relating to
appeals and revision.

It is proposed to amend the sub-heading of Chapter XX relating to appeals to enable

creation and functioning of Joint Commissioner (Appeals).

It is further proposed to substitute section 246 with a new section so as to provide for
appealable orders before Joint Commissioner (Appeals).

Sub-section (1) of the proposed section seeks to provide that any assessee aggrieved by
any of the following orders of an Assessing Officer (below the rank of Joint Commissioner)
may appeal to the Joint Commissioner (Appeals) against—

(i) (a) an order being an intimation under sub-section (1) of section 143, where the
assessee objects to the making of adjustments, or any order of assessment under sub-section
(3) of section 143 or section 144, where the assessee objects to the amount of income
assessed, or to the amount of tax determined, or to the amount of loss computed, or to the
status under which he is assessed;

(b) an order of assessment, reassessment or recomputation under section 147;

(c) an order being an intimation under sub-section (1) of section 200A;

(d) an order under section 201;

(e) an order being an intimation under sub-section (6A) of section 206C;

(f) an order under sub-section (1) of section of section 206CB;

(g) an order imposing a penalty under Chapter XXI; and

(h) an order under section 154 or section 155 amending any of the orders mentioned in
clauses (a) to (g).

The proviso to the said sub-section provides that where an order referred to under this
sub-section is passed by or with the approval of an income-tax authority above the rank of
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Deputy Commissioner, an appeal cannot be filed against such order under this section.

Sub-section (2) provides that where any appeal filed against an order referred to in sub-
section (1) is pending before the Commissioner (Appeals), the Board or an income-tax
authority so authorised by the Board in this regard, may transfer such appeal and any matter
arising out of or connected with such appeal and which is so pending, to the Joint
Commissioner (Appeals) who may proceed with such appeal or matter, from the stage at
which it was before it was so transferred.

Sub-section (3) provides that notwithstanding anything contained in sub-section (1) or

sub-section (2), the Board or an income-tax authority so authorised by the Board in this
regard, may transfer any appeal which is pending before a Joint Commissioner (Appeals)
and any matter arising out of or connected with such appeal and which is so pending, to the
Commissioner (Appeals) who may proceed with such appeal or matter, from the stage at
which it was before it was so transferred.

Sub-section (4) provides that where an appeal is transferred under the provisions of sub-
section (2) and sub-section (3), the appellant shall be provided an opportunity of being
reheard.

Sub-section (5) provides that for the purposes of disposal of appeal by the Joint
Commissioner (Appeals), the Central Government may make a scheme, by notification in
the Official Gazette, so as to dispose of appeals in an expedient manner with transparency
and accountability by eliminating the interface between the Joint Commissioner (Appeals)
and the appellant in the course of appellate proceedings to the extent technologically
feasible and direct that any of the provisions of this Act relating to jurisdiction and
procedure for disposal of appeals by Joint Commissioner (Appeals) shall not apply or shall
apply with such exceptions, modifications and adaptations as may be specified in the
notification.

Sub-section (6) provides that for the purposes of sub-section (1), the Board may specify
that the provisions of that sub-section shall not apply to any case or any class of cases.

It is also proposed to insert an Explanation to the proposed section defines “status” to

mean the category under which the assessee is assessed as “individual”, “Hindu undivided
family” and so on.

These amendments will take effect from 1st April, 2023.

Clause 99 of the Bill seeks to amend section 249 of the Income-tax Act relating to form
of appeal and limitation.

It is proposed to amend sub-section (1) of said section to insert Joint Commissioner

(Appeals) within the ambit of the said section.

It is further proposed to amend sub-section (3) and proviso to sub-section (4) of said
section to insert Joint Commissioner (Appeals) in the said sub-sections.

These amendments will take effect from 1st April, 2023.

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Clause 100 of the Bill seeks to amend section 250 of the Income-tax Act relating to
procedure in appeal.

It is proposed to amend the said section to make the provisions therein applicable
to the Joint Commissioner (Appeals) by inserting a reference to the Joint Commissioner
(Appeals) wherever the term the Commissioner (Appeals) occurs.

