Budget 2021

THE UNION BUDGET 2021
An Analysis of Important Direct Tax Proposals
JAIN SHRIMAL & CO.

CHARTERED ACCOUNTANTS 1
Index
2 Budget 2021 Jain Shrimal & Co.

Time and Threshold
Limits
3
Revised Time Limits
Section No. Particulars Existing Time Limits Revised Time Limits
54GB Investment in Eligible Start Up 31st March 2021 31st March 2022
80EEA Sanction of loan for affordable 31st March 2021 31st March 2022
residential house property
80-IAC Incorporation of eligible start up 31st March 2021 31st March 2022
139 Due date for filing return of income 31st July / 31st October 30th November
of a partner of firm who are getting
audit under section 92CE
*139(4) / 139(5) Belated Return / Revised Return earlier of 31st March or earlier of 31st December or
completion of the completion of the
assessment assessment
*Although amendment has been made to 139(4) and 139(5) but no simultaneous amendment made to section 234F.

Revised Time Limits
Section No. Particulars Existing Time Limits Revised Time Limits
Processing of Income Tax Return 1 Year from end of FY in which 9 Months from end of FY in
143(1)
return filed which return filed
Issuance of notice of assessment 6 Months from end of FY in 3 Months from end of FY in

143(2) which return filed which return filed
Reopening of Assessment 6 Years / 4 Years from end of 3 Years from end of AY,
AY 10 Years from end of AY if
148
Income escaping
assessment exceeds Rs. 50
Lakhs
Time limit for completion of 12 Months from end of AY 9 Months from end of FY
153
original assessment

Revised Threshold Limit
Section No. Particulars Existing Limit Revised Limits
10(23C) Exemption for the income received by any 1 Crore 5 Crore

person on behalf of university or
educational institutional institution
44AB Tax Audit ( whose aggregate of all the 5 Crore 10 Crore

amount received (incl. sales /turnover
😶
/gross receipts) and aggregate of all the
payment made (incl. expenditure ), in
cash in PY, does not exceeds 5% of such
payments)

TDS/TCS
7
TDS on non filer at higher rates
New section 206 AB - Special provision providing for higher rate for TDS for the non-filers of
income-tax return.
�� 206AB: Apply on any sum or

income or amount paid, or payable
or credited, by a person to a
*specified person.
*The specified person is a person

who has not filed the returns of
income for both of the two
assessment years relevant to the
two previous years which are
immediately before the previous
year in which tax is required to be
deducted or collected, as the case
may be.
● Non Applicability - This section shall not apply where the tax is required to be deducted
under sections 192, 192A, 194B, 194BB, 194LBC or 194N of the Act.
TCS on non filer at higher rates
New section 206 CCA - Special provision providing for higher rate for TCS for the non-filers of
income-tax return.
�� 206CCA: Apply on any sum or

amount received by a person
(herein referred to as
collectee) from a *specified
person.
*The specified person is a

person who has not filed the
returns of income for both of the
two assessment years relevant
to the two previous years which
are immediately before the
previous year in which tax is
required to be deducted or
collected, as the case may be.

*Exclusive of GST
**Inclusive of GST
Sec 194Q - Not applicable:

1. Where TDS is deducted under
any other section.
2. Where TCS is collected u/s
206C except u/s 206C(1H)

Capital Gains
11
Capital Gain in the hands of
Firm- Sec 45(4) & 45(4A)

Safe harbour for
Residential Unit
Current Scenario Amendments
Section 43CA : Section 43CA & 56(2)(x):
● Transfer of Land or Building or both ● Transfer of Land or Building or both between 12the
● If the SDV exceeds 110% of the consideration Nov. 2020 to 30th June 21
● First time allotment of residential unit
received or accrued as determined by Stamp
● Consideration < = Rs. 2 Crore
Valuation Authority, such SDV will be deemed to be
full value of consideration. On satisfying the above conditions the safe harbour
Section 56(2)(x) : threshold from existing 110% will increase to 120%.
● Person receiving any immovable property for
consideration which is less than SDV. Applicable from 1st April 2021
● If SDV exceeds 110% of consideration or Rs. 50000,
such difference between SDV and Consideration or
Rs. 50000, whichever is higher, shall be charged to
tax under Income from Other Sources
Our Comments
The 20% safe harbour is not applicable to transactions covered u/s 50C and the same is still @ 10%.

Effect of Budget on HNI

ITR, Processing and
Re-assessment
15
Relaxation in case of Specified senior citizens
😀 🧐 😨 😱 🤬
Step 1 Step 2 Step 3 Step 4 Result

ITR Processing
Current Scenario Amendments
Section 143(1): In calculating total income only adjustment After the amendment this will be read as disallowance of
of disallowance of expenditure indicated in audit report but expenditure or increase in income indicated in audit
not taken in computing total income in return was report but not taken in computing total income in return.
considered.
In calculating total income deduction/ exemption under
sections 10AA or under any of the provisions of Chapter
In calculating total income deduction/ exemption under
VI-A under the heading “C.-Deductions in respect of
sections 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or
certain incomes” shall not be allowed if return is filed after
section 80-IE shall not be allowed if return is filed after the
the due date
due date.
Our Comments
● The scope of adjustment by CPC has been increased as they can now even adjust increase in income as shown
in audit report.
● The scope of disallowance has been increased by including entire Heading “C” of Chapter VI-A i.e., section 80H to
80T.

Changes in Re-assessment
Section Provision
● Earlier AO was required to have reasons to believe that income has escaped
assessment.
● Now AO is required to first enquire, provide an opportunity of being heard by issuing
Section 148 & show cause notice, consider the reply of assessee and finally based on the material on
148A record and reply of assessee decide if the notice u/s 148 is to be issued.
Applicable from:- AY 2021-22
Comment

Other Amendments
19
Clarification on application of income
for Charitable Institution
Particulars Provision
If the amount received for corpus donation shall not considered as exempt if the amount is
Current years Corpus not invested in funds specified u/s 11(5).
donation
Any amount applied out of corpus fund will not be considered as application of income.
However when the amount not allowed as application above is invested in mode specified
Any corpus donation
u/s 11(5) same shall be considered as application in the year of investment.
Any amount applied out of loan received by trust shall not be considered as application.
However when the loan is repaid same will be considered as application.
Loan
In case of a charitable trust having excess application in one year same shall not be
Loss/ Excess considered as application in next financial year.
application
Comment: This will make filing of Income tax return of Charitable trust much more complex.

Equalisation Levy
New Explanation Added -
● Consideration received or receivable for specified services and e-commerce supply or services shall
not include consideration which are taxable as royalty or fees for technical services in India
under the Income - tax Act. They would still be taxed at a higher rate of 10%
● “Online sale of goods” and “online provision of services” shall include one or more of the following
activities taking place online: The definition is very wide and
1) Acceptance of offer for sale; would include almost all the
2) Placing the purchase order; services and goods provided by
3) Acceptance of the Purchase order; e-commerce operator.They would
4) Payment of consideration; or have to register in India to pay
5) Supply of goods or provision of services, partly or wholly such levy
● Consideration received or receivable from e-commerce supply or services shall include :

1) Consideration for sale of goods irrespective of whether the e-commerce operator owns the goods;
and
2) consideration for provision of services irrespective of whether service is provided or facilitated by
the e-commerce operator.
Applicable from:- AY 2021-22

No Depreciation on Goodwill

Miscellaneous Provision
❑ Section 2(29A) - Definition of the term “Liability of Tax” : The term “liability to tax” in relation to a
person means that there is a liability of tax on that person under the law of any country and will
include a case where subsequent to imposition of such tax liability, an exemption has been
provided. This would bring certainty to last year amendment brought in residential status
❑ Section 2(42C) - The scope of slump sale transactions amended to specifically include all types of
transfers - primarily intended to cover slump exchange transactions.
❑ Section 36(1)(va) - Delay in payment (Even a single day) of employee’s PF contribution will be
disallowed. This clarification has been introduced to negate various favourable decisions and
would be applied retrospectively.The default which should have been tackled by Labour
Ministry has to be handled by ministry of finance. This is unreasonable as there could be
genuine delay in contribution.
❑ Section 44ADA - Not applicable to LLP

Miscellaneous Provision
❑ Section 89A - New section has been introduced to address mismatch in taxation of income
from notified overseas retirement fund. It is applicable for individuals who are resident in India
and have opened specified retirement fund accounts outside India, while being non-resident in
India and resident in that country.
❑ Section 234C - Relaxation from interest for default in advance tax payments provided for
dividend income except specified deemed dividend u/s 2(22)(e).
❑ Section 245 - Discontinuance of Income-tax Settlement Commission on or after 1st February,
2021.
❑ Section 245MA - Constitution of a Dispute Resolution Committee for small taxpayers.
❑ Section 255 - Income Tax Appellate Tribunal to be made faceless.This could be resisted as
Tribunal is a court and comes under the purview of Minsitry of Law & Justice.
❑ Section 281B - Fake Invoice/sham transaction - In order to protect the revenue, it is proposed
to provide that the penalty proceedings initiated for fake invoice/sham transactions u/s 271 AAD
of more than 2 crore shall also be eligible for provisional attachment of assets.

Previous Budget
Amendments applicable
from 1st April, 2021
25
Amendments brought by The Finance Act
2020, but applicable from AY 2021-22
Section 6: Residential Status
✔ Provision of Deemed Resident (treated as Not Ordinarily Resident)
Section 9: Income deemed to accrue or arise in India
✔ New Explanation 3A inserted which declare that the income attributable to operations carried out in India, shall include
income from––
i. Such advertisement which targets a customer who resides in India or a customer who accesses the advertisement
through internet protocol address located in India;
ii. Sale of data collected from a person who resides in India or from a person who uses internet protocol address located
in India; and
iii. Sale of goods and services using data collected from a person who resides in India or from a person who uses
internet protocol address located in India.
Section 17: ‘Salary’, ‘perquisite’ and ‘profits in lieu of salary’ defined.
✔ Any contribution made by the employer in respect of the assessee, to the account of an assessee in a recognised
provident fund; in the scheme referred to in subsection (1) of section 80CCD; and in an approved superannuation fund
above 7,50,000 shall be treated as perquisite, and will be taxable.

Section 50C and 56(2)(x)
✔ Deviation from Stamp Duty Value upto 5% has been increased upto 10%.
Section 55: Meaning of “adjusted”, “cost of improvement” and “cost of acquisition”.
✔ In case of a capital asset, being land or building or both, the fair market value of such an asset on 1st April, 2001 shall
not exceed the stamp duty value of such asset as on 1st April, 2001 where such stamp duty value is available.
Section 57: Deductions

✔ As all the dividends are made taxable in the hands of recipient, the deductions from such income are brought in by inserting
the following proviso.
✔ No expenses are allowed as deduction except the interest expenses incurred to earn the income in the nature of Dividend
or income in respect of units of MF specified under clause (23D) of section 10 or income in respect of units from a specified
company defined in the explanation to clause(35) of section 10.
✔ And such deduction shall not exceed 20% of the dividend income, or income in respect of such units included in the total
income for that year.

Section 115BAC: Alternative Tax Rates Slab for Individuals and HUF
✔ Alternative new tax slab rate has been introduced by the Finance Act 2020, without claiming certain exemption/deduction
which can be exercisable from FY 20-21.
Section 115-O: DDT
✔ The companies would not be required to pay DDT. The dividend shall be taxed only in the hands of the recipients at their
applicable tax rate.
Section 12AB: Trust registration
✔ All the Trusts registered u/s 12A/12AA or 80G were required to re-register themselves u/s 12AB (introduced in the Finance
Act,2020). Although it was proposed to start from 01.06.2020 but the same has been postponed to 01.04.2021 by The
Taxation And Other Laws (Relaxation And Amendment Of Certain Provisions) Act, 2020.

Thank You
Contact Us: namanshrimal@jainshrimal.com
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Presented to you by JSCO Budget Team
❖ CA Narendra Shrimal ❖ CA Vartika Vijay

❖ CA Naman Shrimal ❖ Jyoti Jaiswal
❖ CA Anuprav Jain ❖ Akshit Agarwal
❖ CA Naman Maloo ❖ Rahul Chatwani
❖ CA Sourabh Kothari
Disclaimer
❑ This presentation has been prepared on the basis of information available in the public domain
and is intended for guidance purposes only.
❑ Jain Shrimal & Co. has taken reasonable care to ensure that the information in this presentation
is accurate. It however accepts no legal responsibility for any consequential incidents that may
arise from errors or omissions contained in this presentation.
❑ This presentation is based on the information available with us at the time of preparing the same,
all of which are subject to changes which may, directly or indirectly impact the information and
statements given in this presentation.
❑ Neither Jain shrimal & co., nor any person associated with us will be responsible for any loss
howsoever sustained by any person or entity who relies on this presentation. Interested parties
are strongly advised to examine their precise requirements for themselves, form their own
judgments and seek appropriate professional advice.

BUDGET HIGHLIGHTS
(2021-22)
1. No change in Income Tax Rates.
2. Vivad Se Viswas Scheme: Last Date of filing extended to 28th February, 2021.
3. Relief to senior citizens: 75 years and above- Having only pension and interest income:
exemption from filing ITR - Paying banks will deduct TDS.
4. Reopening time-limit of assessment under Income tax cases reduced from 6 years to 3 years .
Only where evidence of concealment of Income is Rs.50 lakhs or more in a year, then reopening
can be made upto 10 years and only with the approval of the highest authority i.e. the Principal Chief
Commissioner of Income Tax.
5. Faceless Dispute Resolution Committee set-up for small tax-payers . A taxpayer having
taxable income upto Rs. 50 lakhs and disputable income upto Rs. 10 lakhs can approach this
committee.
6. A Faceless Income Tax Appellate Tribunal is formed where all the appeals will be conducted
electronically.
7. Section 35(5) of CGST Act omitted and Section 44 substituted to remove the mandatory
requirement of getting accounts and reconciliation statements audited under GST .
8. Tax Audit limited under Sec. 44AB increased to Rs. 10 crore from Rs. 5 crore where 95% of the
transactions are digital.
9. Salary, TDS, Capital Gains and Dividend on listed securities and Interest Income from Bank will be
pre-filled in the ITR form.
10. Easing Compliance requirements of Small Companies – Now a company having Capital upto
Rs.2 crore and Turnover upto Rs.20 crore will be classified as a small Company.
11. Allow One Person Companies (OPC) to grow without any restriction in Share Capital or
Turnover . NRIs will be allowed to set-up OPCs. Presence in India of 120 days in a year is enough to
start an OPC.
12. Launching MCA Version 3.0 – E-Scrutiny, E-Adjudication and Compliance management to be
simplified
13. Custom duty on solar Inverters/Lanterns, auto parts, cotton, silk yarn increased. Exemption
on leather import withdrawn.

BUDGET HIGHLIGHTS
(2021-22)
14. Seven textile parks to come up in 3 years.
15. Sec. 43CA . In case of transfer of residential unit the variation 120% allowed instead of 110%
from the stamp duty if the following conditions are fulfilled -
(i) the transfer of such residential unit takes place during the period beginning from the 12th
day of November, 2020 and ending on the 30th day of June, 2021 ; (ii) such transfer is by way
of first time allotment of the residential unit to any person ; and (iii) the consideration received
or accruing as a result of such transfer does not exceed two crore rupees.
16. Sec. 194Q - Any person, being a buyer who is responsible for paying any sum to any resident for
purchase of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any
previous year, shall, at the time of credit of such sum to the account of the seller or at the time of
payment thereof by any mode, whichever is earlier, deduct an amount equal to 0.1%. of such sum
exceeding fifty lakh rupees as income-tax. If 206C(1H) i.e. TCS and 194Q i.e. TDS are applied in a
single transaction then 194Q will prevail for that transaction. Date of Applicability: 01.07.2021.
17. Penalty increased from 100% to 200% of tax in case of detention of goods by GST officer.
18. For Foreign Investors – lower treaty rate benefit will be given in case of TDS on Dividend.
19. Advance Tax Liability on Dividend to arise only after declaration or payment of Dividend.
20. Deduction of Rs. 1.5 lakhs u/s 80EEA of Interest paid on home loan for Affordable housing will
now be available even for loan taken till 31.3.2022.
21. 80IBA (entitling the developers of affordable housing projects to claim deduction of 100% of the
profits) extended till 31.3.2022.
22. Relief to Trusts – Charitable trusts running Hospitals and Educational Institutions relief increased
from Rs.1 crore to Rs.5 crore(Turnover/Gross Receipts).
23. Agri Infra Development Cess levied on certain products.

UNION
BUDGET
2021-22
KEY AMENDMENTS
1
INDEX
 INCOME TAX
 GST
2
INCOME TAX
3
 Tax deprecation on Goodwill not eligible from FY 2020-2021
onwards
BUSINESS  Permanent disallowance in case of late deposit of employee’s

contribution to Statutory Dues like PF, ESI, etc. w.e.f. FY 2020-
INCOME 2021
 Slum sale definition widened to include transfer of undertaking by
any means (including an ‘exchange’)
4
 Dividend income earned by the foreign company to be excluded
from the calculation of Book Profits for the purpose of calculation
MINIMUM of MAT
ALTERNATE TAX
 Exclusion of past year income included in book profits of
(MAT) - previous year on account of Secondary Adjustment and
RATIONALISATION Advanced Pricing Arrangement (APA)
• Same will be offered in respective previous year for which the
said adjustment is made
5
 Buyer (whose sales turnover exceeds INR 10 Crores) is required
to deduct TDS @ 0.1% on amount exceeding INR 50 lakhs for
purchase of goods w.e.f. 1st July 2021
• This will be applicable for purchase of goods, wherein TCS is
not charged
WITHHOLDING
 TDS - twice the applicable rate or 5% (for PAN holders) / 20%
TAX (for Non-PAN holders) whichever is higher, where recipient has
failed to file Tax Return for 2 years preceding the previous year
 TCS - twice the applicable rate or 5% whichever is higher, where
recipient has failed to file Tax Return for 2 years preceding the
previous year
6
 Time limit for filing revised or belated return is reduced by three
(3) months (i.e. by 31 December, after the end of relevant
financial year)
TAX RETURN
 Relaxation granted to senior citizen (75 years and above) having
FILING only pension and interest income from filing Income Tax Return
 Prefilled ITR containing details of Salary, TDS, Dividend Income,
Capital Gains Income, Interest Income will now be available to
tax-payers
7
 Time limit for completion of summary assessment (intimation u/s
143(1a)) reduced from 12 months to 9 months from the end of
financial year in which tax return is filed
ASSESSMENTS
 Time limit for issuance of scrutiny assessment notice reduced
from 6 months to 3 months from the end of financial year in
which tax return is filed
8
RE-  Time limit for issuing re-assessment notice from end of relevant
Financial Year
ASSESSMENT – • Serious tax evasion cases and where income exceeds INR 50
lakhs - 10 years
[NEW • Others - within 3 years

 Opportunity of hearing to be provided to taxpayer before
PROVISION] initiating re-assessment
 Prior approval of Pr. CIT is required for taking any action
9
FACELESS  Introduction of Faceless Income Tax Tribunal Appeal (ITAT)
DISPUTE  Constitution of faceless dispute resolution mechanism for ‘small
RESOLUTION taxpayer’ wherein the returned income is less than INR 50 lakhs
and the aggregate income amount of variation proposed in
MECHANISM assessment is INR 10 lakhs
10
 Tax Audit threshold increased from INR 5 crores to INR 10
crores (wherein receipts and payments in cash does not exceed
5% of such receipt/payment)
OTHER  Provision of presumptive taxation of profits and gains arising
PROVISIONS from professions will not be applicable to LLP
 20% tolerance limit is being provided for residential buyers and
developers selling residential units under Sec. 50C
(consideration upto INR 2 crores)
11
 LTC exemption for Block Year 2018-21 - amount allowed will be
lower of INR 36,000/- or 1/3rd of Specified expenditure incurred
between 12/10/2020 to 31/03/2021
 Exemption on maturity of Unit Linked Insurance Policy, where
premium paid is more than INR 2,50,000/-, stands withdrawn
OTHER and maturity proceeds will be taxed under capital gains
PROVISIONS [Applicable for policies taken after February 01, 2021]
 No interest to be charged on shortfall in payment of advance tax
on account of dividend income (except deemed dividend)
provided the full tax thereon is paid in subsequent instalment
 Interest on Employee’s Share of Provident Fund beyond INR
2,50,000/- is now liable to tax
12
 In order to incentivize building affordable housing to boost the
supply of such houses, the period of approval of the project by
the competent authority is proposed to be extended to March
31, 2022
 The period of sanctioning of loan by the financial institution is
OTHER proposed to be extended to March 31, 2022 in order to enable
PROVISIONS firsts time buyers to avail deduction of INR 1,50,000/-
 100% deduction of profits and gains derived from an eligible
business by an eligible start-up (incorporated between
01.04.2016 to 01.04.2022) for 3 consecutive assessment years
out of 10 years beginning from the year in which it was
incorporated if the total turnover of its business does not exceed
INR 100 Crores in any of the previous years beginning from the
year in which it is incorporated
13
GST
14
 Sec 7(1) is being RETROSPECTIVELY modified so as to include
activities/transactions between any person and its
members/constituents to be treated as supply
 Further, an explanation in the said section is inserted to negate
any judgement or decree or order of any court and deem person
ETERNAL REST and its members/constituents as two separate persons and
transaction/activities between them to be supply of goods or
TO MUTUALITY services
CONCEPT  This would have an impact on taxability of members’ club
 Essentially the decision of Supreme Court in the case of State of
West Bengal vs. Calcutta Club Limited [2019] 110 taxmann.com
47 (SC) stands inapplicable
 Correspondingly, Entry 7 in Schedule II (Supply to be treated as
of Goods or Services) stands omitted
15
ITC ONLY AS  Sec 16(2) is being modified so as to allow claim of ITC only if the
inward supply gets reflected on GST portal through GSTR-1 of
PER PORTAL the supplier
16
 Sec 35(5) is being omitted so as to remove the mandatory
EASE OF THE requirement of getting annual accounts audited and
REQUIREMENT reconciliation statement submitted by specified professional
OF  Correspondingly, Sec 44 of the CGST Act is being substituted so

as to remove the mandatory requirement of furnishing a
RECONCILIATION reconciliation statement duly audited by specified professional
STATEMENT and the substituted provision provides for filing of the annual
return on self certification basis
17
Sec 16 in respect of Zero-Rated Supplies is being modified as
below –
 Supply of goods or services to a Special Economic Zone
AMENDMENT IN developer or a Special Economic Zone unit will only be zero
rated when the said supply is for authorized operations
ZERO RATING  Zero-rated supply on payment of integrated tax will only be
UNDER IGST ACT available to a notified class of taxpayers or notified supplies of
goods or services and not to all
 Zero-rated supply would be linked to foreign exchange
remittance in case of export of goods with refund
18
INTEREST ON  Sec 50 of the CGST Act is being amended, retrospectively, so as
DELAYED to levy interest on net cash liability debited from Electronic Cash
Ledger with effect from the 1st July, 2017
PAYMENTS
19
 An explanation to sub-section (12) of Sec 75 of the CGST Act is
RECOVERY OF being inserted to clarify that “self-assessed tax” shall include the
TAX AS PER tax payable in respect of outward supplies, the details of which
have been furnished under section 37 (i.e. GSTR-1), but not
GSTR-1 included in the return furnished under section 39 (i.e. GSTR-3B)
20
ENHANCEMENT
 Sec 83 of the CGST Act is being amended so as to provide for
OF POWERS OF provisional attachment in various cases which now also includes
PROVISIONAL cases emanating out of scrutiny of returns, tax collected but not
paid, etc.
ATTACHMENT
21
DETENTION,
SEIZURE  Sec 129 and Sec 130 are being amended to remove anomaly
AND RELEASE OF existing therein and now these provisions stand delinked with
proceedings under these sections from section 74
GOODS AND
 Further, penalty is increased to 200% of tax payable from
CONVEYANCES IN existing 100%, in case of detention, seizure and release of goods
TRANSIT and conveyance in transit
AND  Changes are proposed under Sec 107 for filing of appeal against
order of detention, seizure and release of goods and conveyance
CONFISCATION OF in transit wherein now mandatory pre-deposit of 25% of the
GOODS penalty amount is prescribed
OR CONVEYANCES
22
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23
Budget 2021 - Taxation
Doshi R C & Co.

Chartered Accountants
Budget 2021 :: Taxation
Where the income of senior citizen above the age of 75 years consists only of pension
and/or interest, from bank receiving pension, requirement to file ITR by such citizen has
been done away with.
Reopening window for IT assessment cases reduced from 6 to 3 years. However, in case
of serious tax evasion cases (Rs. 50 lakh or more), it can go up to 10 years .
‘Faceless dispute resolution committee and mechanism' is set up to reduce
litigations for small taxpayers. Any taxpayer with taxable income up to Rs. 50 lakhs and
disputed income up to Rs. 10 lakhs can approach the committee.
Introduced Faceless Income Tax Appellate Tribunal (ITAT) for providing online
resolution.
The 'tax audit limit' under Section 44AB has been increased from Rs.10 crores to Rs.5
crores where 95% of receipts and payments are done in digital mode.
2
Budget 2021 :: Taxation (Continued..)
The 'advance tax liability' on dividend income shall rise only after the declaration or
payment of dividend.
Income-tax Settlement Commission shall cease to operate on or after the 1st
February 2021.
The affordable housing projects can avail tax holiday until 31 March 2022.
Procedure for assessment of search cases changed – minimum 3 years and maximum 10
years income to be reassessed.
Details of capital gains from listed securities, dividend income, and interest from banks, post
office, etc. will be pre-filled in the Income tax Return.
3
Delayed deposit of employee’s contribution towards provident funds, superannuation
funds, and other social security funds by the employer will not be allowed as deduction to
the employer.
Eligibility for claiming tax holiday for start-ups under section 80IAC has been extended
by one more year untill 31st March 2022.
Compliance burden on small charitable trusts running educational institutions and

hospitals has been reduced to trusts whose annual receipt does not exceed INR 5 crore.
The deduction under section 80EEA is to be extended to loans taken up to 31st March
2022.
4
Deduction of TDS at twice the applicable rate or 5% whichever is higher where the
decutee has not filed the income tax return of past two assessment years for which due
date has expired and aggregate of TDS / TCS is Rs. 50,000 or more [w.e.f. I July 2021].
Where the turnover of the buyer exceeds Rs. 10 crore in the preceding financial year,
purchases goods of value exceeding Rs. 50 lakhs shall be responsible to deduct TDS @
0.10 % [w.e.f. I July 2021].
5
Reach us
Address:
Office 407, Suyog Centre,
Girdhar Bhavan Chowk, Maharshinagar, Pune – 411037
E: info@doshirc.in
M: 90280 94428
W: www.doshirc.in
6
Resilience in face of Once in a Century Crisis
Confirmed Cases
Doubling time
Deaths
V Shaped Recovery
GDP Growth
IIP Inflation (%)

Atma Nirbhar Bharat Abhiyan
Stimulus provided under ANB out of total stimulus 9%
Stimulus by Govt and RBI combined 15%
GOVERNMENT REFORMS ENERGY

 Increase in borrowing limits of state o Liquidity support for
governments discoms
 Privatisation of Public Sector o Elimination of Regulatory
Enterprise Assets
o Commercial coal mining
MSMEs AND INDUSTRY o Reduction in cross-
 Collateral free loans for businesses subsidy
 Fund of funds will be set up for
MSMEs SOCIAL SECTOR
 PM Garib Kalyan Yojana  National Digital
 Subordinate debt for MSMEs Health Blueprint
 Disallowing global tenders of up to  Additional Allocation
Rs 200 crore for MGNREGS
 Change in definition of MSMEs  Technology driven
education: PM
eVidya, National
MIGRANT WORKERS Foundational Literacy
 One Nation One Card and Numeracy
 Free food grain Supply to migrants Mission
AGRICULTURE AND ALLIED SECTORS

 Concessional Credit Boost to farmers
 Agri Infrastructure Fund
 Emergency working capital for farmers
 Animal Husbandry infrastructure development
 Amendments to the Essential Commodities Act
 Agriculture marketing reforms
Holistic Approach to Health
Preventive
Supplementary Nutrition
Programme and Poshan
Abhiyan to be merged and
Approach
launched as Mission
Poshan 2.0
Curative Wellbeing
 Outlay ₹64180 crore over 6 years

 Support for Health and Wellness
centres
PM  Setting up of Integrated Public

AtmaNirbhar Health Labs
Swasth  Establishing critical care
hospital blocks
Bharat Yojana
 Strengthening NCDC
 Expanding integrated health
information portal
• Pnuemococcal vaccine to be rolled across the country

• ₹35000 crore for Covid-19 Vaccine in 2021-22
Health Outlay (₹ crore)
2021-22 BE 223846
2020-21 BE 94452
Introduction of National
Commission for Allied
Healthcare Professionals Bill
Industry
PLI launched to create manufacturing global champions across 13 sectors
with amount committed nearly ₹1.97 lakh crore in next 5 years starting
FY2021-22
NIP projects by sector 120

Sector wise share in GVA
Energy Road Urban Railways Others
100
24% 80
29%
60
18% 40
12%
17% 20
0
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
NIP Project pipeline expanded to 3rd RE 2nd RE 1st RE 1st AE
7400 projects Agriculture, forestry & fishing Industry Services
MITRA Scheme to create world class infrastructure for global champions in

textile sector leading to creation of 7 textile parks over 3 years.
Infrastructure
Road Construction Per Day in km
National Rail Plan
• Aims at developing adequate
rail infrastructure by 2030 to
cater to the projected traffic
requirements up to 2050.
• The objective is to increase the
modal share of rail in freight
from the current level of 27 per
cent to 45 per cent.
• 100% electrification of Broad Gauge Routes by 2023
• Indigenously developed automatic train protection system to be launched
 139 GW of installed capacity was added during 6 years

Installed Plant connecting additional 2.8 crore households with addition
Capacity (GW)
of 1.41 lakh circuit km of transmission lines
400
350
300  Revamped reforms-based result-linked power distribution
250 sector scheme will be launched with an outlay of
200 ₹3,05,984 crore over 5 years
150
100  Hydrogen energy mission will be launched
50
0
2013-14 2019-20
Ports, Shipping,
Waterways
PPP mode to be utilised Recycling of Ships Act,

Subsidy support to
for managing 2019 enacted and
promote flagging of
operational services of recycling capacity to be
merchant ships
major ports doubled by 2024
Logistics Performance
Index Rank PNG Infra
financing
54 Ujjwala scheme to
cover 1 crore more Bill to set up a DFI
beneficiaries will be introduced
100 more districts National monetisation

under city gas pipeline of brownfield
distribution network infra assets
44
Independent gas
transport system
2014 2018 operator to be set up
Urban Development
Jal Jeevan Mission (Urban) for universal
water supply in all ULBs
Urban Swachh Bharat Mission with

outlay ₹1,41,678 crore over 5 years
₹2,217 crore for 42 urban centres to

tackle air pollution
Voluntary Vehicle Scrapping policy
Innovative PPP models to augment

public bus transport
MetroLite and MetroNeo for tier 2 and

peripherals of tier 1 cities
Financial Reforms
 Rationalised single Securities Markets Code by 2022

 World class fintech hub at GIFT IFSC
 Permanent institutional framework for Corporate bond market
 SEBI as regulator and greater role for WDRA for development of
commodity market ecosystem
 Investor charter as a right across all financial products
 Amending the Insurance Act,1938 to increase the FDI limit with safeguards
 Asset Reconstruction Company Limited and Asset Management Company
to resolve stressed assets problem of PSBs.
Inclusive Development
AGRICULTURE MSP (crores)
80000
 Extending coverage of 160000
SWAMITVA Scheme to all 60000
130000
states/UTs
40000
 Expansion of Operation 100000
Green scheme to include 22
70000 20000
perishable products
 1000 more mandis to be 40000 0
integrated with e-NAM
FISHERIES MSP Paddy (LHS) MSP Wheat (RHS)
o Development of modern
fishing harbours and fish
landing centres
o Multipurpose Seaweed
Park to be set up in Tamil
Nadu
MIGRANT WORKERS AND LABOURERS
 One nation one ration Share of casual labour in 2018-19

card scheme under
implementation in 32
Total
states and UTs.
 A portal to be
launched for gig,
Urban
building and
construction workers
 Social security
benefits will be Rural
extended to gig and

platform workers 0 5 10 15 20 25 30
Human Capital
EDUCATION SKILLS GII Rank
 Revamped Post  Realigning
90
Matric National
Scholarship Apprenticeship 80
Scheme for Training scheme 70

welfare of SCs for graduates and
60
 100 new Sainik diploma holders in
schools Engineering 50
 750 Eklavya  Partnership with 40

schools in tribal UAE and Japan in
30
areas area of skill
development and 20
recognition 10
Accreditation Regulation
R&D
Standard setting Funding  National
Higher Research
Education
Commission Foundation with
of India
outlay of
₹50,000 crore
over 5 years
Expenditure on Education as per cent of GDP  National
2020-21 BE 3.5 Language
2019-20 RE 3
Translation
Mission to boost
2018-19 2.8
internet access
2017-18 2.8  Deep Ocean
2016-17 2.8 Mission for
ocean
2015-16 2.8
exploration and
2014-15 2.8 biodiversity
-0.5 0.5 1.5 2.5 3.5 conservation
Fiscal Position
• Allowing a normal ceiling of net borrowing for the
states at 4% of GSDP for 2021-22
1 • Additional Borrowing ceiling of 0.5% of GSDP subject
to conditions
2 NSSF loan to FCI for food subsidy to be replaced by

making budget provisions
3 ₹1,18,452 crore as Revenue Deficit grant to 17 states in

2021-22
10.00 9.50
Fiscal Deficit Capital Expenditure
9.00
Percent of GDP
8.00
6.80
7.00
6.00
4.60
5.00 4.10 3.90
4.00 3.50 3.50 3.40
3.00
2015-16
2014-15
2016-17
2017-18
2018-19
2019-20 Actuals
2020-21 RE
2021-22 BE
35 External Debt 12
30 10
25
8
Per cent
Per cent
20
6
15
GENERAL 4
10
GOVERNMENT
DEBT TO GDP 5 2
0 0
2013
2018
2019
2020
2020 (Sept-end)
Debt Service Ratio

External Debt to GDP
Ratio of Short-term debt to reserves
Tax proposals
Taxpayers
Tax Return Exemption from filing income tax returns for opted for Direct
Filers senior citizens (75 years and above) who only Tax Vivad se
(crore) Vishwas
have pension and interest income. The paying
7 Scheme
bank will deduct the necessary tax on their
6 120000.00
income.
5 100000.00
4
Reducing time limit for reopening of income tax
80000.00
assessment
3
60000.00
2 Constitution of a Dispute Resolution Committee for
small tax payers 40000.00
1
0 20000.00
Income Tax Appellate Tribunal to be made faceless
2014 2020
0.00
Increase in limit for tax audit Dividend payment to
for persons who carry out 95% REIT/InvIT to be exempted Additional deduction
of their transactions digitally from TDS of ₹1.5 lakh shall be
available for loans
Pre filling of returns will also Eligibility for claiming tax taken up till 31
cover capital gains from listed holiday for start ups March 2022 for
securities, dividend income, proposed to be extended by purchase of
etc. one more year affordable house
Indirect Tax
GST Collection  Rationalisation of customs duty
1.4 structure by eliminating outdated
2020-21 2019-20
exemptions
1.2 1.14 1.15  Support to MSMEs hit by recent
1.00 1.00 1.02 0.98
1.05 1.05 sharp rise in iron and steel prices
1.0 0.95 and relief to metal recyclers
1.031.03
 Rationalisation of duties on raw
In Rs Lakh crore
0.8 0.91
0.87 0.92 0.95 material inputs to man made
0.86
0.62 textiles
0.6  Rationalisation of custom duty on
gold and silver
0.4 0.32  Increase in duty on solar invertors
and lanterns to promote domestic
0.2 production
 Agriculture Infrastructure and
0.0 Development Cess on small
Apr May Jun Jul Aug Sep Oct Nov Dec
number of items
Rupee comes in
Non Debt Capital
Receipts
5%
Borrowings and other
Liabilities
36%
Income Tax
14%
Union Excise Duties

8%
Non Tax Revenue

6%
Corporation Tax
Customs 13%
3%
GST
15%
Rupee goes out

Pensions
Other Expenditure
Centrally Sponsored 5%
10%
Schemes
9%
Central Sector
Schemes
Subsidies 14%
8%
Defence
8%
Finance Commission
and Other Transfers
10%
Interest Payments
20% States' Share of Taxes
and Duties
16%
Budget at a Glance
Revenue Receipts (crore) Capital Receipts (crore)
2020926 1895152
1788424
1684059 1694812
1555153
1021304
1002271
2019-20 2020-21 2020-21 2021-22 2019-20 2020-21 2020-21 2021-22

(Actuals) (BE) (RE) (BE) (Actuals) (BE) (RE) (BE)
Revenue Expenditure (crore) Capital Expenditure (crore)
554236
3011142
2929000
2630145 439163
2350604 412085
335726
2019-20 2020-21 2020-21 2021-22 2019-20 2020-21 2020-21 2021-22

Allocation to major schemes
MGNREGA (crore) PM KISAN (crore)
111500
2021-22 BE
73000
2020-21 RE
0 10000 20000 30000 40000 50000 60000 70000
2020-21 RE 2021-22 BE
National Health Mission (crore)

National Education 37500
Mission (crore) 37000
36500
2021-22
BE, 36000
34300
2020-21
RE, 35500
28244
35000
34500
2020-21 RE 2021-22 BE
Jal Jeevan Mission (crore) Metro Projects (crore)
20000
2021-22 BE 2021-22
18000 BE,
16000 18998
2020-21 RE 14000
12000
0 20000 40000 60000 10000
8000 2020-21
6000 RE,
AMRUT and Smart Cities (crore) 6484
4000
2021-22 BE 2000
2020-21 RE 0
2020-21 RE 2021-22 BE
0 5000 10000 15000
Major Allocations
Ministry of Housing and Urban

54581
Affairs
Ministry of Health and Family

73932
Welfare
Ministry of Education 93224
Ministry of Railways 110055
Ministry of Road Transport and

118101
Highways
Ministry of Agriculture and

131531
Farmers' Welfare
Ministry of Rural Development 133690
Ministry of Home Affairs 166547
Ministry of Consumer Affairs, Food

256948
and Public Distribution
Ministry of Defence 478196
0 200000 400000 600000

Rs. Crore
VIVEK SINGH & ASSOCIATES Contact No. 9748344790
CHARTERED ACCOUNTANTS Email:vs.associates1309@gmail.com
BUDGET 2021 AT GLANCE
INCOME TAX & OTHER CHANGES
 No changes in Income Tax rates for Individuals, HUF, Firms, Cooperative Societies,
Local Authorities & Companies.
 The TDS Rates during the FY 2021-22 under section 193, 194A, 194B, 194BB,
194D, 194LBA, 194LBB, 8 194LBC and 195 will remain the same as those specified
in Finance Act, 2020
 In view of the situation arising out of outbreak of COVID pandemic, it is proposed

to provide tax exemption to cash allowance in lieu of LTC subject to certain
conditions.
 The existing provision of the section 80EEA of the Act, inter alia, provides a
deduction in respect of interest on loan taken for a residential house property
from any financial institution up to one lakh fifty-thousand rupees subject to the
condition that the loan has been sanctioned during the period beginning on 1st
April, 2019 and ending on 31st March, 2021. There are further conditions that the
stamp duty value of residential house property does not exceed forty-five lakh
rupees and the assessee 25 does not own any residential house property on the
date of sanction of loan. . In order to help such first time home buyers further, it
is proposed to amend the provision of section 80EEA of the Act to extend the
outer date for sanction of loan from 31st March 2021 to 31st March 2022
 Senior citizens who are of the age of 75 year or above, they are exempted from
filing the return of income, if the following conditions are satisfied:-
(i) He has pension income and no other income. However, in addition to such
pension income he may have also have interest income from the same bank in
which he is receiving his pension income;
(ii) This bank is a specified bank. The Government will be notifying a few banks,
which are banking company, to be the specified bank; and
(iii) He shall be required to furnish a declaration to the specified bank.

 TAX AUDIT LIMIT FOR SMALL & MEDIUM ENTERPRISE:
In order to incentivize non-cash transactions to promote digital economy and to
further reduce compliance burden of small and medium enterprises, it is
proposed to increase the threshold from 5 Crore rupees to 10 Crore rupees
provided Cash Receipts & Cash payments during the PY does not exceed 5% of
Total Receipts & Payments.
In all other cases, Turnover limit for Tax Audits are Rs. 1 Crore in case of business
& Rs.50 Lakh for Profession.
 PROVISIONS RELATED TO BELATED & REVISED RETURNS:

Sub-sections (4) and (5) of section 139 of the Act contain provisions relating to
the filing of belated and revised returns of income respectively. The belated or
revised returns under sub-sections (4) and (5) respectively of the said section at
present could be filed before the end of the assessment year or before the
completion of the assessment whichever is earlier.
It is now proposed that the last date for filing of belated or revised returns of
income be reduced by 3 months. Thus the belated return or revised return could
now be filed 3 months before the end of the relevant assessment year or before
the completion of the assessment, whichever is earlier.
 NRIs allowed to operate One Person Companies in India
 Late deposit of employee's contribution to PF by employers will not be allowed as

deduction to employer.
 Tax holiday for start-ups increased by one more year till March 31, 2022.
 Government removes threshold limits of paid-up share capital of Rs 50 lakh and

average annual turnover of Rs 2 crore over the past three financial years for one
Person Company. Government has also eased requirements of residency for a
person setting up a One person company from 182 days to 128 days in India.
 Serious tax offences of concealment of income of over Rs 50 lakh can be

reopened after 10 years. In all other cases, timeline is 3 years.
 Government to increase maximum threshold paid-up capital of small companies

from Rs 50 lakh to Rs 2 crore and increase the threshold of maximum turnover
from Rs 2 crore to Rs 20 crore. More than 2 lakh additional companies to come
under the definition of small companies which have a lower compliance burden
including lower penalties for violations and lower filing requirement.
 NO CHANGES IN INCOME TAX SLAB
Income Tax exemption limit for AY 22-23
For Senior Citizens - Rs.3.00 Lakh

For Super Senior Citizens- Rs.5.00 Lakh
For All Other Assessee - Rs.2.50 Lakh
However Rebate under section 87A is available to the tune of Rs12500.

An assessee can also choose the NEW TAX REGIME announced last year.
OTHER ANNOUNCEMENTS:
 India has two COVID-19 vaccines available and we expect two more vaccines
soon. India currently also has one of the lowest death rate and active cases in the
world. India's economic contraction is due to a global pandemic. Rs.35000 Crore
is provided for COVID Vaccination.
 Govt introduce the Aatmanirbhar Health Yojana with an outlay of Rs 64,180 crore
over six years. This will strengthen the National Centre for Disease Control.
Besides this, the government will also set up 15 Health Emergency Centres
 Govt implement Jal Jeevan Mission with outlay of Rs 2.87 lakh crore to cover
houses and to be implemented over five years. Budget 2021 will also launch
Mission Poshan 2.0. Besides this, launch of urban 'Swacch Bharat Mission' 2.0
with an outlay of Rs 1.42 lakh crore has been made.
 Govt will announce voluntary vehicle scrapping policy. Vehicles to undergo

fitness test - which is 20 years for passenger vehicles and 15 years for commercial
vehicles.
 Foreign investment limit (FDI) hiked in insurance from 49 percent to 74 percent.

Stocks to benefit - ICICI Prudential, HDFC life and SBI Life.
 BPCL, Air India, Shipping Corp, Container Corp and other disinvestments will be
completed in 2021-22
 FM announces Asset Reconstruction Company and Asset Management Company to

help banks tackle bad loans.
 100 new Sainik schools will be set up in partnership with the NGOs, private
schools and States.
 Target to set up 750 Eklavya residential model schools in tribal areas.
 Rs 50,000 crore allocated to develop National Research Foundation over 5 years
to strengthen overall research ecosystem in the country.
 Central university in Leh region of Ladakh.
 A total of 15,552 schools will be developed as Adarsh Vidyalayas.
 More economic corridors announced by govt: 3,500 kms of National Highway
Works in Tamil Nadu at Rs 1.03 lakh cr; 1,100 km in Kerala at Rs 65,000 cr; 675
kms in West Bengal at Rs 25,000 cr; over 1,300 km in Assam at Rs 34,000 cr.
 Allocation for Rural Infrastructure Development Fund to be enhanced from Rs

30,000 crore to Rs 40,000 crore.
 Minimum loan size eligible under SARFAESI Act 2002 for debt recovery for NBFCs
with minimum asset size of Rs 100 crore to be reduced from Rs 50 lakh to Rs 20
lakh.
 Deposit Insurance Cover for bank customers to be increased from Rs 1 lakh to Rs

5 lakh.
 Customs duty on certain auto parts to be increased to 15%.
 Customs duty on gold and silver to be rationalised.
 Customs duty on steel products to be reduced uniformly to 7.5%; duty on copper

scrap to be reduced to 2.5% from 5%; on naptha to 2.5%
 Two public sector banks and one general insurance company to be privatised in
FY22.
 Outlay on capital expenditure to be at Rs 5.54 lakh crore, up 34.5 per cent.
 Seven mega textile parks to be launched over next 3 years.
THANKING YOU!
Vivek Singh
Chartered Accountant
Building a
Resilient and
Confident India
INDIA BUDGET
2021-22
INDIA BUDGET 2021-22
DIRECT TAX
at a glance
01 Building a Resilient and Confident India Direct Tax 01-07

Non-Corporate Assessee Where Sec. 5A is applicable to Spouse

(governed by Portuguese Civil Code, 1980) of
Income tax basic exemption limit and slab rates
a partner of a firm liable to Tax Audit - from
remain unchanged.
31st July to 31st October
No exemption u/s 10(11) & 10(12) shall
be available to interest income accrued on Corporate Assessee
contribution made to provident fund exceeding
Corporate Tax Rates remain unchanged @ 30%.
H 2,50,000 in any previous year, on or after
Tax rate for domestic companies having annual
01-04-2021 and computed in such manner as
turnover or gross receipts ≤ H 400 Crs. in FY
may be prescribed.
2019-20 shall be 25%. Tax rate for Companies
Resident Senior Citizens of the age of 75 years opting taxation u/s 115BAA or 115BAB remains
or above deriving only pension income in a unchanged at 22% and 15% respectively.
specified bank and interest income only from
Sec. 44DB provides specified deduction [Sec.
such specified bank where pension income is
32, 35D, 35DD & 35DDA] in case of business
received, have been exempted from filing return
reorganisation of co-operative bank. The scope
of income w.e.f. AY 2021-22. Such income shall
of Sec. 44DB is now proposed to be extended
be subject to TDS after allowing deduction
in case of conversion of a primary co-operative
under Chapter VIA and rebate u/s 87A based on
bank to a banking company. Necessary
declaration furnished to bank.
amendments has also been made in Sec.
In view of Covid pandemic, Sec. 10(5) has 47(vica) & (vicb) to exempt transfer of a capital
been amended only for AY 2021-22 to provide asset and allotment of shares as a result of such
exemption for cash allowance, being lower of conversion.
H 36,000 per person or one third of the specified
Sec. 72A allowing carry forward of losses and
expenditure, in lieu of applicable LTC in the Block
unabsorbed depreciation on amalgamation
Year 2018-21. Specified expenditure refers to
extended to amalgamation of all public sector
actual expenditure incurred during the period
companies with other public sector companies
12-10-2020 to 31-03-2021, by individual or
instead of only public sector company which is
member of the family on goods or services liable
engaged in the business of operation of aircraft.
to GST @ 12% or above. Press release dated
29-10-2020 has now been enacted by above Sec. 72A also extended to amalgamation of
amendment. an erstwhile public sector company with other
companies after strategic disinvestment by the
Any sum received under a Unit Linked Insurance
Government (where share purchase agreement
Policy/Policies issued on or after 01-02-2021
under strategic disinvestment restricts
shall not be exempt u/s 10(10D), if annual
immediate amalgamation). Post disinvestment,
premium/aggregate premium of such policies
amalgamation must be carried out within 5 years
exceeds H 2.5 lacs in any of the Previous Years.
from end of the previous year in which restriction
The income on redemption of such policy will
of amalgamation in the agreement ends.
be taxable as capital gain at a concessional
However, accumulated losses and unabsorbed
tax rate of 15% [u/s 111A] or 10% [u/s 112A] as
depreciation available to amalgamated company
applicable.
shall not be more than the amount at the time of
Time limit for sanction of loan from any financial strategic disinvestment.
institution extended from 31-03-2021 to
Reconstruction or splitting up of a public sector
31-03-2022 for the purposes of claiming
company into separate companies shall be
additional deduction of interest upto H 1.5 lacs
deemed to be demerger u/s 2(19AA), if the same
on loan taken for affordable housing u/s 80EEA.
has been made to transfer any asset of the
W.e.f. AY 2021-22, due date for filing return of demerged company and the resultant company
income extended for following persons: is a public sector company on appointed date,
Partner of a firm liable to furnish report u/s subject to fulfillment of other conditions as may
92E - from 31st October to 30th November be notified by Central Government.
and

Sec. 115JB amended w.e.f. AY 2021-22 to resident as a result of transfer of non-

provide that if income of any earlier year(s) is deliverable forward contracts entered into
included in the books of accounts of current with an offshore banking unit of an IFSC
year on account of Advance Pricing Agreement which commenced operations on or before
u/s 92CC or Secondary Adjustment u/s 92CE, 31-03-2024 and fulfils prescribed condition;
then the Book Profit of such earlier year(s) and
Sec. 10(4F) inserted to exempt any income of
tax payable thereon shall be re-computed by
a non-resident by way of royalty on account
the AO in the current year if an application is
of lease of an aircraft in a Previous Year paid
made by the assessee. Further, period of 4 years
by a unit of an IFSC, if the unit is eligible for
for determining time limit u/s 154(7) shall be
deduction under Sec. 80LA for that Previous
reckoned from the end of Financial Year in which
Year and has commenced operation on or
such application is received by AO.
before 31-03-2024;
Sec. 115JB amended w.e.f. AY 2021-22 to
Sec. 10(23FF) inserted to exempt any
align treatment of dividend income in case of
capital gains, arising or received by a non-
foreign companies with that of capital gains on
resident, on account of transfer of share of
transfer of securities, interest, royalty and fee for
a resident company by the resultant fund
technical services. Hence, net dividend income
(fund established or incorporated in India,
is to be reduced in cases where such dividend
registered and regulated under SEBI and
income is taxed at lower than MAT rate due to
located in an IFSC which fulfils prescribed
DTAA.
conditions) and such shares were transferred
from the original fund (fund established or
International Taxation and Transfer
incorporated or registered outside India which
Pricing fulfils prescribed conditions) to the resultant
Sec. 2(29A) inserted w.e.f. AY 2021-22 to define fund in relocation, if capital gains on such
the expression ‘liable to tax’ to mean that there shares were not chargeable to tax had that
is a liability of tax on that person under the law relocation not taken place;
of any country and will include a case where
subsequent to imposition of such tax liability, Sec. 47(viiac) inserted to provide that any
exemption has been provided. transfer, in relocation, of a capital asset by the
original fund to the resultant fund shall not
In order to make location in International be considered as transfer for capital gain tax
Financial Services Centre (IFSC) more attractive, purpose;
it is proposed to provide various incentives as
under w.e.f. AY 2022-23:- Sec. 47(viiad) inserted to provide that any
transfer by a shareholder or unit holder or
Sec. 9A(8A) inserted to provide that any or
interest holder, in a relocation, of a capital
more of the conditions for eligible investment
asset being a share or unit or interest held by
fund and its eligible fund manager shall not
him in the original fund in consideration for
apply or shall apply with such modifications
the share or unit or interest in the resultant
as may be specified by notification, if the
fund shall not be considered as transfer for
fund manager is located in an IFSC and has
capital gain tax purpose;
commenced operations on or before 31-03-
2024; Sec. 80LA(1A) amended to provide that
deduction under said section is also available
Sec. 10(4D) amended to provide exemption
to a unit of an IFSC if it is registered under
to a specified fund in respect of income
the IFSC Authority Act, 2019 and thereby
specified therein to the extent such income is
removing the earlier requirement of obtaining
attributable to the investment division of an
permission under any other relevant law;
offshore banking unit located in an IFSC and
which has commenced operation on or before Sec. 80LA(2)(d) inserted to provide that
31-03-2024; the income arising from transfer of an
asset, being an aircraft or aircraft engine,
Sec. 10(4E) inserted to exempt any income
which was leased by a unit of an IFSC to a
accrued or arisen to, or received by a non-

domestic company engaged in the business Sec. 196D amended w.e.f. 01-04-2021 to extend
of operation of aircraft, before such transfer the benefit of lower rates as per respective
shall also be eligible for 100% deduction Double Taxation Avoidance Agreement to
subject to condition that the unit has Financial Institutional Investors in respect of
commenced operation on or before 31-03- withholding tax on income from securities as
2024; specified on furnishing of a valid Tax Residency
Certificate.
Sec. 115AD amended to make the provisions
of the said section applicable to investment Provisions relating to Equalisation Levy (2.0)
division of an offshore banking unit in the amended retrospectively w.e.f. AY 2021-22:-
same manner as it applied to specified fund; Sec. 163 of Finance Act, 2016 amended
to exclude from the scope of ‘Equalisation
Sec. 10(23FE) amended w.e.f. AY 2021-22 to
Levy’, the consideration received/
rationalize the provisions relating to Sovereign
receivable in respect of Royalty or Fees for
Wealth Fund (SWF) and Pension Fund (PF) by
Technical Services income taxable in India.
proposing the following amendments:-
Corresponding amendment in Sec. 10(50) to
SWF/PF may invest in Category-I and clarify that exemption shall not be available in
Category-II Alternate Investment Fund (AIF) respect of such income.
even if AIF invests upto 50% in non-eligible
investments; Sec. 164 of Finance Act, 2016 amended to
provide that online sale of goods/ online
SWF/PF may also invest in the following provision of services shall include one or
subject to specified conditions being satisfied: more activities such as placing of order,
- Investment through domestic holding acceptance of offer, acceptance of purchase
company which invest in minimum 75% order or payment of consideration.
eligible investments; Sec. 165A of Finance Act, 2016 amended
- Investments in NBFC – Infrastructure to provide that for the purpose of charging
debt fund/Infrastructure finance company Equalisation Levy, consideration received
which lends minimum 90% to eligible or receivable from e-commerce supply or
entities; services shall include consideration for sale
of goods/ services irrespective of whether
Exemption to SWF/PF to be proportionate e-commerce operator owns such goods or
in case of less than 100% investments or provides or facilitates such services.
lending. Further, in case, SWF/ PF has loans
or borrowings for making investments in Sec. 10(50) amended to provide that the
India, such fund shall not be eligible for exemption shall be available in respect of
exemption; income arising from any e-commerce supply
or services made or provided or facilitated on
SWF/PF shall not participate in day to day or after 01-04-2020 instead of 01-04-2021.
operations of the investee;
PF to be eligible if PF is liable to tax but Other Relevant Proposals
exemption from taxation for all its income has Sec. 32 read with Sec. 2(11) amended w.e.f.
been provided by the foreign country under AY 2021-22 to exclude Goodwill from ambit
whose laws it is created or established; of intangible assets on which depreciation is
Rules for computation of investment/ lending allowable. Sec. 55 also amended to provide that
threshold shall be notified; cost of acquisition of Goodwill would be the
purchase price as reduced by the depreciation
Sec. 89A inserted w.e.f. AY 2022-23 to provide availed till AY 2020-21. Manner for computation
relief and for addressing mismatch in taxation of capital gain u/s 50 on such Goodwill shall be
of income of specified person from overseas prescribed.
retirement fund maintained in a country (to be
W.e.f. AY 2021-22, definition of ‘Slump sale’
notified).
u/s 2(42C) amended to include transfer of one

or more undertakings by any means including date of 31st March of the relevant Assessment
exchange, relinquishment etc. as provided in Year.
Sec. 2(47).
W.e.f. 01-04-2021, time limit for issuing
Threshold limit for Tax Audit u/s 44AB enhanced intimation u/s 143(1) has been reduced from 12
from H 5 Crs. to H 10 Crs. for person carrying on months to 9 months from the end of the FY in
business, if his receipts and payments in cash which return of income is furnished.
during the year does not exceed 5% of total
Sec. 143(1) has been expanded to
receipts and payments respectively.
make adjustment for increase in income
W.e.f. AY 2021-22, employee’s contribution to reported in tax audit report but not considered
provident, superannuation or any other welfare in computing total income and
funds shall be allowed as deduction u/s 36(1)
(va) only if it is deposited on or before the due make disallowance of deduction under any
date as specified under relevant laws. Benefit of provisions of part C of Chapter VI-A if the
such allowance on depositing within due date of return of income has been furnished beyond
filing return of income as provided in Sec. 43B the due date specified u/s 139(1).
has been done away with.
New Sec. 194Q has been inserted to provide for
New procedure of reassessment prescribed by TDS @ 0.1% w.e.f. 01-07-2021 on purchase of
substituting present Sec. 147, 148, 149 & 151 goods of value or aggregate value exceeding H
with new provisions w.e.f. 01-04-2021. The 50 lacs in a Previous Year by the buyer whose
major amendments, among others, includes the total sales/turnover from business exceed H 10
following Crs. during the preceding year. Consequently,
AO is now mandatorily required to have TCS provisions u/s 206C(1H) shall not be
information either as per risk management applicable on transactions subject to TDS
strategy flagged by the Board or on the basis u/s 194Q.
of objection raised by CAG for initiating any W.e.f. AY 2021-22, no interest u/s 234C on
re-assessment proceedings u/s 147. shortfall in advance tax due to under estimation
Sec. 149 amended to reduce timeline for of dividend income except deemed dividend
issuing notice u/s 148 to a period of 3 years referred in Sec. 2(22)(e) provided appropriate
instead of 4 years/6 years in general cases. advance tax is paid in subsequent instalments.
Further, time limit of 10 years has been Sec. 2(48) defining zero coupon bond amended
prescribed if income escaping assessment, to enable Infrastructure Debt Fund notified u/s
represented in the form of asset is likely to 10(47) to issue such bonds. Income from such
exceed H 50 lacs or more for the relevant year. bonds not liable to TDS u/s 194A.
Separate provisions of reopening till 16 years,
where income in relation to asset located Exemption u/s 10(23C)(iiiad) & (iiiae) is available
outside India has escaped assessment has provided that the annual receipts of any exempt
been deleted. institution did not exceed H 1 Cr. In order to
provide benefit to small trusts and institutions,
Cases of Search u/s 132 or 132A, Survey it has been proposed that the exemption shall
u/s 133A, or requisition cases initiated or be available, if annual receipts of the person
conducted, on or after 01-04-2021 shall claiming exemption from all institutions
now also be covered under re-assessment specified in Sec.10(23C) (iiiad) & (iiiae) does not
proceedings u/s 148. Sec. 153A & 153C exceed H 5 Crs. in aggregate.
has been amended so as to apply only in
relation to search initiated u/s 132 or books of To avoid double counting while calculating
accounts requisitioned u/s 132A on or before application or accumulation of income in case
31-03-2021. of a charitable trust u/s 11 & 12 and institutions
referred to in sub-clause (iiiad) & (iiiae) of clause
W.e.f. AY 2021-22, due date for filing belated in Sec.10(23C), among others, it has been
and revised return of income for all assessees proposed that :
modified to 31st December from existing due

Voluntary contributions for corpus shall Eligible start-up incorporated between 01-04-
be exempt, only if invested or deposited in 2016 to 31-03-2021 were eligible for Tax holiday
prescribed modes maintained specifically for u/s 80-IAC. Such period for incorporation has
such corpus. been extended by one more year to 31-03-2022.
To incentivise investment in eligible start-up,
Application out of above voluntary
time limit for capital gain exemption u/s 54GB
contributions for corpus shall not be
has also been extended by one year from 31-03-
considered as application of income. If the
2021 to 31-03-2022.
above applied corpus is replenished out
of income in subsequent year by way of Tax holiday u/s 80-IBA to be available for
investment or deposit in prescribed modes affordable housing projects approved by the
maintained specifically for corpus, same competent authority upto 31-03-2022 instead
would be treated as application of income. of 31-03-2021. Further, Sec. 80-IBA amended
w.e.f. AY 2022-23 to expand its scope to cover
Application out of loans and borrowings to be
affordable rental housing projects as well to be
allowed as application of income in the year
notified by CG.
of repayment if repayment is out of income of
that year. Notice u/s 142(1) requiring furnishing of return
of income or any information or production
Calculation of income to be applied or
of documents issued by AO only can now be
accumulated during the year shall be made
issued in automated manner by any income tax
without set off of any excess application of
authority
income for earlier year.
W.e.f. 01-04-2021, time limit for issuing notice
Dividend distributed by a Special Purpose u/s 143(2) has been reduced from 6 months to
Vehicle to a business trust, being exempt u/s 3 months from the end of the FY in which return
10(23FC), excluded from purview of TDS u/s of income is furnished. Time limit u/s 153 for
194. Central Government authorized to notify completion of scrutiny assessment [u/s 143(3)]
other persons not liable to TDS on dividend and best judgement assessment [u/s 144] for
received. AY 2021-22 onwards reduced to 9 months from
Safe harbour limit in respect of sale of residential existing 12 months from the end of relevant
unit by real estate developers u/s 43CA Assessment Year.
enhanced from 10% to 20% w.e.f. AY 2021- W.e.f. 01-07-2021, for all assessees (excluding
22, provided sale is made as part of first time non-resident not having PE in India) having
allotment to any person during 12-11-2020 to TDS and TCS of H 50,000 or more in each of
30-06-2021 and consideration does not exceed two preceding previous years and not filed their
H 2 Crs. Safe harbour limit also enhanced in Sec. return of income shall be subject to TDS/TCS
56(2)(x) for providing benefit to the buyers. Press rates being higher of 5% or twice the applicable
release dated 13-11-2020 has been enacted by TDS/TCS rate under newly inserted Sec. 206AB
above amendment. and Sec. 206CCA respectively. In case such
Hitherto, Sec. 45(4) provided for capital gain assessee is not having PAN, TDS would be
on transfer of ‘capital asset’ at the time of @20% as per Sec. 206AA.
dissolution or reconstitution of the firm, AOP or Provisional attachment u/s 281B can be
BOI. Now, Sec. 45(4) has been substituted w.e.f. made by the AO also during the pendency
AY 2021-22 to charge capital gain on distribution of proceedings for imposition of penalty u/s
of capital asset which represents capital account 271AAD for false entry or entry omitted in the
balance. Further new Sec. 45(4A) has been books where likely aggregate penalty exceeds
inserted to charge capital gain also on transfer H 2 Crs.
of money or any asset other than capital asset in
excess of capital account balance. Further, while General and Administrative
computing capital gain, capital account balance
Hitherto, assessment and appellate proceedings
of the partner(s) shall exclude any revaluation or
before CIT(Appeals) were under faceless
self-generated asset including goodwill.

mechanism. Such scheme has been extended or waive penalty and grant immunity from
to appellate proceedings before Income Tax prosecution in case of small and medium
Appellate Tribunal (ITAT) as well. National taxpayers whose returned income is H 50 lacs
Faceless Income-tax Appellate Tribunal Centre or less and aggregate amount of variation
shall be set up. Wherever personal hearing proposed in the order is H 10 lacs or less. Same
is needed, it shall be done through video shall not apply to assessees in respect to whom
conferencing. order of detention, prosecution has been passed
under specified laws or where such order
Income-Tax Settlement Commission (ITSC) is
pertains to search and survey cases.
proposed to be discontinued w.e.f. 01-02-2021
and consequently, one or more Interim Boards Competent authority u/s 5(1) of Smugglers and
is proposed to be constituted for settlement of Foreign Exchange Manipulators (Forfeiture of
pending applications. CG to notify a new scheme Property) Act, 1976 has now been appointed
for settlement of pending applications by Interim as the Adjudicating authority for Prohibition of
Board to eliminate the interface between the Benami Property Transactions Act, 1988 [PBPT
Board and assessee to the extent technologically Act]. Time limit for passing order by Adjudicating
feasible. authority has also been extended to 30-09-2021
where such time limit is expiring during the
Authority for Advance Ruling (AAR) shall be
period from 01-07-2021 to 29-09-2021.
replaced by the ‘Board for Advance Rulings’ from
a notified date. Unlike rulings pronounced by W.r.e.f. 01-06-2016, under Income Declaration
the AAR, the rulings by the Board for Advance Scheme, 2016, there shall be no interest granted
Rulings shall not be binding on the applicant or to assessee on the refund amount.
the Department. Appeals can be filed both by the
Direct Tax Vivad se Vishwas Act, 2020 amended
assessee and Department before HC.
w.r.e.f. 17-03-2020 to exclude cases arising out
Dispute Resolution Committee u/s 245MA of or pursuant to order passed by Settlement
constituted to resolve disputes, to reduce Commission from its ambit.

INDIRECT TAX
at a glance
08 Building a Resilient and Confident India Indirect Tax 08-12

Goods and Services Tax Amendment in Interest Provision (retrospectively

w.e.f. 01-07-2017)
Amendments proposed in the Central Goods &
Services Tax Act, 2017 (CGST Act) and Integrated The proviso to Section 50 to be amended
Goods & Services Tax Act, 2017 (IGST Act) retrospectively w.e.f. 01-07-2017 to charge
(Effective date to be notified coinciding with interest only on that portion of the tax which
amendments in SGST Acts.) is paid by debiting the Electronic Cash Ledger.
Amendments relating to the definition of Supply Amendments relating to assessments

(retrospectively w.e.f. 01-07-2017) Amount of tax payable in respect of details of
A person and its members or constituents outward supplies furnished in Form GSTR-
to be deemed as two separate persons and 1, but not furnished in Form GSTR-3B to be
the activities or transactions, by a person, included in Self-assessed tax [Sec. 75(12)]
other than an individual, to its members or Government may attach provisionally, any
constituents or vice-versa, for a consideration property, including bank account, belonging
to be considered as supply. [Sec. 7(1)(aa)] to the taxable person or any person specified
Supply of goods by any unincorporated under Section 122(1A) after initiation of any
association or body of persons to a member proceeding under Chapter XII, Chapter XIV or
thereof to be omitted from Schedule II to give Chapter XV of the CGST Act. [Sec. 83(1)]
effect to the amendment in the definition of Appeal against order specifying tax and
supply. penalty, issued in cases of detention or
seizure of goods, to be filed only after prior
Amendment relating to Input Tax Credit (ITC)
payment of 25% of penalty by the appellant.
ITC in respect of an invoice or debit note [Sec. 107(6)]
to be available only when the details of the
invoice or debit note has been furnished by Section 74 of the CGST Act to be amended
the supplier in their statement of outward to make detention and seizure of goods a
supply (GSTR-1) and such details have been separate proceeding from recovery of tax.
communicated to the recipient. [Sec. 16(2)
Amendments relating to detention, seizure and
(aa)]
release of goods under Section 129 of the CGST
Amendments relating to Annual Return and Act
Reconciliation Statement Goods detained to be released upon payment
The mandatory requirement of getting annual of penalty equal to 200% of the tax payable on
accounts audited by a chartered accountant such goods or in case of exempted goods 2%
or a cost accountant proposed to be omitted. of the value of goods or H 25,000/-, whichever
[Sec. 35(5)] is less or upon furnishing a security
equivalent to the amount payable in cases
Annual Return may include a self-certified where the owner of the goods comes forward
reconciliation statement, reconciling the value for payment of penalty.
of supplies declared in the return furnished
for the Financial Year, with the audited annual Where the owner of the goods does not
financial statement. [Sec. 44] come forward for payment of penalty, goods
detained to be released upon payment of
Departments of Central Government or a penalty equal to 50% of the value of goods
State Government or Local Authority, whose or 200% of the tax payable on such goods,
books of account are subject to audit by whichever is higher or in case of exempted
CAG or an auditor appointed for auditing the goods 5% of the value of goods or H 25,000/-,
accounts of local authorities under any law whichever is less or upon furnishing a
for the time being in force, will not be required security equivalent to the amount payable.
to furnish Annual Return. [Sec. 44]

Time limits of 7 days from date of detention of sale proceeds, deposit the refund so
or seizure of goods specified for issuance of received along with the applicable interest
notice and 7 days from the date of service of within 30 days after the expiry of the time
notice specified for issuance of order. limit prescribed under the Foreign Exchange
Management Act, 1999 for receipt of foreign
Recovery Proceedings to be initiated on
exchange remittances.
failure of payment of penalty - Where the
person transporting any goods or the owner The Government may notify: (a) the class of
of such goods fails to pay the amount of persons who may make zero rated supply on
penalty payable within 15 days from the date payment of integrated tax and claim refund of
of receipt of the copy of the order, the goods the tax and, (b) a class of goods or services
or conveyance so detained or seized shall be which may be exported on payment of
liable to be sold or disposed of, to recover the integrated tax.
amount of penalty payable.
The conveyance seized may also be released Central Excise (Non – GST Items)
on payment of penalty specified above or Amendments in the Fourth Schedule of the
one lakh rupees, whichever is less by the Central Excise Act 1944
transporter. In Chapter 27, description of goods under
Tariff item 2709 (petroleum oils and oils
Amendments relating to Confiscation of Goods
obtained from bituminous minerals, crude)
Section 130 of the CGST Act to be amended has been amended.
to delink the proceedings relating to
confiscation of goods or conveyances from In the headings of Section IV and Chapter
levy of penalty under Section 129 relating to 24 shall be substituted with “Tobacco and
detention, seizure and release of goods and manufactured tobacco substitutes; products,
conveyances in transit. whether or not containing nicotine, intended
for inhalation without combustion; other
Other amendments in CGST Act nicotine containing products intended for the
The Commissioner or an officer authorised by intake of nicotine into the human body”.
him is being empowered to direct any person Tariff item 2404 has been added in Chapter
to furnish information relating to any matter 24 for charging duty on the abovementioned
dealt with in this act, as may be specified tobacco items.
therein. [Sec. 151]
Section 152 of the CGST Act to be amended The Customs Act, 1962
to provide that no information obtained under [to be effective from the date of enactment of the
Sections 150 and 151 shall be used for any Bill]:
proceedings under the Act without giving
Introduction of Common Customs Electronic
an opportunity of being heard to the person
Portal
concerned.
CBIC empowered to notify a common portal
Amendment in Section 16 of the IGST Act to be called the Common Customs Electronic
A supply of goods or services to a Special Portal for facilitating registration, filing of bill
Economic Zone developer or a Special of entry, shipping bill, other documents and
Economic Zone unit shall be zero-rated forms, payment of duty and for such other
only when the said supply is for authorised purposes as may be specified. [Sec. 154C]
operations. Online facility shall now be made available to
A registered person making zero rated amend documents electronically through the
supply shall be eligible to claim refund of customs automated system and to enable
unutilised input tax credit, subject to the certain amendments on the common portal.
condition that the registered person making [Sec. 149]
such supply shall, in case of non-realisation

To enable service of order, summons, notice Central Sales Tax Act, 1956
or any other communication under the said [to be effective from the date of enactment of the
Act on the said common portal. [Sec. 153] Bill]
Validity for conditional exemption under Section 8(3)(b) of the Central Sales Tax Act,
customs restricted upto 31st day of March 1956 is proposed to be amended to restrict
falling immediately after two years from the date inter-state purchase of goods at concessional
of such exemption, unless otherwise specified. rate of 2% (against issue of Form ‘C’) in case
The period of two years for existing exemption where the registered person uses the said
in force as on the date on which the Finance Bill goods for manufacture or processing of
2021 receives assent shall be reckoned from 01- goods for sale of specific goods i.e. petroleum
02-2021. [Sec. 82] crude, diesel, Motor spirit, natural gas,
aviation turbine fuel] and alcoholic liquor]
Specific time lines provided for completion of
inquiry or investigation culminating into issuance
of show cause notice, being two years from the
The Customs Tariff Act, 1975
[to be effective from the date of enactment of the
date of initiation of such audit, search, seizure
Bill]
or summons, which may further be extended by
a period of one year. For computing time limit Amendments introduced relating to Anti-
of two years, period of stay involved should be dumping duty and Countervailing Duty to provide
excluded. [Sec. 28BB] anti-absorption provisions and other safeguard
Amendment proposed for mandatory filing of bill measures
of entry in advance, i.e. before the day of arrival Procedural changes and other amendments
(including holidays) of conveyance.[Sec. 46] made in Customs Tariff (Identification,
CBIC empowered to provide different time limits Assessment and Collection of Countervailing
for presentation of bill of entry in such cases, to Duty on Subsidised Articles and for
ensure faster clearance. [Sec. 46] Determination of Injury) Rules, 1995 & Custom
Tariff (Identification, Assessment and Collection
Procedure proposed for disposal of seized gold of Anti-Dumping Duty on dumped Articles and
upon application to Commissioner (Appeals) for Determination of Injury) Rules, 1995 [to be
and to carry out various procedures in this effective from 02-02-2021]
regard. Commissioner (Appeals) empowered to
discharge duties conferred or imposed on an Changes in Rates of Customs
officer of customs. [Sec. 110] [to be effective from 02-02-2021]
Amendment proposed for confiscation of goods Electronic and Mobile Phone Industry
which has entered for exportation under claim
Withdrawal of few exemptions on parts of
of remission or refund of any duty or tax on
chargers and sub-parts of mobiles.
account of any contravention of the provisions of
the Act [Sec. 113] The rate of Basic Custom Duty (in short
‘BCD’) on some parts of mobiles will change
Penal provision proposed for fraudulent
from ‘nil’ rate to 2.5%(w.e.f 01-04-2021)
utilisation of input tax credit for discharging any
duty or tax on goods entered for exportation Iron and Steel
under claim of refund with penalty upto five
Reduction in BCD to 7.5% on primary/semi-
times of the refund claim [Sec. 114AC]
finished product of iron or non-alloy steel, flat
Inventories, photographs and lists certified by and long product of iron or non-alloy, alloy
the Commissioner (Appeals) to be included steel and stainless steels
under the definition of ‘documents’ which may
Exempting BCD on scrap of iron or steel for a
be produced as an evidence. [Sec. 139]
period up to 31st March, 2022

Revoking Anti-Dumping Duty and Introduction of Agriculture

Countervailing Duty on certain steel products Infrastructure and Development Cess
for the period 02-02-2021 to 30-09-2021
(AIDC)
Reducing BCD on copper waste and scrap On imported goods [w.e.f 02.02.2021]
from 5% to 2.5%
Enabling provisions introduced for levy
Textile of AIDC on imported goods at a rate not
exceeding custom duty on said goods.
Reduction in the BCD rates on caprolactam,
nylon chips and nylon fiber & yarn from 7.5% Exemption from AIDC granted to all items
to 5% except specific goods including gold and
silver
Chemicals
AIDC to be computed on the import value in
Reduction in BCD on Naphtha from 4% to
the same manner as the value of goods for
2.5%.
the purpose of custom duty - Exemption from
Gold and Silver AIDC granted where goods exempted from
Reduction in BCD on gold and silver products BCD
Social Welfare Surcharge (SWS) to be levied
Renewable Energy
on AIDC, however exemption from SWS on
Increase in BCD on solar invertors from 5% to AIDC granted to imports of gold and silver
20% and on solar lanterns from 5% to 15%.
Exemption to AIDC granted on goods availing
Capital Equipment and Auto Parts exemptions under FTA, EOU and advance
Withdrawal of exemptions on tunnel boring authorization scheme
machine. Consequently it shall attract BCD of
On Petrol and High Speed diesel as additional
7.5%; and its parts and components BCD of
duty of excise [w.e.f 02.02.2021]
2.5%
Levy of AIDC at Rs. 2.5 per litre has been
Increase in BCD on specified auto parts (other imposed on petrol and Rs. 4 per litre on diesel
than Bicycle parts and components) from as an additional duty of excise
10% to 15%
Basic Excise Duty and the Special Additional
Others Products Excise Duty have been calibrated accordingly
Increase in BCD on cotton from nil to 5% and to ensure no additional burden on consumer
on raw silk and silk yarn from 10% to 15%.

Contact us
To know more about Baker Tilly DHC, please visit www.bakertilly.in or any of our offices as mentioned below:
Corporate Office:
701, Leela Business Park, Andheri Kurla Road, Andheri (E), Mumbai - 400 059, Tel: +91 (22) 6672 9999
Constantia, “B” Wing, 7th floor, 11, Dr. U.N. Brahmachari Street, Kolkata - 700 017, Tel: +91 (33) 4002 1485
Ahmedabad Kolkata
407-A, Pinnacle Business Park, Bagrodia Niket, 1st floor,
Corporate Road, Prahlad Nagar, 19C, Sarat Bose Road,
Ahmedabad – 380 015 Kolkata – 700 020
Tel: +91 (079) 4899 2768 Tel: +91 (33) 4603 3014/16
Bengaluru Devarati, 1st Floor,
No. 45, 1st Floor, 2nd Main, Sankey Road, 8. Dr. Rajendra Road,
(Above Indian Bank) Lower Palace Orchards, Kolkata – 700 020
Bengaluru - 560 003 Tel: +91 (33) 2474 6303
Tel: +91 (80) 6454 2545/6454 2546 +91 (33) 4037 2700
No. 202, 2nd Floor, Spearhead Towers, No. 50-56, Mumbai
Margosa Road, Malleswaram, 42, Free Press House,
Bengaluru – 560 055 Nariman Point,
Tel. No: +91 (80) 2346 7914/15 Mumbai – 400 021
Tel: +91 (22) 2287 1099/807/808
Chennai
5B, A Block, 5th Floor, Mena Kampala Arcade, 7th Floor. 701 & 702, C- Wing,
New No 18 & 20, Thiagaraya Road, T. Nagar, Sree Ramdev Commercial Complex,
Chennai – 600 017 Kandivali (West), Mumbai – 400 067
Tel: +91 (44) 2815 4192 Tel: +91 (22) 2809 0752/56
Gurugram New Delhi
DCT # 231, 2nd Floor, DLF City Court, 3rd floor, 52-B, Okhla Industrial Estate Phase III,
Sikanderpur, Gurgaon - 122 002 New Delhi - 110 020
Tel.: +91 (124) 428 7244 Tel: +91 (11) 4711 9999
Hyderabad Pune
1st Floor, Plot No. 47, Above Indian Bank Office No.301, Third floor ,
Vittal Rao Nagar, Madhapur, Lalwani Icon, Viman Nagar,
Hyderabad – 500081 Pune – 411 045
Tel: +91 (40) 4200 7771/0 Tel: +91 20 2661 3737
Jaipur
Office No. 42-43, 6th Floor,
Mahima Triniti, Swage Farm, New Sanganer Road
Jaipur – 302 021
Tel: +91 (0141) 2356 935
For more information or for any queries, write to us at info@dhc.co.in
13 Building a Resilient and Confident India

Disclaimer
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This publication has been carefully prepared, but it has been written in general terms and should be
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14 Building a Resilient and Confident India

Analysis of Direct Tax Proposals
Budget 2021
as introduced by the Finance Bill, 2021 in the Lok Sabha on 01/02/2021
Table of Content
1 2021 Budget Key Highlights
2 Tax Rates
3 Procedural Changes
4 Proposals - Housing & Real Estate Developers
5 Business
6 Capital Gains / Deductions
7 Assessment & Appeal
8 TDS / TCS
9 Penalty
10 Misc. Amendments
2 | Copyright © 2021 Surana Maloo & Co. All rights reserved.

