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Circular 1/2015 : ​Explanatory notes to the provisions of the Finance(No.2) Act, 2014​
January, 27th 2015
                                             CIRCULAR NO. 01/2015
               F. No. 142/13/2014-TPL
                Government of India
                Ministry of Finance
              Department of Revenue
           (Central Board of Direct Taxes)
                       *******

                                      Dated, the 21st January, 2015




    EXPLANATORY NOTES TO THE 
         PROVISIONS OF THE 
      FINANCE(No.2) ACT, 2014 




                     Page 1 of 59 
 
                                CIRCULAR

                             INCOME-TAX ACT

Finance (No.2) Act, 2014  Explanatory Notes to the Provisions of the Finance
(No.2) Act, 2014


            CIRCULAR NO. -01/2015, DATED 21st JANUARY, 2015

                       AMENDMENTS AT A GLANCE

Section/Schedule         Particulars/Paragraph number

                         Finance (No.2) Act, 2014

First Schedule           Rate Structure, 3.1 - 3.4

                         Income-tax Act, 1961

2                        Characterisation of Income in case of Foreign
                         Institutional Investors, 4.1 - 4.3; Long-term Capital
                         Gains on debt oriented Mutual Fund and its qualification
                         as Short-term capital asset, 5.1 - 5.3.
10                       Clarification in respect of section 10(23C), 6.1 - 6.4.
11                       Rationalisation of taxation regime in the case of
                         charitable trusts and institutions, 7.1 - 7.6.
12A                      Applicability of the registration granted to a trust or
                         institution to earlier years, 8.1 - 8.6.
12AA                     Cancellation of registration of the trust or institution in
                         certain cases, 9.1 - 9.5.
24                       Deduction from income from house property, 10.1-
                         10.3.
32AC                     Investment Allowance to a Manufacturing Company,
                         11.1 - 11.4.

35AD                     Deduction in respect of capital expenditure on specified
                         business, 12.1 - 12.10.

37                       Corporate Social Responsibility (CSR), 13.1 - 13.4.

40                       Disallowance of expenditure for non- deduction of tax at
                         source, 14.1 - 14.8.

43                       Speculative transaction in respect of commodity
                         derivatives, 15.1 - 15.3.
44AE                     Business of Plying, Hiring or Leasing Goods Carriages,
                         16.1 - 16.2.


                                 Page 2 of 59 
 
45                        Capital gains arising from transfer of an asset by way of
                          compulsory acquisition, 17.1 -17.4.
47                        Transfer of Government Security by one non-resident to
                          another non-resident, 18.1 - 18.3.
48                        Cost Inflation Index, 19.1 - 19.3.
54                        Capital gains exemption in case of investment in a
                          residential house property, 20.1 - 20.5.
54EC                      Capital gains exemption on investment in Specified
                          Bonds, 21.1 - 21.4.
56                        Taxability of advance for transfer of a capital asset,
                          22.1 - 22.6.

73                        Losses in Speculation Business, 23.1 - 23.3.
80C                       Raising the limit of deduction under section 80C, 24.1-
                          24.4.

80CCD                     Extension of tax benefits under section 80CCD to
                          private sector employees, 25.1 - 25.3.

80-IA                     Extension of the sunset date under section 80-IA for the
                          power sector, 26.1 - 26.3.

92B                       Rationalisation of the definition of International
                          Transaction, 27.1 - 27.4.
92C                       Providing for use of range concept in determination of
                          Arm's Length Price, 28.1 - 28.4.

92CC                      Roll back provision in Advance Pricing Agreement
                          Scheme, 29.1 - 29.4.
112                       Tax on long-term capital gains on units, 30.1 - 30.3.
115BBC                    Anonymous donations under section 115BBC, 31.1-
                          31.4.
115BBD                    Reduction in tax rate on certain dividends received from
                          foreign companies, 32.1 - 32.3.

115JC                     Alternate Minimum Tax, 33.1 - 33.4.

115JEE                    Credit of Alternate Minimum Tax, 34.1 ­ 34.3.

115-O                     Dividend Distribution Tax, 35.1 - 35.8

115R                      Income Distribution Tax, 35.1 - 35.8.

Chapter XII-FA consisting Taxation Regime for Real Estate Investment Trust
of section 115UA          (REIT) and Infrastructure Investment Trust (Invit),
                          36.1 - 36.5.
116                       Income-tax Authorities, 37.1 - 37.3.


                                  Page 3 of 59 
 
119     Enabling CBDT to relax provisions relating to levy of fee
        under section 234E, 38.1 - 38.4.
133A    Power of Survey, 39.1 - 39.5.
133C    Inquiry by prescribed income-tax authority, 40.1- 40.2.
139     Mutual Funds, Securitisation Trusts and Venture
        Capital Companies or Venture Capital Funds to file
        return of income, 41.1 - 41.5.
140     Signing and verification of return of income,
        42.1 - 42.3.
142A    Estimate of value of assets by Valuation Officer and
        time limit for completion of assessments where
        reference made, 43.1 - 43.6.
145     Income Computation and Disclosure Standards, 44.1-
        44.4.

153C    Assessment of income of a person other than the
        person who has been searched, 45.1- 45.3.
194DA   Tax deduction at source from non-exempt payments
        made under life insurance policy, 46.1 - 46.3.

194LC   Concessional rate of tax on overseas borrowing, 47.1-
        47.6.
200     Tax Deduction at Source, 48.1- 48.4.

200A    Tax Deduction at Source, 48.1- 48.4.

201     Tax Deduction at Source, 48.1- 48.4.

220     Interest payable by the assessee under section 220,
        49.1- 49.4.

245A    Enlarging the scope of Settlement Commission, 50.1-
        50.3.
245N    Enlarging the scope of Authority for Advance Rulings,
        51.1- 51.5.
245-O   Expansion of Authority for Advance Rulings, 51.1-51.5.
269SS   Mode of acceptance of loans and deposits, 52.1- 52.3.
269T    Mode of repayment of loans and deposits, 52.1- 52.3.
271G    Levy of Penalty under section 271G by Transfer Pricing
        Officers, 53.1 - 53.4.
276D    Failure to produce accounts and documents, 54.1-54.3.
281B     Provisional attachment under section 281B, 55.1-55.3.
285BA   Obligation to furnish statement of Information, 56.1-
        56.7.
        Unit Trust of India (Transfer of Undertaking and

                Page 4 of 59 
 
                            Repeal) Act, 2002
13                          Extension of income-tax exemption to Specified
                            Undertaking of Unit Trust of India (SUUTI), 57.1 - 57.3.
 

1.   Introduction

1.1 The Finance (No.2) Act, 2014 (hereafter referred to as `the Act') as passed by
the Parliament, received the assent of the President on the 6th day of August, 2014
and has been enacted as Act No. 25 of 2014. This circular explains the substance of
the provisions of the Act relating to direct taxes.


2. Changes made by the Act

2.1 The Act has-

(i) specified the rates of income-tax for the assessment year 2014-15 and the rates
of income-tax on the basis of which tax has to be deducted at source and advance
tax has to be paid during financial year 2014-15.

(ii) amended sections 2,10, 10AA, 11, 12A, 12AA, 24, 32AC, 35AD, 37, 40, 43,
44AE, 45, 47, 48, 49, 51, 54, 54EC, 54F, 56, 73, 80C, 80CCD, 80CCE, 80-IA, 92B,
92C, 92CC, 111A, 112, 115A, 115BBC, 115BBD, 115JC, 115JEE, 115-O, 115R,
115TA, 116, 119, 133A, 139, 140, 145 153, 153B, 153C, 194A, 194LC, 200, 200A,
201, 206AA, 220, 245A, 245N, 245-O, 269SS, 269T, 271FA, 271G, 271H, 276D and
281B of the Income-tax Act, 1961;

(iii) Substituted new sections for sections 142A and 285BA;

(iv) inserted new sections 133C, 142A, 194DA, 194LBA and 271FAA in the Income-
tax Act, 1961;

(v) inserted Chapter XII-FA consisting of section 115UA in the Income-tax Act, 1961;

(vi) amended sections 22A of the Wealth-tax Act, 1957;

(vii) amended sections 97 and 98 of the Finance (No.2) Act, 2004;

(viii) amended section 13 of the Unit Trust of India (Transfer of Undertaking and
Repeal) Act, 2002.









3.   Rate structure

                                     Page 5 of 59 
 
3.1 Rates of income-tax in respect of incomes liable to tax for the assessment
year 2014-15

3.1.1 In respect of income of all categories of assessees liable to tax for the
assessment year 2014-15, the rates of income-tax have been specified in Part I of
the First Schedule to the Act. These rates are the same as those laid down in Part III
of the First Schedule to the Finance Act, 2013 for the purposes of computation of
"advance tax", deduction of tax at source from "Salaries" and charging of tax payable
in certain cases during the financial year 2013-14.

The main features of the rates specified in the said Part I are as follows:


3.1.2 Individual, Hindu undivided family, association of persons, body of
individuals or artificial juridical person. ­

Paragraph A of Part I of the First Schedule specifies the rates of income-tax in the
case of every individual, Hindu undivided family, association of persons, body of
individuals or artificial juridical person (other than a co-operative society, firm, local
authority and company) as under:-



       Income                                    Rate of income- tax
       chargeable to tax
                             Individual    (other      Individual,          Individual
                             than senior and           resident in India    resident        in
                             very senior citizen       who is of the age    India, who is of
                             resident in India),       of sixty years or    the    age      of
                             HUF, association          more but less        eighty years or
                             of persons, body of       than eighty years.   more.       (very
                             individuals      and      (senior citizen)     senior citizen)
                             artificial  juridical
                             person.
       Up to Rs.             Nil
       2 ,00,000
                                                       Nil
       Rs. 2,00,001 - Rs.
       2,50,000                                                             Nil

       Rs. 2,50,001 - Rs. 10%                          10%
       5,00,000

       Rs. 5,00,001 - Rs. 20%                          20%                  20%
       10,00,000

       Exceeding       Rs. 30%                         30%                  30%
       10,00,000


                                       Page 6 of 59 
 
The amount of income-tax so computed shall be increased by a surcharge at the
rate of ten percent. of such income-tax in case of a person having a total income
exceeding one crore rupees. However, marginal relief shall be available so the total
amount payable as income-tax and surcharge on total income exceeding one crore
rupees 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.

The Education Cess on income-tax shall continue to be levied at the rate of two per
cent on the amount of tax computed inclusive of surcharge. In addition, the amount
of tax computed shall be further increased by an additional surcharge called
Secondary and Higher Education Cess on income-tax at the rate of one per cent of
such income-tax inclusive of surcharge.

No marginal relief shall be available in respect of Education Cess and Secondary
and Higher Education Cess.

For instance, if the income of an individual is Rs. 1,01,00,000 and income-tax
computed is Rs. 28,60,000. Surcharge on the income-tax at the rate of 10% of such
tax is Rs. 2,86,000. Thus the total income-tax inclusive of surcharge is Rs. 31,46,000
without providing marginal relief. On providing marginal relief, the income-tax
inclusive of surcharge shall be limited to Rs. 29,60,000. Then the education cess of
two per cent is to be computed on Rs. 29,60,000 which works out to Rs. 59,200. In
addition, the amount of tax computed shall also be increased by an additional cess
called Secondary and Higher Education Cess on income-tax at the rate of one per
cent of such income-tax which for the present case of income-tax of Rs. 29,60,000
works out to be Rs. 29,600. Thus, where the amount of tax computed is Rs.
29,60,000, the Education Cess of two per cent is Rs. 59,200, the Secondary and
Higher is Rs. 29,600. The total cess in this case will amount to Rs. 88,800 (i.e., Rs.
59,200 + Rs. 29,600). No marginal relief shall be available in respect of such Cess.

3.1.3 Co-operative Societies

       In the case of every co-operative society, the rates of income-tax have been
specified in Paragraph B of Part I of the First Schedule to the Act. The rates are as
follows:-

             Income chargeable to tax                          Rate
                  Up to Rs. 10,000                             10%
               Rs. 10,001 -Rs. 20,000                          20%
               Exceeding Rs. 20,000                            30%


The amount of income-tax so computed shall be increased by a surcharge at the
rate of ten percent. of such income-tax in case of a co-operative society having a
total income exceeding one crore rupees. However, marginal relief shall be
available so that the total amount payable as income-tax and surcharge on total
income exceeding one crore rupees shall not exceed the total amount payable as

                                     Page 7 of 59 
 
income-tax on a total income of one crore rupees by more than the amount of
income that exceeds one crore rupees.

The Education Cess on income-tax shall continue to be levied at the rate of two per
cent on the amount of tax computed inclusive of surcharge. In addition, the amount
of tax computed shall be further increased by an additional surcharge called
Secondary and Higher Education Cess on income-tax at the rate of one per cent of
such income-tax inclusive of surcharge.

No marginal relief shall be available in respect of Education Cess and Secondary
and Higher Education Cess.




3.1.4 Firms ­

In the case of every firm, the rate of income-tax of thirty per cent has been specified
in Paragraph C of Part I of the First Schedule to the Act.

The amount of income-tax so computed shall be increased by a surcharge at the
rate of ten percent. of such income-tax in case of a firm having a total income
exceeding one crore rupees. However, marginal relief shall be available so that the
total amount payable as income-tax and surcharge on total income exceeding one
crore rupees 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.

The Education Cess on income-tax shall continue to be levied at the rate of two per
cent on the amount of tax computed inclusive of surcharge. In addition, the amount
of tax computed shall be further increased by an additional surcharge called
Secondary and Higher Education Cess on income-tax at the rate of one per cent of
such income-tax inclusive of surcharge.

No marginal relief shall be available in respect of Education Cess and Secondary
and Higher Education Cess.

3.1.5 Local Authorities ­In the case of every local authority, the rate of income-tax
 has been specified at thirty per cent in Paragraph D of Part I of the First Schedule to
 the Act.

The amount of income-tax so computed shall be increased by a surcharge at the
rate of ten percent. of such income-tax in case of a local authority having a total
income exceeding one crore rupees. However, marginal relief shall be available so
that the total amount payable as income-tax and surcharge on total income
exceeding one crore rupees 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.


                                       Page 8 of 59 
 
The Education Cess on income-tax shall continue to be levied at the rate of two per
cent on the amount of tax computed inclusive of surcharge. In addition, the amount
of tax computed shall be further increased by an additional surcharge called
Secondary and Higher Education Cess on income-tax at the rate of one per cent of
such income-tax inclusive of surcharge.

No marginal relief shall be available in respect of Education Cess and Secondary
and Higher Education Cess.

3.1.6 Companies ­

In the case of a company, the rate of income-tax has been specified in Paragraph E
of Part I of the First Schedule to the Act.


In case of a domestic company, the rate of income-tax is thirty per cent of the total
income. The tax computed shall be enhanced by a surcharge of five per cent where
such domestic company has total income exceeding one crore rupees but not
exceeding ten crore rupees. Surcharge at the rate of ten per cent shall be levied if
the total income of the company exceeds ten crore rupees.