It is further proposed to substitute sub-section (6A) of the said section so as to

provide that in every appeal, the Joint Commissioner (Appeals) or the Commissioner
(Appeals), as the case may be, where it is possible, may hear and decide such appeal within
a period of one year from the end of the financial year in which such appeal is filed before
him under sub-section (1) or transferred to him under sub-section (2) or sub-section (3) of
section 246 or filed before him under sub-section (1) of section 246A, as the case may be.

These amendments will take effect from 1st April, 2023.

It is also proposed to insert a second proviso in sub-section (6C) of the said section
so as to provide that the Central Government may amend any direction issued under sub-
section (6C) of that section on or before 31st March, 2022, by notification in the Official
Gazette.

This amendment will take effect retrospectively from 1st April, 2022.

Clause 101 of the Bill seeks to amend section 251 of the Income-tax Act relating to
powers of the Commissioner (Appeals).

It is proposed to substitute the marginal heading of the said section to include the
Joint Commissioner (Appeals) also in the said heading.

It is further proposed to insert a new sub-section (1A) of the said section so as to

provide that in disposing of an appeal, the Joint Commissioner (Appeals) shall have
powers to confirm, reduce, enhance or annul the assessment in an appeal against an order
of assessment, confirm or cancel or vary an order so as either to enhance or to reduce the
penalty in an appeal against an order imposing a penalty, and in any other case, to pass
such orders in the appeal as he thinks fit.

It is also proposed to amend sub-section (2) and the Explanation to that section to
make the provisions therein applicable to the Joint Commissioner (Appeals) by inserting
a reference to the Joint Commissioner (Appeals) wherever the term “Commissioner
(Appeals)” occurs.

These amendments will take effect from 1st April, 2023.

Clause 102 of the Bill seeks to amend section 253 of the Income-tax Act relating to
appeals to the Appellate Tribunal.

Sub-section (1) of the said section details the types of orders passed under various
sections of the Income-tax Act against which an aggrieved assessee may appeal to the
Appellate Tribunal. It is proposed to amend clause (a) of the said sub-section to provide
that penalty orders passed by Commissioner (Appeals) under the sections 271AAB,
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271AAC and 271AAD shall also be appealable to the Appellate Tribunal.

It is proposed to amend sub-section (1) of the said section by inserting a new sub-clause
(aa) so as to provide that an order passed by a Joint Commissioner (Appeals) under section
154, section 250, section 270A, section 271, section 271A, section 271AAC, section
271AAD or section 271J shall be appealable before the Appellate Tribunal.

It is further proposed to amend clause (c) of the said sub-section to provide that an order
passed under section 263 by a Principal Chief Commissioner or Chief Commissioner or an
order passed under section 154 amending any such order shall also be appealable to the
Appellate Tribunal.

It is also proposed to amend sub-section (2) of the said section to make the provisions therein
applicable to the Joint Commissioner (Appeals) by substituting “Commissioner (Appeals)”
with “Joint Commissioner (Appeals) or Commissioner (Appeals)”.

It is also proposed to amend sub-section (4) of the said section to enable filing of
memorandum of cross-objections in all classes of cases against which appeal can be made
to the Appellate Tribunal.

These amendments will take effect from 1st April, 2023.

Clause 103 of the Bill seeks to amend section 264 of the Income-tax Act relating to
revision of other orders.

It is proposed to consequentially amend sub-section (4) of the said section to

substitute the expression “the Commissioner (Appeals)” with “the Joint Commissioner
(Appeals) or the Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 104 of the Bill seeks to amend section 267 of the Income-tax Act relating to
amendment of assessment on appeal.

It is proposed to consequentially amend the said section to substitute the expression

“the Commissioner (Appeals)” with “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 105 of the Bill seeks to amend the section 269SS of the Income-tax Act
relating to mode of taking or accepting certain loans, deposits and specified sum.

It is proposed to insert a third proviso in the said section so as to provide that in case
where a deposit is accepted by a primary agricultural credit society or a primary
cooperative agricultural and rural development bank from its member or a loan is taken
from a primary agricultural credit society or a primary cooperative agricultural and rural
development bank by its member, the limit of twenty thousand rupees shall be increased
to two lakh rupees.
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It is further proposed to substitute the clause (ii) of Explanation to the said section
so as to provide that "co-operative bank", “primary agricultural credit society” and
“primary co-operative agricultural and rural development bank” shall have the meanings
respectively assigned to them in Explanation to sub-section (4) of section 80P.