Finance Minister
Smt. Nirmala Sitharaman
Finance Minister Nirmala Sitharaman presented the
Union Budget 2021-2022 in the Lok Sabha. For the
first time, Ms. Sitharaman presented a paperless
Budget.
The presentation of the Budget comes in the

shadow of the coronavirus pandemic and its
repercussion on the economy, which is facing its
worst contraction since 1952. In a two-hour long
(or short) speech, she announced a higher capital
expenditure for this fiscal and next, focused on
infrastructure building.
As expected, the health sector also received

additional money. She surprised bond markets with
a fiscal deficit number of 9.5% for FY21 and a very
long, slow glide path towards lowering it
“Dawn of a new era, where India is well-poised to be the land of

hope and promise.”
- Smt. Nirmala Sitharaman

2021 Budget Key Highlights
1. An Expenditure Budget: Nirmala Sitharaman has 5. Bad Bank – A Good Idea: After dithering for almost
found space for imparting a fiscal impulse in 2021- six years, the government has finally decided to set up
22. Compared with a capex of Rs 4.12 lakh crore in an asset reconstruction company that will take over the
Revised Estimate (RE) of 2020-21, she has hiked it bad loans of banks, giving them flexibility to finance the
34.46 per cent to Rs 5.54 lakh crore in 2021-22. economic recovery.
2. Budget for Health Sector: PM Atma Nirbhar

6. Growth Vs Prudence – Tilting Towards Growth:
Swasthya Bharat Yojana The increased allocation is
Fiscal deficit estimated at 6.8 per cent of GDP in
expected to expand and strengthen existing national
2021-22; it is estimated to touch 9.5% in 2020-21.
health institutions, National Centre for Disease
It will be brought down to 4.5 per cent of GDP by
Control (NCDC), Health Emergency Operation
2025-26.
Centers and mobile hospitals
3. A Reform Signal: Two public-sector banks and 7. Securities Market Code (SMC): A Unified
one state-owned general insurance company to be Securities Market Code to be created,
lined up for disinvestment. FDI in insurance to be consolidating provisions of the SEBI Act,
hiked to 74% from 49% now. LIC IPO. Depositories Act, and two other laws.
4. National Faceless Income Tax Appellate

8. Strategic Disinvestment – Again, Needs Political/
Tribunal Centre: Faceless Appellate Proceedings Bureaucratic Push: NITI Aayog asked to short list
before Tribunal (ITAT) in a jurisdiction less manner. It non-core PSUs for strategic sale. After a poor show
will reduce the cost of compliance for taxpayers, and in 2020-21, the government has estimated
increase transparency in the disposal of appeals. disinvestment receipts at Rs 1,75,000 crore.

Faceless Tax Dispute Resolution Panel
Efficiency, Transparency and Reduce Litigation for Small Taxpayers
• Government in previous budget had introduced

“Vivad Se Vishwas” scheme to settle pending
disputes. Indications are there that the scheme
has been a great success. While pending
disputes are being resolved or adjudicated, it is
important that in future there is less number of
disputes from fresh assessments. Hence, in order
to provide early tax certainty to small and
medium taxpayers, it is proposed to introduce a
new scheme for preventing new disputes and
settling the issue at the initial stage.

Some key features of the said scheme is given below:
• Only those disputes where the returned income is fifty lakh rupee or less (if there is a return) and the aggregate amount
of variation proposed in assessment order is ten lakh rupees or less shall be eligible to be considered by the DRC.
• The DRC shall have the powers to reduce or waive any penalty imposable under this Act or grant immunity from
prosecution for any offence under this Act in case of a person whose dispute is resolved under this provision.
• Above procedure will remain faceless.
Following cases were not eligible for the said scheme:
Returned income is more than 50 lakhs.
Addition in the assessment order is more than 10 lakhs.
Assessment is based on search initiated u/s 132 or requisition made u/s 132A or based on Survey initiated u/s 133A or
information received under an agreement referred to in section 90 or section 90A of the Act.
Assessee would not be eligible for benefit of this provision if there is detention, prosecution or conviction under various laws as
specified in the proposed section
Ss
Tax Rates
(Unchanged)

Tax Rates | Individuals / HUF/ AoP / BoI
For Individuals (Other than Senior
Citizens and Super Senior Citizens) For Senior Citizens (60 – 80 years) For Super Senior Citizens (>80 years)
Income Slab Rate Income Slab Income Tax Income Slab Income Tax
Up to Rs 2,50,000 Nil Up to Rs. 3,00,000 Nil Up to Rs 5,00,000 Nil
Rs 2,50,001 to Rs 5,00,000 5% Rs. 3,00,001 to Rs. 5,00,000 5% Rs 5,00,001 to Rs 10,00,000 20%
Rs 5,00,001 to Rs 10,00,000 20% Rs 5,00,001 to Rs 10,00,000 20% Above Rs 10,00,000 30%
Above Rs 10,00,000 30% Above Rs 10,00,000 30%
For Individuals and Senior Citizens For Super Senior Citizens

• Surcharge: 10% if total income exceeds Rs. 50 lacs, 15% if total income exceeds Rs. 1 Crore but doesn't exceed • Surcharge: 10% if total income exceeds Rs. 50
Rs. 2 Crore, 25% if total income exceeds Rs. 2 Crore but doesn't exceed Rs. 5 Crore, 37% if total income lacs, 15% if total income exceeds Rs. 1 Crore but
exceeds Rs. 5 Crore doesn't exceed Rs. 2 Crore, 25% if total income
exceeds Rs. 2 Crore but doesn't exceed Rs. 5
• Health & Education cess at 4% of Income Tax & Surcharge
Crore, 37% if total income exceeds Rs. 5 Crore
• Relief u/s 87A up to Rs. 12,500 for resident individuals with total income of up to Rs. 5,00,000
• Health & Education cess at 4% of Income Tax &
• One can exercise option under Section 115BAC Surcharge
• One can exercise option under Section 115BAC

Tax Rates | Individuals / HUF
For Individuals and Hindu undivided Family Tax rate Conditions:
for Individual and HUF, if they so opt for, shall be as No deduction or Exemption for Leave Travel Concession, House Rent
follows subject to certain conditions Allowance, Miscellaneous Allowances under Rule 2BB, Allowances to
Members of Parliament, Special provisions of Special Economic Zone,
Standard Deduction of Salary income of Rs. 40,000, Professional Tax &
Income Slab Rate Entertainment Allowance, Interest Expenditure in respect of Self Occupied
House Property, Additional Depreciation, Donation to Scientific Association,
Up to Rs 2,50,000 Nil Social Science & Statistical Research , National Laboratory, University or IIT,
or under chapter VI A (except section 80JJAA and 80CCD (2))
Rs 2,50,001 to Rs 5,00,000 5%
No Set off of any loss:

Rs 5,00,001 to Rs 7,50,000 10%
(i) Carried forward or Depreciation if it arose due to any
exemption/deduction as above
Rs 7,50,001 to Rs 10,00,000 15%
(ii) under the head “Income from house property” with any other head of
income;
Rs 10,00,001 to Rs 12,50,000 20% (iii) by claiming the depreciation, if any, under any provision of section 32,
except clause (iia) of sub-section (1) of the said section, determined in
such manner as may be prescribed; and
Rs 12,50,001 to Rs 15,00,000 25%
(iv) without any exemption or deduction for allowances or perquisite, by
whatever name called, provided under any other law for the time being
Above 15,00,000 30% in force

Tax Rates | Companies
Domestic Company
Particulars Rate Foreign Companies

• Tax Rate: 40%
Company opting for section 115BA* 25% • Surcharge: 2% if total income exceeds Rs. 1 Crore
and 5% if total income exceeds Rs. 10 Crores
Company having turnover or gross receipt of up to Rs. 400 • Health & Education cess at 4% of Income Tax &
25%
crore in the previous year 2017-18* Surcharge
Company opting for section 115BAA** 22%
Company opting for section 115BAB** 15% Partnership Firm

• Tax Rate: 30%
Any other company* 30%
• Surcharge at 12% if total income exceeds Rs. 1
MAT** 15% Crore
• * Health & Education cess at 4% of Income Tax &
Surcharge
For Domestic Company
* Surcharge: 7% if total income exceeds Rs. 1 Crore and 12% if total income exceeds Rs. 10
Crores
** Surcharge shall be levied at the flat rate of 10%.
*** MAT shall not be applicable in case of Insurance & Shipping Cos. and Cos. opting for
Section 115BAA or Section 115BAB
Note: Health & Education cess at 4% of Income Tax & Surcharge
Ss
Key Direct Tax

Amendments
11 | Copyright © 2020
2021 Surana Maloo & Co. All rights reserved.
Procedural Changes
No ITR filing for senior citizens aged 75 years and more if earning is only pension, interest
Sec. 139
• New Insertion of section 194P - Specified Senior citizens who are 75 years or above and have only pension and interest income in a
financial year, are exempted from filing income tax returns (ITR) anymore. The bank paying income to them will deduct the
necessary tax from their bank account.
• Four conditions to be fulfilled
1. The senior citizen is resident in India- aged of 75 or more during the Previous Yea
2. Has pension income, interest income from same bank in which he receives pension
3. Bank is a specified bank as per Govt.
4. File a declaration to the specified bank.
• Once declaration is furnished, now the specified bank would have to compute the income of such senior citizen after giving effect to
the deduction like 80C, 80D,80 DDB, etc. and rebate allowable u/s 87A and deduct income tax for relevant AY. No ITR is to be filed
by Specified Senior Citizen.

Procedural Changes
New deadline for filing revise return and belated return:
• It is proposed that the last date for filing of belated or revised returns of income, as the case may be, be reduced by three months.
Thus the belated return or revised return could now be filed three months before the end of the relevant assessment year or before
• Amendment shall become effective from 1st April, 2021 and will accordingly apply to Assessment year 2021-22 and subsequent
Assessment years.

Procedural Changes
GST Fake Invoice of more than Rs.2 Cr shall attracts Provisional Attachment of Assets
Sec 281B vis a vis 271AAD
Existing Proposed
Provisional Attachment u/s 281B in cases of assessment or Now, the Section 281B is amended and along with income
reassessment the AO may provisionally attach any property of escapement the words “or imposition of penalty u/s 271AAD
the assessee, if necessary, in order to protect the interest of where the aggregate amount of penalty imposed is 2 crores
revenue. Prior approval of Pr. Chief Commissioner/Principal or above.” Meaning penalty imposed on a person or a persons
Director or Commissioner or Director, of Income-tax. Such who causes such person to make a false entry or omit an
attachment valid for 6 months. entry from his books of accounts
Allowing assessee to furnish a bank guarantee of value of the

property attached for revocation of the provisional
attachment.
Bank guarantee invoked if there is failure to pay tax demand
on time
Section 271AAD is an anti abuse provision, safeguarding the revenues interest from situation where the tax payer evade such
payment of penalty such power to make provision attachment is now given to the AO in case the aggregate amount exceeds 2
crore. This staunch step of the government against the fraudsters will curb the practice of making fake GST invoices and
wrongful availment of ITC.

Proposals on Housing & Real Estate Developers
Increase in safe harbour limit by 10% for home buyers and real estate developers selling
residential units -Sec 43CA vis a vis Sec 56(2)(x)
• In order to boost the demand in the real-estate sector and to enable the real-estate developers to liquidate their unsold inventory
at a lower rate to home buyers, and considering the decline in prices of the residential unit due to economic slowdown, there is an
increase in the tolerable limit from earlier 10% to proposed 20%. However, this increase in the threshold from 10% to 20% shall
be effective under Section 43CA and Section 56(2)(x) for a limited time period (from 12th November 2020 to 30 June -2021) on
primary sale of residential units having value up to Rs 2 crores to first time house owners/buyers (w.e.f. 1/04/2022)
43CA-Special Provision for full value of consideration for transfer of assets other than capital assets in certain cases
Existing Proposed
If value adopted by the stamp duty authority for payment of The limit of Ten percent has been relaxed to twenty percent
stamp duty does not exceed 110% of consideration received only if following conditions are satisfied;
by the real estate developer for transfer of land or building or
both (other than capital asset), then value so received by the •The Transfer/Sale of Residential between 12/11/2020-
real estate developer shall be deemed to be consideration for 30/06/2021
the purpose of section 43CA of the Act. • First-time allotment of the residential unit to any person
•Consideration for transfer/sale shall not exceed 2 Cr

• 56(2)(x)-Acquisition of Immovable Property for a consideration less than the value adopted by stamp duty authority for the
payment of stamp duty
Existing Proposed
If value adopted by the stamp duty authority for payment of Consequential amendment has been made to section 56(2)(x)
stamp duty does not exceed 110% of purchase consideration of the Act where tolerable limit of 10% has been relaxed to
of an immovable property, then value so paid shall be deemed 20%.
to be cost of acquisition and nothing shall be taxable u/s
56(2)(x) of the Act. - Applicable in case of all Assessee

Deduction for Developing & Building Rental Housing Projects – Sec 80-IBA
• Due to Covid, the Government saw the problems faced by the migrant workers and to help migrant labourers and to
promote affordable rental - amendment in earlier 80-IBA was made
Existing Proposed
Profits and gains derived from the business of developing Insertion of 80-IBA(1A)
and building affordable housing project, there shall, be To allow deduction under section 80-IBA of the Act to allow
100% deduction of Profit and gain from such rental housing
allowed a deduction of an amount equal to 100%of the profits
project which is notified by the Central Government in the
derived from such business Official Gazette and fulfills such conditions
The time period of the project approved between - 01/06/16 Extension of Sunset date- 31/03/2022 for both affordable
to 31/3/2021 housing and affordable rental housing

Additional tax deduction of Rs 1.5 lakh for interest on home loan for affordable housing
extended- Sec 80EEA
Existing Proposed
Section 80-EEA, Deduction of interest on residential housing Amended Section - It is proposed to extend the sunset
loan taken from financial institute upto 1.5 lakh and loan date and now loan sanction upto 31/03/2022
sanctioned between 1/04/2019 to 31/03/2021
Following Condition:
• Housing loan must be taken from a financial institution such as a bank or a housing finance company for buying a residential
house property.
• The home loan must be taken between April 1, 2021 and March 31, 2022.
• Stamp duty value of the house property should not exceed Rs 45 lakhs
• The taxpayer should not own any residential house property as on the date of sanction of loan.
• No deduction claimed u/s 80EE.
• (w.e.f. 1/04/2022)

Business
Depreciation on Goodwill not allowed whether purchased or not Sec 32
• Assessee’s have obtained Depreciation benefit @25% on

Goodwill arising out of Mergers, Acquisitions and
Amalgamations. Such claim was supported by Apex Court
decision in case of Smiff Securities Limited [(2012)348 ITR 302
(SC)]. However, it was prone to abuse by carrying out
restructuring exercise within the group entities and it had
resulted into increased litigation. Furthermore, government is
of the opinion that goodwill is not a depreciable asset for the
reason that goodwill may see appreciation or in the alternative
no depreciation to its value. Therefore, series of amendments in
respective sections is carried out to carve out goodwill from
eligible assets for depreciation.
• Alternatively, cost of acquisition of acquired goodwill will be
allowed u/s 48 for computation of Capital gain on consequent
sale thereof.
• These amendments will take effect from 1st April, 2021

Business
Employees’ Contribution towards PF and ESIC Section 36(1)(va) and Section 43B :
• Tax payers used to claim a deduction u/s 43B of the Act of employees’ contribution towards provident fund or ESIC deposited in to
the Govt. account after the due dates specified under respective statutes. (Several High Courts have upheld the same view)
• It is now proposed to amend Section 43B so as to disallow employees’ contribution towards PF and ESIC, if it is not deposited
within due dates specified under respective statute.
• Amendment shall become effective from 1st April, 2021 and will accordingly apply to Assessment year 2021-22 and
subsequent Assessment years.
Increase in the threshold limit of Audit :
• Finance Act, 2021 has amended the provision of section 44AB of the Act wherein threshold limit for person carrying on business
was increased from five crore rupees to ten crore rupees

Business
Presumptive taxation for professionals under section 44ADA:
• Professional with Gross Receipts not more than 50 Lacs

• For Professional having gross receipts of not more than 50 Lacs, fifty percent of total gross receipts or a higher sum as declared by
assessee shall be deemed to be the profits and gains of such profession chargeable to tax.
• Such provisions were made applicable in case of Individual, Hindu undivided family (HUF) and partnership firm but not a Limited
Liability Partnership (LLP) as LLP was anyways required to maintain in books of accounts under the Limited Liability Partnership Act,
2008.
• Therefore, specific exclusion in this regard is provided to LLP’s and this section is made applicable only in case of Individual, Hindu
undivided family (HUF) and partnership firms.
This amendment will take effect from 1st April, 2021

Capital Gains on Dissolution or Reconstitution of Firm
Transfer of capital asset to partner on dissolution or Reconstitution under section 45(4) & 45(4A):
• In order to incentivize investment in eligible start-ups, extension of Tax holiday by One year
Existing Proposed
Existing Provisions taxed distribution of capital assets on the Profits and Gains arising on receipt of Capital Asset, Money or
dissolution of a firm or AOP or BOI or otherwise in the hands Other Asset on account of Dissolution or Reconstitution of
of such distributor Entity. Such word “Otherwise” was Firm shall be deemed to be taxable in hands of
interpreted to include Reconstitution by some courts while reconstituted/dissolved entity in the year of receipt of Capital
others had restricted interpretation that it will apply ejusdem Asset, Money or Other Asset by partner or member of
generis for akin to distribution cases. AOP/BOI .
Hence, the amendment to extend the scope towards Furthermore, Hyderabad Tribunal & Madras HC had given a
Reconstitution of Firm, AOP and BOI as well relief that increase in Capital account balance on account of
revaluation of assets and capitalization of Self- Generated
Goodwill will not be taxable. Effect of such judgement is
intended to be nullified by clarifying that balance in capital
account would be considered as cost of acquisition with
specific exclusion of revaluation of asset or self-generated
goodwill/asset.

Deductions
Leave Travel Concession Cash Scheme Cause of Covid – Sec 10(5)
• Leave Travel Concession Cash voucher Scheme was introduced in October 2020 to boost consumer demand and to provide tax
benefit to individuals who are unable to claim the usual LTC tax benefit due to covid-related travel restrictions.
Existing Proposed
Exemption in respect of the value of travel concession or Insertion of Second Proviso
assistance received by or due to an employee from his employer In view of the situation arising out of the outbreak of
or former employer for himself and his family, in connection with COVID pandemic, it is proposed to provide tax exemption
his proceeding on leave to any place in India to cash allowance in lieu of LTC - Subject to fulfilment
of conditions
To claim the benefit under the scheme, an individual is required to fulfill the following conditions:
• Spend three times the amount of deemed LTC fare on the purchase of goods/services attracting GST of 12% or more;
• Purchases must be made during the period between October 12, 2020 and March 31, 2021.
• Payment for the purchases must be made through a digital mode including cheque, UPI, etc.
• Invoices must be furnished to an employer containing details of the vendor, GST number and GST amount paid. Invoices in the
name of family members can also be submitted.
A private sector employee can claim a maximum tax exemption of Rs 36,000 per person. Thus, a family of four can claim a tax
exemption of Rs 1.44 lakh. If an individual opts for the new tax regime, then no tax benefit under the scheme will be available under
the old one. No exemption allowed under this clause for the same expenditure to other individual.

Assessment & Appeal
Summary Assessment u/s 143(1)(a) by CPC & Time Limit for issuance of Notice u/s 143(2)
• 143(1)(a)(iv)- adjustment on account of increase in income indicated in the audit report but not taken into account in computing
the total income. Such adjustment were already being proposed by CPC, now the statutory enactment provides specific rights
thereof.
• 143(1)(a)(v)- No deduction under Chapter VI-A under the heading "C.-Deductions in respect of certain incomes unless he furnishes
a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139.
• Time limit for processing of return of income u/s 143(1)(a) reduced from Tweleve months to Nine months from the end of FY in
which return was furnished.
• Time Limit for issuance of Notice u/s 143(2) is reduced to Three Months from six Months from the end of FY in which return was
furnished.

Assessment & Appeal
Tribunal proceedings to be conducted faceless jurisdictional less manner
• In order to impart greater efficiency, transparency and accountability to the assessment process, appeal process and penalty
process under the Act a new faceless assessment scheme, faceless appeal scheme and faceless penalty scheme have already been
introduced. In the same manner, Tribunal proceedings to be conducted faceless and jurisdictional manner.
• This amendment will take effect from 1st April, 2021.
Reduction of time limit for completing assessment:
• It is provided that tax assessments are to be competed with nine months from the end of relevant assessment years.
• This amendment will take effect from 1st April, 2021
Discontinuance of Income-tax Settlement Commission:

• It is proposed to discontinue on or after 1st February, 2021 Income-tax Settlement Commission and to constitute Interim Board of
settlement for pending cases. According, new applications cannot be filed after 1st Feb, 2021.
• These amendments will take effect from 1 st February, 2021.

Assessment & Appeal
Rampant changes in Reopening of assessment and Search assessment scheme:
The budget proposed to amend Reopening of assessment and Search assessment scheme and the time limit for reassessment has been
reduced to 3 years from 6 years/7 years. The proposal addresses serious tax evasion, where evasion evidence is Rs. 50 lakhs or more
can be reopened for last 10 years. Further, after 1st April, 2021, Search and requisition are to be governed by Section 148 instead of
Section 153A or 153C.
Salient features of new proposed scheme are given herewith:
• The provisions of section 153A and section 153C, of the Act are proposed to be made applicable to only search initiated under section 132 of
the Act or books of accounts, other documents or any assets requisitioned under section 132A of the Act, on or before 31st March 2021.
From, 1st April, 2021 Search and requisition are to be governed by Section 148.
• Ratio of Supreme Court judgment in the case of G.K.N.Driveshafts (India) Ltd. vs Income Tax Officers & others reported in (2003) 259 ITR 19
(SC), is incorporated in the Act itself, by inserting Section 148A, wherein it is mandatory for AO to conduct enquiries, and provide an
opportunity of being heard to the assessee. After considering his reply, the Assessing Office shall decide, by passing an order, whether it is a
fit case for issue of notice under section 148 and serve a copy of such order along with such notice on the assessee. After passing order u/s
148A, he can ask assessee to file return of income. However, Section 148A is not applicable in case of search or requisition cases
• Reopening of assessment can be made for only three years instead of six years or seven years. However, Assessing Officer has in his
possession evidence which reveal that the income escaping assessment, represented in the form of asset, amounts to or is likely to amount to
fifty lakh rupees or more, notice can be issued beyond the period of three year but not beyond the period of ten years from the end of the
relevant assessment years.
• Assessing Officer is empowered to assessee or re-compute the income in respect of any issue which has escaped assessment.

Tax Deduction at Source (TDS) on purchase of goods:
Section 194Q (Akin to Provisions of Section 206C(1H)
Applicable in case of payment to Resident for purchase of any goods of the value or aggregate of such value exceeding fifty lakh rupees in
any previous year.
Rate: 0.1% (5% where PAN of the Seller is not provided)
Person Responsible: A Buyer whose total sales, gross receipts or turnover from the business carried on by him exceed ten crore rupees
during the financial year immediately preceding the financial year in which the purchase of goods is carried out,
Point of Taxation: At the time of Payment or at the time of Credit of Sum to the account of Seller whichever is earlier
On What Amount: Amount exceeding fifty lakh rupees.
Exceptions: TDS shall not be deducted in case of

(a) tax is deductible under any of the provisions of this Act; and
(b) tax is collectible under the provisions of section 206C other than a transaction to which sub-section (1H) of section 206C applies.’.
Whether GST to be included:

While there is a specific circular to the effect that amount shall include GST in case of TCS, there is also a specific CBDT circular that amount
shall not include GST in case of TDS. To avoid ambiguous interpretation and to adopt analogous interpretation, a clarificatory circular is
need of the hour.
Effective From : 1st day of July, 2021.

TDS/TCS on ITR non-filer at higher rates: 206AB & 206CCA
• Until now higher rate of TDS and TCS were applicable u/s 206AA and 206CC respectively for Non-PAN Payees. However, it is observed by
Government that PAN’s are obtained but Returns are not filed by unscrupulous assessee’s. Therefore, a new section 206AB providing for
higher deduction of TDS for return non-filer payees.
• Applicable for : Chapter XVII-B other than sections 192, 192A, 194B, 194BB, 194LBC or 194N
• TDS need to be deducted and TCS need to be collected at higher rate if the Payee has not filed the returns of income for both of the two
assessment years relevant to the two previous years which are immediately before the previous year and for which time limit for filing
tax return under sub-section (1) of section 139 of the Act has expired in which tax is required to be deducted or collected, as the case
may be.
• However, this section will be applicable only where the aggregate of tax deducted at source and tax collected at source in non-filer
payees case is rupees fifty thousand or more in each of these two previous years.

Misc. Amendments
Rationalisation of the provisions of Equalisation Levy (S. 153 of Finance Act, 2020)
• As part of BEPS measure, Government had unilaterally introduced Equalization Levy on consideration received by non-resident e-
commerce operators for e-commerce supply or services at 2%. E-Commerce Supply is defined to mean;
• (i) online sale of goods owned by the e-commerce operator;
• (ii) online provision of services provided by the e-commerce operator;
• (iii) online sale of goods or provision of services or both, facilitated by the e-commerce operator; or
• (iv) any combination of activities listed in clause (i), (ii) or clause (iii);
• There were many teething issues as to i) Whether Businesses solicited through online Portal but where actual delivery of Goods and
provision of Services happen physically would be liable for equalization levy or not?
• Further, where online marketplace are only aggregators who doesnot own goods or doesnot provide service, whether the EL would be
applicable only on Commission or entire transaction value ?
• Now, government has expanded scope of EL to include one or more of the following activities;
(a) acceptance of offer for sale;
(b) placing of purchase order;
(c) acceptance of the purchase order;
(d) payment of consideration; or
(e) supply of goods or provision of services, partly or wholly.

Misc. Amendments
• Furthermore, Government has further enhanced scope to include complete transaction value whether or not market place owns the
goods or services provided by such market place.
• Scope is reduced with amendment to exclude transaction from levy of EL where consideration is subject to taxability as royalty or fees
for technical services in India. These amendments will take effect retrospectively from 1st April, 2020.
Removal of Anamoly: Section 10(50) Exemption:
• Section 10(50) provided exemption to income of E-Commerce Operator provided EL was charged from 01st April, 2021. However, EL was
introduced w.e.f 01st April, 2020 and accordingly, exemption u/s 10(50) is also extended for AY 2020-21. These amendments will take
effect from 1st April, 2021.

Misc. Amendments
Clarification regarding the scope of Vivad se Vishwas Act, 2020 - Whether Settlement Cases can be
resolved through VsV?
• A Writ Petition was filed before Delhi High Court to adjudicate whether cases pending before Income Tax Settlement Commission (ITSC)
for settlement of case under Chapter XIX-A of the Income-tax Act would be eligible for opting VsV Scheme or not.
• A Retrospective amendment in respective sections have been made to clarify the position that cases pending before Settlement
Commission shall be outside the purview of VsV Scheme.
The said amendments are proposed to take effect retrospectively from the 17th March 2020.

Misc. Amendments
Tax Exemption On ULIP Proceeds Capped :
ULIP’s are a combination of insurance + investment. A small portion of the money invested goes to securing your life whereas the
rest of the money is invested in the market. Policyholders can pay premiums monthly/annually
Under the existing provisions, all proceeds from ULIPs are tax free, irrespective of the amount of premium paid by the individual
Budget 2021 proposed to limit exemptions on proceeds from unit-linked insurance plans that have so far allowed large investors to receive
tax-free returns.
For ULIPs taken on or after February, 1 2021, the maturity proceeds of policies with an annual premium of more than Rs 2.5 lakh will be
taxable on a par with equity-linked mutual fund schemes.
In the event of the policyholder’s demise, either the sum assured or proceeds of the investments, whichever is higher, are paid out to the
nominee. This amount paid to the nominee, budget said, will continue to be tax free.
These amendments will take effect from 1st April, 2021

Misc. Amendments
Relaxation to NRI for Income of Retirement Benefit Account:
In order to address the mismatch in the year of taxability of withdrawal from retirement funds by residents who opened such fund when
they were non-resident in India. Withdrawal from such funds may be taxable on receipt basis in notified country whereas it is taxable on
accrual basis in India. Because of this anomaly, such residents could not able to claim the credit for taxes paid in either of the countries.
Now, newly inserted Section provides for exemption from taxes on income accrued to specified account opened for the purpose of
retirement benefits in the notified country by a specified person who is the resident in India. Such account was opened by the specified
person when he was non-resident in India and a resident of other country.
Specified Person, Specified Account and notified country is defined under the Act.
Amendment shall become effective from 1st April, 2022 and will apply from AY 2022-23 and subsequent Assessment Year

Misc. Amendments
Elimination of possibility of double deduction while calculating application or accumulation in
Charitable Trust:
Corpus donation is exempted from tax. To eliminate the possibility of double deduction, it is provided that application out of such corpus
donation will not be considered as application as part of the mandatory 85% application from income other than such corpus.
Further, if charitable trust takes loans and make application for charitable or religious purpose out of the proceeds of loans and borrowing,
it will be considered as application. But, repayment of loans will not be considered as application.
These amendments will take effect from 1st April, 2022 and will accordingly apply to the assessment year 2022-23 and
subsequent assessment years.

Misc. Amendments
Amendment in Section 115JB to exclude Capital Gain, Interest, Royalty and FTS:
Income from Capital Gains on securities, interest, royalty and fees for the technical services are taxable at a rate lower than the tax rate
specified u/s 115JB of the Act in case of foreign companies and therefore, the legislature has directed to exclude the expenses debited to
Profit and Loss statement exclusively related to such sums for the purpose of computation of tax payable under section 115JB of the Act
vide clause-(fb) of Explanation-1 to sub section (2) of section 115JB of the Act.
Simultaneously, it was also provided to reduce income in the form of Capital Gains on securities, interest, royalty and fees for the technical
services from the computation of book profit u/s 115JB of the Act.
Amendment shall become effective from 1st April, 2021 and will apply to the Assessment Year 2021-22 and subsequent
Assessment Years
Exemption from levy interest u/s 234C on Dividend Income:

Exemption from levy of interest on default of advance tax instalment to dividend income only if advance tax due on dividend income is
deposited by the tax payer on or before the date of immediately succeeding advance tax instalment or 31st March whichever is earlier.
Amendment shall become effective from 1st April, 2021 and will accordingly apply to Assessment year 2021-22 and subsequent
Assessment years.

Misc. Amendments
Budget 2020 : Global Income of Indian Citizen & IDS
Definition of Liable to Tax Introduced Refund of excess deposit in Income Declaration Scheme:
• An individual, being a citizen of India, having total income, other • Section 191 of the Finance Act, 2016, provided that any
than the income from foreign sources, exceeding fifteen lakh amount of tax, surcharge and penalty paid in pursuance of a
rupees during the previous year shall be deemed to be resident declaration made under the Income Declaration Scheme shall
in India in that previous year, if he is not liable to tax in any not be refundable.
other country or territory by reason of his domicile or residence
or any other criteria of similar nature. • Vide Finance (No. 2) Act, 2019, A proviso to Section 191 of
Finance Act empowered the Board to specify a class of persons
• Liable to Tax was not defined in the Act raising scope for to whom tax paid in excess shall be refundable.
ambiguous interpretations. A definition u/s 2(29A) is
incorporated to mean • Now it is clarified that advance shall be refundable to the
specified class of persons without payment of any interest.
• 2(29A) “liable to tax”, in relation to a person, means that there is
a liability of tax on such person under any law for the time being This amendment will take effect retrospectively from 1st June,
in force in any country, and shall include a case where 2016.
subsequent to imposition of tax liability, an exemption has been
provided.

Ss
Presenter
Information

Surana Maloo & Co. | Chartered Accountants
Presented by
Vidhan Surana, FCA – Founding Partner and Dedicated team of Direct Tax
2nd Floor, Aakashganga Complex Parimal Under Bridge, Paldi, Ahmedabad
Gujarat (India) +91 79 266 51777/8 | www.suranamaloo.com
vidhansurana@suranamaloo.com | M. +91 98240 12724

Thank You
Disclaimer:
This document is intended for private circulation and knowledge sharing purpose only. All efforts have been made to
ensure the accuracy of information in this publication. The information contained in this document is published for the
knowledge of the recipient but is not to be relied upon as authoritative or taken in substitution for the exercise of
judgment by any recipient. The publication is a service to our clients to provide an overview of the Direct Tax Proposals
and shall not be construed as professional advice or an authoritative opinion. Whilst due care has been taken in the
preparation of this publication and information contained herein, we will not be responsible for any errors that may have
crept in inadvertently and do not accept any liability whatsoever, for any direct or consequential loss howsoever arising
from any use of this publication or its contents or otherwise arising in connection herewith.

Budget Analysis 2021 – 22 | Clause by Clause Analysis
CONTENT
1. GST 00
2. Customs Act, Rules 00
3. Customs (Non-Tariff Notification) 00
4. Customs Tariff Act 00
5. Customs Tariff Notifications 00
6. Income Tax 00
7. Central Excise 00
8. SEBI 00
9. Other Misc. Acts 00
www.bizsolindia.com 1
No table of contents entries found.No index entries found.
CGST ACT 2017
Finance Bill
Section Existing Amendment Bizsol Analysis
Clause
99 7(1)aa “(aa) the activities or This is the retrospective

transactions, by a person, amendment w.e.f. 1st
other than an individual, to July 2017 mainly with the
its members or object to cover merger /
constituents or vice versa, amalgamation,
for cash, deferred payment admission retirement,
or other valuable division etc. as the
consideration. transactions between
two different persons.
Explanation.––For the
purposes of this clause, it
is hereby clarified that,
notwithstanding anything This will have the major
contained in any other law tax implications due to
for the time being in force retrospective
or any judgment, decree or amendment.
order of any Court, tribunal
or authority, the person
and its members or Further, schedule II to
constituents shall be Section 7, Sr. No. 7 has
deemed to be two been omitted and
separate persons and the included in this provision.
supply of activities or
transactions inter se shall
be deemed to take place
from one such person to
another”
100 16(2)aa) (aa) the details of the Now, ITC will be allowed
invoice or debit note only on the matched
referred to in clause (a) invoices. In other words,
has been furnished by the only when outward
supplier in the statement supplies and relevant
of outward supplies and details have been
such details have been communicated to the
communicated to the recipient of such invoice /
recipient of such invoice or debit notes.
debit note in the manner
specified under section 37
Finance Bill
Clause
101 35(5) (5) Every registered Omitted Reconciliation of Annual

person whose Return with financial
turnover during a accounts in the Form
financial year
GSTR-9C will be on self-
exceeds the
prescribed limit shall certification basis and not
get his accounts needed to be certified by
audited by a CA / CMAs.
chartered
accountant or a cost Govt should have
accountant and shall appreciated additional
submit a copy of the collection in Dec & Jan
audited annual was received only on
accounts, the
account of finalizing
reconciliation
statement under GSTR-9C, where short
sub-section (2) of duty was noticed and
section 44 and such paid by the taxpayer.
other documents in Professional scrutinized
such form and the financial accounts
manner as may be properly and reconciles
prescribed:
the GST returns and
[Provided that
advise to the clients and
nothing contained in
to pay the duties not paid
this sub-section
by taxpayer. Now, when
shall apply to any
such short payment may
department of the
be noticed by the
Central Government
department, mandatory
or a State
payment of penalty and
Government or a
interest on duties will be
local authority,
the additional liability on
whose books of
the taxpayer.
account are subject
to audit by the
Comptroller and
Auditor-General of
India or an auditor
appointed for
auditing the
accounts of local
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authorities under
any law for the time
being in force.]58
102 44 44. Annual Return - 44. Every registered Now, Annual return to be
(1) Every registered person, other than an Input filed only after
person, other than Service Distributor, a reconciliation with
an Input Service person paying tax under financial accounts on
Distributor, a person section 51 or section 52, a self-certification basis.
paying tax under casual taxable person and
section 51 or section a non-resident taxable Further, Commissioner
52, a casual taxable person shall furnish an have been empowered to
person and a non- annual return which may exempt any class of
resident taxable include a self-certified registered person to file
person, shall furnish reconciliation statement, Annual Return.
an annual return for reconciling the value of
every financial year supplies declared in the
electronically in such return furnished for the
form and manner as financial year, with the
may be prescribed audited annual financial
on or before the statement for every
thirty-first day of financial year
December following electronically, within such
the end of such time and in such form and
financial year: in such manner as may be
prescribed:
[Provided that the
Commissioner may, Provided that the
on the Commissioner may, on the
recommendations of recommendations of the
the Council and for Council, by notification,
reasons to be exempt any class of
recorded in writing, registered persons from
by notification, filing annual return under
extend the time limit this section:
for furnishing the
annual return for Provided further that
such class of nothing contained in this
registered persons section shall apply to any
department of the Central
Government or a State
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Clause
as may be specified Government or a local

therein: authority, whose books of
account are subject to
Provided further that audit by the Comptroller
any extension of
and Auditor- General of
time limit notified by
the Commissioner of India or an auditor
State tax or the appointed for auditing the
Commissioner of accounts of local
Union territory tax authorities under any law
shall be deemed to for the time being in force.
be notified by the 2)
Every registered
person who is
required to get his
accounts audited in
accordance with the
provisions of sub-
section (5) of section
35 shall furnish,
electronically, the
annual return under
sub-section (1)
along with a copy of
the audited annual
accounts and a
reconciliation
statement,
reconciling the value
of supplies declared
in the return
furnished for the
financial year with
the audited annual
financial statement,
and such other
particulars as may
be prescribed.
[Explanation.- For
the purposes of this
section, it is hereby
declared that the
annual return for the
period from the 1st
July, 2017 to the
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Clause
31st March, 2018

shall be furnished on
or before the [31st
January, 2020]63
and the annual
return for the period
from the 1st April,
2018 to the 31st
March, 2019 shall be
furnished on or
before the 31st
March, 2020.]64
103 50 Provided that the Provided that the interest Interest will have to be
interest on tax on tax payable in respect paid only when net tax
payable in respect of of supplies made during a liability arises. However,
supplies made tax period and declared in such provision will not be
during a tax period the return for the said applicable when duty is
and declared in the period furnished after the payable on the gross
return for the said due date in accordance liability, when it is noticed
period furnished with the provisions of by the department and
after the due date in section 39, except where recovery proceedings
accordance with the such return is furnished initiated.
provisions of section after commencement of
39, except where any proceedings under
such return is section 73 or section 74 in
furnished after respect of the said period,
commencement of shall be payable on that
any proceedings portion of the tax which is
under section 73 or paid by debiting the
section 74 in respect electronic cash ledger.
of the said period,
shall be levied on
that portion of the tax
that is paid by
debiting the
electronic cash
ledger.
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Clause
104 74 (ii) where the notice (ii) where the notice under Determination of tax not
under the same the same proceedings is paid or short paid or
proceedings is issued to the main person erroneously refunded or
issued to the main liable to pay tax and some input tax credit wrongly
person liable to pay other persons, and such availed or utilized by
tax and some other proceedings against the reason of fraud or any
persons, and such main person have been willful- misstatement or
proceedings against concluded under section suppression of facts will
the main person 73 or section 74, the not be required in case
have been proceedings against all the Detention, seizure and
concluded under persons liable to pay release of goods and
section 73 or section penalty under sections 122 conveyances in transit
74, the proceedings & 125 are deemed to be and Confiscation of
against all the concluded. goods or conveyances
persons liable to pay and levy of penalty.
penalty under
sections 122, 125,
129 and 130 are
deemed to be
concluded.
105 75 Explanation–For the It is welcome provision.

purposes of this sub-
section, the expression
"self-assessed tax" shall
Errors and omission
include the tax payable in
when corrected on own
respect of details of
by the taxpayers, will be
outward supplies furnished
also considered as a self-
under section 37, but not assess tax.
included in the return
furnished under section
39.’.
106 83(1) (1) Where during the (1) Where, after the The provisional
pendency of any initiation of any proceeding attachment can be made
proceedings under under Chapter XII, even after initiation of any
section 62 or section Chapter XIV or Chapter proceedings rather than
63 or section 64 or XV, the Commissioner is of pendency pf any
section 67 or section the opinion that for the proceedings.
73 or section 74, the purpose of protecting the
Finance Bill
Clause
Commissioner is of interest of the Government

the opinion that for revenue it is necessary so
the purpose of to do, he may, by order in This provision has
protecting the writing, attach been brought to negate
interest of the provisionally, any property, the Gujarat High Court.
Government
revenue, it is including bank account,
necessary so to do, belonging to the taxable
he may, by order in person or any person
writing attach specified in sub-section
provisionally any (1A) of section 122, in such
property, including manner as may be
bank account, prescribed.”
belonging to the
taxable person in
such manner as may
be prescribed.
107 107(6) Provided that no appeal For filing the appeal in

shall be filed against an the case of Detention,
order under sub-section seizure and release of
(3) of section 129, unless a goods and conveyances
sum equal to twenty-five in transit, min 25% of
per cent. of the penalty has penalty levied to be
been paid by the appellant. deposited.
108 129(1) (a) on payment of (a) on payment of penalty Penalty on Detention,

the applicable tax equal to two hundred per seizure and release of
(a) & (b) and penalty equal to cent. of the tax payable on goods and conveyances
one hundred per such goods and, in case of in transit has been
cent. of the tax exempted goods, on enhanced to 200% from
payable on such payment of an amount 100% of the duty amount
goods and, in case equal to two per cent. of in case of taxable goods
of exempted goods, the value of goods or when owner is present
on payment of an twenty-five thousand for release of the goods.
amount equal to two rupees, whichever is less,
per cent. of the value where the owner of the
of goods or twenty- goods comes forward for
five thousand payment of such penalty;
rupees, whichever is
Finance Bill
Clause
less, where the

owner of the goods
comes forward for
payment of such tax
and penalty;
(b) on payment of penalty Penalty can be 50% of

(b) on payment of
equal to fifty per cent. Of value of goods or 200%
the applicable tax
the value of the goods or of duty amount for
and penalty equal to
two hundred per cent. of taxable goods,
the fifty per cent. of
the tax payable on such whichever is higher, in
the value of the
goods, whichever is case of Detention,
goods reduced by
higher, and in case of seizure and release of
the tax amount paid
exempted goods, on goods and conveyances
thereon and, in case
payment of an amount in transit, when owner is
of exempted goods,
equal to five per cent. of not present for release of
on payment of an
the value of goods or the goods.
amount equal to five
twenty-five thousand
per cent. of the value
rupees, whichever is less,
of goods or twenty-
where the owner of the
five thousand
goods does not come
rupees, whichever is
forward for payment of
less, where the
such penalty.
owner of the goods
does not come
forward for payment
of such tax and
penalty;
108 129(2) (2) The provisions of Omitted Provisional release of the

sub-section (6) of goods against the bank
section 67 shall, guarantee will not be
mutatis mutandis, allowed henceforth in
apply for detention case of Detention,
and seizure of goods seizure and release of
and conveyances. goods and conveyances
in transit.
Finance Bill
Clause
129(3) (3) The proper (3) The proper officer Specified timeline has
officer detaining or detaining or seizing goods been given for issuing the
seizing goods or or conveyance shall issue notice within 7 days from
conveyances shall a notice within seven days the date of Detention,
issue a notice of such detention or seizure and release of
specifying the tax seizure, specifying the goods and conveyances
and penalty payable penalty payable, and in transit and needs to
and thereafter, pass thereafter, pass an order specify the penalty
an order for payment within a period of seven amount in the notice,
of tax and penalty days from the date of then only order can be
under clause (a) or service of such notice, for issued.
clause (b) or clause payment of penalty under
(c). clause (a) or clause (b) of
sub-section (1).”;
108 129(4) (4) No tax, interest or (4) No tax, interest or No personal hearing will
penalty shall be penalty shall be be required before
determined under determined under sub- finalizing the order of
sub-section (3) section (3) without giving penalty in the case of
without giving the the person concerned an Detention, seizure and
person concerned opportunity of being heard. release of goods and
an opportunity of conveyances in transit
being heard.
108 129(6) (6) Where the (6) Where the person Since there will be no tax
person transporting transporting any goods or impose, penalty amount
any goods or the the owner of such goods will have to be paid within
owner of the goods fails to pay the amount of 15 days otherwise goods
fails to pay the penalty under sub-section can be disposed off
amount of tax and (1) within fifteen days from recover the penalty.
penalty as provided the date of receipt of the
in sub-section (1) copy of the order passed In case of vehicle, vehicle
within [fourteen under sub-section (3), the can be released by
days]90 of such goods or conveyance so payment of penalty or Rs.
detention or seizure, detained or seized shall be 1 Lac whichever is lower.
further proceedings liable to be sold or However, commissioner
shall be initiated in disposed of otherwise, in has been authorised to
accordance with the such manner and within reduce the time of
provisions of section such time as may be issuance of notice in
130: prescribed, to recover the
Finance Bill
Clause
penalty payable under case of perishable or

sub-section (3): hazardous goods.
Provided that where
the detained or Provided that the
seized goods are conveyance shall be
perishable or released on payment by
hazardous in nature the transporter of penalty
or are likely to under sub-section (3) or
depreciate in value one lakh rupees,
with passage of whichever is less:
time, the said period
of [fourteen days]91
may be reduced by
Provided further that
the proper officer.
where the detained or
seized goods are
perishable or hazardous in
nature or are likely to
depreciate in value with
passage of time, the said
period of fifteen days may
be reduced by the proper
officer.”.
109 130(1) (1) Notwithstanding (1) Where any person— Earlier provision to
anything contained Section 130(1) was
in this Act, if any (i) supplies or receives any exclusive irrespective of
person— goods in contravention of any provision mentioned
any of the provisions of this earlier, but now
(i) supplies or Act or the rules made Confiscation of goods or
receives any goods thereunder with intent to conveyances and levy of
in contravention of evade payment of tax; or penalty in specific
any of the provisions circumstances has given
of this Act or the (ii) does not account for
in the provision.
rules made any goods on which he is
thereunder with liable to pay tax under this
intent to evade Act; or
payment of tax; or
(iii) supplies any goods
(ii) does not account liable to tax under this Act
for any goods on
which he is liable to
Finance Bill
Clause
pay tax under this without having applied for

Act; or registration; or
(iii) supplies any (iv) contravenes any of the

goods liable to tax provisions of this Act or the
under this Act rules made thereunder
without having with intent to evade
applied for payment of tax; or
registration; or
(v) uses any conveyance
(iv) contravenes any as a means of transport for
of the provisions of carriage of goods in
this Act or the rules contravention of the
made thereunder provisions of this Act or the
with intent to evade rules made thereunder
payment of tax; or unless the owner of the
conveyance proves that it
(v) uses any was so used without the
conveyance as a knowledge or connivance
means of transport of the owner himself, his
for carriage of goods agent, if any, and the
in contravention of person in charge of the
the provisions of this conveyance, then, all such
Act or the rules goods or conveyances
made thereunder shall be liable to
unless the owner of confiscation and the
the conveyance person shall be liable to
proves that it was so penalty under section 122.
used without the
knowledge or
connivance of the
owner himself, his
agent, if any, and the
person in charge of
the conveyance,
then, all such goods
or conveyances
shall be liable to
confiscation and the
person shall be
Finance Bill
Clause
liable to penalty
under section 122.
109 130(2) Provided further Provided further that the Penalty amount in case
that the aggregate aggregate of such fine of Confiscation of
of such fine and and penalty leviable goods or conveyances
penalty leviable shall not be less than the and levy of penalty will
shall not be less penalty equal to hundred be at least equal to the
than the amount of per cent. of the tax 100% of tax payable on
penalty leviable payable on such goods: such goods.
under sub-section
(1) of section 129:
109 130(3) (3) Where any fine in Omitted This provision is become
lieu of confiscation redundant and hence
of goods or omitted, since only
conveyance is penalty amount is
imposed under sub- payable and not the tax.,
section (2), the which is covered in the
owner of such goods earlier provisions.
or conveyance or
the person referred
to in sub-section (1),
shall, in addition, be
liable to any tax,
penalty and charges
payable in respect of
such goods or
conveyance.
110 151 151. Power to 151. Power to call for Statistics have been
collect statistics.— information. changed with any
(1) The information. It means
Commissioner may, The Commissioner or an CGST Officers can now
if he considers that it officer authorised by him call any information from
is necessary so to may, by an order, direct any person and such
do, by notification, any person to furnish person will have to
direct that statistics information relating to any furnish information in
may be collected matter dealt with in time, form and any
relating to any connection with this Act,
matter dealt with by within such time, in such
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Clause
or in connection with form, and in such manner, manner as specified by

this Act. as may be specified the commissioner.
therein.”.
(2) Upon such
notification being
issued, the
Commissioner, or
any person
authorised by him in
this behalf, may call
upon the concerned
persons to furnish
such information or
returns, in such form
and manner as may
be prescribed,
relating to any
matter in respect of
which statistics is to
be collected .
111 152(1) 152. Bar on 152. Bar on disclosure of Any information w.r.t. of
disclosure of information.— (1) No any matter cannot be
information.— (1) information of any published without giving
No information of individual return or part any opportunity of being
any individual return thereof with respect to any heard to the person
or part thereof with matter given for the concern.
respect to any purposes of section 150 or
matter given for the section 151 shall, without
purposes of section the previous consent in
150 or section 151 writing of the concerned
shall, without the person or his authorised
previous consent in representative, be
writing of the published in such manner
concerned person or so as to enable such
his authorised particulars to be identified
representative, be as referring to a particular
published in such person and no such
manner so as to information shall be used
enable such for the purpose of any
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Clause
particulars to be proceedings under this Act

identified as without giving an
referring to a opportunity of being heard
particular person to
and no such
information shall be the person concerned
used for the purpose
of any proceedings
under this Act.
111 152(2) (2) Except for the Omitted This clause has been
purposes of omitted for ease of doing
prosecution under business.
this Act or any other
Act for the time
being in force, no
person who is not
engaged in the
collection of
statistics under this
Act or compilation or
computerization
thereof for the
purposes of this Act,
shall be permitted to
see or have access
to any information or
any individual return
referred to in section
151.
112 168(2) Power to issue Power to issue Section 44 has been

instructions or instructions or included and Section
directions.— directions.— 151(1)has been omitted
w.r.t. power to issue
(2) The (2) The Commissioner instructions or directions.
Commissioner specified in clause (91) of
specified in clause section 2, sub-section (3)
(91) of section 2, of section 5, clause (b) of
sub-section (3) of sub-section (9) of section
section 5, clause (b) 25, sub-sections (3) and
Finance Bill
Clause
of sub-section (9) of (4) of section 35, sub-

section 25, sub- section (1) of section 37,
sections (3) and (4) sub-section (2) of section
of section 35, sub- 38, sub-section (6) of
section (1) of section section 39, section 44,
37, sub-section (2) sub-sections (4) and (5) of
of section 38, sub- section 52], [sub-section
section (6) of section (1) of section 143, except
39, [sub-section (1) the second proviso
of section 44, sub- thereof], sub-section (1) of
sections (4) and (5) section 151, clause (l) of
of section 52]105, sub-section (3) of section
[sub-section (1) of 158 and section 167 shall
section 143, except mean a Commissioner or
the second proviso Joint Secretary posted in
thereof]106, sub- the Board and such
section (1) of section Commissioner or Joint
151, clause (l) of Secretary shall exercise
sub-section (3) of the powers specified in the
section 158 and said sections with the
section 167 shall approval of the Board.
mean a
Commissioner or
Joint Secretary
posted in the Board
and such
Commissioner or
Joint Secretary shall
exercise the powers
specified in the said
sections with the
approval of the
Board.
113 Schedul 7. Supply of Goods This has been removed

e II retrospectively since this
The following shall has been added in the
be treated as supply Section 7 itself
of goods, namely: considering as supply.
Finance Bill
Clause
Supply of goods by
any unincorporated
association or body
of persons to a
member thereof for
cash, deferred
payment or other
valuable
consideration.
IGST ACT 2017
Finance
Bill Section Existing Amendment Bizsol Analysis
Clause
114 16(1)(3) 16. Zero rated 16. Zero rated Supply to Developer &
supply.–– (1) supply.–– (1) ―zero unit only for authorised
―zero rated rated supply‖ means operations will be
supply‖ means any any of the following considered as zero
of the following supplies of goods or rated supply.
supplies of goods services or both,
or services or both, namely:––
namely:––
(a) export of goods or
(a) export of goods services or both; or
or services or both;
or (b) supply of goods or
services or both for
(b) supply of goods authorised
or services or both
to a Special Operations to a
Economic Zone Special Economic
developer or a Zone developer or a
Special Economic Special Economic
Zone unit. Zone unit.
- -
- -
Refund only can be
- given for exports when
it is linked with foreign
(3) A registered
exchange.
person making zero
rated supply shall
be eligible to claim
refund of unutilised
input tax credit on
(3) A registered supply of goods or
person making services or both,
zero rated supply without payment of
shall be eligible to
claim refund under
either of the integrated tax, under

following options, bond or Letter of
namely:–– Undertaking, in
(a) he may supply accordance with the

goods or services provisions of section
or both under bond 54 of the Central
or Letter of
Undertaking, Goods and Services
subject to such Tax Act or the rules
conditions, made thereunder,
safeguards and subject to such
procedure as may conditions,
be prescribed, safeguards and
without payment of procedure as may be
integrated tax and prescribed:
claim refund of
unutilised input tax Provided that the
credit; or registered person
making zero rated
(b) he may supply
goods or services supply of goods shall,
or both, subject to in case of non-
such conditions, realisation of sale
safeguards and
proceeds, be liable to
procedure as may
be prescribed, on deposit the refund so
received under
payment of
integrated tax and this sub-section along
claim refund of with the applicable
such tax paid on interest under
goods or services
or both supplied, in section 50 of the
accordance with Central Goods and
the provisions of Services Tax Act
section 54 of the within
Central Goods and
thirty days after the
Services Tax Actor
expiry of the time limit
the rules made
prescribed under
thereunder.
the Foreign Exchange

Management Act,
1999 for receipt of
foreign exchange
remittances, in such
manner as may be
prescribed.
CUSTOMS ACT, 1962
25(4) - “(4A) Where any exemption In order to revamp the

is granted subject to any custom duty exemptions,
condition under sub-section the government has
(1), such exemption shall, decided to review existing
unless otherwise specified old exemption
or varied or rescinded, be notifications. The existing
valid upto 31st day of March exemption notifications
falling immediately after two will remain valid till 31st
years from the date of such March 2023.
grant or variation:
Further the new
Provided that in respect of conditional notification
any such exemption in force issued will also be valid
as on the date on which the for 2 years after which it
Finance Bill, 2021 receives will be reviewed again.
the assent of the President,
the said period of two years
shall be reckoned from the
1st day February, 2021.”.
28BB “28BB. (1) Any inquiry or Definitive time limit of

investigation under this Act, two-year has been
culminating in the issuance prescribed for completion
of a notice under sub- of any proceedings under
section (1) or sub-section (4) the Customs Act. This
of section 28 shall be time limit can be further
completed by issuing such extendable by one year
notice, within a period of two by the Commissioner.
years from the date of
initiation of audit, search,
seizure or summons, as
the case may be:
Provided that the Principal

Commissioner of Customs
or the Commissioner of
Customs may, on sufficient
cause being shown and for
reasons to be recorded in
writing,
extend the said period to a

further period of one year.
(2) For computing the period

under sub-section (1), the
period during which stay
was granted by an order of a
court or tribunal, or the
period for seeking
information from an
overseas authority through a

legal process, shall be
excluded.
removal of doubts, it is
hereby declared that nothing
contained in this section
shall apply to any such
proceeding initiated before
the date on which
the Finance Bill, 2021

receives the assent of the
President.”.
46(3) section 46(3) (i) The (i) in the opening portion, for Sub section (3) of section
importer shall the words and brackets 46 is being amended so
present the bill of “before the end of the next as to,
entry under sub- day following the day
section (1) before the (excluding i. mandate filing of bill
of entry before the
end of the next day
holidays)”, the words and end of the day
following the day preceding the day
(excluding holidays) brackets “before the end of
(including holidays)
on which the aircraft the day (including holidays) of arrival of goods.
or vessel or vehicle
carrying the goods preceding the day” shall be ii. A new proviso is
arrives at a customs substituted; being introduced
station at which such therein, to enable
(ii) for the words “Provided the Board to notify
goods are to be
that”, the following shall be the time period for
cleared for home presenting bill of
consumption or substituted, namely:––
entry in certain
warehousing: “Provided that the Board cases as it may
deem fit.
Provided that a bill of may, in such cases as it may
This amendment is
entry may be deem fit, prescribe different
proposed as customs is
presented 10[at any time limits for presentation of
working 24*7.
time not exceeding the bill of entry, which shall
thirty days prior to] not be later than the end
the expected arrival of the day of such arrival:
of the aircraft or
vessel or vehicle by Provided further that”;
which the goods
have been shipped (iii) for the words “Provided
further that”, the words
for importation into
India: “Provided also that” shall be
Provided further that substituted.
where the bill of entry
is not presented
within the time so
specified and the
proper officer is
satisfied that there
was no sufficient
cause for such delay,
the importer shall pay
such charges for late
presentation of the
bill of entry as may be
prescribed.]
110(1D) - “(1D) Where the goods The procedure for pre-

seized under sub-section (1) trial disposal of seized
is gold in any form as notified gold is proposed to be
under sub-section (1A), revised. The disposal will

then, the proper officer shall, be carried out by the
instead of making an Commissioner (Appeals)
application
having jurisdiction, who
under sub-section (1B) to will certify the correctness
the Magistrate, make such
of inventory of the seized
application to the
Commissioner (Appeals) goods and carry out other
having jurisdiction, who procedures as
shall, as soon as may be, prescribed.
allow the application and
thereafter, the proper officer
shall dispose of such goods
in such manner as the
Central Government may
determine.”.
113(ja) - “(ja) any goods entered for Provision has been
exportation under claim of inserted to confiscate any
remission or refund of any goods entered for
duty or tax or levy to make a exportation under claim
wrongful claim inof remission or refund of
contravention of the any duty or tax or levy, so
provisions of this Act as to make a wrongful
claim in contravention of
or any other law for the time the provisions of the
being in force;”. Customs Act, 1962 or any
other law for the time
being in force.
114AC - ‘114AC. Where any person Penalty up to 5 times of

has obtained any invoice by refund claimed can be
fraud, collusion, wilful levied in specific case
misstatement or where any person has
suppression of facts to obtained any invoice by
utilise input tax credit on the fraud, collusion, willful
basis of such invoice for misstatement or
discharging any duty or tax suppression of facts to
on goods that are entered utilize Input Tax Credit on
for exportation under claim the basis of such invoice

of refund of such duty or tax, for discharging any duty
such or tax on goods that are
entered for exportation
person shall be liable for under claim of refund of
penalty not exceeding five any duty or tax.
times the
refund claimed.
purposes of this section, the
expression “input tax credit”
shall have the same
meaning as assigned to it in
clause (63) of section 2 of
the Central Goods and
Services Tax Act, 2017.’.
139 section 139 In section 139 of the Inventories, photographs

[Explanation. - For Customs Act, in the and lists certified by the
the purposes of this Explanation, for the words, Commissioner (Appeals)
section, "document"
brackets, figures and letter under the new sub-
includes inventories,
photographs and lists “a Magistrate under section (1D) to the
certified by a subsection documents within the
Magistrate under meaning of that section to
sub-section (1C) of (1C) of section 110”, the give evidentiary value to
section 110.] words, brackets, figures and such documents.
letters “a Magistrate under
sub-section (1C), or
Commissioner (Appeals)
under sub-section (1D), of
section 110” shall be
inserted.
139 - “Provided further that such

authorisation or amendment
may also be done
electronically through the
customs automated system
on the basis of risk

evaluation through
appropriate selection
criteria:
Provided also that such

amendments, as may be
specified by the Board, may
be done by the importer or
exporter on the common
portal.”.
154C - “154C. The Board may notify A common portal for

a common portal, to be facilitating registration,
called the Common filing of bills of entry,
Customs Electronic Portal, shipping bills, any other
for facilitating registration, document or form
filing of bills of entry, prescribed under this act
shipping bills, other or under any other law for
documents and forms the time being in force or
prescribed under this Act or the rules and regulations
under any other law for the made thereunder,
time being in force or the payment of duty and for
rules or regulations made carrying out such other
thereunder, payment of duty functions and for such
and for such purposes as may be
specified
other purposes, as the
Board may, by notification,
specify.”.
PART IV
AMENDMENTS TO THE SECURITIES CONTRACTS
(REGULATION) ACT, 1956
AMENDMENTS TO THE SECURITIES CONTRACTS (REGULATION) ACT,

1956
Finance
Clause
138 The provisions of this Part

shall come into force on the
1st day of April 2021.
139 2(da) (da) “pooled investment New definition is

vehicle” means a fund added under the
established in India in the Securities Contracts
form of a trust or otherwise, (Regulation) Act, 1956
such as mutual fund, of “Pooled Investment
alternative investment fund, vehicle.”
collective investment
scheme or a business trust
as defined in sub-section
(13A) of section 2 of the
Income tax Act, 1961 and
(h) “securities” — registered with the Securities
include and Exchange Board of
(i) shares, scrips, India, or such other fund,
stocks, bonds, which raises or collects
debentures, monies from investors and
debenture stock or invests such funds in
other marketable accordance with such
securities of a like regulations as may be made
nature in or of any by the Securities and The definition of
incorporated company Exchange Board of India in securities has been
this behalf;’; amended and it now
or other body
2(h) also includes the
corporate;
pooled investment
vehicle which is
(ii) in clause (h), ––
defined under Section
(h) “securities” —include 2 of the Securities
(i) shares, scrips, stocks, Contracts

bonds, debentures, (Regulation) Act, 1956
debenture stock or other
marketable securities of a
like nature in or of any
incorporated company or or
a pooled investment
2(ida)
vehicle or other body Sub-clause has been
corporate; inserted w.r.t the units
issued by pooled
(ida) units or any other
investment vehicle.
instrument issued by any
pooled investment vehicle;
140 30B 30B. (1) Notwithstanding This is a welcome to a

anything contained in the new section which is
Indian Trust Act, 1882 or in inserted in the
any other law for the time Finance bill which
being in force or in any provides special
judgment, decree or order of provisions related to
any Court, Tribunal or any pooled investment
other authority, a pooled vehicle.
investment vehicle, whether
constituted as a trust or
otherwise, and registered with
the Securities and Exchange
Board of India shall be eligible
to borrow and issue debt
securities in such manner and
to such extent as may be
specified under the
regulations made by
Securities and Exchange
Board of India in this behalf.
(2) Every pooled investment

vehicle referred to in
subsection (1) shall, subject to
the provisions of the trust
deed, be permitted to provide
security interest to lenders in
terms of the facility documents

entered into by such pooled
investment vehicle.
(3) Where any pooled

investment vehicle referred to
in sub-section (1) defaults in
repayment of principal amount
or payment of interest or any
such amount due to the
lender, the lender shall
recover the defaulted amount
and enforce security interest,
if any, against the trust assets,
by initiating proceedings
against the trustee acting on
behalf of such pooled
investment vehicle in
accordance with the terms
and conditions specified in the
facility documents:
Provided that on initiation of

the proceedings against the
trust assets, the trustee shall
not be personally liable and
his assets shall not be utilised
towards recovery of such
debt.
(4) The trust assets, which

remain after recovery of
defaulted amount, shall be
remitted to the unit holders on
proportionate basis.”.
PART VII
THE SECURITIES AND EXCHANGE BOARD OF INDIA

ACT, 1992
THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992:

Finance
Clause
148 12 (1C) No person shall Initially no person shall

sponsor or cause to be sponsor or cause to be
sponsored or carry on or sponsored or carry on or
caused to be carried on
cause to be carried on
any :
the activity of an
alternative investment 1.Venture capital funds
fund or a business trust 2.Collective investment
as defined in clause schemes
(13A) of section 2 of the 3.Mutual funds
Income-tax Act, 1961,
Without obtaining a
unless a certificate of
certificate of registration
registration is granted by from the SEBI Board.
the Board in accordance
with the regulations
made under this Act.”. Vide amendment clause
no. 148 two business
activities has been added
in above list which cannot
be carried on without
obtaining the certificate of
registration from the SEBI
Board namely-
1. Alternative investment
fund
2. Business trust [as

defined in clause (13A) of
section 2 of the Income-tax
Act, 1961]
In view of above
amendment, no person
shall sponsor or cause to be
sponsored or carry on or
caused to be carried on any
Finance
Clause
Alternative investment fund

or Business trust, without
obtaining a certificate of
registration from the SEBI
Board with effect from the
1st day of April 2021.
PART VIII
THE RECOVERY OF DEBTS DUE TO BANKS AND

FINANCIAL INSTITUTIONS ACT, 1993
THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL

INSTITUTIONS ACT, 1993
Finance
Bill Section Section Existing Amendment
Clause
149 2(g) “debt” means “debt” means any liability Initially, Debt Means any
any liability (inclusive of interest) liability (inclusive of interest)
(inclusive of which is claimed as due which is claimed as due from
interest) which is from any person or a any person
claimed as due pooled investment
from any person vehicle as defined in 1. by a Bank of a financial
institution or
by a bank of a clause (da) of section 2
2. by a consortium of banks or
financial of the Securities 3. Financial institutions
institution or by a Contracts (Regulation)
consortium of Act, 1956 by a bank of a
banks or financial financial institution or by a Vide amendment clause no.
institutions during consortium of banks or 149 pooled investment vehicle
the course of any financial institutions during has been added in above list
business activity the course of any business and broadened the scope of
undertaken by the activity undertaken by the definition of debt with effect
bank or the bank or the financial from the 1st day of April 2021.
financial institution or the
“pooled investment vehicle”
institution or the consortium under any law
means-
consortium under for the time being in force,
any law for the in cash or otherwise, As per clause (da) of section 2
time being in whether secured or of the Securities Contracts
force, in cash or unsecured, or assigned, or (Regulation) Act, 1956 “pooled
otherwise, whether payable under a investment vehicle” means a
whether secured decree or order of any civil fund established in India in the
or unsecured, or court or any arbitration form of a trust or otherwise,
assigned, or award or otherwise or such as mutual fund,
whether payable under a mortgage and alternative investment fund,
under a decree or subsisting on, and legally collective investment scheme
order of any civil recoverable on, the date of or a business trust as defined
court or any the application;] in sub-section (13A) of section
arbitration award 2 of the Income tax Act, 1961
or otherwise or and registered with the
under a mortgage Securities and Exchange
and subsisting on, Board of India, or such other
and legally fund, which raises or collects
recoverable on, monies from investors and

the date of the invests such funds in
application;] accordance with such
regulations as may be made by
the Securities and Exchange
Board of India in this behalf.
PART X
AMENDMENT TO THE SECURITISATION AND
RECONSTRUCTION OF FINANCIAL ASSETS AND
ENFORCEMENT OF SECURITY INTEREST ACT, 2002
AMENDMENT TO THE SECURITISATION AND RECONSTRUCTION OF

FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT,
2002
Finance
Clause
2(1)(f) 2 (1) (f) “borrower” The definition of

means any person 2 (1) (f) “borrower” borrower has been
who has been granted means any person who modified and the
financial assistance by any person who, or a scope of “any
any bank or financial pooled investment person” has
institution or who has vehicle as defined in broadened to the
given any guarantee clause (da) of section 2 extent of pooled
or created any of the Securities investment vehicle as
mortgage or pledge as Contracts (Regulation) defined under
security for the Act, 1956 has been Securities Contracts
financial assistance granted financial (Regulation) Act,
granted by any bank assistance by any bank 1956.
or financial institution or financial institution or
and includes a person who has given any
who becomes guarantee or created
borrower of a 1[asset any mortgage or pledge
151 as security for the
reconstruction
company] consequent financial assistance
upon acquisition by it granted by any bank or
of any rights or interest financial institution and
of any bank or includes a person who,
financial institution in or a pooled investment
relation to such vehicle becomes
financial borrower of a 1[asset
assistance2[or who reconstruction
has raised funds company] consequent
through issue of debt upon acquisition by it of
securities]; any rights or interest of
any bank or financial
institution in relation to
such financial
assistance [or who has
2
Finance
Clause
2(1)(zd) raised funds through

issue of debt securities];
(zd) “secured creditor” The definition of
means— secured creditor has
been amended and
(iv) debenture trustee (zd) “secured creditor” under this sub-clause
registered with the means— a secured creditor will
Board appointed by be the debenture
any company for (iv) debenture trustee trustee registered
secured debt registered with the with the SEBI Board
securities; or Board and appointed by and appointed by any
any company for company.
secured debt securities;
or
CUSTOMS TRAIFF ACT
CUSTOMS TARIFF ACT
8B Correction is made for

SEZ which was earlier
under Central Excise
Act which is corrected
as SEZ Act 2005.
9A(1A & 2A) (1B) Where the Central Section 9 & section 9A of
Government, on such the Customs Tariff Act is
inquiry as it may being amended to include
consider necessary, is provisions for anti-
of the opinion that absorption, retrospective
absorption of anti-
levy from the date of
dumping duty imposed initiation of investigation
under sub-section (1) in anti-circumvention
has taken place
cases, aligning
whereby the anti-
countervailing duty
dumping duty so
provisions with those in
imposed is rendered safeguard measures in
ineffective, it may
respect of levy on goods
modify such duty to cleared from EOU and
counter the effect of SEZ into Domestic Tariff
such absorption, from Area, stipulating that
such date, not earlier when countervailing duty
than the date of is revoked temporarily,
initiation of the inquiry,
such revocation shall be
as the Central
for a period not
Government may, by exceeding one year at a
notification in the
time and to provide for
Official Gazette,
imposing Countervailing
specify. duty on review for period
not exceeding 5 years at
Explanation.––For the a time, instead of the 5
purposes of this sub- years at present.
section, “absorption of
anti-dumping duty” is Absorption of CVD is said
to be have taken place if
said to have taken export price is decreased

place: without commensurate
decrease in resale price
(a) if there is a decrease in India. Similarly,
in the export price of an correction has been
article without any made in the explanation
commensurate change w.r.t. SEZ and EOU.
in the cost of production
of such article or export
price of such article to
countries other than
India or resale price in
India of such article
imported from the
exporting country or
territory; or (b) under
such other
circumstances as may
be provided by rules.
for sub-section (2A), the

following sub-section
shall be substituted,
namely:––
‘(2A) Notwithstanding
anything contained in
sub-section (1) and sub-
section (2), a
notification issued
under subsection (1) or
any anti-dumping duty
imposed under
subsection (2) shall not
apply to articles
imported by a hundred
per cent. export-
oriented undertaking or
a unit in a special
economic zone,
unless,—
(i) it is specifically made

applicable in such
notification or to such
undertaking or unit; or
(ii) such article is either

cleared as such into the
domestic tariff area or
used in the manufacture
of any goods that are
cleared into the
domestic tariff area, in
which case,
antidumping duty shall
be imposed on that
portion of the article so
cleared or used, as was
applicable when it was
imported
into India.
purposes of this
section,––
(a) the expression

“hundred per cent.
export-oriented
undertaking” shall have
the same meaning as
assigned to it in clause
(i) of Explanation 2 to
sub-section (1) of
section 3 of the Central

Excise Act, 1944;
(b) the expression

“special economic
zone” shall have the
same meaning as
assigned to it in clause
(za) of section 2 of the

Special Economic
Zones Act, 2005.’;
In Sub section 5 (a) in

the first proviso, for the
words “of five years”,
the words “upto five
years” shall be
substituted;
(b) after the second

proviso, the following
proviso shall be
inserted, namely:–
“Provided also that if the

said duty is revoked
temporarily, the period
of such revocation shall
not exceed one year at
a time.”.
CUSTOMS TARIFF ACT, 1975
CUSTOMS TARIFF CHANGES

The Second & Third Schedule of Finance Act, 2021
Exis
New Description
Existing Description ting New
Chapter of goods (if
of goods / Existing Tari Tarif Effectiv
/Tariff applicable) / Bizsol Remark
Provision / Existing ff f e Date
Heading Existing
HSN Rat Rate
Provision
e
2803 00 Carbon blacks Carbon blacks 5% 7.50 02.02.2 Standard Customs
10 % 021 Tariff rate has been
enhanced
3925 Builders ware of Builders ware of 10% 15% 02.02.2 Standard Customs
plastics plastics 021 Tariff rate has been
enhanced
7007 Safety Glass Safety Glass 10% 15% 02.02.2 Standard Customs
021 Tariff rate has been
enhanced
7104 90 Precious/Semi Precious/Semi 10% 15% 02.02.2 Standard Customs
90 precious stones precious stones /kg 021 Tariff rate has been
enhanced
8414 30 Compressors Compressors 10% 15% 02.02.2 Standard Customs
00 021 Tariff rate has been
enhanced
8414 40 Air compressors Air compressors 7.50 15% 02.02.2 Standard Customs
00 mounted on a wheeled mounted on a % 021 Tariff rate has been
chassis wheeled chassis enhanced
8414 80 Gas Compressors Gas 7.5 15% 02.02.2 Standard Customs
Compressors %/1 021 Tariff rate has been
0% enhanced
8501 10 Electric Motors Electric Motors 10% 15% 02.02.2 Standard Customs
021 Tariff rate has been
enhanced. However,
effective rate is still
retained at 10%
8501 20 Universal AC/DC Universal AC/DC 10% 15% 02.02.2 Standard Customs
00 motors motors 021 Tariff rate has been
enhanced. However,
retained at 10%
Exis
New Description
Heading Existing
HSN Rat Rate
Provision
e
8501 31 Other DC motors/DC Other DC 10% 15% 02.02.2 Standard Customs
8501 32 generators motors/DC 021 Tariff rate has been
8501 33 generators enhanced. However,
8501 34 effective rate is still
8501 40 retained at 10%
8501 51
8501 52
8501 53
8504 90 Other parts of Other parts of 10% 15% 02.02.2 Standard Customs
90 transformers transformers 021 Tariff rate has been
enhanced
8512 90 1. Parts Electrical 1. Parts Electrical 10% 15% 02.02.2 Standard Customs
00 lighting or signalling lighting or 021 Tariff rate has been
8536 41 equipment, defrosters, signalling enhanced
00 demisters equipment,
8536 49 2. Relays defrosters,
00 3. Other relays demisters
2. Relays
3. Other relays
8537 Boards, panels, Boards, panels, 10% 15% 02.02.2 Standard Customs
consoles, desks, etc. consoles, desks, 021 Tariff rate has been
etc. enhanced
8544 30 Ignition wiring sets and Ignition wiring 10% 15% 02.02.2 Standard Customs
00 other wiring sets sets and other 021 Tariff rate has been
wiring sets enhanced
9031 80 Measuring or checking Measuring or 7.50 15% 02.02.2 Standard Customs
00 instruments checking % 021 Tariff rate has been
instruments enhanced. However,
retained at 7.5%
9032 89 Electronic automatic Electronic 7.5 15% 02.02.2 Standard Customs
regulators automatic %/ 021 Tariff rate has been
regulators 10% enhanced
9104 00 Instrument panel Instrument panel 10% 15% 02.02.2 Standard Customs
00 clocks and clocks of clocks and clocks 021 Tariff rate has been
similar type for of similar type for enhanced
vehicles vehicles
2709 00 --Petroleum oils 5% 01.04.2 This has replaced
and oils obtained 021 existing tariff code 2709
2709 00 from bituminous 10 00 & 2709 20 00.
10 minerals, crude No change in tariff rate.
2709 00 ---Petroleum
90
Exis
New Description
Heading Existing
HSN Rat Rate
Provision
e
crude
---Crude
Customs Tariff Notifications

Existing New
Descriptio Descriptio
Chapte Existin New
n of goods n of goods Original Notificati
r /Tariff g Effe Effectiv Bizsol
/ Existing (if Notificat on No.
Headin Effectiv ctive e Date Remark
Provision / applicable ion and Date
g e Rate Rate
Existing ) / Existing
HSN Provision
0713 Pulses Pulses Nil Nil Notificati 02.02.2 Notificatio Nil BCD on
[other than [other than on No 021 n Pulses other
Peas Peas 50/2017 02/2021- than Peas
(Pisum (Pisum dtd Customs (Pisum
sativum), sativum), 30.06.20 dated sativum), Tur,
Tur, Tur, 17 02.02.20 Chickpeas,
Chickpeas Chickpeas, 21 Kabuli Chana,
and Kabuli Bengal Gram
Masoor Chana, and Masoor
(Lentils)]” Bengal (Lentils)]
Gram and
Masoor
(Lentils)]”
071310 Peas Peas 50% 10% Notificati 02.02.2 Notificatio Since AIDC
00 (Pisum (Pisum on No 021 n has been
Sativum) Sativum) 50/2017 02/2021- imposed @
dtd Customs 40% on this
30.06.20 dated item BCD has
17 been reduced
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
02.02.20 from 50% to

21 10%
071320 Kabuli Kabuli 40% 10% Notificati 02.02.2 Notificatio Since AIDC
10 Chana Chana on No 021 n has been
50/2017 02/2021- imposed @
17 02.02.20 been reduced
21 from 40% to
10%
071320 Bengal Bengal 60% 10% Notificati 02.02.2 Notificatio Since AIDC
20 Gram Gram on No 021 n has been
50/2017 02/2021- imposed @
21 from 60% to
10%
071320 Chickpeas Chickpeas 60% 10% Notificati 02.02.2 Notificatio Since AIDC
90 (garbanzos (garbanzos on No 021 n has been
) ) 50/2017 02/2021- imposed @
21 from 60% to
10%
071340 Lentils Lentils 30% 10% Notificati 02.02.2 Notificatio Since AIDC
00 (Mosur) (Mosur) on No 021 n has been
50/2017 02/2021- imposed @
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision

21 from 30% to
10%
071340 Lentils Lentils 30% 30% Notificati 02.02.2 Notificatio AIDC has
00 (Mosur) (Mosur) on No 021 n been imposed
Originating Originating 50/2017 02/2021- @ 20% and
in or in or dtd Customs there is no
exported exported 30.06.20 dated change in
from the from the 17 02.02.20 BCD rate
United United 21 when goods
States of States of imported from
America America USA or
originating
from USA
080810 All Goods All Goods 50% 15% Notificati 02.02.2 Notificatio Since AIDC
00 on No 021 n @ 35% has
50/2017 02/2021- been imposed
dtd Customs on this item
30.06.20 dated BCD on
17 02.02.20 import of
21 Apples has
been reduced
from 50% to
15%
080810 All Goods All Goods 70% 35% Notificati 02.02.2 Notificatio Since AIDC
00 Originating Originating on No 021 n @ 35% has
in or in or 50/2017 02/2021- been imposed
exported exported dtd Customs on this item
from the from the dated BCD on
United United import of
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
States of States of 30.06.20 02.02.20 Apples has