 In the case of a company other than a domestic company, royalties received from
Government or an Indian concern under an approved agreement made after 31-3-
1961 but before 1-4-1976, shall be taxed at fifty per cent. Similarly, fees for technical
services received by such company from Government or an Indian concern under an
approved agreement made after 29-2-1964 but before 1-4-1976, shall be taxed at
fifty per cent. On the balance of the total income of such company, the tax rate shall
be forty per cent. The tax computed shall be enhanced by a surcharge of two per
cent. where such company has total income exceeding one crore rupees but not
exceeding ten crore rupees. Surcharge at the rate of five per cent shall be levied if
the total income of the company other than domestic company exceeds ten crore
rupees.

However, marginal relief shall be allowed in the case of every company to ensure
that (i) the total amount payable as income-tax and surcharge on total income
exceeding one crore rupees 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) the total amount payable as income-tax and
surcharge on total income exceeding ten crore rupees 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.

Education Cess on income-tax shall continue to be levied at the rate of two per cent
on the amount of tax computed, inclusive of surcharge in the case of every company.
Also, such amount of tax and surcharge shall be further increased by an additional
surcharge called Secondary and Higher Education Cess on income-tax at the rate of
one per cent of the amount of tax computed, inclusive of surcharge. No marginal

                                       Page 9 of 59 
 
relief shall be available in respect of Education Cess and Secondary and Higher
Education Cess.

3.2 Rates for deduction of income-tax at source from certain incomes during
the financial year 2014-15.

3.2.1 In every case in which tax is to be deducted at the rates in force under the
provisions of sections 193, 194, 194A, 194B, 194BB, 194D and 195 of the Income-
tax Act, the rates for deduction of income-tax at source during the financial year
2014-15 have been specified in Part II of the First Schedule to the Act. The rates for
deduction of income-tax at source during the financial year 2014 -15 will continue to
be the same as those specified in Part II of the First Schedule to the Finance Act,
2013.




3.2.2 Surcharge ­

The tax deducted at source in the following cases shall be increased by a surcharge
for purposes of the Union indicated below:-

(i) In case of every non-resident person not being a company, the rate of surcharge
is ten percent of tax where the income or aggregate of such income paid or likely to
be paid and subject to the deduction exceeds one crore rupees.

(ii) In case of payments made to foreign companies, the rate of surcharge is 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. In case where such income or the aggregate of such
incomes paid or likely to be paid to a foreign company and subject to the deduction
exceeds ten crore rupees, the rate of surcharge is five percent.

(iii) No surcharge on tax deducted at source shall be levied in the case of an
individual, Hindu undivided family, association of persons, body of individuals,
artificial juridical person, co-operative society, local authority, firm being a resident or
a domestic company.



3.2.3 Education Cess ­

Education Cess on income-tax shall continue to be levied for the purposes of the
Union at the rate of two per cent of income-tax and surcharge, if any, in the cases of
persons not resident in India including companies other than domestic company. For
instance, if the amount of tax deducted from a foreign company is Rs. 1,20,00,000
and the surcharge at the rate of two per cent. is Rs. 2,40,000, then the education


                                       Page 10 of 59 
 
cess of two per cent is to be computed on Rs. 1,22,40,000 which works out to Rs.
2,44,800.

In addition, the amount of tax deducted and surcharge shall be further increased by
an additional surcharge called Secondary and Higher Education Cess on income-tax
at the rate of one per cent in all such cases. Thus in the earlier illustration, where the
amount of tax deducted is Rs. 1,20,00,000, the surcharge is Rs. 2,40,000, the said
Secondary and Higher Education Cess will be computed at the rate of one percent
on Rs. 1,22,40,000 which works out to be Rs. 1,22,400. The total cess in this case
will, therefore, amount to Rs. 3,67,200 (i.e., Rs. 2,44,800 + Rs. 1,22,400).



3.3 Rates for deduction of income-tax at source from "Salaries", computation
of "advance tax" and charging of income-tax in special cases during the
financial year 2014-15.

3.3.1 The rates for deducting income-tax at source from `Salaries' and computing
advance tax during the financial year 2014-15 have been specified in Part III of the
First Schedule to the Act. These rates are also applicable for charging income-tax
during the financial year 2014-15 on current incomes in cases where accelerated
assessments have to be made, e.g., provisional assessment of shipping profits
arising in India to non-residents, assessment of persons leaving India for good
during that financial year, assessment of persons who are likely to transfer property
to avoid tax, assessment of bodies formed for short duration, etc. The rates are as
follows:-

3.3.2 Individual, Hindu undivided family, association of persons, body of
individuals or artificial juridical person ­

Paragraph A of Part III of the First Schedule specifies the rates of income-tax in the
case of every individual, Hindu undivided family, association of persons, body of
individuals or artificial juridical person (other than a co-operative society, firm, local
authority and company). The basic exemption limit has been increased from Rs.
2,00,000 to Rs. 2, 50,000. The exemption limit in case of resident individuals above
the age of sixty years but less than eighty years has also been raised from Rs.
2,50,000 to Rs. 3,00,000. The rates of tax and other slabs of income for various
categories remain the same as in financial year 2013-14. The rates of tax during the
financial year 2014-15 are as follows:-




                                      Page 11 of 59 
 
      Income                                  Rate of income- tax
      chargeable to tax
                           Individual    (other      Individual,          Individual
                           than senior and           resident in India    resident        in
                           very senior citizen       who is of the age    India, who is of
                           resident in India),       of sixty years or    the    age      of
                           HUF, association          more but less        eighty years or
                           of persons, body of       than eighty years.   more.       (very
                           individuals      and      (senior citizen)     senior citizen)
                           artificial  juridical
                           person.
      Up to Rs.            Nil
      2 ,50,000
                                                     Nil
      Rs. 2,50,001 - Rs.
      3,00,000                                                            Nil

      Rs. 3,00,001 - Rs. 10%                         10%
      5,00,000

      Rs. 5,00,001 - Rs. 20%                         20%                  20%
      10,00,000

      Exceeding      Rs. 30%                         30%                  30%
      10,00,000

The amount of income-tax so computed shall be increased by a surcharge at the
rate of ten percent. of such income-tax in case of a person having a total income
exceeding one crore rupees.

However, the total amount payable as income-tax and surcharge on total income
exceeding one crore rupees 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.


The Education Cess on income-tax shall continue to be levied at the rate of two per
cent on the amount of tax computed inclusive of surcharge. In addition, the amount
of tax computed shall be further increased by an additional surcharge called
Secondary and Higher Education Cess on income-tax at the rate of one per cent of
such income-tax inclusive of surcharge. No marginal relief shall be available in
respect of Education Cess and Secondary and Higher Education Cess.




                                    Page 12 of 59 
 
3.3.3 Co-operative Societies


In the case of every co-operative society, the rates of income-tax have been
specified in Paragraph B of Part III of the First Schedule to the Act. The rates are as
follows-

         Income chargeable to tax                           Rate
              Up to Rs. 10,000                              10%
           Rs. 10,001 -Rs. 20,000                           20%
           Exceeding Rs. 20,000                             30%

The amount of income-tax so computed shall be increased by a surcharge at the
rate of ten percent. of such income-tax in case of a co-operative society having a
total income exceeding one crore rupees.

However, marginal relief shall be available. Accordingly, the total amount payable as
income-tax and surcharge on total income exceeding one crore rupees 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.


Education Cess on income-tax and Secondary and Higher Education Cess on
income-tax shall be levied at the rate of two per cent and one per cent respectively of
the amount of income-tax computed inclusive of surcharge. No marginal relief shall
be available in respect of Education Cess and Secondary and Higher Education
Cess.



3.3.4 Firms ­


In the case of every firm, the rate of income-tax of thirty per cent has been specified
in Paragraph C of Part III of the First Schedule to the Act.

The amount of income-tax so computed shall be increased by a surcharge at the
rate of ten percent. of such income-tax in case of a firm having a total income
exceeding one crore rupees.

However, marginal relief shall be available. Accordingly, the total amount payable as
income-tax and surcharge on total income exceeding one crore rupees 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.

The Education Cess on income-tax shall continue to be levied at the rate of two per
cent on the amount of tax computed inclusive of surcharge. In addition, the amount
of tax computed shall be further increased by an additional surcharge called
Secondary and Higher Education Cess on income-tax at the rate of one per cent of

                                     Page 13 of 59 
 
such income-tax inclusive of surcharge. No marginal relief shall be available in
respect of Education Cess and Secondary and Higher Education Cess.



3.3.5 Local Authorities-

In the case of every local authority, the rate of income-tax has been specified at thirty
per cent in Paragraph D of Part III of the First Schedule to the Act.

The amount of income-tax so computed shall be increased by a surcharge at the
rate of ten percent. of such income-tax in case of a local authority having a total
income exceeding one crore rupees.

However, marginal relief shall be available. Accordingly, the total amount payable as
income-tax and surcharge on total income exceeding one crore rupees 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.

Education Cess on Income-tax and Secondary and Higher Education Cess on
income-tax shall be levied at the rate of two per cent and one per cent respectively of
the amount of income tax and surcharge. No marginal relief shall be available in
respect of Education Cess and Secondary and Higher Education Cess.


3.3.6 Companies-

In the case of a company, the rate of income-tax has been specified in Paragraph E
of Part III of the First Schedule to the Act.

In case of a domestic company, the rate of income-tax is thirty per cent of the total
income. The tax computed shall be enhanced by a surcharge of five per cent where
such domestic company has total income exceeding one crore rupees but not
exceeding ten crore rupees. Surcharge at the rate of ten per cent shall be levied if
the total income of the company exceeds ten crore rupees.

In the case of a company other than a domestic company, royalties received from
Government or an Indian concern under an approved agreement made after 31-3-
1961 but before 1-4-1976, shall be taxed at fifty per cent. Similarly, fees for technical
services received by such company from Government or Indian concern under an
approved agreement made after 29-2-1964 but before 1-4-1976, shall be taxed at
fifty per cent. On the balance of the total income of such company, the tax rate shall
be forty per cent. The tax computed shall be enhanced by a surcharge of two per
cent where such company has total income exceeding one crore rupees but not
exceeding ten crore rupees. Surcharge at the rate of five per cent shall be levied if
the total income of the company other than domestic company exceeds ten crore
rupees.

However, marginal relief shall be allowed in the case of every company to ensure
that (i) the total amount payable as income-tax and surcharge on total income

                                      Page 14 of 59 
 
exceeding one crore rupees 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) the total amount payable as income-tax and
surcharge on total income exceeding ten crore rupees 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.
Education Cess on Income-tax and Secondary and Higher Education Cess on
income-tax shall be levied at the rate of two per cent and one per cent respectively of
the amount of income-tax computed including surcharge. No marginal relief shall be
available in respect of Education Cess and Secondary and Higher Education Cess.

3.4 Surcharge on Additional Income-tax Where additional income-tax has to be
paid under section 115-O or section 115-QA or sub-section (2) of section 115R or
section 115TA of the Income-tax Act, that is to say, on distribution of dividend by
domestic companies or distribution of income by a company on buy-back of shares
from shareholders or on distribution of income by a mutual fund to its unit holders or
on distribution of income by a securitization trust to its investors, the additional tax so
payable shall be increased by a surcharge of ten percent of such tax.

4. Characterisation of Income in case of Foreign Institutional Investors
4.1      The provisions contained in clause (14) of section 2 of the Income-tax Act,
1961, before amendment by the Act, defined the term "capital asset" to include
property of any kind held by an assessee, whether or not connected with his
business or profession, but did not include any stock-in-trade or personal assets as
provided in the definition. The foreign portfolio investors [notified as foreign
institutional investors for the purposes of the Income-tax Act vide notification S.O.
199(E) dated 22.01.2014] faced a difficulty in characterisation of their income arising
from transaction in securities as to whether it is capital gains or business income.
Further, the fund manager managing the funds of such investor remained outside
India under the apprehension that their presence in India may constitute permanent
establishment (PE) and the income arising from transactions in securities held in
India may be taxed as business income of PE. In this context, the Finance Minister,
in his budget speech, had stated as under ­
"Foreign Portfolio investors (FPIs) have invested more than Rs. 8 lakh crore (about 130 billion US$) in
India. One of their concerns is uncertainty in taxation on account of characterization of their income.
Moreover, the fund managers of these foreign investors remain outside India under the apprehension
that their presence in India may have adverse tax consequences. With a view to put an end ro this
uncertainty and to encourage these fund managers to shift to India, I propose to provide that income
arising to foreign portfolio investors from transaction in securities will be treated as capital gains."

4.2    Accordingly, clause (14) has been amended to provide that any security held
by foreign institutional investor which has invested in such security in accordance
with the regulations made under the Securities and Exchange Board of India Act,
1992 shall be a capital asset and not a current asset. Therefore, any income arising
from transfer of such security by a foreign institutional investor would be in the nature
of "capital gains".

4.3 Applicability: - This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.

                                             Page 15 of 59 
 
5. Qualification of a unit of a debt oriented Mutual Fund and unlisted security
as Short-term capital asset
5.1 The provisions contained in clause (42A) of section 2 of the Income-tax Act,
before amendment made by the Act, provided that short-term capital asset means a
capital asset held by an assessee for not more than thirty six months immediately
preceding the date of its transfer. However, in the case of a share held in a company
or any other security listed in a recognised stock exchange in India or a unit of the
Unit Trust of India or a unit of a Mutual Fund or a zero coupon bond, the period of
holding for qualifying it as short-term capital asset was not more than twelve months.

5.2 The shorter period of holding of not more than twelve months for consideration
as short-term capital asset was introduced for encouraging investment on stock
market where prices of the securities are market determined. However, all shares
whether listed or unlisted have enjoyed the benefit of short period of holding and
even any investment in shares of private limited companies enjoyed long-term
capital gains on its transfer after twelve months. Accordingly, clause (42A) of section
2 of the Income-tax Act has been amended so as to provide that an unlisted security
and a unit of a mutual fund (other than an equity oriented mutual fund) shall be a
short-term capital asset if it is held for not more than thirty-six months. However, in
the case of share of an unlisted company or a unit of a Mutual Fund specified under
clause (23D) of section 10 of the Income-tax Act, which is transferred during the
period beginning on 1st April, 2014 and ending on 10th July, 2014, the period of
holding for its qualification as short-term capital asset shall be not more than twelve
months.

5.3 Applicability:- This amendment takes effect from 1st April, 2015 and will
accordingly apply, in relation to the assessment year 2015-16 and subsequent
assessment years.


6. Clarification in respect of section 10(23C) of the Income-tax Act

6.1    The provisions of sub-clause (iiiab) and (iiiac) of section 10(23C) of the
Income-tax Act provide exemption, subject to various conditions, in respect of
income of certain educational institutions, universities and hospitals which exist
solely for educational purposes or solely for philanthropic purposes, and not for
purposes of profit and which are wholly or substantially financed by the Government.

6.2    Absence of a definition of the phrase "substantially financed by the
Government" had led to litigation and varying decisions of judicial authorities who
had, for this purpose, relied upon various other provisions of the Income-tax Act and
other Acts. Thus, there has been lack of certainty in this regard.