This amendment will take effect from 1st April, 2023.

Clause 106 of the Bill seeks to amend the section 269T of the Income-tax Act
relating to mode of repayment of certain loans or deposits.

It is proposed to insert a third proviso in the said section so as to provide that in case
where a deposit is paid by a primary agricultural credit society or a primary cooperative
agricultural and rural development bank to its member or a loan is repaid to a primary
agricultural credit society or a primary cooperative agricultural and rural development
bank by its member, the limit of twenty thousand rupees shall be increased to two lakh
rupees.

It is further proposed to substitute clause (ii) to Explanation to the said section so as

to provide that "co-operative bank", “primary agricultural credit society” and “primary co-
operative agricultural and rural development bank” shall have the meanings respectively
assigned to them in Explanation to sub-section (4) of section 80P.

This amendment will take effect from 1st April, 2023.

Clause 107 of the Bill seeks to amend section 270A of the Income-tax Act relating to
penalty for under-reporting and misreporting of income.

It is proposed to consequentially amend the said section to substitute the expression

“the Commissioner (Appeals)” with “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 108 of the Bill seeks to amend section 270AA of the Income-tax Act relating to
immunity from imposition of penalty, etc.

It is proposed to consequentially amend sub-section (6) of the said section by giving

reference to the appeal filed under section 246 before the Joint Commissioner (Appeals) to
make it applicable under the provisions of the said sub-section.

This amendment will take effect from 1st April, 2023.

Clause 109 of the Bill seeks to amend section 271 of the Income-tax Act relating to
failure to furnish returns, comply with notices, concealment of income, etc.

It is proposed to consequentially amend the said section to substitute the expression

“the Commissioner (Appeals)” with “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

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Clause 110 of the Bill seeks to amend section 271A of the Income-tax Act relating to
failure to keep, maintain or retain books of account, documents, etc.

It is proposed to consequentially amend the said section to substitute the expression

“the Commissioner (Appeals)” with “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 111 of the Bill seeks to amend section 271AAC of the Income-tax Act relating
to penalty in respect of certain income.

It is proposed to consequentially amend the said section to substitute the expression

“the Commissioner (Appeals)” with “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 112 of the Bill seeks to amend section 271AAD of the Income-tax Act relating
to penalty for false entry, etc., in books of account.

It is proposed to consequentially amend the said section to substitute the expression

“the Commissioner (Appeals)” with “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 113 of the Bill seeks to amend the section 271C of the Income-tax Act relating
to penalty for failure to deduct tax at source.

It is proposed to amend clause (b) of sub-section (1) of said section so as to provide

that a person shall be liable to pay penalty under that section for failure to ensure payment,
in addition to failure of payment, of whole or any part of tax as required under the
provisions.

It is further proposed to amend the said clause to provide that a person shall be liable
to pay, as penalty, a sum equal to the amount of tax which such person failed to ensure
payment of.

These amendments will take effect from 1st April, 2023.

It is also proposed to amend the said clause to give reference of sub-section (2) of
section 194BA.

This amendment will take effect from 1st July, 2023.

It is also proposed to amend the said clause to give reference of the first proviso to sub-
section (1) of section 194R and the proviso to sub-section (1) of section 194S therein.
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This amendment will take effect from 1st April, 2023.

Clause 114 of the Bill seeks to amend the section 271FAA of the Income-tax Act
relating to penalty for furnishing inaccurate statement of financial transaction or reportable
account.

The said section provides for imposition of penalty of fifty thousand rupees on a
person for furnishing inaccurate information in the statement of financial transaction or
reportable account.

It is proposed to amend the said section to provide that the income-tax authority
imposing penalty under the said section shall be the same as the income tax authority
prescribed under sub-section (1) of section 285BA.

It is further proposed to insert a new sub-section (2) in the said section to provide
that where in the case of a person, referred to in clause (k) of sub-section (1) of section
285BA, who is required to furnish a statement under that section (herein referred to as
reporting financial institution) provides inaccurate information in the statement and the
inaccuracy in such statement is due to false or inaccurate information furnished by the
holder or holders of the relevant reportable account or accounts, the income-tax authority
prescribed under sub-section (1) of section 285BA, shall direct that the reporting financial
institution shall, in addition to the penalty under sub-section (1), if any, pay a sum of five
thousand rupees for every inaccurate reportable account and the reporting financial
institution shall be entitled to recover the sum so paid on behalf of such reportable account
holder, or to retain out of any moneys that may be in its possession, or may come to it from
every such reportable account holder, an amount equal to the sum so paid.