America America 17 21 been reduced
from 50% to
15% which
are originating
or exported
from USA
120600 All goods All goods 10% 30% Notificati 02.02.2 Notificatio BCD
90 for the for the on No 021 n exemption on
purpose of purpose of 50/2017 02/2021- all goods for
extraction extraction dtd Customs extraction and
and and 30.06.20 dated refining of Oil
refining of refining of 17 02.02.20 has been
oil oil 21 withdrawn and
now BCD will
be applicable
on same @
30%
1507 Crude Crude 35% 15% Notificati 02.02.2 Notificatio Since AIDC@
10 00 Soya-bean Soya-bean on No 021 n 20% has been
Oil Oil 50/2017 02/2021- imposed BCD
dtd Customs has been
30.06.20 dated reduced from
17 02.02.20 35% to 15%
21
1511 All Goods - All Goods - 85% 15% Notificati 02.02.2 Notificatio Since AIDC@
10 00 Crude Crude on No 021 n 17.50% has
Palm Oil Palm Oil 50/2017 02/2021- been imposed
dtd Customs BCD has
dated been reduced
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
30.06.20 02.02.20 from 85% to

17 21 15%
1512 All Goods - All Goods - 35% 15% Notificati 02.02.2 Notificatio Since AIDC@
11 10 Crude Crude on No 021 n 20% has been
Sunflower Sunflower 50/2017 02/2021- imposed BCD
Seed Oil Seed Oil dtd Customs has been
30.06.20 dated reduced from
17 02.02.20 35% to 15%
21
2204, - 1. All 150% 50% Notificati 02.02.2 Notificatio Since AIDC@

2205, Goods - on No 021 n 100% has
2206, Wine, 50/2017 02/2021- been imposed
2208 2. dtd Customs BCD has
Vermouth 30.06.20 dated been reduced
and other 17 02.02.20 from 150% to
wine of 21 50%
fresh
grapes,
flavoured,
3. Other
fermented
beverages
for
example,
Cider,
Perry,
Mead,
sake,
mixture of
fermented
beverages
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
or
fermented
beverages
and
nonalcoholi
c
beverages
4. All
goods
(Brandy,
Bourbon
whiskey,
Scotch
etc.)
2207 Denatured Denatured 2.50% 5% Notificati 02.02.2 Notificatio With the

20 00 ethyl ethyl on No 021 n omission of
alcohol alcohol 50/2017 02/2021- this end use
(ethanol) (ethanol) dtd Customs exemption
for use in for use in 30.06.20 dated Denatured
manufactur manufactur 17 02.02.20 ethyl alcohol
e of e of 21 (ethanol)
excisable excisable falling under
goods goods tariff
item 2207 20
00 will now
attract 5%
BCD
23, 28, Veterinary Veterinary 10% As Notificati 02.02.2 Notificatio BCD will be
29, 30 drugs and drugs and per on No 021 n applicable as
or 38 other other Tariff 50/2017 02/2021- per tariff rate.
goods goods dtd Customs Effective Rate
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
specified in specified in 30.06.20 dated and Tariff rate

List 2 List 2 17 02.02.20 is same
21
230120 All Goods All Goods 5% 30% Notificati 02.02.2 Notificatio BCD
on No 021 n increased
50/2017 02/2021- from 5% to
dtd Customs 30%
30.06.20 dated
17 02.02.20
21
2302 Maize Bran Maize Bran Nil 30% Notificati 02.02.2 Notificatio BCD
10 10 on No 021 n increased
50/2017 02/2021- from Nil to
dtd Customs 30%
30.06.20 dated
17 02.02.20
21
2302 Bran, Bran, 15% 30% Notificati 02.02.2 Notificatio BCD

40 00 sharps and sharps and on No 021 n increased
other other 50/2017 02/2021- from 15% to
residues, residues, dtd Customs 30%
whether or whether or 30.06.20 dated
not not 17 02.02.20
in the form in the form 21
of pellets, of pellets,
derived derived
from the from the
sifting, sifting,
milling or milling or
other other
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
working of working of
rice. rice.
2304, All Goods - All Goods - 15% 30% Notificati 02.02.2 Notificatio BCD
2305 or OIL-CAKE OIL-CAKE on No 021 n increased
2306 AND AND 50/2017 02/2021- from 15% to
OTHER OTHER dtd Customs 30%
SOLID SOLID 30.06.20 dated
RESIDUES RESIDUES 17 02.02.20
WHETHER WHETHER 21
OR NOT OR NOT
GROUND GROUND
OR IN THE OR IN THE
FORM OF FORM OF
PELLETS, PELLETS,
RESULTIN RESULTIN
G FROM G FROM
THE THE
EXTRACTI EXTRACTI
ON OF ON OF
SOYABEA SOYABEA
N OIL N OIL
2306 De-oiled De-oiled Nil 30% Notificati 02.02.2 Notificatio BCD

rice bran rice bran on No 021 n increased
oil cake oil cake 50/2017 02/2021- from Nil to
dtd Customs 30%
30.06.20 dated
17 02.02.20
21
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
2309 Feed Feed 20% 30% Notificati 02.02.2 Notificatio BCD

90 additives or additives or on No 021 n increased
pre-mixes pre-mixes 50/2017 02/2021- from 20% to
dtd Customs 30%
30.06.20 dated
17 02.02.20
21
2309 Prawn Shrimp 5% 5% Notificati 02.02.2 Notificatio No change in

90 feed, larvae feed on No 021 n BCD rate for
Shrimp 50/2017 02/2021- Shrimp larvae
larvae feed dtd Customs feed
Fish feed 30.06.20 dated
in pellet 17 02.02.20
form 21
2309 Prawn Shrimp 5% 30% Notificati 02.02.2 Notificatio BCD @ 30%

90 feed, larvae feed on No 021 n will be be
Shrimp 50/2017 02/2021- applicable on
larvae feed dtd Customs Prawn feed
Fish feed 30.06.20 dated and Fish feed
in pellet 17 02.02.20 in pellet form
form 21
Chapte - All Goods ( As per 15% Notificati 02.02.2 Notificatio BCD will be
r 23 Residues Tariff on No 021 n applicable @
(except and waste 50/2017 02/2021- 15%. Effective
2309 from the dtd Customs Rate and
10 00) food 30.06.20 dated Tariff rate is
industries; 17 02.02.20 same
prepared 21
animal
fodder)
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
2528 Boron ores All Goods Nil 2.50 Notificati 02.02.2 Notificatio BCD
% on No 021 n increased
50/2017 02/2021- from Nil to
dtd Customs 2.50%
30.06.20 dated
17 02.02.20
21
2529 Acid grade - 5% 10% Notificati 02.02.2 Notificatio BCD

22 00 fluorspar on No 021 n increased
50/2017 02/2021- from 5% to
dtd Customs 30%
30.06.20 dated
17 02.02.20
21
2701 All Goods All Goods 2.50% 1% Notificati 02.02.2 Notificatio Since AIDC
11 00, on No 021 n has been
2701 50/2017 02/2021- imposed @
12 00, dtd Customs 1.50 % on
2701 30.06.20 dated item falling
19 17 02.02.20 under chapter
21 2701 BCD
has been
reduced from
2.50% to 1%
2701, - All Goods As per 1% Notificati 02.02.2 Notificatio On Account of

2702, Tariff on No 021 n imposition of
2703 50/2017 02/2021- AIDC @
dtd Customs 1.50% on the
30.06.20 dated items falling
17 under this
chapter BCD
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
02.02.20 has been

21 reduced to 1%
2710 Naptha Naptha 4% 2.50 Notificati 02.02.2 Notificatio BCD has

% on No 021 n been reduced
50/2017 02/2021- from 4% to
dtd Customs 2.50%
30.06.20 dated
17 02.02.20
21
Any Common Common NIL NIL Notificati 02.02.2 Notificatio NIL rate of
Chapte salt salt on No 021 n BCD will be
r (including (including 50/2017 02/2021- applicable on
Rock Salt, Rock Salt, dtd Customs import of
Sea Salt Sea Salt 30.06.20 dated Common salt
and Table and Table 17 02.02.20 (including
Salt) Salt) falling 21 Rock Salt,
under Sea Salt and
Chapter Table Salt)
2501 only when
falling under
chapter 2501
otherwise
BCD as per
tariff rate will
be applicable
2907 Bis-phenol Bis-phenol Nil 10% Notificati 02.02.2 Notificatio BCD has
2300 A A on No 021 n been
50/2017 02/2021- increased
dtd Customs
dated
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
30.06.20 02.02.20 from NIL to

17 21 10%
2910 Epichloroh Epichloroh 2.50% 10% Notificati 02.02.2 Notificatio BCD has
3000 ydrin ydrin on No 021 n been
50/2017 02/2021- increased
dtd Customs from 2.50% to
30.06.20 dated 10%
17 02.02.20
21
2929 Diphenylm Diphenylm Nil 7.5% Notificati 02.02.2 Notificatio With the
10 90 ethane 4, ethane 4, on No 021 n omission of
4- 4- 50/2017 02/2021- the end use
diisocyanat diisocyanat dtd Customs exemption this
e (MDI) for e (MDI) for 30.06.20 dated product will
use in the use in the 17 02.02.20 attract BCD
manufactur manufactur 21 @ 7.50%
e of e of
spandex spandex
yarn yarn
293371 Caprolacta Caprolacta 7.50% 5% Notificati 02.02.2 Notificatio BCD has

00 m m on No 021 n been reduced
50/2017 02/2021- from 7.5% to
dtd Customs 5%
30.06.20 dated
17 02.02.20
21
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
31(Exc All Goods 31(Except 7.50% 7.50 Notificati 02.02.2 Notificatio BCD rate of
ept 31022100, % on No 021 n 7.50% will not
310221 3102 3000 50/2017 02/2021- be applicable
00, 31025000, dtd Customs on imports
310250 31043000, 30.06.20 dated made under
00, 31052000, 17 02.02.20 chapter
310430 31053000, 21 31023000
00, 31054000,
310520 31055100,
00, 31055900,
310530 31056000,
00, 31059010,
310540 31059090)
00,
310551
00,
310559
00,
310560
00,
310590
10,
310590
90)
310230 - All Goods 7.50% 2.50 Notificati 02.02.2 Notificatio On Account of

00 % on No 021 n imposition of
50/2017 02/2021- AIDC @ 5%
dtd Customs on the items
30.06.20 dated falling under
17 02.02.20 this chapter
21 BCD has
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
been reduced
to 2.50%
31 Muriate of Muriate of 5% Nil Notificati 02.02.2 Notificatio On Account of

potash, for potash, for on No 021 n imposition of
use as use as 50/2017 02/2021- AIDC @ 5%
manure or manure or dtd Customs on the items
for the for the 30.06.20 dated falling under
production production 17 02.02.20 this chapter
of complex of complex 21 BCD has
fertilizers fertilizers been reduced
to Nil
3102 Urea Urea 5% Nil Notificati 02.02.2 Notificatio On Account of

10 00 on No 021 n imposition of
50/2017 02/2021- AIDC @ 5%
dtd Customs on the items
30.06.20 dated falling under
17 02.02.20 this chapter
21 BCD has
been reduced
to Nil
3105 Diammoniu Diammoniu 5% Nil Notificati 02.02.2 Notificatio On Account of

30 00 m m on No 021 n imposition of
phosphate, phosphate, 50/2017 02/2021- AIDC @ 5%
for use as for use as dtd Customs on the items
manure or manure or 30.06.20 dated falling under
for the for the 17 02.02.20 this chapter
production production 21 BCD has
of complex of complex been reduced
fertilizers fertilizers to Nil
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
32, 34, (a) Electric (a) Electric Nil As Notificati 01.04.2 Notificatio Benefit of Nil
38, 83 parts and parts and per on No 021 n rate of
or any wire rolls wire rolls Tariff 50/2017 02/2021- Customs will
other for fitting for fitting dtd Customs not be
Chapte on electric on electric 30.06.20 dated available for
r lamp / lamp / 17 02.02.20 imports from
table lamp table lamp 21 01.04.2021 ad
/ wall lamp / wall lamp BCD will be
/ ceiling / ceiling applicable as
lamp / door lamp / door per tariff rate.
lamp / lamp / Effective Rate
window window and Tariff rate
lamp / lamp / is same
garden garden
lamp / wire lamp / wire
roll / roll /
Christmas Christmas
ornamentat ornamentat
ion ion
(b) Hinges, (b) Hinges,
metal locks metal locks
and back and back
of photo of photo
frames, frames,
and fittings and fittings
for photo for photo
frame / frame /
box; box;
(c ) Wax (c ) Wax
items for items for
candle candle
holder / holder /
votive / votive /
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
cup; cup;
(d) (d)
Chemicals Chemicals
/ lacquer / lacquer
required for required for
improved improved
finish of finish of
export export
product ; product ;
and items and items
as as
specified in specified in
the the
notification notification
till Sr. No till Sr. No
(zzs) (zzs)
32, 84 Ink - 5% As Notificati 02.02.2 Notificatio BCD will be

or 96 cartridges, per on No 021 n applicable as
ribbon Tariff 50/2017 02/2021- per tariff rate
assembly, dtd Customs and no
ribbon gear 30.06.20 dated concession in
assembly, 17 02.02.20 BCD rate will
ribbon gear 21 be available.
carriage, Effective Rate
for use in and Tariff rate
printers for is same
computers
3208, The The Nil Nil Notificati 02.02.2 Notificatio Existing

3815, following following on No 021 n condition 22 is
3901, goods for goods for 50/2017 02/2021- amended to
or 3920 use in the use in the dtd Customs remove the
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
manufactur manufactur 30.06.20 dated requirement of

e e 17 02.02.20 furnishing an
of EVA of EVA 21 undertaking to
(Ethylene (Ethylene Deputy
Vinyl Vinyl Commissioner
Acetate) Acetate) /Assistant
sheets or sheets or Commissioner
backsheet, backsheet, of Customs. In
which are which are addition, with
used in the used in the the existing
manufactur manufactur condition (as
e of e of amended),
solar solar IGCRD Rules,
photovoltai photovoltai 2017 is being
c cells or c cells or prescribed to
modules, modules, avail the
namely: namely: concession
- - under said
(i) EVA (i) EVA entry
resin; resin;
(ii) EVA (ii) EVA
masterbatc masterbatc
h; h;
(iii) Poly (iii) Poly
ethylene ethylene
terephthala terephthala
te (PET) te (PET)
film; film;
(iv) Poly (iv) Poly
vinyl vinyl
fluoride fluoride
(PVF); (PVF);
(v) Poly (v) Poly
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
vinyl di vinyl di
-fluoride -fluoride
(PVDF); (PVDF);
(vi) (vi)
Adhesive Adhesive
resin; and resin; and
(vii) (vii)
Adhesive Adhesive
hardner hardner
3815 Catalyst for Catalyst for 5% 5% Notificati 02.02.2 Notificatio Existing

90 00 use in the use in the on No 021 n condition 24 is
manufactur manufactur 50/2017 02/2021- amended to
e of cast e of cast dtd Customs remove the
component component 30.06.20 dated requirement of
s of Wind s of Wind 17 02.02.20 furnishing an
Operated Operated 21 undertaking to
Electricity Electricity Deputy
Generator Generator Commissioner
/Assistant
Commissioner
of Customs. In
addition, with
the existing
condition (as
amended),
IGCRD Rules,
2017 is being
prescribed to
avail the
concession
under said
entry
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
3909 Resin for Resin for 5% 5% Notificati 02.02.2 Notificatio Existing

40 90 use in the use in the on No 021 n condition 24 is
manufactur manufactur 50/2017 02/2021- amended to
e of cast e of cast dtd Customs remove the
component component 30.06.20 dated requirement of
s of Wind s of Wind 17 02.02.20 furnishing an
Operated Operated 21 undertaking to
Electricity Electricity Deputy
Generator Generator Commissioner
/Assistant
Commissioner
of Customs. In
addition, with
the existing
condition (as
amended),
IGCRD Rules,
2017 is being
prescribed to
avail the
concession
under said
entry
39, 48 Tags, Tags, Nil Nil Notificati 02.02.2 Notificatio Description of

or labels, labels, on No 021 n items to be
any stickers, stickers, 50/2017 02/2021- imported is
other belts, belts, dtd Customs being
Chapte buttons or buttons or 30.06.20 dated modified to
r hangers, hangers or 17 02.02.20 increase the
imported printed 21 scope of this
by bags exemption
(whether
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
bonafide made of
exporters polythene,
polypropyle
ne, PVC,
high
molecular
or high
density
polyethylen
e) imported
by
bonafide
exporters
3907 Polycarbon Polycarbon 5% 7.50 Notificati 02.02.2 Notificatio BCD has

40 00 ates ates % on No 021 n been
50/2017 02/2021- increased
dtd Customs from 5% to
30.06.20 dated 7.50%
17 02.02.20
21
3908 Nylon Nylon 7.50% 5% Notificati 02.02.2 Notificatio BCD has

chips chips on No 021 n been reduced
50/2017 02/2021- from 7.50% to
dtd Customs 5%
30.06.20 dated
17 02.02.20
21
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
4016 All goods, All goods, 10% 10% Notificati 02.02.2 Notificatio Explanation
95 90, other than- other than- on No 021 n has been
4016 (i) natural (i) natural 50/2017 02/2021- inserted to
99 90, rubber rubber dtd Customs clarify that the
latex made latex made 30.06.20 dated said
balloons balloons 17 02.02.20 exemption
(ii) (ii) 21 entry does not
Microphon Microphon include ‘toy
e rubber e rubber balloons
case for case for made of
cellular cellular natural
mobile mobile rubber latex’
phone: or phone: or
(iii) Censor (iii) Censor
rubber rubber
case / case /
Sealing Sealing
Gasket Gasket
including including
sealing sealing
gaskets / gaskets /
cases from cases from
rubber like rubber like
SBR, SBR,
EPDM, EPDM,
CR, CS, CR, CS,
Silicone Silicone
and all and all
other other
individual individual
rubbers or rubbers or
combinatio combinatio
n/ n/
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
combinatio combinatio
n of rubber n of rubber
for cellular for cellular
mobile mobile
phones phones
“Explanatio
n. - For the
removal of
doubts, this
entry does
not include
toy
balloons
made of
natural
rubber
latex (toy
balloons
are
classified
under
Customs
tariff
heading
9503).”;
41 Wet blue - Nil 10% Notificati 02.02.2 Notificatio BCD

chrome on No 021 n increased
tanned 50/2017 02/2021- from Nil to
leather, dtd Customs 10%
crust 30.06.20 dated
leather, 17 02.02.20
finished 21
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
leather of
all kinds,
including
splits and
sides of the
aforesaid
4707 (A) All (A) All Nil Nil Notificati 02.02.2 Notificatio Now the
goods goods on No 021 n importer is
imported imported 50/2017 02/2021- required to
for use in, for use in, dtd Customs follow IGCRD
or supply or supply 30.06.20 dated Rules 2017
to, to, 17 02.02.20 for availing
a unit for a unit for 21 the benefit
manufactur manufactur
e of paper e of paper
or or
paperboard paperboard
other than other than
newsprint; newsprint;
(B) All (B) All
goods, goods,
imported imported
for use in, for use in,
or supply or supply
to, to,
a unit for a unit for
e of news e of news
print print
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
48 Newsprint The 5% 5% Notificati 02.02.2 Notificatio Entry No

– following on No 021 n 293A and
goods 50/2017 02/2021- 293B are
(i) in strips used in the dtd Customs merged for
or rolls of printing of 30.06.20 dated providing
width newspaper 17 02.02.20 clarity to the
exceeding s, namely: 21 scope of this
28 cm; or - exemption
(ii) in (i) that
rectangular newsprint; exemption is
(including (ii) other available
square) uncoated to newsprint
sheets with paper and other
one side conforming uncoated
exceeding to the paper
28 cm and specificatio conforming to
the other ns of the
side newsprint specifications
exceeding (other than of newsprint
15 cm in its surface (other
the roughness) than its
unfolded . surface
state roughness)
48 Uncoated Notificati
paper of a on No
kind used 50/2017
for printing dtd
newspaper 30.06.20
s, of which 17
not less
than 50%
by weight
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
of the total
fibre
content
consists of
wood fibres
obtained
by
mechanical
or chemi-
mechanical
process,
unsized or
very lightly
sized,
having a
surface
roughness
Parker
Print Surf
(1 Mpa) on
each side
exceeding
2.5 micro
meters
(microns),
weighing
not less
than 40
g/m2 and
not
more than
65 g/m2
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
5002 Raw silk - 10% 15% Notificati 02.02.2 Notificatio BCD has
(not on No 021 n been
thrown) 50/2017 02/2021- increased
dtd Customs from 10% to
30.06.20 dated 15%
17 02.02.20
21
52 or (a) (a) Nil As Notificati 01.04.2 Notificatio Benefit of Nil

any Fasteners Fasteners per on No 021 n rate of
Chapte including including Tariff 50/2017 02/2021- Customs will
r buttons buttons dtd Customs not be
and snap and snap 30.06.20 dated available for
fasteners, fasteners, 17 02.02.20 imports from
zip zip 21 01.04.2021
fasteners fasteners and BCD will
including including be applicable
zippers in zippers in as per tariff
roll, sliders roll, sliders rate. Effective
/ pullers / pullers Rate and
and end and end Tariff rate is
stoppers, stoppers, same
and parts and parts
thereof; thereof;
(b)Inlay (b)Inlay
cards cards
(c ) (c )
Shoulder Shoulder
pads; pads;
(d) (d)
Buckles; Buckles;
(e ) Eyelets (e ) Eyelets
(f) Hooks (f) Hooks
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
and eyes and eyes

(g) Rivets (g) Rivets
and items and items
as as
the the
(zi) (zi)
Any (a) (a) Nil As Notificati 01.04.2 Notificatio Benefit of Nil

Chapte Buckles, Buckles, per on No 021 n rate of
r “D” Rings “D” Rings Tariff 50/2017 02/2021- Customs will
and “O” and “O” dtd Customs not be
Rings, Rings, 30.06.20 dated available for
eyelets, eyelets, 17 02.02.20 imports from
hooks and hooks and 21 01.04.2021 ad
eyes, eyes, BCD will be
rivets, rivets, applicable as
studs, studs, per tariff rate.
decorative decorative Effective Rate
fittings fittings and Tariff rate
and metal and metal is same
trimmings; trimmings;
(b) Buttons (b) Buttons
and snap and snap
fasteners, fasteners,
zip zip
fasteners fasteners
including including
zippers in zippers in
roll, sliders roll, sliders
and end and end
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
stoppers; stoppers;
(c )Velcro (c )Velcro
Hook, Hook,
Velcro Velcro
tapes and tapes and
Loop tape; Loop tape;
(d) Elastic (d) Elastic
Tape, Tape,
adhesive adhesive
tape and tape and
reinforcem reinforcem
ent tape; ent tape;
(e) (e)
Stamping Stamping
foil; foil;
(f) Sewing (f) Sewing
Thread; Thread;
(g) Locks (g) Locks
including including
magnetic magnetic
locks; locks;
and items and items
as as
the the
(zp) (zp)
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
Any (a) Zipper, (a) Zipper, Nil As Notificati 01.04.2 Notificatio Benefit of Nil
Chapte fastener fastener per on No 021 n rate of
r and slider ; and slider ; Tariff 50/2017 02/2021- Customs will
(b) Lace; (b) Lace; dtd Customs not be
(c )Velcro (c )Velcro 30.06.20 dated available for
tape; tape; 17 02.02.20 imports from
(d) Elastic (d) Elastic 21 01.04.2021 ad
tape, tape, BCD will be
curtain curtain applicable as
tape and tape and per tariff rate.
edgeband edgeband Effective Rate
tape; tape; and Tariff rate
(e ) Curtain (e ) Curtain is same
hook; hook;
(f) Button (f) Button
and eyelet; and eyelet;
(g) Tassel; (g) Tassel;
(h) Bead (h) Bead
and and
sequin; sequin;
(i) Insert; (i) Insert;
(j) Sample (j) Sample
fabric of fabric of
total length total length
upto 500 upto 500
Meters Meters
imported imported
during one during one
financial financial
year year
(k) (k)
Embroidery Embroidery
threads ; threads ;
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
(l) Sewing (l) Sewing

threads; threads;
(m) Poly (m) Poly
wadding wadding
materials; materials;
(n) Quilted (n) Quilted
wadding wadding
materials; materials;
(o) Printed (o) Printed
bags; bags;
(p) Fusible (p) Fusible
embroidery embroidery
motifs or motifs or
prints; prints;
(q) Anti- (q) Anti-
theft theft
devices devices
like labels, like labels,
tags and tags and
sensors; sensors;
(r) Pin (r) Pin
bullets for bullets for
packing, packing,
plastic tag plastic tag
bullets, bullets,
metal tabs, metal tabs,
bows, ring bows, ring
and slider and slider
and rings and rings
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
5201 All Goods All Goods Nil 5% Notificati 02.02.2 Notificatio BCD on
on No 021 n import of
50/2017 02/2021- Cotton, not
dtd Customs carded or
30.06.20 dated combed has
17 02.02.20 been
21 increased
from Nil to 5%
and further
AIDC has
been imposed
@ 5%
5202 All Goods All Goods Nil 10% Notificati 02.02.2 Notificatio BCD
on No 021 n increased
50/2017 02/2021- from Nil to
dtd Customs 10%
30.06.20 dated
17 02.02.20
21
5401, All goods, All Goods 5% / 5% Notificati 02.02.2 Notificatio Now BCD on
5402, other than 7.50% on No 021 n Nylon fiber
5403, those of 50/2017 02/2021- and yarn will
5404, nylon / All dtd Customs also attract
540500 Goods of 30.06.20 dated BCD @ 5%
00 or nylon 17 02.02.20 instead of
5406 21 7.5%
5501 to All goods, All Goods 5% / 5% Notificati 02.02.2 Notificatio Now BCD on
5510 other than 7.50% on No 021 n Nylon fibre
those of 50/2017 02/2021- and yarn will
nylon / All dtd Customs also attract
dated BCD @ 5%
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
Goods of 30.06.20 02.02.20 instead of

nylon 17 21 7.5%
5511 All Goods All Goods 10% 10% Notificati 02.02.2 Notificatio Existing
on No 021 n condition 38
50/2017 02/2021- of the entry is
dtd Customs being
30.06.20 dated substituted by
17 02.02.20 IGCRD Rules,
21 2017.
7007 - All goods ( 15% 10% Notificati 02.02.2 Notificatio BCD has
SAFETY on No 021 n been reduced
GLASS, 50/2017 02/2021- to 10%
CONSISTI dtd Customs
NG OF 30.06.20 dated
TOUGHEN 17 02.02.20
ED 21
(TEMPER
ED) OR
LAMINATE
D GLASS)
other than
those
suitable for
use in –
(i) motor
vehicles
falling
under
heading
8702 or
8704;
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
(ii) motor
cars falling
under
heading
8703; or
(iii) motor
cycles
falling
under
heading
8711.
71 Cut and Cut and 10% 10% Notificati 02.02.2 Notificatio BCD rate on
(except polished polished on No 021 n goods falling
7104 coloured coloured 50/2017 02/2021- under tariff
90 90) Gemstones Gemstones dtd Customs item 7104 90
(except 30.06.20 dated 90 (cut and
7104 90 17 02.02.20 polished
90) 21 synthetic
stones) is
being
increased
from 10% to
15%.
71 Gold dore Gold dore 11.85% 6.90 Notificati 02.02.2 Notificatio BCD has
bar, having bar, having % on No 021 n been reduced
gold gold 50/2017 02/2021- from 11.85%
content not content not dtd Customs to 6.90%.
exceeding exceeding 30.06.20 dated Further AIDC
95% 95% - Sr. 17 02.02.20 has been
No 354 of 21 imposed @
Notification 2.50%
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
71 Silver dore Silver dore 11% 6.10 Notificati 02.02.2 Notificatio BCD has
bar having bar having % on No 021 n been reduced
silver silver 50/2017 02/2021- from 11% to
content not content not dtd Customs 6.10%.
exceeding exceeding 30.06.20 dated Further AIDC
95% 95% - Sr. 17 02.02.20 has been
No. 355 of 21 imposed @
Notification 2.50%
71or 98 (i) Gold (i) Gold 12.50% 7.50 Notificati 02.02.2 Notificatio BCD has
bars, other bars, other % on No 021 n been reduced
than tola than tola 50/2017 02/2021- from 12.50%
bars, bars, dtd Customs to 7.50%.
bearing bearing 30.06.20 dated Further AIDC
manufactur manufactur 17 02.02.20 has been
er’s or er’s or 21 imposed @
refiner’s refiner’s 2.50%
engraved engraved
serial serial
number number
and weight and weight
expressed expressed
in metric in metric
units, and units, and
gold coins gold coins
having gold having gold
content not content not
below below
99.5%, 99.5%,
imported imported
by the by the
eligible eligible
passenger passenger
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
(ii) Gold in (ii) Gold in

any form any form
other than other than
(i), (i),
including including
tola bars tola bars
and and
ornaments, ornaments,
but but
excluding excluding
ornaments ornaments
studded studded
with stones with stones
or pearls or pearls
71 or Silver, in Silver, in 12.50% 7.50 Notificati 02.02.2 Notificatio BCD has

98 any form any form % on No 021 n been reduced
including including 50/2017 02/2021- from 12.50%
ornaments, ornaments, dtd Customs to 7.50%.
but but 30.06.20 dated Further AIDC
excluding excluding 17 02.02.20 has been
ornaments ornaments 21 imposed @
studded studded 2.50%
with stones with stones
or pearls, or pearls,
imported imported
by the by the
eligible eligible
passenger passenger
7108 - All goods 12.50% 7.50 Notificati 02.02.2 Notificatio BCD has
other than % on No 021 n been reduced
those 50/2017 02/2021- from 12.50%
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
mentioned dtd Customs to 7.50%.

at S. No. 30.06.20 dated Further AIDC
354 17 02.02.20 has been
21 imposed @
2.50%
7106 - All goods 12.50% 7.50 Notificati 02.02.2 Notificatio BCD has
those 50/2017 02/2021- from 12.50%
mentioned dtd Customs to 7.50%.
at S. No. 30.06.20 dated Further AIDC
355 17 02.02.20 has been
21 imposed @
2.50%
7104 Polished - 7.5% 15% Notificati 02.02.2 Notificatio BCD

Cubic on No 021 n increased
zirconia 50/2017 02/2021- from 7.50% to
dtd Customs 15%
30.06.20 dated
17 02.02.20
21
7112 Spent Spent 11.85% 9.17 Notificati 02.02.2 Notificatio BCD has
catalyst or catalyst or % on No 021 n been reduced
ash ash 50/2017 02/2021- from 11.85%
containing containing dtd Customs to 9.17%
precious precious 30.06.20 dated
metals metals 17 02.02.20
21
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
7107 - All goods 12.50% 10% Notificati 02.02.2 Notificatio BCD has
00 00, on No 021 n been reduced
7109 50/2017 02/2021- from 12.50%
00 00, dtd Customs to 10%
7110, 30.06.20 dated
7111 17 02.02.20
00 00, 21
7112,
7118
7113 - Gold or 20% 10% Notificati 02.02.2 Notificatio BCD has

silver on No 021 n been reduced
findings 50/2017 02/2021- from 20% to
Explanatio dtd Customs 10%
n.- For the 30.06.20 dated
purposes 17 02.02.20
of this 21
entry, “gold
or silver
findings”
means a
small
component
such as
hook,
clasp,
clamp, pin,
catch,
screw back
used to
hold the
whole or a
part of a
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
piece of
jewellery in
place.
72 All goods - 10% 7.50 Notificati 02.02.2 Notificatio Entry Omitted.

other than % on No 021 n Same is
goods 50/2017 02/2021- subsumed in
mentioned dtd Customs new entry no
against 30.06.20 dated 376E having
serial 17 02.02.20 BCD rate of
number 21 7.50%
371 and
371A
7201, All goods All goods 5% 5% Notificati 02.02.2 Notificatio BCD has
7202, other than on No 021 n been made @
7203, the 50/2017 02/2021- 5% for All
7205, following:- dtd Customs goods falling
7226 (i) goods 30.06.20 dated under 7201,
11 00 mentioned 17 02.02.20 7202, 7203,
against 21 7205, 7226 11
serial 00
numbers
367,368,
369, 370,
371, 371B,
3713A,
373B, 376
and 376C;
(ii) seconds
and
defectives
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
of goods
falling
under
Chapter 72
7204 Melting All Goods 2.50% Nil Notificati 02.02.2 Notificatio BCD on all
scrap of on No 021 n goods falling
iron or 50/2017 02/2021- under 7204
steel (other dtd Customs has been
than 30.06.20 dated reduced to Nil
stainless 17 02.02.20 upto
steel) 21 31.03.2022
7204 Scrap of All Goods Nil 2.50 Notificati 01.04.2 Notificatio BCD @
stainless % on No 022 n 2.50% will be
steel, for 50/2017 02/2021- applicable on
the dtd Customs on all goods
purpose of 30.06.20 dated falling under
melting 17 02.02.20 7204 from
21 01.04.2022
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
7206, All Goods - 10% - Notificati 02.02.2 Notificatio Entry Omitted.

7207, on No 021 n Same is
7213, 50/2017 02/2021- subsumed in
7214, dtd Customs new entry no
7215, 30.06.20 dated 376E having
7216, 17 02.02.20 BCD rate of
7217, 21 7.50%
7221,
7222,
7223,
7225
(except
7225
11 00,
7225
3090,
7225
4019,
7225
50 or
7225
9900),
7226
(except
7226
11 00)
7227 or
7228
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
7208, All Goods - 12.50% - Notificati 02.02.2 Notificatio Entry Omitted.

7209, other than on No 021 n Same is
7210, those 50/2017 02/2021- subsumed in
7211, specified at dtd Customs new entry no
7212, serial 30.06.20 dated 376E having
7225 number 17 02.02.20 BCD rate of
30 90, 371A 21 7.50%
7225
40 19,
7225
50 or
7225
99 00
7210 All Goods All Goods 12.50% 7.50 Notificati 02.02.2 Notificatio BCD has
12 10, % on No 021 n been reduced
7210 50/2017 02/2021- from 12.50%
12 90 dtd Customs to 7.50%.
30.06.20 dated
17 02.02.20
21
7208 Hot rolled - 10% - Notificati 02.02.2 Notificatio Entry Omitted.

coils for on No 021 n Same is
use in 50/2017 02/2021- subsumed in
manufactur dtd Customs new entry no
e of welded 30.06.20 dated 376E having
tubes and 17 02.02.20 BCD rate of
pipes 21 7.50%
falling
under
heading
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
7305 or
7306
7212 Co - - 10% -
40 00 polymer
coated MS
tapes /
stainless
steel tapes
for use in
manufactur
e of
telecommu
nication
grade
optical
fibres or
optical fibre
cables
7218 All Goods - 7.50% -
7224 All Goods - 7.50% -
7225 Magnesiu Magnesiu 2.50% Nil Notificati 02.02.2 Notificatio BCD has
19 90 m Oxide m Oxide on No 021 n been reduced
(MgO) (MgO) 50/2017 02/2021- from 2.50% to
coated cold coated cold dtd Customs Nil
rolled steel rolled steel 30.06.20 dated
coils for coils for 17 02.02.20
use in use in 21
e of cold e of cold
rolled grain rolled grain
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
oriented oriented
steel steel
(CRGO) (CRGO)
falling falling
under 7225 under 7225
11 00 11 00
7225 The The 2.50% Nil Notificati 02.02.2 Notificatio BCD has
following following on No 021 n been reduced
goods, goods, 50/2017 02/2021- from 2.50% to
namely:- namely:- dtd Customs Nil
(i) hot (i) hot 30.06.20 dated
rolled coils; rolled coils; 17 02.02.20
(ii) cold - (ii) cold - 21
rolled rolled
Magnesiu Magnesiu
m Oxide m Oxide
(MgO) (MgO)
coated and coated and
annealed annealed
steel; steel;
(iii) hot (iii) hot
rolled rolled
annealed annealed
and pickled and pickled
coils; coils;
(iv) cold (iv) cold
rolled full rolled full
hard, for hard, for
the the
e of cold e of cold
rolled grain rolled grain
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
oriented oriented
steel steel
(CRGO) (CRGO)
steel falling steel falling
under tariff under tariff
item 7225 item 7225
11 00 11 00
7219, All goods - 7.50% - Notificati 02.02.2 Notificatio Entry Omitted.

7220 other than on No 021 n Same is
those at Sr. 50/2017 02/2021- subsumed in
No. 371B dtd Customs new entry no
and 30.06.20 dated 376E having
seconds 17 02.02.20 BCD rate of
and 21 7.50%
defectives
7229 All Goods - 7.50% - Notificati 02.02.2 Notificatio Entry Omitted.

other than on No 021 n Same is
INVAR 50/2017 02/2021- subsumed in
dtd Customs new entry no
30.06.20 dated 376E having
17 02.02.20 BCD rate of
21 7.50%
72 - All goods 15% 7.50 Notificati 02.02.2 Notificatio BCD has

the 50/2017 02/2021- to 7.50%
following, dtd Customs
namely: - 30.06.20 dated
(i) goods 17 02.02.20
mentioned 21
against S.
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
Nos. 366,
367, 368,
369, 371A,
371B, 374,
375, 376A,
376B and
376D;
(ii) seconds
and
defectives
of goods
falling
under
Chapter 72
73 All Goods All Goods 10% 10% Notificati 02.02.2 Notificatio BCD on
other than: other than: on No 021 n Screws, bolts,
(i) goods (i) goods 50/2017 02/2021- nuts etc.
mentioned mentioned dtd Customs under heading
against against 30.06.20 dated 7318 is being
serial serial 17 02.02.20 increased to
number number 21 15%
377A; 377A;
(ii) goods (ii) goods
mentioned mentioned
against against
serial serial
number number
377B; 377B;
(iii) goods (iii) goods
falling falling
under under
heading
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
heading 7318 or
7323 7323
7307 All goods All goods 10% 10% Notificati 02.02.2 Notificatio BCD on
29 00, other than other than on No 021 n Screws, bolts,
7307 screw SIM 50/2017 02/2021- nuts etc.
99 90, (7318 15 socket/othe dtd Customs under heading
7308 00) and r 30.06.20 dated 7318 is being
90 90, SIM Socket mechanical 17 02.02.20 increased to
7310 / Other items 21 15%
29 90, Mechanical (Metal)
7318 Items (7326 90
15 00 (Metal) 99) for
7318 (7326 90 cellular
16 00 99) for mobile
7318 cellular phone
29 90 mobile
7320 phone
90 90,
7325
99 99,
7326
19 90,
7326
90 99
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
7326 Forged Forged 5% 5% Notificati 02.02.2 Notificatio Existing

90 99 steel rings steel rings on No 021 n condition 24 is
for for 50/2017 02/2021- amended to
manufactur manufactur dtd Customs remove the
e of special e of special 30.06.20 dated requirement of
bearings bearings 17 02.02.20 furnishing an
for use in for use in 21 undertaking to
wind wind Deputy
operated operated Commissioner
electricity electricity /Assistant
generators generators Commissioner
of Customs. In
addition, with
the existing
condition (as
amended),
IGCRD Rules,
2017 is being
prescribed to
avail the
concession
under said
entry
7404 Brass All Goods 2.50% 2.50 Notificati 02.02.2 Notificatio BCD on
scrap - % on No 021 n copper waste
7404 00 22 50/2017 02/2021- and scrap
dtd Customs under heading
30.06.20 dated 7404 is being
17 02.02.20 reduced to
21 2.5%
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
84 or Permanent Permanent 5% 5% Notificati 02.02.2 Notificatio Existing

any magnets magnets on No 021 n condition 24 is
other for for 50/2017 02/2021- amended to
Chapte manufactur manufactur dtd Customs remove the
r e of PM e of PM 30.06.20 dated requirement of
synchrono synchrono 17 02.02.20 furnishing an
us us 21 undertaking to
generators generators Deputy
above above Commissioner
500KW for 500KW for /Assistant
use in wind use in wind Commissioner
operated operated of Customs. In
electricity electricity addition, with
generators generators the existing
condition (as
amended),
IGCRD Rules,
2017 is being
prescribed to
avail the
concession
under said
entry
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
84 or (A) (A) 5% 5% Notificati 02.02.2 Notificatio Existing

any Machinery, Machinery, on No 021 n condition 51 is
other instrument instrument 50/2017 02/2021- amended to
Chapte s, s, dtd Customs remove the
r apparatus apparatus 30.06.20 dated requirement of
and and 17 02.02.20 furnishing an
appliances, appliances, 21 undertaking to
as well as as well as Deputy
parts parts Commissioner
(whether (whether /Assistant
finished or finished or Commissioner
not) or raw not) or raw of Customs. In
materials materials addition, with
for the for the the existing
manufactur manufactur condition (as
e of e of amended),
aforesaid aforesaid IGCRD Rules,
items and items and 2017 is being
their parts, their parts, prescribed to
required for required for avail the
renovation renovation concession
or or under said
modernizat modernizat entry
ion of a ion of a
fertilizer fertilizer
plant and plant and
(B) spare (B) spare
parts, other parts, other
raw raw
materials materials
(including (including
semi semi
-finished -finished
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
material) or material) or
consumabl consumabl
es stores, es stores,
essential essential
for for
maintenan maintenan
ce of the ce of the
fertilizer fertilizer
plant plant
mentioned mentioned
above above
84 or The The 5% 5% Notificati 02.02.2 Notificatio IGCRD Rules,

any following following on No 021 n 2017 is being
other goods, goods, 50/2017 02/2021- prescribed in
Chapte namely: namely: dtd Customs addition with
r - - 30.06.20 dated the Condition
(1) Kits (1) Kits 17 02.02.20 52 for the
required for required for 21 entry.
the the
conversion conversion
of motor - of motor -
spirit or spirit or
diesel diesel
driven driven
vehicles vehicles
into into
Compresse Compresse
d Natural d Natural
Gas driven Gas driven
or Propane or Propane
driven or driven or
Liquefied Liquefied
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
Petroleum Petroleum
Gas driven Gas driven
vehicles; vehicles;
(2) Parts of (2) Parts of
the kits the kits
specified at specified at
(1) (1)
84 or All goods, All goods, 5% 5% Notificati 02.02.2 Notificatio Existing

any for for on No 021 n condition 53 is
other renovation renovation 50/2017 02/2021- amended to
Chapte or or dtd Customs remove the
r modernizat modernizat 30.06.20 dated requirement of
ion of a ion of a 17 02.02.20 furnishing an
power power 21 undertaking to
generation generation Deputy
plant (other plant (other Commissioner
than than /Assistant
captive captive Commissioner
power power of Customs. In
generation generation addition, with
plant) plant) the existing
condition (as
amended),
IGCRD Rules,
2017 is being
prescribed to
avail the
concession
under said
entry
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
84 or All goods, All goods, 5% 5% Notificati 02.02.2 Notificatio Existing

any imported imported on No 021 n condition 54 is
other by a by a 50/2017 02/2021- amended to
Chapte manufactur manufactur dtd Customs remove the
r er - er - 30.06.20 dated requirement of
supplier for supplier for 17 02.02.20 furnishing an
the the 21 undertaking to
manufactur manufactur Deputy
e and e and Commissioner
supply of supply of /Assistant
machinery machinery Commissioner
and and of Customs. In
equipment equipment addition, with
to a power to a power the existing
generation generation condition (as
plant (other plant (other amended),
than than IGCRD Rules,
captive captive 2017 is being
power power prescribed to
generation generation avail the
plant) plant) concession
under said
entry
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
84, 85 (1) The (1) The Notificati 02.02.2 Notificatio Existing

or 90 following following on No 021 n condition 60
goods for goods for 50/2017 02/2021- for the entry is
use in use in dtd Customs being
pharmaceu pharmaceu 30.06.20 dated amended to
tical and tical and 5% 5% 17 02.02.20 remove the
biotechnolo biotechnolo Nil Nil 21 requirement of
gy sector, gy sector, furnishing the
imported imported end use
for for certificate
research research regarding use
and and of
developme developme imported
nt nt goods to the
purposes, purposes, 5% 5% Deputy
by an by an Nil Nil Commissioner
importer importer /Assistant
registered registered Commissioner
with the with the of Customs at
Departmen Departmen the Port of
t of t of import.
Scientific Scientific IGCRD Rules
and and 2017 is
Industrial Industrial prescribed in
Research, Research, addition to
in the in the condition no
Ministry of Ministry of 60
Science Science
and and
Technolog Technolog
y of the y of the
Governme Governme
nt of India, nt of India,
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
namely:- namely:-
(a) Goods (a) Goods
List 21 List 21
(b) Goods (b) Goods
List 22 List 22
(2) The (2) The

following following
goods for goods for
use in the use in the
pharmaceu pharmaceu
tical and tical and
biotechnolo biotechnolo
gy sector, gy sector,
imported imported
by a by a
er, having er, having
a research a research
and and
developme developme
nt wing nt wing
registered registered
with the with the
Departmen Departmen
t of t of
Scientific Scientific
and and
Industrial Industrial
Research, Research,
in the in the
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
Ministry of Ministry of
Science Science
and and
Technolog Technolog
y of the y of the
Governme Governme
nt of India, nt of India,
namely:- namely:-
(a) Goods (a) Goods
List 21 List 21
(b) Goods (b) Goods
List 22 List 22
84, 85 Goods Goods Nil Nil Notificati 02.02.2 Notificatio Existing

or 90 specified in specified in on No 021 n condition 61
list 23 for list 23 for 50/2017 02/2021- for the entry is
use of the use of the dtd Customs being
Agro - Agro - 30.06.20 dated amended to
Chemical Chemical 17 02.02.20 remove the
Sector Unit Sector Unit 21 requirement of
having having furnishing the
export export end use
turnover of turnover of certificate
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
Rupees Rupees regarding use

Twenty Twenty of
Crores and Crores and imported
above above goods to the
during the during the Deputy
preceding preceding Commissioner
financial financial /Assistant
year by a year by a Commissioner
manufactur manufactur of Customs at
er having a er having a the Port of
Research Research import.
and and IGCRD Rules
Developme Developme 2017 is
nt wing nt wing prescribed in
registered registered addition to
with the with the condition no
Departmen Departmen 61
t of t of
Scientific Scientific
and and
Industrial Industrial
Research, Research,
in the in the
Ministry of Ministry of
Science Science
and and
Technolog Technolog
y of the y of the
Governme Governme
nt of India nt of India
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
8431 The Parts and Nil 2.50 Notificati 02.02.2 Notificatio BCD
following component % on No 021 n exemption on
goods, s for 50/2017 02/2021- ‘tunnel boring
namely: manufactur dtd Customs machines
- e of tunnel 30.06.20 dated (TBMs)’
(A) Tunnel boring 17 02.02.20 (heading
boring machines 21 8430) has
machines been
(B) Parts withdrawn.
and Consequently,
component it will now
s of (A) for attract BCD of
use in the 7.5 %. Also,
assembly ‘parts &
of Tunnel components
boring for
machines manufacture
(84 or any of TBMs’
other falling under
chapter) heading 8431
will now
attract 2.5%
BCD by
following
IGCRD Rules
procedure
40 % on No 021 n been reduced
50/2017 02/2021- from 15% to
dtd Customs 7.50%
30.06.20 dated
17
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
02.02.20
21
80 % on No 021 n been reduced
(except 50/2017 02/2021- from 15% to
8414 dtd Customs 7.50%
80 11) 30.06.20 dated
17 02.02.20
21
Any All parts for All parts for 5% 10% Notificati 02.02.2 Notificatio All parts for
Chapte use in the use in the on No 021 n use in the
r manufactur manufactur 50/2017 02/2021- manufacture
e of LED e of LED dtd Customs of LED lights,
lights or lights or 30.06.20 dated fixtures
fixtures fixtures 17 02.02.20 including LED
including including 21 lamps, LED
LED LED drivers and
Lamps Lamps MCPCB of
LED lights,
will attract
10% BCD
Any All inputs All inputs 5% 10% Notificati 02.02.2 Notificatio All parts for
Chapte for use in for use in on No 021 n use in the
r the the 50/2017 02/2021- manufacture
manufactur manufactur dtd Customs of LED lights,
e of LED e of LED 30.06.20 dated fixtures
(Light (Light 17 02.02.20 including LED
Emitting Emitting 21 lamps, LED
Diode) Diode) drivers and
driver or driver or MCPCB of
MCPCB MCPCB LED lights,
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
(Metal (Metal will attract

Core Core 10% BCD
Printed Printed
Circuit Circuit
Board) for Board) for
LED lights LED lights
and and
fixtures or fixtures or
LED LED
Lamps Lamps
Chapte Elctic Elctic 10% 15% Notificati 02.02.2 Notificatio Tariff rate on
r 85 Motors and Motors and effec on No. 021 n No. all goods
8501 Generators Generators tive 50/2017 02/2021 falling under
10 to Excluding Excluding rate Cus Cus sub-heading
8501 generating generating 10% dated dated 8501 10 to
53 set set 30.06.20 01.02.20 8501 53 is
17 21 being
increased
from 10% to
15%
8544 All goods All goods 7.50% 10% Notificati 02.02.2 Notificatio BCD is
(EXCE (other than (other than on No. 021 n No. increased
PT USB Cable USB Cable 50/2017 02/2021
854400 for cellular for cellular Cus Cus
0 mobile mobile dated dated
and854 phone) phone) 30.06.20 01.02.20
470) 17 21
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
8504 Active Active 5.00% 5.00 Notificati 02.02.2 Notificatio Earlier

energy energy % on No. 021 n No. condition No.
controller controller 50/2017 02/2021 9 (IGCRD
(AEC) for (AEC) for Cus Cus process was
use in use in dated dated applicable
Manufactur Manufactur 30.06.20 01.02.20 now condition
e of e of 17 21 No. 24 also
renewable renewable made
power power applicable i.e.
system system obtaining
(RPS) (RPS) certification
Invertors Invertors from
Customs.
85 or “(a) Parts, “(a) Parts, Nil 2.50 Notificati 01.04.2 Notificatio BCD on
any component component % on No. 021 n No. inputs, parts,
other s and s and 50/2017 02/2021 sub-parts and
chapte accessorie accessorie Cus Cus raw materials
r s except s except dated dated of following
1. Lithium- Lithium-ion 30.06.20 01.02.20 specified parts
ion cell cell and 17 21 of
(falling Printed cellular mobile
Tariff item Circuit phone, is
85076 000) Board being
and Assembly increased
2. Printed (PCBA), for
Circuit use in
Board manufactur
Assembly e of
(PCBA), Lithium-ion
falling battery and
under tariff battery
item 8507 pack;
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
9090 for
use in
manufactur
e of
Lithium-ion
battery and
other than
battery of
mobile
hand sets
including
cellular
phones
falling
under tariff
item 8507
6000;
Any NA Inputs, Nil 2.50 Notificati 01.04.2 Notificatio New entry

chapte parts or % on No. 021 n No. 512A inserted
r sub-parts 50/2017 02/2021 BCD on
for use in Cus Cus inputs, parts,
the dated dated sub-parts and
manufactur 30.06.20 01.02.20 raw materials
ing of 17 21 of following
Printed specified parts
Circuit of
Board cellular mobile
Assembly phone, is
(PCBA) being
(falling increased
under tariff
item 8507
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
90 90) of
Lithium-ion
battery and
battery
pack
8536 Parts of Parts of Nil 10% Notificati 01.04.2 Notificatio BCD

41 00, LCD & LCD & on No. 021 n No. increased to
8536 LED LED 50/2017 02/2021 boost
49 00 Cus Cus domestic
dated dated industries
30.06.20 01.02.20
17 21
8507 Lithium ion Lithium ion 5% 5% Notificati 02.02.2 Notificatio Entry split with
60 00 cell for use cell for use on No. 021 n No. addition of
in the in 50/2017 02/2021 Lithium Cell
manufactur manufactur Cus Cus used in
e of e of battery dated dated electrical
Lithium ion or battery 30.06.20 01.02.20 vehicle
accumulato pack, other 17 21
r other than than those
the mentioned
following: against S.
a. battery Nos. 527A
pack of and 527B
cellular
8507 mobile Lithium ion 5% 5% Notificati 02.02.2 Notificatio
60 00 phone and cell for use on No. 021 n No.
b. power in the 50/2017 02/2021
bank manufactur Cus Cus
e of battery dated dated
or battery
pack of
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
cellular 30.06.20 01.02.20

mobile 17 21
phone
8507 Lithium ion 5% 5% Notificati 02.02.2 Notificatio

60 00 cell for use on No. 021 n No.
in the 50/2017 02/2021
manufactur Cus Cus
e of battery dated dated
or battery 30.06.20 01.02.20
pack of 17 21
electrically
operated
vehicle or
hybrid
motor
vehicle
8507 NA Lithium ion 20% 15% Notificati 02.02.2 Notificatio BCD rate is
60 00 battery or on No. 021 n No. reduced
battery 50/2017 02/2021
pack of Cus Cus
cellular dated dated
mobile 30.06.20 01.02.20
phones 17 21
8507 NA All goods 20% 10% Notificati 02.02.2 Notificatio BCD rate is
60 00 other than on No. 021 n No. reduced
the 50/2017 02/2021
following, Cus Cus
namely: - dated dated
(i) goods 30.06.20 01.02.20
mentioned 17 21
against S.
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
Nos. 528A
and 528B;
(ii) Power
Bank
8714 All goods All goods 10% 15% Notificati 02.02.2 Notificatio BCD rate is
other than other than on No. 021 n No. increased on
Bycycle Bycycle 50/2017 02/2021 specified auto
parts and parts and Cus Cus parts to
component component dated dated promote
s s 30.06.20 01.02.20 domestic
17 21 manufacturer
88 or Parts of Parts of Nil Nil Notificati 02.02.2 Notificatio Condition

Any Gliders or Gliders or on No. 021 n No. Number 9
other Simulators Simulators 50/2017 02/2021 (IGCRD
Chapte of Aircrafts of Aircrafts Cus Cus procedure) is
r (excluding (excluding dated dated imposed
rubber rubber 30.06.20 01.02.20
tyres and tyres and 17 21
tubes of tubes of
Gliders Gliders
Any Componen Nil Nil Notificati 02.02.2 Notificatio New entry

Chapte ts or parts, on No. 021 n No. 535A inserted
r including 50/2017 02/2021 to provide the
engines, of Cus Cus exemptions to
aircraft of dated dated parts and
heading 30.06.20 01.02.20 components
8802 – 17 21 in addition to
(a) for raw materials
manufactur available
e of aircraft earlier.
falling Condition
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
under number 109

heading inserted which
8802; required
(b) for certificate
manufactur from Join
e of parts Secretary of
of aircraft Ministry of
at (a), defence
imported
by Public
Sector
Units under
the Ministry
of Defence
9031 All goods 7.50% 7.50 Notificati 02.02.2 Notificatio No change in

80 00 (Other % on No. 021 n No. BCD rate
instrument 50/2017 02/2021 however,
s, Cus Cus included in
appliances dated dated Notification
& 30.06.20 01.02.20
Machines 17 21
of
Measuring
& Checking
9405 Solar, Solar, 5% 15% Notificati 02.02.2 Notificatio BCD rate is

5040 Lanterns or Lanterns or on No. 021 n No. increased
solar lamps solar lamps 50/2017 02/2021
Cus Cus
dated dated
30.06.20 01.02.20
17 21
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
9503 Parts of Parts of 5% 15% Notificati 02.02.2 Notificatio BCD rate is

electronic electronic on No. 021 n No. increased
toys for toys for 50/2017 02/2021
manufactur manufactur Cus Cus
e of e of dated dated
electronic electronic 30.06.20 01.02.20
toys viz; toys. 17 21
part of
electric
trains
including
tracks,
signals.
NA NA NA NA NA Notificati 02.02.2 Notificatio Clause (b) of

on No. 021 n No. Condition
50/2017 02/2021 Nos. 22, 24
Cus Cus relating to
dated dated undertaking
30.06.20 01.02.20 and Condition
17 21 number 30 &
38, 51, 53,54
of Notification
omitted
Chapter Existing New Exist New Original Effective Notifica Bizsol Remark
/Tariff Descriptio Description ing Tariff Notifica Date tion No.
Headin n Tarif Rate tion and
g f Date
Rate
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
Any (i) against (i) against S. Nil Nil 57/2017 02nd Feb Notificati BCD will be
Chapter S. No. 6A, in No. 6A, in - 2021 on No. applicable to
column (3), column (3), Custom 03/2021 "Metal Shield" at
after item after item (b), s, – applicable rate.
(b), the the following dated Custom
following proviso shall the 30th s dated
proviso shall be inserted, June 1st
be inserted, namely: - 2017 Februar
namely: - “Provided y 2021
“Provided that nothing
that nothing contained in
contained in the entries
the entries mentioned at
mentioned items (a) and
at items (a) (b) shall
and (b) shall apply to the
apply to the following
following goods,
goods, namely: -
namely: - (i)
(i) connectors;
connectors; (ii)
(ii) microphones;
microphone (iii) receivers;
s; (iv) speaker;
(iii) (v) SIM
receivers; socket”;
(iv) speaker; (vi) metal
(v) SIM shield
socket”;
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
Any 6A. Any 6A. Any Nil 2.50% 57/2017 01st Apr Notificati BCD exemption
Chapter Chapter Chapter - 2021 on No. removed &
(a) Inputs or (a) Inputs or Custom 03/2021 taxable @ 2.5%
parts for parts for use s, – for items except
use in in dated Custom for the items
manufactur manufacture the 30th s dated specified in
e of Printed of Printed June 1st proviso.
Circuit Circuit Board 2017 Februar
Board Assembly y 2021
Assembly (PCBA) of
(PCBA) of cellular
cellular mobile
mobile phones
phones (b) Inputs or
(b) Inputs or sub-parts for
sub-parts use in
for use in manufacture
manufactur of parts
e of parts mentioned at
mentioned (a) above
at (a) above “Provided
that nothing contained in
contained the entries
in the mentioned at
entries items (a) and
mentioned (b) shall
at items (a) apply to the
and (b) following
shall apply goods,
to the namely: -
following (i)
goods, connectors;
namely: - (ii)
(i) microphones;
connectors; (iii) receivers;
(ii) (iv) speaker;
microphone (v) SIM
s; socket”;
(iii) (vi) metal
receivers; shield
(iv)
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
speaker;
(v) SIM
socket”;
Any 6B. Any 6B. Any Nil Nil 57/2017 02nd Feb Notificati Camera Lens are
Chapter Chapter (a) Chapter (a) - 2021 on No. excluded from
Inputs or Inputs or Custom 03/2021 entry No. 6B(a) &
parts for parts for use s, – (b) which is now
use in in dated Custom taxable
manufactur manufacture the 30th s dated
e of of Camera June 1st
Camera Module of 2017 Februar
Module of cellular y 2021
cellular mobile
mobile phones
sub-parts use in
manufactur of parts
mentioned (a) above
that nothing
contained in
the entries
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
mentioned
at items (a)
and (b) shall
apply to the
“camera
lens”;
Any 6B. Any 6B. Any Nil 2.50% 57/2017 01st Apr Notificati BCD exemption
Chapter Chapter (a) Chapter (a) - 2021 on No. removed &
Inputs or Inputs or Custom 03/2021 taxable @ 2.5%
parts for parts for use s, – for items except
use in in dated Custom for Camera Lens
manufactur manufacture the 30th s dated which is taxable at
e of of Camera June 1st applicable rate.
Camera Module of 2017 Februar
Module of cellular y 2021
cellular mobile
mobile phones
sub-parts use in
manufactur of parts
mentioned (a) above
that contained in
nothing the entries
contained mentioned
in the at items (a)
entries and (b) shall
mentioned apply to the
at items (a) “camera
and (b) lens”;
shall apply
to the
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
“camera
lens”;
Any 6C. Any 6C. Any Nil 2.50% 57/2017 01st Apr Notificati BCD exemption
Chapter Chapter Chapter - 2021 on No. removed &
(a) Inputs or (a) Inputs or Custom 03/2021 taxable @ 2.5%.
parts for parts for use s, –
use in in dated Custom
manufactur manufacture the 30th s dated
e of of June 1st
Connectors Connectors 2017 Februar
of cellular of cellular y 2021
mobile mobile
phones phones
(b) Inputs or (b) Inputs or
sub-parts sub-parts for
for use in use in
manufactur manufacture
e of parts of parts
mentioned mentioned at
at (a) above (a) above
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
Any Inputs or Inputs or raw Nil 2.50% 57/2017 01st Apr Notificati BCD exemption
Chapter raw material for - 2021 on No. removed &
material for use in Custom 03/2021 taxable @ 2.5%
use in manufacture s, – for all the items of
manufactur of following dated Custom this entry except
e of parts of the 30th s dated for the ommitted
following Cellular June 1st entries which will
parts of mobile 2017 Februar be taxable at
Cellular phones; y 2021 applicable BCD
mobile (i) Charger or rate.
phones; adapter
(i) Charger (ii) Battery
or adapter pack
(ii) Battery (iii) Wired
pack Headset
(iii) Wired (iv) Omitted
Headset (v) Omitted
(iv) Battery (vi) Omitted
cover (vii) Omitted
(v) Front (viii) GSM
cover Antenna /
(vi) Front Antenna of
cover (with any
Zinc technology
Casting) (ix) Omitted
(vii) Middle (x) Main Lens
cover (xi) Camera
(viii) GSM Lens
Antenna / (xii) Omitted
Antenna of (xiii) Omitted
any (xiv) Omitted
technology (xv) Omitted
(ix) Side (xvi) Omitted
Key (xvii) Omitted
(x) Main (xviii)
Lens Omitted
(xi) Camera (xix) Omitted
Lens (xx) Omitted
(xii) Screw (xxi) Omitted
(xiii) (xxii) Omitted
Microphone (xxiii)
Rubber Omitted
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
Case (xxiv) Mylar

(xiv) Sensor for LCD FPC
Rubber (xxv) Omitted
Case / (xxvi) Film-
Sealing Front Flash
Gasket (xxvii)
including Omitted
sealing (xxviii)
gaskets / Omitted
cases from (xxix)
Rubbers Microphone
like SBR, and Receiver
EPDM, CR, (xxx) Omitted
CS, (xxxi) USB
Silicone Cable
and all
other
individual
rubbers or
combinatio
n /
combinatio
n of rubbers
(xv) PU
case /
Sealing
Gasket –
Other
articles of
Polyuretha
ne foam like
sealing
gaskets /
case
(xvi)
Sealing
Gaskets /
Cases from
PE, PP,
EPS, PC
and all
other
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
individual
polymers or
combinatio
n /
combinatio
n of
polymers
(xvii) SIM
socket /
Other
Mechanical
items
(Metal)
(xviii) SIM
Socket /
Other
Mechanical
items
(Plastic)
(xix) Back
Cover
(xx)
Conductive
Cloth
(xxi) Heat
Dissipation
Sticker
Battery
Cover
(xxii)
Sticker-
Battery Slot
(xxiii)
Protective
Film for
main Lens
(xxiv) Mylar
for LCD
FPC
(xxv) LCD
Conductive
Foam
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
(xxvi) Film-
Front Flash
(xxvii) LCD
Foam
(xxviii) BT
Foam
(xxix)
Microphone
and
Receiver
(xxx) Key
Pad
(xxxi) USB
Cable
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
Any 7A. Any Omitted Nil 57/2017 02nd Feb Notificati BCD Exemption
Chapter Chapter - 2021 on No. removed & BCD
Inputs or Custom 03/2021 @10% will be
raw s, – leviable.
material dated Custom
[other than the 30th s dated
Printed June 1st
Circuit 2017 Februar
Board y 2021
Assembly
(PCBA)
(falling
under tariff
item 8504
90 90) and
Moulded
Plastics
(falling
undertariff
items 3926
90 99 or
8504 90
90)] for use
in the
manufactur
e of charger
or adapter
of cellular
mobile
phones
3926 90 7B. 3926 90 Omitted 10% 57/2017 02nd Feb Notificati BCD exemption
99, 8504 99, 8504 90 - 2021 on No. removed &
90 90 90 Custom 03/2021 taxable @15%
Moulded s, – rate.
Plastics of dated Custom
charger or the 30th s dated
adapter of June 1st
cellular 2017 Februar
mobile y 2021
phones
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
Any 7C. Any Omitted Nil 57/2017 02nd Feb Notificati BCD exemption
Chapter Chapter - 2021 on No. removed &
Inputs or Custom 03/2021 taxable at
parts for s, – applicable rate.
use in the dated Custom
manufactur the 30th s dated
e of June 1st
following 2017 Februar
parts of y 2021
charger or
adapter of
cellular
mobile
phones,
namely:-
(i) Printed
Circuit
Board
Assembly
(PCBA)
(falling
under tariff
item 8504
90 90)
(ii) Moulded
Plastics
(falling
under tariff
items
3926 90 99
or 8504 90
90
Any 7D. Any Omitted Nil 57/2017 02nd Feb Notificati BCD exemption
Inputs or Custom 03/2021 taxable at
raw s, – applicable rate.
material dated Custom
other than: - the 30th s dated
(i) Lithium June 1st
ion cell 2017 Februar
(falling y 2021
under tariff
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
item 8507
60 00); and
(ii) Printed
Circuit
Board
Assembly
(PCBA)
(falling
under tariff
item 8507
90 90),
for use in
manufactur
e of Battery
pack of
Cellular
mobile
phones.
Any 7E. Any Omitted Nil 57/2017 01st Apr Notificati BCD exemption
Inputs, Custom 03/2021 taxable at
parts or s, – applicable rate.
sub-parts dated Custom
for use in the 30th s dated
the June 1st
manufacturi 2017 Februar
ng of y 2021
Printed
Circuit
Board
Assembly
(PCBA)
(falling
under tariff
item 8507
90 90) of
following
goods,
namely: -
(i) Battery
pack of
cellular
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
mobile
phones;
(ii) Power
Bank of
lithium ion.
Any 8. Inputs or 8. Inputs or Nil 2.50% 57/2017 01st Apr Notificati BCD exemption
Chapter raw raw material - 2021 on No. removed &
material for for use in Custom 03/2021 taxable @ 2.5%
use in manufacture s, – for all the items of
manufactur of following dated Custom this entry except
e of goods the 30th s dated for the ommitted
following namely :- June 1st entries which will
goods (i) Other 2017 Februar be taxable at
namely :- machines y 2021 applicable BCD
(i) Other capable of rate.
machines connecting to
capable of an automatic
connecting data
to an processing
automatic machine or to
data a network
processing (8443 32 90)
machine or (ii) Ink
to a cartridges,
network with print
(8443 32 head
90) assembly
(ii) Ink (8443 99 51)
cartridges, (iii) Ink
with print cartridges,
head without print
assembly head
(8443 99 assembly
51) (8443 99 52)
(iii) Ink (iv) Ink spray
cartridges, nozzle (8443
without 99 53)
print head (v) Omitted
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
assembly (vi) Omitted

(8443 99 (vii) Omitted
52)
(iv) Ink
spray
nozzle
(8443 99
53)
(v) Base
stations
(8517 61
00)
(vi) All
goods
falling
under tariff
item 8517
62 90
(vii) All
goods
falling
under tariff
item 8517
69 90
3920 99 All goods Omitted 10% 57/2017 02nd Feb Notificati BCD exemption
99 other than - 2021 on No. removed &
the Custom 03/2021 taxable at
following s, – applicable rate.
parts or dated Custom
subparts or the 30th s dated
accessories June 1st
of cellular 2017 Februar
mobile y 2021
phones,
namely:-
(i) Battery
cover
(ii) Front
cover
(iii) Front
cover (with
Zinc
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
Casting)
(iv) Middle
cover
(v) Back
Cover
(vi) Main
Lens
(vii)
Camera
Lens
8504 40 All goods All goods 10% 10% 57/2017 02nd Feb Notificati Change in
other than other than - 2021 on No. description Solar
charger or the following Custom 03/2021 Inverters added &
adapter of goods, s, – taxable at 10%.
cellular namely:- dated Custom
mobile (a) charger or the 30th s dated
phones power June 1st
adapter; 2017 Februar
(b) solar y 2021
inverter ”;
8504 90 13A. 10% 57/2017 02nd Feb Notificati BCD @10%
90 All goods - 2021 on No. applicable on
other than Custom 03/2021 added entries.
the following s, –
goods, dated Custom
namely: - the 30th s dated
(a) Printed June 1st
Circuit Board 2017 Februar
Assembly of y 2021
charger
or power
adapter;
(b) Moulded
Plastic of
charger or
power
adapter
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
8504 90 16. All Omitted 10% 57/2017 02nd Feb Notificati BCD exemption
90 goods other - 2021 on No. removed &
than Custom 03/2021 taxable at
Lithium-ion s, – applicable rate.
battery of dated Custom
cellular the 30th s dated
mobile June 1st
phones 2017 Februar
y 2021
8507 60 17. Lithium- Omitted 15% 57/2017 02nd Feb Notificati BCD exemption
00 ion battery - 2021 on No. removed &
of cellular Custom 03/2021 taxable at
mobile s, – applicable rate.
phones dated Custom
the 30th s dated
June 1st
2017 Februar
y 2021
8507 60 17A. Omitted 5% 57/2017 02nd Feb Notificati BCD exemption
00 Lithium ion - 2021 on No. removed &
cell for use Custom 03/2021 taxable at
in the s, – applicable rate.
manufactur dated Custom
e of battery the 30th s dated
pack of June 1st
cellular 2017 Februar
mobile y 2021
phone.
8507 60 Lithium ion Omitted 5% 57/2017 02nd Feb Notificati BCD exemption
00 cell for use - 2021 on No. removed &
in the Custom 03/2021 taxable at
manufactur s, – applicable rate.
e of power dated Custom
bank of the 30th s dated
Lithium June 1st
ion.-17B 2017 Februar
5% y 2021
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
8517 62 20. All 20. All goods 10% 10% 57/2017 02nd Feb Notificati No Change only
90 or goods other other than - 2021 on No. entry (h)
8517 69 than the the following Custom 03/2021 bifurgated to (h) &
90 following goods, s, – (i).
goods, namely: - dated Custom
namely: - (a) Wrist the 30th s dated
(a) Wrist wearable June 1st
wearable devices 2017 Februar
devices (commonly y 2021
(commonly known as
known as smart
smart watches);
watches); (b) Optical
(b) Optical transport
transport equipment;
equipment; (c)
(c) Combination
Combinatio of one or
n of one or more of
more of Packet
Packet Optical
Optical Transport
Transport Product or
Product or Switch
Switch (POTP or
(POTP or POTS);
POTS); (d) Optical
(d) Optical Transport
Transport Network
Network (OTN)
(OTN) products;
products; (e) IP Radios;
(e) IP (f) Soft
Radios; switches and
(f) Soft Voice over
switches Internet
and Voice Protocol
over (VoIP)
Internet equipment,
Protocol namely, VoIP
(VoIP) phones,
equipment, media
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
namely, gateways,
VoIP gateway
phones, controllers
media and session
gateways, border
gateway controllers;
controllers (g) Carrier
and session Ethernet
border Switch,
controllers; Packet
(g) Carrier Transport
Ethernet Node (PTN)
Switch, products,
Packet Multiprotocol
Transport Label
Node (PTN) Switching
products, Transport
Multiprotoc Profile
ol Label (MPLS-TP)
Switching products;
Transport (h) Multiple
Profile Input/Multipl
(MPLS-TP) e Output
products; (MIMO)
(h) Multiple products;
Input/Multip (i) Long
le Output Term
(MIMO) and Evolution
Long Term (LTE)
Evolution products.
(LTE)
products
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
8517 70 22. Printed 22. Printed 10% 10% 57/2017 02nd Feb Notificati No Change only
10 Circuit Circuit Board - 2021 on No. entry (h)
Board Assembly Custom 03/2021 bifurgated to (h) &
Assembly (PCBA) of s, – (i).
(PCBA) of following dated Custom
following goods, the 30th s dated
goods, namely: - June 1st
namely: - (a) Base 2017 Februar
(a) Base station; y 2021
station; (b) Optical
(b) Optical transport
transport equipment;
equipment; (c)
(c) Combination
Combinatio of one or
n of one or more of
more of Packet
Packet Optical
Optical Transport
Transport Product or
Product or Switch
Switch (POTP or
(POTP or POTS);
POTS); (d) Optical
(d) Optical Transport
Transport Network
Network (OTN)
(OTN) products;
products; (e) IP Radios;
(e) IP (f) Soft
Radios; switches and
(f) Soft Voice over
switches Internet
and Voice Protocol
over (VoIP)
Internet equipment,
Protocol namely, VoIP
(VoIP) phones,
equipment, media
namely, gateways,
VoIP gateway
phones, controllers
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
media and session

gateways, border
gateway controllers;
controllers (g) Carrier
and session Ethernet
border Switch,
controllers; Packet
(g) Carrier Transport
Ethernet Node
Switch, (PTN)
Packet products,
Transport Multiprotocol
Node Label
(PTN) SwitchingTra
products, nsport Profile
Multiprotoc (MPLS-TP)
ol Label products;
SwitchingTr (h) Multiple
ansport Input/Multipl
Profile e Output
(MPLS-TP) (MIMO)
products; products;
(h) Multiple (i) Long
Input/Multip Term
le Output Evolution
(MIMO) and (LTE)
Long products.
Term
Evolution
(LTE)
products
39, 74, Former, Omiited Nil Ministry 02nd Feb Notificati BCD exemption
85 bases, of 2021 on No. removed &
bobbins, Finance 04/2021 taxable at
brackets; (Depart - applicable rate.
CP wires; ment of Custom
P.B.T.; Revenu s dated
Phenol e) No. 01st Feb
resin 25/99- 2021
moulding Custom
Existing New
Chapte Existin New
g e Rate Rate
HSN Provision
powder;La s, dated
mination/ El the 28th
silicon steel Februar
strips used y, 1999
in
manufactur
e of
Transforme
rs
Existi Original Notifica

Chapter Existing New New
ng Notifica Effectiv tion No.
/Tariff Descriptio Descriptio Tariff Bizsol Remark
Tariff tion and e Date and
Heading n n Rate
Rate date Date
8517 70 10 (i) Multiple (i) Multiple 20% 20% Notificati 02.02.2 Notificati Entry split into two
Input/Multi Input/Multi BCD BCD on No. 021 on No. serial numbers.
ple Output ple Output tariff tariff 24/2005 05/2021 These amendments
(MIMO); (MIMO) rate rate Cus Cus are only
and Long products; Exemp Exemp dated dated clarificatory in
Term (j) Long ted on ted on 01.03.20 01.02.20 nature
Evolution Term followi followin 05 21
(LTE) Evolution ng g
products”. (LTE) proced proced
products”. ure ure
under under
IGCRD IGCRD
Rules, Rules,
2017 2017

Heading n n Rate
Rate date Date
Chapter 90 Exemption Exemption 5% Nil Notificati 02.02.2 Notificati Notification is
Medical from from Health on No. 021 on No. amended to
Devices Health Health Cess 08/2020 06/2021 provide Health
Cess on Cess on Cus Cus Cess exemption on
the goods the goods dated dated medical devices
imported imported 02.02.20 01.02.20 imported by
into India into India 20 21 international/diplom
as as atic
specified specified organization/ trade
in various in representative
existing Notificatio
Notificatio ns:
ns 1. 84/1997
Cus dated
11.11.199
7
2. 03/1957
Cus dated
08.01.195
7
Chapter 98 Project Project 5% 10% Notificati 02.02.2 Notificati Exemption from
Project imports for imports for on No. 021 on No. customs duty &
imports, setting up setting up 01/2011 07/2021 whole of additional
laboratory of solar of solar Cus Cus customs duty has
chemicals, power power dated dated been withdrawn on
etc. generation generation 06.01.20 01.02.20 project imports for
project or project or 11 21 setting up of solar
facility facility power generation
project or facility.
39, 48 or Tags, Tags, Exemp Applica Notificati 02.02.2 Notificati Exemption from
any other labels and labels and ted ble on No. 021 on No. customs duty has
chapter printed printed Tariff 34/2017 07/2021 been withdrawn
bags for bags for rate Cus Cus and now applicable
fixing on fixing on dated dated customs duty shall
articles for articles for 30.06.20 01.02.20 be imposed
export or export or 17 21
for the for the
packaging packaging
of such of such
articles articles
Any Sports and Sports and Exemp Applica Notificati 02.02.2 Notificati Exemption from
Chapter other other ted ble on No. 021 on No. customs duty and
goods for goods for Tariff 75/2017 07/2021 IGST has been
organising organising rate Cus Cus withdrawn
FIFA FIFA dated dated
under 17 under 17 13.09.20 01.02.20
17 21

Heading n n Rate
Rate date Date
World cup, World cup,
2017 2017
Chapter 37 Photograp Photograp 10% Nil Notificati 02.02.2 Notificati Notification is