6.3   Therefore, clause (23C) of section 10 has been amended by inserting an
Explanation below sub-clause (iiiac) of the said clause. It provides that if the
Government grant to a university or other educational institution, hospital or other

                                     Page 16 of 59 
 
institution referred to in section 10(23C)(iiiab) or 10(23C)(iiiac) during any previous
year exceeds a prescribed percentage of the total receipts (including any voluntary
contributions), of such university or other educational institution, hospital or other
institution, as the case may be, then such university or other educational institution,
hospital or other institution shall be considered as being substantially financed by the
Government for that previous year. Vide notification No. 79 /2014 dated 12.12.2014,
Rule 2BBB has been inserted in the Income-tax Rules. The said Rule provides that
any university or other educational institution, hospital or other institution referred to
in sub-clauses (iiiab) and (iiiac) of clause (23C) of section 10 of the Income-tax Act
shall be considered as being substantially financed by the Government for any
previous year if the Government grant to such university, hospital, or institution
exceeds 50 percent of its total receipts, including any voluntary contributions, during
the said previous year.

6.4   Applicability:- This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.


7. Rationalisation of taxation regime in the case of charitable trusts and
institutions

7.1     The provisions of section 11 of the Income-tax Act provide for exemption to
trusts or institutions in respect of income derived from property held under trust and
voluntary contributions subject to various conditions contained in the said section.
The primary condition for grant of exemption is that the income derived from property
held under trust should be applied for the charitable purposes, and where such
income cannot be applied during the previous year, it has to be accumulated in the
modes prescribed and applied for such purposes in accordance with various
conditions provided in the section. If the accumulated income is not applied in
accordance with the conditions provided in the said section, then such income is
deemed to be taxable income of the trust or institution. Section 13 of the Income-tax
Act provides for the circumstances under which exemption under section 11 or 12 of
the said Act in respect of whole or part of income would not be available to a trust or
institution.

7.2    The sections 11, 12, 12A, 12AA and 13 of the Income-tax Act constitute a
complete code governing the grant, cancellation or withdrawal of registration,
providing exemption to income, and also the conditions subject to which a charitable
trust or institution is required to function in order to be eligible for exemption. They
also provide for withdrawal of exemption either in part or in full if the relevant
conditions are not fulfilled.

7.3    Several issues had arisen in respect of the application of exemption regime to
trusts or institutions in respect of which clarity in law was required.

7.4    The first issue was regarding the interplay of the general provision of
exemptions which are contained in section 10 of the Income-tax Act vis-a-vis the
specific and special exemption regime provided in sections 11 to 13 of the said Act.
As indicated above, the primary objective of providing exemption in case of

                                      Page 17 of 59 
 
charitable institution is that income derived from the property held under trust should
be applied and utilised for the object or purpose for which the institution or trust has
been established. In many cases it had been noted that trusts or institutions which
are registered and have been availing benefits of the exemption regime do not apply
their income, which is derived from property held under trust, for charitable purposes.
In such circumstances, when the income becomes taxable, a claim of exemption
under general provisions of section 10 in respect of such income is preferred and tax
on such income is avoided. This defeats the very objective and purpose of placing
the conditions of application of income etc. in respect of income derived from
property held under trust in the first place.

7.4.1 Sections 11, 12 and 13 of the Income-tax Act are special provisions governing
institutions which are being given benefit of tax exemption. It is therefore imperative
that once a person voluntarily opts for the special dispensation it should be governed
by these specific provisions and should not be allowed flexibility of being governed
by other general provisions or specific provisions at will. Allowing such flexibility has
undesirable effects on the objects of the regulations and leads to litigation.

7.4.2 Similar situation existed in the context of section 10(23C) of the Income-tax
Act which provides for exemption to funds, institution, hospitals, etc. which have
been granted approval by the prescribed authority. The provision of section 10(23C)
also have similar conditions of accumulation and application of income, investment
of funds in prescribed modes etc.

7.4.3 Therefore, the Income-tax Act has been amended to provide specifically that
where a trust or an institution has been granted registration for purposes of availing
exemption under section 11, and the registration is in force for a previous year, then
such trust or institution cannot claim any exemption under any provision of section
10 [other than that relating to exemption of agricultural income and income exempt
under section 10(23C)] of the Income-tax Act. Similarly, entities which have been
approved or notified for claiming benefit of exemption under section 10(23C) of the
Income-tax Act would not be entitled to claim any benefit of exemption under other
provisions of section 10 of the said Act (except the exemption in respect of
agricultural income).

7.5    The second issue which had arisen was that the existing scheme of section
11 as well as section 10(23C) of the Income-tax Act provided exemption in respect of
income when it is applied to acquire a capital asset. Subsequently, while computing
the income for purposes of these sections, notional deduction by way of depreciation
etc. was being claimed and such amount of notional deduction was not being applied
for charitable purpose. As a result, double benefit was being claimed by the trusts
and institutions. Therefore, these provisions were required to be rationalised to
ensure that double benefit is not claimed and such notional amount does not get
excluded from the condition of application of income for charitable purpose.

7.5.1 Accordingly, the Income-tax Act has been amended to provide that under
section 11 and section 10(23C), income for the purposes of its application shall be
determined without any deduction or allowance by way of depreciation or otherwise
in respect of any asset, acquisition of which has been claimed as an application of
income under these sections in the same or any other previous year.

                                      Page 18 of 59 
 
7.6 Applicability:- These amendments take effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.


8. Applicability of the registration granted to a trust or institution to earlier
years

8.1    The provisions of section 12A of the Income-tax Act, before amendment by
the Act, provided that a trust or an institution can claim exemption under sections 11
and 12 only after registration under section 12AA of the said Act has been granted.
In case of trusts or institutions which apply for registration after 1st June, 2007, the
registration shall be effective only prospectively.

8.2      Non-application of registration for the period prior to the year of registration
caused genuine hardship to charitable organisations. Due to absence of registration,
tax liability is fastened even though they may otherwise be eligible for exemption and
fulfil other substantive conditions. However, the power of condonation of delay in
seeking registration was not available.

8.3     In order to provide relief to such trusts and remove hardship in genuine cases,
section 12A of the Income-tax Act has been amended to provide that in a case
where a trust or institution has been granted registration under section 12AA of the
Income-tax Act, the benefit of sections 11 and 12 of the said Act shall be available in
respect of any income derived from property held under trust in any assessment
proceeding for an earlier assessment year which is pending before the Assessing
Officer as on the date of such registration, if the objects and activities of such trust or
institution in the relevant earlier assessment year are the same as those on the basis
of which such registration has been granted.

8.4    Further, it has been provided that no action for reopening of an assessment
under section 147 of the Income-tax Act shall be taken by the Assessing Officer in
the case of such trust or institution for any assessment year preceding the first
assessment year for which the registration applies, merely for the reason that such
trust or institution has not obtained the registration under section 12AA for the said
assessment year.

8.5     However, the above benefits would not be available in the case of any trust or
institution which at any time had applied for registration and the same was refused
under section 12AA of the Income-tax Act or a registration once granted was
cancelled.

8.6 Applicability: - These amendments take effect from 1st October, 2014.




9. Cancellation of registration of the trust or institution in certain cases


                                       Page 19 of 59 
 
9.1. The provisions of section 12AA of the Income-tax Act, before amendment by
the Act, provided that the registration once granted to a trust or institution shall
remain in force until it is cancelled by the Commissioner. The Commissioner could
cancel the registration under two circumstances:

(a) the activities of a trust or institution are not genuine, or;
(b) the activities are not being carried out in accordance with the objects of the trust
or institution.

9.1.1 The Commissioner was empowered to cancel the registration only if either or
both of the above conditions were satisfied, and not otherwise.

9.2     There have been cases where trusts, particularly in the year in which they had
substantial income claimed to be exempt under other provisions of the Income-tax
Act though they deliberately violated the provisions of section 13 of the said Act by
investing in modes other that specified modes, etc. Similarly, there have been cases
where the income is not properly applied for charitable purposes or is diverted for the
benefit of certain interested persons. However, due to restrictive interpretation of the
powers of the Commissioner under the said section 12AA, registration of such trusts
or institutions continued to be in force and these institutions continued to enjoy the
beneficial regime of exemption.

9.3     Whereas under section 10(23C) of the Income-tax Act, which also allows
similar benefits of exemption to a fund, Institution, University etc, the power of
withdrawal of approval is vested with the prescribed authority if such authority is
satisfied that such entity has not applied income or made investment in accordance
with provisions of said section 10(23C) or the activities of such entity are not genuine
or are not being carried out in accordance with all or any of the conditions subject to
which it was approved.

9.4     Therefore, in order to rationalise the provisions relating to cancellation of
registration of a trust, section 12AA of the Income-tax Act has been amended to
provide that where a trust or an institution has been granted registration, and
subsequently it is noticed that its activities are being carried out in such a manner
that,--

    (i) its income does not enure for the benefit of the public;

    (ii) it is for benefit of any particular religious community or caste (in case it is
              established after commencement of the Income-tax Act, 1961);
    (iii) any income or property of the trust is used or applied directly or indirectly for
              the benefit of specified persons like author of trust, trustees etc.; or
    (iv) its funds are not invested in specified modes,

           then the Principal Commissioner or the Commissioner may cancel the
           registration, if such trust or institution does not prove that there was a
           reasonable cause for the activities to be carried out in the aforesaid
           manner.

9.5 Applicability: - This amendment takes effect from 1st October, 2014.

                                       Page 20 of 59 
 
10. Deduction from income from house property

10.1 The provisions contained in section 24 of the Income-tax Act provide that
income chargeable under the head "Income from house property" shall be computed
after making certain deductions. Clause (b) of the said section provides that where
the property is acquired with borrowed capital, the amount of any interest payable on
such capital shall be allowed as deduction in computing the income from house
property. The second proviso to clause (b) of the said section, inter-alia, provided
that in case of self-occupied property where the acquisition or construction of the
property is completed within three years from the end of the financial year in which
the capital is borrowed, the amount of deduction under that clause shall not exceed
one lakh fifty thousand rupees.

10.2 There has been appreciation in the value of house property and accordingly
cost of finance has also gone up. Therefore, the second proviso to clause (b) of
section 24 has been amended so as to increase the limit of deduction on account of
interest in respect of property referred to in sub-section (2) of section 23 of the
Income-tax Act to two lakh rupees.

10.3 Applicability:- This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.



11. Investment Allowance to a Manufacturing Company

11.1 In order to encourage the companies engaged in the business of manufacture
or production of an article or thing to invest substantial amount in acquisition and
installation of new plant and machinery, Finance Act, 2013 inserted section 32AC in
the Income-tax Act to provide that where an assessee, being a company, is engaged
in the business of manufacture of an article or thing and invests a sum of more than
Rs.100 crore in new assets (plant and machinery) during the period beginning from
1st April, 2013 and ending on 31st March, 2015, then the assessee shall be allowed
a deduction of 15% of cost of new assets for assessment years 2014-15 and 2015-
16.

11.2.1 As growth of the manufacturing sector is crucial for employment generation
and development of an economy, section 32AC of the Income-tax Act has been
amended to extend the deduction available under the said section for investment
made in plant and machinery up to 31.03.2017.

11.2.2 Further, in order to simplify the existing provisions of section 32AC of the
Income-tax Act and also to make medium size investments in plant and machinery
eligible for deduction, section 32AC has been amended to provide that the deduction


                                    Page 21 of 59 
 
under the said section shall be allowed if the company on or after 1st April, 2014
invests more than Rs.25 crore in plant and machinery in a previous year.

11.2.3 Section 32AC has been further amended to provide that the assessee who is
eligible to claim deduction under the existing combined threshold limit of Rs.100
crore for investment made in previous years 2013-14 and 2014-15 shall continue to
be eligible to claim deduction under the existing provisions contained in sub-section
(1) of section 32AC even if its investment in the year 2014-15 is below the new
threshold limit of investment of Rs. 25 crore during the previous year.

11.3 The deduction allowable under this section after the amendment in different
scenario of investment is given by way of illustration in the following table:
                                                                            (Rs. in crore)
Sl. Particulars          P.Y.     P.Y.        P.Y.       P.Y.    Remarks
No.                      2013-    2014-       2015-      2016-
                         14       15          16         17

1     Amount         of 20        90          --         --      Under the existing section
      investment                                                 32AC(1)
      Deduction          Nil      16.5        --         --
      allowable
2     Amount         of 30        40          --         --      Under the amended
      investment                                                 section 32AC(1A)
      Deduction          Nil      6           --         --
      allowable
3     Amount         of 150       10          --         --      Under the existing section
      investment                                                 32AC(1)
      Deduction          22.5     1.5         --         --
      allowable
4     Amount         of 60        20          --         --      No deduction either under
      investment                                                 section     32AC(1)    or
      Deduction          Nil      Nil         --         --      32AC(1A)
      allowable
5     Amount         of 30        30          30         40      Under the amended
      investment                                                 section 32AC(1A)
      Deduction          Nil      4.5         4.5        6
      allowable
6     Amount         of 150       20          70         20      Deduction both under section
      investment                                                 32AC(1) & 32AC(1A)
      Deduction          22.5     3           10.5       Nil
      allowable

11.4 Applicability:- These amendments takes effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent years.



12.    Deduction in respect of capital expenditure on specified business

12.1 The provisions of section 35AD of the Income-tax Act, before its amendment
by the Act, inter alia, provided for investment-linked tax incentive by way of allowing
a deduction in respect of the whole of any expenditure of capital nature (other than

                                        Page 22 of 59 
 
expenditure on land, goodwill and financial instrument) incurred wholly and
exclusively, for the purposes of the "specified business" during the previous year in
which such expenditure is incurred. The following "specified businesses" are eligible
for availing the investment-linked deduction under section 35AD as enumerated in
clause (c) of sub-section (8) of the said section:-

      (i)      setting up and operating a cold chain facility;

      (ii)     setting up and operating a warehousing facility for storage of
               agricultural produce;

      (iii)    laying and operating a cross-country natural gas or crude or petroleum
               oil pipeline network for distribution, including storage facilities being an
               integral part of such network;

      (iv)      building and operating, anywhere in India, a hotel of two-star or above
               category as classified by the Central Government;

       (v)     building and operating, anywhere in India, a hospital with at least one
               hundred beds for patients;

      (vi)      developing and building a housing project under a scheme for slum
               redevelopment or rehabilitation, framed by the Central Government or
               a State Government, as the case may be, and notified by the Board in
               accordance with the prescribed guidelines;

      (vii)    developing and building a housing project under a scheme for
               affordable housing framed by the Central Government or a State
               Government, as the case may be, and notified by the Board in
               accordance with the prescribed guidelines;

      (viii)   production of fertilizer in India;

      (ix)     setting up and operating an inland container depot or a container
               freight station notified or approved under the Customs Act, 1962;

      (x)      bee-keeping and production of honey and beeswax; and

      (xi)     setting up and operating a warehousing facility for storage of sugar;

12.2 So as to promote investment in these sectors, clause (c) of sub-section (8) of
section 35AD has been amended to include two new businesses as "specified
business" for the purposes of the investment-linked deduction under section 35AD,
which are :-

      (a)      laying and operating a slurry pipeline for the transportation of iron ore;




                                         Page 23 of 59 
 
      (b)    setting up and operating a semiconductor wafer fabrication
             manufacturing unit, if such unit is notified by the Board in accordance
             with the prescribed guidelines.