This amendment will take effect from 1st April, 2023.

Clause 115 of the Bill seeks to amend section 271J of the Income-tax Act relating to
penalty for furnishing incorrect information in reports or certificates.

It is proposed to consequentially amend the said section to substitute the expression

“the Commissioner (Appeals)” with “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 116 of the Bill seeks to amend the section 274 of the Income-tax Act relating to
procedure.

It is proposed to insert a second proviso in sub-section (2B) of the said section so as to

provide that the Central Government may amend any direction issued under sub-section
(2B) of that section on or before 31st March, 2022, by notification in the Official Gazette.

This amendment will take effect retrospectively from 1st April, 2022.

Clause 117 of the Bill seeks to amend section 275 of the Income-tax Act relating to
bar of limitation for imposing penalties.
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It is proposed to consequentially amend the said section to substitute the expression

“the Commissioner (Appeals)” with “the Joint Commissioner (Appeals) or the
Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 118 of the Bill seeks to amend section 276A of the Income-tax Act relating to
failure to comply with the provisions of sub-sections (1) and (3) of section 178.

The said section provides for punishment for non-compliance of the provisions of sub-
sections (1) and (3) of section 178.

It is proposed to insert a second proviso to the said section so as to provide that no

proceeding shall be initiated under this section on or after 1st April, 2023.

This amendment will take effect from 1st April, 2023.

Clause 119 of the Bill seeks to amend the section 276B of the Income-tax Act relating
to failure to pay tax to the credit of Central Government under Chapter XII-D or XVII-B.

It is proposed to amend clause (a) of the said section so as to make it applicable if a

person fails to pay to the credit of the Central Government the tax deducted at source by
him as required by or under the provisions of Chapter XVII-B.

It is further proposed to substitute clause (b) of the said section to provide that failure
to pay tax or ensure payment of tax, to the credit of the Central Government as required by
or under sub-section (2) of section 115-O, the proviso to section 194B, the first proviso to
sub-section (1) of section 194R or the proviso to sub-section (1) of section 194S shall be
eligible for initiating proceedings under the section.

These amendments will take effect from 1st April, 2023.

It is also proposed to provide in the said clause that failure to pay tax or ensure payment
of tax, to the credit of Central Government as required under sub-section (2) of section
194BA shall be eligible for initiating proceedings under that section.

This amendment will take effect from 1st July, 2023.

Clause 120 of the Bill seeks to amend section 279 of the Income-tax Act relating to
prosecution to be at instance of Principal Chief Commissioner or Chief Commissioner or
Principal Commissioner or Commissioner.

It is proposed to consequentially amend sub-section (1) of the said section to

substitute the expression “Commissioner (Appeals)” with “Joint Commissioner (Appeals)
or Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 121 of the Bill seeks to amend section 287 of the Income-tax Act relating to
publication of information respecting assesses in certain cases.
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It is proposed to consequentially amend sub-section (2) of the said section to

substitute the expression “the Commissioner (Appeals)” with “the Joint Commissioner
(Appeals) or the Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Clause 122 of the Bill seeks to amend section 295 of the Income-tax Act relating to
power to make rules.

It is proposed to amend clause (eec) of sub-section (2) of the said section so as to

include the words “or inventory valuation” after the word “audit”.

It is further proposed to consequentially amend the clause (mm) of sub-section (2) of

said section to substitute the expression “the Commissioner (Appeals)” with “the Joint
Commissioner (Appeals) or the Commissioner (Appeals)”.

This amendment will take effect from 1st April, 2023.

Customs

Clause 123 seeks to amend section 25 of the Customs Act by inserting a new proviso
in sub-section (4A), so as to exclude certain categories of conditional exemption specified
therein from the purview of the said sub-section.

Clause 124 of the Bill seeks to amend section 127C of the Customs Act by inserting
a new sub-section (8A) therein to provide that an order under sub-section (5) shall be passed
within nine months from the date of making application under section 127B, and if no order
is passed within the said period, the settlement proceeding shall abate and the case shall be
reverted back to the adjudicating authority.