Photograph hic, hic, on No. 021 on No. amended to
ic or filming, filming, 153/199 08/2021 extend exemption
cinematogr sound sound 4 Cus Cus from Customs duty
aphic recording recording dated dated and IGST on import
goods and radio and radio 13.07.19 01.02.20 of costumes and
equipment equipment 94 21 props in film
, raw films, , raw films, making subject to
video- video- the specified
tapes and tapes and conditions
sound- sound-
recording recording
tapes. tapes,
costumes
and props
9801 Project Project NA 5% Notificati 02.02.2 Notificati High Speed Rail
Imports Imports on No. 021 on No. Projects has been
42/1996 09/2021 included in the list
Cus & of projects eligible
dated 10/2021 for benefit under
23.07.19 Cus Project Imports
96 dated Scheme
01.02.20
21
A new Agriculture Infrastructure and Development Cess has been levied on specified goods
(vegetables, fuel etc.) via clause 115 and 116 of Finance Bill 2021. AIDC rate are yet to be notified.
Below mentioned are maximum rates.
AIDC
max rate
Chapter New Notification
Existing Existing (effective Effective
/Tariff Description No. and Bizsol Remark
Description Rate rate yet Date
Heading of goods Date
to be
notified)
0713 10 All goods All goods 0 40% 02.02.2021 Clause 115 This has been
and 116 of imposed to
Finance Bill secured domestic
2021 market and ensure
level playing field.
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
10 and 116 of imposed to
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
AIDC
max rate
to be
notified)
0713 20 Chick Peas Chick Peas 0 50% 02.02.2021 Clause 115 This has been
90 (Garbanzos) (Garbanzos) and 116 of imposed to
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
0713 40 Lentil (Mosur) Lentil (Mosur) 0 20% 02.02.2021 Clause 115 This has been
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
00 (Apples) and 116 of imposed to
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
00 (Palm Crude and 116 of imposed to
Oil) Finance Bill secured domestic
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
AIDC
max rate
to be
notified)
1507 10 All goods ( All goods ( 0 20% 02.02.2021 Clause 115 This has been
00 Sunflower Sunflower and 116 of imposed to
Seed oil) Seed oil) Finance Bill secured domestic
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
1512 11 All goods ( All goods ( 0 20% 02.02.2021 Clause 115 This has been
10 Crude Oil) Crude Oil) and 116 of imposed to
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
2204, All goods All goods 0 100% 02.02.2021 Clause 115 This has been
2205, (Wine and and 116 of imposed to
2206, fermented Finance Bill secured domestic
2008 Beverages) 2021 market and ensure
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
2701, All goods All goods 0 2% 02.02.2021 Clause 115 This has been
2702, (Coal, Lignite, and 116 of imposed to
2703 Peat) Finance Bill secured domestic
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
AIDC
max rate
to be
notified)
00, (Urea and and 116 of imposed to
3102 30 Chemical Finance Bill secured domestic
00 fertilizers) 2021 market and ensure
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
31 Muriate of Muriate of NIL 5% 02.02.2021 Clause 115 This has been
potash, for potash, for and 116 of imposed to
use as use as Finance Bill secured domestic
manure or for manure or for 2021 market and ensure
the the level playing field.
production of production of However SWS is
complex complex not leviable on
fertilisers fertilisers such AIDC
(Notification
13/2021, Dt 1st
February 2021)
3105 30 Diammonium Diammonium 0 5% 02.02.2021 Clause 115 This has been
00 phosphate, phosphate, and 116 of imposed to
for use as for use as Finance Bill secured domestic
manure or for manure or for 2021 market and ensure
the the level playing field.
production of production of However SWS is
complex complex not leviable on
fertilisers fertilisers such AIDC
(Notification
13/2021, Dt 1st
February 2021)
5201 All goods All goods 0 5% 02.02.2021 Clause 115 This has been
(Cotton not and 116 of imposed to
carded or Finance Bill secured domestic
combed) 2021 market and ensure
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
AIDC
max rate
to be
notified)
7106 or Silver, Silver, 0 3% 02.02.2021 Clause 115 This has been
98 including including and 116 of imposed to
silver dore silver dore Finance Bill secured domestic
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
7108 or Gold, Gold, 0 3% 02.02.2021 Clause 115 This has been
98 including gold including gold and 116 of imposed to
dore dore Finance Bill secured domestic
However SWS is
not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
Any All goods All goods 0 NIL 02.02.2021 Clause 115 This has been
Chapter other than other than and 116 of imposed to
goods goods Finance Bill secured domestic
mentioned mentioned 2021 market and ensure
against serial against serial level playing field.
numbers 1 to numbers 1 to However SWS is
16 above. 16 above. not leviable on
such AIDC
(Notification
13/2021, Dt 1st
February 2021)
Any All goods on All goods on 0 NIL 02.02.2021 Clause 115 This has been
Chapter which which and 116 of imposed to
exemption exemption Finance Bill secured domestic
from basic from basic 2021 market and ensure
customs duty customs duty level playing field.
is claimed is claimed However SWS is
and allowed and allowed not leviable on
under the under the such AIDC
advance advance (Notification
authorisation. authorisation. 13/2021, Dt 1st
February 2021)
AIDC
max rate
to be
notified)
Any All goods on All goods on 0 NIL 02.02.2021 Clause 115 This has been
Chapter which which and 116 of imposed to
exemption exemption Finance Bill secured domestic
from basic from basic 2021 market and ensure
customs duty customs duty level playing field.
is claimed is claimed However SWS is
and allowed and allowed not leviable on
under the under the such AIDC
notifications, notifications, (Notification
published in published in 13/2021, Dt 1st
the Gazette the Gazette February 2021)
of India, of India,
Extraordinary, Extraordinary,
Part II, Part II,
Section 3, Section 3,
Sub-section Sub-section
(i), mentioned (i), mentioned
in the in the
ANNEXURE. ANNEXURE.
Social Welfare Surcharge Notifications:
Chapte New
Existing New Notificatio
r /Tariff Descriptio Existin Effectiv
Descriptio SW n No. and Bizsol Remark
Headin n of g SWS e Date
n S Date
g goods
2710 Motor spirit Motor spirit 3% 10% 02.02.202 12/2021- Exemption
commonly commonly 1 Customs, notification has
known as known as Dt 1st been rescinded and
petrol petrol February, as such SWS shall
2021 be levied full rate of
10%
2710 19 High speed High speed 3% 10% 02.02.202 12/2021- Exemption
30 diesel diesel 1 Customs, notification has
(HSD) (HSD) Dt 1st been rescinded and
February, as such SWS shall
2021 be levied full rate of
10%
7106 Silver Silver 3% 10% 02.02.202 12/2021- Exemption
(including (including 1 Customs, notification has
silver plated silver plated Dt 1st been rescinded and
with gold with gold February, as such SWS shall
or or 2021 be levied full rate of
platinum), platinum), 10%
unwrought unwrought
or in semi- or in semi-
ed ed
forms, or in forms, or in
powder powder
form form
7108 Gold Gold 3% 10% 02.02.202 12/2021- Exemption
(including (including 1 Customs, notification has
gold plated gold plated Dt 1st been rescinded and
with with February, as such SWS shall
platinum) platinum) 2021 be levied full rate of
unwrought unwrought 10%
or in semi- or in semi-
ed ed
forms, or in forms, or in
powder powder
form form
2515 Crude or Crude or 10% NIL 02.02.202 14/2021- Exemption of SWS
1100 roughly roughly 1 Customs, has been extended
trimmed trimmed Dt 1st to such stones
Chapte New
Existing New Notificatio
r /Tariff Descriptio Existin Effectiv
Descriptio SW n No. and Bizsol Remark
Headin n of g SWS e Date
n S Date
g goods
marble or marble or February,
travertine travertine 2021
stone stone
2515 Blocks of Blocks of 10% NIL 02.02.202 14/2021- Exemption of SWS
1210 marble or marble or 1 Customs, has been extended
travertine travertine Dt 1st to such stones
stone stone February,
2021
5002 Raw silk Raw silk 30% 15% 02.02.202 15/2021- 50% of BCD has
1 Customs, been exempted on
Dt 1st import of raw silk
February,
2021
5004, Silk Silk 15% 10% 02.02.202 15/2021- Further 5%
5005, Yarn/waste Yarn/waste 1 Customs, exemption has
5006, or woven or woven Dt 1st been given on
5007 fabrics on fabrics on February, import of Silk
such such 2021 yarn/waste woven
yarn/waste yarn/waste fabrics on such
yarn/waste
5202 Cotton Cotton 25% 10% 02.02.202 15/2021- 50% of BCD has
waste waste 1 Customs, been exempted on
Dt 1st import of raw silk
February,
2021
Anti-Dumping Duty and Countervailing Duty Notifications:
New Original
Chapter Existing New Existin Notificatio
Tarif Notificatio Effective
/Tariff Descriptio Descriptio g Tariff n No. and Bizsol Remark
f n and Date
Heading n n Rate Date
Rate date
7228 Straight Straight USD Nil Notificatio 02.02.202 Notificatio Levy of Anti-
Length Length 44.89 n 1 to n No. dumping duty has
Bars and Bars and to no.54/201 30.09.202 05/2021 been temporarily
Rods of Rods of 155.82 8 1 Cus(ADD) removed for the
Alloy Steel Alloy Steel per MT Cus(ADD) dated period 2nd February
dated 01.02.202 2021 to 30th
18.10.201 1 September 2021 on
8 import of Straight
Length Bars and
Rods of Alloy steel
from China PR.
7228 10 High- High- USD Nil Notificatio 02.02.202 Notificatio Levy of Anti-
10 or Speed Speed 1902.3 n 1 to n No. dumping duty has
7228 10 Steel of Steel of 4 to no.38/201 30.09.202 06/2021 been temporarily
90 Non- Non- 3263.6 9 1 Cus(ADD) removed for the
Cobalt Cobalt 8 per Cus(ADD) dated period 2nd February
Grade Grade MT dated 01.02.202 2021 to 30th
25.09.201 1 September 2021 on
9 import of High-
Speed Steel of Non-
Cobalt Grade from
Brazil, China PR
and Germany.
7210, Flat rolled Flat rolled USD Nil Notificatio 02.02.202 Notificatio Levy of Anti-
7212, product of product of 13.07 n 1 to n No. dumping duty has
7225 and steel, steel, to no.16/202 30.09.202 07/2021 been temporarily
7226 plated or plated or 173.10 0 1 Cus(ADD) removed for the
coated coated per MT Cus(ADD) dated period 2nd February
with with dated 01.02.202 2021 to 30th
alloy of alloy of 23.06.202 1 September 2021 on
Aluminium Aluminium 0 import of Flat rolled
and Zinc and Zinc product of steel
(Aluminium or Zinc
coated) from China
PR, Vietnam and
Korea RP.
7219 and Flat rolled Flat rolled 22.31% Nil Notificatio 02.02.202 Notificatio Levy of provisional
7220 products products to n 1 n No. Countervailing duty
of of 24.83% no.02/202 01/2021 has been withdrawn
stainless stainless of CIF 0 Cus(CVD) on import of Flat
steel steel value Cus(CVD) dated rolled products of
dated 01.02.202 stainless steel from
9.10.2020 1 Indonesia.
New Original
Chapter Existing New Existin Notificatio
Tarif Notificatio Effective
/Tariff Descriptio Descriptio g Tariff n No. and Bizsol Remark
f n and Date
Heading n n Rate Date
Rate date
7219 or Hot rolled Hot rolled 18.95% Nil Notificatio 02.02.202 Notificatio Levy of
7220 and cold and cold of n 1 to n No. Countervailing duty
rolled rolled landed no.01/201 30.09.202 02/2021 has been
stainless stainless value 7 1 Cus(CVD) temporarily removed
steel flat steel flat Cus(CVD) dated for the period 2nd
products products dated 01.02.202 February 2021 to
07.09.201 1 30th September
7 2021 on import of
Hot rolled and cold
rolled
stainless steel flat
products from China
PR.
Central Excise Act, 1944
CENTRAL EXCISE ACT, 1944:
Fourth Schedule In the Central Excise Act, New tariff items [2404
1944 (hereinafter referred 11 00] and [2404 19
to as 00] inserted in Chapter
the Central Excise Act), the 24 in the fourth
Fourth Schedule shall,–– Schedule of the
(i) with effect from the 1st Central Excise Act,
April, 2021, be amended in 1944 accordance with
the manner specified in the
upcoming Harmonized
Fifth Schedule; and
System 2022
(ii) with effect from the 1st
Nomenclature and to
January, 2022, be also
amended in the manner prescribe tariff rate of
specified in the Sixth 81% on these tariff
Schedule. items with effect from
01.01.2022.
Fourth Schedule In the Fourth Schedule to (I) It is proposed to

the Central Excise Act, in specify correct IS
Chapter 27, with effect “17076” against
the tariff item
from the 1st day of
27101249 and
January, 2020,–– made effective
from 01.01.2020,
retrospectively
(i) for the entry in column
(2) occurring against tariff (II) It is proposed that
tariff rate of 14%+
item 2710 12 49, the entry
Rs. 15.00 per litre
“---- M15 Fuel conforming against tariff item
to standard 2710 20 10 and
2710 20 20 may
IS 17076” shall be be prescribed and
substituted and shall be made effective
deemed to have been from 01.01.2020,
substituted; retrospectively
(ii) for the entry in column

(4) occurring against tariff

“14% + Rs.15.00 per litre”
shall be substituted and
shall be deemed to have
been substituted;
(iii) for the entry in column

(4) occurring against tariff
“14% + Rs.15.00 per litre”
shall be substituted and
shall be deemed to have
been substituted
Fourth Schedule Notwithstanding anything Amendment in Fourth

read with Section contained in paragraph 2 Schedule made by
3C of Central Excise of the notification of the Notification No.
Act,1944 Government of India in the 08/2019-CE (T) dated
Ministry of Finance 31.12.2019 shall be
(Department of Revenue) made effective w.e.f.
number G.S.R 978 (E), 01.01.2020,
dated the 31st December, retrospectively
2019, issued in exercise of
the powers conferred
under section 3C of the
Central Excise Act, 1944,
the amendments made in
Chapter 27 of the Fourth
Schedule thereto by the
said notification shall be
deemed to have, and
always to have had effect,
for all purposes, on and
from the 1st day of
January, 2020
Misc Acts
AMENDMENT TO THE INDIAN STAMP ACT, 1899

Amendment
Sec
Effective Existing provision Amended Provision Bizsol Remarks
No
from
8G 01st April NA “8G. Notwithstanding No Stamp Duty required to
2021 anything contained in this pay on Immovable
Act or any other law for property when Govt. /
the time being in force, Associate Companies etc
any instrument for make Strategic sale,
conveyance or transfer of disinvestment etc.
a business or asset or
right in any immovable
property from a
Government company, its
subsidiary, unit or joint
venture, by way of
strategic sale or
disinvestment or demerger
or any other scheme of
arrangement, to another
Government company or
to the Central Government
or any State Government,
after the approval of the
Central Government, shall
not be liable to duty under
this Act.
purposes of this section,
“Government company”
shall have the same
meaning as assigned to it
in clause (45) of section 2
of the Companies Act,
2013.”.
AMENDMENT TO THE CONTINGENCY FUND OF INDIA ACT, 1950

Amendment
Sec
No
from
2 (2) 01st April “(3) On and from the date Enhancement in sum to
2021 (2) On and from the on which the Finance paid out of consolidated
date on which the Bill, 2021 fund of India into the
Finance Bill, 2005 receives the assent of contingency fund of India
receives the assent of the President, the sum to Rs. 30,000 Cr from
the president, which shall be earlier 500 Crores.
the sum which shall be paid from and out of the Limit has been enhanced
paid from and out of Consolidated Fund of for utilisation of such
the Consolidated Fund India into the Fund in Contingencies.
of India into the Contingency Fund of
Contingency India under sub-section
Fund of India under (2) shall stand
sub-section (1) shall enhanced to thirty
stand enhanced to five thousand crores of
hundred crores of rupees.”.
rupees.
AMENDMENT TO THE CENTRAL SALES TAX ACT, 1956

8(3)(b) On 8. Rates of tax on 8. Rates of tax on sales in Earlier these provisions
Enactment of sales in the course of the course of inter-State were applicable to
Finance Bill inter-State trade or trade or commerce.— specific goods like
commerce.— (3)The goods referred to telecommunication
(3)The goods in sub-section(1) network, Mining,
referred to in sub- (b)are goods of the class Generation of Electricity
section(1) or classes specified in or power, now the same
(b) are goods of the the certificate of is applicable to all types
class or classes registration of the of goods as defined in
specified in the registered dealer Section2(d)
certificate of purchasing the goods as
registration of the being intended for re-
registered dealer sale by him or subject to
purchasing the goods any rules made by the
as being intended for Central Government in
re-sale by him or this behalf, for use by
subject to any rules him in the manufacture
made by the Central or processing for sale of
Government in this goods specified under
behalf, for use by him clause (d) of section 2;”
in the manufacture or 2(d) "goods" includes all
processing of goods materials, articles,
for sale or in the tele- commodities and all other
communications kinds of movable property,

Amendment
Sec
No
from
network or in mining but does not include
or in the generation newspapers, actionable
or distribution of claims, stocks, shares and
electricity or any securities.
other form of power;
AMENDMENT TO THE FINANCE ACT, 2001

Schdu 01st January NA (b) after tariff item 2403 Containing tobacco or
le VII 2022 99 90 and the entries reconstituted tobacco will
relating thereto, the attract Excise Duty
following tariff items and @25%. Tobacco or its
entries shall be inserted products not covered
with effect above are also included
from the 1st day of for levy of Duty @25%.
January, 2022, namely:–
–
2404 11 00 -- containing
tobacco or reconstituted
tobacco Kg. 25%
2404 19 00 -- Other Kg.
25% .
AMENDMENTS TO THE FINANCE (NO.2) ACT, 2004

Amendment
Sec
No
from
97 01st (13) “taxable (i) in clause (13), in sub- Now sale or surrender or
(13)(b) February securities transaction” clause (b), for the words redemption of a unit of an
2021 means a transaction of “Mutual Fund;”, the equity oriented fund to an
— following shall be insurance company, on
(b) sale of a unit of an substituted, namely:– maturity or partial
equity oriented fund to – withdrawal, with respect
the Mutual Fund; “Mutual Fund; or to unit linked insurance
(ba) sale or surrender or policy issued by such
redemption of a unit of insurance company will
an equity oriented fund also be considered as
to an insurance taxable securities
company, on maturity or transaction
partial withdrawal, with
respect to unit linked
insurance policy issued
by such insurance
company on or after the
1st day of February, 2021
97 01st NA (ii) after clause (13), the The term "unit linked
February following clause shall be insurance policy" has
2021 inserted, namely:–– been defined as per
‘(13A) “unit linked Income Tax Act, 1961.
insurance policy” shall
have the
meaning assigned to it in
Explanation 3 of clause
(10D)
of section 10 of the
Income-tax Act, 1961;’
98 01st NA after serial number 5 and The entry has been newly
February the entries relating inserted & applicable STT
2021 thereto, the following rate is @ 0.001%
shall be inserted,
namely:––
“5A. Sale or surrender or
redemption of a unit of
an equity oriented fund
to an insurance
company, on maturity or
partial
withdrawal, with respect
to unit linked [0.001]

Amendment
Sec
No
from
percent. insurance
policy issued by such
insurance company on
or after the first day of
February, 2021
100 & 01st 100. Collection and the words “Mutual Fund” The word Mutual Fund is
101 February recovery of securities wherever they occur, the substituted as "Mutual
2021 transaction tax. words “or insurance Fund or Insurance
(1) Every recognised company” shall be Company"
stock exchange shall inserted. Insurance co. has also
collect the securities covered for
transaction securatization act and
tax from every person, hence amendment has
being a purchaser or a been made in Finace Act,
seller, as the case may 2004.
be, who
enters into a taxable
securities transaction
in that stock
exchange, at the rates
specified in section 98.
(2)The prescribed
person in the case of
every Mutual Fund
shall collect the
securities transaction
tax from every person
who sells a unit to that
Mutual Fund,
at the rate specified in
section 98.
(3) The securities
transaction tax
collected during any
calendar month in
accordance with the
provisions of sub-

Amendment
Sec
No
from
section (1) or sub-
section (2) 17or
subsection (2A) or
sub-section (2B), shall
be paid by every
recognised stock
exchange or by the
prescribed person16
in the case of every
Mutual Fund or the
lead merchant banker
in the case of an initial
public offer or an initial
offer.

163 01 st April 163. (1) This Chapter (i) in section 163, in sub- Equlisation levy will not
2020 extends to the whole section (3), the following be applicable on
of India except the proviso shall be inserted, consideration received or
State of Jammu and namely:–– receivable which are
Kashmir. “Provided that the taxable as royalty or fees
(2) It shall come into consideration received for technical services in
force on such date as or receivable for India under the Income-
the Central specified services and tax Act.
Government may, by for e-commerce supply
notification in the or services shall not
Official Gazette, include the
appoint. consideration, which are
(3) It shall apply to taxable as royalty or fees
consideration received for technical services in

Amendment
Sec
No
from
or receivable for India under the Income-
specified services tax Act, read with the
provided on or after agreement notified by
the commencement of the Central Government
this Chapter. under section 90 or
section 90A of the said
Act.”;
164 01st April Section 164(cb): “e- Section 164(cb): “e- Explanation has been
2020 commerce supply or commerce supply or inserted so as to include
services” means — services” means — online sale of Goods and
-online sale of goods -online sale of goods online provision of
owned by the e- owned by the e-commerce services.
commerce operator; operator; or
or -online provision of
-online provision of services provided by the e-
services provided by commerce operator; or
the e-commerce -online sale of goods or
operator; or provision of services or
-online sale of goods both, facilitated by the e-
or provision of commerce operator; or o
services or both, any combination of
facilitated by the e- activities listed in clause (i),
commerce operator; (ii) or clause (iii);
or o any combination ‘Explanation.––For the
of activities listed in purposes of this clause,
clause (i), (ii) or clause “online sale of goods”
(iii); and “online provision of
services”
shall include one or more
of the following online
activities, namely:––
(a) acceptance of offer
for sale; or
(b) placing of purchase
order; or
(c) acceptance of the

Amendment
Sec
No
from
purchase order; or
(d) payment of
consideration; or
(e) supply of goods or
provision of services,
partly or wholly;’;
165A( 01st April NA 165A“(b) consideration consideration received

b) 2020 received or receivable or receivable from
from ecommerce supply ecommerce supply or
or services shall services has been
include–– specified
(i) consideration for sale
of goods irrespective of
whether the e-commerce
operator owns the
goods;
(ii) consideration for
provision of services
irrespective of whether
service is provided or
facilitated by the e-
commerce operator.”.

Amendment
Sec
No
from
191 01st June Any amount of tax and Any amount of tax and It has been clarified that
2016 surcharge paid under surcharge paid under any amount of Tax,
section 184 or penalty section 184 or penalty paid Surcharge & penalty
paid under section 185 under section 185 in declared shall not be
in pursuance of a pursuance of a declaration refunded without any
declaration made made under section 183 Interest.
under section 183 shall not be refundable
shall not be without any interest.
refundable.
CUSTOMS NON TARIFF NOTIFICATIONS
CUSTOMS NONTARIFF CHANGES

Notification
Rules Amendment Bizsol Analysis
Number
Notification NA (aa) capital goods means The Capital goods have been
No. 09/2021- goods, the value of which is defined as it is proposed that
Customs capitalised in the books of depreciation will be allowed
(N.T.) dated account of the importer;‘; on such capital goods.
1st Feb 2021
Notification NA (ca) job work means any The term job work has been
No. 09/2021- treatment, process or defined so that goods can be
Customs manufacture, consistent imported under IGCRD and
(N.T.) dated with the exemption can be sent to job worker.
1st Feb 2021 notification undertaken by a
person on goods belonging
to the importer except gold,
jewellery and articles
thereof, and other precious
metals or stones; and the
term ―job worker‖ shall be
construed accordingly;‘;
Notification “manufacture” means the (e) manufacture means the The term importer has been
No. 09/2021- processing of raw processing of raw materials added to allow full job work
Customs material or inputs in any or inputs by the importer in under the IGCRD Rules,
(N.T.) dated manner that results in any manner that results in 2017.
1st Feb 2021 emergence of a new emergence of a new
product having a distinct product having a distinct
name, character and use nature or character or use
and the term or name; and the term
“manufacturer” shall be ―manufacturer shall be
construed accordingly; construed accordingly;‘;
Notification (f) “output service” (f) output service means The term utilization has been
No. 09/2021- means supply of service supply of service excluding added to allow full job work
Customs with the use of the after-sales service, utilizing under the IGCRD Rules,
(N.T.) dated imported goods. imported goods. 2017.
1st Feb 2021
Notification
Number
Notification 4. Information about “4. Importer to give prior Prior intimation of the details
No. 09/2021- intent to avail benefit of information. – The of the job worker and the
Customs exemption notification.– importer shall provide process to be carried out the
(N.T.) dated An importer who intends information to the Deputy job worker needs to be given.
1st Feb 2021 to avail the benefit of an Commissioner of Customs,
exemption notification or, as the case may be, the
shall provide the Assistant Commissioner of
information to the Deputy Customs having jurisdiction
Commissioner of over the premises where
Customs or, as the case the imported goods shall be
may be, Assistant put to use
Commissioner of
Customs having for manufacture of goods or
jurisdiction over the for rendering output service
premises where the except after-sales service,
imported goods shall be about the
put to use for following particulars,
manufacture of goods or namely: —
for rendering output
service, the particulars, (i) the name and address
namely:- (i) the name of the importer and his
and address of the job worker, if any;
manufacturer; (ii) the
goods produced at his (ii) the goods produced or
process undertaken at the
manufacturing facility;
manufacturing facility of
(iii)the nature and
the importer and/or his
description of imported
goods used in the job worker, if any, or
both;
manufacture of goods or
providing an output (iii) the nature and
service. description of imported
goods used in the
manufacture of goods at the
premises of the importer or

the job worker, if any;
Notification
Number
(iv) nature of output service

rendered utilising imported
goods.
Notification (6) Importer who 6. Importer to give Enabling provisions to has

No. 09/2021- intends to avail the information regarding been made to allow records
Customs benefit of an exemption receipt of imported goods keeping with the job workers.
(N.T.) dated notification to give and maintain records. - (1) Also the provision has been
1st Feb 2021 information regarding The importer shall provide made to file quarterly returns
receipt of imported information of the receipt of instead of monthly return.
goods and maintain the imported goods in the Also the format of the return
records. - (1) The premises, where the has been specified.
importer who intends to imported goods shall be put
avail the benefit of an to use for manufacture of
exemption notification goods or job work or for
shall provide the rendering output service
information of the receipt within two days (excluding
of the imported goods in holidays, if any) of such
his premises where receipt to the Jurisdictional
goods shall be put to use Customs Officer.
for manufacture, within
two days (excluding (2) The importer shall
holidays, if any) of such maintain an account in such
receipt to the manner to clearly indicate
jurisdictional Customs the quantity,-
Officer. (2) The importer i. and value of goods
who has availed the imported;
benefit of an exemption
notification shall maintain ii. of imported goods
an account in such consumed;
manner so as to clearly
indicate the quantity and iii. of goods sent for job
value of goods imported, work, nature of job work
the quantity of imported carried out;
goods consumed in iv. of goods received after
accordance with job work;
provisions of the
Notification
Number
exemption notification, v. of goods re-exported, if

the quantity of goods re- any, under rule 7; and
exported, if any, under
rule 7 and the quantity vi. remaining in stock,
remaining in stock, bill of according to bills of entry,
entry wise and shall and shall produce the said
produce the said account account as and when
as and when required by required by the Deputy
the Deputy Commissioner of Customs,
Commissioner of or, as the case may be, the
Customs or, as the case Assistant Commissioner of
may be, Assistant Customs having jurisdiction
Commissioner of over the premises or where
Customs having the imported goods shall be
jurisdiction over the
premises where the put to use for manufacture
imported goods shall be of goods or for rendering
put to use for output service.
for rendering output (3) The importer shall
service. (3) The importer submit a quarterly return, in
the form appended to these
who has availed the
benefit of an exemption rules to the Deputy
notification shall submit a Commissioner of Customs,
or, as the case may be, the
quarterly return, in the
Assistant Commissioner of
Form appended to these
Customs having jurisdiction
rules, to the Deputy
Commissioner of over the premises where
the imported goods shall be
Customs or, as the case
may be, Assistant put to use for manufacture
Commissioner of of goods or for rendering
Customs having output service, by the tenth
day of the following quarter.
jurisdiction over the
premises where the
imported goods shall be
put to use for
for rendering output
Notification
Number
service, by the tenth day

of the following quarter.
Notification NA ―6A. Procedure for Procedure for allowing

No. 09/2021- allowing imported goods imported goods for job
Customs for job work. - (1) The work has been notified.
(N.T.) dated importer shall send the
1st Feb 2021 imported goods except
gold, jewellery and articles
thereof; and other precious
metals or
stones for job work, for

manufacture of goods, after
giving an intimation in
duplicate to the
Jurisdictional Customs
Officer of his intention to do
so.
(2) The importer shall also

specify the following
particulars, namely: —
i. name and address of the

job worker;
ii. nature and description of

the job work to be carried
on the imported goods in
the manufacturing process;
iii. quantity and description

of the goods intended to be
sent to the job worker.
Notification
Number
(3) The Jurisdictional

Customs Officer shall
forward a copy of the
intimation along with the
particulars specified in sub-
rules (1) and (2) to the
concerned Customs Officer
under whose
jurisdiction the premises of

the job worker is situated.
(4) The importer shall send

the goods to the premises
of the job worker enclosing
a challan, specifying the
description and quantity of
the goods.
(5) The maximum period for

which the goods can be
sent to the job worker shall
be six months from the date
of issue of challan specified
in sub-rule
(6) In case the importer is

unable to establish that the
goods sent for job work have
been used as per the
particulars of job work
referred in sub-rule (2), the
Officershall take necessary
action against the importer
under rules 8 and 8A.
(7) The job worker shall
Notification
Number
i. maintain an account of
receipt of goods,
manufacturing process
undertaken thereon and the
waste generated, if any,
during such process;
ii. produce the account

details before the
Officer as and when
required by the said officer;
iii. after completion of the

job work send the
processed goods to the
importer or to another job
worker as directed by the
Importer for carrying out the
remaining processes, if any,
under the cover of a challan
or the challan of the
principal manufacturer duly
endorsed by him.
Notification ―(3) The importer, with the The imported capital goods
No. 09/2021- permission of the that have been used for the
Customs jurisdictional Deputy specified purpose to be
(N.T.) dated Commissioner of Customs cleared on payment of
1st Feb 2021 or, as the case may be, differential duty, along with
Assistant Commissioner of interest, on the depreciated
Customs having jurisdiction value. The depreciation
over norms would be the same as
applied to EOUs, as per
the premises where the Foreign Trade Policy. Same
imported goods shall be put depreciation rate will be
to use for manufacture of applicable to computers and
goods or for rendering computer peripherals.
output service, may clear
Notification
Number
the imported capital goods,

after having been used for
the specified purpose, on

payment of duty equal to
the difference between the
duty leviable on such goods
but for the exemption
availed and that already
paid, if any, at the time of
importation, along with
interest, at the rate fixed by
the notification issued under
section 28AA of the Act, on
the depreciated value
allowed in straight line
method, as specified
below, namely : —
(i) for every quarter in the

first year @ 4%;
(ii) for every quarter in the

second year @ 3%;
(iii) for every quarter in the

third year @ 3%;
(iv) for every quarter in the

fourth and fifth year @
2.5%;
(v) and thereafter for every

quarter @ 2%.
Explanation. - (1) For the

purpose of computing rate
Notification
Number
of depreciation for any part

of a quarter,
a full quarter shall be taken

into account.
(2) There shall be no upper

limit for such depreciation.
(3) The depreciation shall

be allowed from the date
when the imported capital
goods have come into use
for the purpose as specified
in the exemption notification
upto the date of its
clearance
Notification NA ―(2) Notwithstanding The responsibility has been

No. 09/2021- anything specified in these casted on the importer in
Customs rules in relation to removal case of goods sent on job
(N.T.) dated and processing of imported work.
1st Feb 2021 goods for job work, the
importer shall be
responsible for ensuring
that the said goods are
used in accordance with the
purposes provided in the
exemption notification and
in the event of failure to do
so, the Jurisdictional Deputy
Commissioner of Customs,
or, as the case may be, the
Assistant Commissioner of
Customs having jurisdiction
over the premises where
the imported goods shall be
put to use for manufacture
of goods or for rendering
Notification
Number
output service, shall take

action under these rules,
without prejudice to any
other action which may be
taken under the Act, rules
or regulations made
thereunder or under any
other law for the time being
in force.
Notification NA 8A. Penalty. - The importer Penal provision has been

No. 09/2021- or a job worker who inserted for contravention of
Customs contravenes any of the the conditions mentioned in
(N.T.) dated provisions of these rules or IGCRD Rules, 2017.
1st Feb 2021 abets such contravention,
shall be liable to a penalty
to an extent of the amount
specified under clause (ii) of
sub-section (2) of section
158 of the Act without
prejudice to any other
action which may be taken
under the Act, rules or
regulations made
thereunder or under any
other law for the time being
in force.
Notification The Customs Tariff (3A) The period of Enabling provision for the
No. 10/2021- (Identification, investigation shall, - provisional assessment in
Customs Assessment and anti-circumvention
(N.T.) dated Collection of Anti- (i) not be more than six investigation and certain
1st Feb 2021 dumping Duty on months old as on the date other miscellaneous changes
Dumped Articles and for of initiation of investigation; have been proposed in
Determination of Injury) (ii) be for a period of twelve Customs Tariff (Identification,
Amendment Rules 2021 months normally and for Assessment and Collection of
with effect from 02nd reasons to be recorded in Anti-dumping Duty on
February, 2021 writing, the designated Dumped Articles and for
Notification
Number
authority may consider a Determination of Injury)

minimum of six months or Rules, 1995. 10/2021-
maximum of eighteen Customs (N.T.), dated 1st
months.”; February, 2021
(c) with effect from the 1st

day of July, 2021, in rule 23,
-
(i) in sub-rule (2), the

following proviso shall be
inserted, namely: -
“Provided that
notwithstanding anything
contained in rule 17, such
review shall be completed
at least three months prior
to expiry of the anti-
dumping duty under
review.”;
(d) in rule 26, after sub-rule

(4), the following sub-rule
shall be inserted, namely: -
“(4A) The Central

Government may, on
recommendation of the
designated authority, resort
to provisional assessment
of the imports of the article
alleged to be circumventing
an antidumping duty in
force and may ask a
guarantee from the
importer, till the time a
decision under sub-rule (3)
Notification
Number
of rule 27 is taken by the

Central Government.”;
(e) with effect from the 1st

in sub-rule (2), the following
proviso shall be inserted,
namely: -
“Provided that such review

shall be completed at least
three months prior to expiry
of the duty under review.”
Notification The Customs Tariff In the Customs Tariff Enabling provision for the
No. 11/2021- (Identification, Assessment provisional assessment in
Customs (Identification, and Collection of anti-circumvention
(N.T.) dated Assessment and Countervailing Duty on investigation and make
1st Feb 2021 Collection of Subsidized Articles and for certain other miscellaneous
Countervailing Duty on Determination of Injury) changes have been proposed
Subsidized Articles and Rules, 1995,- in Customs Tariff
for Determination of (Identification, Assessment
Injury) Amendment (c) in rule 24, - and Collection of
Rules, 2021 with effect Countervailing Duty on
from 02nd February,2021 (i) with effect from the 1st
day of July, 2021, in sub- Subsidised Articles and for
rule (4), the following Determination of Injury)
proviso shall be inserted, Rules, 1995. 11/2021-
namely: - Customs (N.T.), dated 1st
February, 2021
“Provided that
contained in rule 19, such
review shall be completed
at least three months prior
to expiry of the
Notification
Number
countervailing duty under

review.”;
(d) in rule 26, after sub-rule

(4), the following sub-rule
“(4A) The Central

Government may, on
recommendation of the
designated authority, resort
to provisional assessment
of the imports of the article
alleged to be circumventing
a countervailing duty in
force and may ask a
guarantee from the
importer, till the time a
decision under sub-rule (3)
of rule 27 is taken by the
Central Government.”;
(e) with effect from the 1st

in sub-rule (2), the following
proviso
“Provided that such review

shall be completed at least
three months prior to expiry
of the duty under review.”.
Notification The Customs Tariff 8. Determination of serious Enabling provision to provide

No. 12/2021- injury or threat of serious for the manner of application
Customs (Identification and injury. The Director General of safeguard measures
Assessment of shall determine serious including tariff-rate quota and
Safeguard Duty)
Notification
Number
(N.T.) dated Amendment Rules, injury or threat of serious make certain other
1st Feb 2021 2021. injury to the domestic miscellaneous changes have
industry taking into been proposed Customs
Tariff (Identification and
account the following Assessment of Safeguard
principles, namely: - Duty) Rules, 1997 (12/2021-
(i) in the investigation to Customs (N.T.), dated 1st
determine whether February, 2021
increased imports have
caused or threatening to
cause serious injury to the
domestic industry, the
Director General shall
evaluate all
relevant factors of an
objective and quantifiable
nature having a bearing on
the situation of that industry,
in particular, the rate and
amount of the increase in
imports of the article
concerned in absolute and

relative terms, the share of
the domestic market taken
by increased imports,
changes in the level of
sales, production,
productivity, capacity
utilisation, profits and
losses, and employment;
(ii) the determination

referred to in clause (i) shall
not be made unless the
investigation demonstrates,
on the basis of objective
evidence, the existence of
Notification
Number
the causal link between

increased imports of the
article concerned and
serious injury or threat
thereof and when factors
other than increased
imports are causing injury to
the domestic industry at the
same time, such injury shall
not be attributed to
increased imports and in
such cases, the Director
General may refer the
complaint to the authority
for antidumping or
countervailing duty
investigations, as
appropriate.”. imposed
under sub-section (1) of
section 8B of the Act;’
Customs Tariff Notification No. 03/2021 & 04/2021

Existing
New
Chapte Description Effe Notific
Description Existi
Sr. r of goods / New Original ctiv ation
of goods (if ng Bizsol
No /Tariff Existing Tariff Notifica e No.
applicable) Tariff Remark
. Headin Provision / Rate tion Dat and
/ Existing Rate
g Existing e Date
Provision
HSN
1 Any (i) against S. (i) against S. Nil Nil 57/2017- 02nd Notifica BCD will
Chapter No. 6A, in No. 6A, in Customs Feb tion No. be
column (3), column (3), , 2021 03/202 applicable
after item (b), after item (b), dated the 1 – to "Metal
the following the following 30th Custom Shield" at
proviso shall proviso shall June s dated applicable
be inserted, be inserted, 2017 1st rate.
namely: - namely: - Februar
“Provided that “Provided y 2021
nothing that nothing
contained in contained in
the entries the entries
mentioned at mentioned at
items (a) and items (a) and
(b) shall apply (b) shall apply
to the following to the
goods, following
namely: - goods,
(i) connectors; namely: -
(ii) (i)
microphones; connectors;
(iii) receivers; (ii)
(iv) speaker; microphones;
(v) SIM (iii) receivers;
socket”; (iv) speaker;
(v) SIM
socket”;
(vi) metal
shield
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
2 Any 6A. Any 6A. Any Nil 2.50% 57/2017- 01st Notifica BCD
Chapter Chapter Chapter Customs Apr tion No. exemption
(a) Inputs or (a) Inputs or , 2021 03/202 removed &
parts for use in parts for use dated the 1 – taxable @
manufacture in 30th Custom 2.5% for
of Printed manufacture June s dated items
Circuit Board of Printed 2017 1st except for
Assembly Circuit Board Februar the items
(PCBA) of Assembly y 2021 specified
cellular mobile (PCBA) of in proviso.
phones cellular
(b) Inputs or mobile
sub-parts for phones
use in (b) Inputs or
manufacture sub-parts for
of parts use in
mentioned at manufacture
(a) above of parts
“Provided that mentioned at
nothing (a) above
contained in “Provided
the entries that nothing
mentioned at contained in
items (a) and the entries
(b) shall apply mentioned at
to the following items (a) and
goods, (b) shall apply
namely: - to the
(i) connectors; following
(ii) goods,
microphones; namely: -
(iii) receivers; (i)
(iv) speaker; connectors;
(v) SIM (ii)
socket”; microphones;
(iii) receivers;
(iv) speaker;
(v) SIM
socket”;
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
(vi) metal
shield
3 Any 6B. Any 6B. Any Nil Nil 57/2017- 02nd Notifica Camera
Chapter Chapter (a) Chapter (a) Customs Feb tion No. Lens are
Inputs or parts Inputs or , 2021 03/202 excluded
for use in parts for use dated the 1 – from entry
manufacture in 30th Custom No. 6B(a)
of Camera manufacture June s dated & (b)
Module of of Camera 2017 1st which is
cellular mobile Module of Februar now
phones cellular y 2021 taxable
(b) Inputs or mobile
sub-parts for phones
use in (b) Inputs or
manufacture sub-parts for
of parts use in
(a) above of parts
mentioned at
(a) above
“Provided
that nothing
contained in
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
the entries
mentioned
at items (a)
and (b) shall
apply to the
“camera
lens”;
4 Any 6B. Any 6B. Any Nil 2.50% 57/2017- 01st Notifica BCD
Chapter Chapter (a) Chapter (a) Customs Apr tion No. exemption
Inputs or parts Inputs or , 2021 03/202 removed &
for use in parts for use dated the 1 – taxable @
manufacture in 30th Custom 2.5% for
of Camera manufacture June s dated items
Module of of Camera 2017 1st except for
cellular mobile Module of Februar Camera
phones cellular y 2021 Lens
(b) Inputs or mobile which is
sub-parts for phones taxable at
use in (b) Inputs or applicable
manufacture sub-parts for rate.
of parts use in
(a) above of parts
“Provided mentioned at
that nothing (a) above
contained in “Provided
the entries that nothing
mentioned at contained in
items (a) and the entries
(b) shall mentioned
apply to the at items (a)
“camera and (b) shall
lens”; apply to the
“camera
lens”;
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
5 Any 6C. Any 6C. Any Nil 2.50% 57/2017- 01st Notifica BCD
Chapter Chapter Chapter Customs Apr tion No. exemption
(a) Inputs or (a) Inputs or , 2021 03/202 removed &
parts for use in parts for use dated the 1 – taxable @
manufacture in 30th Custom 2.5%.
of Connectors manufacture June s dated
of cellular of 2017 1st
mobile phones Connectors Februar
(b) Inputs or of cellular y 2021
sub-parts for mobile
use in phones
manufacture (b) Inputs or
of parts sub-parts for
mentioned at use in
(a) above manufacture
of parts
mentioned at
(a) above
6 Any Inputs or raw Inputs or raw Nil 2.50% 57/2017- 01st Notifica BCD
Chapter material for material for Customs Apr tion No. exemption
use in use in , 2021 03/202 removed &
manufacture manufacture dated the 1 – taxable @
of following of following 30th Custom 2.5% for
parts of parts of June s dated all the
Cellular Cellular 2017 1st items of
mobile mobile Februar this entry
phones; phones; y 2021 except for
(i) Charger or (i) Charger or the
adapter adapter ommitted
(ii) Battery (ii) Battery entries
pack pack which will
(iii) Wired (iii) Wired be taxable
Headset Headset at
(iv) Battery (iv) Omitted applicable
cover (v) Omitted BCD rate.
(v) Front cover (vi) Omitted
(vi) Front (vii) Omitted
cover (with (viii) GSM
Zinc Casting) Antenna /
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
(vii) Middle Antenna of
cover any
(viii) GSM technology
Antenna / (ix) Omitted
Antenna of (x) Main Lens
any (xi) Camera
technology Lens
(ix) Side Key (xii) Omitted
(x) Main Lens (xiii) Omitted
(xi) Camera (xiv) Omitted
Lens (xv) Omitted
(xii) Screw (xvi) Omitted
(xiii) (xvii) Omitted
Microphone (xviii) Omitted
Rubber Case (xix) Omitted
(xiv) Sensor (xx) Omitted
Rubber Case / (xxi) Omitted
Sealing (xxii) Omitted
Gasket (xxiii) Omitted
including (xxiv) Mylar
sealing for LCD FPC
gaskets / (xxv) Omitted
cases from (xxvi) Film-
Rubbers like Front Flash
SBR, EPDM, (xxvii)
CR, CS, Omitted
Silicone and (xxviii)
all other Omitted
individual (xxix)
rubbers or Microphone
combination / and Receiver
combination of (xxx) Omitted
rubbers (xxxi) USB
(xv) PU case / Cable
Sealing
Gasket –
Other articles
of
Polyurethane
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
foam like
sealing
gaskets / case
(xvi) Sealing
Gaskets /
Cases from
PE, PP, EPS,
PC and all
other
individual
polymers or
combination /
combination of
polymers
(xvii) SIM
socket / Other
Mechanical
items (Metal)
(xviii) SIM
Socket / Other
Mechanical
items (Plastic)
(xix) Back
Cover
(xx)
Conductive
Cloth
(xxi) Heat
Dissipation
Sticker Battery
Cover
(xxii) Sticker-
Battery Slot
(xxiii)
Protective
Film for main
Lens
(xxiv) Mylar for
LCD FPC
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
(xxv) LCD
Conductive
Foam
(xxvi) Film-
Front Flash
(xxvii) LCD
Foam
(xxviii) BT
Foam
(xxix)
Microphone
and Receiver
(xxx) Key Pad
(xxxi) USB
Cable
7 Any 7A. Any Omitted Nil 57/2017- 02nd Notifica BCD

Chapter Chapter Customs Feb tion No. Exemption
Inputs or raw , 2021 03/202 removed &
material [other dated the 1 – BCD
than Printed 30th Custom @10% will
Circuit Board June s dated be
Assembly 2017 1st leviable.
(PCBA) Februar
(falling under y 2021
tariff item 8504
90 90) and
Moulded
Plastics
(falling
undertariff
items 3926 90
99 or 8504 90
90)] for use in
the
manufacture
of charger or
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
adapter of
cellular mobile
phones
8 3926 90 7B. 3926 90 Omitted 10% 57/2017- 02nd Notifica BCD

99, 99, 8504 90 90 Customs Feb tion No. exemption
8504 90 Moulded , 2021 03/202 removed &
90 Plastics of dated the 1 – taxable
charger or 30th Custom @15%
adapter of June s dated rate.
cellular mobile 2017 1st
phones Februar
y 2021
9 Any 7C. Any Omitted Nil 57/2017- 02nd Notifica BCD
Chapter Chapter Customs Feb tion No. exemption
Inputs or parts , 2021 03/202 removed &
for use in the dated the 1 – taxable at
manufacture 30th Custom applicable
of following June s dated rate.
parts of 2017 1st
charger or Februar
adapter of y 2021
cellular mobile
phones,
namely:-
(i) Printed
Circuit Board
Assembly
(PCBA)
(falling under
tariff item 8504
90 90)
(ii) Moulded
Plastics
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
(falling under
tariff items
3926 90 99 or
8504 90 90
10 Any 7D. Any Omitted Nil 57/2017- 02nd Notifica BCD

Chapter Chapter Customs Feb tion No. exemption
Inputs or raw , 2021 03/202 removed &
material other dated the 1 – taxable at
than: - 30th Custom applicable
(i) Lithium ion June s dated rate.
cell (falling 2017 1st
under tariff Februar
item 8507 60 y 2021
00); and
(ii) Printed
Circuit Board
Assembly
(PCBA)
(falling under
tariff item 8507
90 90),
for use in
manufacture
of Battery pack
of Cellular
mobile
phones.
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
11 Any 7E. Any Omitted Nil 57/2017- 01st Notifica BCD
Chapter Chapter Customs Apr tion No. exemption
Inputs, parts or , 2021 03/202 removed &
sub-parts for dated the 1 – taxable at
use in the 30th Custom applicable
manufacturing June s dated rate.
of Printed 2017 1st
Circuit Board Februar
Assembly y 2021
(PCBA)
(falling under
tariff item 8507
90 90) of
following
goods,
namely: -
(i) Battery
pack of cellular
mobile
phones;
(ii) Power
Bank of lithium
ion.
12 Any 8. Inputs or 8. Inputs or Nil 2.50% 57/2017- 01st Notifica BCD
Chapter raw material raw material Customs Apr tion No. exemption
for use in for use in , 2021 03/202 removed &
manufacture manufacture dated the 1 – taxable @
of following of following 30th Custom 2.5% for
goods namely goods June s dated all the
:- namely :- 2017 1st items of
(i) Other (i) Other Februar this entry
machines machines y 2021 except for
capable of capable of the
connecting to connecting to ommitted
an automatic an automatic entries
data data which will
processing processing be taxable
machine or to machine or to at
a network a network
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
(8443 32 90) (8443 32 90) applicable
(ii) Ink (ii) Ink BCD rate.
cartridges, cartridges,
with print head with print
assembly head
(8443 99 51) assembly
(iii) Ink (8443 99 51)
cartridges, (iii) Ink
without print cartridges,
head without print
assembly head
(8443 99 52) assembly
(iv) Ink spray (8443 99 52)
nozzle (8443 (iv) Ink spray
99 53) nozzle (8443
(v) Base 99 53)
stations (8517 (v) Omitted
61 00) (vi) Omitted
(vi) All goods (vii) Omitted
falling under
tariff item 8517
62 90
(vii) All goods
falling under
tariff item 8517
69 90
13 3920 99 All goods other Omitted 10% 57/2017- 02nd Notifica BCD
99 than the Customs Feb tion No. exemption
following parts , 2021 03/202 removed &
or subparts or dated the 1 – taxable at
accessories of 30th Custom applicable
cellular mobile June s dated rate.
phones, 2017 1st
namely:- Februar
(i) Battery y 2021
cover
(ii) Front cover
(iii) Front cover
(with Zinc
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
Casting)
(iv) Middle
cover
(v) Back Cover
(vi) Main Lens
(vii) Camera
Lens
14 8504 40 All goods other All goods 10% 10% 57/2017- 02nd Notifica Change in
than charger other than the Customs Feb tion No. descriptio
or adapter of following , 2021 03/202 n Solar
cellular mobile goods, dated the 1 – Inverters
phones namely:- 30th Custom added &
(a) charger or June s dated taxable at
power 2017 1st 10%.
adapter; Februar
(b) solar y 2021
inverter ”;
15 8504 90 13A. 10% 57/2017- 02nd Notifica BCD
90 All goods Customs Feb tion No. @10%
other than the , 2021 03/202 applicable
following dated the 1 – on added
goods, 30th Custom entries.
namely: - June s dated
(a) Printed 2017 1st
Circuit Board Februar
Assembly of y 2021
charger
or power
adapter;
(b) Moulded
Plastic of
charger or
power
adapter
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
16 8504 90 16. All goods Omitted 10% 57/2017- 02nd Notifica BCD
90 other than Customs Feb tion No. exemption
Lithium-ion , 2021 03/202 removed &
battery of dated the 1 – taxable at
cellular mobile 30th Custom applicable
phones June s dated rate.
2017 1st
Februar
y 2021
17 8507 60 17. Lithium-ion Omitted 15% 57/2017- 02nd Notifica BCD
00 battery of Customs Feb tion No. exemption
cellular mobile , 2021 03/202 removed &
phones dated the 1 – taxable at
30th Custom applicable
June s dated rate.
2017 1st
Februar
y 2021
18 8507 60 17A. Lithium Omitted 5% 57/2017- 02nd Notifica BCD
00 ion cell for use Customs Feb tion No. exemption
in the , 2021 03/202 removed &
manufacture dated the 1 – taxable at
of battery pack 30th Custom applicable
of cellular June s dated rate.
mobile phone. 2017 1st
Februar
y 2021
19 8507 60 Lithium ion cell Omitted 5% 57/2017- 02nd Notifica BCD
00 for use in the Customs Feb tion No. exemption
manufacture , 2021 03/202 removed &
of power bank dated the 1 – taxable at
of Lithium ion.- 30th Custom applicable
17B 5% June s dated rate.
2017 1st
Februar
y 2021
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
20 8517 62 20. All goods 20. All goods 10% 10% 57/2017- 02nd Notifica No
90 or other than the other than the Customs Feb tion No. Change
8517 69 following following , 2021 03/202 only entry
90 goods, goods, dated the 1 – (h)
namely: - namely: - 30th Custom bifurgated
(a) Wrist (a) Wrist June s dated to (h) & (i).
wearable wearable 2017 1st
devices devices Februar
(commonly (commonly y 2021
known as known as
smart smart
watches); watches);
(b) Optical (b) Optical
transport transport
equipment; equipment;
(c) (c)
Combination Combination
of one or more of one or
of Packet more of
Optical Packet
Transport Optical
Product or Transport
Switch (POTP Product or
or POTS); Switch
(d) Optical (POTP or
Transport POTS);
Network (d) Optical
(OTN) Transport
products; Network
(e) IP Radios; (OTN)
(f) Soft products;
switches and (e) IP Radios;
Voice over (f) Soft
Internet switches and
Protocol Voice over
(VoIP) Internet
equipment, Protocol
namely, VoIP (VoIP)
phones, media equipment,
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
gateways, namely, VoIP
gateway phones,
controllers and media
session border gateways,
controllers; gateway
(g) Carrier controllers
Ethernet and session
Switch, Packet border
Transport controllers;
Node (PTN) (g) Carrier
products, Ethernet
Multiprotocol Switch,
Label Packet
Switching Transport
Transport Node (PTN)
Profile (MPLS- products,
TP) products; Multiprotocol
(h) Multiple Label
Input/Multiple Switching
Output Transport
(MIMO) and Profile
Long Term (MPLS-TP)
Evolution products;
(LTE) (h) Multiple
products Input/Multipl
e Output
(MIMO)
products;
(i) Long
Term
Evolution
(LTE)
products.
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
21 8517 70 22. Printed 22. Printed 10% 10% 57/2017- 02nd Notifica No
10 Circuit Board Circuit Board Customs Feb tion No. Change
Assembly Assembly , 2021 03/202 only entry
(PCBA) of (PCBA) of dated the 1 – (h)
following following 30th Custom bifurgated
goods, goods, June s dated to (h) & (i).
namely: - namely: - 2017 1st
(a) Base (a) Base Februar
station; station; y 2021
(b) Optical (b) Optical
transport transport
equipment; equipment;
(c) (c)
Combination Combination
of one or more of one or
of Packet more of
Optical Packet
Transport Optical
Product or Transport
Switch (POTP Product or
or POTS); Switch
(d) Optical (POTP or
Transport POTS);
Network (d) Optical
(OTN) Transport
products; Network
(e) IP Radios; (OTN)
(f) Soft products;
switches and (e) IP Radios;
Voice over (f) Soft
Internet switches and
Protocol Voice over
(VoIP) Internet
equipment, Protocol
namely, VoIP (VoIP)
phones, media equipment,
gateways, namely, VoIP
gateway phones,
controllers and media
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
session border gateways,
controllers; gateway
(g) Carrier controllers
Ethernet and session
Switch, Packet border
Transport controllers;
Node (g) Carrier
(PTN) Ethernet
products, Switch,
Multiprotocol Packet
Label Transport
SwitchingTran Node
sport Profile (PTN)
(MPLS-TP) products,
products; Multiprotocol
(h) Multiple Label
Input/Multiple SwitchingTra
Output nsport Profile
(MIMO) and (MPLS-TP)
Long products;
Term (h) Multiple
Evolution Input/Multipl
(LTE) e Output
products (MIMO)
products;
(i) Long
Term
Evolution
(LTE)
products.
22 39, 74, Former, Omiited Nil Ministry 02nd Notifica BCD
85 bases, of Feb tion No. exemption
bobbins, Finance 2021 04/202 removed &
brackets; CP (Departm 1- taxable at
wires; P.B.T.; ent of Custom applicable
Phenol resin Revenue s dated rate.
moulding ) No. 01st
powder;Lamin 25/99- Feb
ation/ El silicon Customs 2021
Existing
New
Description Existi
/ Existing Rate
g Existing e Date
Provision
HSN
steel strips , dated
used in the 28th
manufacture February
of , 1999
Transformers
INCOME TAX ACT
Amendm Amendment in
Sec ent existing
Provision Existing provision Bizsol Remarks
No Effective provision / new
from provision
2(11) 01-04- Definition of block of assets means a block of assets‖ Goodwill has been
2021 Block of asset group of assets falling means a group of excluded from
within a class of assets assets falling definition of block of
comprising— within a class of asset for
assets depreciation
(a) tangible assets, being comprising— purpose.
buildings, machinery,
plant or furniture; (a) tangible
assets, being
(b) intangible assets, buildings,
being know-how, machinery, plant
patents, copyrights, or furniture;
trade-marks, licences,
franchises (b) intangible
assets, being
or any other business or know-how,
commercial rights of patents,
similar nature, copyrights, trade-
in respect of which the marks, licences,
same percentage of franchises
depreciation is or any other
prescribed business or
commercial rights
of similar nature,
not being
goodwill of a
business or
profession in
respect of which
the same
percentage of
depreciation is
prescribed
2(14)( c) 01-04- Capital Asset Newly inserted any unit linked Capital Assets now
2021 insurance policy include ULIP which
Amendm Amendment in
Sec ent existing
from provision
to which is taxable where

exemption under deduction is not
clause (10D) of claimed when it is
section 10 does more than Rs.
not apply on 2,50,000/-
account of the
applicability of the
fourth and fifth
proviso thereof
2(19AA)- 01-04- Demerger Newly inserted For the purposes New explanation has
Explanat 2021 of this clause, been inserted - so
ion 6 as to enable Govt for
the reconstruction demerger of PSU’s
or splitting up of a and will be eligible
public sector for Capital Gain
company into exemption.
separate
companies shall
be deemed to be
a demerger, if
such
reconstruction or
splitting up has
been made to
transfer any asset
of the demerged
company to the
resulting
company and the
resulting
company––
(i) is a public
sector company
on the appointed
day indicated in
Amendm Amendment in
Sec ent existing
from provision
such scheme, as
may be approved
by
the Central
Government or
any other body
authorized under
the provisions of
the Companies
Act, 2013 or any
other law for the
time being in
force governing
such public sector
companies in this
behalf; and
(ii) fulfils such

other conditions
as may be
notified by the
Central
Government in
the Official
Gazette in this
behalf;”;
2(29A) 01-04- Liable to Tax Newly inserted. liable to tax”, in Liable to tax has
2021 relation to a been defined for the
person, means 1st time in Income
that there is a Tax act. Clarificatory
liability of tax on provision inserted
such person
under any law for
the time being in
force in any
Amendm Amendment in
Sec ent existing
from provision
country, and shall

include a case
where
subsequent to
imposition of tax
liability, an
exemption has
been provided
2(42C) 01-04- Slump Sale slump sale means the transfer of one or Clarificatory
2021 transfer of one or more more provision inserted
undertakings as a result undertaking, by where in all types of
of the sale for a lump any means for a transfer are included
sum consideration lump sum in slump sale so as
without values being consideration to include
assigned to the individual without values exchanges and
assets and liabilities in being assigned to barter.
such the individual
assets and
sales. liabilities in such
sales.
2(42C)- 01-04- Slump Sale Newly inserted For the purposes Clarificatory
Explanat 2021 of this clause, provision inserted
ion 3 where in all types of
“transfer” shall transfer are included
have the meaning in slump sale so as
assigned to it in to include
clause (47) exchanges and
barter.
2(48) 01-04- Zero Coupon zero coupon bond zero coupon bond Zero coupon bond
2022 Bond means a bond— means a bond— includes or
infrastructure debt
(a) issued by any (a) issued by any fund by
infrastructure capital infrastructure infrastructure capital
company or capital company
Amendm Amendment in
Sec ent existing
from provision
infrastructure capital fund or infrastructure company or public

or public sector capital fund or co
infrastructure
company 9 [or scheduled debt fund or
bank] on or after the 1st public sector
day of June, 2005;
company 9 [or
(b) in respect of which no scheduled bank]
payment and benefit is on or after the 1st
received or receivable day of June,
before maturity or 2005;
redemption from (b) in respect of
infrastructure capital which no
company or payment and
infrastructure capital fund benefit is
or public sector received or
company 9 [or scheduled receivable before
bank]; maturity or
redemption from
infrastructure
capital company
or infrastructure
capital fund or
infrastructure
debt fund or
public sector
company 9 [or
scheduled bank];
2(48)- 01-04- Zero Coupon N.A For the purposes Clarification has
Explanat 2022 Bond of this clause, been provided on
ion 2 infrastructure debt
the expression fund.
“infrastructure
debt fund” shall
Amendm Amendment in
Sec ent existing
from provision
mean the
infrastructure
debt fund notified
by the Central
Government in
the Official
Gazette under
clause (47 of
section 10.’.
9A(8A) 01-04- Certain Newly inserted The Central New sub section has
2022 activities do Government may, been inserted to
not constitute by notification in attract investment in
business IFSC by relaxing
connections the Official some conditions
in India Gazette, specify specified
that any one or
more of the
conditions
specified in
clauses (a) to (m)
of sub-section (3)
or clauses (a) to
(d) of sub-section
(4) shall not apply
or shall
apply with such

modifications, as
may be specified
in such
notification, in
case of an eligible
Amendm Amendment in
Sec ent existing
from provision
investment fund
and its
eligible fund
manager, if such
fund manager is
located in an
International
Financial
Services Centre,
as defined in
clause
(a) of the
Explanation to
section 80LA, and
has commenced
its operations on
or before the 31st
day of March,
2024.
10(claus 01-04- Tax attributable to units held “or is attributable Exemption provided
e 4D) 2022 incentives for by non-resident (not to the investment to income of
units located being the permanent division of investment division
in establishment offshore of Offshore unit
International calculated in
Financial of a non-resident in banking unit, as prescribed manner
Services India) the case may be
Centre (IFSC)
10(claus 01-04- Tax Newly inserted “investment Investment division

e 4D)- 2022 incentives for division of has been clarified
Explanat units located offshore
ion aa in
International
Amendm Amendment in
Sec ent existing
from provision
Financial banking unit”

Services means an
Centre (IFSC) investment
division of a
banking unit of a
non-resident
located in an
International
Financial
Services Centre,
as referred to in
sub-section (1A)
of section 80LA
and which has

commenced its
operations on or
before the 31st
day of March,
2024
10(claus “specified fund” means a “specified fund” Specified fund has

e 4D)- fund established or means,–– been clarified
Explanat incorporated in India in
ion c the form of a trust or a (i) a fund
company or a limited established or
liability partnership or a incorporated in
body India in the form
of a trust or a
corporate,–– company or a
limited liability
(I) which has been partnership or a
granted a body
certificate of registration corporate,––
as a Category III
Alternative Investment
Amendm Amendment in
Sec ent existing
from provision
Fund and is regulated (I) which has

under the Securities and been granted a
Exchange Board of India
(Alternative Investment certificate of
Fund) Regulations, 2012, registration as a
made under the Category III
Securities and Exchange Alternative
Investment Fund
Board of India Act, 1992. and is regulated
under the
(II) which is located in Securities and
any Exchange Board
International Financial of India
Services Centre; and (Alternative
Investment Fund)
(III) of which all the units Regulations,
other than 2012, made
under the
unit held by a sponsor or
Securities and
manager Exchange
Board of India
Act, 1992;
(II) which is
located in any
International
Financial
Services Centre;
and
(III) of which all

the units other
than
unit held by a
sponsor or
Amendm Amendment in
Sec ent existing
from provision
manager are
held by non-
residents; or
(ii) investment
division of an
offshore
banking unit,
which has been–
–
(I) granted a
certificate of
registration as a
Category III
Alternative
Investment Fund
and is
regulated under
the Securities
and
Exchange Board
of India
(Alternative
Investment
Fund)
Regulations,
2012, made
under the
Securities and
Exchange Board
of India Act,
1992 or which
Amendm Amendment in
Sec ent existing
from provision
has commenced
its operations
on or before the
31st day of
March,
2024; and
(II) fulfils such

conditions
including
maintenance of
separate
accounts for its

investment
division, as may
be prescribed
10 01-04- Tax Newly inserted any income Proposed to exempt

(clause 2022 incentives for accrued or arisen income to a non-
4E) units located to, or received by resident as a result
in a non-resident as of transfer of non-
International a result of deliverable forward
Financial transfer of non- contracts.
Services deliverable
Centre (IFSC)
forward contracts
entered into with
an offshore
banking unit of an
International
Financial
Services Centre
as referred to in
sub-section (1A)
of section 80LA,
Amendm Amendment in
Sec ent existing
from provision
which fulfils such

conditions as may
be
prescribed;
10 01-04- Tax Newly inserted any income of a Proposed to exempt

(clause 2022 (AY incentives for non-resident by royalty income to a
4F) 2022-23) units located way of royalty, on non-resident as a
in account of lease result of lease of air
International of an aircraft in a craft paid by IFSC.
Financial previous year,
Services paid by a unit of
Centre (IFSC) an International
Financial
Services Centre
as referred to in
sub-section (1A)
of
section 80LA, if
the unit––
(i) is eligible for

deduction under
the said section
for that previous
year; and
(ii) has
commenced its
operations on or
before the 31st
day of March,
2024.”;
Amendm Amendment in
Sec ent existing
from provision
Proviso 01-04- Leave Travel Provided further In view of Covid

to 10(5) 2021 Concession that for the pandemic, cash
to employees assessment year allowance in lieu of
(AY 2021- beginning on the LTC has been
22) 1st day of April, proposed subject to
2021, the value in fulfilment of
conditions and
lieu of any travel expenditure
concession or
assistance
received by, or
due to, such
individual shall
also be exempt
under this clause
subject to the
fulfillment of such
conditions
(including the
condition of
incurring such
amount of such
expenditure
within such
period), as may
be prescribed
Explanat 01-04- Leave Travel For the removal

ion II sec 2021 Concession of doubts, it is
10(5) to employees
hereby clarified
that where an
individual claims
exemption and
the exemption is
allowed under the
Amendm Amendment in
Sec ent existing
from provision
second proviso in
connection with
the prescribed
expenditure, no
exemption shall
be allowed under
this clause in
respect of such
prescribed
expenditure to
any other
individual.”;
proviso 01-04- Taxation of Newly inserted Provided also that Sec 10(10D)
to 2021 proceeds of nothing contained provided exemption
10(10D) high premium in this clause for sum received
unit linked shall apply with under Life insurance
insurance respect to any policies where the
policy (ULIP) unit linked premium did not
exceed 10% of the
insurance policy, actual sum assured.
issued on or after However there was
the 1st day of no limit on the
February, 2021, if annual premium
the amount of payment, hence
premium payable exemption under sec
for any of the 10(10D) will be
previous year eligible if the
during the term of premium for
such policy previous year limits
exceeds two lakh to Rs. 2.5 Lakhs
and fifty thousand
rupees
Amendm Amendment in
Sec ent existing
from provision
proviso 01-04- Taxation of Newly inserted Provided also that The above Rs. 2.5L
to 2021 proceeds of if the premium is limit will be
10(10D) high premium payable, by a applicable for the
unit linked person, for more premium payable on
insurance than one unit all life insurance
policy (ULIP) linked insurance policies.
23 policies,
issued on or after
the 1st day of
February, 2021,
the provisions of
this clause shall
apply only with
respect to those
unit linked
insurance
policies, where
the aggregate
amount of
premium does not
exceed the
amount referred
to in fourth
proviso in any
of the previous
year during the
term of any of
those
policies:
proviso 01-04- Taxation of Newly inserted Provided also that The limit of Rs. 2.5L
to 2021 proceeds of the provisions of for the premium
10(10D) high premium the fourth and shall not be
Amendm Amendment in
Sec ent existing
from provision
unit linked fifth provisos shall applicable in case of

insurance not apply to any death of person
policy (ULIP) sum received on
the death of a
person
proviso 01-04- Taxation of Newly inserted Provided also that Guidelines may be
to 2021 proceeds of if any difficulty issued by CBDT to
10(10D) high premium arises in giving remove any further
unit linked effect to the difficulties.
insurance provisions of this
policy (ULIP) clause, the Board
may, with the
previous approval
of the Central
Government,
issue guidelines
for the purpose of
removing the
difficulty and
every guideline
issued by the
Board under this
proviso shall be
laid before each
House of
Parliament, and
shall be binding
on the income-tax
authorities and
the assesse
Explanat Newly inserted For the purposes ULIP has been

ion III to of this clause, clarified.
Amendm Amendment in
Sec ent existing
from provision
sec “unit linked

10(10D) insurance policy”
means a life
insurance policy
which has
components of
both investment
and insurance
and is linked to a
unit as defined in
clause
(ee) of regulation
3 of the Insurance
Regulatory and
Development
Authority of India
(Unit Linked
Insurance
Products)
Regulations,
2019 issued by
the
Insurance
Regulatory and
Development
Authority under
the Insurance
Act, 1938 and the
Insurance
Regulatory and
Development
Authority Act,
1999.’
Amendm Amendment in
Sec ent existing
from provision
Proviso 01-04- Taxability of Newly Inserted Provided that the Prior to this
to 10(11) 2022 Interest on provisions of this amendment, entire
various funds clause shall not interest on provident
where income apply to the fund was exempted.
is exempt income by way of Now the exemption
interest accrued will be applicable
during the where the Interest to
previous year in Provident Fund does
the account of a not exceed Rs. 2.5L
person to the in any PY on or after
extent it relates to FY 2021-22.
the amount or the
aggregate of
amounts of
contribution made
by that person
exceeding two
lakh and fifty
thousand rupees
in any previous
year in that fund,
on or after the 1st
day of April, 2021
and computed in
such manner as
may be
prescribed
Proviso 01-04- Newly Inserted Provided that the Prior to this

to 10(12) 2022 provisions of this amendment, entire
clause shall not interest on provident
apply to the fund was exempted.
income by way of Now the exemption
interest accrued will be applicable
during the where the
previous year in contribution to
Amendm Amendment in
Sec ent existing
from provision
the account of a Provident Fund does

person to the not exceed Rs. 2.5L
extent it relates to in any PY on or after
the amount or the FY 2021-22.
aggregate of
amounts of
contribution made
by that person
exceeding two
lakh and
fifty thousand
rupees in any
previous year in
that fund, on or
after the 1st day
of April, 2021 and
computed in such
manner as may
be prescribed
10(23C) 01-04- Exemption to (iiiad) any university or (iiiad) any Earlier exemption
(iiiad) 2021 Universities other educational university or other limit of Rs. 1 crore
or institution existing solely educational under rule 2BC is
educational for educational purposes institution existing proposed to
institutions and not for purposes of solely for increase to Rs.
profit if the aggregate educational 5crore
annual receipts of such purposes and not
university or for purposes of
educational institution profit if the
do not exceed the aggregate annual
amount of annual receipts
receipts as may be
prescribed; or of the person
from such
university or
universities or
Amendm Amendment in
Sec ent existing
from provision
educational
institution or
educational
institutions do
not exceed five
crore rupees
10(23C) 01-04- Exemption to (iiiae) any hospital or (iiiae) any Earlier exemption
(iiiae) 2021 hospitals other institution for the hospital or other limit of Rs. 1crore
reception and treatment institution for the under rule 2BC is
of persons suffering from reception and proposed to
illness or mental treatment of increase to Rs.
defectiveness or for the persons suffering 5crore
reception and treatment from illness or
of persons during mental
convalescence or of defectiveness or
persons requiring for the reception
medical attention or and treatment of
rehabilitation, existing persons during
solely for philanthropic convalescence or
purposes and not for of persons
purposes of profit, if the requiring medical
aggregate annual attention or
receipts of such rehabilitation,
existing solely for
hospital or institution philanthropic
do not exceed the purposes and not
amount of annual for purposes of
receipts as may be profit, if the
prescribed; or] aggregate annual
receipts of the
person
from such
hospital or
hospitals or
institution or
Amendm Amendment in
Sec ent existing
from provision
institutions do
not exceed five
crore rupees
10(23C) 01-04- Newly inserted For the purposes Explanation inserted

2021 of sub-clauses
(iiiad) and (iiiae),

it is hereby
clarified that if the
person has
receipts from
university or
universities or
educational
institution or
institutions as
referred to in sub-
clause (iiiad), as
well as from
hospital or
hospitals or
institution or
institutions as
referred to in sub-
clause (iiiae), the
exemptions under
these clauses
shall not apply, if
the aggregate of
annual receipts of
the person from
such university or
universities or
Amendm Amendment in
Sec ent existing
from provision
educational
institution or
institutions or
hospital or
hospitals or
institution or
institutions,
exceed five crore
rupees; or
10(23C)- 01-04- Newly inserted For the purposes Explanation inserted

Explanat 2022 of determining the to avoid double
ion 2 to amount of application of funds.
3rd application under
Proviso this proviso,-
(i) application for

charitable or
religious
purposes from
the corpus as
referred to in
Explanation 1,
shall not be
treated as
application of
income for
charitable or
religious
purposes:
Provided that the

amount not so
treated as
application or part
thereof, shall be
Amendm Amendment in
Sec ent existing
from provision
treated as
application for
charitable or
religious
purposes in the
previous year in
which the
amount, or part
thereof, is
invested or
deposited
back, into one or

more of the forms
or modes
specified in sub-
section (5) of
section 11
maintained
specifically for
such corpus, from
the income of that
year and to the
extent of such
investment or
deposit; and
(ii) application for

charitable or
religious
purposes, from
any loan or
borrowing, shall
not be treated as
application of
income for
charitable or
Amendm Amendment in
Sec ent existing
from provision
religious
purposes:
Provided that the

amount not so
treated as
application or part
thereof, shall be
treated as
application for
charitable or
religious
purposes in the
previous year in
which the loan or
borrowing, or part
thereof, is repaid
from the income
of that year and
to the extent of
such
repayment
10(23C)- 01-04- Newly inserted For the purposes No amendment to

Explanat 2022 of this clause, it is previous year will be
ion 2 to clarified that the applicable.
20th calculation of
Proviso income required
to be applied or
accumulated
during the
previous year
shall be made
without any set
off or deduction
or allowance of
Amendm Amendment in
Sec ent existing
from provision
any excess
application of any
of the year
preceding to the
previous year
10(23FE) Sovereign a) category I or category a) category I or Relaxation proposed

(c) Wealth Fund II – alternative category II – for condition of
investment fund alternative 100% investment in
regulated under investment fund eligible infrastructure
SEBI(alternative regulated under co to upto 50%. It
investment fund SEBI(alternative will attract foreign
regulation), 2012 made investment fund investment
under SEBI act 1992 regulation), 2012
having 100% made under SEBI
investment in one or act 1992 having
more cos or enterprise not less than
referred to in item b fifty per cent
investment in one
or more cos or
enterprise
referred to in item
b or in an
Infrastructure
Investment Trust
referred to in
subclause
(i) of clause (13A)

of section 2; or
10(23FE) Sovereign Newly inserted “(d) a domestic Presently SWF/PF

(d) & ( e) Wealth company, set up are not allowed to
Fund(SWF) and registered on invest through
or holding co and now
it is proposed to
Amendm Amendment in
Sec ent existing
from provision
after the 1st day allow the same with

of April, 2021, certain conditions
having minimum
75%
. investments in
one or more of
the
companies or
enterprises or
entities referred
to in item (b);
or
(e) a non-banking
financial company
registered as an
Infrastructure
Finance
Company as
referred to in
notification
number
RBI/2009-10/316
issued by the
Reserve Bank of
India or in an
Infrastructure
Debt Fund, a
non-banking
finance company,
as referred to in
the Infrastructure
Amendm Amendment in
Sec ent existing
from provision
Debt Fund-Non-
Banking Financial
Companies
(Reserve Bank)
Directions, 2011,
issued by the
Reserve Bank of
India, having
minimum ninety
per cent. lending
to one or more of
the companies or
enterprises or
entities referred
to in item (b)
Proviso Sovereign Newly inserted Provided also that Presently SWF/PF

to Wealth in case a are not allowed to
10(23FE) Fund(SWF) Category-I or invest in NBFC and
Category- now proposed to
allow the same with
II Alternative certain conditions
Investment Fund
referred to in item
(c) of sub-clause
(iii) has
investment of less
than one hundred
per cent. in one
or more of the
companies or
enterprises
or entities
referred to in item
(b) of the said
Amendm Amendment in
Sec ent existing
from provision
sub-clause or in
an Infrastructure
Investment Trust
referred to in item
(c) of the said
sub-clause,
income accrued
or arisen or
received or
attributable to
such investment,
directly or
indirectly, which
is exempt under
this clause shall
be calculated
proportionately to
that investment
made in one or
more of the
companies or
enterprises or
entities referred
to in item (b) of
the said sub-
clause or in the
Infrastructure
Investment Trust
referred to in item
(c) of the said
sub-clause, in
such manner as
may be
prescribed:
Amendm Amendment in
Sec ent existing
from provision
Provided also that

in case a
domestic
company referred
to in item (d) of
sub-clause (iii)
has investment of
less than one
hundred per cent.
in one or more of
the companies or
enterprises or
entities referred
to in item (b)
of the said sub-

clause, income
accrued or arisen
or received or
attributable to
such investments,
directly or
indirectly, which
is exempt under
this clause shall
be
calculated
proportionately to
the investment
made in one or
more of the
companies or
enterprises or
entities referred
to in item (b) of
Amendm Amendment in
Sec ent existing
from provision
the said sub-

clause, in such
manner as may
be prescribed:
Provided also that

in case a non-
banking finance
company
registered as an
Infrastructure
Finance
Company or
Infrastructure
Debt Fund,
referred to in item
(e) of sub-clause
(iii), has lending
of less than one
hundred per cent.
in one or more of
the companies or
enterprises or
entities referred
to in item (b) of
the said sub-
clause, income
accrued or arisen
or received or
attributable to
such lending,
directly or
indirectly, which
Amendm Amendment in
Sec ent existing
from provision
is exempt under
this clause shall
be calculated
proportionately to
the lending made
in one or more of
the
companies or
enterprises or
entities referred
to in item (b)
of the said sub-

clause, in such
manner as may
be prescribed:
Provided also that

in case a
sovereign wealth
fund or pension
fund has loans or
borrowings,
directly or
indirectly, for the
purposes of
making
investment in
India, such fund

shall be deemed
to be not eligible
for exemption
under this clause.
Amendm Amendment in
Sec ent existing
from provision
10(23FE) Sovereign Newly inserted Provided that the

- Wealth provisions of sub-
explanat Fund(SWF) clause (iii) and
ion 1 (iv) shall not
clause b apply to any
payment made to
creditors or
depositors for
loan taken or
borrowing for the
purposes other
than for making
investment in
India
10(23FE) Newly inserted participate in the

- day to day
explanat
ion 1 operations of
clause b investee but the
monitoring
mechanism to
protect the
investment with
the investee
including the right
to appoint
directors or
executive director
shall not be
considered as
participation in
the day to day
operations of the
investee
Amendm Amendment in
Sec ent existing
from provision
10(23FE) Newly inserted For the purposes

- of this clause,––
explanat
ion 2 (i) “investee”
and 3 means a
business trust, or
a company, or an
enterprise, or an
entity, or a
Category I or
Category II
Alternative
Investment Fund,
or an
Infrastructure
Investment Trust
or a domestic
company, or an
Infrastructure
Finance
Company or an
Infrastructure
Debt Fund
referred to in item
(e) of sub-clause
(iii), in which the
sovereign wealth
fund or the
pension fund, as
the case may be,
has made the
investment,
directly or
indirectly,
Amendm Amendment in
Sec ent existing
from provision
under the
provisions of this
clause;
(ii) “loan and

borrowing”
means—
(a) any loan taken

or borrowing by a
sovereign wealth
fund from, or any
deposit or
investment made
in a sovereign
wealth fund by,
any person other
than the
Government of
the country in
which the
sovereign wealth
fund is set up;
(b) any loan taken

or borrowing by a
pension fund from
or any deposit or
investment made
in a pension fund
by, any person
but shall not
include the
deposit or
investment which
represents
statutory
Amendm Amendment in
Sec ent existing
from provision
obligations and
defined
contributions of
one or more
funds or plans
established for
providing
retirement, social
security,
employment,
disability, death
benefits or any
similar
compensation to
the participants or
beneficiaries of
such funds or
plans, as the
case may be.
Explanation 3.––
For the purposes
of this clause, the
Central
Government may
prescribe that the
method of
calculation of “fifty
per cent.” referred
to in item (c) or
“seventy-five per
cent.” referred to
in item (d) or
“ninety per cent.”
referred to in item
Amendm Amendment in
Sec ent existing
from provision
(e), of sub-clause
(iii) shall be such
as may be
prescribed
10(23FF) 01-04- Newly inserted ‘(23FF) any New clause

2022 income of the 10(23FF) has been
nature of capital inserted to exempt
gains, arising capital gain income
to a non-resident on
or received by a account of transfer
non-resident, of share of a
which is on company resident in
account of India by resultant
transfer of share fund and shares are
of a company transferred from
resident in India, original fund to
by the resultant fund in
relocation.
resultant fund and
such shares were
transferred from
the
original fund to
the resultant fund
in relocation, and
where
capital gains on
such shares were
not chargeable to
tax if
Amendm Amendment in
Sec ent existing
from provision
that relocation
had not taken
place.
Explanation.––
For the purposes
of this clause, the
expressions
“original fund”,
“relocation” and
“resultant
fund” shall have

the meanings
respectively
assigned to
them in the
Explanation to
clause (viiac) and
clause (viiad)
of section 47
10(50) 01-04- any income arising from any income Section applicable
2021 any specified service arising from any for E-commerce
provided on or after the specified service supply on or after 1-
date on which the provided on or 04-2020 and
provisions of Chapter VIII after the date on exemption will not
of the Finance Act, 2016 which the apply for royalties
comes into force or provisions of and fees notified by
arising from any e- Chapter VIII of Govt u/s 90 and 90A
commerce supply or the Finance Act,
services made or 2016 comes into
provided or facilitated on force or arising
or after 01-04-2021 and from any e-
chargeable to commerce supply
Amendm Amendment in
Sec ent existing
from provision
equalization levy under or services made

that Chapter. or provided or
facilitated on or
after 01-04-2020
and chargeable to
equalization levy
under that
Chapter
10(50) – Newly inserted Explanation 1.–– Royalty or fees for