12.3 It has also been provided that the date of commencement of operations for
availing investment linked deduction in respect of the two new specified businesses
shall be on or after 1st April, 2014.

12.4 The provisions of section 35AD, before amendment by the Act, did not
provide for a specific time period for which capital assets on which the deduction has
been claimed and allowed, are to be used for the specified business.

12.5 With a view to ensure that the capital asset on which investment linked
deduction has been claimed is used for the purposes of the specified business, sub-
section (7A) has been inserted in section 35AD to provide that any asset in respect
of which a deduction is claimed and allowed under section 35AD, shall be used only
for the specified business for a period of eight years beginning with the previous year
in which such asset is acquired or constructed.

12.6 If any asset on which a deduction under section 35AD has been allowed, is
demolished, destroyed, discarded or transferred, the sum received or receivable for
the same is chargeable to tax under clause (vii) of section 28 of the Income-tax Act.
This does not take into account a case where asset on which deduction under
section 35AD has been claimed is used for any purpose other than the specified
business by way of a mode other than that specified above. Accordingly, sub-section
(7B) has been inserted to provide that if such asset is used for any purpose other
than the specified business, the total amount of deduction so claimed and allowed in
any previous year in respect of such asset, as reduced by the amount of
depreciation allowable in accordance with the provisions of section 32 as if no
deduction had been allowed under section 35AD, shall be deemed to be income of
the assessee chargeable under the head "Profits and gains of business or
profession" of the previous year in which the asset is so used.

      Example:
       Deduction claimed under section 35AD on a capital :         Rs. 100
       asset
       Depreciation eligible on such asset under section 32 :      Rs. 15

       Profit chargeable to tax in accordance with the :           Rs. 85
       provisions of sub-section (7B) of section 35AD

12.7 It has also been provided that the provisions contained in sub-section (7B) of
the said section would, however, not apply to a company which has become a sick
industrial company under sub-section (1) of section 17 of the Sick Industrial
Companies (Special Provisions) Act, 1985 within the time period specified in sub-
section (7A) of section 35AD.

                                     Page 24 of 59 
 
12.8 The provisions of sub-section (3) of the aforesaid section, before amendment
by the Act, provided that where any assessee has claimed a deduction under this
section, no deduction shall be allowed under the provisions of Chapter VIA of the
Income-tax Act for the same or any other assessment year. As section 10AA of the
Income-tax Act also provides for profit linked deduction in respect of units set-up in
Special Economic Zones, section 35AD has been amended to provide that where
any deduction has been availed of by the assessee on account of capital
expenditure incurred for the purposes of specified business in any assessment year,
no deduction under section 10AA shall be available to the assessee in the same or
any other assessment year in respect of such specified business.

12.9 As a consequence of this amendment, section 10AA has also been amended
to provide that no deduction under section 35AD shall be available in any
assessment year to a specified business which has claimed and availed of the
deduction under section 10AA in the same or any other assessment year.

12.10 Applicability:-These amendments take effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.



13. Corporate Social Responsibility (CSR)

13.1 Under the Companies Act, 2013 certain companies (which have net worth of
Rs.500 crore or more, or turnover of Rs.1000 crore or more, or a net profit of Rs.5
crore or more during any financial year) are required to spend certain percentage of
their profit on activities relating to Corporate Social Responsibility (CSR). Under the
existing provisions of the Income-tax Act, expenditure incurred wholly and
exclusively for the purposes of the business is only allowed as a deduction for
computing taxable business income.

13.2 CSR expenditure, being an application of income, is not incurred wholly and
exclusively for the purposes of carrying on business. As the application of income is
not allowed as deduction for the purposes of computing taxable income of a
company, amount spent on CSR cannot be allowed as deduction for computing the
taxable income of the company. Moreover, the objective of CSR is to share burden
of the Government in providing social services by companies having net
worth/turnover/profit above a threshold. If such expenses are allowed as tax
deduction, this would result in subsidizing of around one-third of such expenses by
the Government by way of tax expenditure.

13.3 The provisions of section 37(1) of the Income-tax Act provide that deduction for
any expenditure, which is not mentioned specifically in section 30 to section 36 of the
Income-tax Act, shall be allowed if the same is incurred wholly and exclusively for
the purposes of carrying on business or profession. As the CSR expenditure (being

                                     Page 25 of 59 
 
an application of income) is not incurred for the purposes of carrying on business,
such expenditures cannot be allowed under the provisions of section 37 of the
Income-tax Act. Therefore, in order to provide certainty on this issue, said section 37
has been amended to clarify that for the purposes of sub-section (1) of section 37
any expenditure incurred by an assessee on the activities relating to corporate social
responsibility referred to in section 135 of the Companies Act, 2013 shall not be
deemed to have been incurred for the purpose of business and hence shall not be
allowed as deduction under said section 37. However, the CSR expenditure which is
of the nature described in section 30 to section 36 of the Income-tax Act shall be
allowed as deduction under those sections subject to fulfillment of conditions, if any,
specified therein.

13.4 Applicability:- This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent years.



14. Disallowance of expenditure for non- deduction of tax at source

14.1 The provisions of section 40(a)(i) of the Income-tax Act, prior to the amendment
by the Act, provided that certain payments such as interest, royalty and fee for
technical services made to a non-resident shall not be allowed as deduction in
computing business income if tax on such payments had not been deducted, or after
deduction, has not been paid within the time prescribed under section 200(1) of the
Income-tax Act. The Income-tax Act contains similar provisions for disallowance of
business expenditure in respect of certain payments made to residents. Under
section 40(a)(ia) of the Income-tax Act, in case of payments made to resident, the
deductor is allowed to claim deduction for payments as expenditure in the previous
year of payment, if tax is deducted during the previous year and the same is paid on
or before the due date specified for filing of return of income under section 139(1) of
the Income-tax Act. However, in case of disallowance for non-payment of tax from
payments made to non-residents, this extended time limit of payment of tax
deducted at source up to the date of filing of return of income under section 139(1)
was not available.

14.2 In order to provide similar extended time limit for payment of tax deducted from
payments made to non-residents, section 40(a)(i) of the Income-tax Act has been
amended so as to provide that the deductor shall be allowed to claim deduction for
payments made to non-residents in the previous year of payment, if tax is deducted
during the previous year and the same is paid on or before the due date specified for
filing of return under section 139(1) of the Income-tax Act.

14.3 As mentioned above, in case of non-deduction of tax at source or non-payment
of tax so deducted from certain payments made to residents, the entire amount of
expenditure on which tax was deductible is disallowed under section 40(a)(ia) for the
purposes of computing income under the head "Profits and gains of business or

                                     Page 26 of 59 
 
profession". The disallowance of whole of the amount of expenditure causes
hardship, especially in case of payment made to a resident in whose case the
withholding of tax is only a mode of collection of tax and does not result into final
discharge of tax liability.

14.4 Accordingly, section 40(a)(ia) of the Income-tax Act has been amended to
provide that in case of non-deduction of tax at source or non-payment of tax so
deducted on payments made to residents as specified in section 40(a)(ia) of the
Income-tax Act, the disallowance shall be restricted to 30% of the amount of
expenditure claimed.

14.5 Further, the first proviso to section 40(a)(ia) of the Income-tax Act, prior to its
amendment by the Act, provided that sum, which was disallowed due to non-
deduction of tax at source or non-payment of tax so deducted, shall be allowed
deduction in the previous year in which such tax deducted at source has been paid.
As the disallowance under the amended section 40(a)(ia) of the Income-tax Act has
been restricted to 30% of the amount of expenditure, the first proviso to the said
section 40(a)(ia) has also been amended to provide that deduction of 30% of the
amount of expenditure shall be allowed in the previous year in which the tax so
deducted has been paid. In this regard, it is hereby clarified that in respect of the
amount disallowed for assessment year commencing on or before 1st day of April
2014, the deduction for the whole of the amount disallowed under section 40(a)(ia) of
the Income-tax Act, shall be allowed under the first proviso to section 40(a)(ia) in the
previous year in which tax deducted at source has been paid.






14.6 Further, provisions of section 40(a)(ia) of the Income-tax Act, prior to its
amendment by the Act, provided that certain payments such as interest,
commission, brokerage, rent, royalty fee for technical services and contract payment
made to a resident shall not be allowed as deduction for computing business income
if tax on such payments was not deducted, or after deduction, was not paid within
the time specified under the said section. Chapter XVII-B of the Income-tax Act
mandates deduction of tax from certain other payments such as salary, directors fee,
which were not specified in section 40(a)(ia) of the Income-tax Act. The payments on
which tax is deductible under Chapter XVII-B but not specified under section
40(a)(ia) of the Income-tax Act may also be claimed as expenditure for the purposes
of computation of income under the head "Profits and gains from business or
profession".

 14.7 Section 40(a)(ia) of the Income-tax Act has proved to be an effective tool for
ensuring compliance of TDS provisions by the payers. Therefore, in order to improve
the TDS compliance in respect of payments to residents which were not specified in
section 40(a)(ia) of the Income-tax Act, the said section 40(a)(ia) has been
amended to provide that the disallowance under the said section shall extend to all
expenditure on which tax is deductible under Chapter XVII-B of the Income-tax Act.



                                      Page 27 of 59 
 
14.8 Applicability:- These amendments takes effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent years.



15. Speculative transaction in respect of commodity derivatives

15.1 The provisions contained in clause (5) of section 43 of the Income-tax Act
define the term speculative transaction. The proviso to the said clause (5) of section
43 excludes certain category of transactions as speculative transactions. The
Finance Act, 2013 made a provision for levy of commodities transaction tax on
commodity derivatives in respect of commodities other than agricultural
commodities. As a consequence to the levy of commodities transaction tax, clause
(e) was inserted in the proviso to clause (5) of section 43 of the Income-tax Act to
provide that eligible transaction in respect of trading in commodity derivatives carried
out in a recognised association shall not be considered as speculative transaction.
Vide Circular No. 3 dated 24-01-2014 explaining the provisions of the Finance Act,
2013, it was clarified that the eligible transaction shall include only those transactions
in commodity derivatives which are liable to commodities transaction tax.

15.2 Accordingly, clause (e) of the proviso to the said clause (5) of section 43 of the
Income-tax Act has been amended to provide that eligible transaction in respect of
trading in commodity derivatives carried out in a recognised association and
chargeable to commodities transaction tax under Chapter VII of the Finance Act,
2013 shall not be considered to be a speculative transaction.

15.3 Applicability:- This amendment takes effect from 1st April, 2014 and will
accordingly apply, in relation to the assessment year 2014-15 and subsequent
assessment years.




16. Business of Plying, Hiring or Leasing Goods Carriages

16.1 The provisions of section 44AE of the Income-tax Act, prior to its amendment by
the Act, provided for presumptive taxation in the case of an assessee who is
engaged in the business of plying, hiring or leasing goods carriages and not owning
more than ten goods carriages at any time during the previous year. Income from the
said business is calculated as under:

Type of Goods Carriage        Amount of Presumptive Taxation

Heavy Goods Vehicle(HGV)      RS. 5,000 for every month (or part of a month) during which
                              the goods carriage is owned by the taxpayer.




                                      Page 28 of 59 
 
Vehicle other than HGV       Rs 4,500 for every month (or part of a month) during which
                             the goods carriage is owned by the taxpayer.



16.1.1 The amount of presumptive income was revised by the Finance (No.2) Act,
2009. Further, the provisions of said section 44AE made a distinction between HGV
and vehicle other than HGV for specifying the amount of presumptive income.

16.1.2 Considering the erosion in the real values of the amount of specified
presumptive income due to inflation over the years and also in order to simplify this
presumptive taxation scheme, section 44AE has been amended to provide for a
uniform amount of presumptive income of Rs.7,500 for every month (or part of a
month) for all types of goods carriage without any distinction between HGV and
vehicle other than HGV.

16.2 Applicability:- This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent years.



17. Capital gains arising from transfer of an asset by way of compulsory
acquisition

17.1 The existing provisions contained in section 45 of Income-tax Act provide for
charging of any profits or gains arising from transfer of a capital asset. Sub-section
(5) of the said section provides for the manner of dealing with capital gains arising
from transfer by way of compulsory acquisition and where the compensation is
enhanced or further enhanced by the court, Tribunal or any other authority. Clause
(b) of the said sub-section provides that where the amount of compensation is
enhanced or further enhanced by the court it shall be deemed to be the income
chargeable of the previous year in which such amount is received by the assessee.

17.2 There was uncertainty about the year in which the amount of compensation
received in pursuance of an interim order of the court is to be charged to tax, due to
court orders.

17.3 Therefore, sub-section (5) of section 45 of the Income-tax Act, has been
amended to provide that the amount of compensation received in pursuance of an
interim order of the court, Tribunal or other authority shall be deemed to be the
income chargeable under the head `Capital gains' in the previous year in which the
final order of such court, Tribunal or other authority is made.

17.4 Applicability:-This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.

                                     Page 29 of 59 
 
18. Transfer of Government Security by one non-resident to another non-
resident

18.1 The provisions contained in section 47 of the Income-tax Act provide that
certain transactions shall not be considered as transfer for the purpose of charging of
capital gains.

18.2 With a view to facilitate listing and trading of Government securities outside
India, clause (viib) has been inserted in section 47 of the Income-tax Act so as to
provide that any transfer of a capital asset, being a Government Security carrying a
periodic payment of interest, made outside India through an intermediary dealing in
settlement of securities, by a non-resident to another non-resident shall not be
considered as transfer for the purpose of charging capital gains.

18.3 Applicability:- This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to assessment year 2015-16 and subsequent
assessment years.



19. Cost Inflation Index

19.1 The provisions contained in section 48 of the Income-tax Act prescribe the
mode of computation of income chargeable under the head "Capital gains". Clause
(v) of the Explanation to the said section prior to its amendment by the Act defined
the term "Cost Inflation Index" (CII) which in relation to a previous year meant such
index as may be notified by the Government having regard to seventy-five percent of
average rise in the Consumer Price Index (CPI) for urban non-manual employees
(UNME) for the immediately preceding previous year to such previous year.

19.2 The release of CPI for UNME has been discontinued. Accordingly, clause (v) of
the Explanation to section 48 of the Income-tax Act has been amended to provide
that "Cost Inflation Index" in relation to a previous year means such index as may be
notified by the Central Government having regard to seventy-five percent of average
rise in the Consumer Price Index (Urban) for the immediately preceding previous
year to such previous year.

19.3 Applicability:-This amendment takes effect from 1st April, 2016 and will,
accordingly, apply in relation to assessment year 2016-17 and subsequent
assessment years.




                                     Page 30 of 59 
 
20. Capital gains exemption in case of investment in a residential house
property

20.1 The provisions contained in sub-section (1) of section 54 of the Income-tax Act,
before its amendment by the Act, inter alia, provided that where capital gain arises
from the transfer of a long-term capital asset, being buildings or lands appurtenant
thereto, and being a residential house, and the assessee within a period of one year
before or two years after the date of transfer, purchases, or within a period of three
years after the date of transfer constructs, a residential house, then, the amount of
capital gains to the extent invested in the new residential house is not chargeable to
tax under section 45 of the Income-tax Act.