Customs Tariff

Clause 125 of the Bill seeks to amend sections 9, 9A and 9C of the Customs Tariff
Act so as to omit certain words therein and to clarify that the determination or review of
safeguard duty or of countervailing duty or of anti-dumping duty are to be done by an
authority in such manner as may be specified in the rules made under sections 8B, 9, 9A
and 9B of the said Act.

Clause 126 seeks to amend the First Schedule to the Customs Tariff Act, in the manner
specified in––

(a) the Second Schedule so as to revise the rates in respect of certain tariff items
with effect from the 2nd day of February, 2023;

(b) the Third Schedule with a view to revise the rates in respect of certain tariff
items, with effect from the date on which the Finance Bill, 2023 receives the assent of
the President.

(c) the Fourth Schedule so as to revise the entries in respect of certain tariff items
 203

with effect from 1st May,2023.

Clause 127 seeks to amend the Second Schedule to the Customs Tariff Act so as to
revise the entries in respect of certain tariff items in the manner specified in the Fifth
Schedule with effect from 1st May, 2023.

Central Goods and Services Tax

Clause 128 of the Bill seeks to amend clause (d) of sub-section (2) and clause (c) of
sub-section (2A) in section 10 of the Central Goods and Services Tax Act so as to remove
the restriction imposed on registered persons engaged in supplying goods through electronic
commerce operators from opting to pay tax under the composition levy.

Clause 129 of the Bill seeks to amend second and third provisos to sub-section (2) of
section 16 of the Central Goods and Services Tax Act to align the said sub-section with the
return filing system provided in the said Act.

Clause 130 of the Bill seeks to amend Explanation to sub-section (3) of section 17 of
the Central Goods and Services Tax Act so as to restrict availment of input tax credit in
respect of certain transactions specified in clause (a) of paragraph 8 of Schedule III of the
said Act, as may be provided by rules, by including the value of such transactions in the
value of exempt supply.

It also seeks to amend sub-section (5) so as to provide that input tax credit shall not be
available in respect of goods or services or both received by a taxable person which are
used or intended to be used for activities relating to his obligations under corporate social
responsibility referred to in section 135 of the Companies Act, 2013.

Clause 131 of the Bill seeks to substitute, with effect from the 1st day of July, 2017,
section 23 of the Central Goods and Services Tax Act relating to persons not liable for
registration so as to provide overriding effect to the said section over sub-section (1) of
section 22 and section 24 of the said Act.

Clause 132 of the Bill seeks to insert a new sub-section (5) in section 37 of the Central
Goods and Services Tax Act so as to provide a time limit of three years upto which the
details of outward supplies under sub-section (1) of the said section for a tax period can be
furnished by a registered person. It further seeks to empower the Government, on the
recommendation of the Council, to extend by notification, the said time limit for a registered
person or a class of registered persons, subject to certain conditions and restrictions.

Clause 133 of the Bill seeks to insert a new sub-section (11) in section 39 of the Central
Goods and Services Tax Act so as to provide a time limit of three years upto which the
return for a tax period can be furnished by a registered person. It further seeks to empower
the Government, on the recommendation of the council, to extend by notification, the said
time limit for a registered person or a class of registered persons, subject to certain
conditions and restrictions.

Clause 134 of the Bill seeks to insert a new sub-section (2) in section 44 of the Central
Goods and Services Tax Act so as to provide a time limit of three years upto which the
annual return under sub-section (1) of the said section for a financial year can be furnished
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by a registered person. It further seeks to empower the Government, on the recommendation

of the Council, to extend by notification, the said time limit for a registered person or a class
of registered persons, subject to certain conditions and restrictions.

Clause 135 of the Bill seeks to insert a new sub-section (15) in section 52 of the Central
Goods and Services Tax Act so as to provide a time limit of three years upto which the
statement under sub-section (4) of the said section for a month can be furnished by an
electronic commerce operator. It further seeks to empower the Government, on the
recommendation of the Council, to extend by notification, the said time limit for an operator
or a class of operators, subject to certain conditions and restrictions.

Clause 136 of the Bill seeks to amend sub-section (6) of section 54 of the Central
Goods and Services Tax Act by removing reference to the provisionally accepted input tax
credit so as to align the same with the present scheme of availment of self-assessed input
tax credit as per sub-section (1) of section 41 of the said Act.