Explanat For the removal technical services
ion 1 of doubts it is will not be included
and 2 hereby clarified for this purpose.
that the income
referred to in this
clause shall not
include and shall
be deemed never
to have been
included any
income which is
chargeable to tax
as royalty or fees
for technical
services in India
under this Act
read with the
agreement
notified by the
Central
Government
under section 90
or section 90A.
Amendm Amendment in
Sec ent existing
from provision
Explanation 2.—
For the purposes
of this clause,––
(i) “e-commerce
supply or
services” shall
have the meaning
assigned to it in
clause (cb) of
section 164 of the
Finance Act,
2016;
(ii) "specified
service" shall
have the meaning
assigned to it in
clause (i) of
section 164 of the
Finance Act,
2016
11 01-04- Income from [(d) income in the form of [(d) income in the Exemption to
2022 property held voluntary contributions form of voluntary voluntary
for charitable made with a specific contributions contribution made
or religious direction that they shall made with a with specific
purposes form part of the corpus of specific direction direction.
the trust or institution. that they shall
form part of the

corpus of the trust
or institution,
subject to the
condition that
such voluntary
contributions are
Amendm Amendment in
Sec ent existing
from provision
invested or
deposited in one
or more of the
forms or modes
specified in sub-
section (5)
maintained
specifically for
such corpus
11- 01-04- Newly inserted For the purposes

Explanat 2022 of determining the
ion 4 amount of
application under
clause (a) or
clause (b),––
(i) application for

charitable or
religious
purposes from
the corpus as
referred to in
clause (d) of this
subsection, shall
not be treated as
application of
income for
charitable or
religious
purposes:
Provided that the

amount not so
treated as
application, or
part thereof, shall
Amendm Amendment in
Sec ent existing
from provision
be treated as
application for
charitable or
religious
purposes in the
previous year in
which the
amount, or part
thereof, is
invested or
deposited
back, into one or

more of the forms
or modes
specified in sub-
section (5)
maintained
specifically for
such corpus from
the income of that
year and to the
extent of such
investment or
deposit; and
(ii) application for

charitable or
religious
purposes, from
any loan or
borrowing, shall
not be treated as
application of
income for
charitable or
Amendm Amendment in
Sec ent existing
from provision
religious
purposes:
Provided that the

amount not so
treated as
application, or
part thereof, shall
be treated as
application for
charitable or
religious
purposes in the
previous year in
which the loan or
borrowing, or part
thereof, is repaid
from the income
of that year and
to the extent of
such repayment.
Explanation 5.––
For the purposes
of this sub-
section,
it is hereby
clarified that the
calculation of
income required
to be applied or
accumulated
during the
previous year
shall be made
without any set
Amendm Amendment in
Sec ent existing
from provision
off or deduction
or
allowance of any
excess
application of any
of the year
preceding the
previous year.
32(1) 01-04- Depreciation know-how, patents, know-how, Goodwill has been

2021 on Goodwill copyrights, trade marks, patents, specifically excluded
licences, franchises or copyrights, trade for the purpose of
any other business or marks, licences, Depreciation.
commercial rights of franchises or any
similar nature, being other business or
intangible assets commercial rights
acquired on or after the of similar nature,
1st day of April, 1998, being intangible
assets acquired
on or after the 1st
day of April, 1998
not being
goodwill of a
business or
profession
Explanat (b) intangible assets, (b) intangible

ion 3 of being know-how, assets, being
32(1) patents, copyrights, trade know-how,
marks, licences, patents,
franchises or any other copyrights, trade
business or commercial marks, licences,
rights of similar nature. franchises or any
other business
not being
Amendm Amendment in
Sec ent existing
from provision
goodwill of a
business or
profession
Explanat 01-04- Payment by Newly inserted For the removal Deduction on

ion 2 to 2021 employer of of doubts, it is account of
sec employee hereby clarified Employee
36(1)(va) AY 2021- contribution that the contribution to
22 to a fund on or provisions of provident fund and
before due section 43B shall ESI is covered under
date not apply and sec 36(1)(va) and
will be available only
shall be deemed if payment has been
never to have made within due
been applied for date of specific act
the purposes of and not Income Tax
determining the return filing due
“due date” under date. However
this clause deduction on
account of employer
contribution is
available if payment
is made within due
date of Income Tax
return filing due
date. Explanation
has been inserted to
clarify that sec 43B
will not be applicable
for employee
contribution.
Now all Govt dues

on account of
employees
contribution has to
Amendm Amendment in
Sec ent existing
from provision
be paid on the due

date.
Explanat 01-04- Newly inserted For the removal Deduction on

ion 5 to 2021 of doubts, it is account of
sec 43B hereby clarified Employee
AY 2021- that the contribution to
22 provisions of this provident fund and
section shall not ESI is covered under
apply and shall sec 36(1)(va) and
be deemed never will be available only
to have been if payment has been
applied to a sum made within due
received by the date of specific act
assessee from and not Income Tax
any of his return filing due
employees to date. However
which the deduction on
provisions of sub- account of employer
clause (x) of contribution is
clause (24) of available if payment
section 2 applies. is made within due
date of Income Tax
return filing due
date. Explanation
has been inserted to
clarify that sec 43B
will not be applicable
for employee
contribution.
Proviso 01-04- Special Provided further The limit of 10%

to sec 2021 provisions for that in case of difference in sale
43CA(1) full value of transfer of an value and Market
AY 2021- consideration asset, being a value in case of
22 s residential unit, sales of residential
Amendm Amendment in
Sec ent existing
from provision
the provisions of property has been

this proviso shall increased to 20% in
have the effect as following case :-
if for the words
“one hundred and Sale is between first
ten per cent.”, the time buyer and
words “one Developer
hundred and The property value
twenty per cent.” is less than Rs.2
had been Crores. The transfer
substituted, if the of residential unit
following takes place during
conditions are 12/11/2020 to
satisfied, 30/06/2021.
namely:–– The requisite
(i) the transfer of amendments are
such residential proposed in section
unit takes place 43CA and 56(2)(x)
during the period

beginning from
the 12th day of
November, 2020
and ending on the
30th day of June,
2021;
(ii) such transfer

is by way of first
time allotment
of the residential
unit to any
person; and
Amendm Amendment in
Sec ent existing
from provision
(iii) the
consideration
received or
accruing as a
result of such
transfer does not
exceed two crore
rupees.’
Explanat 01-04- Special For the purposes Explanation for

ion to 2021 provisions for of this section, residential unit has
43CA full value of been defined.
AY 2021- consideration “residential unit”
22 s means an
independent
housing unit with
separate facilities
for living, cooking
and sanitary
requirement,
distinctly
separated from
other residential
units within the

building, which is
directly
accessible from
an outer door or
through an
interior door in a
shared hallway
and not by
walking through
the living space of
Amendm Amendment in
Sec ent existing
from provision
another
household.
Proviso 01-04- The threshold limit for The threshold Tax Audit limit has
to 2021 Tax audit was Rs. 5 limit for Tax audit been increased to
44AB(a) crore in case where the has been 10 crores in case
AY 2021- cash receipts or payment enhanced from where the cash
22 does not exceed 5% of Rs. 5 crore to receipts or payment
Total receipt and Rs. 10 Crores in does not exceed 5%
payment case where the of Total receipt and
cash receipts or payment
payment does not
exceed 5% of
Total receipt and
payment
44ADA(1 01-04- Presumptive Notwithstanding anything Notwithstanding This provision is not

) 2021 taxation for contained in sections 28 anything applicable to LLP
professionals to 43C, in the case of contained in since LLP are
AY 2021- under section an assessee, being a sections 28 to required to maintain
22 44ADA resident in India, who is 43C, in the case books of accounts in
engaged in a profession of an assessee, any case under LLP
referred to in sub-section being an Act.
(1) of section 44AA and individual,
whose total gross Hindu undivided
receipts do not exceed family or a
fifty lakh rupees in a partnership firm
previous year, a sum other than a
equal to fifty per cent of limited liability
the total gross receipts of partnership as
the assessee in the
previous year on account defined under
of such profession or, as clause (n) of
the case may be, a sum sub-section (1)
higher than the aforesaid of section 2 of
sum claimed to have the
Amendm Amendment in
Sec ent existing
from provision
been earned by the Limited Liability

assessee, shall be Partnership Act,
deemed to be the profits 2008, who is a
and gains of such resident in
profession chargeable to
tax under the head India, and, who
“Profits and gains of is engaged in a
business or profession”. profession
referred to in sub-
section (1) of
section 44AA and
whose total gross
receipts do not
exceed fifty lakh
rupees in a
previous year, a
sum equal to fifty
per cent of the
total gross
receipts of the
assessee in the
previous year on
account of such
profession or, as
the case may be,
a sum higher than
the aforesaid sum
claimed to have
been earned by
the assessee,
shall be deemed
to be the profits
and gains of such
profession
chargeable to tax
under the head
Amendm Amendment in
Sec ent existing
from provision
“Profits and gains

of business or
profession”.
44DB(3) 01-04- Special The amount of deduction The amount of Now Deduction
2021 provision for allowable to the deduction allowed for
computing successor co-operative allowable to the conversion of
AY 2021- deductions in bank under section 32, successor co- primary co-op bank
22 the case of section 35D, section operative bank or to banking company
business 35DD or section 35DDA to the converted
reorganizatio shall be determined in Banking
n of co- accordance with the company under
operative formula section 32,
banks section 35D,
section 35DD or
section 35DDA
shall be
determined in
accordance with
the formula
44DB(4) 01-04- Special The provisions of section The provisions of Now Deduction
2021 provision for 35D, section 35DD or section 35D, allowed for
computing section 35DDA shall, in a section 35DD or conversion of
AY 2021- deductions in case where an section 35DDA primary co-op bank
22 the case of undertaking of the shall, in a case to banking company
business predecessor co- where an
reorganizatio operative bank entitled to undertaking of the
n of co- the deduction under the predecessor co-
operative said section is operative bank
banks transferred before the entitled to the
expiry of the period deduction under
specified therein to a the said section is
successor co-operative transferred before
bank on account of the expiry of the
business reorganisation, period specified
Amendm Amendment in
Sec ent existing
from provision
apply to the successor therein to a

co-operative bank in the successor co-
financial years operative bank or
subsequent to the year to a converted
of business banking
reorganisation as they company on
would have applied to account of
the predecessor co- business
operative bank, as if the reorganisation,
business reorganisation apply to the
had not taken place. successor co-
operative bank or
to the converted
banking
company in the
financial years
subsequent to the
year of business
reorganisation as
they would have
applied to the
predecessor co-
operative bank,
as if the business
reorganisation
had not taken
place.
44DB(5)( 01-04- Special N.A “banking Banking co have

ca) 2021 provision for company" shall been defined.
computing have the meaning
AY 2021- deductions in assigned to it in
22 the case of clause (c) of
business section 5 of
reorganizatio Banking
n of co-
Amendm Amendment in
Sec ent existing
from provision
operative Regulation Act,

banks 1949
44DB(da 01-04- Special N.A “conversion” Conversion have

) & (db) 2021 provision for means transition been defined
computing of a primary co-
AY 2021- deductions in operative bank to
22 the case of a banking
business company under
reorganizatio the
n of co-
operative scheme of the
banks Reserve Bank of
India as notified
vide its circular
number DCBR.
CO. LS. PCB. Cir.
No.
5/07.01.000/2018
-19, dated the
27th September,
2018;
(db) “converted
banking
company” means
a banking
company formed
as a result of
conversion from
primary co-
operative bank;’
44DB(5)( 01-04- Special "predecessor co- "predecessor co- Scope of definition

h) 2021 provision for operative bank" means operative bank" of predecessor co-
computing the amalgamating co- means the
Amendm Amendment in
Sec ent existing
from provision
AY 2021- deductions in operative bank or the amalgamating co- operative bank has
22 the case of demerged co-operative operative bank or been extended
business bank, as the case may the demerged co-
reorganizatio be; operative bank or
n of co- the primary co-
operative operative bank
banks which has been
succeeded as a
result of
conversion, as
the case may be;
44DB(5)( 01-04- Special “primary co- Clarifications have

ha) 2021 provision for operative bank” been provided
computing shall have the
AY 2021- deductions in meaning
22 the case of assigned to it in
business clause (ccv) of
reorganizatio section 5 of the
n of co- Banking
operative Regulation Act,
banks 1949
45(1B) Capital gains N.A Notwithstanding Deeming capital

anything gain provision has
contained in sub- been inserted for
section (1), where transactions to
any person which sec 10(10D) is
receives at any not applicable.
time during any
previous year any
amount under a
unit linked
insurance policy,
to which
exemption under
Amendm Amendment in
Sec ent existing
from provision
clause (10D) of
section 10 does
not apply on
account of the
fourth and fifth
proviso thereof,
including the
amount allocated
by
way of bonus on
such policy, then,
any profits or
gains arising from
receipt of such
amount by such
person shall be
chargeable to
income-tax under
the head "Capital
gains" and shall
be deemed to be
the income of
such person of
the
previous year in
which such
amount was
received and the
income taxable
shall be
calculated in such
manner as may
be prescribed.
Amendm Amendment in
Sec ent existing
from provision
45(4) Capital gains The profits or gains Notwithstanding Section has been
arising from the transfer anything substituted
of a capital asset by way contained in sub-
of distribution of capital section (1),
assets on the dissolution
of a firm or other where a specified
association of persons or person receives
body of individuals (not during the
being a company or a previous year any
co-operative society) or capital asset at
otherwise, shall be the time of
chargeable to tax as the dissolution or
income of the firm, reconstitution of
association or body, of the
the previous year in
which the said transfer specified entity,
takes place and, for the which represents
purposes of section 48, the balance in his
the fair market value of capital account in
the asset on the date of the books of
such transfer shall be accounts of such
deemed to be the full specified entity at
value of the the time of its
consideration received or dissolution or
accruing as a result of reconstitution,
the transfer. then any profits or
gains arising from
receipt of such
capital asset by
the specified
person shall be
chargeable to
income-tax as
income of such
specified entity
under the head
Amendm Amendment in
Sec ent existing
from provision
"Capital gains"
and shall be
deemed to be the
income of such
specified entity of
the previous year
in which such
capital asset was
received by the
specified person
and
notwithstanding
anything to the
contrary
contained in this
Act, for the
purposes of
section 48,––
(a) fair market

value of the
capital asset on
the date of such
receipt shall be
deemed to be the
full value of the
consideration
received or
accruing as a
result of the
transfer
of such capital
asset; and
(b) the cost of

acquisition of the
Amendm Amendment in
Sec ent existing
from provision
capital asset shall

be determined in
accordance with
the provisions of
this Chapter:
Provided that the

balance in the
capital account of
the specified
person in the
books of account
of the specified
entity is to be
calculated without
taking into
account increase
in the capital
account of the
specified person
due to revaluation
of any asset or
due to self-
generated
goodwill or any
other self-
generated asset.
Explanation.––
For the purposes
of this sub-
section,––
(i) “specified
entity” means a
firm or other
association of
Amendm Amendment in
Sec ent existing
from provision
persons or body
of individuals (not
being a company
or a cooperative
society);
(ii) “self-
generated
goodwill” and
“self-generated
asset” mean
goodwill or asset,
as the case may
be, which has
been acquired
without incurring
any cost for
purchase or
which has been
generated during
the course of the
business or
profession;
(iii) “specified
person” means a
person who is
partner of a firm
or member of
other association
of persons or
body of
individuals (not
being a company
or a cooperative
Amendm Amendment in
Sec ent existing
from provision
society), in any
previous year.
(4A)
Notwithstanding
anything
contained in sub-
section (1),
where a specified
person receives
during the
previous year any
money or other
asset at the time
of dissolution or
reconstitution
of the specified
entity, which is in
excess of the
balance in his
capital account in
the books of
accounts of such
specified entity at
the time of its
dissolution or
reconstitution,
then any profits or
gains arising from
receipt of such
money or other
asset by the
specified person
shall be
Amendm Amendment in
Sec ent existing
from provision
chargeable to
income-tax as
income of such
specified entity
under the head
"Capital gains"
and shall be
deemed to be the
income of such
specified entity of
the previous year
in which such
money or other
asset was
received by the
specified person
and
notwithstanding
anything to the
contrary
contained in this
Act, for the
purposes of
section 48,––
(a) value of any

money or the fair
market value of
other asset on the
date of such
receipt shall be
deemed to be the
full value of the
consideration
received or
accruing as a
Amendm Amendment in
Sec ent existing
from provision
result of the
transfer of such
capital asset; and
(b) the balance in

the capital
account of the
specified person
in the books of
accounts of the
specified entity at
the time of its
dissolution or
reconstitution
shall be deemed
to be the cost of
acquisition:
Provided that the

balance in the
capital account of
the specified
person in the
books of account
of the specified
entity is to be
calculated without
taking into
account increase
in the capital
account of the
specified person
due to revaluation
of any asset or
due to self-
generated
goodwill or any
Amendm Amendment in
Sec ent existing
from provision
other self-
generated asset.
Explanation.––
For the purpose
of this sub-
section, the
expressions
“specified entity”,
“self-generated
goodwill”,
“selfgenerated
asset” and
"specified person"
shall have the
meaning
respectively
assigned to them
in sub-section (4)
47(vica) 01-04- Transactions Newly inserted ‘(viiac) any Definitions and

2022 not regarded transfer, in a clarifications issued
as Transfer relocation, of a for definition of
capital asset by transfer
the original fund
to the resulting
fund;
(viiad) any
transfer by a
shareholder or
unit holder or
interest holder, in
a relocation, of a
capital asset
being a share or
Amendm Amendment in
Sec ent existing
from provision
unit or interest
held by him in the
original fund in
consideration for
the share or unit
or interest in the
resultant fund;
Explanation.––
For the purposes
of clauses (viiac)
and (viiad),–– (a)
“original fund”
means a fund
established or
incorporated or
registered outside
India, which
collects funds
from its members
for investing it for
their benefit and
fulfills the
following
conditions,
namely:—
(i) the fund is not

a person resident
in India;
(ii) the fund is a

resident of a
country or a
specified territory
with which an
Amendm Amendment in
Sec ent existing
from provision
agreement
referred to in sub-
section (1) of
section 90 or
subsection (1) of
section 90A has
been entered
into; or is
established or
incorporated or
registered in a
country or a
specified territory
as may be
notified by the
Central
Government in
this behalf;
(iii) the fund and

its activities are
subject to
applicable
investor
protection
regulations in the
country or
specified territory
where it is
established or
incorporated or is
a resident; and
(iv) fulfils such

other conditions
Amendm Amendment in
Sec ent existing
from provision
as may be
prescribed;
(b) “relocation”
means transfer of
assets of the
original fund to a
resultant fund on
or before the 31st
day of March,
2023, where
consideration for
such transfer is
discharged in the
form of share or
unit or interest in
the resulting fund
to the
shareholder or
unit holder or
interest holder of
the original fund
in the same
proportion in
which the share
or unit or interest
was held by such
shareholder or
unit holder or
interest holder in
such original
fund;
(c) “resultant
fund” means a
fund established
or incorporated in
Amendm Amendment in
Sec ent existing
from provision
India in the form

of a trust or a
company
or a limited
liability
partnership,
which––
(i) has been

granted a
certificate of
registration as a
Category I or
Category II or
Category III
Alternative
Investment Fund,
and is regulated
under the
Securities and
Exchange Board
of India
(Alternative
Investment Fund)
Regulations,
2012 made under
the Securities and
exchange Board
of
India Act, 1992;

and 15 of 1992.
(ii) is located in
any International
Financial
Amendm Amendment in
Sec ent existing
from provision
Services Centre
as referred to in
sub-section (1A)
of
section 80LA;’.
48(iii) 01-04- Mode of Newly inserted iii) in case of Capital balance at

2021 computation specified entity the time of
of Capital referred to in sub- dissolution or
Gain section (4A) of reconstitution will be
section 45, the capital asset.
amount included
in the total
income of such
specified entity
under sub-section
(4A) of section 45
which is
attributable to the
capital asset
being transferred,
calculated in the
prescribed
manner
Proviso Special Newly inserted Provided that in a Goodwill excluded

to sec 50 Provisions for case where from depreciable
depreciable goodwill of a asset
asset business or
profession forms
part of a block of
asset for the
assessment year
beginning on the
1st day of April,
Amendm Amendment in
Sec ent existing
from provision
2020 and
depreciation
thereon has been
obtained by the
assessee under
the Act, the
written down
value of that
block of asset
and short term
capital gain, if
any, shall be
determined in
such manner as
may be
prescribed.
54GB Exemption of Investment in Investment in Time limit for

Capital Gain subscription in equity subscription in investment extended
on trf of shares of eligible co till equity shares of to 31-03-2022
Residential 31-03-2021 eligible co till 31-
property 03-2022
55 Cost of (a) in relation to a capital “(a) in relation to Being goodwill not a

improvement/ asset, being goodwill of a a capital asset, depreciable asset,
cost of business being goodwill of provisions are
acquisition a business or aligned.
[or a trade mark or brand profession, or a
name associated with a trade mark or
business or a right to brand name
manufacture, produce or associated with a
process any article or business or
thing or profession, or a
right to carry on any right to
businessor profession, manufacture,
tenancy rights, stage produce or
Amendm Amendment in
Sec ent existing
from provision
carriage permits or loom process any

hours,— article or thing, or
right to carry on
(i) in the case of any business or
acquisition of such asset profession, or
by the assessee by tenancy rights, or
purchase from a
previous owner, means stage carriage
the amount of the permits, or loom
purchase price; and hours,—
(ii) in any other case [not (i) in the case of

being a case falling acquisition of
under sub-clauses (i) to such asset by the
(iv) of sub-section (1) assessee by
purchase from a
of section 49], shall be previous owner,
taken to be nil means the
amount of the
purchase price;
and
(ii) in the case

falling under sub-
clauses (i) to (iv)
of sub-section (1)
of section 49 and
where such asset
was acquired by
the previous
owner (as defined
in that section) by
purchase, means
the amount of the
purchase
Amendm Amendment in
Sec ent existing
from provision
price for such

previous owner;
and
(iii) in any other

case, shall be
taken to be nil:
Provided that
where the capital
asset, being
goodwill
of a business or
profession, in
respect of which
a deduction on
account of
depreciation
under sub-section
(1) of section 32
has been
obtained by the
assessee in any
previous year
preceding the
previous year
relevant to the
assessment year
commencing on
or after the 1st
day of April,
2021, the
provisions of sub-
clauses (i) and (ii)
shall apply with
Amendm Amendment in
Sec ent existing
from provision
the modification
that the total
amount of
depreciation
obtained by the
assessee under
sub-section
(1) of section 32
before the
assessment year
commencing
on the 1st day of

April, 2021 shall
be reduced from
the amount of
purchase price;
56 01-04- Income from Provided also that Limit of 10%

2022 Other in case of increased to 20%
Sources property being
referred to in the
second proviso to
sub-section (1) of
section 43CA, the
provisions of sub-
item (ii) of item
(B) shall have
effect as if for the
words “ten per
cent.”, the words
“twenty per cent.”
had been
substituted;”;
Amendm Amendment in
Sec ent existing
from provision
(b) in the proviso,

in clause (IX)
after the words,
brackets and
figures “clause
(vii)”, the words,
brackets, figures
and letters “or
clause (viiac) or
clause (viiad)”
shall be inserted
with effect from
the 1st day of
April, 2022
72A 01-04- Provisions (1) Where there has (1) Where there Specific requirement
2021 relating to been an amalgamation has been an of amalgamation of
carry forward of— amalgamation pubic sector
and set off of (a) a company owning an of— companies in the
accumulated industrial undertaking or (a) a company business of aircraft
loss and a ship or a hotel with owning an is omitted and
unabsorbed another company; or industrial general public sector
depreciation (b) a banking company undertaking or a companies is added.
allowance in referred to in clause (c) ship or a hotel Also covered those
amalgamation of section 5 of the with another public sector
or demerger, Banking Regulation company; or companies who has
etc.— Act, 1949 (10 of 1949) (b) a banking the share purchase
with a specified bank; or company referred agreement under
(c) one or more public to in clause (c) of Strategic
sector company or section 5 of the Disinvestment which
companies engaged in Banking restricts the
the business of Regulation immediate
operation of aircraft Act, 1949 (10 of amalgamation but is
with one or more 1949) with a amalgamated within
public sector company specified bank; or 5 years from the
(c) one or more date, such restriction
Amendm Amendment in
Sec ent existing
from provision
or companies engaged public sector on immediate

in similar business, company or amalgamation of the
companies agreement is
engaged in the terminated.
business of
operation of
aircraft with one
or more public
sector company
or companies
engaged in
similar
business,
(c) one or more
public sector
company or
companies with
one or more
public sector
company or
companies; or
(d) an erstwhile
public sector
company with
one or more
company or
companies, if
the share
purchase
agreement
entered into
under strategic
disinvestment
restricted
immediate
amalgamation of
Amendm Amendment in
Sec ent existing
from provision
the said public

sector company
and the
amalgamation is
carried out
within five year
from the end of
the previous
year in which
the restriction
on
amalgamation in
the share
purchase
agreement
ends,”;
‘Provided that
the accumulated
loss and the
unabsorbed
depreciation of
the
amalgamating
company,
in case of an
amalgamation
referred to in
clause (d),
which is deemed
to be the loss or,
as the case may
be, the
allowance for
unabsorbed
depreciation of
the
Amendm Amendment in
Sec ent existing
from provision
amalgamated
company, shall
not be more
than the
accumulated
loss and
unabsorbed
depreciation of
the public sector
company as on
the date on
which the public
sector company
ceases to be a
public sector
company as a
result of
strategic
disinvestment.
Explanation.––
For the
purposes of
clause (d),––
(i) “control”
shall have the
same meaning
as assigned to
in clause (27) of
section 2 of the
Companies Act,
2013;
(ii) “erstwhile
public sector
company”
means a
company which
Amendm Amendment in
Sec ent existing
from provision
was a public
sector company
in
earlier previous
years and
ceases to be a
public sector
company by way
of strategic
disinvestment
by the
Government;
(iii) “strategic
disinvestment”
means sale of
shareholding by
the Central
Government or
any State
Government in a
public sector
company which
results in
reduction of its
shareholding to
below fifty-one
per
cent. along with
transfer of
control to the
buyer.’.
79 01-04- Carry forward New Sub-Clause In section 79 of It is proposed to

2022 and set off of inserted the Income-tax insert a new clause
losses in the Act, in sub- in sub-section (2) to
case of section (2), after the said section so
Amendm Amendment in
Sec ent existing
from provision
certain clause (d), the as to provide that

companies.— following clause nothing contained in
shall be inserted the section shall
with effect from apply to a case to
the 1st day of the extent that a
April, 2022, change in the
namely:–– shareholding takes
“(e) to a place during the
company to the previous year on
extent that a account of relocation
change in the referred to in the
shareholding Explanation to
has taken place clause (viiac) and
during the (viiad) of Section
previous year on 47.
account of
relocation
referred to in the
Explanation to
clause (viiac)
and (viiad) of
section 47.”.
80EEA 01-04- Deduction for In section 80EEA Dedution u/s 80EEA

2022 interest paid of the Income-tax on the interest on
on home loan Act, in sub- loan against
for affordable section (3), in affordable house is
housing clause (i), for the extended till 31-03-
figures “2021”, 22.
the figures “2022”
shall be
substituted with
effect from the 1st
day of April,
2022.
Amendm Amendment in
Sec ent existing
from provision
80-IAC 01-04- Special In section 80-IAC Extension till 01-04-

2021 provision in of the Income-tax 22 for claiming
respect of Act, in the 100% deduction of
specified Explanation, in profit and loss for
business clause (ii), in sub- any 3 consecutive
clause (a), for the assessment years
figures out of 10
“2021”, the assessment years, if
figures “2022” total turnover does
shall be not exceed Rs. 100
substituted. crores.
80-IBA 01-04- Deductions in “(1A) Where the Insertion of

2022 respect of gross total subsection for giving
profits and income of an deduction of 100%
gains from assessee profit from the
housing includes any business of
projects profits and gains developing and
derived from the building rental
business housing project.
of developing and Meaning of Rental
building rental Housing Project is
housing project, also defined by
there shall be inserting clause (da)
allowed a to the main section.
deduction of an This deduction is
amount equal to available till 01-04-
hundred per cent. 2022.
of the profits and
gains derived
from such
business.”;
(b) in sub-section
(2), in clause (a),
for the figures
Amendm Amendment in
Sec ent existing
from provision
“2021”, the
figures
“2022”shall be
substituted;
(c) in sub-section
(6), after clause
(d), the following
clause shall be
inserted,
namely:––
‘(da) “rental
housing project”
means a project
which is notified
by the Central
Government in
the Official
Gazette under
this clause on or
before the 31st
day of March,
2022 and fulfils
such conditions
as may be
specified in the
said
notification;’.
80LA 01-04- Deductions in A) in sub-section It is proposed to

2022 respect of (1A), for the amend the
certain words “any other provisions of said
incomes of relevant laws was sub-section (1A) so
Offshore obtained”, the as to provide that
Banking Units words deduction can also
and “permission or be claimed if
Amendm Amendment in
Sec ent existing
from provision
International registration under permission or

Financial the International registration under
Services Financial the International
Centre. Services Centre Financial Services
Authority Act, Centre Authority Act,
2019 was 2019 was obtained.
obtained” shall be
substituted; It is proposed to
B) in sub-section amend the
(2), after clause provisions of said
(c), the following sub-section (2) of
clause shall be the said section by
inserted, inserting new clause
namely:–– (d) so as to provide
“(d) arising from that the income from
the transfer of transfer of an asset
an asset, being ,being an aircraft or
an aircraft or aircraft engine which
aircraft engine, was leased by a unit
which was referred to in clause
leased by a unit (c) to a domestic
referred to in company engaged in
clause (c) to a the business of
domestic operation aircraft
company before such transfer
engaged in the subject to the
business of condition that the
operation of unit has commenced
aircraft, before operation on or
such before the 31st day
transfer subject of 2024 shall also be
to condition that eligible for
the unit has deduction.
commenced
operation on or It is proposed to
before the 31st amend clause (ii) of
Amendm Amendment in
Sec ent existing
from provision
day of March, sub-section (3) of

2024.”; the said section so
C) in sub-section as to provide that in
(3), for clause (ii), case the unit is
the following registered under the
clause shall be International
substituted, Financial Services
namely:–– Centre
“(ii) a copy of the Authority Act, 2019
permission then the copy of
obtained under permission shall
clause (a) of sub- mean a copy of the
section (1) of permission or
section 23 of the registration obtained
Banking under the
Regulation Act, International
1949 or copy of Financial Services
permission or Centre Authority Act,
registration 2019.
obtained under
the International
Financial
Services Centre
Authority Act,
2019.”.
89A 01-04- Relief from Newly Inserted Where a specified Insertion of new
2022 taxation in person has section 89A giving
income from income accrued relief from retirement
retirement in a specified benefit to a NRI in
benefit account, such India and resident in
account income shall be the notified country,
maintained in taxed in such having specified
a notified manner and in account in the
country. such year as may notified country.
be prescribed.
Amendm Amendment in
Sec ent existing
from provision
Explanation.––
For the purposes
of this section,––
(a) “specified
person” means a
person resident in
India who opened
a specified
account in a
notified country
while being non-
resident in India
and resident in
that country;
(b) “specified
account” means
an account
maintained in a
notified country
by the specified
person in respect
of his retirement
benefits and the
income from such
account is not
taxable on
accrual basis but
is taxed by such
country at the
time of withdrawal
or redemption;
(c) “notified
country” means a
country as may
be notified by the
Central
Amendm Amendment in
Sec ent existing
from provision
Government in
the Official
Gazette for the
purposes of this
section.’.
112A 01-04- Tax on In section 112A of It is proposed to

2021 interest on the Income-tax amend the said
National Act, in the Explanation to the
Savings Explanation, in section so as to
Certificates clause (a), in the include a fund set up
opening portion, under a scheme of
after the word an insurance
and figures company comprising
“section 10”, the unit linked insurance
words, brackets, policies to which
figures and letter exemption under
“or under a clause (10D) of
scheme of an section 10 does not
insurance apply on account of
company the applicability of
comprising unit the fourth and fifth
linked insurance proviso thereof
policies to which within the definition
exemption under of “equity oriented
clause (10D) of fund”.
the said section
does not apply on
account of the
fourth and fifth
proviso thereof”
shall be inserted.
115AD 01-04- Tax on A) in sub-section It is proposed to

2022 income of (1),–– amend the said
Amendm Amendment in
Sec ent existing
from provision
Foreign (a) in the opening section so as to

Institutional portion, after the provide that income
Investors words “a of investment
from specified fund”, division of an
securities or the words “or offshore banking unit
capital gains investment of a non-resident
arising from division of an from securities or
their Transfer. offshore banking capital gains arising
unit” shall be from their transfer
inserted; shall also be taxed
in clause (b), in at the rate of ten per
sub-clause (i), in cent. under the
item (B), after the provisions of the
words “of said section.
specified fund”,
the words “or It is further proposed
investment to insert a new sub-
division of an section (1B) in the
offshore banking said section so as to
unit” shall be provide investment
inserted; division of an
B) after sub- offshore banking
section (1A), the unit, the provision of
following sub- this section shall
section shall be apply to the extent of
inserted, income that is
namely:–– attributable to the
“(1B) investment division
Notwithstanding of such banking unit
anything referred to in sub-
contained in clause (ii) of clause
subsection (1), in (c) to the
case of Explanation to
investment clause (4D) of
division of an section 10 as a
offshore Category-III portfolio
Amendm Amendment in
Sec ent existing
from provision
banking unit, the investor under the

provisions of this securities and
section shall exchange Board of
apply to the India
extent of income (Foreign Portfolio
that is attributable investors)
to the investment Regulations, 2019
division of such made under the
banking units, Securities And
referred to in sub- Exchange Board of
clause (ii) of India Act, 1992,
clause( c) to the calculated in the
Explanation to prescribed manner.
clause (4D) of
section 10, as a It is also proposed to
Category-III define the
portfolio investor expression
under the “investment division
Securities and of an offshore
Exchange Board banking unit”.
of India (Foreign
Portfolio
Investors)
Regulations,
2019 made under
the Securities
And Exchange
Board of India
Act, 1992,
calculated in such
manner as may
be prescribed.”;
C)in sub-section
(2), after the
words “the
specified fund” at
Amendm Amendment in
Sec ent existing
from provision
both the places

where they occur,
the words “or
investment
division of an
offshore banking
unit” shall be
inserted;
D) in the
Explanation, after
clause (a), the
following clause
shall be inserted,
namely:–––
“(aa) the
expression
“investment
division of
offshore banking
unit” shall have
the meaning
assigned to it in
clause (aa) of the
Explanation to
clause (4D) of
section 10;”.
115JB 01-04- Minimum I) In Sub-section Clause (iid) of

2021 Alternative (2)- Explanation 1 of the
Tax in Explanation 1,– said section
– provides that the
A)in clause (fb), amount of income in
in sub-clause (B), the nature of capital
for the words gains, interest,
“interest, royalty”, royalty or fee for
the words technical services
Amendm Amendment in
Sec ent existing
from provision
“interest, accruing or arising to

dividend, royalty” an assessee, being
shall be a foreign company,
substituted will be reduced from
B)in the long line, the book profit if
in clause (iid), in such income is
sub-clause (B), credited to the
for the words statement of profit
“interest, royalty”, and loss and tax on
the words such income is at a
“interest, rate less than the
dividend, royalty” rate specified under
shall be that section. Further
substituted; such assessee will
II) After sub- be allowed
section (2C), the expenses relatable
following sub- to such income
section shall be mentioned in the
inserted, namely: said clause under
── sub-clause (B) of
“(2D) In the case clause (fb) of the
of an assessee said Explanation.
being a
company, where It is proposed to
there is an amend the said
increase in book clause (fb) and
profit of the clause (iid),
previous occurring in the long
year due to line of Explanation 1,
income of past so as to provide
year or years similar relief to
included in the dividend as already
book profit on there for capital
account of an gains, interest,
advance pricing royalty and fee for
agreement technical services as
Amendm Amendment in
Sec ent existing
from provision
entered into by provided in these

the assessee clauses.
under section
92CC or on It is further proposed
account of to insert a new sub-
secondary section (2D) in the
adjustment said section so as to
required to be provide that where in
made under the case of the
section 92CE, company there is an
the Assessing increase in book
Officer shall, on profit of the previous
an application year due to income
made to him in of past year or years
this behalf by included in the book
the asssessee, profit on account of
recompute the an advance pricing
book profit of agreement entered
the past year or into by the assessee
years and tax under section 92CC
payable, if any, or on account of
by the assessee secondary
during the adjustment required
previous year to be made under
under sub- section 92CE, the
section (1), in Assessing Officer
such manner as shall, on an
may be application made to
prescribed and him in this behalf by
the provisions the asssessee,
of section 154 recompute the book
shall, so far as profit of
may be, apply the past year or
and the period years and tax
of four years payable, if any, by
specified in sub- the assessee during
Amendm Amendment in
Sec ent existing
from provision
section (7) of the previous year

that section under sub-section
shall be (1), in such manner
reckoned from as may be provided
the end of the by rules and the
financial year in provisions of section
which the said 154 shall, so far as
application is may be, apply and
received by the the period of four
Assessing years specified in
Officer.”. sub-section (7) of
that section shall be
reckoned from the
end of the financial
year in which the
said application is
received by the
Assessing Officer.
139(1) 01-04- Return of In this sub-section, In this sub- Section 5A as it

2021 income ―due date means,— section, due date stands today
(a) where the assessee means, provides that the
[other than an assessee (a) where the income of the
referred to in clause (aa)] assessee [other husband and wife
is— than an assessee governed under the
(i) a company5 ***; or referred to in Portuguese Civil
(ii) a person (other than a clause (aa)] is— Code in force in the
company) whose (i) a company5 state of Goa shall be
accounts are required to ***; or divided equally
be audited under this Act (ii) a person between the
or under any other law (other than a husband and wife
for the time being in company) whose and the apportioned
force; or accounts are income will be
(iii) a working partner of required to be included separately
a firm whose accounts audited under this in the total income of
are required to be Act or under any the respective
Amendm Amendment in
Sec ent existing
from provision
audited under this Act or other law for the spouse. Due date for
under any other law for time being in both will be 30th
the time being in force force; or September.
(iii) a working
partner of a firm
whose accounts
are required to be
audited under this
Act or under any
other law for the
time being in
force or the
spouse of such
partner if the
provisions of
section 5A
applies to such
spouse.
139(1) 01-04- Return of [(aa) in the case of an [(aa) in the case Due date for filing
2021 income assessee[who] is of an return for partners
required to furnish a assessee[who],in to whom 92E is
report referred to in cluding the applicable will be
section 92E, the 30th partners of the 30th November.
day of November of the firm being such
assessment year; assessee, is
required to
furnish a report
referred to in
section 92E, the
30th day of
November of the
assessment year;
139(4) 01-04- Return of Anyperson who has not Anyperson who Delayed return can
2021 income furnished a return within has not furnished be filed within 9
Amendm Amendment in
Sec ent existing
from provision
the time allowed to him a return within the month from the
under sub-section (1), time allowed to completion of
may furnish the return for him under sub- previous year.
any previous year at any section (1), may
time before the end of furnish a return
the relevant assessment for any previous
year or before the year at any time
completion of the within three
assessment, whichever months prior to
is earlier. the end of the
relevant
assessment year
or before the
completion of the
assessment,
whichever is
earlier.
139(5) 01-04- Return of If any person, having If any person, Revised return can
2021 income furnished a return under having furnished be filed within 9
sub-section (1) or sub- a return under month from the
section (4), discovers sub-section (1) or completion of
any omission or any sub-section (4), previous year.
wrong statement therein, discovers any
he may furnish a revised omission or any
return at any time before wrong statement
the end of the relevant therein, he may
assessment year or furnish a
before the completion of revised return at
the assessment, any time within
whichever is earlier three months
before the end of
the relevant
assessment year
or before the
completion of the
Amendm Amendment in
Sec ent existing
from provision
assessment,
whichever is
earlier
142(1) 01-04- Inquiry before New Proviso inserted Provided further Notice under 143(1)
2021 assessment that a notice may be issued by
under this sub- prescribed
section for the incometax authority
purposes of this and not only
clause may also Assessing Officer.
be served by the
prescribed
income-tax
authority,”.
143(1) 01-04- Assessment Provided further that no Provided further Intimation shall be
2021 intimation under this sub- that no intimation sent within 9 months
section shall be sent under this sub- from the end of
after the expiry of one section shall be financial year.
year from the end of the sent after the
financial year in which expiry of nine
the return is made months from the
end of the
financial year in
which the return
is made
143(1) 01-04- Assessment (a) the total income or (a) the total Total income
2021 loss shall be computed income or loss assessed in 143(1)
after making the shall be shall include
following adjustments, computed after increase in income
namely:— making the also in addition to
(i) any arithmetical error following disallowance of
in the return; adjustments, expenditures.
(ii) an incorrect claim, if namely:—
such incorrect claim is (i) any
apparent from any arithmetical error
Amendm Amendment in
Sec ent existing
from provision
information in the return; in the return;

[(iii) disallowance of loss (ii) an incorrect
claimed, if return of the claim, if such
previous year for which incorrect claim is
set off of loss is claimed apparent from
was furnished beyond any information in
the due date specified the return;
under sub-section (1) of [(iii) disallowance
section 139; of loss claimed, if
(iv) disallowance of return of the
expenditure indicated in previous year for
the audit report but not which set off of
taken into account in loss is claimed
computing the total was furnished
income in the return; beyond the due
(v) disallowance of date specified
deduction claimed under under sub-section
sections 10AA, 80-IA, (1) of section 139;
80-IAB, 80-IB, (iv) disallowance
80-IC, 80-ID or section of expenditure or
80-IE, if the return is increase in
furnished beyond the income indicated
due date specified under in the audit report
sub-section (1) of section but not taken into
139 account in
computing the
total income in
the return;
(v) disallowance
of deduction
claimed under
sections section
10AA or under
any of the
provisions
of Chapter VI-A
Amendm Amendment in
Sec ent existing
from provision
under the
heading “C.-
Deductions in
respect of certain
incomes”, if the
return is furnished
beyond the due
date specified
under sub-section
(1) of section 139.
143(2) 01-04- Assessment Provided that no notice Provided that no Notice under section
2021 under this sub-section notice under this 143 (2) can be
shall be served on the sub-section shall issued within 3
assessee after the expiry be served on the months from the end
of six months from the assessee after of the financial year.
end of the financial year the expiry of 3
in which the return is months from the
furnished. end of the
financial year in
which the return
is furnished.
147 01-04- Income If the Assessing Officer If any income Even if provisions of
2021 escaping has reason to believe] chargeable to tax, 148A have not been
assessment that any income in the case of an complied with, the
chargeable to tax has assessee, has AO can assess or
escaped assessment for escaped reassess.
any assessment year, he assessment for
may, subject to the any assessment
provisions of sections year, the
148 to 153, assess or Assessing Officer
reassess such income may, subject to
and also any other the provisions of
income chargeable to tax sections 148 to
which has escaped 153, assess or
Amendm Amendment in
Sec ent existing
from provision
assessment and which reassess such

comes to his notice income or
subsequently in the recompute the
course of the loss or the
proceedings under this depreciation
section, or recompute allowance or any
the loss or the other allowance
depreciation allowance or deduction for
or any other allowance, such assessment
as the case may be, for year (hereafter in
the assessment year this section
concerned (hereafter in and in sections
this section and in 148 to 153
sections 148 to 153 referred to as the
referred to as the relevant
relevant assessment assessment
year). year).
Explanation.—For
the purpose of
assessment or
reassessment
under this
section, the
Assessing Officer
may assess or
reassess the
income in respect
of any issue,
which has
escaped
assessment, and
such issue comes
to his notice
subsequently in
the course of the
proceedings
Amendm Amendment in
Sec ent existing
from provision
under this
section,
irrespective of the
fact that the
provisions of
section 148A
have not been
complied with.”.
148 01-04- Issue of notice 148. Issue of notice Before making Assessing Officer
2021 where income where income has the assessment, has to obtaine prior
has escaped escaped assessment. reassessment or approval of the
assessment [(1)] Before making the recomputation specified authority to
assessment, under section issue notice under
reassessment or 147, and subject this section.
recomputation under to the provisions
section 147, the of section 148A,
Assessing Officer shall the Assessing
serve on the assessee a Officer shall serve
notice requiring him to on the assessee
furnish within such a notice, along
period, as may be with a copy of the
specified in the notice, a order passed, if
return of his required, under
income or the income of clause (d) of
any other person in section 148A,
respect of which he is requiring him to
assessable under this furnish within
Act during the previous such period, as
year corresponding to may be specified
the relevant assessment in such notice, a
year, in the prescribed return of his
form and verified in the income or the
prescribed manner and income of any
setting forth such other other person in
particulars as may be respect of which
Amendm Amendment in
Sec ent existing
from provision
prescribed; and the he is assessable

provisions of this Act under this Act
shall, so far as may be, during the
apply accordingly as if previous year
such return were a return corresponding to
required to be furnished the relevant
undersection 139. assessment year,
[Provided that in a in the prescribed
case— form and verified
(a) where a return has in the prescribed
been furnished during manner and
the period commencing setting forth such
on the 1st day of other
October, 1991 and particulars as
ending on the 30th day may be
of September, 2005 in prescribed; and
response to a notice the provisions of
served under this this Act shall, so
section, and far as may be,
(b) subsequently a notice apply accordingly
has been served under as if such return
sub-section (2) of section were a return
143 after the expiry of required to be
twelve months specified furnished under
in the proviso to sub- section 139:
section (2) of section Provided that no
143, as it stood notice under this
immediately before the section shall be
amendment of said sub- issued unless
section by the Finance there is
Act, 2002 (20 of 2002) information with
but before the expiry the Assessing
of the time limit for Officer which
making the assessment, suggests that the
re-assessment or income
recomputation as chargeable to tax
Amendm Amendment in
Sec ent existing
from provision
specified in sub-section has escaped

(2) of section 153, every assessment in
such notice referred to in the case of the
this clause shall be assessee for the
deemed to be a valid relevant
notice: assessment year
Provided further that in a and the
case— Assessing Officer
(a) where a return has has obtained prior
been furnished during approval of the
the period commencing specified
on the 1st day of authority to issue
October, 1991 and such notice.
ending on the 30th day Explanation 1.—
of September, 2005, in For the purposes
response to a notice of this section
served under this and section 148A,
section, and the information
(b) subsequently a notice with the
has been served under Assessing Officer
clause (ii) of sub-section which suggests
(2) of section 143 after that the income
the expiry of twelve chargeable to tax
months specified in the has escaped
proviso to clause (ii) of assessment
sub-section (2) of section means,—
143, but before the (i) any information
expiry of the time limit for flagged in the
making the assessment, case of the
reassessment or assessee for the
recomputation as relevant
specified in sub-section assessment year
(2) of section 153, every in accordance
such notice referred to in with the risk
this clause shall be management
deemed to be a valid strategy
Amendm Amendment in
Sec ent existing
from provision
notice.] formulated by the

[Explanation.—For the Board from time
removal of doubts, it is to time;
hereby declared that (ii) any final
nothing contained in the objection raised
first proviso or the by the
second proviso shall Comptroller and
apply to any return which Auditor General
has been furnished on or of India to the
after the 1st day of effect that the
October, 2005 in assessment in
response to a notice the case of the
served under this assessee for the
section.] relevant
[(2) The Assessing assessment year
Officer shall, before has not been
issuing any notice under made in
this section, record his accordance with
reasons for doing so.] the provisions of
this Act.
Explanation 2.—
For the purposes
of this section,
where,—
(i) a search is
initiated under
section 132 or
books of account,
other documents
or any assets are
requisitioned
under section
132A, on or after
the 1st day of
April, 2021, in the
case of the
Amendm Amendment in
Sec ent existing
from provision
assessee; or
(ii) a survey is
conducted under
section 133A in
the case of the
assessee on or
after the 1st day
of April, 2021; or
(iii) the Assessing
Officer is
satisfied, with the
prior approval of
the Principal
Commissioner or
Commissioner,
that any money,
bullion, jewellery
or other valuable
article or thing,
seized or
requisitioned in
case of any other
person on or after
the 1st day of
April, 2021,
belongs to the
assessee; or
(iv) the Assessing
Officer is
satisfied, with the
prior approval of
Principal
Commissioner or
Commissioner,
that any books of
account or
Amendm Amendment in
Sec ent existing
from provision
documents,
seized or
requisitioned in
case of any other
person on or after
the 1st day of
April, 2021,
pertains or
pertain to, or any
information
contained therein,
relate to, the
assessee, the
Assessing Officer
shall be deemed
to have
information which
suggests that the
income
chargeable to tax
has escaped
assessment in
the case of the
assessee for the
three assessment
years
immediately
preceding the
assessment year
relevant to the
previous year in
which the search
is initiated or
books of
account, other
documents or any
Amendm Amendment in
Sec ent existing
from provision
assets are
requisitioned or
survey is
conducted in the
case of the
assessee or
money, bullion,
jewellery or other
valuable article or
thing or books of
account or
documents are
seized or
requisitioned in
case of any other
person.
Explanation.3—
For the purposes
of this section,
specified
authority means
the specified
authority referred
to in section 151.
148A 01-04- Conducting Newly Inserted 148A. The The AO shall

2021 inquiry, Assessing Officer conduct enquiry with
providing shall, before prior approval to
opportunity issuing any notice check if income has
before issue of under section escaped
notice under 148, — assessment. Further
section 148. (a) conduct any opportunity of being
enquiry, if heard shall also be
required, with the given to assessee
prior with prior approval.
approval of Time limit of 7 days t
Amendm Amendment in
Sec ent existing
from provision
specified 30 days shall be

authority, with given to assessee to
respect to the reply which shall be
information which considered by AO.
suggests that the
income
chargeable to tax
has escaped
assessment;
(b) provide an
opportunity of
being heard to
the
assessee, with
the prior approval
of specified
authority, by
serving upon him
a notice to show
cause within such
time, as may be
specified in the
notice, being not
less than seven
days and but not
exceeding thirty
days from the
date on which
such notice is
issued, or such
time, as may be
extended by him
on the basis of an
application in this
behalf, as to why
a notice under
Amendm Amendment in
Sec ent existing
from provision
section 148
should not be
issued on the
basis of
information which
suggests that
income
chargeable to tax
has escaped
assessment in his
case for the
relevant
assessment year
and results of
enquiry
conducted, if any,
as per clause (a);
(c) consider the
reply of assessee
furnished, if any,
in response to the
show-cause
notice referred to
in clause (b);
(d) decide, on the
basis of material
available on
record including
reply of the
assessee,
whether or not it
is a fit case to
issue a notice
under section
148, by passing
an order, with the
Amendm Amendment in
Sec ent existing
from provision
prior approval of
specified
authority, within
one month from
the end of the
month in which
the reply referred
to in clause (c) is
received by him,
or where no such
reply is furnished,
within one month
from the end of
the month in
which time or
extended time
allowed to furnish
a reply as per
clause (b)
expires:
Provided that the
provisions of this
section shall not
apply in a case
where,—
(a) a search is
initiated under
section 132 or
books
of account, other
documents or any
assets are
requisitioned
under section
132A in the case
of the
Amendm Amendment in
Sec ent existing
from provision
assessee on or
after the 1st day
of April, 2021; or
(b) the Assessing
Officer is
satisfied, with the
prior approval of
the Principal
Commissioner or
Commissioner
that any money,
bullion, jewellery
or
other valuable
article or thing,
seized in a
search under
section 132 or
requisitioned
under section
132A, in
the case of any
other person on
or after the 1st
day of
April, 2021,
belongs to the
assessee; or
(c) the Assessing
Officer is
satisfied, with the
prior approval of
the Principal
Commissioner or
Commissioner
that any books of
Amendm Amendment in
Sec ent existing
from provision
account or
documents,
seized in a
search under
section 132 or
requisitioned
under section
132A, in case of
any other
person on or after
the 1st day of
April, 2021,
pertains
or pertain to, or
any information
contained therein,
relate to, the
assessee.
Explanation.—For
the purposes of
this section,
specified
authority means
the specified
authority referred
to in section
151.”.
149 01-04- Time limit for [(1) No notice under (1) No notice Time limit for issue
2021 notice. section 148 shall be under section 148 of notice under 148
issued for the relevant shall be issued has been reduced
assessment year,— for from 4 years to 3
[(a) if four years have the relevant years. Similarly AO
elapsed from the end of assessment can open the case in
the relevant assessment year,— case income likely to
year, unless the case (a) if three years escape assessment
Amendm Amendment in
Sec ent existing
from provision
falls under clause (b)[or have elapsed is in excess of Rs.

clause (c)]; from the end of 50 Lakhs.
(b) if four years, but not the
more than six years, relevant
have elapsed from the assessment year,
end of the relevant unless the case
assessment year unless falls under
the income chargeable to clause (b);
tax which has escaped (b) if three years,
assessment amounts to but not more than
or is likely to amount to ten years, have
one lakh rupees or more elapsed from the
for that year;] end of the
[(c) if four years, but not relevant
more than sixteen years, assessment year
have elapsed from the unless the
end of the relevant Assessing Officer
assessment year unless has in his
the income in relation to possession books
any asset (including of accounts or
financial interest in any other documents
entity) located outside or evidence which
India, chargeable to tax, reveal that the
has escaped income
assessment.] chargeable to tax,
Explanation.—In represented in
determining income the form of asset,
chargeable to tax which which has
has escaped escaped
assessment for the assessment
purposes of this sub- amounts to or is
section, the provisions of likely to amount
Explanation 2 of section to fifty lakh
147 shall apply as they rupees or more
apply for for that year:
the purposes of that Provided that no
Amendm Amendment in
Sec ent existing
from provision
section.] notice under

(2) The provisions of section 148 shall
sub-section (1) as to the be
issue of notice shall be issued at any
subject to the provisions time in a case for
of section 151. the relevant
(3) If the person on assessment year
whom a notice under beginning on or
section 148 is to be before 1st day of
served is a person April, 2021, if
treated as the agent of a such notice could
non-resident under not have been
section 163 and the issued at that
assessment, time on account
reassessment or of being beyond
recomputation to be the time limit
made in pursuance of specified under
the notice is to be made the provisions of
on him as the agent of clause (b) of sub-
such non-resident, the section (1) of this
notice shall not be issued section, as they
after the expiry of a stood
period of [six years] from immediately
the end of the relevant before the
assessment year. commencement
[Explanation.—For the of the Finance
removal of doubts, it is Act, 2021:
hereby clarified that the Provided further
provisions of sub- that the
sections (1) and (3), as provisions of this
amended by the Finance sub-section shall
Act, 2012, shall also be not apply in a
applicable for any case, where a
assessment year notice under
beginning on or before section 153A, or
section 153C
Amendm Amendment in
Sec ent existing
from provision
the 1st day of April, read with section

2012.] 153A, is required
to be issued in
relation to a
search initiated
under section 132
or books of
account, other
documents or any
assets
requisitioned
under section
132A, on or
before the 31st
day of March,
2021:
Provided also that
for the purposes
of computing the
period of
limitation as per
this section, the
time or
extended time
allowed to the
assessee, as per
show-cause
notice issued
under clause (b)
of section 148A
or the period
during which the
proceeding under
section 148A is
stayed by an
order or injunction
Amendm Amendment in
Sec ent existing
from provision
of any court, shall

be excluded:
Provided also that
where
immediately after
the
exclusion of the
period referred to
in the
immediately
preceding
proviso, the
period of
limitation
available to the
Assessing Officer
for passing an
order under
clause (d) of
section 148A is
less than seven
days, such
remaining period
shall be extended
to seven days
and the period of
limitation in sub-
section (1) shall
be deemed to be
extended
accordingly.
(2) The provisions
of sub-section (1)
as to the issue of
notice shall be
subject to the
Amendm Amendment in
Sec ent existing
from provision
provisions of
section 151.”
151 01-04- Sanction for (1) No notice shall be 151. Specified Authority whos
2021 issue of notice. issued under section 148 authority for the approval is required
by an Assessing Officer, purposes of is specified in this
after the expiry of a section 148 and section. Principal
period of four years from section 148A Chief Commissioner
the end of the relevant shall be,— approval is required
assessment year, unless (i) Principal in case 3 years have
the Commissioner or elapsed.
Principal Chief Principal Director
Commissioner or Chief or Commissioner
Commissioner or or Director, if
Principal Commissioner three years or
or Commissioner is less than three
satisfied, on the reasons years have
recorded by the elapsed from the
Assessing Officer, that it end of the
is a fit case for the issue relevant
of such notice. assessment year;
(2) In a case other than a (ii) Principal Chief
case falling under sub- Commissioner or
section (1), no notice Principal
shall be issued under Director General
section 148 by an or where there is
Assessing Officer, who is no Principal Chief
below the rank of Joint Commissioner or
Commissioner, unless Principal Director
the Joint General, Chief
Commissioner is Commissioner or
satisfied, on the reasons Director General,
recorded by such if more than three
Assessing Officer, that it years have
is a fit case for the issue elapsed from the
of such notice. end of the
Amendm Amendment in
Sec ent existing
from provision
(3) For the purposes of relevant

sub-section (1) and sub- assessment year.
section (2), the Principal
Chief Commissioner or
the Chief Commissioner
or the Principal
Commissioner or the
Commissioner or the
Joint Commissioner, as
the case may be, being
satisfied on the reasons
recorded by the
Assessing Officer about
fitness of a case for the
issue of notice under
section 148, need not
issue such notice
himself.]
151A 01-04- In section 151A of 151A shall be

2021 the Income-tax applicable to notice
Act, in sub- under 148 and 148A
section (1), in the also.
opening portion,
after the words
and figures
“issuance of
notice under
section 148”, the
words, figures
and letter “or
conducting of
enquiries or
issuance of show-
cause notice or
passing of order
Amendm Amendment in
Sec ent existing
from provision
under section
148A” shall be
inserted.
153 01-04- Time limit for New proviso inserted Provided also that Previously
2021 completion of in respect of an assessment was to
assessments, order of be completed within
reassessments assessment 21 months from the
and relating to the completion of
recomputation assessment year Financial year. Now
commencing on the same has been
or after the 1st reduced to 9 months
day of April, from the completion
2021, the of assesment year.
provisions of this This is a welcome
sub-section shall provision.
have effect, as if
for the words
“twenty-one
months”, the
words “nine
months” had
been
substituted.”.
153A 01-04- Assessment in Notwithstanding anything Notwithstanding Assessment in case

2021 case of search contained in anything of search or
or requisition. section139, section 147, contained in requisition has been
section 148, section 149, section139, restricted to period
section 151 and section section 147, where a search is
153, in the case of a section 148, initiated under
person section 149, section 132 or books
where a search is section 151 and of account, other
initiated under section section 153, in documents or any
132 or books of account, the case of a assets are
other documents or any person requisitioned under
Amendm Amendment in
Sec ent existing
from provision
assets are where a search is section 132A after

requisitioned under initiated under the 31st day of May,
section 132A after the section 132 or 2003 but on or
31st day of May, 2003. books of account, before the 31st day
other documents of March, 2021.
or any assets are
requisitioned
under section
132A after the
31st day of May,
2003 but on or
before the 31st
day of March,
2021.
153C (3) 01-04- Assessment of Newly Inserted (3) Nothing As per Section153C,
2021 income of any contained in this where the Assessing
other person section shall Officer is satisfied
apply in that articles or books
relation to a of accounts relates
search initiated to some other
under section 132 person, then AO
or books of shall hand over such
account, other articles/ books to AO
documents or any having jurisdiction
assets over such other
requisitioned person. Such hand
under section over shall be apply
132A on or after in case of Search
the 1st day of and seizure or
April, 2021. requisition books of
account by Principal
Chief Commissioner
or Chief
Commissioner u/s
132A.
Amendm Amendment in
Sec ent existing
from provision
194(c) 01-04- Payments to Newly Inserted (d)a “business Tax shall not be
2021 contractors trust”, as defined deducted at source
in clause (13A) of for where income is
section 2, by a paid or payable to
special purpose business trust
vehicle referred to provided that the
in the Explanation income is exempt in
to clause (23FC) the hands of
of section 10; Business trust.
(e) any other
person as may be
notified by the
Central
Government in
the Official
Gazette in this
behalf.’.
194A 01-04- TDS on Newly substituted After the words Tax shall not be
2021 Interest (other “infrastructure deducted at source
than Interest capital fund or”, for where income is
on Securities) the paid or payable to
words infrastructure capital
“infrastructure fund or infrastructure
debt fund or” shall debt fund in relation
be inserted. to zero coupon
bonds. Previously
such provision was
applicable only to
infrastructure capital
fund now the same
has been made
effective to
infrastructure debt
fund.
Amendm Amendment in
Sec ent existing
from provision
194-IB 01-07- TDS on Rent In a case where the tax In a case where Considering the
(4) 2021 is required to be the tax is required newly inserted
deducted as per the to be deducted as provision of 206AB
provisions of section per the provisions given below as
206AA, such deduction of section 206AA applicable to
shall not exceed the or section 206AB, specified persons,
amount of rent payable such deduction tax deduction shall
for the last month of the shall not exceed not exceed the
previous year or the last the amount of amount of rent
month of the tenancy, as rent payable for payable for the last
the case may be. the last month of month of the
the previous year previous year or the
or the last month last month of the
of the tenancy, as tenancy.
the case may be.
194P 01-04- Deduction of Newly Inserted ‘194P. (1) As exemption is

2021 tax Notwithstanding being provided to
in case of anything specified senior
specified contained in the citizens from filing of
senior provisions of Income Tax return,
citizen. Chapter XVII-B, the specified bank
in case of a shall take into
specified senior account the
citizen, the deductions under
specified bank Chapter VI-A of the
shall, after giving citizen while
effect to the deducting tax at
deduction source.
allowable under Specified Senior
Chapter VI-A and citizen is :-
rebate allowable a. who is of the age
under section of seventy-five years
87A, compute the or more
total income of at any time during
such specified the previous year;
Amendm Amendment in
Sec ent existing
from provision
senior citizen for b. who is having

the relevant income of the nature
assessment year of pension and
and deduct interest from same
income-tax on bank in which they
such total income receive pension.
on the basis of c. who has furnished
the rates in force. declaration to the
(2) The provisions specified bank.
of section 139
shall not apply to Now such senior
a citizens will have
specified senior provide declaration
citizen for the to deductor about
assessment year eligible deductions
relevant to the permitted under
previous year in Chapter VI-A.
which the tax has
been deducted
under subsection
(1).
Explanation.––
For the purposes
of this section,––
(a) “specified
bank” means a
banking company
as the
Central
Government may,
by notification in
Official
Gazette, specify;
(b) “specified
senior citizen”
means an
Amendm Amendment in
Sec ent existing
from provision
individual,
being a resident
in India––
(i) who is of the
age of seventy-
five years or more
at any time during
the previous year;
(ii) who is having
income of the
nature of pension
and no other
income except
the income of the
nature
of interest
received or
receivable from
any account
maintained by
such individual in
the same
specified
bank in which he
is receiving his
pension income;
and
(iii) has furnished
a declaration to
the specified
bank containing
such particulars,
in such form and
verified in such
Amendm Amendment in
Sec ent existing
from provision
manner, as may
be prescribed.’.
194Q 01-07- Deduction of Newly Inserted 194Q. (1) Any Tax is to be

2021 tax person, being a deducted @ 0.1% if
at source on buyer who is the following
payment of responsible conditions are
certain sum for for paying any satisfied:-
purchase of sum to any a. purchase of
goods. resident goods by buyer who
(hereafter in this is responsible for
section referred paying any sum to
to as the seller) any resident (seller).
for purchase of b. above Rs. 50
any goods of the Lakhs in the
value or previous year
aggregate of such c. "buyer" means a
value exceeding person whose total
fifty lakh rupees sales, gross receipts
in any previous or turnover from the
year, shall, at the business carried on
time of credit of by him exceed ten
such sum to the crore rupees during
account of the the previous
seller or at the financial year.
time of payment d. such provision
thereof by any shall be applicable
mode, whichever even if any such
is earlier, deduct amount is credited to
an amount equal suspense account or
to 0.1 percent. of any other such
such sum account.
exceeding fifty
lakh rupees as Provision shall not
income-tax. be applicable if:-
Explanation.–– a. tax is deductible
Amendm Amendment in
Sec ent existing
from provision
For the purposes under any other

of this sub- provision
section, b. tax is collectible
“buyer” means a under the provisions
person whose of section 206C
total sales, gross other than a
receipts or transaction to which
turnover from the sub-section (1H) of
business carried section 206C
on by him exceed applies.’
ten crore rupees In case tax is
during the collected on same
financial year transaction, No tax
immediately will be deducted.
preceding the
financial year in
which the
purchase of
goods is carried
out, not being a
person, as the
Central
Government may,
by notification in
the Official
Gazette, specify
for this purpose,
subject to such
conditions as may
be specified
therein.
(2) Where any
sum referred to in
sub-section (1) is
credited to any
account, whether
Amendm Amendment in
Sec ent existing
from provision
called “suspense
account” or by
any other name,
in the books of
account of the
person liable to
pay such income,
such credit of
income shall be
deemed to be the
credit of such
income to the
account of the
payee and the
provisions of this
section shall
apply accordingly.
(3) If any difficulty
arises in giving
effect to the
provisions of this
section, the
Board may, with
the previous
approval of the
Central
Government,
issue guidelines
for the purpose of
removing the
difficulty.
(4) Every
guideline issued
by the Board
under sub-section
(3) shall, as soon
Amendm Amendment in
Sec ent existing
from provision
as may be after it
is issued, be laid
before
each House of
Parliament, and
shall be binding
on the incometax
authorities and
the person liable
to deduct tax.
(5) The provisions
of this section
shall not apply to
a
transaction on
which––
(a) tax is
deductible under
any of the
provisions of this
Act; and
(b) tax is
collectible under
the provisions of
section 206C
other than a
transaction to
which sub-section
(1H) of
section 206C
applies.’.
196D (1) 01-04- Income of New Proviso inserted Provided that Where Central
2021 Foreign where an Government have
Institutional agreement enter into an
referred to in agreement with the
Amendm Amendment in
Sec ent existing
from provision
Investors from subsection (1) of Government of any

securities. section 90 or sub- country outside India
section (1) of which is applicable
section 90A to recepient of
applies to the payment and the
payee and if the recipient also
payee has furnishes certificate
furnished a to this effect, then
certificate tax shall be
referred to in sub- deducted @ 20% or
section (4) of rate as provided in
section 90 or sub- such agreement.
section (4) of
section 90A, as
the case may be,
then, income-tax
thereon shall be
deducted at the
rate of twenty per
cent. or at the
rate or rates of
income-tax
provided in such
agreement for
such
income,
whichever is
lower.”
206AA 01-07- Deduction of New Proviso inserted Provided further Section 206AA
2021 tax at higher that where the tax provides that if PAN
tax rate is required to be is not furnished by
deducted under the payee, the
section 194Q, the withholding tax rate
provisions of would be 20% or the
clause (iii) shall rate in force,
Amendm Amendment in
Sec ent existing
from provision
apply as if for the whichever is higher.

words “twenty per But in case of
cent.”, the words transaction where
“five per cent.” tax is to be deducted
had been @ 0.10% under
substituted.’ section 194Q, such
rate shall be 5%.
206AB 01-07- Special Newly Inserted (1) Tax is to be

2021 provision for Notwithstanding deducted at twice
deduction of anything the specified rate or
tax contained in any rate in force or @5%
at source for other provisions (whichever is higher)
non-filers of of this Act, where in the following
income-tax tax is required to cases where
return. be deducted at recipient has:-
source under the a. not filed return of
provisions of income for 2
Chapter XVIIB, assesment years
other than and
sections 192, b. aggregate of tax
192A, 194B, deducted at source
194BB, 194LBC and tax collected at
or 194N on any source in his case is
sum or income or rupees fifty thousand
amount paid, or or more in each of
payable or 54 these two previous
income-tax years.
return.
credited, by a This shall not
person (hereafter include a
referred to as nonresident
deductee) to a who does not have a
specified person, permanent
the tax shall be establishment in
deducted at the India.
Amendm Amendment in
Sec ent existing
from provision
higher of the Now every person

following rates, responsible for tax
namely:–– deduction should
(i) at twice the obtain the
rate specified in declaration about
the relevant filing of income tax
provision return from deductee
of the Act; or otherwise ths
(ii) at twice the provision will be
rate or rates in applicable.
force; or
(iii) at the rate of
five per cent..
(2) If the
provisions of
section 206AA is
applicable to a
specified person,
in addition to the
provision of this
section, the tax
shall be deducted
at higher of the
two rates
provided in this
section and in
section 206AA.
(3) For the
purposes of this
section “specified
person”
means a person
who has not filed
the returns of
income for both of
the two
Amendm Amendment in
Sec ent existing
from provision
assessment
years relevant to
the two previous
years
immediately prior
to the previous
year in which tax
is required to be
deducted, for
which the time
limit of filing
return of income
under sub-section
(1) of section 139
has expired; and
the aggregate of
tax deducted at
source and tax
collected at
source in his case
is rupees fifty
thousand or more
in each of these
two previous
years:
Provided that the
specified person
shall not include a
nonresident who
does not have a
permanent
establishment in
India.
Explanation.––
For the purposes
of this sub-
Amendm Amendment in
Sec ent existing
from provision
section, the
expression
“permanent
establishment”
includes a fixed
place of business
through which the
business of the
enterprise is
wholly or partly
carried on.’.
206CCA 01-07- Special Newly Inserted (1) Tax is to be

2021 provision for Notwithstanding collected at twice the
collection of anything specified rate or rate
tax contained in any in force or @5% in
at source for other provisions the following cases
non-filers of of this Act, where where recipient has:
income-tax tax is required to -
return. be collected at a. not filed return of
source under the income for 2
provisions of assesment years
Chapter XVII-BB, and
on any sum or b. aggregate of tax
amount received deducted at source
by a person and tax collected at
(hereafter source in his case is
referred to as rupees fifty thousand
collectee) from a or more in each of
specified person, these two previous
the tax shall be years.
collected at the
higher of the This shall not
following two include a
rates, namely:–– nonresident
(i) at twice the who does not have a
Amendm Amendment in
Sec ent existing
from provision
rate specified in permanent

the relevant establishment in
provision India.
of the Act; or
(ii) at the rate of
five per cent.
(2) If the
provisions of
section 206CC is
applicable to a
specified person,
in addition to the
provisions of this
section, the tax
shall be collected
at higher of the
two rates
provided in this
section and in
section 206CC.
(3) For the
purposes of this
section “specified
person”
means a person
who has not filed
the returns of
income for both of
the two
assessment
years relevant to
the two previous
years
immediately prior
to the previous
year in which tax
Amendm Amendment in
Sec ent existing
from provision
is required to be
collected, for
which the time
limit of filing
return of income
under sub-section
(1) of section 139
has expired; and
the aggregate of
tax deducted at
source and tax
collected at
source in his case
is rupees fifty
thousand or more
in each of these
two previous
years:
Provided that the
specified person
shall not include a
nonresident who
does not have a
permanent
establishment in
India.
Explanation.––
For the purposes
of this sub-
section, the
expression
“permanent
establishment”
includes a fixed
place of business
through which the
Amendm Amendment in
Sec ent existing
from provision
business of the
enterprise is
wholly or partly
carried on.’
234C (1) 01-04- Interest for Newly Inserted “(d) the amount of No interest under
2021 defaults in dividend income,” section 234C shall
furnishing Explanation 2.–– be payable on
return of For the purposes dividend income
income of this sub- excluding deemed
section, dividend.
the term
“dividend” shall
have the meaning
assigned to it in
clause (22) of
section 2, but
shall not include
sub-clause (e)
thereof.’
245A 01-02- SETTLEMENT Newly Inserted ‘(da) “Interim Section 245 of the
2021 OF CASES Board” means the Income Tax Act
Interim Board for empowers the
Settlement assessing officer
constituted under (AO) to adjust the
section 245AA;’ refund (or a part of
(ii) after the the refund) against
clause (e), the any tax demand that
following clauses is outstanding from
shall be the taxpayer. In this
inserted and shall context Interium
be deemed to Borad, Member of
have been the interium Borad
inserted, and pending
namely:––
Amendm Amendment in
Sec ent existing
from provision
‘(ea) “Member of application have

the Interim Board” been defined.
means a
Member of the
Interim Board;
(eb) “pending
application”
means an
application
which was filed
under section
245C and which
fulfils the
following
conditions,
namely: —
(i) it was not
declared invalid
under sub-section
(2C) of section
245D; and
(ii) no order under
sub-section (4) of
section 245D
was issued on or
before the 31st
day of January,
2021
with respect to
such application;’.
245AA 01-02- SETTLEMENT Newly Inserted 245AA. (1) The Formation,

2021 OF CASES Central consititution and
Government shall working mechanism
constitute of the Interim
one or more Boards for
Amendm Amendment in
Sec ent existing
from provision
Interim Boards for Settlement has been

Settlement, as given.
may be
necessary, for the
settlement of
pending
applications.
(2) Every Interim
Board shall
consist of three
members, each
being an officer of
the rank of Chief
Commissioner, as
may be
nominated by the
Board.”.
(3) If the
Members of the
Interim Board
differ in opinion
on any point, the
point shall be
decided
according to the
opinion of the
majority.”
245B 01-02- SETTLEMENT Newly Inserted Provided that the Considering that
2021 OF CASES Income-tax Interim Boards for
Settlement Settlement shall be
Commission so constituted, Income-
constituted shall tax Settlement
cease to operate Commission will
on or after the 1st cease to operate
Amendm Amendment in
Sec ent existing
from provision
day of February, w.e.f.1st February

2021.” 2021.
245BC 01-02- SETTLEMENT Newly Inserted Provided that the Provision relating to
2021 OF CASES provisions of this Income-tax
section shall not Settlement
apply on or after Commission are
the 1st day of being made
February, 2021.” ineffective.
245BD 01-02- SETTLEMENT Newly Inserted Provided that the Provision relating to
2021 OF CASES provisions of this Income-tax
section shall not Settlement
apply on or after Commission are
the 1st day of being made
February, 2021.” ineffective.
245C(4) 01-02- SETTLEMENT Newly Inserted No application Provision relating to

2021 OF CASES shall be made Income-tax
under this section Settlement
on or Commission are
after the 1st day being made
of February, ineffective.
2021.
245D 01-02- SETTLEMENT Newly Inserted (i) in sub-section The provision is

2021 OF CASES (2C), after the relating to transition
second proviso, of cases from
the Income-tax
following proviso Settlement
shall be inserted Commission to
and shall be Interim Boards for
deemed to have Settlement.
been inserted, A. For applications
namely:–– made for which
“Provided also order was to be
that where in passed before 31st
Amendm Amendment in
Sec ent existing
from provision
respect of an January 2021 but

application, has not been
an order, which passed, shall be
was required to valid.
be passed under B. Further orders of
this subsection on Income-tax
or before the 31st Settlement
day of January, Commission can be
2021, has not amended by Interim
been passed on Boards for
or before the 31st Settlement.
day of January, C. Considering that
2021, such Interium Board is not
application shall yet formed the time-
deemed to be limit for amending
valid.”; any order or filing of
(ii) in sub-section rectification
(6B), for the application has been
words “amend specified.
any order D. Further, in place
passed by it”, the of words “Settlement
words “amend Commission”, the
any order words “Settlement
passed” shall be Commission or
substituted and Interim Board of
shall be deemed Settlement” had
to have been been substituted.
substituted;
(iii) after sub-
section (8), the
following sub-
sections shall be
inserted and shall
be deemed to
have been
inserted,
Amendm Amendment in
Sec ent existing
from provision
namely:––
‘(9) On and from
the 1st day of
February, 2021,
the
provisions of sub-
sections (1), (2),
(2B), (2C), (3),
(4),
(4A), (5), (6) and
(6B) shall apply to
pending
applications
allotted to Interim
Board with the
following
modifications,
namely:––
(i) for the words
“Settlement
Commission”,
wherever they
occur, the words
“Interim Board”
shall
be substituted;
(ii) for the word
“Bench”, the
words “Interim
Board” shall be
substituted;
(iii) for the
purposes of this
section, the date
referred to in sub-
section (2) of
Amendm Amendment in
Sec ent existing
from provision
section 245M
shall be
deemed to be
date on which the
application was
made
under section
245C and
received by the
Interim
Board;
(iv) where the
time-limit for
amending any
order
or filing of
rectification
application as per
sub-section
(6B) expires on or
after the 1st day
of February,
2021,
in computing the
period of
limitation, the
period
commencing from
the 1st February,
2021 and ending
on the end of the
month in which
the Interim Board
is constituted
shall be excluded
and where
Amendm Amendment in
Sec ent existing
from provision
immediately after
exclusion of such
period, the
remaining period
available to the
Interim Board for
amending the
order or to the
Principal
Commissioner
or Commissioner
or the applicant
for filing of
application is less
than sixty days,
such remaining
period shall be
extended to sixty
days and the
period
of limitation shall
be deemed to
have been
extended
accordingly.
(10) On and from
the 1st day of
February, 2021,
the
provisions of sub-
sections (6A) and
(7) shall have
words
“Settlement
Commission”, the
Amendm Amendment in
Sec ent existing
from provision
words
“Settlement
Commission or
Interim Board of
Settlement” had
been substituted.
(11) The Central
Government may
by notification in
the
Official Gazette,
make a scheme,
for the purposes
of
settlement in
respect of
pending
applications by
the Interim Board,
so as to impart
greater efficiency,
transparency and
accountability
by—
(a) eliminating the
interface between
the Interim
Board and the
assessee in the
course of
proceedings to
the extent
technologically
feasible;
(b) optimising
utilisation of the
Amendm Amendment in
Sec ent existing
from provision
resources
through
economies of
scale and
functional
specialisation;
(c) introducing a
mechanism with
dynamic
jurisdiction.
(12) The Central
Government may,
for the purposes
of
giving effect to
the scheme made
under sub-section
(11), by
notification in the
Official Gazette,
direct that any of
the provisions of
this Act shall not
apply or shall
apply with such
exceptions,
modifications and
adaptations as
may be specified
in the said
notification:
Provided that no
such direction
shall be issued
after the 31st day
of March, 2023.
Amendm Amendment in
Sec ent existing
from provision
(13) Every
notification issued
under sub-section
(11) and sub-
section (12) shall,
as soon as may
be after the
notification is
issued, be laid
before each
House of
Parliament.”.
245DD 01-02- SETTLEMENT Newly Inserted On and from the the power of the
(3) 2021 OF CASES 1st day of Settlement
February, 2021, Commission shall be
the power exercised by the
of the Settlement Interim Board.
Commission
under this section
shall be exercised
by the Interim
Board and the
provisions of this
section shall
mutatis mutandis
apply to the
Interim Board as
they apply to the
Settlement
Commission.”.
245F 01-02- SETTLEMENT Newly Inserted On and from the Powers and
2021 OF CASES 1st day of functions of the
February, 2021, Settlement
the Commission under
Amendm Amendment in
Sec ent existing
from provision
powers and this section shall be

functions of the exercised or
Settlement performed, by the
Commission Interim Board.
under this section
shall be exercised
or performed, by
the Interim Board
and all the
provisions of this
section shall
mutatis mutandis
apply to the
Interim Board as
they apply to the
Settlement
Commission.”
245G 01-02- SETTLEMENT Newly Inserted Provided further Powers and