20.2 The provisions contained in sub-section (1) of section 54F of the Income-tax
Act, before its amendment by the Act, inter-alia, provided that where capital gains
arises from transfer of a long-term capital asset, not being a residential house, and
the assessee within a period of one year before or two years after the date of
transfer, purchases, or within a period of three years after the date of transfer
constructs, a residential house, then, the portion of capital gains in the ratio of cost of
new asset to the net consideration received on transfer is not chargeable to tax.

20.3 Certain courts had interpreted that the exemption is also available if investment
is made in more than one residential house. The benefit was intended for investment
in one residential house within India. Accordingly, sub-section (1) of section 54 of the
Income-tax Act has been amended to provide that the rollover relief under the said
section is available if the investment is made in one residential house situated in
India.

20.4 Similarly, sub-section (1) of section 54F of the Income-tax Act has been
amended to provide that the exemption is available if the investment is made in one
residential house situated in India.

20.5 Applicability: - These amendments take effect from 1st April, 2015 and will
accordingly apply in relation to assessment year 2015-16 and subsequent
assessment years.



21. Capital gains exemption on investment in Specified Bonds

21.1 The provisions contained in sub-section (1) of section 54EC of the Income-tax
Act, provide that where capital gain arises from the transfer of a long-term capital
asset and the assessee has, within a period of six months, invested the whole or part
of capital gains in the long-term specified asset, the proportionate capital gains so
invested in the long-term specified asset, out of the whole of the capital gain, shall


                                       Page 31 of 59 
 
not be charged to tax. The proviso to the said sub-section provides that the
investment made in the long-term specified asset during any financial year shall not
exceed fifty lakh rupees.

21.2 However, the wordings of the proviso have created an ambiguity. As a result
the capital gains arising during the year after the month of September were invested
in the specified asset in such a manner so as to split the investment in two years i.e.,
one within the year and second in the next year but before the expiry of six months.
This resulted in the claim for relief of one crore rupees as against the intended limit
for relief of fifty lakh rupees.

21.3 Accordingly, a proviso in sub-section (1) of section 54EC of the Income-tax Act
has been inserted to provide that the investment made by an assessee in the long-
term specified asset, out of capital gains arising from transfer of one or more original
assets, during the financial year in which the original asset or assets are transferred
and in the subsequent financial year does not exceed fifty lakh rupees.

21.4 Applicability:-This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to assessment year 2015-16 and subsequent
assessment years.



22.    Taxability of advance for transfer of a capital asset

22.1 The provisions contained in section 56 of the Income-tax Act, inter-alia,
provide that income of every kind which is not to be excluded from the total income
under the Income-tax Act shall be chargeable to income-tax under the head "Income
from other sources", if it is not chargeable to income-tax under any other head of
income.

22.2 Sub-section (2) of section 56 of the Income-tax Act provides for the specific
category of incomes that shall be chargeable to income-tax under the head "Income
from other sources".

22.3 A new clause (ix) has been inserted in said sub-section (2) of section 56 to
provide for the taxability of any sum of money, received as an advance or otherwise
in the course of negotiations for transfer of a capital asset. Such sum shall be
chargeable to income-tax under the head `income from other sources' if such sum is
forfeited and the negotiations do not result in transfer of such capital asset.

22.4 A consequential amendment in clause (24) of section (2) of the Income-tax
Act has also been made to include such sum in the definition of the term 'income'.

22.5 The provisions of section 51 of the Income-tax Act, before amendment by the
Act, provided that any advance retained or received shall be reduced from the cost

                                      Page 32 of 59 
 
of acquisition of the asset or the written down value or the fair market value of the
asset. In order to avoid double taxation of the advance received and retained, said
section 51 has been amended to provide that where any sum of money received as
an advance or otherwise in the course of negotiations for transfer of a capital asset ,
has been included in the total income of the assessee for any previous year, in
accordance with the provisions of clause (ix) of sub-section (2) of section 56, such
amount shall not be deducted from the cost for which the asset was acquired or the
written down value or the fair market value, as the case may be, in computing the
cost of acquisition.

22.6 Applicability: - These amendments take effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent years.




23. Losses in Speculation Business

23.1 The provisions of section 73 of the Income-tax Act provide that losses incurred
in respect of a speculation business cannot be set off or carried forward and set off
except against the profits of any other speculation business. Explanation to said
section 73, before its amendment by the Act, provided that in case of a company
deriving its income mainly under the head "Profits and gains of business or
profession" (other than a company whose principal business is business of banking
or granting of loans and advances), and where any part of its business consists of
purchase or sale of shares, such business shall be deemed to be speculation
business for the purpose of this section. Sub-section (5) of section 43 of the Income-
tax Act defines the term speculative transaction as a transaction in which a contract
for purchase or sale of any commodity, including stocks and shares, is settled
otherwise than by way of actual delivery. However, the proviso to the said section
exempts, inter-alia, transaction in respect of trading in derivatives on a recognised
stock exchange from its ambit.

23.2 Accordingly, an amendment has been made in Explanation to section 73 of the
Income-tax Act to provide that the provision of the Explanation shall also not be
applicable to a company the principal business of which is the business of trading in
shares.

23.3 Applicability:-This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to assessment year 2015-16 and subsequent
assessment years.




                                     Page 33 of 59 
 
24.   Raising the limit of deduction under section 80C of the Income-tax Act

24.1 Under the provisions of section 80C of the Income-tax Act, before amendment
by the Act, an individual or a Hindu undivided family was allowed a deduction from
income of an amount not exceeding one lakh rupees with respect to sums paid or
deposited in the previous year, in certain specified instruments.

24.2 The investments eligible for deduction, specified under sub-section (2) of
section 80C, include life insurance premia, contributions to provident fund, schemes
for deferred annuities etc. The assessee had the freedom to invest in any one or
more of the eligible instruments within the overall ceiling of Rs. 1 lakh.

24.3 The limit of above investments eligible for deduction under section 80C was
fixed vide Finance Act, 2005. In order to encourage household savings, the limit of
deduction allowed under section 80C has been raised from the existing Rs. 1 lakh to
Rs.1.5 lakh. In view of the same, consequential amendment has been carried out in
section 80CCE of the Act. The limit of employer's contribution to a notified pension
scheme is, however, retained at Rs. 1 lakh u/s 80CCD.

24.4 Applicability:-These amendments take effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.



25.   Extension of tax benefits under section 80CCD of the Income-tax Act to
private sector employees

25.1 Under the provisions contained in sub-section (1) of section 80CCD of the
Income-tax Act, before amendment by the Act, if an individual, employed by the
Central Government or any other employer on or after 1st January, 2004, has paid or
deposited any amount in a previous year in his account under a notified pension
scheme, a deduction of such amount not exceeding ten per cent. of his salary is
allowed. Similarly, the contribution made by the Central Government or any other
employer to the said account of the individual under the pension scheme is also
allowed as deduction under sub-section (2) of section 80CCD, to the extent it does
not exceed ten per cent. of the salary of the individual in the previous year.

25.2 Considering the fact that for employees in the private sector, the date of
joining the service is not relevant for joining the New Pension Scheme, the
provisions of section 80CCD have been amended to provide that the condition of the
date of joining the service on or after 1.1.2004 is not applicable to them for the
purposes of deduction under the said section.

25.3 Applicability:- This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to assessment year 2015-16 and subsequent
assessment years.

                                    Page 34 of 59 
 
26.    Extension of the sunset date under section 80-IA of the Income-tax Act
for the power sector

26.1 Under the provisions contained in the clause (iv) of sub-section (4) of section
80-IA of the Income-tax Act, before amendment by the Act, a deduction of profits and
gains is allowed to an undertaking which, ­

(a)    is set up in any part of India for the generation and distribution of power if it
       begins to generate power at any time during the period beginning on 1st April,
       1993 and ending on 31st March, 2014;

(b)    starts transmission or distribution by laying a network of new transmission or
       distribution lines at any time during the period beginning on 1st April, 1999
       and ending on 31st March, 2014;

(c)    undertakes substantial renovation and modernization of existing network of
       transmission or distribution lines at any time during the period beginning on
       1st April, 2004 and ending on 31st March, 2014.

26.2 With a view to provide further time to the undertakings to commence the
eligible activity to avail the tax incentive, the above provisions have been amended
to extend the terminal date for a further period up to 31st March, 2017 i.e. till the end
of the 12th Five Year Plan.

26.3 Applicability:- These amendments take effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.




27. Rationalisation of the definition of International Transaction

27.1 The provisions of section 92B of the Income-tax Act, before its amendment by
the Act, defined 'International transaction' as a transaction in the nature of purchase,
sale, lease, provision of services, etc. between two or more associated enterprises,
either or both of whom are non-residents.

27.2 Sub-section (2) of the said section extended the scope of the definition of
international transaction by providing that a transaction entered into with an
unrelated person shall be deemed to be a transaction with an associated enterprise,
if there exists a prior agreement in relation to the relevant transaction between such
other person and the associated enterprise, or the terms of the relevant transaction
are determined in substance between the other person and the associated
enterprise. The wordings of sub-section (2) of section 92B, prior to its amendment,
had led to a doubt whether for the transaction to be treated as an international
transaction, the unrelated person should also be a non-resident.

                                      Page 35 of 59 
 
27.3 With a view to clarify the intention of the legislature, section 92B has been
amended to provide that where, in respect of a transaction entered into by an
enterprise with a person other than an associated enterprise, there exists a prior
agreement in relation to the relevant transaction between the other person and the
associated enterprise or, where the terms of the relevant transaction are determined
in substance between such other person and the associated enterprise, and either
the enterprise or the associated enterprise or both of them are non-resident, then
such transaction shall be deemed to be an international transaction entered into
between two associated enterprises, whether or not such other person is a non-
resident.

27.4 Applicability:- This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.


28. Providing for use of range concept in determination of Arm's Length Price

28.1 Section 92C of the Income-tax Act provides for computation of Arm's Length
Price (ALP) of an international transaction or specified domestic transaction. Sub-
section (1) provides that ALP shall be determined by the most appropriate method.
Sub-section (2), inter alia, provides that where more than one price is determined by
the most appropriate method, the ALP shall be taken to be arithmetical mean of such
price.

28.2 The use of arithmetical mean for determination of ALP is a unique feature of
Indian transfer pricing regime introduced in 2002. This was necessitated on account
of lack of publically available data in respect of comparables. Internationally, most
countries employ a "range" concept for determination of ALP where more than one
price is determined.

28.3 With a view to introduce `range concept' for determination of ALP, sub-section
(2) of section 92C has been amended to provide that in respect of international
transaction or specified domestic transaction undertaken on or after 01.04.2014,
where more than one price is determined by the most appropriate method, the ALP
shall be computed in the manner as may be prescribed. However, the arithmetic
mean concept will continue to apply where number of comparables is inadequate.

28.4 Applicability:- This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.


29. Roll back provision in Advance Pricing Agreement Scheme

29.1 Section 92CC of the Income-tax Act provides for Advance Pricing Agreement
(APA). It empowers the Central Board of Direct Taxes, with the approval of the
Central Government, to enter into an APA with any person for determining the Arm's

                                    Page 36 of 59 
 
Length Price (ALP) or specifying the manner in which ALP is to be determined in
relation to an international transaction which is to be entered into by that person. The
agreement entered into is valid for a period, not exceeding five previous years, as
may be specified in the agreement. Once the agreement is entered into, the ALP of
the international transaction, which is subject matter of the APA, would be
determined in accordance with such an APA.

29.2 In many countries the APA scheme provides for "roll back" mechanism for
dealing with ALP issues relating to transactions entered into during the period prior
to APA. The "roll back" provisions refer to the applicability of the methodology of
determination of ALP, or the ALP, to be applied to the international transactions
which had already been entered into in a period prior to the period covered under an
APA. However, the "roll back" relief is provided on case to case basis subject to
certain conditions. Providing for such a mechanism in Indian legislation would reduce
litigation which is currently pending or may arise in future in respect of the transfer
pricing matters.

29.3 Therefore, section 92CC of the Income-tax Act has been amended to provide
for roll back mechanism in the APA scheme. It has been provided that the APA may,
subject to such conditions, procedure and manner as may be prescribed, provide for
determining the arm's length price or specify the manner in which the arm's length
price is to be determined in relation to an international transaction entered into by the
person during any period not exceeding four previous years preceding the first of the
previous years for which the advance pricing agreement applies in respect of the
international transaction to be undertaken in future.

29.4   Applicability: - This amendment takes effect from 1st October, 2014.



30.    Tax on long-term capital gains on units

30.1 The provisions contained in section 112 of the Income-tax Act provide for tax
payable in the case of income arising from the transfer of a long-term capital asset.
The proviso to sub-section (1) , before amendment made by the Act, provided that
where the tax payable in respect of any income arising from transfer of a long-term
capital asset, being listed securities or unit or zero coupon bond is more than ten per
cent of the amount of capital gains without indexation adjustment, then such excess
shall be ignored.

30.2 The aforesaid proviso has been amended to provide that where the tax
payable in respect of any income arising from transfer of a long-term capital asset,
being listed securities (other than a unit) or zero coupon bond exceeds ten per cent
of the amount of capital gains without indexation adjustment, such excess shall be
ignored. However, where the tax payable in respect of any income arising from the
transfer of a long-term capital asset, being a unit of a Mutual Fund specified under
clause (23D) of section 10 of the Income-tax Act, during the period beginning on 1st
April, 2014 and ending on 10th July, 2014, exceeds ten per cent of the amount of

                                      Page 37 of 59 
 
capital gains before giving effect to the provisions of the second proviso to section 48
of the Income-tax Act, then, such excess shall be ignored for the purpose of
computing the tax payable by the assessee.

30.3 Applicability: - This amendment takes effect from 1st April, 2015 and will
accordingly apply, in relation to the assessment year 2015-16 and subsequent
assessment years.




31. Anonymous donations under section 115BBC of the Income-tax Act

31.1 The provisions of section 115BBC of the Income-tax Act, before amendment
by the Act, provided for levy of tax at the rate of 30 per cent. in case of certain
assessees, being university, hospital, charitable organisation, etc. on the amount of
aggregate anonymous donations exceeding five per cent of the total donations
received by the assessee or one lakh rupees, whichever is higher.

31.2 Due to the mechanism of aggregation of tax provided in section 115BBC,
while tax at the rate of 30 per cent. was levied on the amount of anonymous
donations exceeding the threshold, the remaining tax was chargeable on total
income after reducing the full amount of anonymous donations. The proper way of
computation is to reduce the income by the amount which has been taxed at the rate
of 30 per cent.

31.3 Therefore, section 115BBC has been amended to provide that the income-tax
payable shall be the aggregate of the amount of income-tax calculated at the rate of
thirty per cent on the aggregate of anonymous donations received in excess of five
per cent of the total donations received by the assessee or one lakh rupees,
whichever is higher, and the amount of income-tax with which the assessee would
have been chargeable had his total income been reduced by the aggregate of the
anonymous donations which is in excess of the five per cent of the total donations
received by the assessee or one lakh rupees, as the case may be.