Clause 137 of the Bill seeks to amend section 56 of the Central Goods and Services
Tax Act so as to provide by rules the manner of computation of period of delay for
calculation of interest on delayed refunds.

Clause 138 of the Bill seeks to insert a new sub-section (1B) in section 122 of the
Central Goods and Services Tax Act so as to provide for penal provisions applicable to
electronic commerce operators in case of contravention of provisions relating to supplies of
goods or services made through them by unregistered persons or composition taxpayers.

Clause 139 of the Bill seeks to amend sub-section (1) of section 132 of the Central
Goods and Services Tax Act so as to decriminalise offences specified in clauses (g), (j) and
(k) of the said sub-section and to increase the monetary threshold from one hundred lakh
rupees to two hundred lakh rupees for launching prosecution for the offences under the said
Act, except for the offences related to issuance of invoices without supply of goods or
services or both.

Clause 140 of the Bill seeks to amend first proviso to sub-section (1) of section 138 of
the Central Goods and Services Tax Act so as to exclude the persons involved in offences
relating to issuance of invoices without supply of goods or services or both from the option
of compounding of the offences under the said Act.

It further seeks to amend sub-section (2) so as to rationalise the amount for

compounding of various offences by reducing the minimum as well as maximum amount
for compounding.

Clause 141 of the Bill seeks to insert a new section 158A in the Central Goods and
Services Tax Act so as to provide for the manner and conditions for sharing of the
information furnished by the registered person in his application for registration or in his
return filed or in his statement of outward supplies, or the details uploaded by him for
generation of electronic invoice or E-way bill or any other details, as may be provided by
rules, on the common portal with such other systems, as may be notified.

Clause 142 of the Bill seeks to amend Schedule III of the Central Goods and Services
Tax Act to give retrospective applicability to paragraphs 7 and 8 and the Explanation 2 to
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the said Schedule with effect from the 1st day of July, 2017.

Integrated Goods and Services Tax

Clause 143 of the Bill seeks to amend clause (16) of section 2 of the Integrated Goods
and Services Tax Act, by omitting certain words therein, so as to restrict the meaning of the
term “non-taxable online recipient” to mean any unregistered person receiving online
information and database access or retrieval services located in the taxable territory. It
further seeks to clarify that the persons registered solely in terms of clause (vi) of section
24 of the Central Goods and Services Tax Act shall be treated as unregistered person for
the purpose of the said clause.
It also proposes to amend clause (17) of the said section by removing certain words
therein so as to remove the condition of “essentially automated” and “involving minimal
human intervention” from the said definition.

Clause 144 of the Bill seeks to omit the proviso to sub-section (8) of section 12 of the
Integrated Goods and Services Tax Act so as to remove the confusion regarding availment
of input tax credit and other matters.

Miscellaneous

Clauses 145 and 146 seek to amend the Government Savings Promotion Act, 1873.

It is proposed to substitute sub-section (4) of section 4A of the said Act to make a

provision for payment of eligible balance to the legal heir in case of death of the depositor
without nomination. It is, inter alia, proposed to include legal heir certificate also to be a
valid proof for payment of eligible balance to the person legally entitled. This is to simplify
and facilitate the process of payment of claim where no nomination had been made by the
depositor in the account exceeding such balance as may be provided in the rules.

It is further proposed to consequentially substitute clause (i) of sub-section (2) of section

15 of the said Act.

It is also proposed to amend the Schedule to incorporate new Savings Schemes notified
on or after 12th December, 2019.

Clauses 147 seek to amend the Indian Stamp Act, 1899.

It is proposed to amend the division D of article 47 of Schedule I of the said Act so as to

also exempt policies of life insurance issued under the Pradhan Mantri Jeevan Jyoti Bima
Yojana (PMJJBY) from the application of stamp duty.

Clause 148 of the Bill seeks to amend section 18A of the Securities Contracts
(Regulation) Act, 1956 relating to contracts in derivatives.