2021 OF CASES that on or after functions of the
the 1st day of Settlement
February, 2021, Commission under
functions of the this section shall be
Settlement exercised or
Commission performed, by the
under this section Interim Board.
shall be
performed by the
Interim Board and
the provisions of
this section shall
mutatis mutandis
apply to Interim
Board as they
apply to the
Amendm Amendment in
Sec ent existing
from provision
Settlement
Commission.”.
245H 01-02- SETTLEMENT Newly Inserted On and from the Powers and
2021 OF CASES 1st day of functions of the
February, 2021, Settlement
the power Commission under
of the Settlement this section shall be
Commission exercised or
under this section performed, by the
shall be exercised Interim Board.
by the Interim
Board and the
provisions of this
section shall
mutatis mutandis
apply to the
Interim Board as
they apply to the
Settlement
Commission.”
245M 01-02- SETTLEMENT Newly Inserted (1) With respect In case of

2021 OF CASES to a pending application pending
application, the before Settlement
assessee who Commission, the
had filed such assessee can
application may, withdraw the case
at his option, within a period of
withdraw such three months from
application within the date of
a period of three commencement of
months from the the Finance Act,
date of 2021 and intimate
commencement the Assessing
of the Finance Officer.
Amendm Amendment in
Sec ent existing
from provision
Act, 2021 and In case the

intimate the application is not
Assessing withdrawn by
Officer, in the assesee, pending
prescribed application shall be
manner, about deemed to have
such withdrawal. been received by the
(2) Where the Interim Board on the
option under sub- date on which such
section (1) is not application is allotted
exercised by the or transferred to the
assessee within Interim Board which
the time allowed the board may
under that sub- transfer as required.
section, the
pending
application shall
be deemed to
have been
received by the
Interim Board on
the date on which
such application
is allotted or
transferred to the
Interim Board
under sub-section
(3).
(3) The Board
may, by an order,
allot any pending
application to any
Interim Board and
may also transfer,
by an order, any
pending
Amendm Amendment in
Sec ent existing
from provision
application from
one Interim Board
to another Interim
Board.
(4) Where the
pending
application is
allotted to an
Interim Board
under sub-section
(3) or transferred
to another Interim
Board
subsequently, all
the records,
documents or
evidences, by
whatever name
called, with the
Settlement
Commission shall
be transferred to
such Interim
Board and shall
be
deemed to be the
records before it
for all purposes.
(5) Where the
assessee
exercises the
option under
subsection
(1) to withdraw
his application,
the proceedings
Amendm Amendment in
Sec ent existing
from provision
with
respect to the
application shall
abate on the date
on which
such application
is withdrawn and
the Assessing
Officer, or,
as the case may
be, any other
income-tax
authority before
whom the
proceeding at the
time of making
the application
was pending,
shall dispose of
the case in
accordance with
the
provisions of this
Act as if no
application under
section 245C
had been made:
Provided that for
the purposes of
the time-limit
under
sections 149,
153, 153B, 154
and 155 and for
the purposes of
payment of
Amendm Amendment in
Sec ent existing
from provision
interest under
section 243 or
244 or, as the
case may be,
section 244A, for
making the
assessment or
reassessment
under this sub-
section, the
period
commencing on
and from the date
of the application
to the Settlement
Commission
under section
245C and ending
with the date
referred to in this
sub-section shall
be excluded:
Provided further
that the income-
tax authority shall
not be entitled to
use the material
and other
information
produced by the
assessee before
the Settlement
Commission or
the results of the
inquiry held or
evidence
Amendm Amendment in
Sec ent existing
from provision
recorded by the
Settlement
Commission in
the course of
proceedings
before it:
Provided also that
nothing contained
in the first proviso
shall apply in
relation to the
material and
other information
collected, or
results of the
inquiry held or
evidence
recorded by the
Assessing
Officer, or as the
case may be,
other incometax
authority during
the course of any
other proceeding
under this Act
irrespective of
whether such
material or other
information or
results of the
inquiry or
evidence were
also produced by
the assessee or
the Assessing
Amendm Amendment in
Sec ent existing
from provision
Officer before the

Settlement
Commission.”.
245MA(1 01-04- Dispute Newly Inserted (1) The Central The Central
) 2021 Resolution Government shall Government shall
Committee. constitute, one or constitute one or
more Dispute more Dispute
Resolution Resolution
Committees, as Committee.
may be
necessary, in
accordance with
the rules made
under this Act, for
dispute resolution
in the case of
such persons or
class of persons,
as may be
specified by the
Board, who may
opt for dispute
resolution under
this Chapter in
respect of dispute
arising from any
variation in the
specified order in
his case and who
fulfils the
specified
conditions.
Amendm Amendment in
Sec ent existing
from provision
245MA(2 01-04- Dispute Newly Inserted (2) The Dispute Power of Dispute
) 2021 Resolution Resolution Resolution
Committee. Committee, Committee to reduce
subject to such or waive any penalty
conditions, as imposable under this
may be act or grant
prescribed, shall immunity from any
have the powers offence punishable
to reduce or under this Act.
waive any penalty
imposable under
this Act or grant
immunity from
prosecution for
any offence
punishable under
this Act in case of
a person whose
dispute is
resolved under
this Chapter.
245MA(3 01-04- Dispute Newly Inserted (3) The Central Sub-section (3)
) 2021 Resolution Government may grant power to
Committee. make a scheme, Central Government
by notification in to make a scheme
the Official for the purpose of
Gazette, for the Dispute Resolution
purposes of under this chapter,
dispute 62 so as to impart
resolution under greater efficiency,
this Chapter, so transparency and
as to impart accountability.
greater efficiency,
transparency and
accountability
Amendm Amendment in
Sec ent existing
from provision
by—
(a) eliminating the
interface between
the Dispute
Resolution
Committee and
the assessee in
the course of
dispute resolution
proceedings to
the extent
technologically
feasible;
(b) optimising
utilisation of the
resources
through
economies of
scale and
functional
specialisation;
(c) introducing a
dispute resolution
system with
dynamic
jurisdiction.
245MA(4 01-04- Dispute Newly Inserted (4) The Central Sub-section (4) of
) 2021 Resolution Government may, said section seeks to
Committee. for the purposes provide that the
of giving effect to Central Government
the scheme made may, for the
under sub-section purposes of giving
(3), by notification effect to the scheme
in the Official made under sub-
Gazette, direct section (3), by
Amendm Amendment in
Sec ent existing
from provision
that any of the notification in the

provisions of this Official Gazette,
Act shall not direct that any of the
apply or shall provisions of this Act
apply with such shall not apply or
exceptions, shall apply with such
modifications and exceptions,
adaptations as modifications and
may be specified adaptations as may
in the said be specified in the
notification: notification.
Provided that no However, no
such direction direction shall be
shall be issued issued after the 31st
after the 31st day day of March, 2023.
of March, 2023.
245MA(5 01-04- Dispute Newly Inserted (5) Every Sub-section (5) of

) 2021 Resolution notification issued section 245MA
Committee. under sub- seeks to provide that
sections (3) and every notification
(4) shall, as soon issued under sub-
as may be after section (3) and sub-
the notification is section (4) shall, as
issued, be laid soon as may be
before each after the notification
House of is issued, be laid
Parliament. before each House
of Parliament.
Explanat 01-04- Dispute Newly Inserted Explanation.— Defines the

ion to 2021 Resolution For the purposes Specified conditions
245MA Committee. of this section,— in relation to a
(a) “specified person for Dispute
conditions” in Resolution
relation to a and Defines the
Amendm Amendment in
Sec ent existing
from provision
person means a Specified Order for

person who fulfils Dispute Resolution
the following
conditions,
namely:—
(I) where he is not
a person,—
(A) in respect of
whom an order of
detention has
been made under
the provisions of
the Conservation
of Foreign
Exchange and
Prevention of
Smuggling
Activities Act,
1974:
Provided that—
(i) such order of
detention, being
an order to which
the provisions of
section 9 or
section 12A of the
said Act do not
apply, has been
revoked on the
report of the
Advisory Board
under section 8 of
the said Act or
before the receipt
of the report of
the Advisory
Amendm Amendment in
Sec ent existing
from provision
Board; or
(ii) such order of
detention being
an order to which
the provisions of
section 9 of the
said Act apply,
has not been
revoked before
the expiry of the
time for, or on the
basis of, the
review under sub-
section (3) of
section 9, or on
the report of the
Advisory Board
under section 8,
read with sub-
section (2) of
section 9, of the
said Act; or
(iii) such order of
detention, being
an order to which
the provisions of
section 12A of the
said Act apply,
has not been
revoked before
the expiry of the
time for, or on the
basis of, the first
review under sub-
section (3) of the
said section, or
Amendm Amendment in
Sec ent existing
from provision
on the basis of
the report of the
Advisory Board
under section 8,
read with
subsection (6) of
section 12A, of
the said Act; or
(iv) such order of
detention has not
been set aside by
a court of
competent
jurisdiction;
(B) in respect of
whom
prosecution for
any offence
punishable under
the provisions of
the Indian Penal
Code, the
Unlawful
Activities
(Prevention) Act,
1967, the
Narcotic Drugs
and Psychotropic
Substances Act,
1985, the
Prohibition of
Benami
Transactions Act,
1988, the
Prevention of
Corruption Act,
Amendm Amendment in
Sec ent existing
from provision
1988 or the
Prevention of
Money
Laundering Act,
2002 has been
instituted and he
has been
convicted of any
offence
punishable under
any of those Acts;
(C) in respect of
whom
prosecution has
been initiated by
an income-tax
authority for any
offence
punishable under
the provisions of
this Act or the
Indian Penal
Code or for the
purpose of
enforcement of
any civil liability
under any law for
the time being in
force, or such
person has been
convicted of any
such offence
consequent upon
the prosecution
initiated by an
Income-tax
Amendm Amendment in
Sec ent existing
from provision
authority;
(D) who is notified
under section 3 of
the Special Court
(Trial of Offences
Relating to
Transactions in
Securities) Act,
1992;
(II) such other
conditions, as
may be
prescribed.
(b) “specified
order” means
such order,
including draft
order, as may be
specified by the
Board, and,—
(i) aggregate sum
of variations
proposed or
made in such
order does not
exceed ten lakh
rupees;
(ii) such order is
not based on
search initiated
under section 132
or requisition
under section
132A in the case
of assessee or
Amendm Amendment in
Sec ent existing
from provision
any other person

or survey under
section 133A or
information
received under an
agreement
referred to in
section 90 or
section 90A;
(iii) where return
has been filed by
the assessee for
the assessment
year relevant to
such order, total
income as per
such return does
not exceed fifty
lakh rupees.’.
245N 01-04- Advance Section 245N Section 245N Section 245N is for
2021 Rulings 3 [(b) ―applicant‖ 3 [(b) definition for the
Definitions means— ―applicant‖ chapter XIX-B
(A) any person who— means— Advance Rulings,
(I) is a non-resident (A) any person Clause (b) defines
referred to in sub-clause who— Applicant, after the
(i)of clause(a);or (I) is a non- amendment, person
(II) is a resident referred resident referred mentioned under
to in sub-clause(ii)of to in sub-clause Sub-clause (B), (C),
clause(a); or (i)of clause(a);or and (D) are omitted
(III) is a resident referred (II) is a resident w.e.f. 01-04-2021.
to in sub-clause (iia) of referred to in sub- Clause (c) defines
clause (a) falling within clause(ii)of meaning of
any such clause(a); or Application for
class or category of (III) is a resident advance ruling as:-
persons as the Central referred to in sub- It means an
Amendm Amendment in
Sec ent existing
from provision
Government may, by clause (iia) of application which is

notification in the Official clause (a) falling made to Board of
Gazette, specify; or within any such Advance Ruling after
(IV) is a resident falling class or category insertion of words "
within any such class or of persons as the or the Board for
category of persons as Central Advance Rulings” in
the Central Government may, Clause C of Section
Government may, by by notification in 245N.
notification in the Official the Official A new clause (ca)
Gazette, specify in this Gazette, specify; defines the meaning
behalf; or or of Board for
(V) is referred to in sub- (IV) is a resident Advance Ruling is
clause (iv) of clause (a), falling within any inserted to Section
and makes an such class or 245N which means
application under sub- category of the board as
section (1) of section persons as the constituted u/s 245-
245Q; Central OB
(B) an applicant as Government may,
defined in clause (c) of by notification in
section 28E of the the Official
Customs Act, 1962 (52 Gazette, specify
of in this behalf; or
1962); (V) is referred to
(C) an applicant as in sub-clause (iv)
defined in clause (c) of of clause (a), and
section 23A of the makes an
Central Excise Act, 1944 application under
(1 sub-section (1) of
of 1944); section 245Q;
(D) an applicant as (B) an applicant
defined in clause (b) of as defined in
section 96A of the clause (c) of
Finance section 28E of the
Act, 1994 (32 of 1994);]] Customs Act,
Clause C- 1962 (52 of
"application" means an 1962);
Amendm Amendment in
Sec ent existing
from provision
application made to the (C) an applicant

Authority under sub- as defined in
section (1) of section clause (c) of
245Q; section 23A of the
Central Excise
Act, 1944 (1
of 1944);
(D) an applicant
as defined in
clause (b) of
section 96A of the
Finance
Act, 1994 (32 of
1994);]]
Clause C-
"application"
means an
application made
to the Authority
under sub-
section (1) of
section 245Q;
245O 01-04- Authority for New Proviso inserted In section 245-O Insertion of
2021 Advance of the Income-tax Provision to the
Rulings Act, in sub- Section 245O, that
section (1), after the Authority shall
the proviso, the cease to operate
following proviso from the date as and
shall be inserted, when will be
namely:— mentioned in the
“Provided further notification.
that the Authority
so constituted
shall cease to
operate on and
Amendm Amendment in
Sec ent existing
from provision
from such date as

the Central
Government may,
by notification in
the Official
Gazette,
appoint.”.
245OB 01-04- Board for Newly Inserted 245-OB. (1) The Insertion of new
2021 Advance Central section 245-OB
Rulings Government shall relating to Board of
constitute one or Advance Ruling. In
more Boards for this section Central
Advance Rulings, Government has to
as may be form Board of
necessary, for Advance Ruling,
giving advance which will give
rulings under this Advance Rulings
Chapter on or and shall consist of
after such date as at least two
the Central members, each
Government may, being an officer not
by notification in below the rank of
the Official Chief Commissioner,
Gazette, appoint. as may be
(2) The Board for nominated by the
Advance Rulings Board.
shall consist of
two members,
each being an
officer not below
the rank of Chief
Commissioner, as
may be
nominated by the
Board.”.
Amendm Amendment in
Sec ent existing
from provision
245P 01-04- Vacancies, 245P(1) No proceeding Section 245P of "Authoriy" has been
2021 etc., not to before, or the Income-tax substituted by
invalidate pronouncement of Act shall be "Board for Advance
proceedings advance ruling by, the numbered as Rulings" from the
Authority shall be sub-section (1) date as and when
questioned or shall be thereof, and after notified by the
invalid on the ground sub-section (1) as central government.
merely of the existence so numbered, the
of any vacancy or defect following sub-
in the constitution of the section shall be
Authority. inserted,
namely:––
“(2) With effect
from such date as
the Central
Government may,
by notification in
the Official
Gazette, appoint,
the provisions of
this section shall
have effect as if
for the word
“Authority”, the
words “Board for
Advance Rulings”
had been
substituted.”.
245Q 01-04- Application for Applicationfor advance In section 245Q Application to sought
2021 advance ruling ruling.—(1) An applicant of the Income-tax advance ruling
desirous of obtaining an Act,— under Chater IIIA of
advance ruling under this (a) in sub-section Central Excise Act
Chapter 1 [or under (1), the words, 1944, or Under
Chapter V of the figures and letters Chapter VA of the
Customs Act, 1962 (52 “or under Chapter Finance Act 1994
Amendm Amendment in
Sec ent existing
from provision
of 1962) or under IIIA of the Central shall not be allowed

Chapter IIIA of the Excise Act, 1944 under Section 245Q
Central Excise Act, 1944 or under Chapter of the income tax act
(1 of 1944) or under VA of the Finance 1961.
Chapter VA of the Act, 1994” shall
Finance Act, 1994 (32 of be omitted with
1994)] may make an effect from such
application in such form date as the
and in such manner as Central
may be prescribed, Government may,
stating the question on by notification in
which the advance ruling the Official
is sought. Gazette, appoint;
(2) The application shall (b) after sub-
be made in quadruplicate section (3), the
and be accompanied by following sub-
a fee of 2 [ten thousand section shall be
rupees or such fee as inserted,
may be prescribed in this namely:—
behalf, whichever is “(4) Where an
higher]. application is
(3) An applicant may made under this
withdraw an application section before
within thirty days from such date as the
the date of the Central
application. Government may,
by notification in
the Official
Gazette appoint,
and in respect of
which no order
under sub-section
(2) of section
245R has been
passed or
advance ruling
Amendm Amendment in
Sec ent existing
from provision
under sub-section
(4) of section
245R has been
pronounced
before such date,
such application
along with all the
relevant records,
documents or
material, by
whatever name
called, on the file
of the Authority
shall be
transferred to the
Board for
Advance Rulings
and shall be
deemed to be the
records before
the Board for
Advance Rulings
for all purposes.”.
245R 01-04- Procedure on 245R. Procedure on In section 245R In Section 245R

2021 receipt of receipt of application.— of the Income-tax Procedure after
application (1) On receipt of an Act, after receipt of
application, the Authority subsection (7), application, there
shall cause a copy the following sub- are new subsection
thereof to be forwarded sections shall be which are inserted
to the 3 inserted, w.e.f. 01-04-21. The
[PrincipalCommissioner namely:— zist of the
or Commissioner] and, if ‘(8) On and from subsection (8), (9),
necessary, call upon him such date as the (10) and (11) are as
to furnish the relevant Central follows:
records: Government may, a. Word Authority to
Amendm Amendment in
Sec ent existing
from provision
Provided that where any by notification in be replaced by

records have been called the Official Board for Advance
for by the Authority in Gazette, appoint, Rulings
any case, such records the provisions of b. Central Govt to
shall, as soon as this section shall impart greater
possible, be returned to have effect as if efficiency,
the 3 for the word transparency and
[PrincipalCommissioner “Authority”, the accountability for
or Commissioner]. words “Board for giving Advance
(2) The Authority may, Advance Rulings” Rulings.
after examining the had been
application and the substituted and
records called for, by the provisions of
order, either allow or this section shall
reject the application: apply mutatis
4 [Provided that the mutandis to the
Authority shall not allow Board for
the application where the Advance Rulings
question raised in the as they apply to
application,— the Authority.
(i) is already pending (9) The Central
before any income-tax Government may,
authority or Appellate by notification in
Tribunal [except in the the Official
case of a resident Gazette, make a
applicant falling in sub- scheme for the
clause (iii) of clause (b) purposes of
of section 245N] or any giving advance
court; rulings under this
(ii) involves Chapter by the
determination of fair Board for
market value of any Advance Rulings,
property; so as to impart
(iii) relates to a greater efficiency,
transaction or issue transparency and
which is designed prima accountability
Amendm Amendment in
Sec ent existing
from provision
facie for the avoidance of by—

incometax [except in the (a) eliminating the
case of a resident interface between
applicant falling in sub- the Board for
clause (iii) of clause (b) Advance Rulings
ofsection 245N 5*** 6 and the applicant
[or in the case of an in the course of
applicant falling in sub- proceedings to
clause (iiia) of clause (b) the extent
of section 245N]]:] technologically
Provided further that no feasible;
application shall be (b) optimising
rejected under this sub- utilisation of the
section unless an resources
opportunity has been through
given to the applicant of economies of
being heard: scale and
Provided also that where functional
the application is specialisation;
rejected, reasons for (c) introducing a
such rejection shall be system with
given in the order. dynamic
(3) A copy of every order jurisdiction.
made under sub-section (10) The Central
(2) shall be sent to the Government may,
applicant and to the 3 for the purposes
[Principal Commissioner of giving effect to
or Commissioner]. the scheme made
(4) Where an application under sub-section
is allowed under sub- (9), by notification
section (2), the Authority in the Official
shall, after examining Gazette, direct
such further material as that any of the
may be placed before it provisions of this
by the applicant or Act shall not
obtained by the apply or shall
Amendm Amendment in
Sec ent existing
from provision
Authority, pronounce its apply with such

advance ruling on the exceptions,
question specified in the modifications and
application. adaptations as
(5) On a request may be specified
received from the in the said
applicant, the Authority notification:
shall, before pronouncing Provided that no
its advance ruling, such direction
provide an opportunity to shall be issued
the applicant of being after the 31st day
heard, either in person or of March, 2023.
through a duly (11) Every
authorised notification issued
representative. under sub-section
Explanation.— (9) and sub-
For the purposes of this section (10) shall,
sub-section, authorised as soon as may
representative‖ shall be after the
have the meaning notification is
assigned to it in sub- issued, be laid
section (2) of section before each
288, as if the applicant House of
were an assessee. Parliament.’.
(6) The Authority shall
pronounce its advance
ruling in writing within six
months of the receipt of
application.
(7) A copy of the
advance ruling
pronounced by the
Authority, duly signed by
the Members and
certified in the prescribed
manner shall be sent to
Amendm Amendment in
Sec ent existing
from provision
the applicant and to the 1

[Principal Commissioner
or Commissioner], as
soon as may be, after
such pronouncement.
245S 01-04- Applicability of (1) The advance ruling In section 245S of (1) The advance
2021 advance ruling pronounced by the the Income-tax ruling pronounced
Authority under section Act, after by the Authority
245R shall be binding subsection (2), under section 245R
only— the following sub- shall be binding
(a) on the applicant who section shall be only—
had sought it; inserted, (a) on the applicant
(b) in respect of the namely:— who had sought it;
transaction in relation to “(3) Nothing (b) in respect of the
which the ruling had contained in this transaction in
been sought; and section shall relation to which the
(c) on the 1[Principal apply to any ruling had been
Commissioneror advance ruling sought; and
Commissioner], and the pronounced (c) on the 1[Principal
income-tax authorities under section Commissioneror
subordinate to him, in 245R on or after Commissioner], and
respect of the applicant such date as the the income-tax
and the said transaction. Central authorities
(2) The advance ruling Government may, subordinate to him,
referred to in sub-section by notification in in respect of the
(1) shall be binding as the Official applicant and the
aforesaid unless there is Gazette, said transaction.
a change in law or facts appoint.”. (2) The advance
on the basis of which the ruling referred to in
advance ruling has been sub-section (1) shall
pronounced. be binding as
aforesaid unless
there is a change in
law or facts on the
basis of which the
Amendm Amendment in
Sec ent existing
from provision
advance ruling has

been pronounced.
“(3) Nothing
contained in this
section shall apply to
any advance ruling
pronounced under
section 245R on or
after such date as
the Central
Government may, by
notification in the
Official Gazette,
appoint.”.
245T 01-04- Advance ruling (1) Where the Authority In section 245T of (1) Where the
2021 to be void in finds, on a the Income-tax Authority finds, on a
certain representation made to it Act,— representation made
circumstances by the 1 [Principal (a) in sub-section to it by the 1
Commissioner or (1), the words “by [Principal
Commissioner] or it” shall be Commissioner or
otherwise, that an omitted; Commissioner] or
advance ruling (b) after sub- otherwise, that an
pronounced by it under section (2), the advance ruling
sub-section (6) of section following sub- pronounced by it
245R has been obtained section shall be under sub-section
by the applicant by fraud inserted, (6) of section 245R
or misrepresentation of namely:— has been obtained
facts, it may, by order, ‘(3) With effect by the applicant by
declare such ruling to be from such date as fraud or
void ab initio and the Central misrepresentation of
thereupon all the Government may, facts, it may, by
provisions of this Act by notification in order, declare such
shall apply (after the Official ruling to be void ab
excluding the period Gazette, appoint, initio and
beginning with the date the provisions of thereupon all the
Amendm Amendment in
Sec ent existing
from provision
of such advance ruling this section shall provisions of this Act

and ending with the date have effect as if shall apply (after
of order under this sub- for the word excluding the period
section) to the applicant “Authority”, the beginning with the
as if such advance ruling words “Board for date of such
had never been made. Advance Rulings” advance ruling and
(2) A copy of the order had been ending with the date
made under sub-section substituted.’. of order under this
(1) shall be sent to the sub-section) to the
applicant and the 1 applicant as if such
[Principal Commissioner advance ruling had
or Commissioner]. never been made.
(2) A copy of the
order made under
sub-section (1) shall
be sent to the
applicant and the 1
[Principal
Commissioner or
Commissioner].
‘(3) With effect from
such date as the
Central Government
may, by notification
in the Official
Gazette, appoint, the
provisions of this
section shall have
word “Authority”, the
words “Board for
Advance Rulings”
had been
substituted.’.
Amendm Amendment in
Sec ent existing
from provision
245U 01-04- Powers of the (1) The Authority shall, In section 245U (1) The Authority
2021 Authority for the purpose of of the Income-tax shall, for the
exercising its Act, after sub- purpose of
powers,have all the section (2), the exercising its
powers of a civil court following sub- powers,have all the
under the Code of Civil section shall be powers of a civil
Procedure, 1908 (5 of inserted, court under the
1908) as are referred to namely:— Code of Civil
in section 131 of this Act. “(3) On and from Procedure, 1908 (5
(2) The Authority shall be such date as the of 1908) as are
deemed to be a civil Central referred to in section
court for the purposes of Government may, 131 of this Act.
section 195, but not for by notification in (2) The Authority
the purposes of Chapter the Official shall be deemed to
XXVI, of the Code of Gazette, appoint, be a civil court for
Criminal Procedure, the powers of the the purposes of
1973 (2 of 1974) and Authority under section 195, but not
every proceeding before this section shall for the purposes of
the Authority shall be be exercised by Chapter XXVI, of the
deemed to be a judicial the Board for Code of Criminal
proceeding within the Advance Rulings Procedure, 1973 (2
meaning of sections 193 and the of 1974) and every
and 228, and for the provisions of this proceeding before
purpose of section 196, section shall the Authority shall
of the Indian Penal Code mutatis mutandis be deemed to be a
(45 of 1860). apply to the judicial proceeding
Board for within the meaning
Advance Rulings of sections 193 and
as they apply to 228, and for the
the Authority.”. purpose of section
196, of the Indian
Penal Code (45 of
1860).
“(3) On and from
such date as the
Central Government
Amendm Amendment in
Sec ent existing
from provision
may, by notification
in the Official
Gazette, appoint, the
powers of the
Authority under this
section shall be
exercised by the
Board for Advance
Rulings and the
provisions of this
section shall mutatis
mutandis apply to
the Board for
Advance Rulings as
they apply to the
Authority.”.
245V 01-04- Procedure of The Authority shall, In section 245V of The Authority shall,
2021 Authority subject to the provisions the Income-tax subject to the
of this Chapter, have Act, the following provisions of this
power to regulate its own proviso shall be Chapter, have
procedure in all matters inserted, power to regulate its
arising out of the namely:— own procedure in all
exercise of its powers “Provided that matters arising out
under this Act.] nothing contained of the exercise of its
in this section powers under this
shall apply on or Act.]
after such date as “Provided that
the Central nothing contained in
Government may, this section shall
by notification in apply on or after
the Official such date as the
Gazette, Central Government
appoint.”. may, by notification
in the Official
Gazette, appoint.”.
Amendm Amendment in
Sec ent existing
from provision
245W(1) 01-04- Appeal Newly Inserted “245W (1) The A new section Sec.
2021 applicant, if he is 245W is inserted
aggrieved by any w.e.f. 01-04-21,
ruling pronounced provding the option
or order passed of appeal to the
by the Board for applicant , if his
Advance Rulings aggrieved by the
or the Assessing decition ruling
Officer, on the pronounced by the
directions of the Board of Advance
Principal Rulings or
Commissioner or Assessing Officer.
Commissioner, The applicant can
may appeal to the appeal to High Court
High Court within 60 days from
against such the date of
ruling or order of communication of
the Board of the said ruling or
Advance Rulings order.
within sixty days
from the date of
the
communication of
that ruling or
order, in such
form and manner,
as may be
prescribed:
Provided that
where the High
Court is satisfied,
on an application
made by the
appellant in this
behalf, that the
appellant was
Amendm Amendment in
Sec ent existing
from provision
prevented by
sufficient cause
from presenting
the appeal within
the period
specified in sub-
section (1), it may
grant further
period of thirty
days for filing
such appeal.
245W(2) 01-04- Appeal Newly Inserted (2) The Central

2021 Government may
make a scheme,
by notification in
the Official
Gazette, for the
purposes of filing
appeal to the
High Court under
sub-section (1) by
the Assessing
Officer, so as to
impart greater
efficiency,
transparency and
accountability
by—
(a) optimising
utilisation of the
resources
through
economies of
scale and
functional
Amendm Amendment in
Sec ent existing
from provision
specialisation;
(b) introducing a
team-based
mechanism with
dynamic
jurisdiction.
245W(3) 01-04- Appeal Newly Inserted (3) The Central

2021 Government may,
for the purposes
of giving effect to
the scheme made
under sub-section
(2), by notification
in the Official
Gazette, direct
that any of the
provisions of this
Act shall not
apply or shall
apply with such
exceptions,
modifications and
adaptations as
may be specified
in the said
notification:
Provided that no
such direction
shall be issued
after the 31st day
of March, 2023.
(4) Every
notification issued
under sub-section
(2) and sub-
Amendm Amendment in
Sec ent existing
from provision
section (3) shall,

as soon as may
be after the
notification is
issued, be laid
before each
House of
Parliament.”.
245W(4) 01-04- Appeal Newly Inserted (4) Every

2021 notification issued
under sub-section
(2) and sub-
section (3) shall,
as soon as may
be after the
notification is
issued, be laid
before each
House of
Parliament.”.
255(7) 01-04- Procedure of (1) The powers and In section 255 of Sub-sections are
2021 Appellate functions of the Appellate the Income-tax inserted to the main
Tribunal Tribunal may be Act, after sub- section 255
exercised and section (6), the i.e.Procedure of
discharged by Benches following sub- Appellate Tribunal.
constituted by the sections shall be The gist of the
President of the inserted, namely: section are as
Appellate Tribunal from –– below:
among the members “(7) The Central a. Under Sub-
thereof. Government may Section (7), the
(2) Subject to the make a scheme, Central Government
provisions contained in by notification in may make a scheme
sub-section (3), a Bench the Official for disposal of
shall consist of one Gazette, for the appeals by the
Amendm Amendment in
Sec ent existing
from provision
judicial member and one purposes of Appellate Tribunal.

accountant member. disposal of b. Under Sub-
(3) The President or any appeals by the Section (8), the
other member of the Appellate Central Government
Appellate Tribunal Tribunal so as to can direct that any of
authorised in this behalf impart greater the provision of the
by the Central efficiency, act, shall not apply
Government may, sitting transparency and to such scheme, but
singly, dispose of any accountability it shall be only
case which has been by— applicable if made
allotted to the Bench of (a) eliminating the before 31-03-2023.
which he is a member interface between c. Under Sub-
and which pertains to an the Appellate Section (9), all the
assessee whose total Tribunal and above notification
income as computed by parties to the has to be laid before
the 4[Assessing Officer] appeal in the each House of
in the case does not course of Parliament.
exceed 5[fifty lakh appellate
rupees], and the proceedings to
President may, for the the extent
disposal of any particular technologically
case, constitute a feasible;
Special Bench consisting (b) optimising
of three or more utilisation of the
members, one of whom resources
shall necessarily be a through
judicial member and one economies of
an accountant member. scale and
(4) If the members of a functional
Bench differ in opinion specialisation;
on any point, the point (c) introducing an
shall be decided appellate system
according to the opinion with dynamic
of the majority, if there is jurisdiction.
a majority, but if the
members are equally
Amendm Amendment in
Sec ent existing
from provision
divided, they shall state

the point or points on
which they differ, and the
case shall be referred by
the President of the
Appellate Tribunal for
hearing on such point or
points by one or more of
the other members of the
Appellate Tribunal, and
such point or points shall
be decided according to
the opinion of the
majority of the members
of the Appellate Tribunal
who have heard the
case, including those
who first heard it.
(5) Subject to the
provisions of this Act, the
Appellate Tribunal shall
have power to regulate
its own procedure and
the procedure of
Benches thereof in all
matters arising out of the
exercise of its powers or
of the discharge of its
functions, including the
places at which the
Benches shall hold their
sittings.
(6) The Appellate
Tribunal shall, for the
purpose of discharging
its functions, have all the
Amendm Amendment in
Sec ent existing
from provision
powers which are vested

in the income-tax
authorities referred to in
section 131, and any
proceeding before the
be deemed to be a
judicial proceeding within
the meaning of sections
193 and 228 and for the
purpose of section 196 of
the Indian Penal Code
(45 of 1860), and the
be deemed to be a civil
court for all the purposes
of section 195 and
Chapter XXXV of the
Code of Criminal
Procedure, 1898 (5 of
1898).
255(8) 01-04- Procedure of (8) The Central

2021 Appellate Government may,
Tribunal for the purposes
of giving effect to
the scheme made
under sub-section
(7), by notification
in the Official
Gazette, direct
that any of the
provisions of this
Act shall not
apply to such
scheme or shall
Amendm Amendment in
Sec ent existing
from provision
apply with such

exceptions,
modifications and
adaptations as
may be specified
in the said
notification:
Provided that no
such direction
shall be issued
after the 31st day
of March, 2023.
255(9) 01-04- Procedure of (9) Every

2021 Appellate notification issued
Tribunal under sub-section
(7) and sub-
section (8) shall,
as soon as may
be after the
notification is
issued, be laid
before each
House of
Parliament.”.
281B 01-04- Provisional 1[281B. Provisional In section 281B of The Assesing Officer
2021 attachment to attachment to protect the Income-tax is allowed to
protect revenue in certain Act, in sub- provisional attach
revenue in cases.— section (1), after property to protect
certain cases (1) Where, during the the words revenue in cases of
pendency of any “escaped penalty u/s 271AAD,
proceeding for the assessment”, the if penalty is likely to
assessment of any words, figures be more than Rs. 2
income or for the and letters “or for Crores.
assessment or imposition of
Amendm Amendment in
Sec ent existing
from provision
reassessment of any penalty under

income which has section 271AAD
escaped assessment, where the amount
the 2 [Assessing Officer] or aggregate of
is of the opinion that for amounts of
the purpose of protecting penalty likely to
the interests of the be imposed under
revenue it is necessary the said section
so to do, he may, with exceeds two
the previous approval of crore rupees”
the 2 [ 3 [Principal Chief shall be inserted.
Commissioner or Chief
Commissioner], 4
[Principal Commissioner
or Commissioner], 5
[Principal Director
General or Director
General] or 6 [Principal
Director or Director]], by
order in writing, attach
provisionally any
property belonging to the
assessee in the manner
provided in the Second
Schedule.
DISCLAIMER
For Private Circulation only. While utmost care has been taken to
provide up to date & current information, any person using this
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responsible for any errors / omissions or any losses arising out of
use of contents of this newsletter. Reproduction of contents in any
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This disclaimer informs readers that the views, thoughts, and

opinions expressed in the text belong solely to the author, and not
necessarily to the author’s employer, organization, committee or
other group or individual.
For Private Circulation Only
Tax Research Foundation

Presents
Clause by Clause Analysis

of
BUDGET 2021
CA Avinash Gupta
B.Com(Hons.-SRCC), FCA
L.Lb,LLM(Vienna),
NIRC Member
Mob: 9810751999
CA Himanshu Agarwal
Accounting & Business
Compliance Solution
Index
Sl.No. Particulars Page No.
1. Tax Rates 1
2. Indicidual Tax 5
3. Business Taxation 12
4. Capital Gains 19
5. Changes in International Tax 23
6. Penalty 32
7. Tax Administration and Compliance 33
8. Tax Deduction at Source 46
9. Miscellaneous Amendments 49
Analysis of Budget 2021

1 Tax Research Foundation
1. Tax Rates
i. Personal Tax Rates
Option 1
Individuals other than Senior Citizen
Proposed rate of tax
Income (Rs)
(FY 2021-22)
Upto 2,50,000 Nil
2,50,001-5,00,000 5%
5,00,001-10,00,000 20%
10,00,001 and above 30%
Senior Citizen (Between 60 – 80 years of age)

Income (Rs)
(FY 2021-22)
Upto 3,00,000 Nil
3,00,001-5,00,000 5%
5,00,001-10,00,000 20%
10,00,001 and above 30%
Super Senior Citizen (Between above 80 years of age)

Income (Rs)
(FY 2021-22)
Upto 5,00,000 Nil
5,00,001-10,00,000 20%
10,00,001 and above 30%

Option 2

Income (Rs)
(FY 2021-22)
Upto 2,50,000 Nil
2,50,001-5,00,000 5%
5,00,001-7,50,000 10%
7,50,001 – 10,00,000 15%
10,00,001 – 12,50,000 20%
12,50,001-15,00,000 25%
15,00,001 and above 30%
*Note- No deduction
Note: Cess of 4% is leviable on the amount of income tax and surcharge, if

any.
Rebate under Section 87A continues for a resident individual (whose in-
come does not exceed 5,00,000. The amount of rebate is 100% of income
tax calculated before education cess or 12,500 whichever is less.
Surcharge to be added
Proposed rate of tax Old rate of Tax
Income (Rs)
(FY 2021-22) (FY 2020-21)
Upto 50 Lakhs Nil Nil
50 Lakhs - 1 Crore 10% 10%
1 Crore - 2 Crore 15% 15%
2 Crore - 5 Crore 25% 25%
Above 5 Crore 37% 37%
*Surcharge on Dividend income and capital gains u/s 111A & 112A will be
restricted to 15% only.

ii. Corporate tax rates
Income
(FY 2021-22)
Domestic Company having total
30%*
income less than 1 Crore
income more than 1 Crore but less 30%* plus surcharge of 7%
than 10 Crore
30%* plus surcharge of 12%
income more than 10 Crore
Other Company having total income
40%
less than 1 Crore
more than 1 Crore but less than 10 40% plus 2%
Crore
40% plus 5%
more than 10 Crore
Note: Cess of 4% shall be levied over and above the above taxes.
*Reduced rate of 25% shall be applicable where total turnover / receipts
in the last P.Y. does not exceed Rs 400 Cr

iii. Firms
Flat tax rate of 30% and surcharge @ 12% of income tax if net
income exceeds Rs 1 Cr. Additionally, cess of 4% is applicable.
iv. Cooperative Societies
Particular Rate of Tax
Having total income of less than 10,001 10%
Having total income of more than 1,000 plus 20% of total income
10,000 but less than 20,001 in excess fo Rs.10,000
Having total income of more than 3,000 plus 30% of total in-
20,000 come in excees of Rs. 20,000
Note: Surcharge @ 12% of income tax if net income exceeds Rs.1 Crore is
applicable. Additionally, cess of 4% shall be levied.

2. Individual Tax
2.1 Withdrawal of exemption on Interest received on
employee’s contribution to PF/RPF [AY 2022-23
onwards]
Section 10(11) of the Act provides for exemption with respect to any
payment from a provident fund to which the Provident Funds Act,
1925 applies or from any other provident fund set up by the Central
Government and notified by it in this behalf in the Official Gazette.
Similarly, Section 10(12) provides for exemption with respect to the
accumulated balance due and becoming payable to an employee
participating in a recognised provident fund, to the extent provided
in rule 8 of Part A of the Fourth Schedule
As a result of above exemption u/s 10, entire interest accrued/
received on employees’ contribution is exempt from tax without any
threshold limit. As a result, many employees are contributing huge
amounts under employees’ contribution as there is no cap on the
same.
In order to limit the exemption, it is proposed to insert proviso to
Section 10(11) and 10(12) of the Act, providing that the provisions of
these clauses shall not apply to the interest income accrued during
the previous year in the account of the person to the extent it relates
to the amount or the aggregate of amounts of contribution made by
the person exceeding Rs. 2,50,000 in a previous year in that fund, on
or after 1st April, 2021.
2.2 Exemption for LTC Cash Scheme [AY 2021-22 only]
Under the existing provisions of the Act, section 10(5) of the Act
provides for exemption in respect of the value of travel concession
or assistance received by or due to an employee from his employer
or former employer for himself and his family, in connection with his
proceeding on leave to any place in India. In view of the situation
arising out of outbreak of COVID pandemic, it is proposed to provide
tax exemption to cash allowance in lieu of LTC.

Hence, it is proposed to insert second proviso in section 10(5), so
as to provide that, for the assessment year 2021-2022, the value in
lieu of any travel concession or assistance received by, or due to, an
individual shall also be exempt under this clause subject to fulfilment
of conditions to be prescribed.
It is also proposed to clarify by way of an Explanation that where an
individual claims and is allowed exemption under the second proviso
in connection with prescribed expenditure, no exemption shall be
allowed under this clause in respect of same prescribed expenditure
to any other individual.
The conditions for this purpose shall be prescribed in the Income-tax
Rules in due course and shall, inter alia, be as under:
• The employee exercises an option for the deemed LTC fare in lieu
of the applicable LTC in the Block year 2018-21;
• “specified expenditure” means expenditure incurred by an
individual or a member of his family during the specified period
on goods or services which are liable to tax at an aggregate rate of
12% or above under various GST laws and goods are purchased or
services procured from GST registered vendors/service providers;
• “specified period” means the period commencing from 12-10-
2020 and ending on 31-03-2021;
• the amount of exemption shall not exceed Rs. 36,000 per person
or one-third of specified expenditure, whichever is less;
• the payment to GST registered vendor/service provider is made
by an account payee cheque drawn on a bank or account payee
bank draft, or use of electronic clearing system through a bank
account or through such other electronic mode as prescribed
under Rule 6ABBA and tax invoice is obtained from such vendor/
service provider;
• If the amount received by, or due to an individual as per the terms
of his employment, from his employer in relation to himself and
his family, for the LTC is more than what is allowable to such
person under the above discussed provisions, the exemption

under the proposed amendment would be available only to the
extent of exemption admissible under above listed provisions.
As per the proposed amendment, in case of any employee who have
received cash in lieu of LTC concession for the block years 2018-21
from his employer and the employee has incurred expenditure on any
goods or services (attracting GST @ 12% or more), then the employee
is entitled to an exemption of Rs. 36,000 per person or 1/3rd of the
expenditure made, whichever is less.
2.3 Extension of date of sanction of loan for affordable
residential house property [AY 2022-23]
The existing provision of the section 80EEA of the Act, inter alia,
provides a deduction in respect of interest on loan taken for a
residential house property from any financial institution up to one
lakh fifty-thousand rupees subject to the condition that the loan has
been sanctioned during the period beginning on 01-04-2019 and
ending on 31-03-2021. There are further conditions that the stamp
duty value of residential house property does not exceed Rs. 45,00,000
and the assessee does not own any residential house property on the
date of sanction of loan. This provision allows deduction to the first-
time home buyers, in respect of interest on home loan. In order to
help such first-time home buyers further, it is proposed to extend the
benefit for one more year to 31st March 2022.
Now, this deduction, introduced from AY 2020-21onwards to
encourage the first-time home buyers wherein a deduction of up to
Rs. 1,50,000 p. a. (in addition to deduction under section 24(b)) for
loan sanctioned has been extended from 31.03.2021 to 31.03.2022.
2.4 Insertion of new section 89A to remove the hardship
regarding mismatch of year of taxability and
subsequent allowance of foreign tax credit [AY 2022-
23]
In case of residents who had opened retirement fund accounts in
a country outside India, the income tax act provides for taxation
on accrual basis while some countries provides for taxation on
withdrawal basis which results in non-allowance of foreign tax

credit withheld outside India since the year of taxability mismatches
amongst India and other country.
In order to remove this genuine hardship, it is proposed to insert a
new section 89A to the Act to provide that the income of a specified
person from specified account shall be taxed in the manner and in
the year as prescribed by the Central Government.
Whereas –
“Specified person” means a person resident in India who opened a
specified account in a notified country while being non-resident in
India and resident in that country.
“Specified account” means as an account maintained in a notified
country which is maintained for retirement benefits and the income
from such account is not taxable on accrual basis and is taxed by such
country at the time of withdrawal or redemption.
“Notified country” means a country notified by the Central
Government for the purposes of this section in the Official Gazette.
2.5 Taxation of proceeds of high premium unit linked
insurance policy (ULIP) [AY 2021-22]
Section 10(10D) of the Act provides for the exemption for the sum
received under a life insurance policy, including the sum allocated
by way of bonus on such policy in respect of which the premium
payable for any of the years during the terms of the policy does not
exceed 10% of the actual capital sum assured.
Under the existing provisions of the Act, there is no cap on the
amount of annual premium being paid by any person during the
term of the policy. In order to limit the amount of investment in ULIP,
it is proposed to provide for the followings:
i) Insert Explanation 3 to the section 10(10D) of the Act to define
ULIP as a life insurance policy which has components of both
investment and insurance and is linked to a unit as defined in
regulation (3)(ee) of the IRDA (ULIP) Regulations, 2019 dated
the 8th day of July, 2019.

ii) Insert fourth proviso to section 10(10D) of the Act to provide that
the exemption under this clause shall not apply with respect to
any ULIP issued on or after the 1st February, 2021, if the amount
of premium payable for any of the previous year during the term
of the policy exceeds Rs. 2,50,000.
iii) Insert fifth proviso to this clause to provide that, if premium is
payable by a person for more than one ULIPs, issued on or after
the 1st February, 2021, exemption under this clause shall be
available only with respect to such policies aggregate premium
whereof does not exceed the amount of Rs. 2,50,000, for any of
the previous years during the term of any of the policy.
iv) Insert sixth proviso to this clause providing that the provisions
of fourth and fifth provisos shall not apply to any sum received
on the death of a person.
v) Insert seventh proviso to this clause to enable CBDT to issue
guidelines with the approval of Central Government for the
purpose of removing the difficulty and to lay every guideline
issued by the Board before each House of Parliament and to
make it binding on the income-tax authorities and the assessee.
vi) Provide that a ULIP [to which exemption under section 10(10D)
of the Act does not apply on account of the applicability of the
fourth and fifth proviso] is a capital asset under section 2(14) of
the Act.
vii) Provide for the deemed taxation of profit and gains from the
redemption of ULIP [to which exemption under section 10(10D)
fourth and fifth proviso] as capital gains by inserting new sub-
section (1B) in section 45 and to take power to prescribe rules
for calculation of such capital gains.
viii) Include such ULIPs [to which exemption under section 10(10D)
fourth and fifth proviso] in the definition of equity oriented
fund in section 112A so as to provide them same treatment as
unit of equity oriented fund.

ix) Thus provisions of section 111A and 112A would apply on sale/
redemption of such ULIPs.
STT is also made applicable on maturity or partial withdrawal from
ULIP
2.6 Advance tax instalment for dividend income [AY
2021-22]
Section 234C of the Act provides for payment of interest by an
assessee who does not pay or fails to pay on time the advance tax
instalments as per section 208 of the Act.
The first proviso of the section 234C(1) provides for certain exclusions
that if the shortfall in the advance tax instalment or the failure to
pay the same on time is on account of the income listed therein, no
interest under section 234C shall be charged provided the assessee
has paid full tax in subsequent advance tax instalments.
As the divided income is uncertain and cannot be estimated, it is
proposed to include dividend income also in the above exclusion.
2.7 Relaxation for senior citizen from filing ITR (New
Section 194P) [AY 2021-22]
It is proposed to insert a new section 194P to the Act, which proposes
to provide relief to the senior citizens of the age of 75 years or above
from the compliance of section 139 of the Act which provides for
filing of return of income.
A senior citizen of the age of 75 year or above is not required to file
the return of income, if the following conditions are satisfied –
• The senior citizen is resident in India and of the age of 75 or
more during the previous year;
• He has only pension income and may also have interest income
from the same bank (specified bank - to be notified by the CG)
in which he is receiving his pension income;
• He shall be required to furnish a declaration to the specified
bank. The declaration shall be containing such particulars, in
such form and verified in such manner, as may be prescribed.

Once the declaration is furnished, the specified bank would be
required to compute the income of such senior citizen after giving
effect to the deduction allowable under Chapter VI-A and rebate
allowable under section 87A of the Act, for the relevant assessment
year and deduct income tax on the basis of rates in force. Once this
is done, there will not be any requirement of furnishing return of
income by such senior citizen for this assessment year.

3. Business Taxation
3.1 Payment by employer of employee contribution to a
fund on or after due date will be disallowed [AY 2021-
22]
Section 2(24) of the Act provides that income to include any sum
received by the assessee from his employees as contribution to any
provident fund or superannuation fund or any fund set up under
the provisions of ESI Act or any other fund for the welfare of such
employees. Section 36(1) of the Act provides for various deductions
allowed while computing the income under the head Profits and
gains of business or profession if the said sum is paid on or before the
due date.
However, as per judgement of many High Courts like Delhi High Court
in case of AMIL Ltd Vs CIT, it was held that the said deposit is covered
under Section 43B and should be allowed if the same actually paid by
the assessee on or before the due date for furnishing the return of the
income under section 139(1). There are many conflicting judgements
also.
Accordingly, in order to provide certainty, it is proposed to –
- amend section 36(1)(va) of the Act by inserting another
explanation to the said clause to clarify that the provision of
section 43B does not apply and deemed to never have been
applied for the purposes of determining the due date under this
clause; and
- amend section 43B of the Act by inserting Explanation 5 to the
said section to clarify that the provisions of the said section do
not apply and deemed to never have been applied to a sum
received by the assessee from any of his employees to which
provisions of section 2(24)(x) applies.
3.2 Depreciation on Goodwill [AY 2021-22]

Section 2(11) of the Act provides the definitions of block of assets as
a group of assets falling within a class of assets comprising,

(a) tangible assets, being buildings, machinery, plant or furniture
and
(b) intangible assets, being know-how, patents, copyrights, trade-
marks, licences, franchises or any other business or commercial
rights of similar nature,
in respect of which the same percentage of depreciation is prescribed.
Hon‘ble Supreme Court in the case Smiff Securities Limited [(2012)348
ITR 302 (SC)] held that the Goodwill of a business or a profession is an
asset within the meaning of section 32 of the Act and depreciation
on goodwill is allowable under the said section
Now, amendment is proposed in Section 2(11) and Section 32(1)
(ii) for goodwill of a business or profession will not be considered
as a depreciable asset and there would not be any depreciation on
goodwill of a business or profession in any situation. However, in a
case where goodwill is purchased by an assessee, the purchase price
of the goodwill will continue to be considered as cost of acquisition
for the purpose of computation of capital gains under section 48
of the Act subject to the condition that in case depreciation was
obtained by the assessee in relation to such goodwill prior to the
assessment year 2021-22, then the depreciation so obtained by the
assessee shall be reduced from the amount of the purchase price of
the goodwill.
3.3 No Presumptive taxation u/s 44ADA for LLPs [AY
2021-22]
There is no bar for LLPs to claim the benefit of section 44ADA of the
Act relating to special provision for computing profits and gains of
profession on presumptive basis. Now, The said benefit has been
taken away from the Limited Liability Partnership (LLP) as defined
under section 2(1)(n) of Limited Liability Partnership Act, 2008. Now,
LLP are required to maintain books of accounts in all case.

3.4 Rental income also allowed as deduction u/s 80-IBA
for affordable housing [AY 2022-23]
The existing provision of the section 80-IBA of the Act provides that
where the gross total income of an assessee includes any profits
and gains derived from the business of developing and building
affordable housing project, there shall, subject to certain conditions
specified therein, be allowed a deduction of an amount equal to
100% of the profits and gains derived from such business. One of the
conditions is that the project is approved by the competent authority
after the 1st day of June 2016 but on or before the 31st day of March
2021.
To help migrant labourers and to promote affordable rental, it is
proposed to allow deduction under section 80-IBA of the Act also
to such rental housing project which is notified by the Central
Government in the Official Gazette and fulfils such conditions as
specified in the said notification.
Further, the deadline 31st March 2021 has been extended to 31st
March 2022.
3.5 Conversion of Urban Cooperative Bank into Banking
Company to be tax neutral [AY 2021-22]
Section 44DB of Act provides for computing deductions in the case
of business re-organization of cooperative banks. In other words,
conversion of cooperative bank to company is not covered under said
section.
It is proposed to expand the scope of business reorganization to

include conversion of a primary co-operative bank to a banking
company and the deductions available under section 44DB of the
Act shall also be made applicable in relation to such conversion of
primary co-operative bank to the banking company.
Further, it is also proposed that transfer of a capital asset by the

primary co-operative bank to the banking company as a result of
conversion shall not be treated as transfer under section 47 of the

Act. Consequently, the allotment of shares of the converted banking
company to the shareholders of the predecessor primary co-operative
bank shall not be treated as transfer under the said section of the Act.
3.6 Relaxation for strategic disinvestment of PSUs [AY

2021-22]
Section 2(19AA) of the Act defines that -demerger”, in relation to
companies, means the transfer, pursuant to a scheme of arrangement
under sections 391 to 394 of the Companies Act, 1956, by a demerged
company of its one or more undertakings to any resulting company
on satisfaction of conditions prescribed in the said clause.
Section 72A of the Act provides that the accumulated loss and
unabsorbed depreciation of the amalgamating company or
companies shall be deemed to be the accumulated losses and
unabsorbed depreciation of the amalgamated company or
companies in specified cases and subject to the conditions specified
in the said section.
It is proposed to relax the above provisions for public sector
companies (PSUs) in order to facilitate strategic disinvestment by the
Government. Accordingly, it is proposed to carry out the following
amendments-
(1) It is proposed to amend section 2(19AA) of the Act to insert
Explanation 6 to clarify that the reconstruction or splitting up
of a public sector company into separate companies shall be
deemed to be a demerger, if
• such reconstruction or splitting up has been made to
transfer any asset of the demerged company to the resultant
company; and
• the resultant company is a public sector company on the
appointed date indicated in the scheme approved by
the Government or any other body authorised under the
provisions of the Companies Act, 2013 or any other Act
governing such public sector companies in this behalf; and

• fulfils such other conditions as may be notified by the
Central Government in the Official Gazette.
(2) It is proposed to amend section 72A(1) of the Act,
(a) to provide that the provision of section 72A(1) shall also
apply in case of amalgamation of one or more public sector
company or companies with one or more public sector
company or companies.
(b) to provide that the provision of section 72A(1) shall also
apply in case of amalgamation of an erstwhile public sector
company with one or more company or companies, if
• the share purchase agreement entered into under
strategic disinvestment restricted immediate
amalgamation of the said public sector company; and
• the amalgamation is carried out within five year from
the end of the previous year in which the restriction on
amalgamation in the share purchase agreement ends.
(c) to provide that the accumulated loss and the unabsorbed
depreciation of the amalgamating company, in case of
an amalgamation referred to in clause (c) above, which
is deemed to be loss or, as the case may be, allowance for
unabsorbed depreciation of the amalgamated company
shall not be more than the accumulated loss and unabsorbed
depreciation of the public sector company as on the date
on which the public sector company ceases to be a public
sector company as a result of strategic disinvestment;
3.7 Extension of date of incorporation for eligible start

up for exemption and for investment in eligible start-
up [AY 2022-23]
As per the existing provisions of the section 80-IAC of the Act, the
eligible start-up is required to be incorporated on or after 1st day of
April, 2016 but before 1st day of April 2021. Similarly, the benefit of
section 54GB is also available till 31st March 2021.

3.8 Increase in safe harbour limit of 10% to 20% for
home buyers and real estate developers selling such
residential units [AY 2021-22]
Section 43CA of the Act, inter alia, provides that where the
consideration declared to be received or accruing as a result of the
transfer of land or building or both, is less than the value adopted or
assessed or assessable by any authority of a State Government (i.e.
-stamp valuation authority||) for the purpose of payment of stamp
duty in respect of such transfer, the value so adopted or assessed or
assessable shall for the purpose of computing profits and gains from
transfer of such assets, be deemed to be the full value of consideration.
The said section also provide that where the value adopted or
assessed or assessable by the authority for the purpose of payment
of stamp duty does not exceed one hundred and ten per cent of the
consideration received or accruing as a result of the transfer, the
consideration so received or accruing as a result of the transfer shall,
for the purposes of computing profits and gains from transfer of such
asset, be deemed to be the full value of the consideration.
In order to boost the demand in the real-estate sector and to enable
the real-estate developers to liquidate their unsold inventory at a
lower rate to home buyers, it is proposed to increase the safe harbour
threshold from existing 10% to 20% under section 43CA of the Act, if
the following conditions are satisfied:-
• The transfer of residential unit takes place during the period
from 12th November, 2020 to 30th June, 2021
• The transfer is by way of first time allotment of the residential
unit to any person
• The consideration received or accruing as a result of such transfer
does not exceed Rs. 2 crore.
Consequential relief has also been provided in Section 56(2)(x).

3.9 Limits for tax audit in certain cases increased from
Rs.5 to Rs.10 cr [AY 2021-22]
Under section 44AB of the Act, every person carrying on business
is required to get his accounts audited, if his total sales, turnover
or gross receipts, in business exceed or exceeds Rs. 1 crore in any
previous year.
Finance Act 2020 has increased the threshold limit of tax audit for a
person carrying on business was increased from Rs. 1 crore to Rs. 5
crore in cases where,-
(i) aggregate of all receipts in cash during the previous year does
not exceed 5% of such receipt; and
(ii) aggregate of all payments in cash during the previous year does
not exceed 5% of such payment.
In order to promote digital economy with more non-cash transactions,
the compliance burden will be reduced by increasing the threshold
from Rs. 5 crore to Rs. 10 crore in the specified cases as stated above.

4. Capital Gains
4.1 Issuance of zero coupon bond by infrastructure debt
fund [AY 2022-23]
Section 2(48) of the Act provides the definition of zero coupon
bond, as a bond issued by any infrastructure capital company or
infrastructure capital fund or public sector company or scheduled
bank and in respect of which no payment and benefit is received or
receivable before maturity or redemption. These are required to be
notified by the Central Government in the Official Gazette.
For providing the same benefit infrastructure debt fund [which are
notified by the Central Government in the Official Gazette under
section 10(47) of the Act] to issue zero coupon bond necessary
amendments are proposed in section 2(48) of the Act.
Consequential amendment has also been proposed in section
194A(3)(x) to provide for non-deduction of TDS.
4.2 Enhancing the scope of Slump Sale [AY 2021-22]

Section 50B of the Act contains special provision for computation of
capital gains in case of slump sale.
Section 2(42C) of the Act defines -slump sale to mean the transfer
of one or more undertakings as a result of sale for lump sum
consideration without value being assigned to individual assets and
liabilities in such cases.
This has been interpreted by some courts that other means of transfer
listed in section 2(47) of the Act, in relation to definition of the word
transfer in relation to capital asset like exchange, relinquishment etc,
are excluded.
It is proposed to amend the scope of the definition of the definition
of slump sale by amending the provision of section 2(42C) of the Act
so that all types of transfer as defined in section 2(47) of the Act are
included within its scope.

4.3 New provision of transfer of capital asset to partner
on dissolution or reconstitution [AY 2022-23]
The existing provisions of section 45 of the Act inter alia, provides
that any profits or gains arising from the transfer of a capital asset
shall be chargeable to income-tax under the head Capital gains and
shall be deemed to be the income of the previous year in which such
transfer takes place.
Further section 45(4) of the said section, provides that the profits or
gains arising from the transfer of a capital asset by way of distribution
of capital assets on the dissolution of a firm or other association of
persons or body of individuals (not being a company or a co-operative
society) or otherwise, shall be chargeable to tax as the income of
such firm or other association of persons or body of individuals of
the previous year in which the said transfer takes place. Further, the
fair market value of the asset on the date of such transfer shall be
deemed to be the full value of the consideration for the purposes of
section 48.
In this regard, it has been noticed that there is uncertainty regarding
applicability of provisions of aforesaid sub-section to a situation
where assets are revalued or self- generated assets are recorded in
the books of accounts and payment is made to partner or member
which is in excess of his capital contribution.
New section 45(4) of the Act has been proposed to be applied in a
case where a specified person who receives during the previous
year any capital asset at the time of dissolution or reconstitution of
the specified entity. The capital asset represents the balance in the
capital account of such specified person in the books of the specified
entity at the time of its dissolution or reconstitution.
In this situation, the profit and gains arising from the receipt of such
capital asset by the specified person shall be chargeable to income-
tax as income of the specified entity under the head capital gains
and shall be deemed to be the income of such specified entity of the
previous year in which the capital asset was received by the specified
person. For the purposes of section 48 of the Act, the fair market value

of the capital asset on the date of such receipt shall be deemed to be
the full value of the consideration received or accruing as a result of
the transfer of the capital asset. The balance in the capital account of
the specified person in the books of account of the specified entity is
to be calculated without taking into account increase in the capital
account of the specified person due to revaluation of any asset or due
to self-generated goodwill or any other self-generated asset.
Further, another new section 45(4A) of the Act has been proposed
to be applied in a case where a specified person receives during the
previous year any money or other asset at the time of dissolution
or reconstitution of the specified entity. The money or other asset
is required to be in excess of the balance in the capital account of
such specified person in the books of accounts of the specified entity
at the time of its dissolution or reconstitution. In this situation, the
profits or gains arising from the receipt of such money or other asset
by the specified person shall be chargeable to income-tax as income
of the specified entity under the head “Capital gains” and shall be
deemed to be the income of such specified entity of the previous
year in which the money or other asset was received by the specified
person. For the purposes of section 48 of the Act,
• value of the money or the fair market value of other asset on the
date of such receipt shall be deemed to be the full value of the
consideration received or accruing as a result of the transfer of
the capital asset; and
• the balance in the capital account of the specified person in
the books of accounts of the specified entity at the time of its
dissolution or reconstitution shall be deemed to be the cost of
acquisition.
The balance in the capital account of the specified person in the books
of account of the specified entity is to be calculated without taking
into account increase in the capital account of the specified person
due to revaluation of any asset or due to self- generated goodwill or
any other self-generated asset.

For the purposes of these two sub-sections,-
• specified person is proposed to be defined as a person who is
partner of a firm or member of other association of persons
or body of individuals (not being a company or a cooperative
society), in any previous year;
• specified entity is proposed to be defined as a firm or other
association of persons or body of individuals (not being a
company or a cooperative society);and
• self-generated goodwill and self-generated assets are proposed
to be defined as goodwill or asset, as the case may be, which
has been acquired without incurring any cost for purchase or
which has been generated during the course of the business or
profession.
Consequential amendment is also proposed in section 48 of the Act
to provide that in case of specified entity, the amount included in the
total income of such specified entity under section 45(4A) which is
attributable to the capital asset being transferred, shall be reduced
from the full value of the consideration to compute income charged
under the head capital gains. This is to be calculated in the manner to
be prescribed later.

5. Changes in International Tax
5.1 Rationalisation of the provisions of Equalisation
Levy [AY 2020-21]
Under section 165A of Finance Act, 2016, as inserted by section 153
of the Finance Act, 2020, Equalisation Levy is to be levied at the rate
of 2% of the amount of consideration received or receivable by an
e-commerce operator from e-commerce supply or services made or
provided or facilitated, by it-
(i) to a person resident in India; or
(ii) to a non-resident in the specified circumstances as referred to in
sub-section (3); or
(iii) to a person who buys such goods or services or both, using
internet protocol address located in India.
For this purpose, E-commerce supply or service is defined as to mean:-
(i) online sale of goods owned by the e-commerce operator;
(ii) online provision of services provided by the e-commerce
operator;
(iii) online sale of goods or provision of services or both, facilitated
by the e-commerce operator; or
(iv) any combination of activities listed in clause (i), (ii) or clause (iii);
Section 10(50) of the Act provides for the exemption for the income
arising from any specified service provided on or after the date on
which the provisions of Chapter VIII of the Finance Act, 2016 comes
into force or arising from any e- commerce supply or services made
or provided or facilitated on or after the 1st day of April, 2021 and
chargeable to equalisation levy under that Chapter.
For providing clarity in the above provisions, it is proposed to
carry out the following amendments in the Finance Act, 2016:-
• Insert an Explanation to section 163 of the Finance Act,
2016, clarifying that consideration received or receivable for
specified services and consideration received or receivable for
e-commerce supply or services shall not include consideration

which are taxable as royalty or fees for technical services in India
under the Income-tax Act read with DTAA.
• Insert an Explanation to clause (cb) of section 164 of the
Finance Act, 2016, providing that for the purposes of defining
e-commerce supply or service, “online sale of goods” and “online
provision of services” shall include one or more of the following
activities taking place online:
(a) Acceptance of offer for sale;
(b) Placing the purchase order;
(c) Acceptance of the Purchase order;
(d) Payment of consideration; or
(e) Supply of goods or provision of services, partly or wholly
• Amend section 165A of the Finance Act, 2016, to provide that
consideration received or receivable from e-commerce supply or
services shall include:
(i) consideration for sale of goods irrespective of whether the
e-commerce operator owns the goods; and
(ii) consideration for provision of services irrespective of whether
service is provided or facilitated by the e-commerce operator.
It is also proposed to amend section 10(50) of the Act to -
(i) provide that section 10(50) will apply for the e-commerce supply
or services made or provided or facilitated on or after 1st April,
2020.
(ii) clarify that exemption under section 10(50) will not apply for
royalty or fees for technical services which is taxable under the
Act read with the agreement notified by the Central Government
under section 90 or section 90A of the Act.
define e-commerce supply or services under section 10(50) as the
meaning assigned to it in clause (cb) of section 164 of Chapter VIII of
the Finance Act,2016.

5.2 Tax incentives for units located in IFSC [AY 2022-23]
Government has establishment a world class financial services centre
known as IFSC. Units located in IFSC enjoy some concession. In order
to make location in IFSC more attractive, it is proposed to provide the
following additional incentives:
1. It is proposed to amend section 9A of the Act to provide that the
Central Government may, by notification in the Official Gazette,
specify that any one or more of the conditions specified under
section 9A of the Act shall not apply (or apply with modification)
to an eligible investment fund or its eligible fund manager, if
the fund manager is located in an IFSC and has commenced
operations on or before the 31st day of March, 2024.
2. It is also proposed to amend section 10(4D) of the Act so as
to provide that the exemption under this clause shall also be
available in case of any income accrued or arisen to, or received
to the investment division of offshore banking unit to the extent
attributable to it and computed in the prescribed manner.
3. It is also proposed to amend the expression “specified
fund” to include under the purview the investment division
of offshore banking unit which has been granted a category
III AIF registration and fulfils other conditions to be prescribed
including the condition of maintaining separate books for its
investment division. The investment division of offshore banking
unit is proposed to be defined as an investment division of a
banking unit of a non-resident located in an IFSC and which has
commenced operation on or before the 31st day of March, 2024.
4. It is also proposed to insert new clause (4E) in of section 10 of the
Act so as to exempt any income accrued or arisen to, or received
by a non-resident as a result of transfer of non-deliverable
forward contracts entered into with an offshore banking unit
of International Financial Services Centre which commenced
operations on or before the 31st day of Mach, 2024 and fulfils
prescribed conditions.

5. It is also proposed to insert new clause (4F) in of section 10 of
the Act so as to exempt any income of a non-resident by way of
royalty on account of lease of an aircraft in a previous year paid
by a unit of an International Financial Services Centre, if the unit
is eligible for deduction under section 80LA for that previous
year and has commenced operation on or before the 31st day of
the March, 2024.
6. It is also proposed to insert new clause (23FF) in of section 10 of
the Act so as to exempt any income of the nature of capital gains,
arising or received by a non-resident, which is on account of
transfer of share of a company resident in India by the resultant
fund and such shares were transferred from the original fund to
the resultant fund in relocation, if capital gains on such shares
were not chargeable to tax had that relocation not taken place.
“Original Fund” is proposed to be defined as a fund established or
incorporated or registered outside India, which collects funds from
its members for investing it for their benefit and fulfils the following
conditions, namely:—
(a) the fund is not a person resident in India;
(b) the fund is a resident of a country or a specified territory
with which DTAA has been entered into; or is established or
incorporated or registered in a country or a specified territory
notified by the Central Government in this behalf;
(c) the fund and its activities are subject to applicable investor
protection regulations in the country or specified territory where
it is established or incorporated or is a resident; and
(d) fulfils such other conditions as prescribed;
“Relocation” is proposed to be defined as transfer of assets of the
original fund to a resultant fund on or before the 31st day of March,
2023, where consideration for such transfer is discharged in the form
of share or unit or interest in the resulting fund to the shareholder
or unit holder or interest holder of the original fund in the same
proportion in which the share or unit or interest was held by such
shareholder or unit holder or interest holder in such original fund.

“Resultant fund” is proposed to be defined as a fund
established or incorporated in India in the form of a trust or a
company or a limited liability partnership, which-
(a) has been granted a certificate of registration as a Category I or
Category II or Category III Alternative Investment Fund, and is
regulated by SEBI; and
(b) is located in any IFSC as referred to in section 80LA(1A).
7. It is also proposed to amend section 47 of the Act to insert new
clauses in the said section so as to provide that any transfer, in
relocation, of a capital asset by the original fund to the resultant
fund shall not be considered as transfer for capital gain tax
purpose. It is also proposed to provide another clause to provide
that any transfer by a shareholder or unit holder or interest
holder, in a relocation, of a capital asset being a share or unit or
interest held by him in the original fund in consideration for the
share or unit or interest in the resultant fund shall not be treated
as transfer for the purpose of capital gains.
5.3 Relaxation of provisions for exemption related to

Sovereign Wealth Fund (SWF) and Pension Fund
(PF) [AY 2021-22]
Section 10(23FE) of the Act provides for the exemption to specified
persons from the income in the nature of dividend, interest or long-
term capital gains arising from an investment made by it in India.
Specified persons are SWF or PF which fulfils conditions prescribed
therein and are specified for this purpose by the Central Government
through notification in the Official Gazette. This provision was
introduced through the Finance Act, 2020 to encourage investments
of SWF and PF into infrastructure sector of India.
In order to remove the difficulties in meeting some of the conditions
by SEF & PF, the followings amendments are proposed in the Bill:
• Allowing Alternate Investment Fund (AIF) to invest up to 50% in
non-eligible investments

Presently SWF/PFs may invest in a Category-I or Category-II
Alternative Investment Fund, having 100% investment in eligible
infrastructure company. It is proposed to:
(a) relax the condition of 100% to 50%.
(b) allow the investment by Category-I or Category-II AIF in an
Infrastructure Investment Trust (InvIT).
(c) Exemption under this clause shall be calculated proportionately,
in case if aggregate investment of AIF in infrastructure company
or companies or in InvIT is less than 100%.
• Investment through holding company
Presently, SWF/PFs are not allowed to invest through holding
company. It is proposed to allow the same subject to the following
conditions:
(a) Holding company should be a domestic company.
(b) It should be set up and registered on or after 1st April, 2021.
(c) It should have minimum 75% investments in one or more
infrastructure companies.
(d) Exemption under this clause shall be calculated proportionately,
in case if aggregate investment of holding company in
infrastructure company or companies is less than 100%
• Investment in NBFC- IDF/IFC (non-banking finance company-
infrastructure debt fund/Infrastructure finance company)
Presently, SWF/PFs are not allowed to invest in NBFC-IFC/IDF. It is
proposed to allow the same subject to the following conditions:
(a) NBFC-IDF/IFC should have minimum 90% lending to one or
more infrastructure entities.
(b) Exemption under this clause shall be calculated proportionately,
in case if aggregate lending of NBFC-IDF or NBFC-IFC in
infrastructure company or companies is less than 100%.
• Loan or borrowings by SWF/Pension Fund
Presently, SWF/PFs are not allowed to have loans or borrowings
or deposit or investments as there is a condition that no benefit

should enure to private person. It is proposed to provide that
there should not be any loan or borrowing for the purpose
of making investment in India. It is also proposed to provide
that the condition regarding no benefit to private person and
assets going to government on dissolution would not apply to
any payment made to creditor or depositor for loan taken or
borrowing other than for the purpose of making investment in
India.
• Commercial activity
Presently, SWF/PFs are not allowed to undertake any commercial
activity. This condition is proposed to be removed and replaced
with a condition that SWF/PFs shall not participate in day to
day operation of investee. However, appointing director and
executive director for monitoring the investment would not
amount to participation in day to day operation. The term
“investee” is proposed to define to mean a business trust or
a company or an enterprise or an entity or a category I or II
Alternative Investment Fund or an Infrastructure Investment
Trust or a domestic company or an Infrastructure Finance
Company or an Infrastrure Debt Fund, in which the SWF or PF, as
the case may be, has made the investment, directly or indirectly,
under the provisions of this clause.
• Liable to Tax
Presently, some PFs are liable to tax in their country though given
exemption subsequently. It is proposed to amend this sub-clause
to provide that if pension fund is liable to tax but exemption from
taxation for all its income has been provided by the foreign country
under whose laws it is created or established, then such pension fund
shall also be eligible.
• Rules to prescribe the method of calculation
It is also proposed to provide that the Central Government
may prescribe the method of calculation of 50% or 75% or
90%referred above.

5.4 Relaxation from MAT to companies [AY 2021-22]
Section 115JB of the Act provides for MAT at the rate of 15% of its book
profit, in case tax on the total income of a company computed under
the provisions of the Act is less than the 15% of book profit. Book
profit for this purpose is computed by making certain adjustments
to the profit disclosed in the profit and loss account prepared by the
company in accordance with the provisions of the Companies Act,
2013.
Presently no adjustment in computation of book profit under section
115JB is allowed on account of additional income of past year(s)
included in books of account of current year on account of secondary
adjustment under section 92CE or on account of an Advance Pricing
Agreement (APA) entered with the taxpayer under section 92CC.
Moreover, in case of foreign companies, dividend income is now
taxable in the hand of foreign companies at concessional tax rate
provided in the DTAA (generally 10%) which may result in additional
MAT liability for foreign company. To provide relief in above situation,
it is proposed to,-
(i) provide that in cases where past year income is included in
books of account during the previous year on account of an
APA or a secondary adjustment, the Assessing Officer shall,
on an application made to him in this behalf by the assessee,
recompute the book profit of the past year(s) and tax payable, if
any, during the previous year, in the prescribed manner. Further,
the provision of section 154 of the Act shall apply so far as
possible and the period of four years specified in sub-section (7)
of section 154 shall be reckoned from the end of the financial
year in which the said application is received by the Assessing
Officer.
(ii) to provide similar treatment to dividend as already there for
capital gains on transfer of securities, interest, royalty and Fee
for Technical Services (FTS) in calculating book profit for the
purposes of section 115JB of the Act, so that both specified
dividend income and the expense claimed in respect thereof are

reduced and added back, while computing book profit in case
of foreign companies where such income is taxed at lower than
MAT rate due to DTAA.
5.5 DTAA relief granted to FII for WHT on dividends [AY
2021-22]
Section 196D of the Act provides for deduction of tax on income of FII
from securities at the rate of 20%. The DTAA applicable to these FIIs
provides for lower WHT rates.
Now, it is proposed to insert a proviso to section 196D of the Act to
provide that benefit of lower WHT rate as provided in DTAA should be
provided to FIIs provided such payee has furnished the tax residency
certificate (TRC). In simple words, TDS for FIIs shall be deducted at
the rate of 20% or rate or rates of income-tax provided in DTAA,
whichever is lower on providing valid TRC and Form 10F.

6. Penalty
6.1 Provisional attachment in Fake Invoice cases [AY
2021-22 onwards]
Section 281B of the Act contains provisions which provide that in
cases of assessment or reassessment, the Assessing Officer may
provisionally attach any property of the assessee, if necessary, in
order to protect the interest of revenue. This can be done only with
prior approval of Pr.CCIT / Pr.DGIT / CCIT / DGIT / Pr.CIT / Pr.DIT /
CIT / DIT of Income-tax. Such provisional attachment is valid for a
period of 6 months. Further, the said section allows the assessee to
furnish a bank guarantee of the value of the property so attached for
revocation of the provisional attachment. The above bank guarantee
shall be invoked if the assessee fails to pay his tax demand on time.
The powers under this section can only be exercised by the Assessing
Officer.
Section 271AAD of the Act was inserted vide the Finance Act, 2020 to
impose penalty on a person or a person who causes such person to
make a false entry or omit an entry from his books of accounts. It is an
anti-abuse provision. Upon initiation of such penalty proceedings, it
is highly likely that the taxpayer may also evade the payment of such
penalty, if imposed. Hence, in order to protect the interest of revenue,
it is proposed to amend the provision of section 281B of the Act to
enable the Assessing Officer to exercise the powers under this section
during the pendency of proceedings for imposition of penalty under
section 271AAD of the Act, if the amount or aggregate of amounts of
penalty imposable is likely to exceed Rs. 2 crore.

7. Tax Administration and
Compliance
7.1 Extending due date for filing ITR in some cases [AY
2021-22 onwards]
In the case of a firm liable for Transfer Pricing Audit (Form 3CEB), the
due date for filing of original return of income is the 30th November
of the assessment year. Since the total income of such partner can
be determined after the books of accounts of such firm have been
finalized, it is proposed that the due date of such partner be extended
to 30th November of the assessment year.
7.2 Reducing time limit to file belated return and revise

return [AY 2021-22]
Presently, the belated or revised returns under section 139(4) and
139(5) respectively of the Act can be filed during the assessment year
itself or before the completion of the assessment, whichever is earlier.
Now, the time limit for filing of belated or revised returns of income, as
the case may be, has been proposed to reduce by 3 months. Thus, the
belated return or revised return could now be filed 3 months before
the end of the relevant assessment year i.e. up to 31st December
of the AY or before the completion of the assessment, whichever is
earlier.
7.3 Relaxation for difficulties in cases of defective

returns [AY 2021-22]
It is proposed to delegate certain power to CBDT by empowering the
Board to specify, vide notification that any of the conditions specified
under explanation to section 139(9) shall not apply for a class of
assessee or shall apply with such modifications, as maybe specified
in such notification.