31.4 Applicability:- This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.


32. Reduction in tax rate on certain dividends received from foreign companies

32.1 Section 115BBD of the Income-tax Act was introduced as an incentive for
attracting repatriation of income earned by Indian companies from investments made
abroad. It provides for taxation of gross dividends received by an Indian company
from a specified foreign company at a concessional rate of 15 per cent. if such
dividend is included in the total income for the assessment year 2012-13 or 2013-14
or 2014-2015.


                                      Page 38 of 59 
 
32.2 With a view to encourage Indian companies to repatriate foreign dividends
into the country, section 115BBD has been amended to extend the benefit of lower
rate of taxation without limiting it to a particular assessment year. Thus, such foreign
dividends received in financial year 2014-15 and subsequent financial years shall
continue to be taxed at the lower rate of 15%.

32.3 Applicability:- This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.




33.      Alternate Minimum Tax

33.1 The provisions of section 115JC of the Income-tax Act, before its amendment
by the Act, provide that where the regular income tax payable by a person, other
than a company, for a previous year is less than the alternate minimum tax for such
previous year, the person would be required to pay income tax at the rate of
eighteen and one half per cent on its adjusted total income. The section further
provides that the total income shall be increased by deductions claimed under Part C
of Chapter VI-A, and under section 10AA to arrive at adjusted total income.

33.2 Under the Income-tax Act, the investment linked deductions have been
provided in place of profit linked deductions. These profit linked deductions are
subject to alternate minimum tax (AMT).

33.3 Accordingly, with a view to include the investment linked deduction claimed
under section 35AD in computing adjusted total income for the purpose of calculating
alternate minimum tax, section 115JC has been amended to provide that total
income shall be increased by the deduction claimed under section 35AD for the
purpose of computation of adjusted total income. The amount of depreciation
allowable under section 32 shall, however, be reduced in computing the adjusted
total income.
      Example:

       Total income                                                         :   Rs. 60

       Deduction claimed under Chapter VI-A                                 :   Rs. 40

       Deduction claimed under section 35AD on a capital asset              :   Rs. 100

       Computation of adjusted total income for the purposes of AMT
       Total income                                                         :   Rs. 60

       ADDITIONS
           (i) deduction under Chapter VI-A (on non-specified business)     :   Rs. 40

       (ii) deduction under section 35AD(on specified business)   Rs. 100
       LESS: depreciation under section 32                        Rs. 15    :   Rs. 85


                                            Page 39 of 59 
 
      Adjusted total income under section 115JC                              Rs.185

33.4 Applicability:- These amendments take effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.

34.     Credit of Alternate Minimum Tax

34.1 The provisions of sub-section (1) of section 115JEE of the Income-tax Act,
before amendment by the Act, provided that the provisions of Chapter-XII BA shall
be applicable to any person who has claimed a deduction under part C of Chapter
VI-A or claimed a deduction u/s 10AA. Further the provisions of sub-section (2) of
section 115JEE, before amendment by the Act, provided that the Chapter shall not
be applicable to an individual, HUF, association of persons , a body of individuals
(whether incorporated or not) or an artificial juridical person if the adjusted total
income does not exceed twenty lakh rupees. This has created difficulty in claim of
credit of alternate minimum tax under section 115JD in an assessment year where
the income is not more than twenty lakh rupees or there is no claim of any deduction
under section 10AA or Chapter VI-A.

34.2 Sub-section (1) of section 115JEE has been amended to provide that Chapter
XII-BA shall also be applicable to a person who has claimed any deduction under
section 35AD of the Income-tax Act.

34.3 Further, with a view to enable an assessee to claim credit of alternate
minimum tax paid in any earlier previous year, section 115JEE has been amended to
provide that the credit for tax paid under section 115JC shall be allowed in
accordance with the provisions of section 115JD, notwithstanding the conditions
mentioned in sub-section (1) or (2) of section 115JEE.

34.4 Applicability: - This amendment takes effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.




35. Dividend and Income Distribution Tax

35.1 Section 115-O of the Income-tax Act provides that a domestic company shall
be liable for payment of additional income-tax at the rate of 15 per cent. on any
amount declared, distributed or paid by way of dividends to its shareholders. This tax
on distributed profits is final tax in respect of the amount declared, distributed or paid
as dividends and no credit in respect of it can be claimed by the company or the
shareholder.




                                          Page 40 of 59 
 
35.2 Similarly, section 115 R of the Income-tax Act provides for levy of additional
income-tax in respect of income distributed by the mutual fund to its investors at the
rates specified in the said section.

35.3 Prior to introduction of dividend distribution tax (DDT), the dividends were
taxable in the hands of the shareholder. The gross amount of dividend representing
the distributable surplus was taxable, and the tax on this amount was paid by the
shareholder at the applicable rate which varied from 0 to 30%. However, after the
introduction of the DDT, a lower rate of 15% was applicable but this rate was being
applied on the amount paid as dividend after reduction of distribution tax by the
company.

35.4 Therefore, the tax was computed by the company with reference to the net
amount. Similar was the case when income was distributed by mutual funds. Due to
difference in the base of the income distributed or dividend on which the distribution
tax is calculated, the effective tax rate was lower than the rate provided in the
respective sections.

35.5 In order to ensure that tax is levied on proper base, the amount of
distributable income, and the dividends which are actually received by the unit holder
of the mutual fund or shareholders of the domestic company, as the case may be,
were required to be grossed up for the purpose of computing the additional tax.


35.6 Accordingly, section 115-O has been amended so as to provide that for the
purposes of determining the tax on distributed profits payable in accordance with the
provisions of section 115-O, any amount by way of dividends referred to in sub-
section (1) of the said section, as reduced by the amount referred to in sub-section
(1A) [referred to as net distributed profits], shall be increased to such amount as
would, after reduction of the tax on such increased amount at the rate specified in
sub-section (1), be equal to the net distributed profits. Thus, where the amount of
dividend paid or distributed by a company is Rs. 85, then DDT under the amended
provision would be calculated as follows:
       Dividend amount distributed = Rs. 85
       Increase by Rs. 15 [i.e. (85*0.15)/(1-0.15)]
       Increased amount = Rs. 100
       DDT @ 15% of Rs. 100 = Rs. 15
       Tax payable u/s 115-O is Rs. 15

       Dividend distributed to shareholders = Rs. 85

35.7 Similarly, section 115R has been amended to provide that for the purposes of
determining the additional income-tax payable in accordance with sub-section (2) of
the said section, the amount of distributed income shall be increased to such amount
as would, after reduction of the additional income-tax on such increased amount at
the rate specified in sub-section (2), be equal to the amount of income distributed by
the Mutual Fund.

35.8   Applicability:-These amendments take effect from 1st October, 2014.



                                     Page 41 of 59 
 
36. Taxation Regime for Real Estate Investment Trust (REIT) and Infrastructure
Investment Trust (Invit)

36.1 The Securities and Exchange Board of India (SEBI) has notified regulations
relating to two new categories of investment vehicles namely, the Real Estate
Investment Trust (REIT) & Infrastructure Investment Trust (Invit) on 26th September,
2014. These are SEBI (Real Estate Investment Trusts) Regulations, 2014 and SEBI
(Infrastructure Investment Trusts) Regulations, 2014.

36.2 The income-investment model of REITs and Invits (referred to as business
trusts) has the following distinctive elements:
(i) the trust would raise capital by way of issue of units (to be listed on a recognised
stock exchange) and can also raise debts directly both from resident as well as non-
resident investors;
(ii) the income bearing assets would be held by the trust by acquiring controlling or
other specific interest in an Indian company (SPV) from the sponsor.

36.3 Accordingly, the Income-tax Act has been amended to put in place a specific
taxation regime which provides for the way the income in the hands of such trusts is
to be taxed and the taxability of the income distributed by such business trusts in the
hands of the unit holders of such trusts. Such regime has the following main
features:­

 (i) The listed units of a business trust, when traded on a recognised stock exchange,
would be liable to securities transaction tax (STT), and the long term capital gains
shall be exempt and the short term capital gains shall be taxable at the rate of 15%.

(ii) In case of capital gains arising to the sponsor at the time of exchange of shares in
SPVs with units of the business trust, the taxation of gains shall be deferred and tax
on gains shall be levied at the time of disposal of units by the sponsor. However, the
preferential capital gains regime (consequential to levy of STT) available in respect
of units of business trust, will not be available to the sponsor in respect of these units
at the time of transfer. Further, for the purpose of computing capital gain, the cost of
these units shall be considered as cost of the shares to the sponsor. The holding
period of shares shall also be included in the holding period of such units.
(iii) The income by way of interest received by the business trust from SPV is
accorded pass through treatment i.e., there is no taxation of such interest income in
the hands of the trust and no withholding tax at the level of SPV. However,
withholding tax at the rate of 5 per cent. in case of payment of interest component of




                                      Page 42 of 59 
 
income distributed to non-resident unit holders, and at the rate of 10 per cent. in
respect of payment of interest component of distributed income to a resident unit
holder shall be effected by the trust.
(iv) In case of external commercial borrowings by the business trust, the benefit of
reduced rate of 5 per cent. tax on interest payments to non-resident lenders shall be
available on similar conditions, for such period as is provided in section 194LC of the
Income-tax Act.
(v) The dividend received by the trust shall be subject to dividend distribution tax at
the level of SPV but will be exempt in the hands of the trust, and the dividend
component of the income distributed by the trust to unit holders will also be exempt.
(vi) The income by way of capital gains on disposal of assets by the trust shall be
taxable in the hands of the trust at the applicable rate. However, if such capital gains
are distributed, then the component of distributed income attributable to capital gains
would be exempt in the hands of the unit holder. Any other income of the trust shall
be taxable at the maximum marginal rate.
(vii) The business trust is required to furnish its return of income.
(viii) The necessary forms to be filed and other reporting requirements to be met by
the trust shall be prescribed to implement the above scheme.

36.5   Applicability: - This amendment takes effect from 1st October, 2014.




37. Income-tax Authorities

37.1 Section 116 of the Income-tax Act specifies income-tax authorities for the
purposes of the Income-tax Act and section 117 states that the Central Government
may appoint such persons as it thinks fit to be income-tax authorities. The income-
tax authorities enumerated under section 116 of the Income-tax Act include Central
Board of Direct Taxes, Directors-General of Income-tax or Chief Commissioners of
Income-tax, Directors of Income-tax or Commissioners of Income-tax etc.

37.2 In view of the creation of new income-tax authorities, section 116 of the Income-
tax Act has been amended so as to include the newly created income-tax authorities.
Further, clauses (34A), (34B), (34C) and (34D) in section 2 of the Income-tax Act
have been inserted so as to define the terms "Principal Chief Commissioner of
Income-tax", "Principal Commissioner of Income-tax", "Principal Director General of
Income-tax" and "Principal Director of Income-tax" to mean a person appointed to be
an income-tax authority under section 117 of the Income-tax Act. Consequential
amendments in clauses (15A), (16) and (21) of section 2 and in other sections of the
Income-tax Act have also been made.

37.3 Applicability:- These amendments take effect retrospectively from 1st June,
2013.

                                      Page 43 of 59 
 
38. Enabling CBDT to relax provisions relating to levy of fee under section
234E of the Income-tax Act:

38.1 As per the existing provisions of the Income-tax Act, a deductor/collector is
required to furnish periodical tax deducted at source (TDS)/tax collected at source
(TCS) statements (quarterly) containing the details of deduction/collection of tax
made during the quarter by the prescribed due date. Delay in furnishing of TDS/TCS
statement results in delay in granting of credit of TDS/TCS to the deductee/collectee
and consequently leads to delay in issue of refunds to the deductee/collectee or
raising of infructuous demand against the deductee/collectee.

38.2 In order to provide effective deterrence against delay in furnishing of
TDS/TCS statement, the Finance Act, 2012 inserted section 234E in the Income-tax
Act to provide for levy of fee of Rs.200 per day for late furnishing of TDS/TCS
statement from the due date of furnishing of TDS/TCS statement to the date of
furnishing of TDS/TCS statement. The levy of fee under section 234E of the
Income-tax Act has proved to be an effective tool in improving the compliance in
respect of timely submission of TDS/TCS statement by the deductor/collector.
However, the levy of fee under section 234E of the Income-tax Act could not be
waived / reduced even in the cases where the delay in filing of TDS/TCS statement
was due to circumstances beyond the control of the deductor/collector.

38.3 For removing the genuine hardship faced by the deductors/collectors due to
levy of fee mandated by the section 234E of the Income-tax Act, section 119 (2)(a) of
the Income-tax Act has been amended to enable the CBDT to relax the provisions of
the section 234E of the Income-tax Act in suitable cases.

38.4 Applicability:- This amendment takes effect from the 1st October, 2014.



39.   Power of Survey

39.1 The provisions contained in section 133A of the Income-tax Act enable the
Income-tax authority to enter any premises in which business or profession is carried
out for the purposes of survey. An income-tax authority acting under this section may
impound and retain in his custody any books of account or documents inspected by
him during the course of survey. However, prior to its amendment by the Act, the
said section provided that such income-tax authority shall not retain in his custody
any such books of account or document for a period exceeding ten days (exclusive
of holidays) without obtaining the approval of the Chief Commissioner or Director
General therefor, as the case maybe.



                                    Page 44 of 59 
 
39.2 An income-tax authority acting under section 133A has the powers as
conferred upon it under sub-section (1) of section 131 of the Income-tax Act. With a
view to align the time period and the authority for approval for retention of books of
account or other documents beyond the specified time period, section 133A has
been amended to provide that the income-tax authority shall not retain in his custody
any such books of account or other documents for a period exceeding fifteen days
(exclusive of holidays) without obtaining the approval of the Principal Chief
Commissioner or Director General or Commissioner or Director therefor, as the case
may be.

39.3 Section 133A has further been amended to provide that an income-tax
authority may, for the purpose of verifying that tax has been deducted or collected at
source in accordance with the provisions of Chapter XVII-B or Chapter XVII-BB, as
the case may be, enter any office, or a place where business or profession is carried
on, within the limits of the area assigned to him, or any such place in respect of
which he is authorised for the purposes of the said section by such income-tax
authority who is assigned the area within which such place is situated where books
of account or documents are kept. The income-tax authority may for this purpose
enter an office, or a place where business or profession is carried on after sunrise
and before sunset. Further, such income-tax authority may require the deductor or
the collector or any other person who may at the time and place of survey be
attending to such work, 
(i)    to afford him the necessary facility to inspect such books of account or other
documents as he may require and which may be available at such place, and
(ii)   to furnish such information as he may require in relation to such matter.

39.4 It has also been provided that an income-tax authority while acting under sub-
section (2A) of section 133A, may place marks of identification on the books of
account or other documents inspected by him and take extracts and copies thereof.
He may also record the statement of any person which may be useful for, or relevant
to, any proceeding under the Income-tax Act. However, while acting under said sub-
section (2A), the income-tax authority shall not impound and retain in his custody
any books of accounts or documents inspected by him or make an inventory of any
cash, stock or other valuables.

39.5   Applicability:- These amendments take effect from 1st October, 2014.




40. Inquiry by prescribed income-tax authority

40.1 With a view to enable prescribed income-tax authority to verify the information
in its possession relating to any person, a new section 133C has been inserted in the
Income-tax Act so as to provide that for the purposes of verification of information in

                                     Page 45 of 59 
 
its possession relating to any person, prescribed income-tax authority, may, issue a
notice to such person requiring him, on or before a date to be therein specified, to
furnish information or documents, verified in the manner specified therein which may
be useful for, or relevant to, any enquiry or proceeding under this Act.