It is proposed to insert a new clause (ba) in the said section so as to provide that the
contract in derivatives issued by a Foreign Portfolio Investor in a International Financial
Service Centre regulated by the International Financial Service Centres Authority shall also
be legal and valid contracts and to define the expression “Foreign Portfolio Investor”.
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Clause 149 of the Bill seeks to substitute a new section for section 19 of the Central
Sales Tax Act so as to declare the Customs, Excise and Service Tax Appellate Tribunal
constituted under section 129 of the Customs Act as the Appellate Authority for settlement
of inter-State disputes falling under sections 6A and 9.

Clause 150 of the Bill seeks to omit section 24 of the Central Sales Tax Act in view of
the abolition of Authority for Advance Rulings.

Clause 151 of the Bill seeks to amend section 25 of the Central Sales Tax Act so as to
insert a new sub-section (3) therein to provide for transfer of pending proceedings before
the erstwhile Authority for Advance Rulings to the Authority referred to in section 19.

Clause 152 of the Bill seeks to amend sections 2 and 46 of the Prohibition of Benami
Property Transactions Act, 1988.

Clause (18) of section 2 provides the definition of High Court.

It is proposed to amend the said clause to provide that where the aggrieved party does
not ordinarily reside or carry on business or personally work for gain within the jurisdiction
of any High Court; and where the Government being the aggrieved party, any of the
respondents do not ordinarily reside or carry on business or personally work for gain within
the jurisdiction of any High Court, the High Court shall be the High Court within the
jurisdiction of which, the office of the Initiating Officer is located.

It is further proposed to amend sub-sections (1) and (1A) of section 46 to provide that
the aggrieved persons including the Initiating Officer shall file appeal against the order of
the Adjudicating Authority within a period of forty-five days from the date on which the
order was received by the Initiating Officer or by such person, instead of forty-five days
from the date of the order.

These amendments will take effect from 1st April, 2023.

Clause 153 seeks to amend the Seventh Schedule to the Finance Act, 2001, in the manner
specified in the Sixth Schedule so as to revise the rates in respect of certain tariff items with
effect from the 2nd February, 2023.

Clause 154 seeks to amend the Unit Trust of India (Transfer of Undertaking and Repeal)
Act, 2002.

Section 8 of the said provides for Administrator to vacate office.

Sub-section (1) of the said section, inter alia, provides that the Administrator shall,
immediately on redemption of all the schemes of the specified undertaking and the payment
of entire amount to investors shall vacate his office.

It is proposed to amend the said sub-section so as to provide that the Administrator shall,
immediately on redemption of all the schemes of the specified undertaking and the payment
of entire amount to investors or from such date as may be notified by the Central
Government in the Official Gazette, whichever is earlier, vacate his office.
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Section 13 of the Act pertains to tax exemption or benefit to continue to have effect.

Sub-section (1) of the said section provides that notwithstanding anything contained in
the Income-tax Act or any other enactment for the time being in force relating to tax or
income, profits or gains, no income-tax or any other tax shall be payable by the
Administrator in relation to the specified undertaking for the period beginning on the
appointed day and ending on 31st March, 2023, in respect of any income, profits or gains
derived, or any amount received in relation to the specified undertaking.

It is proposed to amend the said sub-section (1) so as to extend tax exemption to specified
undertaking from 31st March, 2023 to 30th September, 2023.

These amendments will take effect from the 1st April, 2023.
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MEMORANDUM REGARDING DELEGATED LEGISLATION

The provisions of the Bill, inter alia, empower the Central Government to issue
notifications and the Board to make rules for various purposes as specified therein.

Clause 10 of the Bill seeks to amend section 17 of the Income-tax Act relating to
“salary”, “perquisite” and “profits in lieu of salary” defined. Clause (2) of the said section
empowers the Board to make rules to provide for the manner of computation of the value of
accommodation provided by the employer to the employee.

Clause 12 of the Bill seeks to amend section 35D of the Income-tax Act relating to
amortisation of certain preliminary expenses.

Clause (a) of sub-section (2) empowers the Board to make rules to provide for the
form and manner and the period within which the assessee shall furnish statement of
expenditure to the income-tax authority.

Clause 32 of the Bill seeks to amend section 56 of the Income-tax Act relating to
income from other sources.

Clause (xiii) of sub-section (2) of the said section empowers the Board to make rules
for the manner of computation of the sum received which exceeds the aggregate of the
premium paid in a life insurance policy which shall be chargeable to income-tax under the
head ‘Income from other sources’.