7.4 Reduction of time-line for completing assessment
Section 153 of the Act contains provisions in respect of time-limit for
completion of assessment, reassessment and re-computation under
the Act. The sub-section (1) of the said section provides that the time-
limit for passing an assessment order under section 143 or 144 of
the Act shall be 21 months from the end of the assessment year in
which the income was first assessable. However, this time limit had
earlier been curtailed in order to improve the efficacy and efficiency
of the Department to give effect to computerization of processes
under the Act. As a result, the time limit for completion of assessment
proceedings under sections 143 or 144 of the Act was reduced
to 18 months for A.Y. 2018-19 and 12 months for A.Y. 2019-20 and
subsequent assessment years vide the Finance Act, 2017.
Since then, the assessment procedure has been completely
overhauled by the introduction of the Faceless Assessment Scheme,
2019. The assessment procedure is now conducted in a completely
faceless and jurisdiction-less way where all internal and external
communication is made electronically and different aspects of the
assessment procedure like verification, scrutiny of books of accounts
etc. are carried on by different units. The person-to-person interface
between the taxpayer and the Department has been eliminated. This
team-based approach for assessment with a dynamic jurisdiction is
technologically driven and very efficient. Thus, the time required for
completion of assessment procedure needs to be further reduced.
It has been proposed that the time limit for completion of assessment
proceedings may be reduced further by 3 months. Thus the time for
completing of assessment is proposed to be 9 months from the end
of the assessment year in which the income was first assessable, for
the assessment year 2021-22 and subsequent assessment years.
7.5 Return processing and issue of notice for regular
assessment
The existing provisions of section 143(1)(a) of the Act provides that
at the time of processing of return of income made under section
139, or in response to a notice under section 142(1), the total income

or loss shall be computed after making the adjustments specified in
clauses (i) to (vi) therein.
It is proposed to amend the provisions of section 143(1) of the Act,-
(i) to allow for the adjustment on account of increase in income
indicated in the audit report but not taken into account in
computing the total income.
(ii) to give consequential effect to amendment carried out in section
80 AC vide Finance Act, 2018.
(iii) to reduce the time limit for sending intimation under section
143(1) of the Act from 1 year to 9 months from the end of the
financial year in which the return was furnished.
Further, it is also proposed to reduce the time limit for issue of notice
for regular assessment under section 143(2) of the Act from 6 months
to 3 months from the end of the financial year in which the return is
furnished.
7.6 Income escaping assessment and search
assessments [w.e.f. 1-4-2021]
Under the Act, the provisions related to income escaping assessment
(re-assessment) provide that if the Assessing Officer has reason to
believe that any income chargeable to tax has escaped assessment
for any assessment year, he may assess or reassess or re-compute the
total income for such year under section 147 of the Act by issuing
a notice under section 148 of the Act. However, such reopening
is subject to the time limits prescribed in section 149 of the Act.
(Presently 6 years)
In cases where search is initiated u/s 132 of the Act or books of account,
other documents or any assets are requisitioned under section 132A
of the Act, assessment is made in the case of the assessee, or any
other person, in accordance with the special provisions of sections
153A, 153B, 153C and 153D, of the Act that deal specifically with such
cases. (Presently block assessment of 6 years or 10 years in specified
case 10 years as well)
The Bill proposes a completely new procedure of assessment of such

cases by reduction in time limit by which a notice for assessment or
reassessment or re-computation can be issued. The salient features of
new procedure are as under:-
(i) The provisions of section 153A and section 153C, of the Act are
proposed to be made applicable to only search initiated under
section 132 of the Act or books of accounts, other documents
or any assets requisitioned under section 132A of the Act, on or
before 31st March 2021.
(ii) Assessments or reassessments or in re-computation in cases
where search is initiated under section 132 or requisition is
made under 132A, after 31st March 2021, shall be under the new
procedure.
(iii) Section 147 proposes to allow the Assessing Officer to assess or
reassess or re-compute any income escaping assessment for any
assessment year (called relevant assessment year).
Before such assessment or reassessment or re-computation, a notice
is required to be issued under section 148 of the Act, which can be
issued only when there is information with the Assessing officer which
suggests that the income chargeable to tax has escaped assessment
in the case of the assessee for the relevant assessment year. Prior
approval of specified authority is also required to be obtained before
issuance of such notice by the Assessing Officer.
(iv) It is proposed to provide that any information which has been
flagged in the case of the assessee for the relevant assessment
year in accordance with the risk management strategy formulated
by the Board shall be considered as information which suggests
that the income chargeable to tax has escaped assessment. The
flagging would largely be done by the computer based system.
(v) Further, a final objection raised by the CAG to the effect that
the assessment in the case of the assessee for the relevant
assessment year has not been in accordance with the provisions
of the Act shall also be considered as information which suggests
that the income chargeable to tax has escaped assessment.
(vi) Further, in search, survey or requisition cases initiated or made
or conducted, on or after 1st April, 2021, it shall be deemed that
the Assessing officer has information which suggests that the
income chargeable to tax has escaped assessment in the case of
the assessee for the 3 assessment years immediately preceding
the assessment year relevant to the previous year in which the
search is initiated or requisition is made or any material is seized
or requisitioned or survey is conducted.
(vii) New Section 148A of the Act proposes that before issuance of
notice the Assessing Officer shall conduct enquiries, if required,
and provide an opportunity of being heard to the assessee. After
considering his reply, the Assessing Office shall decide, by passing
an order, whether it is a fit case for issue of notice under section
148 and serve a copy of such order along with such notice on the
assessee. The Assessing Officer shall before conducting any such
enquiries or providing opportunity to the assessee or passing
such order obtain the approval of specified authority. However,
this procedure of enquiry, providing opportunity and passing
order, before issuing notice under section 148 of the Act, shall
not be applicable in search or requisition cases.
(viii) The time limitation for issuance of notice under section 148 of
the Act is proposed to be provided in section 149 of the Act and
is as below:
- in normal cases, no notice shall be issued if 3 years have
elapsed from the end of the relevant assessment year. Notice
beyond the period of 3 years from the end of the relevant
assessment year can be taken only in a few specific cases.
- in specific cases where the Assessing Officer has in his
possession evidence which reveal that the income escaping
assessment, represented in the form of asset, amounts to or
is likely to amount to Rs. 50 lakh or more, notice can be issued
beyond the period of 3 year but not beyond the period of 10
years from the end of the relevant assessment year;
- Another restriction has been provided that the notice under
section 148 of the Act cannot be issued at any time in a case

for the relevant assessment year beginning on or before 1st
day of April, 2021, if such notice could not have been issued
at that time on account of being beyond the time limit
prescribed under the provisions of clause (b), as they stood
immediately before the proposed amendment.
- Since the assessment or reassessment or re-computation in
search or requisition cases (where such search or requisition
is initiated or made on or before 31st March 2021) are to
be carried out as per the provision of section 153A, 153B,
153Cand 153D of the Act, the aforesaid time limitation shall
not apply to such cases.
- It is also proposed that for the purposes of computing the
period of limitation for issue of section 148 notice, the time
or extended time allowed to the assessee in providing
opportunity of being heard or period during which such
proceedings before issuance of notice under section 148
are stayed by an order or injunction of any court, shall be
excluded. If after excluding such period, time available to the
Assessing Officer for passing order, about fitness of a case
for issue of 148 notice, is less than seven days, the remaining
time shall be extended to seven days.
(ix) The specified authority for approving enquiries, providing
opportunity, passing order under section 148A of the Act and for
issuance of notice under section 148 of the Act are proposed to
be —
(a) PCIT or PDIT or CIT or DIT, if three years or less than three years
have elapsed from the end of the relevant assessment year;
(b) PCCIT or PDGIT or CCIT or DGIT, if more than three years have
elapsed from the end of the relevant assessment year.
(x) Once assessment or reassessment or re-computation has
started the Assessing officer is proposed to be empowered (as
at present) to assess or reassess the income in respect of any
issue which has escaped assessment and which comes to his
notice subsequently in the course of the proceeding under this
procedure notwithstanding that the procedure prescribed in
section 148A was not followed before issuing such notice for
such income.
7.7 Issue of Notice u/s 142(1) [w.e.f. 1-4-2021]
Section 142(1)(i) of the Act provides the Assessing Officer the
authority to issue notice to an assessee, who has not submitted
a return of income, asking for submission of return for conducting
inquiry before assessment. This is necessary to bring into the fold of
taxation non-filers or stop filers who have transactions resulting in
income. However, this power can be currently invoked only by the
Assessing Officer.
In order to enable centralized issuance of notices etc. in an automated
manner, it is proposed to amend the provisions of section 142(1)(i) to
empower the prescribed income-tax authority besides the Assessing
Officer to issue notice under the said clause.
7.8 New Dispute Resolution Committee [w.e.f. 1-4-2021]
In order to provide early tax certainty to small and medium taxpayers,
it is proposed to introduce a new scheme for preventing new disputes
and settling the issue at the initial stage. The new scheme is proposed
to be incorporated in a new section 245MA and has the following
features
(i) The Central Government shall constitute one or more Dispute
Resolution Committee (DRC).
(ii) This committee shall resolve disputes of such persons or class of
person which shall be specified by the Board. The assessee would
have an option to opt for or not opt for the dispute resolution
through the DRC.
(iii) Only those disputes where the returned income is Rs. 50 lakh or
less (if there is a return) and the aggregate amount of variation
proposed in specified order is Rs. 10 lakh or less shall be eligible
to be considered by the DRC.
(iv) If the specified order is based on a search initiated under
section 132 or requisition made under section 132A or a survey
initiated under 133A or information received under Exchange of

Information, such specified order shall not be eligible for being
considered by the DRC.
(v) Assessee would not be eligible for benefit of this provision if
there is detention, prosecution or conviction under various laws
as specified in the proposed section.
(vi) Board will prescribe some other conditions in due course which
would also need to be satisfied for being eligible under this
provision.
(vii) The DRC, subject to such conditions as may be prescribed, shall
have the powers to reduce or waive any penalty imposable under
this Act or grant immunity from prosecution for any offence
under this Act in case of a person whose dispute is resolved
under this provision.
(viii) The Central Government has also been empowered to make a
scheme by notification in the Official Gazette for the purpose
of dispute resolution under this provision. The scheme shall
impart greater efficiency, transparency and accountability by
eliminating interface to the extent technologically feasible, by
optimising utilisation of resources and introducing dynamic
jurisdiction. The Central Government may, for the purposes of
giving effect to the scheme, by notification in the Official Gazette,
direct that any of the provisions of this Act shall not apply or
shall apply with such exceptions, modifications and adaptations
as may be specified in the notification.
7.9 New Board for Advance Ruling
As large number of applications are pending before AAR since last
many years. There is a need to look for an alternative method of
providing advance ruling which can give rulings to taxpayers in timely
manner. Hence, it is proposed to constitute a Board of Advance Ruling
and to make the following amendments in the existing provisions of
AAR:-
(ii) The Authority for Advance Rulings shall cease to operate
with effect from such date, as may be notified by the Central
Government in the Official Gazette.

(iii) It is proposed that the Central Government shall constitute one
or more Board for Advance Rulings for giving advance rulings
under the said Chapter on and after the notified date. Every such
Board shall consist of two members, each being an officer not
below the rank of Chief Commissioner. Advance rulings of such
Board shall not be binding on the applicant or the Department
and if aggrieved, the applicant or the Department may appeal
against the ruling or order passed by the Board before the High
Court.
(iv) Since the work of Authority shall be carried out by the Board for
Advance Rulings on and after the notified date, amendments are
proposed to be made to the various provisions of the Chapter to
this effect.
(v) Section 245Q (which deals with filing of application) is proposed
to be amended to provide that the pending application with the
Authority i.e. in respect of which order under section 245R(2) or
section 245R(4) has not been passed before the notified date
shall be transferred to the Board for Advance Rulings along with
all records, documents or material, by whatever name called and
shall be deemed to be records before the Board for all purposes.
(vi) The Central Government is also proposed to be empowered to
make a scheme by notification in the Official Gazette for the
purpose of giving advance ruling by Board of Advance Ruling
under this provision. The scheme shall impart greater efficiency,
transparency and accountability by eliminating interface to
the extent technologically feasible, by optimising utilisation
of resources and introducing dynamic jurisdiction. The Central
Government may, for the purposes of giving effect to the
scheme, by notification in the Official Gazette, direct that any of
the provisions of this Act shall not apply or shall apply with such
exceptions, modifications and adaptations as may be specified
in the notification.
(vii) A new section 245W is proposed to be inserted to provide
for appeal to High Court against the order passed or ruling
pronounced by the Board for Advance Ruling. This appeal can

be filed by the applicant as well as by the Department. Such
appeal shall be filed within sixty days from the date of the
communication of such ruling or order, in such form and manner
as may be prescribed. However, where the High Court is satisfied,
on an application made in this behalf, that the appellant was
prevented by sufficient cause from presenting the appeal within
the period specified in this section, it may allow a further period
of thirty days for filing such appeal. The Central Government
shall be empowered to notify a scheme for filing of appeal by the
Assessing Officer so as to impart greater efficiency, transparency
and accountability by optimising utilisation of the resources
through economies of scale and functional specialisation;
introducing a system with dynamic jurisdiction. The Central
Government may, for the purposes of giving effect to the
scheme, by notification in the Official Gazette, direct that any of
the provisions of this Act shall not apply or shall apply with such
in the notification.
7.10 Faceless ITAT
In order to ensure that the reforms initiated by the Department to
reduce human interface from the system reaches the next level, it is
imperative that a faceless scheme be launched for ITAT proceedings
on the same line as faceless appeal scheme. This will not only reduce
cost of compliance for taxpayers, increase transparency in disposal
of appeals but will also help in achieving even work distribution in
different benches resulting in best utilisation of resources.
Therefore, it is proposed to insert new sub-sections in the section 255
of the Act so as to provide that the Central Government may notify
a scheme for the purposes of disposal of appeal by the ITAT so as to
impart greater efficiency, transparency and accountability by,—
(a) eliminating the interface between the ITAT and parties to the
appeal in the course of proceedings to the extent technologically
feasible;
(b) optimising utilisation of the resources through economies of
scale and functional specialisation;

(c) introducing an appellate system with dynamic jurisdiction. It
is also proposed to empower the Central Government, for the
purpose of giving effect to the scheme made under the proposed
sub-section, for issuing notification in the Official Gazette, to
direct that any of the provisions of this Act shall not apply or
shall apply with such exceptions, modifications and adaptations
as may be specified in the notification.
7.11 Abolishment of Income-tax Settlement Commission
It is proposed to discontinue Income-tax Settlement Commission
(ITSC) and to constitute Interim Board of settlement for pending
cases. The various amendments proposed are as under:
• ITSC shall cease to operate on or after 1st February, 2021
• No application under section 245C of the Act for settlement of
cases shall be made on or after 1st February, 2021;
• All applications that were filed under section 245C of the Act and
not declared invalid under sub-section (2C) of section 245D of the
Act and in respect of which no order under section 245D(4) of the
Act was issued on or before the 31st January, 2021 shall be treated
as pending applications.
• Where in respect of an application, an order, which was required to
be passed by the ITSC under section 245(2C) of the Act on or before
the 31st day of January, 2021 to declare an application invalid
but such order has not been passed on or before 31st January,
2021, such application shall be deemed to be valid and treated as
pending application.
• The Central Government shall constitute one or more Interim
Board for Settlement (hereinafter referred to as the Interim Board),
as may be necessary, for settlement of pending applications. Every
Interim Board shall consist of three members, each being an officer
of the rank of Chief Commissioner, as may be nominated by the
Board. If the Members of the Interim Board differ in opinion on
any point, the point shall be decided according to the opinion of
majority.

• On and from 1st February, 2021, the provisions related to exercise
of powers or performance of functions by the ITSC viz. provisional
attachment, exclusive jurisdiction over the case, inspection of
reports and power to grant immunity shall apply mutatis mutandi
to the Interim Board for the purposes of disposal of pending
applications and in respect of functions like rectification of orders
for all orders passed under sub-section (4) of section 245D of the
Act. However, where the time-limit for amending any order or filing
of rectification application under section 245(6B) of the Act expires
on or after 1st February, 2021, in computing the period of limitation,
the period commencing from 1st February, 2021 and ending on the
end of the month in which the Interim Board is constituted shall be
excluded and the remaining period shall be extended to sixty days,
if less than sixty days.
• With respect to a pending application, the assessee who had filed
such application may, at his option, withdraw such application
within a period of three months from the date of commencement
of the Finance Act, 2021 and intimate the Assessing Officer, in the
prescribed manner, about such withdrawal.
• Where the option for withdrawal of application is not exercised by
the assessee within the time allowed, the pending application shall
be deemed to have been received by the Interim Board on the date
on which such application is allotted or transferred to the Interim
Board.
• The Board may, by an order, allot any pending application to any
Interim Board and may also transfer, by an order, any pending
application from one Interim Board to another Interim Board.
• Where the pending application is allotted to an Interim Board or
transferred to another Interim Board subsequently, all the records,
documents or evidences, with whatever name called, with the ITSC
shall be transferred to such Interim Board and shall be deemed to
be the records before it for all purposes.
• Where the assessee exercises the option to withdraw his
application, the proceedings with respect to the application shall

abate on the date on which such application is withdrawn and
the Assessing Officer, or, as the case may be, any other income-tax
authority before whom the proceeding at the time of making the
application was pending, shall dispose of the case in accordance
with the provisions of this Act as if no application under section
245C of the Act had been made. However, for the purposes of
the time-limit under sections 149, 153, 153B, 154 and 155 and
for the purposes of payment of interest under section 243 or 244
or, as the case may be, section 244A, for making the assessment
or reassessment, the period commencing on and from the date
of the application to the ITSC under section 245C of the Act
and ending with the date on which application is withdrawn
shall be excluded. Further, the income-tax authority shall not be
entitled to use the material and other information produced by
the assessee before the ITSC or the results of the inquiry held
or evidence recorded by the ITSC in the course of proceeding
before it. However, this restriction shall not apply in relation to the
material and other information collected, or results of the inquiry
held or evidence recorded by the Assessing Officer, or, as the case
may be, other income-tax authority during the course of any other
proceeding under this Act irrespective of whether such material
or other information or results of the inquiry or evidence was also
produced by the assessee or the Assessing officer before the ITSC.
• The Central Government may make a scheme, by notification
in the Official Gazette, for the purposes of settlement in respect
of pending applications by the Interim Board, so as to impart
greater efficiency, transparency and accountability by eliminating
the interface between the Interim Board and the assessee in the
course of proceedings to the extent technologically feasible;
optimising utilisation of the resources through economies of
scale and functional specialisation; and introducing a mechanism
with dynamic jurisdiction. The Central Government may, for the
purposes of giving effect to the said scheme, by notification in the
Official Gazette, direct that any of the provisions of this Act shall
not apply or shall apply with such exceptions, modifications and
adaptations as may be specified in the notification.
8. Tax Deduction at Source
8.1 No TDS on payment of Dividend to business trust
[AY 2020-21]
This amendment proposes to amend second proviso to section 194
of the Act to further provide that the provisions of section 194 i.e.
TDS on dividend shall also not apply to dividend income credited or
paid to a business trust by a special purpose vehicle or payment of
dividend to any other person as may be notified. This means that no
TDS needs to be deducted to AIF Category III also.
8.2 New TDS on purchase of goods [applicable w.e.f.
01.07.2021]
A new section 194Q is proposed to be inserted to provide for
deduction of TDS by person responsible for paying any sum to
any resident for purchase of goods @ 0.1%. It is proposed that TDS
under this section is only required to be deducted by those person
(i.e. buyer) whose total sales or gross receipts or turnover from the
business carried on by him exceed Rs. 10 Crores during the financial
year immediately preceding the financial year in which the purchase
of goods is carried out.
Tax is required to be deducted by such person, if the purchase of
goods by him from the seller is of the value or aggregate of such
value exceeding Rs. 50 Lakhs in the previous year. It is proposed to
provide that the provisions of this section shall not apply to –
(i) a transaction on which tax is deductible under any provision of
the Act; and
(ii) a transaction, on which tax is collectible under the provisions of
section 206C other than transaction to which section 206C(1H)
applies.
This means, if on a transaction a TDS or TCS is required to be carried
out under any other provision, then it would not be subjected to TDS
under this section other than a transaction where TCS is required

under section 206C(1H) as well as TDS under this section, then on
that transaction only TDS under this section shall be carried out.
Central Government is proposed to be empowered by notification
in the Official Gazette to exempt a person from obligation under
this section on fulfilment of conditions as may be specified in that
notification.
Board with the approval of the Central Government has been
empowered to issue guidelines for removing difficulty in giving
effect to the provisions of this section.
Consequential amendment is also proposed in section 206AA(1) of
the Act and insert second proviso to further provide that where the
tax is required to be deducted under section 194Q and PAN is not
provided, the TDS shall be at the rate of 5%.
8.3 Insertion of new section 206AB and 206CCA – TDS/
TCS on non-filers of ITR at higher rates [applicable
w.e.f. 01.07.2021]
It is proposed to insert a new section 206AB in the Act as a special
provision providing for higher rate for TDS for the non-filers of
income-tax return. Similarly, it is proposed to insert a section 206CCA
in the Act as a special provision for providing for higher rate of TCS for
non-filers of income-tax return.
Proposed section 206AB of the Act would apply on any sum or
income or amount paid, or payable or credited, by a person (herein
referred to as deductee) to a specified person. This section shall not
apply where the tax is required to be deducted under sections 192,
192A, 194B, 194BB, 194LBC or 194N of the Act. The proposed TDS rate
in this section is higher of the followings rates –
• twice the rate specified in the relevant provision of the Act; or
• twice the rate or rates in force; or
• the rate of 5%
If the provision of section 206AA of the Act is applicable to a specified
person, in addition to the provision of this section, the tax shall be

deducted at higher of the two rates provided in this section and in
section 206AA of the Act.
Proposed section 206CCA of the Act would apply on any sum or
amount received by a person (herein referred to as collectee) from a
specified person. The proposed TCS rate in this section is higher of the
following rates –
• twice the rate specified in the relevant provision of the Act; or
• the rate of 5%
If the provision of section 206CC of the Act is applicable to a specified
person, in addition to the provision of this section, the tax shall be
collected at higher of the two rates provided in this section and in
section 206CC of the Act.
“Specified person” proposes to means a person who has not filed the
returns of income for both of the two assessment years relevant to
the two previous years which are immediately before the previous
year in which tax is required to be deducted or collected, as the case
may be. Further the time limit for filing tax return under section
139(1) of the Act has expired for both these assessment years.
There is another condition that aggregate of TDS and TCS in his case
is Rs. 50,000 or more in each of these two previous years. Specified
person shall not include a non-resident who does not have a
permanent establishment in India.

9. Miscellaneous Amendments
9.1 Definition of the term ―Liable to tax [AY 2021-22]
It is proposed to insert section 2(29A) to the Act providing the
definition of the term,“liable to tax”.The term “liable to tax” in relation
to a person means that there is a liability of tax on that person under
the law of any country and will include a case where subsequent to
imposition of such tax liability, an exemption has been provided.
9.2 Rationalization of the provision of Charitable
Trust and Institutions to eliminate possibility of
double deduction while calculating application or
accumulation [AY 2022-23]
In order to rationalize the provisions of charitable trust, it has been
proposed that-
a) Voluntary contributions made with a specific direction that it
shall form part of the corpus shall be invested or deposited in
one or more of the forms or modes specified in section 11(5)
maintained specifically for such corpus.
b) Application out of corpus shall not be considered as application
for charitable or religious purposes for the purposes of third
proviso of section 11(23C) and section 11(a) and section 11(b).
However, when it is invested or deposited back, into one or more
of the forms or modes specified in section 11(5) maintained
specifically for such corpus from the income of the previous year,
such amount shall be allowed as application in the previous
year in which it is deposited back to corpus to the extent of such
deposit or investment.
c) Application from loans and borrowings shall not be considered
as application for charitable or religious purposes for the
purposes of third proviso of section 11(23C) and section 11(a)
and section 11(b). However, when loan or borrowing is repaid
from the income of the previous year, such repayment shall be
allowed as application in the previous year in which it is repaid
to the extent of such repayment.

d) Clarify in both section 10(23C) and section 11 that for the
computation of income required to be applied or accumulated
during the previous year, no set off or deduction or allowance of
any excess application, of any of the year preceding the previous
year, shall be allowed.
9.3 Raising of threshold limit for approval u/s 10(23)
(iiiad) & (iiiae) from Rs. 1 to 5 Cr [AY 2022-23]
In order to provide benefit to small trust and institutions, it has been
proposed that the exemption under sub-clause (iiiad) and (iiiae) shall
be increased to Rs 5 crore and such limit shall be applicable for an
assessee with respect to the aggregate receipts from university or
universities or educational institution or institutions as referred to in
sub-clause (iiiad) as well as from hospital or hospitals or institution or
institutions as referred to in sub-clause (iiiae).

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UNION BUDGET
PROPOSAL 2021
Goods and Services Tax
RAPG & Co. Chartered Accountants 1
GST Leviable On Member Vis-à-vis Club And Association -
A New Clause (aa) Section 7(1) of CGST Act 2017
• Proposal to INSERT new clause (aa) in sub-section (1) of Section 7 w.e.f. 01-07-2017, to
ensure, levy of tax on activities or transactions involving supply of goods or services by any
person, other than an individual, to its members or constituents or vice-versa, for cash, deferred
payment or other valuable consideration,
• Earlier, the above supply was deemed as supply of goods under schedule II of CGST Act, 2017,
• Now, the same has been shifted from schedule II to a new clause (aa) of section 7(1),

Claim ITC, if invoice uploaded in GSTR 1-
A New Clause (aa) under Section 16(2) of the Act
• Proposal to INSERT new clause (aa) to sub-section (2) of the section 16 of the CGST Act is being
inserted to provide that input tax credit on invoice or debit note may be availed only when the
details of such invoice or debit note have been furnished by the supplier in the statement of
outward supplies i.e. Form GSTR 1 and such details are appearing to the recipient on GST
portal,
• The ITC shall be claimed by the recipient only if the invoice has been uploaded in GSTR 1 by
the supplier,
• This is also notable that rule 36(4) is already in place to specify that the ITC on invoices not uploaded
by the supplier should not exceed 5% of eligible ITC.

Audit of Accounts and Reconciliation Statement-
Omitted - Section 35(5) of the Act
• Proposal to OMIT section 35(5) to remove the mandatory requirement of getting annual
accounts audited and reconciliation statement submitted by specified professional.
• Section 35(5) is provided as below:
Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his
accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual
accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents in such form
and manner as may be prescribed:

Self certified reconciliation statement-
Amendment in Section 44 of the Act
• With the omission of Section 35(5), corresponding amendment has been proposed to substitute the
Section 44 of the Act, as below:
Every registered person, other than an Input Service Distributor, a person paying tax under
section 51 or section 52, a casual taxable person and a non-resident taxable person shall furnish an
annual return which may include a self certified reconciliation statement, reconciling the value of
supplies declared in the return furnished for the financial year, with the audited annual financial
statement for every financial year electronically, within such time and in such form and in such manner
as may be prescribed,

INTEREST ON NET CASH LIABILITY –
Section 50 amended w.e.f. 01 July 2017
• Proposal to amend proviso to Section 50(1) and deemed to be substituted w.e.f. 01-07-2017 as
below:
Provided that the interest on tax payable in respect of supplies made during a tax
period and declared in the return for the said period furnished after the due date in
accordance with the provisions of section 39, except where such return is furnished after
commencement of any proceedings under section 73 or section 74 in respect of the said period,
shall be payable on that portion of the tax which is paid by debiting the electronic cash
ledger.”

Appeal to Appellate Tribunal -
• A proviso to sub-section (6) of section 107 of the CGST Act is being inserted to provide that no
appeal shall be filed against an order made under sub-section (3) of section 129, unless a sum
equal to twenty-five per cent. of penalty has been paid by the appellant.

Power to collect any information -
• Section 151 of the CGST Act is being substituted to empower the jurisdictional commissioner to
call for information from any person relating to any matter dealt with in connection with the Act.
• The section 151 shall be substituted as below:

“The Commissioner or an officer authorised by him may, by an order, direct any person to
furnish information relating to any matter dealt with in connection with this Act, within such time,
in such form, and in such manner, as may be specified therein”

Use of information received u/s 150 or 151
• To provide that no information obtained under sections 150 and 151 shall be used for the
purposes of any proceedings under the Act without giving an opportunity of being heard to the
person concerned.
• The provision of Section 152(1) shall be amended as below:

No information of any individual return or part thereof with respect to any matter given for the
purposes of section 150 or section 151 shall, without the previous consent in writing of the
concerned person or his authorised representative, be published in such manner so as to enable
such particulars to be identified as referring to a particular person and no such information shall
be used for the purpose of any proceedings under this Act without giving an opportunity of being
heard to the person concerned.

Changes in Zero Rate Supply of Goods and Service -
▪ Export of goods and/services shall be eligible for refund of un-utilized ITC without payment of IGST under
Bond or Letter of Undertaking,
▪ In case of export of goods and non-realization of sale proceeds within the time prescribed under FEMA,
1999, then the Exporter of goods shall be required to deposit the refund so received under this
provision along with interest as per Section 50 within 30 days from the date prescribed under FEMA,
▪ Supply of goods or services to a Special Economic Zone (SEZ) developer or a Special Economic Zone unit
shall be treated as Zero rated supply if such supply is for authorised operations of SEZ developer/unit,
▪ Zero-rated supply with payment of IGST shall be applicable to a notified class of taxpayers or notified goods
or services,

Thank You!
Feel free to reach us at:
info@rapg.in
CA Neeraj Kumar +91 9999 83 6182

CA Deepak Arya +91 9818 44 9179
GST - Decoding of Amendments of Budget 2021
Ca Vaishali B. Kharde
Connect us at
Email: cakhardevaishali@gmail.com
Mob: 9561005039
1
Contents
About Document / How to read .............................................................................. 4
Overview about Indian GST .................................................................................... 5
Deliberation of Economic Survey 2020-21 from GST Perspective! ............................ 7
Budget 2021 - The Finance Bill 2021 ........................................................................ 9
Section Wise Analysis of Amendments made in Budget 2021. ............................... 10
CGST Act – Decoding of Amendments Proposed. .................................................. 16
1. Section 7 - Scope of supply. ............................................................................................ 17
2. Section 16 - Eligibility and conditions for taking input tax credit. ................................. 25
3. Section 35 - Accounts and other records ...................................................................... 34
4. Section 44 - Annual return. ............................................................................................ 41
5. Section 50 - Interest on delayed payment of tax. .......................................................... 45
6. Section 74 – Determination of tax not paid or short paid etc ....................................... 49
7. Section 75 - General provisions relating to determination of tax.................................. 58
8. Section 83 - Provisional attachment to protect revenue in certain cases. .................... 67
9. Section 107 - Appeals to Appellate Authority ................................................................ 70
10. Section 129 - Detention, seizure and release of goods and conveyances in transit ...... 82
11. Section 130 - Confiscation of goods or conveyances and levy of penalty. .................... 93
12. Section 151 - Power to collect statistics ....................................................................... 100
2
13. Section 152 - Bar on disclosure of information ............................................................ 103
14. Section 168 - Power to issue instructions or directions ............................................... 105
15. Schedule II of the CGST Act .......................................................................................... 108
IGST Act - Decoding of Amendment Proposed ..................................................... 118
About CA Vaishali Kharde ................................................................................... 125
3
About Document / How to read
▪ GST has completed almost four years. In these four years, taxpayers are
struggling with maze of amendments and clarification by way of
Notifications, Circulars, Order along with several litigation.
▪ In addition to real time update now it’s 3rd amendment which is proposed
for GST Act.
▪ Thus, it’s becoming difficult to understand whether GST is heading towards
simplification or further complications and how to handle this 4-year child
which will now move to 5th year.
▪ In this document we had covered detailed analysis of the Amendment
Proposed by the Finance Bill, 2021 [FB, 2021].
▪ ‘Red’ colour is used to highlight the section wise amendments of Finance
Bill, 2021.
▪ Earlier amendments made for respective sections are covered by way of
foot note.
4
Overview about Indian GST
The GST has enacted from 01.07.2017 which subsumes central taxes like
Central Excise Duty, Additional Duties of Customs (commonly known as CVD),
Special Additional Duty of Customs (SAD), Service Tax etc and State taxes like
State VAT, Central Sales Tax, Luxury Tax, Entry Tax, Taxes on advertisements
etc. The key objective of enactment of GST was one nation one tax and
seamless flow of credit, however after implementation question arises that
really the objective of GST is achieved?
As far as one nation one tax is concern under GST law the State Authorities
are empowered to have separate provisions. As per 101st Constitutional
Amendment Act, Article 246A was introduced for implementation of GST. As
per Article 246A of the Constitution of India, “Notwithstanding anything
contained in articles 246 and 254, Parliament, and, subject to clause (2), the
Legislature of every State, have power to make laws with respect to goods
and services tax imposed by the Union or by such State.”
5
Article 246A formed a unique body GST Council with Cooperative Federalism
where the Centre and the State can take decision. Earlier apex court1 had
held that within the sphere allotted to them, States are supreme.
Thus, even GST council is a body where decisions are taken together by
Central and State it is observe that certain state has different provisions with
respect to applicability, exemptions etc like threshold limit for E-way bill,
exemptions etc Even recently Maharashtra State Government has issued a
Trade Circular2 notifying that it shall not adopt circulars issued by central
instead will issue a separate GST circular. Thus, it’s diluting the objective of
GST ‘One Nation One Tax’ as future of GST in towards State Governments
formulating a different law also an different legal interpretation instead
adopting the same as laid down by the Central Government.
1
S.R. Bommai v. Union of India [(1994) 2 SCR 644]
2
No. 01T of 2021
6
Deliberation of Economic Survey 2020-21 from GST Perspective!
Year 2020-21 was with full of challenges for everyone. Almost all planning,
prediction, visions etc changed rapidly as COVID-19 developed. Likewise, even
from tax perspective changes are made keeping in mind pandemic situation of
India.
The initial stringent lockdown was critical for all business, however as per
Economic Survey 2020-21 (ES 2021) the V-shaped economic recovery has
demonstrated in GDP. The shortfall in indirect taxes during April to November
2020 was led by shortfall in customs and GST collections for the Centre.
As per ES 2021, the recovery from GST perspective has started from November
20 and revenue for the month of December 20 stood at 1.15 lakh crore.
Additionally, ES highlighted that this has been the highest monthly GST
collection since introduction of GST and has been due to the combined effect
of
▪ The rapid economic recovery of business post pandemic and
▪ The nation-wide drive against GST evaders and fake bills
▪ Many systemic changes introduced recently which have led to improved
compliance. This change includes E-way bill blocking, Implementation of
E-invoicing etc.
7
ES 2021 further highlighted certain Notifications which were issued in order to
provide relief to taxpayers due to COVID-19 Like increased time limit for filing
of appeal, furnishing of return, or any other compliance under the GST Act etc
As per ES 2021, improved compliance is one of the reasons for GST Collection.
To mitigate the risk of fake invoicing and fake firm it is necessary that
compliance should be streamlined. However, while strengthening the
compliance an eye on genuine taxpayer is most important. Many of such
taxpayers are getting affected on account of provisions or restrictions
announced under GST. To save such genuine taxpayer it is essential to provide
compliance rating as prescribed u/s 149 of the CGST Act, 2017 which is
applicable mutatis mutandis under IGST, UTGST Act and SGST laws. Thus, every
registered person shall be assigned a compliance rating based on the record of
compliance and as per said rating action like blocking of E-way bill, cancellation
of GST registration etc which negatively affect the smooth functioning of
business operations can be taken.
8
Budget 2021 - The Finance Bill 2021
In the Budget Speech FM has discussed shortly about GST as given hereunder
174. Before I come to my Indirect Tax proposals, I would like to appraise the
House on GST. The GST is now four years old, and we have taken several
measures to further simplify it. Some of the measures include:
i. nil return through SMS,
ii. quarterly return and monthly payment for small taxpayers,
iii. electronic invoice system,
iv. validated input tax statement,
v. pre-filled editable GST return, and
vi. staggering of returns filing.
The capacity of GSTN system has also been enhanced. We have also
deployed deep analytics and Artificial Intelligence to identify tax evaders
and fake billers and launched special drives against them.
175. The results speak for themselves. We have made record collections.
in the last few months.
176. The GST Council has painstakingly thrashed out thorny issues. As
Chairperson of the Council, I want to assure the House that we shall take
9
every possible measure to smoothen the GST further, and remove
anomalies such as the inverted duty structure
Thus, Budget Speech of Hon’ble FM is only about 3 paras with respect to GST.
However fine print issued was shocking for all and covering almost 15
amendments with respect to GST Act. We hereby analysed each amendment
along with rational wherever possible and our view thereon.
Section Wise Analysis of Amendments made in Budget 2021.
The Finance Bill 2021 (FB Bill, 2021) has proposed to amend Fifteen sections of
the GST Act and one section of IGST Act. The brief analysis of the same is as
under
Clause of FB, Section of GST Act Amendment Proposed
2001
Proposed to be applicable retrospective from 1st July 2017
Clause 99 Section 7 of the CGST Amended so that to ensure GST
Act – Amended on supply by society to its
members or constituents or
vice-versa, for cash, deferred
10
payment or other valuable
consideration. Accordingly,
amendments are also proposed
in Schedule II.
Clause 103 Section 50 of the CGST Proposed to be amended so as
Act – Amended to charge interest on net cash
liability with effect from the 1st
July, 2017
Clause 113 Schedule -II of CGST Act Amended in consent with
amendment proposed u/s 7 of
the CGST Act
Applicable from the date to be Notified
Clause 100 Section 16 of the CGST Proposed to be amended so that
Act– Amended to allow Input tax credit (ITC) on
invoice or debit note only when
the details of such invoice or
debit note have been furnished
by the supplier in their GSTR-1
Clause 101 Section 35 of CSGT Act Proposed to be amended so that
Clause 102 -– Amended annual accounts audited, and
11
Section 44 of CGST Act reconciliation statement can be
-Substituted self-certified instead by
professional.
Clause 104 Section 74 of the CGST Seizure and Confiscation of
Act – Amended goods and conveyances in
transit is proposed to be
separated from recovery of tax.
Clause 105 Section 75 of the CGST Section 75 is proposed to amend
Act – Amended so that “self-assessed tax” shall
include the tax payable in
respect of difference between
GSTR-1 and GSTR-3B.
Clause 106 Section 83 of the CGST Proposed amendment empower
Act – Amended the officer to attach bank or
property in case of proceeding
under any sections of Chapter
XII, Chapter XIV or Chapter XV.
Clause 107 Section 107 of the Amount equal to 25% of the
CGST Act – Amended penalty has required to be paid
by the appellant for filing of
12
appeal against an order made
under sub-section (3) of section
129[detention/seizure]
Clause 108 Section 129 of the Delink the proceedings under
CGST Act – Amended that section relating to
detention, seizure and release of
goods and conveyances in
transit, from section 130 relating
to confiscation of goods or
conveyances and levy of
penalty.
Clause 109 Section 130 of the Delink the proceedings under
CGST Act – Amended that section relating to
confiscation of goods or
conveyances and levy of penalty
from the proceedings under
section 129 relating to
detention, seizure and release of
goods and conveyances in
transit
13
Clause 110 Section 151 of the Empower the jurisdictional
CGST Act – Amended commissioner to call for
information from any person
relating to any matters dealt
with in connection with the Act.
Clause 111 Section 152 of the Information obtained under
CGST Act – Amended sections 150 and 151 shall not
be used for the purposes of any
proceedings under the Act
without giving an opportunity of
being heard.
Clause 112 Section 168 of the Enable the jurisdictional
CGST Act – Amended commissioner to exercise
powers under section 151 to call
for information
Clause 114 Section 16 of IGST Act Only specified persons or goods
or services will be able to claim
refund of IGST paid in case of
export with payment of GST.
14
Realisation of fund within
prescribed period will be
mandatory else refund received
will be liable to be pay to
Government Exchequer with
interest as applicable;
15
CGST Act – Decoding of Amendments Proposed.
1.Section 7 2. Section 16 3. Section 35

•Scope of supply. •Eligibility and conditions •Accounts and other
for taking input tax credit. records
4. Section 44 5. Section 50 6. Section 74

•Annual return. •Interest on delayed •Determination of tax not
payment of tax. paid or short paid etc

•General provisions relating •Provisional attachment to •Appeals to Appellate
to determination of tax protect revenue in certain Authority.
cases.

•Detention, seizure and •Confiscation of goods or •Power to collect statistics.
release of goods and conveyances and levy of
conveyances in transit. penalty
13. Section 152 14. Section 168 15. Schedule II

•Bar on disclosure of •Power to issue instructions •Classification in to Goods
information or directions. and Services
16
1. Section 7 - Scope of supply.
Contents in FB, 2021 – Clause 99
99. In the Central Goods and Services Tax Act, 2017 (hereinafter referred
as the Central Goods and Services Tax Act), in section 7, in sub-section
(1), after clause (a), the following clause shall be inserted and shall be
deemed to have been inserted with effect from the 1st day of July, 2017,
namely:––
“(aa) the activities or transactions, by a person, other than an individual,
to its members or constituents or viceversa, for cash, deferred payment
or other valuable consideration. Explanation.––For the purposes of this
clause, it is hereby clarified that, notwithstanding anything contained in
any other law for the time being in force or any judgment, decree or
order of any Court, tribunal or authority, the person and its members or
constituents shall be deemed to be two separate persons and the supply
of activities or transactions inter se shall be deemed to take place from
one such person to another;”.
Earlier Provision
7. Scope of supply.
(1) For the purposes of this Act, the expression ― Supply includes–
17
a. all forms of supply of goods or services or both such as sale,
transfer, barter, exchange, licence, rental, lease or disposal
made or agreed to be made for a consideration by a person in
the course or furtherance of business;
b. import of services for a consideration whether or not in the
course or furtherance of business;[and]3
c. the activities specified in Schedule I, made or agreed to be
made without a consideration;[****]4
d. (d) [*****]5.
[(1A) where certain activities or transactions constitute a
supply in accordance with the provisions of sub-section (1),
they shall be treated either as supply of goods or supply of
services as referred to in Schedule II.]6
(2) Notwithstanding anything contained in sub-section (1),––
a. activities or transactions specified in Schedule III; or
b. such activities or transactions undertaken by the Central
Government, a State Government or any local authority in
3
Inserted w.e.f 01st July, 2017 by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018)
– Brought into force on 01st February, 2019.
4
Omitted ―and‖ w.e.f 01st July, 2017 by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31
of 2018) – Brought into force on 01st February, 2019.
5
Omitted ―(d) the activities to be treated as supply of goods or supply of services as referred to in Schedule
II.‖ w.e.f. 01st July, 2017 by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) –
Brought into force on 01st February, 2019.
6
Inserted w.e.f. 01st July, 2017 by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of
2018) – Brought into force on 01st February, 2019.
18
which they are engaged as public authorities, as may be
notified by the Government on the recommendations of the
Council, shall be treated neither as a supply of goods nor a
supply of services.
(3) Subject to the provisions of [sub-sections (1), (1A) and (2)]7 , the
Government may, on the recommendations of the Council, specify,
by notification, the transactions that are to be treated as—
a. a supply of goods and not as a supply of services; or
b. a supply of services and not as a supply of goods
Amended Provision
(1) For the purposes of this Act, the expression ― Supply includes–
a. all forms of supply of goods or services or both such as sale,
transfer, barter, exchange, licence, rental, lease or disposal
made or agreed to be made for a consideration by a person in
the course or furtherance of business.
(aa) the activities or transactions, by a person, other
than an individual, to its members or constituents or viceversa,
for cash, deferred payment or other valuable
consideration.
7
Substituted for ―sub-sections (1) and (2)‖ w.e.f. 01st July, 2017 by The Central Goods and Services Tax
(Amendment) Act, 2018 (No. 31 of 2018) – Brought into force on 01st February, 2019
19
Explanation.––For the purposes of this clause, it is
hereby clarified that, notwithstanding anything contained
in any other law for the time being in force or any
judgment, decree or order of any Court, tribunal or
authority, the person and its members or constituents shall
be deemed to be two separate persons and the supply of
activities or transactions inter se shall be deemed to take
place from one such person to another;”.
b. import of services for a consideration whether or not in the
course or furtherance of business;[and]8
c. the activities specified in Schedule I, made or agreed to be
made without a consideration;[****]9
d. [*****]10.
[(1A) where certain activities or transactions constitute a
supply in accordance with the provisions of sub-section (1),
they shall be treated either as supply of goods or supply of
services as referred to in Schedule II.]11
8
Inserted w.e.f 01st July, 2017 by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018)
– Brought into force on 01st February, 2019.
9
Omitted ―and‖ w.e.f 01st July, 2017 by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31
of 2018) – Brought into force on 01st February, 2019.
10
Omitted ―(d) the activities to be treated as supply of goods or supply of services as referred to in Schedule
II.‖ w.e.f. 01st July, 2017 by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) –
Brought into force on 01st February, 2019.
11
Inserted w.e.f. 01st July, 2017 by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of
2018) – Brought into force on 01st February, 2019.
20
(2) Notwithstanding anything contained in sub-section (1),––
a. activities or transactions specified in Schedule III; or
b. such activities or transactions undertaken by the Central
Government, a State Government or any local authority in
which they are engaged as public authorities, as may be
notified by the Government on the recommendations of the
Council, shall be treated neither as a supply of goods nor a
supply of services.
(3) Subject to the provisions of [sub-sections (1), (1A) and (2)]12 , the
Government may, on the recommendations of the Council, specify,
by notification, the transactions that are to be treated as—
a. a supply of goods and not as a supply of services; or a supply
of services and not as a supply of goods
Our Comment
Section 7 which gives ‘Scope of Supply’ has proposed to be amended by
the FB, 2021 so that to levy GST on activities or transactions involving
supply of goods or services by any person, other than an individual, to its
members or constituents or vice-versa.
12
Substituted for ―sub-sections (1) and (2)‖ w.e.f. 01st July, 2017 by The Central Goods and Services Tax
(Amendment) Act, 2018 (No. 31 of 2018) – Brought into force on 01st February, 2019
21
As per ‘Notes on Clauses’ of the FB 2021’ the amendment is explained as
given hereunder,
Clause 99 of the Bill seeks to amend section 7 of the Central Goods and
Services Tax Act, 2017, with retrospective effect from the 1st July, 2017,
by inserting a new clause (aa) in sub-section (1) thereof, so as to ensure
levy of tax on activities or transactions involving supply of goods or
services by any person, other than an individual, to its members or
constituents or vice-versa, for cash, deferred payment or other valuable
consideration.
It is also proposed to insert an Explanation therein, to clarify that the
person or its members or constituents shall be deemed to be two
separate persons and the supply of activities or transactions inter se shall
be deemed to take place from one person to another.
Given the aforesaid it seems that amendment has been proposed so that
to end the dispute/litigation with respect to levy of GST in case of
Society and Members.
22
Earlier, GST said to be payable on all supply made for consideration.
Further, the term business is defined u/s 2 (17) which specifically
includes provision by association, society, or any such body (for a
subscription or any other consideration) of the facilities or benefits to its
members. Thus, as per one school of thought amounts charged to
members or society contribution can be said to be liable to GST.
However, there was Chaos on applicability of GST because, in erstwhile
regime in the case of Matunga Gymkhana Tahnee Heights Co-op Hou
Soc Ltd [2015-TIOL-108-CESTAT-MUM, CESTAT] held that services to
members of club or cooperative housing society is not service by one to
another thus not chargeable to service tax. Additionally, reference to
Calcutta Club (2019-TIOL-449-SC-ST-LB) can be taken wherein Apex
Court has confirmed the concept of mutuality. Thus, as per another
school of thought, it can be construed that GST is not applicable on basis
of principle of mutuality.
Even, the taxpayers had approached to Advance Ruling Authority to get
clarification. Accordingly, in one of the cases13 of Appellate Advance
13
Apsara Co-Operative Housing Society Ltd [2020-TIOL-65-AAAR-GST]
23
Ruling authorities has confirmed the decision of advance ruling authority
that GST is applicable on the monthly subscription/contribution charged
by the society from its members and concept of mutuality is not
applicable.
Given the aforesaid, now amendment seems to be proposed to
specifically include levy of GST in case of member and society by
deeming them as separate persons.
Consequent to this amendment of section 7, paragraph 7 of Schedule II
as given under has also been proposed to be omitted retrospectively,
w.e.f. July 1, 2017.
7. Supply of Goods- The following shall be treated as supply of goods,
namely:—
Supply of goods by any unincorporated association or body of persons to
a member thereof for cash, deferred payment or other valuable
consideration.
Further, this amendment is proposed to be applicable, with
retrospective effect from the 1st of July, 2017. Now the question
24
remains same about validity of retrospective amendment where could
result in to additional liability.
2. Section 16 - Eligibility and conditions for taking input tax credit.
100. In section 16 of the Central Goods and Services Tax Act, in sub-section
(2), after clause (a), the following clause shall be inserted, namely:––
“(aa) the details of the invoice or debit note referred to in clause (a) has been
furnished by the supplier in the statement of outward supplies and such
details have been communicated to the recipient of such invoice or debit note
in the manner specified under section 37;”.
Earlier Provision
Section 16 Eligibility and conditions for taking input tax credit.
(1) Every registered person shall, subject to such conditions and restrictions
as may be prescribed and in the manner specified in section 49, be entitled to
take credit of input tax charged on any supply of goods or services or both to
him which are used or intended to be used in the course or furtherance of his
business and the said amount shall be credited to the electronic credit ledger
of such person.
25
(2) Notwithstanding anything contained in this section, no registered person
shall be entitled to the credit of any input tax in respect of any supply of
goods or services or both to him unless, —
(a) he is in possession of a tax invoice or debit note issued by a supplier
registered under this Act, or such other tax paying documents as may be
prescribed;
(b) he has received the goods or services or both.
[Explanation. — For the purposes of this clause, it shall be deemed that the
registered person has received the goods or, as the case may be, services —
(i) where the goods are delivered by the supplier to a recipient or any other
person on the direction of such registered person, whether acting as an agent
or otherwise, before or during movement of goods, either by way of transfer
of documents of title to goods or otherwise;
(ii) where the services are provided by the supplier to any person on the
direction of and on account of such registered person.14]
(c) subject to the provisions of [section 41 or section 43A], the tax charged in
respect of such supply has been actually paid to the Government, either in
14
Substituted for ―Explanation.—For the purposes of this clause, it shall be deemed that the registered
person has received the goods where the goods are delivered by the supplier to a recipient or any other
person on the direction of such registered person, whether acting as an agent or otherwise, before or during
movement of goods, either by way of transfer of documents of title to goods or otherwise;‖ by The Central
Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought into force w.e.f. 01st February, 201
26
cash or through utilization of input tax credit admissible in respect of the said
supply; and
(d) he has furnished the return under section 39 :
Provided that where the goods against an invoice are received in lots or
instalments, the registered person shall be entitled to take credit upon receipt
of the last lot or instalment :
Provided further that where a recipient fails to pay to the supplier of goods or
services or both, other than the supplies on which tax is payable on reverse
charge basis, the amount towards the value of supply along with tax payable
thereon within a period of one hundred and eighty days from the date of issue
of invoice by the supplier, an amount equal to the input tax credit availed by
the recipient shall be added to his output tax liability, along with interest
thereon, in such manner as may be prescribed :
Provided also that the recipient shall be entitled to avail of the credit of input
tax on payment made by him of the amount towards the value of supply of
goods or services or both along with tax payable thereon.
(3) Where the registered person has claimed depreciation on the tax
component of the cost of capital goods and plant and machinery under the
provisions of the Income-tax Act, 1961 (43 of 1961), the input tax credit on
the said tax component shall not be allowed.
27
(4) A registered person shall not be entitled to take input tax credit in
respect of any invoice or debit note for supply of goods or services or both
after the due date of furnishing of the return under section 39 for the month
of September following the end of financial year to which such invoice or
[….]15 debit note pertains or furnishing of the relevant annual return,
whichever is earlier :
[Provided that the registered person shall be entitled to take input tax credit
of September, 2018 till the due date of furnishing of the return under the said
section for the month of March, 2019 in respect of any invoice or invoice
relating to such debit note for supply of goods or services or both made during
the financial year 2017-18, the details of which have been uploaded by the
supplier under sub-section (1) of section 37 till the due date for furnishing the
details under sub-section (1) of said section for the month of March, 2019.]
Amended Provision
Section 16 Eligibility and conditions for taking input tax credit.
(1) Every registered person shall, subject to such conditions and restrictions
as may be prescribed and in the manner specified in section 49, be entitled to
take credit of input tax charged on any supply of goods or services or both to
15
Omitted ―invoice relating to such‖ by The Finance Act, 2020 (No. 12 of 2020) – Brought into force w.e.f. 01st
January, 2021.
28
him which are used or intended to be used in the course or furtherance of his
business and the said amount shall be credited to the electronic credit ledger
of such person.
(2) Notwithstanding anything contained in this section, no registered person
shall be entitled to the credit of any input tax in respect of any supply of
goods or services or both to him unless, —
(a) he is in possession of a tax invoice or debit note issued by a supplier
registered under this Act, or such other tax paying documents as may be
prescribed;
(aa) ) the details of the invoice or debit note referred to in clause (a) has been
details have been communicated to the recipient of such invoice or debit note
(b) he has received the goods or services or both.
[Explanation. — For the purposes of this clause, it shall be deemed that the
registered person has received the goods or, as the case may be, services —
29
(i) where the goods are delivered by the supplier to a recipient or any other
person on the direction of such registered person, whether acting as an agent
or otherwise, before or during movement of goods, either by way of transfer
of documents of title to goods or otherwise;
(ii) where the services are provided by the supplier to any person on the
direction of and on account of such registered person.16]
(c) subject to the provisions of [section 41 or section 43A], the tax charged in
respect of such supply has been actually paid to the Government, either in
cash or through utilization of input tax credit admissible in respect of the said
supply; and
(d) he has furnished the return under section 39 :
Provided that where the goods against an invoice are received in lots or
instalments, the registered person shall be entitled to take credit upon receipt
of the last lot or instalment :
Provided further that where a recipient fails to pay to the supplier of goods or
services or both, other than the supplies on which tax is payable on reverse
charge basis, the amount towards the value of supply along with tax payable
16
Substituted for ―Explanation.—For the purposes of this clause, it shall be deemed that the registered
person has received the goods where the goods are delivered by the supplier to a recipient or any other
person on the direction of such registered person, whether acting as an agent or otherwise, before or during
movement of goods, either by way of transfer of documents of title to goods or otherwise;‖ by The Central
Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought into force w.e.f. 01st February, 201
30
thereon within a period of one hundred and eighty days from the date of issue
of invoice by the supplier, an amount equal to the input tax credit availed by
the recipient shall be added to his output tax liability, along with interest
thereon, in such manner as may be prescribed :
Provided also that the recipient shall be entitled to avail of the credit of input
tax on payment made by him of the amount towards the value of supply of
goods or services or both along with tax payable thereon.
(3) Where the registered person has claimed depreciation on the tax
component of the cost of capital goods and plant and machinery under the
provisions of the Income-tax Act, 1961 (43 of 1961), the input tax credit on
the said tax component shall not be allowed.
(4) A registered person shall not be entitled to take input tax credit in
respect of any invoice or debit note for supply of goods or services or both
of September following the end of financial year to which such invoice or
[….]17 debit note pertains or furnishing of the relevant annual return,
whichever is earlier :
[Provided that the registered person shall be entitled to take input tax credit
17
Omitted ―invoice relating to such‖ by The Finance Act, 2020 (No. 12 of 2020) – Brought into force w.e.f. 01st
January, 2021.
31
of September, 2018 till the due date of furnishing of the return under the said
section for the month of March, 2019 in respect of any invoice or invoice
relating to such debit note for supply of goods or services or both made during
the financial year 2017-18, the details of which have been uploaded by the
supplier under sub-section (1) of section 37 till the due date for furnishing the
details under sub-section (1) of said section for the month of March, 2019.]
Our Comment
Section 16 (2) of the CGST Act is proposed to be amended so that to
prescribe one more condition for eligibility of ITC. In this regard ’Notes
to Clauses’ of the FB, 2021 read as
Services Tax Act by inserting a new clause (aa) in sub-section (2) thereof,
so as to provide that input tax credit on invoice or debit note may be
availed only when the details of such invoice or debit note has been
details have been communicated to the recipient of such invoice or debit
note.
Earlier, as per Section 16 (2) of the Act conditions given below are
required to be complied with

32
▪ A tax invoice or debit note issued by a supplier registered under this
Act, or such other tax paying documents as may be prescribed
should be available.
▪ Goods or Services or both should be received.
▪ Tax Charged in respect to such supply has been actually paid to the
Government.
▪ Furnished the return under section 39:
Now in addition to aforesaid it is proposed that taxpayer must comply with
one more condition that respective details of invoice or debit note has been
furnished by the supplier in the statement of outward supply and such
details have been communicated to the recipient.
Given the aforesaid it can be said that, to overcome the lacuna in the law a
provision is proposed in the law in line with Rule 36(4) of the CGST Act
which restrict the avaiment of ITC to the extent of prescribed percentage
with respect to invoices which are not uploaded by the Supplier. Below are
the amendments made time to time under Rule 36 (4) of the CGST Act.
33
July 2017 to September October 2019 to December
2019 2019
• ITC as per GSTR-2A is • ITC as per GSTR-2A and
available (Although 20% of eligible ITC can be
alternatively credit may availed on provisional
be claimed as per books) basis
January 2020 February 2020 to March

• ITC as per GSTR-2A and 2020
10% of eligible ITC can be • ITC allowed as per books
availed on provisional but applicability of10% of
basis eligible ITC deferred till
August 2020
February 2020 to January 2021 onwards

December 2020 • ITC as per GSTR-2A and
• ITC as per GSTR-2A and 5% of eligible ITC can be
10% of eligible ITC can be availed on provisional
availed on provisional basis
basis
3. Section 35 - Accounts and other records
101. In section 35 of the Central Goods and Services Tax Act,
sub-section (5) shall be omitted.
34
Earlier Provision
SECTION 35. Accounts and other records. —
(1) Every registered person shall keep and maintain, at his principal place of
business, as mentioned in the certificate of registration, a true and correct
account of —
(a) production or manufacture of goods;
(b) inward and outward supply of goods or services or both;
(c) stock of goods;
(d) input tax credit availed;
(e) output tax payable and paid; and
(f) such other particulars as may be prescribed :
Provided further that the registered person may keep and maintain such
accounts and other particulars in electronic form in such manner as may be
prescribed.
(2) Every owner or operator of warehouse or godown or any other place
used for storage of goods and every transporter, irrespective of whether he is
a registered person or not, shall maintain records of the consigner, consignee
and other relevant details of the goods in such manner as may be prescribed.
35
(3) The Commissioner may notify a class of taxable persons to maintain
additional accounts or documents for such purpose as may be specified
therein.
(4) Where the Commissioner considers that any class of taxable person is
not in a position to keep and maintain accounts in accordance with the
provisions of this section, he may, for reasons to be recorded in writing,
permit such class of taxable persons to maintain accounts in such manner as
may be prescribed.
(5) Every registered person whose turnover during a financial year exceeds
the prescribed limit shall get his accounts audited by a chartered accountant
or a cost accountant and shall submit a copy of the audited annual accounts,
the reconciliation statement under sub-section (2) of section 44 and such
other documents in such form and manner as may be prescribed :
[Provided that nothing contained in this sub-section shall apply to any
department of the Central Government or a State Government or a local
authority, whose books of account are subject to audit by the Comptroller and
36
Auditor-General of India or an auditor appointed for auditing the accounts of
local authorities under any law for the time being in force.]
(6) Subject to the provisions of clause (h) of sub-section (5) of section 17,
where the registered person fails to account for the goods or services or both
in accordance with the provisions of sub-section (1), the proper officer shall
determine the amount of tax payable on the goods or services or both that
are not accounted for, as if such goods or services or both had been supplied
by such person and the provisions of section 73 or section 74, as the case may
be, shall, mutatis mutandis, apply for determination of such tax.
Amended Provision
SECTION 35. Accounts and other records. —
(1) Every registered person shall keep and maintain, at his principal place of
business, as mentioned in the certificate of registration, a true and correct
account of —
(a) production or manufacture of goods;
(b) inward and outward supply of goods or services or both;
(c) stock of goods;
(d) input tax credit availed;
37
(e) output tax payable and paid; and
(f) such other particulars as may be prescribed :
Provided that where more than one place of business is specified in the
certificate of registration, the accounts relating to each place of business shall
be kept at such places of business :
Provided further that the registered person may keep and maintain such
accounts and other particulars in electronic form in such manner as may be
prescribed.
(2) Every owner or operator of warehouse or godown or any other place
used for storage of goods and every transporter, irrespective of whether he is
a registered person or not, shall maintain records of the consigner, consignee
and other relevant details of the goods in such manner as may be prescribed.
(3) The Commissioner may notify a class of taxable persons to maintain
additional accounts or documents for such purpose as may be specified
therein.
38
(4) Where the Commissioner considers that any class of taxable person is
not in a position to keep and maintain accounts in accordance with the
provisions of this section, he may, for reasons to be recorded in writing,
permit such class of taxable persons to maintain accounts in such manner as
may be prescribed.
(5) Every registered person whose turnover during a financial year exceeds
the prescribed limit shall get his accounts audited by a chartered accountant
or a cost accountant and shall submit a copy of the audited annual accounts,
the reconciliation statement under sub-section (2) of section 44 and such
other documents in such form and manner as may be prescribed :
[Provided that nothing contained in this sub-section shall apply to any
Auditor-General of India or an auditor appointed for auditing the accounts of
local authorities under any law for the time being in force.]18
18
Inserted by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought
into force w.e.f. 01st February, 2019.
39
(6) Subject to the provisions of clause (h) of sub-section (5) of section 17,
where the registered person fails to account for the goods or services or both
in accordance with the provisions of sub-section (1), the proper officer shall
determine the amount of tax payable on the goods or services or both that
are not accounted for, as if such goods or services or both had been supplied
by such person and the provisions of section 73 or section 74, as the case may
be, shall, mutatis mutandis, apply for determination of such tax.
Section 35 (5) of the CGST Act has omitted. ‘Notes to Clauses related to said
section read as under,
Clause 101 of the Bill seeks to omit sub-section (5) of section 35 of the
Central Goods and Services Tax Act so as to remove the mandatory
requirement of getting annual accounts audited and the reconciliation
statement submitted by specified professional.
Accordingly, now it is proposed that there will not be a requirement to get
accounts audited from professional. There was always a debate that
whether professionals are liable to the extent of reconciliation statement as
prescribed or has a huge responsibility as defined u/s 2(13) of the CGST Act.
However, amending such section to include self-certification by taxpayer
will now cast a responsibility on taxpayer.

40
4. Section 44 - Annual return.
102. For section 44 of the Central Goods and Services Tax Act, the following
section shall be substituted, namely:––
“44. Every registered person, other than an Input Service Distributor, a person
paying tax under section 51 or section 52, a casual taxable person and a non-
resident taxable person shall furnish an annual return which may include a
self certified reconciliation statement, reconciling the value of supplies
declared in the return furnished for the financial year, with the audited annual
financial statement for every financial year electronically, within such time
and in such form and in such manner as may be prescribed:
Provided that the Commissioner may, on the recommendations of the Council,
by notification, exempt any class of registered persons from filing annual
return under this section:
Provided further that nothing contained in this section shall apply to any
41
Auditor General of India or an auditor appointed for auditing the accounts of
local authorities under any law for the time being in force.”.
Earlier Provision
SECTION 44. Annual return.
1) Every registered person, other than an Input Service Distributor, a person
resident taxable person, shall furnish an annual return for every financial year
electronically in such form and manner as may be prescribed on or before the
thirty-first day of December following the end of such financial year :
[Provided that the Commissioner may, on the recommendations of the Council
and for reasons to be recorded in writing, by notification, extend the time limit
for furnishing the annual return for such class of registered persons as may be
specified therein :
Provided further that any extension of time limit notified by the Commissioner
of State tax or the Commissioner of Union territory tax shall be deemed to be
notified by the Commissioner.]
(2) Every registered person who is required to get his accounts audited in
42
accordance with the provisions of sub-section (5) of section 35 shall furnish,
electronically, the annual return under sub-section (1) along with a copy of the
audited annual accounts and a reconciliation statement, reconciling the value
of supplies declared in the return furnished for the financial year with the
audited annual financial statement, and such other particulars as may be
prescribed.
[ Explanation. - For the purposes of this section, it is hereby declared that the
annual return for the period from the 1st July, 2017 to the 31st March, 2018
shall be furnished on or before the [31st January, 2020] and the annual return
for the period from the 1st April, 2018 to the 31st March, 2019 shall be
furnished on or before the 31st March, 2020.]
Amended Provision
SECTION 44. Annual return.
Every registered person, other than an Input Service Distributor, a person
resident taxable person shall furnish an annual return which may include a
self certified reconciliation statement, reconciling the value of supplies
declared in the return furnished for the financial year, with the audited annual
43
financial statement for every financial year electronically, within such time
and in such form and in such manner as may be prescribed:
Provided that the Commissioner may, on the recommendations of the Council,
by notification, exempt any class of registered persons from filing annual
return under this section:
Provided further that nothing contained in this section shall apply to any
Auditor General of India or an auditor appointed for auditing the accounts of
local authorities under any law for the time being in force.”.
Our Comment
In tune with Section 35 (5) of the CGST Act Section 44 of the CGST Act
substituted to prescribe self-certification in case of GSTR-9C. ‘Notes to
Clauses’ of said section read as under
‘Clause 102 of the Bill seeks to substitute a new section for section 44 of the
Central Goods and Services Tax Act so as to remove the mandatory
requirement of furnishing a reconciliation statement duly audited by
specified professional and to provide for filing of the annual return on self-
44
certification basis. It further empowers the Commissioner to exempt a class
of taxpayers from the requirement of filing the annual return.’
Accordingly, now it is proposed that there will not be a requirement to
certify reconciliation statement by professionals. However, amending such
section to include self-certification by taxpayer will now cast a huge
responsibility on taxpayer.
5. Section 50 - Interest on delayed payment of tax.
(1), for the proviso, the following proviso shall be substituted and shall be
deemed to have been substituted with effect from the 1st day of July, 2017,
namely:––
“Provided that the interest on tax payable in respect of supplies made during
a tax period and declared in the return for the said period furnished after the
due date in accordance with the provisions of section 39, except where such
return is furnished after commencement of any proceedings under section 73
or section 74 in respect of the said period, shall be payable on that portion of
the tax which is paid by debiting the electronic cash ledger.”.
45
Earlier Provision
SECTION 50. Interest on delayed payment of tax. —
(1) Every person who is liable to pay tax in accordance with the provisions of
this Act or the rules made thereunder, but fails to pay the tax or any part
thereof to the Government within the period prescribed, shall for the period
for which the tax or any part thereof remains unpaid, pay, on his own, interest
at such rate, not exceeding eighteen per cent., as may be notified by the
Government on the recommendations of the Council :
[Provided that the interest on tax payable in respect of supplies made during
or section 74 in respect of the said period, shall be levied on that portion of
the tax that is paid by debiting the electronic cash ledger.]19
(2) The interest under sub-section (1) shall be calculated, in such manner as
may be prescribed, from the day succeeding the day on which such tax was
due to be paid.
19
Inserted by The Finance (No. 2) Act, 2019 (No. 23 of 2019) – Brought into force w.e.f. 01st September, 2020.
46
(3) A taxable person who makes an undue or excess claim of input tax credit
under sub-section (10) of section 42 or undue or excess reduction in output
tax liability under sub-section (10) of section 43, shall pay interest on such
undue or excess claim or on such undue or excess reduction, as the case may
be, at such rate not exceeding twenty-four per cent., as may be notified by the
Government on the recommendations of the Council.
Amended Provision
SECTION 50. Interest on delayed payment of tax. —
(1) Every person who is liable to pay tax in accordance with the provisions of
this Act or the rules made thereunder, but fails to pay the tax or any part
thereof to the Government within the period prescribed, shall for the period
for which the tax or any part thereof remains unpaid, pay, on his own, interest
at such rate, not exceeding eighteen per cent., as may be notified by the
Government on the recommendations of the Council :
“Provided that the interest on tax payable in respect of supplies made during
or section 74 in respect of the said period, shall be payable on that portion of
the tax which is paid by debiting the electronic cash ledger.”.20
20
Applicable w.e.f 1st July 2017
47
(2) The interest under sub-section (1) shall be calculated, in such manner as
may be prescribed, from the day succeeding the day on which such tax was
due to be paid.
(3) A taxable person who makes an undue or excess claim of input tax credit
under sub-section (10) of section 42 or undue or excess reduction in output
tax liability under sub-section (10) of section 43, shall pay interest on such
undue or excess claim or on such undue or excess reduction, as the case may
be, at such rate not exceeding twenty-four per cent., as may be notified by the
Our Comment
Section 50 is proposed to be amended retrospectively w.e.f 01.07.2017
to so that interest on tax is payable on net value (i.e Tax Payable in cash
after adjustment of ITC) . ‘Notes to clause’ with respect to said
amendment read as
‘Clause 103 of the Bill seeks to amend section 50 of the Central Goods
and Services Tax Act to substitute the proviso to sub-section (1) so as to
charge interest on net cash liability retrospectively with effect from the
1st July, 2017’
48
This is one of the most awaited amendment.
6. Section 74 – Determination of tax not paid or short paid etc
104. In section 74 of the Central Goods and Services Tax Act, in Explanation 1,
in clause (ii), for the words and figures “sections 122, 125, 129 and 130”, the
words and figures “sections 122 and 125” shall be substituted.
Earlier Provision
SECTION 74. Determination of tax not paid or short paid or erroneously
refunded or input tax credit wrongly availed or utilised by reason of fraud or
any wilful misstatement or suppression of facts. —
(1) Where it appears to the proper officer that any tax has not been paid or
short paid or erroneously refunded or where input tax credit has been wrongly
availed or utilised by reason of fraud, or any wilful misstatement or
suppression of facts to evade tax, he shall serve notice on the person
chargeable with tax which has not been so paid or which has been so short
paid or to whom the refund has erroneously been made, or who has wrongly
availed or utilised input tax credit, requiring him to show cause as to why he
49
should not pay the amount specified in the notice along with interest payable
thereon under section 50 and a penalty equivalent to the tax specified in the
notice.
(2) The proper officer shall issue the notice under sub-section (1) at least six
months prior to the time limit specified in sub-section (10) for issuance of
order.
(3) Where a notice has been issued for any period under sub-section (1), the
proper officer may serve a statement, containing the details of tax not paid or
short paid or erroneously refunded or input tax credit wrongly availed or
utilised for such periods other than those covered under sub-section (1), on
the person chargeable with tax.
(4) The service of statement under sub-section (3) shall be deemed to be
service of notice under sub-section (1) of section 73, subject to the condition
that the grounds relied upon in the said statement, except the ground of
fraud, or any wilful misstatement or suppression of facts to evade tax, for
periods other than those covered under sub-section (1) are the same as are
mentioned in the earlier notice.
50
(5) The person chargeable with tax may, before service of notice under sub-
section (1), pay the amount of tax along with interest payable under section
50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his
own ascertainment of such tax or the tax as ascertained by the proper officer
and inform the proper officer in writing of such payment.
(6) The proper officer, on receipt of such information, shall not serve any
notice under sub-section (1), in respect of the tax so paid or any penalty
payable under the provisions of this Act or the rules made thereunder.
(7) Where the proper officer is of the opinion that the amount paid under
sub-section (5) falls short of the amount actually payable, he shall proceed to
issue the notice as provided for in sub-section (1) in respect of such amount
which falls short of the amount actually payable.
(8) Where any person chargeable with tax under sub-section (1) pays the
said tax along with interest payable under section 50 and a penalty equivalent
to twenty-five per cent. of such tax within thirty days of issue of the notice, all
proceedings in respect of the said notice shall be deemed to be concluded.
51
(9) The proper officer shall, after considering the representation, if any,
made by the person chargeable with tax, determine the amount of tax,
interest and penalty due from such person and issue an order.
(10) The proper officer shall issue the order under sub-section (9) within a
period of five years from the due date for furnishing of annual return for the
financial year to which the tax not paid or short paid or input tax credit
wrongly availed or utilised relates to or within five years from the date of
erroneous refund.
(11) Where any person served with an order issued under sub-section (9)
pays the tax along with interest payable thereon under section 50 and a
penalty equivalent to fifty per cent. of such tax within thirty days of
communication of the order, all proceedings in respect of the said notice shall
be deemed to be concluded.
Explanation 1. — For the purposes of section 73 and this section, —
(i) the expression “all proceedings in respect of the said notice” shall not
include proceedings under section 132;
52
(ii) where the notice under the same proceedings is issued to the main
person liable to pay tax and some other persons, and such proceedings
against the main person have been concluded under section 73 or section 74,
the proceedings against all the persons liable to pay penalty under sections
122, 125, 129 and 130 are deemed to be concluded.
Explanation 2. — For the purposes of this Act, the expression “suppression”
shall mean non-declaration of facts or information which a taxable person is
required to declare in the return, statement, report or any other document
furnished under this Act or the rules made thereunder, or failure to furnish
any information on being asked for, in writing, by the proper officer
Amended Provision
ECTION 74. Determination of tax not paid or short paid or erroneously
refunded or input tax credit wrongly availed or utilised by reason of fraud or
any wilful misstatement or suppression of facts. —
(1) Where it appears to the proper officer that any tax has not been paid or
short paid or erroneously refunded or where input tax credit has been wrongly
availed or utilised by reason of fraud, or any wilful misstatement or
suppression of facts to evade tax, he shall serve notice on the person
53
chargeable with tax which has not been so paid or which has been so short
paid or to whom the refund has erroneously been made, or who has wrongly
availed or utilised input tax credit, requiring him to show cause as to why he
should not pay the amount specified in the notice along with interest payable
thereon under section 50 and a penalty equivalent to the tax specified in the
notice.
(2) The proper officer shall issue the notice under sub-section (1) at least six
months prior to the time limit specified in sub-section (10) for issuance of
order.
(3) Where a notice has been issued for any period under sub-section (1), the
proper officer may serve a statement, containing the details of tax not paid or
short paid or erroneously refunded or input tax credit wrongly availed or
utilised for such periods other than those covered under sub-section (1), on
the person chargeable with tax.
(4) The service of statement under sub-section (3) shall be deemed to be
service of notice under sub-section (1) of section 73, subject to the condition
that the grounds relied upon in the said statement, except the ground of
fraud, or any wilful misstatement or suppression of facts to evade tax, for
54
periods other than those covered under sub-section (1) are the same as are
mentioned in the earlier notice.
(5) The person chargeable with tax may, before service of notice under sub-
section (1), pay the amount of tax along with interest payable under section
50 and a penalty equivalent to fifteen per cent. of such tax on the basis of his
own ascertainment of such tax or the tax as ascertained by the proper officer
and inform the proper officer in writing of such payment.
(6) The proper officer, on receipt of such information, shall not serve any
notice under sub-section (1), in respect of the tax so paid or any penalty
payable under the provisions of this Act or the rules made thereunder.
(7) Where the proper officer is of the opinion that the amount paid under
sub-section (5) falls short of the amount actually payable, he shall proceed to
issue the notice as provided for in sub-section (1) in respect of such amount
which falls short of the amount actually payable.
(8) Where any person chargeable with tax under sub-section (1) pays the
said tax along with interest payable under section 50 and a penalty equivalent
55
to twenty-five per cent. of such tax within thirty days of issue of the notice, all
proceedings in respect of the said notice shall be deemed to be concluded.
(9) The proper officer shall, after considering the representation, if any,
made by the person chargeable with tax, determine the amount of tax,
interest and penalty due from such person and issue an order.
(10) The proper officer shall issue the order under sub-section (9) within a
period of five years from the due date for furnishing of annual return for the
financial year to which the tax not paid or short paid or input tax credit
wrongly availed or utilised relates to or within five years from the date of
erroneous refund.
(11) Where any person served with an order issued under sub-section (9)
pays the tax along with interest payable thereon under section 50 and a
penalty equivalent to fifty per cent. of such tax within thirty days of
communication of the order, all proceedings in respect of the said notice shall
be deemed to be concluded.
Explanation 1. — For the purposes of section 73 and this section, —
56
(i) the expression “all proceedings in respect of the said notice” shall not
include proceedings under section 132;
against the main person have been concluded under section 73 or section 74,
the proceedings against all the persons liable to pay penalty under sections
122, 125, 129 and 130 Section 122 and Section 125 are deemed to be
concluded.
Explanation 2. — For the purposes of this Act, the expression “suppression”
shall mean non-declaration of facts or information which a taxable person is
required to declare in the return, statement, report or any other document
furnished under this Act or the rules made thereunder, or failure to furnish
any information on being asked for, in writing, by the proper officer
Our Comment
Section 74 is proposed to be amended so as to make Seizure and
Confiscation of goods and conveyances in transit separate from recovery
of tax.
57
Services Tax Act so as to make seizure and confiscation of goods and
conveyances in transit a separate proceeding from the recovery of tax.
This means conclusion of proceedings will now lead to conclusion of
proceedings under section 73 or 74 and proceedings under section 122
and 125, however will not lead to conclusion of proceedings under
section 129 and 130 of the CGST Act.
7. Section 75 - General provisions relating to determination of tax
Content in FB, 2021 – Clause 105
(12), the following Explanation shall be inserted, namely:––
‘Explanation.––For the purposes of this sub-section, the expression "self-
assessed tax" shall include the tax payable in respect of details of outward
supplies furnished under section 37, but not included in the return furnished
under section 39.’.
Earlier Provision
58
SECTION 75. General provisions relating to determination of tax. —
(1) Where the service of notice or issuance of order is stayed by an order of a
court or Appellate Tribunal, the period of such stay shall be excluded in
computing the period specified in sub-sections (2) and (10) of section 73 or
sub-sections (2) and (10) of section 74, as the case may be.
(2) Where any Appellate Authority or Appellate Tribunal or court concludes
that the notice issued under sub-section (1) of section 74 is not sustainable for
the reason that the charges of fraud or any wilful misstatement or
suppression of facts to evade tax has not been established against the person
to whom the notice was issued, the proper officer shall determine the tax
payable by such person, deeming as if the notice were issued under sub-
section (1) of section 73.
(3) Where any order is required to be issued in pursuance of the direction of
the Appellate Authority or Appellate Tribunal or a court, such order shall be
issued within two years from the date of communication of the said direction.
(4) An opportunity of hearing shall be granted where a request is received in
writing from the person chargeable with tax or penalty, or where any adverse
decision is contemplated against such person.
59
(5) The proper officer shall, if sufficient cause is shown by the person
chargeable with tax, grant time to the said person and adjourn the hearing
for reasons to be recorded in writing :
Provided that no such adjournment shall be granted for more than three
times to a person during the proceedings.
(6) The proper officer, in his order, shall set out the relevant facts and the
basis of his decision.
(7) The amount of tax, interest and penalty demanded in the order shall not
be in excess of the amount specified in the notice and no demand shall be
confirmed on the grounds other than the grounds specified in the notice.
(8) Where the Appellate Authority or Appellate Tribunal or court modifies
the amount of tax determined by the proper officer, the amount of interest
and penalty shall stand modified accordingly, taking into account the amount
of tax so modified.
60
(9) The interest on the tax short paid or not paid shall be payable whether or
not specified in the order determining the tax liability.
(10) The adjudication proceedings shall be deemed to be concluded, if the
order is not issued within three years as provided for in sub-section (10) of
section 73 or within five years as provided for in sub-section (10) of section 74.
(11) An issue on which the Appellate Authority or the Appellate Tribunal or
the High Court has given its decision which is prejudicial to the interest of
revenue in some other proceedings and an appeal to the Appellate Tribunal or
the High Court or the Supreme Court against such decision of the Appellate
Authority or the Appellate Tribunal or the High Court is pending, the period
spent between the date of the decision of the Appellate Authority and that of
the Appellate Tribunal or the date of decision of the Appellate Tribunal and
that of the High Court or the date of the decision of the High Court and that of
the Supreme Court shall be excluded in computing the period referred to in
sub-section (10) of section 73 or sub-section (10) of section 74 where
proceedings are initiated by way of issue of a show cause notice under the
said sections.
61
(12) Notwithstanding anything contained in section 73 or section 74, where
any amount of self-assessed tax in accordance with a return furnished under
section 39 remains unpaid, either wholly or partly, or any amount of interest
payable on such tax remains unpaid, the same shall be recovered under the
provisions of section 79.
(13) Where any penalty is imposed under section 73 or section 74, no
penalty for the same act or omission shall be imposed on the same person
under any other provision of this Act.
Amended Provision
ECTION 75. General provisions relating to determination of tax. —
(1) Where the service of notice or issuance of order is stayed by an order of a
court or Appellate Tribunal, the period of such stay shall be excluded in
computing the period specified in sub-sections (2) and (10) of section 73 or
sub-sections (2) and (10) of section 74, as the case may be.
(2) Where any Appellate Authority or Appellate Tribunal or court concludes
that the notice issued under sub-section (1) of section 74 is not sustainable for
the reason that the charges of fraud or any wilful misstatement or
62
suppression of facts to evade tax has not been established against the person
to whom the notice was issued, the proper officer shall determine the tax
payable by such person, deeming as if the notice were issued under sub-
(3) Where any order is required to be issued in pursuance of the direction of
the Appellate Authority or Appellate Tribunal or a court, such order shall be
issued within two years from the date of communication of the said direction.
(4) An opportunity of hearing shall be granted where a request is received in
writing from the person chargeable with tax or penalty, or where any adverse
decision is contemplated against such person.
(5) The proper officer shall, if sufficient cause is shown by the person
chargeable with tax, grant time to the said person and adjourn the hearing
for reasons to be recorded in writing :
Provided that no such adjournment shall be granted for more than three
times to a person during the proceedings.
63
(6) The proper officer, in his order, shall set out the relevant facts and the
basis of his decision.
(7) The amount of tax, interest and penalty demanded in the order shall not
be in excess of the amount specified in the notice and no demand shall be
confirmed on the grounds other than the grounds specified in the notice.
(8) Where the Appellate Authority or Appellate Tribunal or court modifies
the amount of tax determined by the proper officer, the amount of interest
and penalty shall stand modified accordingly, taking into account the amount
of tax so modified.
(9) The interest on the tax short paid or not paid shall be payable whether or
not specified in the order determining the tax liability.
(10) The adjudication proceedings shall be deemed to be concluded, if the
order is not issued within three years as provided for in sub-section (10) of
section 73 or within five years as provided for in sub-section (10) of section 74.
64
(11) An issue on which the Appellate Authority or the Appellate Tribunal or
the High Court has given its decision which is prejudicial to the interest of
revenue in some other proceedings and an appeal to the Appellate Tribunal or
the High Court or the Supreme Court against such decision of the Appellate
Authority or the Appellate Tribunal or the High Court is pending, the period
spent between the date of the decision of the Appellate Authority and that of
the Appellate Tribunal or the date of decision of the Appellate Tribunal and
that of the High Court or the date of the decision of the High Court and that of
the Supreme Court shall be excluded in computing the period referred to in
sub-section (10) of section 73 or sub-section (10) of section 74 where
proceedings are initiated by way of issue of a show cause notice under the
said sections.
(12) Notwithstanding anything contained in section 73 or section 74, where
any amount of self-assessed tax in accordance with a return furnished under
section 39 remains unpaid, either wholly or partly, or any amount of interest
payable on such tax remains unpaid, the same shall be recovered under the
65
Explanation.––For the purposes of this sub-section, the expression "self-
assessed tax" shall include the tax payable in respect of details of outward
supplies furnished under section 37, but not included in the return furnished
under section 39.’.
(13) Where any penalty is imposed under section 73 or section 74, no
penalty for the same act or omission shall be imposed on the same person
under any other provision of this Act.
Our Comment
Section 75 of the CGST Act proposed to be amended so that self-assessed
tax will also include the outward supplies shown as per the statement of
outward supplies u/s. 37 i.e outward supplies as per GSTR-1 is higher than
GSTR-3B.
Notes to clause with respect to this clause read as
Services Tax Act so as to insert an Explanation in sub-section (12) to clarify
that “self-assessed tax” shall include the tax payable in respect of details of
outward supplies furnished under section 37, but not included in the return
furnished under section 39.
66
8. Section 83 - Provisional attachment to protect revenue in certain cases.
106. In section 83 of the Central Goods and Services Tax Act, for sub-section
(1), the following sub-section shall be substituted, namely:––
“(1) Where, after the initiation of any proceeding under Chapter XII, Chapter
XIV or Chapter XV, the Commissioner is of the opinion that for the purpose of
protecting the interest of the Government revenue it is necessary so to do, he
may, by order in writing, attach provisionally, any property, including bank
account, belonging to the taxable person or any person specified in sub-
section (1A) of section 122, in such manner as may be prescribed.
Earlier Provision
SECTION 83. Provisional attachment to protect revenue in certain cases. —
(1) Where during the pendency of any proceedings under section 62 or section
63 or section 64 or section 67 or section 73 or section 74, the Commissioner is
of the opinion that for the purpose of protecting the interest of the
Government revenue, it is necessary so to do, he may, by order in writing
attach provisionally any property, including bank account, belonging to the
taxable person in such manner as may be prescribed.
67
(2)Every such provisional attachment shall cease to have effect after the
expiry of a period of one year from the date of the order made under sub-
section (1).
Amended Provision
SECTION 83. Provisional attachment to protect revenue in certain cases. —
(1) Where during the pendency of any proceedings under section 62 or section
63 or section 64 or section 67 or section 73 or section 74, the Commissioner is
of the opinion that for the purpose of protecting the interest of the
Government revenue, it is necessary so to do, he may, by order in writing
attach provisionally any property, including bank account, belonging to the
taxable person in such manner as may be prescribed.
“(1) Where, after the initiation of any proceeding under Chapter XII, Chapter
XIV or Chapter XV, the Commissioner is of the opinion that for the purpose of
protecting the interest of the Government revenue it is necessary so to do, he
may, by order in writing, attach provisionally, any property, including bank
account, belonging to the taxable person or any person specified in sub-
section (1A) of section 122, in such manner as may be prescribed
68
(2)Every such provisional attachment shall cease to have effect after the
expiry of a period of one year from the date of the order made under sub-
section (1).
Subsection (1) of Section 83 is substituted widen the ambit of provisional
attachment by way of substitution of section by chapters of the CGST Act.
In this regard, notes to clauses read as,
Clause 106 of the Bill seeks to substitute sub-section (1) of section 83 of the
Central Goods and Services Tax Act so as to provide that provisional
attachment shall remain valid for the entire period starting from the
initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV
till the expiry of a period of one year from the date of order made
thereunder.
Thus, earlier only in case of prescribed section authorities can provisionally
attach bank account. However, now proposed amendment empower the
officer to attach bank or property in case of proceeding under any sections
of Chapter XII, Chapter XIV or Chapter XV. At present also, we observed
that bank accounts are getting attached even for genuine cases and
Authorities are misusing said powers. Going forward, using this power
could get increased.