40.2 Applicability: - This amendment takes effect from 1st October, 2014.




41. Mutual Funds, Securitisation Trusts and Venture Capital Companies or
Venture Capital Funds to file return of income

41.1 The provisions contained in section 139 of the Income-tax Act provide that
every person being a company or a firm or being a person (other than a company or
firm) if his total income or the total income of any other person in respect of which he
is assessable under the said Act during the previous year exceeds the maximum
amount which is not chargeable to income-tax, shall furnish a return of his income or
the income of such other person during the previous year, in the prescribed form and
verified in the prescribed manner and setting forth such other particulars as may be
prescribed. Apart from the above, certain other entities, which are not chargeable to
income-tax in accordance with the provisions of section 10 of the Income-tax Act, are
required to file their return of income if their total income without giving effect to the
provisions of said section 10, exceeds the maximum amount which is not chargeable
to income-tax.

41.2 Clause (23D) of section 10 of the Income-tax Act exempts the income of a
Mutual Fund, clause (23DA) of section 10 of the said Act exempts the income of a
securitisation trust from the activity of securitisation and clause (23FB) of section 10
of the Income-tax Act exempts the income of a venture capital company (VCC) or
venture capital fund (VCF) from investment in a venture capital undertaking. Before
amendments made by the Act, the Mutual Fund or securitisation trust or VCC or VCF
were not obligated to furnish their return of income under section 139 of the Income-
tax Act. Instead they were required to furnish a statement giving details of the nature
of the income paid or credited or income distributed during the previous year and
such other relevant details as may be prescribed.

41.3 Sub-section (4C) of section 139 of the Income-tax Act has been amended to
provide that Mutual Fund referred to in clause (23D) of section10, securitization trust
referred to in clause (23DA) of section 10 and Venture Capital Company or Venture
Capital Fund referred to in clause (23FB) of section 10 of the Income-tax Act shall, if
the total income in respect of which such fund, trust or company is assessable,
without giving effect to the provisions of section 10 of the Income-tax Act, exceeds
the maximum amount which is not chargeable to income-tax, furnish a return of such
income of the previous year in the prescribed form and verified in the prescribed

                                      Page 46 of 59 
 
manner and setting forth such other particulars as may be prescribed and all the
provisions of the Income-tax Act, so far as may be, apply as if it were a return
required to be furnished under sub-section (1) of section 139 of the said Act.

41.4 Further, in the case of the Mutual Funds and securitisation trusts referred to
above, the requirement of filing of statements before an income-tax authority has
been dispensed with by omitting sub-section (3A) of section 115R and sub-section
(3) of section 115TA.

41.5 Applicability:-These amendments take effect from 1st April, 2015.




42. Signing and verification of return of income

42.1 The provisions under section 140 of the Income-tax Act, before amendment by
the Act, provided that the return under section 139 shall be signed and verified in the
manner specified therein.

42.2 With a view to enable the verification of returns either by a sign in manuscript or
by any electronic mode, section 140 of the Income-tax Act has been amended to
provide that the return shall be verified by the persons specified therein. The manner
of verification of return is prescribed under section 139 of the Income-tax Act.

42.3 Applicability:- This amendment takes effect from 1st October, 2014.



43. Estimate of value of assets by Valuation Officer and time limit for
completion of assessments where reference made

43.1 The provisions contained in section 142A of the Income-tax Act, before its
amendment by the Act, provided that the Assessing Officer may, for the purpose of
making an assessment or reassessment, require the Valuation Officer to make an
estimate of the value of any investment, any bullion, jewellery or fair market value of
any property. On receipt of the report of the Valuation Officer, the Assessing Officer
may after giving the assessee an opportunity of being heard take into account such
report for the purposes of assessment or reassessment.

43.2 Section 142A of the Income-tax Act does not envisage rejection of books of
account as a pre-condition for reference to the Valuation Officer for estimation of the
value of any investment or property. Further, the said section 142A does not provide
for any time limit for furnishing of the report by the Valuation Officer.



                                      Page 47 of 59 
 
43.3 Accordingly, section 142A has been substituted so as to provide that the
Assessing Officer may, for the purposes of assessment or reassessment, require the
assistance of a Valuation Officer to estimate the value, including fair market value, of
any asset, property or investment and submit the report to him. The Assessing
Officer may make a reference to the Valuation Officer whether or not he is satisfied
about the correctness or completeness of the accounts of the assessee. The
Valuation Officer, shall, for the purpose of estimating the value of the asset, property
or investment, have all the powers of section 38A of the Wealth-tax Act, 1957. The
Valuation Officer is required to estimate the value of the asset, property or
investment after taking into account the evidence produced by the assessee and any
other evidence in his possession or gathered, after giving an opportunity of being
heard to the assessee.If the assessee does not co-operate or comply with the
directions of the Valuation Officer he may, estimate the value of the asset, property
or investment to the best of his judgment.

43.4 It has also been provided that the Valuation Officer shall send a copy of his
estimate to the Assessing Officer and the assessee within a period of six months
from the end of the month in which the reference is made. On receipt of the report
from the Valuation Officer, the Assessing Officer may, after giving the assessee an
opportunity of being heard, take into account such report in making the assessment
or reassessment.

43.5 Sections 153 and 153B of the Income-tax Act have also been amended to
provide that the time period beginning with the date on which the reference is made
to the Valuation Officer and ending with the date on which his report is received by
the Assessing Officer shall be excluded from the time limit provided under the
aforesaid section for completion of assessment or reassessment.

43.6 Applicability:- These amendments take effect from 1st October, 2014.


44. Income Computation and Disclosure Standards

44.1 Section 145 of the Income-tax Act provides that the method of accounting for
computation of income under the heads "Profits and gains of business or profession"
and "Income from other sources" can either be the cash or mercantile system of
accounting. The Finance Act, 1995 empowered the Central Government to notify
Accounting Standards (AS) for any class of assessee or for any class of income.
Since the introduction of these provisions, only two Accounting Standards relating to
disclosure of accounting policies and disclosure of prior period and extraordinary
items and changes in accounting policies have been notified.

44.2 The Central Board of Direct Taxes (CBDT) had constituted an Accounting
Standard Committee in 2010. The Committee has submitted its Final Report in


                                      Page 48 of 59 
 
August, 2012. The Committee recommended that the AS notified under the Income-
tax Act should be made applicable only to the computation of taxable income and a
taxpayer should not be required to maintain books of account on the basis of AS
notified under the Income-tax Act. The Final Report of the Committee was placed in
public domain for inviting comments from stakeholders and general public. After
examining the comments/suggestions, the Committee, inter alia, recommended that
the provisions of section 145 of the Income-tax Act may be suitably amended to
clarify that the notified AS are not meant for maintenance of books of account but are
to be followed for computation of income.

44.3 In order to clarify that the standards notified under subsection (2) of section
145 of the Income-tax Act are to be followed for computation of income and
disclosure of information by any class of assessees or for any class of income,
section 145(2) has been amended to provide that the Central Government may notify
in the Official Gazette from time to time income computation and disclosure
standards to be followed by any class of assessees or in respect of any class of
income.

 44.3.1 Section 145(2) has been further amended to provide that the Assessing
Officer may make an assessment in the manner provided in section 144 of the
Income-tax Act, if the income has not been computed in accordance with the
standards notified under subsection (2) of section 145 of the Income-tax Act.

44.4 Applicability:- These amendments take effect from 1st April, 2015 and will,
accordingly, apply in relation to the assessment year 2015-16 and subsequent
assessment years.



45. Assessment of income of a person other than the person who has been
searched

45.1 Section 153C of the Income-tax Act relates to assessment of income of any
person other than the person in whose case search has been initiated or requisition
is made. The provisions contained in sub-section (1) of section 153C of Income-tax
Act, before its amendment by the Act, provided that notwithstanding anything
contained in section 139, section 147, section148, section 149, section 151 and
section 153 of the said Act, where the Assessing Officer is satisfied that any money,
bullion, jewellery or other valuable article or thing or books of account or documents
seized or requisitioned belong to any person, other than the person referred to in
section 153A of the said Act, then the books of account or documents or assets
seized or requisitioned shall be handed over to the Assessing Officer having
jurisdiction over such other person and that Assessing Officer shall proceed against
each such other person and issue such other person notice and assess or reassess
income of such other person in accordance with the provisions of section 153A of the
Income-tax Act.

                                     Page 49 of 59 
 
45.2 Section 153C of the Income-tax Act has been amended to provide that
notwithstanding anything contained in section 139, section147, section 148, section
149, section 151 and section 153 of the said Act, where the Assessing Officer is
satisfied that any money, bullion, jewellery or other valuable article or thing or books
of account or documents seized or requisitioned belongs or belong to any person,
other than the person referred to in section 153A of the said Act, then books of
account or documents or assets seized or requisitioned shall be handed over to the
Assessing Officer having jurisdiction over such other person and that Assessing
Officer shall proceed against each such other person and issue such other person
notice and assess or reassess income of such other person in accordance with the
provisions of section 153A if he is satisfied that the books of account or documents
or assets seized or requisitioned have a bearing on the determination of the total
income of such other person for the relevant assessment year or years referred to in
sub-section (1) of section 153A of the Income-tax Act .

45.3 Applicability:-This amendment takes effect from 1st October, 2014.




46.   Tax deduction at source from non-exempt payments under life
insurance policy

46.1 The provisions of section 10(10D) of the Income-tax Act provide that any sum
received under a life insurance policy, including the sum allocated by way of bonus
on such policy is exempt subject to fulfillment of conditions specified under said
section 10(10D). Therefore, the sum received under a life insurance policy which
does not fulfill the conditions specified under section 10(10D) are taxable under the
provisions of the Income-tax Act.

46.2 In order to have a mechanism for reporting of transactions and collection of tax
in respect of sum paid under life insurance policies which are not exempt under
section 10(10D) of the Income-tax Act, a new section 194DA has been inserted in
the Income-tax Act to provide for deduction of tax at the rate of 2 per cent on sum
paid under a life insurance policy, including the sum allocated by way of bonus,
which is not exempt under section 10(10D) of the Income-tax Act. In order to reduce
the compliance burden on the small tax payers, it has been provided that no
deduction under this provision shall be made if the aggregate sum paid in a financial
year to an assessee is less than Rs.1,00,000/-.

46.3 Applicability:- This amendment takes effect from 1st October, 2014.




                                      Page 50 of 59 
 
47. Concessional rate of tax on overseas borrowing

47.1 The provisions of section 194LC of the Income-tax Act, before amendment by
the Act, provided for lower withholding tax rate of 5 per cent. on interest paid by an
Indian company to non-residents on monies borrowed by it in foreign currency from a
source outside India under a loan agreement or through issue of long-term
infrastructure bonds at any time on or after the 1st day of July, 2012 but before the
1st day of July, 2015 subject to certain conditions.

47.2 In order to further incentivise low cost long-term foreign borrowings by Indian
companies, section 194LC has been amended to extend the benefit of this
concessional rate of withholding tax to borrowings by way of issue of any long-term
bond, and not limited to a long term infrastructure bond.

47.3 Further, the period of borrowing has also been extended by two years. The
concessional rate of withholding tax will now be available in respect of borrowings
made on or after the 1st day of July, 2012 but before the 1st day of July, 2017.

47.4 Section 206AA of the Income-tax Act provides for deduction of tax at source
at a higher rate if the recipient of income does not provide his permanent account
number to the deductor. An exception from applicability of section 206AA was made
in respect of payment of interest on long-term infrastructure bonds eligible for benefit
under section 194LC.

47.5 Consequent to amendment of section 194LC, amendment in section 206AA
has also been made to provide that the provisions of the said section are not
applicable in respect of the payment of interest on any long-term bond referred to in
section 194LC.

47.6   Applicability:- These amendments take effect from 1st October, 2014.




48. Tax Deduction at Source

48.1 Under Chapter XVII-B of the Income-tax Act, a person is required to deduct tax
on certain specified payments at the specified rates if the payment exceeds specified
threshold. The person deducting tax (`the deductor') is required to file a quarterly
statement of tax deduction at source (TDS) containing the prescribed details of
deduction of tax made during the quarter by the prescribed due date.

48.2 Currently, a deductor is allowed to file correction statement for rectification/
updation of the information furnished in the original TDS statement as per the
Centralised Processing of Statements of Tax Deducted at Source Scheme, 2013
notified vide Notification No.03/2013 dated 15th January, 2013. However, there does
not exist any express provision in the Income-tax Act for enabling a deductor to file
correction statement.



                                      Page 51 of 59 
 
48.3 In order to bring clarity in the matter relating to filing of correction statement,
Section 200 of the Income-tax Act has been amended to allow the deductor to file
correction statements.

48.3.1 Consequently, provisions of section 200A of the Income-tax Act have also
amended to enable the processing of correction statement filed.

48.3.2 The provisions of section 201(1) of the Income-tax Act provide for passing of
an order deeming a payer as assessee in default if he does not deduct or does not
pay or after deduction fails to pay the whole or part of the tax as per the provisions of
Chapter XVII-B of the Income-tax Act. Section 201(3) of the Income-tax Act provides
for the time limit for passing of order under section 201(1) of the Income-tax Act for
deeming a payer as assessee in default for failure to deduct tax from payments
made to a resident. Clause (i) of subsection (3) of section 201 of the Income-tax Act
provided that no order under sub-section (1) of section 201 of the Income-tax Act
shall be passed after expiry of two years from the end of the financial year in which
the TDS statement has been filed. Currently, the processing of TDS statement is
done in the computerised environment and mainly focuses on the transactions
reported in the TDS statement filed by the deductor. Therefore, there is no rationale
for not treating the deductor as assessee in default in respect of the TDS default
after two years only on the ground that the deductor has filed TDS statement
whereas TDS defaults are generally in respect of the transaction not reported in the
TDS statement. Therefore, clause (i) of sub-section (3) of section 201of the Income-
tax Act which provided time limit of two years for passing order under section 201(1)
of the Income-tax Act for cases in which TDS statement have been filed, has been
omitted.

48.3.3 Clause (ii) of subsection(3) of section 201 of the Income-tax Act provided a
time limit of six years from the end of the financial year in which payment/credit is
made, for passing of an order under section 201(1) of the Income-tax Act in cases in
which TDS statement has not been filed. However, notice under section 148 of the
Income-tax Act may be issued for reassessment up to 6 years from the end of the
assessment year for which the income has escaped assessment. Therefore, section
148 of the Income-tax Act allows reopening of cases of one more preceding previous
year than specified under clause (ii) of subsection (3) of section 201of the Income-
tax Act. Due to this, order under subsection(1) of section 201of the Income-tax Act
could not be passed in respect of defaults relating to TDS which came to the notice
during search/reassessment proceeding in respect of the previous year which were
covered under section 148 of the Income-tax Act but not under section 201(3)(ii) of
the Income-tax Act. In order to align the time limit provided under section 201(3)(ii)
with that provided under section 148 of the Income-tax Act, , section 201 has been
amended and accordingly the time limit provided under section 201(3)(ii) of the
Income-tax Act for passing an order under section 201(1) of the income-tax Act has
been extended by one more year.