Clause 50 of the Bill seeks to amend section 115BAC of the Income-tax Act relating
to tax on income of individuals and Hindu undivided family.

Second proviso to sub-section (3) of the said section empowers the Board to make
rules to provide for the manner of corresponding adjustment to the written down value of
block of assets.

Sub-section (6) of the said section, empowers the Board to make rules for opting out
of sub-section (1A) for the purpose of computation of tax on total income. It further
empowers the Board to make rules to provide for the manner of exercise of the option.

Clause 52 of the Bill seeks to insert a new section 115BAE of the Income-tax Act
relating to tax on income of certain new manufacturing co-operative societies.

(1) Sub-clause (iii) of clause (c) of sub-section (2) of the said section empowers the
Board to make rules to prescribe the manner of claiming depreciation under clause (iia) of
sub-section (1) of section 32.

(2) Sub-section (5) of the said section empowers the Board to make rules for the
manner of exercising the option to file return.

Clause 54 seeks to insert a new section 115BBJ in the Income-tax Act relating to tax
on winnings from online games.
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The proposed amendment seeks to empower the Board to make rules to provide the
manner of computation of the net winnings from online game during the previous year.

Clause 63 of the Bill seeks to amend section 132 of the Income-tax Act relating to
search and seizure.

Sub-section (2) of the said section empowers the Board to make rules to provide the
procedure for approval of any person or entity, for providing assistance to the authorised
officer for all or any action under sub-section (1) or (1A) of section 132.

Clause (iii) of sub-section (9D) empowers the Board to make rules to provide
procedure for approval for making reference to any other person or entity or any valuer
registered by or under any law for the time being in force, for the purposes of search or
seizure. It is further empowers the Board to make rules to provide for the manner of
estimation of the fair market value of the property, for the purposes of search or seizure.

Clause 74 of the Bill empowers the Board to make rules to provide the form of
application to be made by the assessee under sub-section (20) of section 155.

Clause 83 of the Bill seeks to insert a new section 194BA in the Income-tax Act
relating to winnings from online game.

Sub-section (1) of the proposed section seeks to empower the Board to provide for
the manner of computation of deduction of income-tax on the net winnings from online
games while paying income to any person. It further empowers the Board to make rules to
provide for the manner of computation to deduct the income-tax at the time of withdrawal
of the net winnings.

Indirect-tax

Clause 130 of the Bill seeks to amend the Explanation in sub-section (3) of section
17 of the Central Goods and Services Tax Act which clarifies that the expression “value of
exempt supply” shall not include the value of activities or transactions specified in Schedule
III except certain activities or transactions specified therein. Clause (ii) of the said
Explanation empowers the Government to specify by rules the value of such activities or
transactions in respect of clause (a) of paragraph 8 of Schedule III which are so excepted.

Clause 137 of the Bill seeks to amend section 56 of the Central Goods and Services
Tax Act by substituting certain words therein which empowers the Government to provide
by rules the manner of computing the interest in respect of refund payable for the period of
delay beyond sixty days from the date of receipt of application till the date of refund, subject
to the conditions and restrictions specified therein.

Clause 141 of the Bill seeks to insert a new section 158A in the Central Goods and
Services Tax Act relating to consent based sharing of information furnished by taxable
person. Sub-section (1) of the said section empowers the Government to provide by rules
the details to be shared and the manner in which and the conditions subject to which the
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details may be shared by the common portal with such other systems notified by the
Government.

Sub-section (2) of the said section empowers the Government to provide by rules the
form and manner in which the consent of the supplier and the recipient specified therein shall
be obtained.

Miscellaneous

Clauses 145 to 146 seek to amend the Government Savings Promotion Act, 1873.

Sub-section (4) of section 4A empowers the Central Government to make rules to

provide for payment of the exceeding balance where no nomination had been made by the
depositor.

2. The matters in respect of which rules may be made or notifications or order may be
issued in accordance with the provisions of the Bill are matters of procedure and detail and
it is not practicable to provide for them in the Bill itself.

3. The delegation of legislative power is, therefore, of a normal character.

 LOK SABHA

_________________________

BILL

to give effect to the financial proposals of the Central Government

for the financial year 2023-2024.

_________________________

(Smt. Nirmala Sitharaman,

Minister of Finance.)