                                      Page 52 of 59 
 
48.3.4 The provisions of section 271H of the Income-tax Act provide for levy of
penalty for failure to furnish TDS/TCS statements in certain cases or furnishing of
incorrect information in TDS/TCS statements. However, section 271H of the Income-
tax Act did not specify the authority which would be competent to levy the penalty
under the said section. Therefore, provisions of section 271H have been amended to
provide that the penalty under section 271H of the Income-tax Act shall be levied by
the Assessing officer.

48.4 Applicability:- These amendments take effect from 1st October, 2014.



49.    Interest payable by the assessee under section 220 of the Income-tax
Act

49.1 The provisions contained in sub-section (1) of section 220 of the Income-tax
Act, provide that any amount specified as payable in a notice of demand under
section 156 of the Income-tax Act shall be paid within thirty days of the service of
notice at the place and to the person mentioned in the notice. Sub-section (2) states
that if the amount specified in the notice is not paid within the period, the assessee
shall be liable to pay simple interest at one per cent for every month or part of a
month comprised in the period commencing from the day immediately following the
end of the period mentioned in sub-section (1) and ending with the day on which the
amount is paid. The proviso to sub-section (2) stated that where as a result of an
order under sections 154, 155, 250, 254, 260, 262, 264 or sub-section (4) of section
245D of the Income-tax Act, the amount on which interest payable under the said
section 220 had been reduced, the interest shall be reduced accordingly and the
excess interest paid, if any, shall be refunded.

49.2 Liability of the assessee to pay interest is based on the theory of continuity of
the proceedings and the doctrine of relation back. Accordingly, subsection (1A) has
been inserted in section 220 of the Income-tax Act to provide that where any notice
of demand has been served upon an assessee and any appeal or other proceeding,
as the case may be, is filed or initiated in respect of the amount specified in the said
notice of demand, then such demand shall be deemed to be valid till the disposal of
appeal by the last appellate authority or disposal of proceedings, as the case may be
and such notice of demand shall have effect as provided in section 3 of the Taxation
Laws (Continuation and Validation of Recovery Proceedings) Act, 1964.

49.3 It has been further provided that where as a result of an order under sections
154, 155, 250, 254, 260, 262, 264 or sub-section (4) of section 245D of the Income-
tax Act, the amount on which interest was payable under section 220 had been
reduced and subsequently as a result of an order under said sections or section 263,
the amount on which interest was payable under section 220 is increased, the
assessee shall be liable to pay interest under sub-section (2) of the said section on

                                      Page 53 of 59 
 
the amount payable as a result of such order, from the day immediately following the
end of the period mentioned in the first notice of demand referred to in sub section
(1) of the said section 220 and ending with the day on which the amount is paid.

49.4   Applicability:-These amendments take effect from the 1st October, 2014.


50. Enlarging the scope of Settlement Commission

50.1 Clause (b) of section 245A provides the definition of `case' which means any
proceeding for assessment under the Income-tax Act, of any person in respect of
any assessment year or assessment years which may be pending before an
assessing officer. However, the proviso to the said clause,before its amendment by
the Act, provided that proceedings for assessment or reassessment under section
147 or a proceeding for making fresh assessment in pursuance of an order under
section 254 or section 263 or section 264 of the Income-tax Act, setting aside or
cancelling an assessment shall not be a proceeding for assessment for the purpose
of this clause.

50.2 In order to enlarge the scope of Settlement Commission, the proviso to clause
(b) of section 245A of the Income-tax Act has been omitted to enable proceedings
under section 147 and proceedings for making fresh assessment in pursuance of an
order under section 254 or section 263 or section 264 of the Income-tax Act, setting
aside or cancelling an assessment also be eligible for settlement before the
Settlement Commission. Similar amendment has also been made in section 22A of
the Wealth -tax Act.

50.3 Applicability:- These amendments take effect from 1st October, 2014.




51.    Enlarging the scope of Authority for Advance Rulings

51.1 Chapter XIX-B (Sections 245N to 245V) of the Income-tax Act provides that a
person can make an application to the "Authority for Advance Rulings (AAR)" to
obtain an advance ruling on the tax liability arising out of a transaction undertaken, or
proposed to be undertaken by a non-resident. A ruling can also be obtained by
certain notified residents in respect of an issue relating to computation of total
income which is pending before any income-tax authority or the Appellate Tribunal.

51.2 In order to enlarge the scope of Advance Rulings, section 245N has been
amended to provide that the "advance ruling" shall also include a determination by
the Authority in relation to the tax liability of a resident applicant, arising out of a
transaction which has been undertaken or is proposed to be undertaken by such

                                      Page 54 of 59 
 
applicant and such determination shall include the determination of any question of
law or of fact specified in the application.

51.3 It has also been provided that a resident as may be notified in the Official
Gazette by the Central Government may apply to the Authority for Advance Rulings.
The said notification has been issued vide notification no. 73/2014 dated 28-11-
2014.

51.4 Section 245-O of the Income-tax Act, before its amendment by the Act,
provided for single Authority for Advance Rulings with its office located in Delhi. In
order to handle the enlarged scope of the Authority for Advance Rulings, section
245-O of the Income-tax Act has been amended to provide for more than one
benches of the Authority. It has also been provided that the Authority shall be located
in the National Capital Territory of Delhi and its Benches shall be located at places
notified by the Central Government.It has also been provided that besides the
Chairman, revenue Member and law Member;the Authority shall consist of such
number of Vice-chairmen, as the Central Government may, appoint. Qualification for
appointment as Vice-Chairman has been provided to be a judge of a High Court.

51.5 Applicability:- These amendments take effect from the 1st October, 2014.



52. Mode of acceptance or repayment of loans and deposits

52.1 The provisions contained in section 269SS of the Income-tax Act, before its
amendment by the Act, inter-alia, provided that no person shall take from any other
person any loan or deposit otherwise than by an account payee cheque or account
payee bank draft, if the amount of such loan or deposit or aggregate of such loans or
deposits is twenty thousand rupees or more. Similarly, the provisions of section 269T
of the Income-tax Act, before amendment made by the Act,inter-alia, provided that
no loan or deposit shall be repaid otherwise than by an account payee cheque or
account payee bank draft, if the amount of such loan or deposit together with interest
or the aggregate amount of such loans or deposits together with interest, if any
payable thereon, is twenty thousand rupees or more.

52.2 In the present times many banking transactions take place by way of internet
banking facilities or by use of payment gateways. Accordingly, the provisions of the
said sections 269SS and 269T have been amended to provide that acceptance or
repayment of any loan or deposit by use of electronic clearing system through a
bank account shall not be prohibited under the said sections if the other conditions
regarding the quantum etc. are satisfied.




                                     Page 55 of 59 
 
52.3 Applicability:- These amendments take effect from 1st April, 2015 and will,
accordingly, apply in relation to assessment year 2015-16 and subsequent
assessment years.



53. Levy of Penalty under section 271G of the Income-tax Act by Transfer
Pricing Officers

53.1 The provisions of section 271G of the Income-tax Act, before amendment by
the Act, provided that if any person who has entered into an international transaction
or specified domestic transaction fails to furnish any such document or information
as required by sub-section (3) of section 92D of the Income-tax Act, then such
person shall be liable to penalty which may be levied by the Assessing Officer or the
Commissioner (Appeals).

53.2 Section 92CA of the Income-tax Act provides that an Assessing Officer may
make a reference to a Transfer Pricing Officer (TPO) for computation of arm's length
price (ALP). TPO has been defined in the said section to mean a Joint
Commissioner or Deputy Commissioner or Assistant Commissioner who is
authorised by the Board to perform all or any of the functions of an Assessing Officer
specified in sections 92C and 92D of the Income-tax Act. The determination of arm's
length price in several cases is done by the TPO.

53.3 Therefore, section 271G has been amended to include TPO, as referred to in
Section 92CA, as an authority competent to levy the penalty under section 271G in
addition to the Assessing Officer and the Commissioner (Appeals).

53.4   Applicability: - This amendment takes effect from 1st October, 2014.




54. Failure to produce accounts and documents

54.1 The provisions of section 276D of the Income-tax Act, before amendment by
the Act, provided that if a person wilfully fails to produce accounts and documents as
required in any notice issued under sub-section (1) of section 142 of the Income-tax
Act or wilfully fails to comply with a direction issued to him under sub-section (2A) of
said section 142, he shall be punishable with rigorous imprisonment for a term which
may extend to one year or with fine equal to a sum calculated at a rate which shall
not be less than four rupees or more than ten rupees for every day during which the
default continues, or with both.

54.2 The monetary limit in the section was fixed in the year 1971. The low limit has
become irrelevant today. Accordingly, the provisions of section 276D of the Income-
tax Act have been amended so as to provide that if a person wilfully fails to produce
accounts and documents as required in any notice issued under sub-section (1) of

                                      Page 56 of 59 
 
section 142 of the Income-tax Act or wilfully fails to comply with a direction issued to
him under sub-section (2A) of said section 142, he shall be punishable with rigorous
imprisonment for a term which may extend to one year and with fine.

54.3 Applicability:- This amendment takes effect from 1st October, 2014.




55. Provisional attachment under section 281B of the Income-tax Act

55.1 The provisions of sub-section (1) section 281B of the Income-tax Act provide
that during the pendency of any proceeding for assessment or reassessment the
Assessing Officer may, in order to protect the interests of revenue, with the previous
approval of the Chief Commissioner or Commissioner, attach provisionally any
property belonging to the assessee in the manner provided in the Second Schedule.
Sub-section (2) of section 281B of the Income-tax Act, before its amendment by the
Act, provided that the provisional attachment shall cease to have effect after the
expiry of six months. However, the Chief Commissioner or Commissioner may
extend the period up to a total period of two years.

55.2 It has been observed that in certain cases the maximum period of extension of
2 years expires before the assessment order is passed. Recovery proceedings can
be initiated only after the assessment order is passed and demand is raised.
Accordingly, the proviso to sub-section (2) of section 281B has been amended so as
to provide that the Chief Commissioner, Commissioner, Director General or Director
may extend the period of provisional attachment so that the total period of extension
does not exceed two years or up to sixty days after the date of assessment or
reassessment, whichever is later.

55.3 Applicability:- This amendment takes effect from 1st October, 2014.




56. Obligation to furnish statement of Information

56.1 The provisions of section 285BA of the Income-tax Act, prior to its amendment
by the Act, provided for filing of an annual information return by specified persons in
respect of specified financial transactions which are registered or recorded by them
and which are relevant and required for the purposes of the Income-tax Act to the
prescribed income-tax authority.

56.2 With a view to facilitate effective exchange of information in respect of residents
and non-residents, section 285BA of the Income-tax Act has been amended to
provide for furnishing of statement by a prescribed reporting financial institution in

                                      Page 57 of 59 
 
respect of a specified financial transaction or reportable account to the prescribed
income-tax authority. It has also been provided that the statement of information
shall be furnished within such time, and in such form and manner as may be
prescribed.

56.3 It has further been provided that where any person, who has furnished a
statement of information under sub-section (1),or in pursuance of a notice issued
under sub-section (5) of the said section comes to know or discovers any inaccuracy
in the information provided in the statement, then, he shall, within a period of ten
days, inform the income-tax authority or other authority or agency referred to in sub-
section (1) of the said section, the inaccuracy in such statement and furnish the
correct information in the manner as may be prescribed.

56.4 It has also been provided that the Central Government may, by rules, specify,-
(a) the persons referred to in sub-section (1) of section 285BA to be registered with
the prescribed income-tax authority; (b) the nature of information and the manner in
which such information shall be maintained by the persons referred to in (a) above;
and (c) the due diligence to be carried out by the persons referred to in (a) for the
purpose of identification of any reportable account referred to in sub-section (1) of
section 285BA.

56.5 Further, the provisions of section 271FA of the Income-tax Act, before
amendment by the Act, provided for penalty for failure to furnish an annual
information return. The said section 271FA has been amended to provide for penalty
for failure to furnish statement of information or reportable account.

56.6 A new section 271FAA has been inserted in the Income-tax Act to provide that
if a person referred to in clause (k) of sub-section (1) of section 285BA of the said
Act, who is required to furnish a statement of financial transaction or reportable
account, provides inaccurate information in the statement and where, (a) the
inaccuracy is due to a failure to comply with the due diligence requirement
prescribed under sub-section (7) of said section 285BA or is deliberate on the part of
the person; or (b) the person knows of the inaccuracy at the time of furnishing the
statement of financial transaction or reportable account, but does not inform the
prescribed income-tax authority or such other authority or agency; or (c) the person
discovers the inaccuracy after the statement of financial transaction or reportable
account is furnished and fails to inform and furnish correct information within the time
specified under sub-section (6) of said section 285BA, then, the prescribed income-
tax authority may direct that such person shall pay, by way of penalty, a sum of fifty
thousand rupees.

56.7 Applicability:- These amendments take effect from 1st April, 2015.



                                      Page 58 of 59 
 
57.   Extension of income-tax exemption to Specified Undertaking of Unit
Trust of India (SUUTI)


57.1 The Specified Undertaking of the Unit Trust of India (SUUTI) was created vide
the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002. SUUTI is the
successor of UTI. The mandate of SUUTI is to liquidate Government liabilities on
account of the erstwhile UTI.

57.2 Vide section 13(1) of the said Repeal Act, SUUTI is exempt from income-tax
or any other tax or any income, profits or gains derived, or any amount received in
relation to the specified undertaking for a period of five years, computed from the
appointed day, i.e. 1st day of February, 2003. This exemption was to come to an end
on 31st January, 2008. However, the exemption was extended up to the 31st March,
2009 and thereafter, up to the 31st March, 2014.

57.3 Since some of the tasks of SUUTI are still pending closure, the said section
13(1) has been amended so as to extend the exemption for a further period of five
years that is upto 31st March, 2019.


                                                                        [Amit Katoch]
                                         Under Secretary to the Government of India
                                                                    Dated 21.01.2015
                                                             [F. No. 142/13/2014-TPL]
Copy to:-
1. PS to FM/OSD to FM/OSD to MoS(R).
2. PS to Secretary (Revenue)/OSD to Advisor to FM.
3. The Chairperson, Members and all other officers in CBDT of the rank of Under
Secretary and above.
4. All Chief Commissioners/Director General of Income-tax ­ with a request to
circulate amongst all officers in their regions/charges.
5. DGIT (International Taxation)/DGIT (Systems)/DGIT (Vigilance)/DGIT
(Admn.)/DGIT (NADT)/DGIT (L&R).
6. Media Co-ordinator and Official spokesperson of CBDT.
7. DIT (IT)/ DIT (RSP&PR)/DIT (Audit)/ DIT (Vig.)/ DIT (Systems)/DIT (O &MS)/ DIT (Spl.
Inv.)
8. The Comptroller and Auditor General of India (30 copies).
9. Joint Secretary and Legal Advisor, Ministry of Law and Justice, New Delhi.
10. The Institute of Charted Accountants of India, IP Estate, New Delhi.
11. All Chambers of Commerce as per usual mailing list.


                                                                      [Amit Katoch]
                                         Under Secretary to the Government of India


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