69
9. Section 107 - Appeals to Appellate Authority
(6), the following proviso shall be inserted, namely: –
“Provided that no appeal shall be filed against an order under sub-section (3)
of section 129, unless a sum equal to twenty-five per cent. of the penalty has
been paid by the appellant.
Earlier Provision
SECTION 107. Appeals to Appellate Authority. —
(1) Any person aggrieved by any decision or order passed under this Act or the
State Goods and Services Tax Act or the Union Territory Goods and Services
Tax Act by an adjudicating authority may appeal to such Appellate Authority
as may be prescribed within three months from the date on which the said
decision or order is communicated to such person.
(2) The Commissioner may, on his own motion, or upon request from the
Commissioner of State tax or the Commissioner of Union territory tax, call for
70
and examine the record of any proceedings in which an adjudicating authority
has passed any decision or order under this Act or the State Goods and
Services Tax Act or the Union Territory Goods and Services Tax Act, for the
purpose of satisfying himself as to the legality or propriety of the said decision
or order and may, by order, direct any officer subordinate to him to apply to
the Appellate Authority within six months from the date of communication of
the said decision or order for the determination of such points arising out of
the said decision or order as may be specified by the Commissioner in his
order.
(3) Where, in pursuance of an order under sub-section (2), the authorised
officer makes an application to the Appellate Authority, such application shall
be dealt with by the Appellate Authority as if it were an appeal made against
the decision or order of the adjudicating authority and such authorised officer
were an appellant and the provisions of this Act relating to appeals shall
apply to such application.
(4) The Appellate Authority may, if he is satisfied that the appellant was
prevented by sufficient cause from presenting the appeal within the aforesaid
71
period of three months or six months, as the case may be, allow it to be
presented within a further period of one month.
(5) Every appeal under this section shall be in such form and shall be verified
in such manner as may be prescribed.
(6) No appeal shall be filed under sub-section (1), unless the appellant has
paid —
(a) in full, such part of the amount of tax, interest, fine, fee and penalty
arising from the impugned order, as is admitted by him; and
(b) a sum equal to ten per cent. of the remaining amount of tax in
dispute arising from the said order, [subject to a maximum of twenty-
five crore rupees,]21 in relation to which the appeal has been filed.
(7) Where the appellant has paid the amount under sub-section (6), the
recovery proceedings for the balance amount shall be deemed to be stayed.
(8) The Appellate Authority shall give an opportunity to the appellant of
being heard.
21
Inserted by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought
into force w.e.f. 01st February, 2019
72
(9) The Appellate Authority may, if sufficient cause is shown at any stage of
hearing of an appeal, grant time to the parties or any of them and adjourn
the hearing of the appeal for reasons to be recorded in writing :
Provided that no such adjournment shall be granted more than three times to
a party during hearing of the appeal.
(10) The Appellate Authority may, at the time of hearing of an appeal, allow
an appellant to add any ground of appeal not specified in the grounds of
appeal, if it is satisfied that the omission of that ground from the grounds of
appeal was not wilful or unreasonable.
(11) The Appellate Authority shall, after making such further inquiry as may
be necessary, pass such order, as it thinks just and proper, confirming,
modifying or annulling the decision or order appealed against but shall not
refer the case back to the adjudicating authority that passed the said decision
or order :
73
Provided that an order enhancing any fee or penalty or fine in lieu of
confiscation or confiscating goods of greater value or reducing the amount of
refund or input tax credit shall not be passed unless the appellant has been
given a reasonable opportunity of showing cause against the proposed order :
Provided further that where the Appellate Authority is of the opinion that any
tax has not been paid or short-paid or erroneously refunded, or where input
tax credit has been wrongly availed or utilised, no order requiring the
appellant to pay such tax or input tax credit shall be passed unless the
appellant is given notice to show cause against the proposed order and the
order is passed within the time limit specified under section 73 or section 74.
(12) The order of the Appellate Authority disposing of the appeal shall be in
writing and shall state the points for determination, the decision thereon and
the reasons for such decision.
(13) The Appellate Authority shall, where it is possible to do so, hear and
decide every appeal within a period of one year from the date on which it is
filed :
74
Provided that where the issuance of order is stayed by an order of a court or
Tribunal, the period of such stay shall be excluded in computing the period of
one year.
(14) On disposal of the appeal, the Appellate Authority shall communicate
the order passed by it to the appellant, respondent and to the adjudicating
authority.
(15) A copy of the order passed by the Appellate Authority shall also be sent
to the jurisdictional Commissioner or the authority designated by him in this
behalf and the jurisdictional Commissioner of State tax or Commissioner of
Union Territory Tax or an authority designated by him in this behalf.
(16) Every order passed under this section shall, subject to the provisions of
section 108 or section 113 or section 117 or section 118 be final and binding
on the parties.
Amended Provision
SECTION 107. Appeals to Appellate Authority. —
(1) Any person aggrieved by any decision or order passed under this Act or the
State Goods and Services Tax Act or the Union Territory Goods and Services
75
Tax Act by an adjudicating authority may appeal to such Appellate Authority
as may be prescribed within three months from the date on which the said
decision or order is communicated to such person.
(2) The Commissioner may, on his own motion, or upon request from the
Commissioner of State tax or the Commissioner of Union territory tax, call for
and examine the record of any proceedings in which an adjudicating authority
has passed any decision or order under this Act or the State Goods and
Services Tax Act or the Union Territory Goods and Services Tax Act, for the
purpose of satisfying himself as to the legality or propriety of the said decision
or order and may, by order, direct any officer subordinate to him to apply to
the Appellate Authority within six months from the date of communication of
the said decision or order for the determination of such points arising out of
the said decision or order as may be specified by the Commissioner in his
order.
(3) Where, in pursuance of an order under sub-section (2), the authorised
officer makes an application to the Appellate Authority, such application shall
be dealt with by the Appellate Authority as if it were an appeal made against
the decision or order of the adjudicating authority and such authorised officer
76
were an appellant and the provisions of this Act relating to appeals shall
apply to such application.
(4) The Appellate Authority may, if he is satisfied that the appellant was
prevented by sufficient cause from presenting the appeal within the aforesaid
period of three months or six months, as the case may be, allow it to be
presented within a further period of one month.
(5) Every appeal under this section shall be in such form and shall be verified
in such manner as may be prescribed.
(6) No appeal shall be filed under sub-section (1), unless the appellant has
paid —
(a) in full, such part of the amount of tax, interest, fine, fee and penalty
arising from the impugned order, as is admitted by him; and
(b) a sum equal to ten per cent. of the remaining amount of tax in
dispute arising from the said order, [subject to a maximum of twenty-
five crore rupees,]22 in relation to which the appeal has been filed.
22
0 Inserted by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought into
force w.e.f. 01st February, 2019
77
“Provided that no appeal shall be filed against an order under sub-section (3)
of section 129, unless a sum equal to twenty-five per cent. of the penalty has
(7) Where the appellant has paid the amount under sub-section (6), the
recovery proceedings for the balance amount shall be deemed to be stayed.
(8) The Appellate Authority shall give an opportunity to the appellant of
being heard.
(9) The Appellate Authority may, if sufficient cause is shown at any stage of
hearing of an appeal, grant time to the parties or any of them and adjourn
the hearing of the appeal for reasons to be recorded in writing :
Provided that no such adjournment shall be granted more than three times to
a party during hearing of the appeal.
(10) The Appellate Authority may, at the time of hearing of an appeal, allow
an appellant to add any ground of appeal not specified in the grounds of
78
appeal, if it is satisfied that the omission of that ground from the grounds of
appeal was not wilful or unreasonable.
(11) The Appellate Authority shall, after making such further inquiry as may
be necessary, pass such order, as it thinks just and proper, confirming,
modifying or annulling the decision or order appealed against but shall not
refer the case back to the adjudicating authority that passed the said decision
or order :
Provided that an order enhancing any fee or penalty or fine in lieu of
confiscation or confiscating goods of greater value or reducing the amount of
refund or input tax credit shall not be passed unless the appellant has been
given a reasonable opportunity of showing cause against the proposed order :
Provided further that where the Appellate Authority is of the opinion that any
tax has not been paid or short-paid or erroneously refunded, or where input
tax credit has been wrongly availed or utilised, no order requiring the
appellant to pay such tax or input tax credit shall be passed unless the
appellant is given notice to show cause against the proposed order and the
order is passed within the time limit specified under section 73 or section 74.
79
(12) The order of the Appellate Authority disposing of the appeal shall be in
writing and shall state the points for determination, the decision thereon and
the reasons for such decision.
(13) The Appellate Authority shall, where it is possible to do so, hear and
decide every appeal within a period of one year from the date on which it is
filed :
Provided that where the issuance of order is stayed by an order of a court or
Tribunal, the period of such stay shall be excluded in computing the period of
one year.
(14) On disposal of the appeal, the Appellate Authority shall communicate
the order passed by it to the appellant, respondent and to the adjudicating
authority.
(15) A copy of the order passed by the Appellate Authority shall also be sent
to the jurisdictional Commissioner or the authority designated by him in this
behalf and the jurisdictional Commissioner of State tax or Commissioner of
Union Territory Tax or an authority designated by him in this behalf.
80
(16) Every order passed under this section shall, subject to the provisions of
section 108 or section 113 or section 117 or section 118 be final and binding
on the parties.
Section 107(6) inserted so that to revise pre-deposit for filling appeal
before first appellate authority @ 25% of the penalty imposed. Notes to
clauses mention that,
Clause 107 of the Bill seeks to insert a new proviso in sub-section (6) of
section 107 of the Central Goods and Services Tax Act so as to provide that
no appeal shall be filed against an order made under sub-section (3) of
section 129, unless a sum equal to twenty-five per cent. of the penalty has
Before this amendment, the pre-deposit was only to the extent of 10% of
Tax Liability in case of dispute which is now proposed to be 25% of the
penalty amount in case of detention and seizure of conveyance and goods
during transit.
81
10. Section 129 - Detention, seizure and release of goods and conveyances
in transit
108. In section 129 of the Central Goods and Services Tax Act, ––
(i) in sub-section (1), for clauses (a) and (b), the following clauses shall be
substituted, namely:––
“(a) on payment of penalty equal to two hundred per cent. of the tax payable
on such goods and, in case of exempted goods, on payment of an amount
equal to two per cent. of the value of goods or twenty-five thousand rupees,
whichever is less, where the owner of the goods comes forward for payment
of such penalty;
(b) on payment of penalty equal to fifty per cent. Of the value of the goods or
two hundred per cent. of the tax payable on such goods, whichever is higher,
and in case of exempted goods, on payment of an amount equal to five per
cent. of the value of goods or twenty-five thousand rupees, whichever is less,
where the owner of the goods does not come forward for payment of such
penalty;”;
82
(ii) sub-section (2) shall be omitted;
(iii) for sub-section (3), the following sub-section shall be substituted,
namely:––
“(3) The proper officer detaining or seizing goods or conveyance shall issue a
notice within seven days of such detention or seizure, specifying the penalty
payable, and thereafter, pass an order within a period of seven days from the
date of service of such notice, for payment of penalty under clause (a) or
clause (b) of sub-section (1).”;
(iv) in sub-section (4), for the words “No tax, interest or penalty”, the words
“No penalty” shall be substituted;
(v) for sub-section (6), the following sub-section shall be substituted, namely:–
“(6) Where the person transporting any goods or the owner of such goods
fails to pay the amount of penalty under sub-section (1) within fifteen days
from the date of receipt of the copy of the order passed under sub-section (3),
the goods or conveyance so detained or seized shall be liable to be sold or
83
disposed of otherwise, in such manner and within such time as may be
prescribed, to recover the penalty payable under sub-section (3):
Provided that the conveyance shall be released on payment by the transporter
of penalty under sub-section (3) or one lakh rupees, whichever is less:
Provided further that where the detained or seized goods are perishable or
hazardous in nature or are likely to depreciate in value with passage of time,
the said period of fifteen days may be reduced by the proper officer.”.
Earlier Provision
SECTION 129. Detention, seizure and release of goods and conveyances in
transit. —
(1)Notwithstanding anything contained in this Act, where any person
transports any goods or stores any goods while they are in transit in
contravention of the provisions of this Act or the rules made thereunder, all
such goods and conveyance used as a means of transport for carrying the said
goods and documents relating to such goods and conveyance shall be liable
to detention or seizure and after detention or seizure, shall be released, ––
(a) on payment of the applicable tax and penalty equal to one hundred per
cent. of the tax payable on such goods and, in case of exempted goods, on
payment of an amount equal to two per cent. of the value of goods or twenty-
84
five thousand rupees, whichever is less, where the owner of the goods comes
forward for payment of such tax and penalty;
(b) on payment of the applicable tax and penalty equal to the fifty per cent.
of the value of the goods reduced by the tax amount paid thereon and, in case
of exempted goods, on payment of an amount equal to five per cent. of the
value of goods or twenty-five thousand rupees, whichever is less, where the
owner of the goods does not come forward for payment of such tax and
penalty;
(c) upon furnishing a security equivalent to the amount payable under
clause (a) or clause (b) in such form and manner as may be prescribed :
Provided that no such goods or conveyance shall be detained or seized
without serving an order of detention or seizure on the person transporting
the goods.
(2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis,
apply for detention and seizure of goods and conveyances.
85
(3) The proper officer detaining or seizing goods or conveyances shall issue a
notice specifying the tax and penalty payable and thereafter, pass an order
for payment of tax and penalty under clause (a) or clause (b) or clause (c).
(4) No tax, interest or penalty shall be determined under sub-section (3)
without giving the person concerned an opportunity of being heard.
(5) On payment of amount referred in sub-section (1), all proceedings in
respect of the notice specified in sub-section (3) shall be deemed to be
concluded.
(6) Where the person transporting any goods or the owner of the goods fails
to pay the amount of tax and penalty as provided in sub-section (1) within
[fourteen days]23 of such detention or seizure, further proceedings shall be
initiated in accordance with the provisions of section 130 :
Provided that where the detained or seized goods are perishable or hazardous
in nature or are likely to depreciate in value with passage of time, the said
period of [fourteen days] may be reduced by the proper officer.
23
Substituted for ―seven days‖ by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of
2018) – Brought into force w.e.f. 01st February, 2019
86
Amended Provision
SECTION 129. Detention, seizure and release of goods and conveyances in
transit. —
(1 ) Notwithstanding anything contained in this Act, where any person
transports any goods or stores any goods while they are in transit in
contravention of the provisions of this Act or the rules made thereunder, all
such goods and conveyance used as a means of transport for carrying the said
goods and documents relating to such goods and conveyance shall be liable
to detention or seizure and after detention or seizure, shall be released, ––
(a) on payment of the applicable tax and penalty equal to one hundred per
cent. of the tax payable on such goods and, in case of exempted goods, on
payment of an amount equal to two per cent. of the value of goods or twenty-
five thousand rupees, whichever is less, where the owner of the goods comes
“(a) on payment of penalty equal to two hundred per cent. of the tax payable
on such goods and, in case of exempted goods, on payment of an amount
equal to two per cent. of the value of goods or twenty-five thousand rupees,
87
whichever is less, where the owner of the goods comes forward for payment
of such penalty;
(b) on payment of the applicable tax and penalty equal to the fifty per cent.
of the value of the goods reduced by the tax amount paid thereon and, in case
of exempted goods, on payment of an amount equal to five per cent. of the
value of goods or twenty-five thousand rupees, whichever is less, where the
owner of the goods does not come forward for payment of such tax and
penalty;
(b) on payment of penalty equal to fifty per cent. Of the value of the goods or
two hundred per cent. of the tax payable on such goods, whichever is higher,
and in case of exempted goods, on payment of an amount equal to five per
cent. of the value of goods or twenty-five thousand rupees, whichever is less,
where the owner of the goods does not come forward for payment of such
penalty;”;
(c) upon furnishing a security equivalent to the amount payable under
clause (a) or clause (b) in such form and manner as may be prescribed :
88
Provided that no such goods or conveyance shall be detained or seized
without serving an order of detention or seizure on the person transporting
the goods.
(2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis,
apply for detention and seizure of goods and conveyances.
(3) The proper officer detaining or seizing goods or conveyances shall issue a
notice specifying the tax and penalty payable and thereafter, pass an order
for payment of tax and penalty under clause (a) or clause (b) or clause (c).
“(3) The proper officer detaining or seizing goods or conveyance shall issue a
notice within seven days of such detention or seizure, specifying the penalty
payable, and thereafter, pass an order within a period of seven days from the
date of service of such notice, for payment of penalty under clause (a) or
clause (b) of sub-section (1).”;
89
(4) No tax, interest or penalty No Penalty shall be determined under sub-
section (3) without giving the person concerned an opportunity of being
heard.
(5) On payment of amount referred in sub-section (1), all proceedings in
respect of the notice specified in sub-section (3) shall be deemed to be
concluded.
(6) Where the person transporting any goods or the owner of the goods fails
to pay the amount of tax and penalty as provided in sub-section (1) within
[fourteen days]24 of such detention or seizure, further proceedings shall be
initiated in accordance with the provisions of section 130 :
Provided that where the detained or seized goods are perishable or hazardous
in nature or are likely to depreciate in value with passage of time, the said
period of [fourteen days] may be reduced by the proper officer.
“(6) Where the person transporting any goods or the owner of such goods
fails to pay the amount of penalty under sub-section (1) within fifteen days
24
Substituted for ―seven days‖ by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of
2018) – Brought into force w.e.f. 01st February, 2019
90
from the date of receipt of the copy of the order passed under sub-section (3),
the goods or conveyance so detained or seized shall be liable to be sold or
disposed of otherwise, in such manner and within such time as may be
prescribed, to recover the penalty payable under sub-section (3):
Provided that the conveyance shall be released on payment by the transporter
of penalty under sub-section (3) or one lakh rupees, whichever is less:
Provided further that where the detained or seized goods are perishable or
hazardous in nature or are likely to depreciate in value with passage of time,
the said period of fifteen days may be reduced by the proper officer.”.
Section 129 of the CGST Act proposed to be amended
1. to remove word Tax and Interest. It means now for release of
conveyance only penalty is required to be paid. However, Penalty is
increased to 200% from 100%.
2. Subsection (2) is omitted. Thus, now conveyance and goods
detained cannot be released on merely on execution of bond and
bank guarantee as security.
91
3. Subsection 3 is substituted so that to prescribe time frame. The
proper officer detaining or seizing goods or conveyance is now
required to issue a notice within seven days of such detention and
thereafter, pass an order within a period of seven days from the
date of service of such notice.
4. Subsection 6 has been substituted. As per new subsection the
goods or conveyance detained or seized shall become liable to be
sold or disposed off if payment of imposed penalty is not made
within 15 days from the date of receipt of copy of the order
imposing such penalty.
In this regard, notes to clauses mention that,
Clause 108 of the Bill seeks to amend section 129 of the Central Goods
and Services Tax Act so as to delink the proceedings under that section
relating to detention, seizure and release of goods and conveyances in
transit, from the proceedings under section 130 relating to confiscation
of goods or conveyances and levy of penalty.
92
Thus, it seems that Section 129 is further strengthened. Even it seems
that tax and interest is not required to be paid for real ease of
conveyance, however penalty is increased to 200%. Also, now merely
execution of bond and bank guarantee as security will not lead to realse
of goods detained.
11.Section 130 - Confiscation of goods or conveyances and levy of penalty.
109. In section 130 of the Central Goods and Services Tax Act,––
(a) in sub-section (1), for the words “Notwithstanding anything contained in
this Act, if ”, the word “Where” shall be substituted;
(b) in sub-section (2), in the second proviso, for the words, brackets and
figures “amount of penalty leviable under sub-section (1) of section 129”, the
words “penalty equal to hundred per cent. of the tax payable on such goods”
shall be substituted; (c) sub-section (3) shall be omitted.
93
Earlier Provision
SECTION 130. Confiscation of goods or conveyances and levy of penalty.
(1) Notwithstanding anything contained in this Act, if any person —
(i) supplies or receives any goods in contravention of any of the provisions
of this Act or the rules made thereunder with intent to evade payment of tax;
or
(ii)does not account for any goods on which he is liable to pay tax under this
Act; or
(iii) supplies any goods liable to tax under this Act without having applied for
registration; or
(iv) contravenes any of the provisions of this Act or the rules made
thereunder with intent to evade payment of tax; or
(v) uses any conveyance as a means of transport for carriage of goods in
contravention of the provisions of this Act or the rules made thereunder
unless the owner of the conveyance proves that it was so used without the
knowledge or connivance of the owner himself, his agent, if any, and the
94
person in charge of the conveyance, then, all such goods or conveyances shall
be liable to confiscation and the person shall be liable to penalty under
section 122.
(2) Whenever confiscation of any goods or conveyance is authorised by this
Act, the officer adjudging it shall give to the owner of the goods an option to
pay in lieu of confiscation, such fine as the said officer thinks fit :
Provided that such fine leviable shall not exceed the market value of the
goods confiscated, less the tax chargeable thereon :
Provided further that the aggregate of such fine and penalty leviable shall not
be less than the amount of penalty leviable under sub-section (1) of section
129 :
Provided also that where any such conveyance is used for the carriage of the
goods or passengers for hire, the owner of the conveyance shall be given an
option to pay in lieu of the confiscation of the conveyance a fine equal to the
tax payable on the goods being transported thereon.
95
(3) Where any fine in lieu of confiscation of goods or conveyance is imposed
under sub-section (2), the owner of such goods or conveyance or the person
referred to in sub-section (1), shall, in addition, be liable to any tax, penalty
and charges payable in respect of such goods or conveyance.
(4) No order for confiscation of goods or conveyance or for imposition of
penalty shall be issued without giving the person an opportunity of being
heard.
(5) Where any goods or conveyance are confiscated under this Act, the title
of such goods or conveyance shall thereupon vest in the Government.
(6) The proper officer adjudging confiscation shall take and hold possession
of the things confiscated and every officer of Police, on the requisition of such
proper officer, shall assist him in taking and holding such possession.
(7) The proper officer may, after satisfying himself that the confiscated
goods or conveyance are not required in any other proceedings under this Act
and after giving reasonable time not exceeding three months to pay fine in
lieu of confiscation, dispose of such goods or conveyance and deposit the sale
proceeds thereof with the Government.
96
Amended Provision
SECTION 130. Confiscation of goods or conveyances and levy of penalty.
(1) Notwithstanding anything contained in this Act, Where if any person —
(i) supplies or receives any goods in contravention of any of the provisions
of this Act or the rules made thereunder with intent to evade payment of tax;
or
(ii)does not account for any goods on which he is liable to pay tax under this
Act; or
registration; or
(iv) contravenes any of the provisions of this Act or the rules made
thereunder with intent to evade payment of tax; or
(v) uses any conveyance as a means of transport for carriage of goods in
contravention of the provisions of this Act or the rules made thereunder
unless the owner of the conveyance proves that it was so used without the
knowledge or connivance of the owner himself, his agent, if any, and the
97
person in charge of the conveyance, then, all such goods or conveyances shall
be liable to confiscation and the person shall be liable to penalty under
section 122.
(2) Whenever confiscation of any goods or conveyance is authorised by this
Act, the officer adjudging it shall give to the owner of the goods an option to
pay in lieu of confiscation, such fine as the said officer thinks fit :
Provided that such fine leviable shall not exceed the market value of the
goods confiscated, less the tax chargeable thereon :
Provided further that the aggregate of such fine and penalty leviable shall not
be less than the amount of penalty leviable under sub-section (1) of section
129 : penalty equal to hundred per cent of the tax payable on such goods
Provided also that where any such conveyance is used for the carriage of the
goods or passengers for hire, the owner of the conveyance shall be given an
option to pay in lieu of the confiscation of the conveyance a fine equal to the
tax payable on the goods being transported thereon.
98
(3) Where any fine in lieu of confiscation of goods or conveyance is imposed
under sub-section (2), the owner of such goods or conveyance or the person
referred to in sub-section (1), shall, in addition, be liable to any tax, penalty
and charges payable in respect of such goods or conveyance.
(4) No order for confiscation of goods or conveyance or for imposition of
penalty shall be issued without giving the person an opportunity of being
heard.
(5) Where any goods or conveyance are confiscated under this Act, the title
of such goods or conveyance shall thereupon vest in the Government.
(6) The proper officer adjudging confiscation shall take and hold possession
of the things confiscated and every officer of Police, on the requisition of such
proper officer, shall assist him in taking and holding such possession.
(7) The proper officer may, after satisfying himself that the confiscated
goods or conveyance are not required in any other proceedings under this Act
and after giving reasonable time not exceeding three months to pay fine in
lieu of confiscation, dispose of such goods or conveyance and deposit the sale
proceeds thereof with the Government.
99
Section 130 amnded
1. to substitute the word “Notwithstanding anything contained in this
Act, if ”, with word “Where”. Thus, now this section does not have
any overriding impact.
2. Section 130 (3) (c) is omitted. Thus, now there will not be any
additional tax, penalty and charges in respect of such goods or
conveyance
Notes to clauses prescribe that,
Clause 109 of the Bill seeks to amend section 130 of the Central Goods
and Services Tax Act, so as to delink the proceedings under that section
relating to confiscation of goods or conveyances and levy of penalty from
the proceedings under section 129 relating to detention, seizure and
release of goods and conveyances in transit.
12.Section 151 - Power to collect statistics
110. For section 151 of the Central Goods and Services Tax Act, the
following section shall be substituted, namely: ––
100
“151. The Commissioner or an officer authorised by him may, by an order,
direct any person to furnish information relating to any matter dealt with in
connection with this Act, within such time, in such form, and in such manner,
as may be specified therein.”.
Earlier Provision
SECTION 151. Power to collect statistics. —
(1) The Commissioner may, if he considers that it is necessary so to do, by
notification, direct that statistics may be collected relating to any matter
dealt with by or in connection with this Act.
(2) Upon such notification being issued, the Commissioner, or any person
authorised by him in this behalf, may call upon the concerned persons to
furnish such information or returns, in such form and manner as may be
prescribed, relating to any matter in respect of which statistics is to be
collected.
Amended Provision
SECTION 151. Power to collect statistics. —
(1) The Commissioner may, if he considers that it is necessary so to do, by
notification, direct that statistics may be collected relating to any matter
dealt with by or in connection with this Act.
101
(2) Upon such notification being issued, the Commissioner, or any person
authorised by him in this behalf, may call upon the concerned persons to
furnish such information or returns, in such form and manner as may be
prescribed, relating to any matter in respect of which statistics is to be
collected.
“151. The Commissioner or an officer authorised by him may, by an order,
direct any person to furnish information relating to any matter dealt with in
connection with this Act, within such time, in such form, and in such manner,
as may be specified therein.”.
Section 151 of the CGST Act amended grant wide powers to the
concerned jurisdictional commissioner. Notes to clauses prescribe as
Clause 110 of the Bill seeks to substitute section 151 of the Central Goods
and Services Tax Act so as to empower the jurisdictional commissioner to
call for information from any person relating to any matters dealt with in
connection with the Act.
102
13.Section 152 - Bar on disclosure of information
111. In section 152 of the Central Goods and Services Tax
Act,––
(a) in sub-section (1),––
(i) the words “of any individual return or part thereof” shall be omitted;
(ii) after the words “any proceedings under this Act”, the words “without
giving an opportunity of being heard to the person concerned” shall be
inserted;
(b) sub-section (2) shall be omitted
Earlier Provision
SECTION 152. Bar on disclosure of information. —
(1) No information of any individual return or part thereof with respect to
any matter given for the purposes of section 150 or section 151 shall, without
the previous consent in writing of the concerned person or his authorised
representative, be published in such manner so as to enable such particulars
to be identified as referring to a particular person and no such information
shall be used for the purpose of any proceedings under this Act.
103
(2) Except for the purposes of prosecution under this Act or any other Act for
the time being in force, no person who is not engaged in the collection of
statistics under this Act or compilation or computerisation thereof for the
purposes of this Act, shall be permitted to see or have access to any
information or any individual return referred to in section 151.
(3) Nothing in this section shall apply to the publication of any information
relating to a class of taxable persons or class of transactions, if in the opinion
of the Commissioner, it is desirable in the public interest to publish such
information.
Amended Provision
SECTION 152. Bar on disclosure of information. —
(1) No information of any individual return or part thereof with respect to
any matter given for the purposes of section 150 or section 151 shall, without
the previous consent in writing of the concerned person or his authorised
representative, be published in such manner so as to enable such particulars
to be identified as referring to a particular person and no such information
shall be used for the purpose of any proceedings under this Act “without
giving an opportunity of being heard to the person concerned”.
104
(2) Except for the purposes of prosecution under this Act or any other Act for
the time being in force, no person who is not engaged in the collection of
statistics under this Act or compilation or computerisation thereof for the
purposes of this Act, shall be permitted to see or have access to any
information or any individual return referred to in section 151.
(3) Nothing in this section shall apply to the publication of any information
relating to a class of taxable persons or class of transactions, if in the opinion
of the Commissioner, it is desirable in the public interest to publish such
information.
Section 152 has proposed to be amended to include personal hearing,
Thus, this section is amended in consensus with section 51. Now as per
proposed section information received shall not be permitted to be used
for the purpose of any proceedings under this Act without giving an
opportunity of being heard.
14.Section 168 - Power to issue instructions or directions
105
(2),––
(i) for the words, brackets and figures “sub-section (1) of section 44”, the
word and figures “section 44” shall be substituted;
(ii) the words, brackets and figures “sub-section (1) of section 151,” shall be
omitted
Earlier Provision
Section 168 Power to issue instructions or directions
(1) The Board may, if it considers it necessary or expedient so to do for the
purpose of uniformity in the implementation of this Act, issue such orders,
instructions or directions to the central tax officers as it may deem fit, and
thereupon all such officers and all other persons employed in the
implementation of this Act shall observe and follow such orders, instructions
or directions.
(2) The Commissioner specified in clause (91) of section 2, sub-section (3) of
section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of
section 35, sub-section (1) of section 37, sub-section (2) of section 38, sub-
106
section (6) of section 39, [sub-section (1) of section 44, sub-sections (4) and (5)
of section 52,] sub-section (5) of section 66, sub-section (1) of section 143 sub-
section (1) of section 143, except the second proviso thereof” , sub-section (1)
of section 151, clause (l) of sub-section (3) of section 158 and section 167 shall
mean a Commissioner or Joint Secretary posted in the Board and such
Commissioner or Joint Secretary shall exercise the powers specified in the said
sections with the approval of the Board.—
Amended Provision
Section 168 Power to issue instructions or directions
(1) The Board may, if it considers it necessary or expedient so to do for the
purpose of uniformity in the implementation of this Act, issue such orders,
instructions or directions to the central tax officers as it may deem fit, and
thereupon all such officers and all other persons employed in the
implementation of this Act shall observe and follow such orders, instructions
or directions.
(2) The Commissioner specified in clause (91) of section 2, sub-section (3) of
section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of
section 35, sub-section (1) of section 37, sub-section (2) of section 38, sub-
section (6) of section 39, [sub-section (1) of section 44, Section 44 sub-
107
sections (4) and (5) of section 52,] sub-section (5) of section 66, sub-section (1)
of section 143 sub-section (1) of section 143, except the second proviso
thereof” , sub-section (1) of section 151, clause (l) of sub-section (3) of section
158 and section 167 shall mean a Commissioner or Joint Secretary posted in
the Board and such Commissioner or Joint Secretary shall exercise the powers
specified in the said sections with the approval of the Board.—
15.Schedule II of the CGST Act
113. In Schedule II of the Central Goods and Services Tax Act, paragraph 7
shall be omitted and shall be deemed to have been omitted with effect from
the 1st day of July, 2017.
SCHEDULE II
[See Section 7]
ACTIVITIES [OR TRANSACTIONS] TO BE TREATED AS SUPPLY OF GOODS OR
SUPPLY OF SERVICES
108
1. Transfer
(a) any transfer of the title in goods is a supply of goods;
(b) any transfer of right in goods or of undivided share in goods without the
transfer of title thereof, is a supply of services;
(c) any transfer of title in goods under an agreement which stipulates that
property in goods shall pass at a future date upon payment of full
consideration as agreed, is a supply of goods.
2. Land and Building
(a) any lease, tenancy, easement, licence to occupy land is a supply of
services;
(b) any lease or letting out of the building including a commercial, industrial
or residential complex for business or commerce, either wholly or partly, is a
supply of services.
3. Treatment or process
Any treatment or process which is applied to another person’s goods is a
supply of services.
4. Transfer of business assets
109
(a) where goods forming part of the assets of a business are transferred or
disposed of by or under the directions of the person carrying on the business
so as no longer to form part of those assets, whether or not for a
consideration, such transfer or disposal is a supply of goods by the person;
(b) where, by or under the direction of a person carrying on a business,
goods held or used for the purposes of the business are put to any private use
or are used, or made available to any person for use, for any purpose other
than a purpose of the business, whether or not for a consideration, the usage
or making available of such goods is a supply of services;
(c) where any person ceases to be a taxable person, any goods forming part
of the assets of any business carried on by him shall be deemed to be supplied
by him in the course or furtherance of his business immediately before he
ceases to be a taxable person, unless —
(i) the business is transferred as a going concern to another person; or
(ii) the business is carried on by a personal representative who is deemed to
be a taxable person.
5. Supply of services
The following shall be treated as supply of services, namely :—
(a) renting of immovable property;
110
(b) construction of a complex, building, civil structure or a part thereof,
including a complex or building intended for sale to a buyer, wholly or partly,
except where the entire consideration has been received after issuance of
completion certificate, where required, by the competent authority or after its
first occupation, whichever is earlier.
Explanation. — For the purposes of this clause —
(1) the expression “competent authority” means the Government or any
authority authorised to issue completion certificate under any law for the
time being in force and in case of non-requirement of such certificate from
such authority, from any of the following, namely :—
(i) an architect registered with the Council of Architecture constituted under
the Architects Act, 1972 (20 of 1972); or
(ii) a chartered engineer registered with the Institution of Engineers (India);
or
(iii) a licensed surveyor of the respective local body of the city or town or
village or development or planning authority;
(2) the expression “construction” includes additions, alterations,
replacements or remodelling of any existing civil structure;
(c) temporary transfer or permitting the use or enjoyment of any intellectual
property right;
111
(d) development, design, programming, customisation, adaptation,
upgradation, enhancement, implementation of information technology
software;
(e) agreeing to the obligation to refrain from an act, or to tolerate an act or
a situation, or to do an act; and
(f) transfer of the right to use any goods for any purpose (whether or not for
a specified period) for cash, deferred payment or other valuable
consideration.
6. Composite supply
The following composite supplies shall be treated as a supply of services,
namely :—
(a) works contract as defined in clause (119) of section 2; and
(b) supply, by way of or as part of any service or in any other manner
whatsoever, of goods, being food or any other article for human consumption
or any drink (other than alcoholic liquor for human consumption), where such
supply or service is for cash, deferred payment or other valuable
consideration.
112
7. Supply of Goods
The following shall be treated as supply of goods, namely :—
Supply of goods by any unincorporated association or body of persons to a
member thereof for cash, deferred payment or other valuable consideration.
Amended Provision
SCHEDULE II
[See Section 7]
ACTIVITIES [OR TRANSACTIONS] TO BE TREATED AS SUPPLY OF GOODS OR
SUPPLY OF SERVICES
1. Transfer
(a) any transfer of the title in goods is a supply of goods;
(b) any transfer of right in goods or of undivided share in goods without the
transfer of title thereof, is a supply of services;
(c) any transfer of title in goods under an agreement which stipulates that
property in goods shall pass at a future date upon payment of full
consideration as agreed, is a supply of goods.
2. Land and Building
113
(a) any lease, tenancy, easement, licence to occupy land is a supply of
services;
(b) any lease or letting out of the building including a commercial, industrial
or residential complex for business or commerce, either wholly or partly, is a
supply of services.
3. Treatment or process
Any treatment or process which is applied to another person’s goods is a
supply of services.
4. Transfer of business assets
(a) where goods forming part of the assets of a business are transferred or
disposed of by or under the directions of the person carrying on the business
so as no longer to form part of those assets, whether or not for a
consideration, such transfer or disposal is a supply of goods by the person;
(b) where, by or under the direction of a person carrying on a business,
goods held or used for the purposes of the business are put to any private use
or are used, or made available to any person for use, for any purpose other
than a purpose of the business, whether or not for a consideration, the usage
or making available of such goods is a supply of services;
114
(c) where any person ceases to be a taxable person, any goods forming part
of the assets of any business carried on by him shall be deemed to be supplied
by him in the course or furtherance of his business immediately before he
ceases to be a taxable person, unless —
(i) the business is transferred as a going concern to another person; or
(ii) the business is carried on by a personal representative who is deemed to
be a taxable person.
5. Supply of services
The following shall be treated as supply of services, namely :—
(a) renting of immovable property;
(b) construction of a complex, building, civil structure or a part thereof,
including a complex or building intended for sale to a buyer, wholly or partly,
except where the entire consideration has been received after issuance of
completion certificate, where required, by the competent authority or after its
first occupation, whichever is earlier.
Explanation. — For the purposes of this clause —
(1) the expression “competent authority” means the Government or any
authority authorised to issue completion certificate under any law for the
115
time being in force and in case of non-requirement of such certificate from
such authority, from any of the following, namely :—
(i) an architect registered with the Council of Architecture constituted under
the Architects Act, 1972 (20 of 1972); or
(ii) a chartered engineer registered with the Institution of Engineers (India);
or
(iii) a licensed surveyor of the respective local body of the city or town or
village or development or planning authority;
(2) the expression “construction” includes additions, alterations,
replacements or remodelling of any existing civil structure;
(c) temporary transfer or permitting the use or enjoyment of any intellectual
property right;
(d) development, design, programming, customisation, adaptation,
upgradation, enhancement, implementation of information technology
software;
(e) agreeing to the obligation to refrain from an act, or to tolerate an act or
a situation, or to do an act; and
(f) transfer of the right to use any goods for any purpose (whether or not for
a specified period) for cash, deferred payment or other valuable
consideration.
116
6. Composite supply
The following composite supplies shall be treated as a supply of services,
namely :—
(a) works contract as defined in clause (119) of section 2; and
(b) supply, by way of or as part of any service or in any other manner
whatsoever, of goods, being food or any other article for human consumption
or any drink (other than alcoholic liquor for human consumption), where such
supply or service is for cash, deferred payment or other valuable
consideration.
7. Supply of Goods
The following shall be treated as supply of goods, namely :—
Supply of goods by any unincorporated association or body of persons to a
member thereof for cash, deferred payment or other valuable consideration.
117
IGST Act - Decoding of Amendment Proposed
114. In the Integrated Goods and Services Tax Act, 2017, in section 16, ––
(a) in sub-section (1), in clause (b), after the words “supply of goods or
services or both”, the words “for authorised operations” shall be inserted;
(b) for sub-section (3), the following sub-sections shall be substituted,
namely:––
“(3) A registered person making zero rated supply shall be eligible to claim
refund of unutilised input tax credit on supply of goods or services or both,
without payment of integrated tax, under bond or Letter of Undertaking, in
accordance with the provisions of section 54 of the Central Goods and
Services Tax Act or the rules made thereunder, subject to such conditions,
safeguards and procedure as may be prescribed:
Provided that the registered person making zero rated supply of goods shall,
in case of non-realisation of sale proceeds, be liable to deposit the refund so
received under this sub-section along with the applicable interest under
section 50 of the Central Goods and Services Tax Act within thirty days after
118
the expiry of the time limit prescribed under the Foreign Exchange
Management Act, 1999 for receipt of foreign exchange remittances, in such
manner as may be prescribed.
(4) The Government may, on the recommendation of the Council, and subject
to such conditions, safeguards and procedures, by notification, specify––
(i) a class of persons who may make zero rated supply on payment of
integrated tax and claim refund of the tax so paid;
(ii) a class of goods or services which may be exported on payment of
integrated tax and the supplier of such goods or services may claim the refund
of tax so paid.”.
Earlier Provision
SECTION 16. Zero rated supply. —
(1) “zero rated supply” means any of the following supplies of goods or
services or both, namely :-
(a) export of goods or services or both; or
119
(b) supply of goods or services or both to a Special Economic Zone developer
or a Special Economic Zone unit.
(2) Subject to the provisions of sub-section (5) of section 17 of the Central
Goods and Services Tax Act, credit of input tax may be availed for making
zero-rated supplies, notwithstanding that such supply may be an exempt
supply.
(3) A registered person making zero rated supply shall be eligible to claim
refund under either of the following options, namely :-
(a) he may supply goods or services or both under bond or Letter of
Undertaking, subject to such conditions, safeguards and procedure as may be
prescribed, without payment of integrated tax and claim refund of unutilised
input tax credit; or
(b) he may supply goods or services or both, subject to such conditions,
safeguards and procedure as may be prescribed, on payment of integrated
tax and claim refund of such tax paid on goods or services or both supplied,
120
in accordance with the provisions of section 54 of the Central Goods and
Services Tax Act or the rules made thereunder.
Amended Provision
SECTION 16. Zero rated supply. —
(1) “zero rated supply” means any of the following supplies of goods or
services or both, namely :-
(a) export of goods or services or both; or
(b) supply of goods or services or both “for authorised operations to a
Special Economic Zone developer or a Special Economic Zone unit.
(2) Subject to the provisions of sub-section (5) of section 17 of the Central
Goods and Services Tax Act, credit of input tax may be availed for making
zero-rated supplies, notwithstanding that such supply may be an exempt
supply.
(3) A registered person making zero rated supply shall be eligible to claim
refund under either of the following options, namely :-
121
(a) he may supply goods or services or both under bond or Letter of
Undertaking, subject to such conditions, safeguards and procedure as may be
prescribed, without payment of integrated tax and claim refund of unutilised
input tax credit; or
(b) he may supply goods or services or both, subject to such conditions,
safeguards and procedure as may be prescribed, on payment of integrated
tax and claim refund of such tax paid on goods or services or both supplied,
in accordance with the provisions of section 54 of the Central Goods and
Services Tax Act or the rules made thereunder.
“(3) A registered person making zero rated supply shall be eligible to claim
refund of unutilised input tax credit on supply of goods or services or both,
without payment of integrated tax, under bond or Letter of Undertaking, in
accordance with the provisions of section 54 of the Central Goods and
Services Tax Act or the rules made thereunder, subject to such conditions,
safeguards and procedure as may be prescribed:
Provided that the registered person making zero rated supply of goods shall,
in case of non-realisation of sale proceeds, be liable to deposit the refund so
122
received under this sub-section along with the applicable interest under
section 50 of the Central Goods and Services Tax Act within thirty days after
the expiry of the time limit prescribed under the Foreign Exchange
Management Act, 1999 for receipt of foreign exchange remittances, in such
(4) The Government may, on the recommendation of the Council, and subject
to such conditions, safeguards and procedures, by notification, specify––
(i) a class of persons who may make zero rated supply on payment of
integrated tax and claim refund of the tax so paid;
(ii) a class of goods or services which may be exported on payment of
integrated tax and the supplier of such goods or services may claim the refund
of tax so paid.”.
Our Comment
‘Notes on clauses’ with respect to amendment of section 16 of the IGST
Act read as
Clause 114 of the Bill seeks to amend section 16 of the Integrated Goods
and Services Tax Act, 2017 so as to make provisions for restricting the
123
zero rated supply on payment of integrated tax only to specified class of
taxpayers or specified supplies of goods or services. It further provides to
link the foreign exchange remittance in case of export of goods with
refund and further restricting zero rating of supplies made to special
economic zone only when such supplies are for authorised operations.
Sub section (1) (b) of section 16 is proposed to amend so that to restrict
the enjoyment of benefit to the supplies to SEZ developer or SEZ Unit
which are for authorised operations.
Further subsection (3) is substituted. As per proposed amendment only
notified class of taxpayer or goods or services will be eligible for
claiming refund in case the export with payment of tax.
Alternatively, it can be said that now the taxpayers will have to export
without payment of tax and claim refund of the accumulated ITC. Also,
subsection (3) now mandates the realisation of sales proceeds otherwise
the refund claimed will be liable to be deposited back in the treasury of
the government along with the interest u/s. 50.
124
About CA Vaishali Kharde
• CA Vaishali Kharde is a Founder of Vaishali B Kharde and Company having
more than 10 years’ experience in the field of Indirect Taxation [Goods and
Services Tax (GST), Service Tax, Excise, Export Benefits and VAT]
• Vaishali is Leader and consultant in advisory firm for advising to leading
Indian and multi-national entities
• Vaishali has Authored a book named, ‘Handbook on E-way Bill’, GST Audit
and Annual Return, A Guide on ‘Vivad -Se -Vishwas,
• Vaishali is a regular writer of articles at various web portal like Tax-India
Online, Tax-On Go, Tax sutra etc.
• Vaishali is regular speaker at various seminars on GST.
• Vaishali has actively contributed her technical inputs in the Service Tax and
GST books published by Bharat Publication, Delhi and New Book Corporation,
Mumbai
125
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Kondhalkar, Pallavi Kashid.
Thanks to CA Dilip Jain Sir and CA Pritam Mahure Sir under

whose guidance learned practical approach towards Law.
126
-
S KHAITAN & ASSOCIATES CA SHUBHAM KHAITAN

FINANCE BILL - GST AMENDMENTS 2021 1ST FEBRUARY 2021
GST AMENDMENTS – HIGHLIGHTS AT A GLANCE
1. Transaction between a person (other than an individual) to its members for consideration to be
treated as a supply.......................................................................................................................... 2
2. Appearance of transaction in GSTR-2A/2B – a mandatory condition for availment of ITC ............ 3
3. Annual accounts to be audited by Specified professionals............................................................. 4
4. Self certification of reconciliation statement by the registered person ......................................... 4
5. Interest on net tax liability to be retrospective .............................................................................. 6
6. Detention and Seizure to be separate from the Demand / Recovery provisions ........................... 7
7. Direct recovery without SCN upon furnishing of details in GSTR-1 without tax payment in GSTR-
3B .................................................................................................................................................... 8
8. Provisional Attachment upon initiation (and not pendency) of proceedings and increased
coverage of beneficiaries or masterminds of fake invoicing……………………………………………………….9
9. Filing of appeal against detention order upon payment of 25% penalty………………………………….10
10. Payment of only penalty for release of goods and Increased penalty amount for detention and
seizure proceedings ...................................................................................................................... 10
11. Provisions of Section 67(6) no longer to apply for release of goods on security ......................... 12
12. Time limit provided for issuance of notice and order u/s 129 ..................................................... 12
13. Direct disposal of goods upon non-payment of penalty for detention ....................................... 13
14. Delinking of Detention and Confiscation proceedings ................................................................. 14
15. Empowerment of Commissioner to call for information ............................................................. 16
16. Opportunity of being heard before using the called for information in any proceedings........... 17
17. Power under Section 150 to call for information transferred from the Board to the Jurisdictional
Commissioner ............................................................................................................................... 18
18. Rationalization of entry of supply of goods by unincorporated association in light of the new
insertion in the definition of supply ............................................................................................. 19
19. Non-realization of sale proceeds in case of zero rated supply of goods to result in recovery of
refund ........................................................................................................................................... 19
20. Export with payment of tax to be allowed to notified persons or notified goods /services only
... …………………………………………………………………………………………………………………………………………….21
1 | SHUBHAM@CAKHAITAN.COM S.KHAITAN & ASSOCIATES

1. Transaction between a person (other than an individual) to its members for

consideration to be treated as a supply
Source
Clause 99 of the Finance Bill, 2021.
Effective Date
With effect from the 1st day of July, 2017.
New Provision
Section 7(1)(aa) of the CGST Act, 2017.
Amendment
The provision marked in green has been newly inserted:
7(1)(aa) - the activities or transactions, by a person, other than an individual, to its
members or constituents or vice-versa, for cash, deferred payment or other valuable
consideration.
Explanation. - For the purposes of this clause, it is hereby clarified that,
notwithstanding anything contained in any other law for the time being in force or any
judgment, decree or order of any Court, tribunal or authority, the person and its
members or constituents shall be deemed to be two separate persons and the supply
of activities or transactions inter se shall be deemed to take place from one such
person to another;”.
Effect of the Amendment

There had been an area of dispute regarding the taxability of transactions
carried out between the members and the association of persons / partnership
firms / joint ventures. This was particularly after the Hon’ble Supreme Court
judgement in the case of Calcutta Club Ltd (Civil Appeal No. 4184 of 2009)
recently. It was held that the club / association and its members are not distinct
persons and that there would be no leviability of service tax on any services
provided by the club to its persons following the concept of mutuality.
This amendment aims to put a deeming fiction effective from 1st July 2017
within the law providing that the person (other than an individual) and its
members should mandatorily be treated as two separate persons. Also, the
activities or transactions carried out between such person and the members for
consideration should mandatorily be treated as a supply leviable to tax under
GST.
The above position of the law is overriding all the provisions of GST and any
other law and even the judgements of any Court, Tribunal or any other
authority. The validity of such amendment in the eyes of Courts may have to
withstand the test of time.

2. Appearance of transaction in GSTR-2A/2B – a mandatory condition for availment of

ITC
Source
Effective Date
Date to be notified by the government.
New Provision
Section 16(2)(aa) of the CGST Act, 2017.
Amendment
The provision marked in green has been newly inserted:
16(2)(aa) - the details of the invoice or debit note referred to in clause (a) has been
furnished by the supplier in the statement of outward supplies and such details have
been communicated to the recipient of such invoice or debit note in the manner
specified under section 37;”.

Till now, the conditions for availment of input tax credit was only dependent on
the supplier to the extent whether he has actually paid the taxes charged to the
government. To a certain extent, this condition is not always possible to verify in
the hands of the recipient particularly where the supplier has mis-declared or not
declared the correct tax values in GSTR-3B.
On the other hand, there was no clause to deny input tax credit based on the
matching of the details declared by the supplier in his GSTR-1 and actual input
tax credit availed by the recipient. Thereby, the credit matching between GSTR-
2A and 3B was not a pre-condition for availment of input tax credit under Section
16(2). In order to mandate availment of input tax credit based on GSTR-2A / 2B,
the law now prescribes a pre-condition that input tax credit on invoice or debit
note may be availed only when the details of such invoice or debit note have
been furnished by the supplier in his GSTR-1 and it is communicated to the
recipient in GSTR-2A / 2B.
From a prima facie understanding, it seems that the 100% matching of input tax
credit for forward charge transactions may be introduced once this provision
gets notified. However, the fate of this provision in consonance with Rule 36(4)
may also be known once the provision and their respective rules are notified.

3. Annual accounts to be audited by Specified professionals.
Source
Effective Date
Affected Provision
Section 35(5) of the CGST Act, 2017
Amendment
The provision marked in red has been omitted
35(5) - Every registered person whose turnover during a financial year exceeds the
prescribed limit shall get his accounts audited by a chartered accountant or a cost
accountant and shall submit a copy of the audited annual accounts, the reconciliation
statement under sub-section (2) of section 44 and such other documents in such form
and manner as may be prescribed:
[Provided that nothing contained in this sub-section shall apply to any department of
the Central Government or a State Government or a local authority, whose books of
account are subject to audit by the Comptroller and Auditor-General of India or an
auditor appointed for auditing the accounts of local authorities under any law for the
time being in force.]
4. Self certification of reconciliation statement by the registered person
Source
Effective Date
Affected Provision
Section 44 of the CGST Act, 2017.
Provision before amendment

44(1) - Every registered person, other than an Input Service Distributor, a person
paying tax under section 51 or section 52, a casual taxable person and a non-resident
taxable person, shall furnish an annual return for every financial year electronically in
such form and manner as may be prescribed on or before the thirty-first day of
December following the end of such financial year:
[Provided that the Commissioner may, on the recommendations of the Council and
for reasons to be recorded in writing, by notification, extend the time limit for

furnishing the annual return for such class of registered persons as may be specified
therein:
Provided further that any extension of time limit notified by the Commissioner of State
tax or the Commissioner of Union territory tax shall be deemed to be notified by the
Commissioner.]
44(2) - Every registered person who is required to get his accounts audited in
accordance with the provisions of sub-section (5) of section 35 shall furnish,
electronically, the annual return under sub-section (1) along with a copy of the audited
annual accounts and a reconciliation statement, reconciling the value of supplies
declared in the return furnished for the financial year with the audited annual financial
statement, and such other particulars as may be prescribed.
[Explanation.- For the purposes of this section, it is hereby declared that the annual
return for the period from the 1st July, 2017 to the 31st March, 2018 shall be furnished
on or before the [31st January, 2020]69 and the annual return for the period from the
1st April, 2018 to the 31st March, 2019 shall be furnished on or before the 31st March,
2020
Provision after Amendment
Every registered person, other than an Input Service Distributor, a person paying tax
under section 51 or section 52, a casual taxable person and a non-resident taxable
person shall furnish an annual return which may include a self - certified reconciliation
statement, reconciling the value of supplies declared in the return furnished for the
financial year, with the audited annual financial statement for every financial year
electronically, within such time and in such form and in such manner as may be
prescribed:
Provided that the Commissioner may, on the recommendations of the Council, by
notification, exempt any class of registered persons from filing annual return under
this section:
Provided further that nothing contained in this section shall apply to any department
of the Central Government or a State Government or a local authority, whose books
of account are subject to audit by the Comptroller and Auditor- General of India or an
auditor appointed for auditing the accounts of local authorities under any law for the
time being in force.
Effect of the Amendment of Clauses 101 and 102

The mandatory requirement of getting the reconciliation in GSTR-9C certified
by a Chartered Accountant/ Cost Accountant is proposed to be removed. Any
registered person would be able to furnish the annual return along with a
self-certified reconciliation statement reconciling the values between annual
return and financial statements.

5. Interest on net tax liability to be retrospective
Source
Effective Date
Affected Provision
Proviso to Section 50(1).
Provision before Amendment
50(1) - Every person who is liable to pay tax in accordance with the provisions of this
Act or the rules made thereunder, but fails to pay the tax or any part thereof to the
Government within the period prescribed, shall for the period for which the tax or any
part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding
eighteen per cent., as may be notified by the Government on the recommendations
of the Council:
[Provided that the interest on tax payable in respect of supplies made during a tax
accordance with the provisions of section 39, except where such return is furnished
after commencement of any proceedings under section 73 or section 74 in respect of
the said period, shall be levied on that portion of the tax that is paid by debiting the
electronic cash ledger.]
Provision after amendment
50(1) - Every person who is liable to pay tax in accordance with the provisions of this
Act or the rules made thereunder, but fails to pay the tax or any part thereof to the
Government within the period prescribed, shall for the period for which the tax or any
part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding
eighteen per cent., as may be notified by the Government on the recommendations
of the Council:
Provided that the interest on tax payable in respect of supplies made during a tax
accordance with the provisions of section 39, except where such return is furnished
after commencement of any proceedings under section 73 or section 74 in respect of
the said period, shall be payable on that portion of the tax which is paid by debiting
the electronic cash ledger.


Interest due to late furnishing of GSTR-3B was made applicable on the net tax
liability i.e. on the amount paid from the electronic cash ledger only through the
Finance Act 2020. However, this provision was given a prospective effect with
effect from 1st September 2020. Now this relaxation has been given a
retrospective effect from 1st July 2017 i.e. from the advent of GST.
6. Detention and Seizure to be separate from the Demand / Recovery provisions
Source
Effective Date
Affected Provision
Explanation 1(ii) of Section 74 of the CGST Act, 2017

Explanation 1.—For the purposes of section 73 and this section,—
(i) the expression all proceedings in respect of the said notice shall not include
proceedings under section 132;
(ii) where the notice under the same proceedings is issued to the main person liable
to pay tax and some other persons, and such proceedings against the main person
have been concluded under section 73 or section 74, the proceedings against all the
persons liable to pay penalty under sections 122, 125, 129 and 130 are deemed to be
concluded.
(i) the expression all proceedings in respect of the said notice shall not include
proceedings under section 132;
(ii) where the notice under the same proceedings is issued to the main person liable
to pay tax and some other persons, and such proceedings against the main person
have been concluded under section 73 or section 74, the proceedings against all the
persons liable to pay penalty under sections 122 and 125 are deemed to be concluded.

This amendment has been brought in to make the proceedings of the
detention, seizure and confiscation of goods and conveyances in transit
separate from the demand and recovery proceedings under Section 73 and
74 of the CGST Act 2017.

7. Direct recovery without SCN upon furnishing of details in GSTR-1 without tax
payment in GSTR-3B
Source
Effective Date
Affected Provision
Section 75(12) of the CGST Act, 2017.
Amendment
The provision marked in green has been inserted
75(12) - Notwithstanding anything contained in section 73 or section 74, where any
amount of self-assessed tax in accordance with a return furnished under section 39
remains unpaid, either wholly or partly, or any amount of interest payable on such tax
remains unpaid, the same shall be recovered under the provisions of section 79.
75(12) - Notwithstanding anything contained in section 73 or section 74, where any
amount of self-assessed tax in accordance with a return furnished under section 39
remains unpaid, either wholly or partly, or any amount of interest payable on such tax
remains unpaid, the same shall be recovered under the provisions of section 79.
‘Explanation. –– For the purposes of this sub-section, the expression "self-assessed
tax" shall include the tax payable in respect of details of outward supplies furnished
under section 37, but not included in the return furnished under section 39.’

Section 75(12) provides that where any self-assessed tax remains unpaid, the
same can be directly recovered without any issuance of showcause notice. Self-
assessment provides for taxes declared in GSTR-3B as per Section 39. Thereby,
only taxes declared in GSTR-3B but remaining unpaid through it (practical
impossibility) could form the scope of this section 75(12).
Now, it has been provided that if a supplier only provides outward supplies in
GSTR-1 without including such supplies in GSTR-3B, then the government can
directly opt for recovery of taxes under Section 79 without issuance of any
showcause notice u/s 73 or 74.

8. Provisional Attachment upon initiation (and not pendency) of proceedings and

increased coverage of beneficiaries or masterminds of fake invoicing
Source
Effective Date
Affected Provision
Section 83(1) of the CGST ACT,2017
83(1) - Where during the pendency of any proceedings under section 62 or section 63
or section 64 or section 67 or section 73 or section 74, the Commissioner is of the
opinion that for the purpose of protecting the interest of the Government revenue, it
is necessary so to do, he may, by order in writing attach provisionally any property,
including bank account, belonging to the taxable person in such manner as may be
prescribed.

83(1) - “Where, after the initiation of any proceeding under Chapter XII, Chapter XIV
or Chapter XV, the Commissioner is of the opinion that for the purpose of protecting
the interest of the Government revenue it is necessary so to do, he may, by order in
writing, attach provisionally, any property, including bank account, belonging to the
taxable person or any person specified in sub-section (1A) of section 122, in such
manner as may be prescribed.”.

Earlier only upon pendency of certain proceedings of assessment, inspection,
search and seizure and demand / recovery, the power to exercise provisional
attachment of property could be exercised.
Now, Section 83 has been modified to allow provisional attachment of property
wherever any proceedings of assessment, inspection, search and seizure and
demand / recovery have been initiated. Such provisional attachment will remain
valid from such initiation of proceedings till the expiry of one year from the date
of order.
Also, the provisions of provisional attachment of the property have been
extended to include those persons who are the beneficiaries or at whose instance
the fake invoicing transactions are carried out as provided under Section 122(1A)
of the CGST Act 2017.

9. Filing of appeal against detention order upon payment of 25% penalty
Source
Effective Date
New Provision
Proviso to Section 107(6) of the CGST Act, 2017
Amendment
The proviso marked in green has been inserted
“Provided that no appeal shall be filed against an order under sub-section (3) of
section 129, unless a sum equal to twenty-five per cent. of the penalty has been paid
by the appellant.”

Before this amendment, a person can file an appeal against a detention order
passed u/s 129(3) of the CGST Act 2017 only upon payment of 10% of the tax in
dispute. This was leading to mis-utilization of this provision by the tax payers.
After the proposed amendment, against the adjudication order for detention or
seizure of goods or conveyance u/s 129(3) of the CGST Act 2017, an appeal can
now be filed only upon payment of 25% of the levied penalty under Section 129.
10. Payment of only penalty for release of goods and Increased penalty amount for
detention and seizure proceedings
Source
Clause 108(i) & (iv) of the Finance Bill, 2021.
Effective Date
Affected Provision
Section 129(1)(a) & (b) and 129(4) of the CGST Act, 2017.
Amendment
The provision marked in red has been omitted and the provision marked in green has
been inserted:


129(1)(a) - on payment of the applicable tax and penalty equal to one hundred per
cent of the tax payable on such goods and, in case of exempted goods, on payment of
an amount equal to two per cent. of the value of goods or twenty-five thousand
rupees, whichever is less, where the owner of the goods comes forward for payment
of such tax and penalty;
129(1)(b) - on payment of the applicable tax and penalty equal to the fifty per cent.
of the value of the goods reduced by the tax amount paid thereon and, in case of
exempted goods, on payment of an amount equal to five per cent. of the value of
goods or twenty-five thousand rupees, whichever is less, where the owner of the
goods does not come forward for payment of such tax and penalty;
129(4) - No tax, interest or penalty shall be determined under sub-section (3) without
giving the person concerned an opportunity of being heard.
129(1)(a) - on payment of penalty equal to two hundred per cent. of the tax payable
on such goods and, in case of exempted goods, on payment of an amount equal to
two per cent. of the value of goods or twenty-five thousand rupees, whichever is less,
where the owner of the goods comes forward for payment of such penalty;
129(1)(b) - on payment of penalty equal to fifty per cent. Of the value of the goods or
two hundred per cent. of the tax payable on such goods, whichever is higher, and in
case of exempted goods, on payment of an amount equal to five per cent. of the value
of goods or twenty-five thousand rupees, whichever is less, where the owner of
the goods does not come forward for payment of such penalty
129(4) - No penalty shall be determined under sub-section (3) without giving the
person concerned an opportunity of being heard.

Upon detention and seizure of goods and conveyance u/s 129, one had to pay
the tax along with the penalty in order to get the goods released. After this
amendment, only the penalty amount needs to be paid in order to secure
release of goods whereas the tax amount would continue to be paid through
GSTR-3B of the relevant month. However, the penalty amount under this
provision has been modified for non-exempted goods as follows:
Situation Earlier Penalty Amended penalty

Where owner 100% of the tax 200% of the tax payable
comes forward payable
for payment of
penalty
Where owner 50% of the value of Higher of:
does not come goods less tax paid a) 50% of the value of
forward for goods
penalty b) 200% of the tax
payment payable

11. Provisions of Section 67(6) no longer to apply for release of goods on security
Source
Clause 108(ii) of the Finance Bill, 2021.
Effective Date
Affected Provision
Amendment
been inserted:

129(2) - The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply
for detention and seizure of goods and conveyances.

The requirement of following the provisions of Section 67(6) for release of goods
on provisional basis upon execution of bond and security as per the specified
manner and quantum has been removed. However, the allowance of release of
goods upon furnishing of security u/s 129(1)(c) still stands.
12. Time limit provided for issuance of notice and order u/s 129
Source
Clause 108(iii) of the Finance Bill, 2021.
Effective Date
Affected Provision
Amendment
been inserted:


129(3) - The proper officer detaining or seizing goods or conveyances shall issue a
notice specifying the tax and penalty payable and thereafter, pass an order for
payment of tax and penalty under clause (a) or clause (b) or clause (c).
129(3) - The proper officer detaining or seizing goods or conveyance shall issue a
notice within seven days of such detention or seizure, specifying the penalty payable,
and thereafter, pass an order within a period of seven days from the date of service
of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1).

The law now prescribes a time limit for issuance of notice and passing the order
of detention or seizure. The time limit of issuance of notice has been provided
as 7 days of such detention or seizure and that of order is 7 days from the date
of such notice.
13. Direct disposal of goods upon non-payment of penalty for detention
Source
Clause 108(v) of the Finance Bill, 2021.
Effective Date
Affected Provision
Amendment
been inserted:

129(6) - Where the person transporting any goods or the owner of the goods fails to
pay the amount of tax and penalty as provided in sub-section (1) within [fourteen
days] of such detention or seizure, further proceedings shall be initiated in accordance
with the provisions of section 130:
Provided that where the detained or seized goods are perishable or hazardous in
nature or are likely to depreciate in value with passage of time, the said period of
[fourteen days] may be reduced by the proper officer.


129(6) - Where the person transporting any goods or the owner of such goods fails to
pay the amount of penalty under sub-section (1) within fifteen days from the date of
receipt of the copy of the order passed under sub-section (3), the goods or conveyance
so detained or seized shall be liable to be sold or disposed of otherwise, in such
manner and within such time as may be prescribed, to recover the penalty payable
under sub-section (3):
Provided that the conveyance shall be released on payment by the transporter of
penalty under sub-section (3) or one lakh rupees, whichever is less:
Provided further that where the detained or seized goods are perishable or hazardous
in nature or are likely to depreciate in value with passage of time, the said period of
fifteen days may be reduced by the proper officer.

The proceedings of confiscation of goods u/s 130 have been made independent
of the proceedings of detention and seizure as per Section 129(3) of the CGST
Act 2017.
Earlier non-payment of tax and penalty within 14 days of detention and seizure
u/s 129 led to introduction of confiscation proceedings u/s 130.
Now, upon non-payment of penalty within 15 days (or less for
perishable/hazardous goods) of receipt of order copy of detention, the detained
goods or conveyance can directly sold or disposed of in the prescribed time and
manner. Further, the transporter has been given an option to get his conveyance
released upon payment of applicable penalty or Rs. 1 lakh whichever is less.
14. Delinking of Detention and Confiscation proceedings
Source
Effective Date
Affected Provision
Section 130(1); 130(2) & 130(3) of the CGST Act, 2017.
130(1) - Notwithstanding anything contained in this Act, if any person—
(i) supplies or receives any goods in contravention of any of the provisions of this Act
or the rules made thereunder with intent to evade payment of tax; or
(ii) does not account for any goods on which he is liable to pay tax under this Act; or

registration; or
(iv) contravenes any of the provisions of this Act or the rules made thereunder with
intent to evade payment of tax; or
(v) uses any conveyance as a means of transport for carriage of goods in contravention
of the provisions of this Act or the rules made thereunder unless the owner of the
conveyance proves that it was so used without the knowledge or connivance of the
owner himself, his agent, if any, and the person in charge of the conveyance,
then, all such goods or conveyances shall be liable to confiscation and the person shall
be liable to penalty under section 122.
Second proviso to Section 130(2) - Provided further that the aggregate of such fine
and penalty leviable shall not be less than the amount of penalty leviable under sub-
section (1) of section 129:
130(3) - Where any fine in lieu of confiscation of goods or conveyance is imposed
under sub-section (2), the owner of such goods or conveyance or the person referred
to in sub-section (1), shall, in addition, be liable to any tax, penalty and charges
payable in respect of such goods or conveyance.
130(1) - Where any person—
(i) supplies or receives any goods in contravention of any of the provisions of this Act
or the rules made thereunder with intent to evade payment of tax; or
registration; or
(iv) contravenes any of the provisions of this Act or the rules made thereunder with
intent to evade payment of tax; or
(v) uses any conveyance as a means of transport for carriage of goods in contravention
of the provisions of this Act or the rules made thereunder unless the owner of the
conveyance proves that it was so used without the knowledge or connivance of the
owner himself, his agent, if any, and the person in charge of the conveyance,
then, all such goods or conveyances shall be liable to confiscation and the person shall
be liable to penalty under section 122.
Second proviso to Section 130(2) - Provided further that the aggregate of such fine
and penalty leviable shall not be less than the penalty equal to hundred per cent. of
the tax payable on such goods.


The confiscation provision no longer overrides any other provision of the Act.
The proceedings of confiscation stands delinked with the penalty proceedings
due to detention of goods.
Also, the minimum aggregate fine and penalty for confiscation was provided to
be the penalty for detention under Section 129. This has now been modified to
provide the amount to be equivalent to 100% of the tax payable on such goods.
Also, the requirement to pay fine in addition to the tax, penalty and charges
payable in respect of the goods has been omitted.
15. Empowerment of Commissioner to call for information
Source
Effective Date
Affected Provision
Section 151 of the CGST Act, 2017
151(1) - The Commissioner may, if he considers that it is necessary so to do, by
notification, direct that statistics may be collected relating to any matter dealt with by
or in connection with this Act.
151(2) - Upon such notification being issued, the Commissioner, or any person
authorised by him in this behalf, may call upon the concerned persons to furnish such
information or returns, in such form and manner as may be prescribed, relating to any
matter in respect of which statistics is to be collected .
151 - The Commissioner or an officer authorised by him may, by an order, direct any
person to furnish information relating to any matter dealt with in connection with this
Act, within such time, in such form, and in such manner, as may be specified therein.

The amendment has been provided to empower the jurisdictional commissioner
to call for information from any person relating to any matter dealt with in
connection with the Act.

16. Opportunity of being heard before using the called for information in any
proceedings
Source
Effective Date
Affected Provision
Amendment
been inserted:

152(1) - No information of any individual return or part thereof with respect to any
matter given for the purposes of section 150 or section 151 shall, without the previous
consent in writing of the concerned person or his authorised representative, be
published in such manner so as to enable such particulars to be identified as referring
to a particular person and no such information shall be used for the purpose of any
proceedings under this Act.
152(2) - Except for the purposes of prosecution under this Act or any other Act for the
time being in force, no person who is not engaged in the collection of statistics under
this Act or compilation or computerisation thereof for the purposes of this Act, shall
be permitted to see or have access to any information or any individual return referred
to in section 151.

152(1) - No information with respect to any matter given for the purposes of section
150 or section 151 shall, without the previous consent in writing of the concerned
person or his authorised representative, be published in such manner so as to enable
such particulars to be identified as referring to a particular person and no such
information shall be used for the purpose of any proceedings under this Act without
giving an opportunity of being heard to the person concerned.

This amendment is to provide that no information obtained under sections 150
and 151 shall be used for the purposes of any proceedings under the Act without

17. Power under Section 150 to call for information transferred from the Board to the
Jurisdictional Commissioner
Source
Effective Date
Affected Provision
Amendment
been inserted:
168(2) - The Commissioner specified in clause (91) of section 2, sub-section (3) of
section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of section
35, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of
section 39, [sub-section (1) of section 44, sub-sections (4) and (5) of section 52], [sub-
section (1) of section 143, except the second proviso thereof], sub-section (1) of
section 151, clause (l) of sub-section (3) of section 158 and section 167 shall mean a
Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint
Secretary shall exercise the powers specified in the said sections with the approval of
the Board.
168(2) - The Commissioner specified in clause (91) of section 2, sub-section (3) of
section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of section
35, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of
section 39, [section 44, sub-sections (4) and (5) of section 52], [sub-section (1) of
section 143, except the second proviso thereof], clause (l) of sub-section (3) of section
158 and section 167 shall mean a Commissioner or Joint Secretary posted in the Board
and such Commissioner or Joint Secretary shall exercise the powers specified in the
said sections with the approval of the Board.

Section 168(2) of the CGST Act 2017 provides for the powers which can only be
exercised by the Commissioner or Joint Secretary posted in the Board. This has
been amended to enable the jurisdictional Commissioner (and not the Board) to
exercise powers under section 151 to call for information.

18. Rationalization of entry of supply of goods by unincorporated association in light of

the new insertion in the definition of supply
Source
Effective Date
Affected Provision
Paragraph 7 of Schedule II of the CGST Act, 2017
Amendment
The provision marked in red has been omitted

7. Supply of Goods
The following shall be treated as supply of goods, namely:—
Supply of goods by any unincorporated association or body of persons to a member
thereof for cash, deferred payment or other valuable consideration.

Due to the retrospective insertion of Section 7(1)(aa) of the CGST Act 2017, the above
entry providing for supply of goods only by any unincorporated association or body
of persons loses its significance. This entry gets automatically covered within the
main definition as per Section 7(1)(aa) of the CGST Act 2017. Thereby, this entry has
been omitted from Schedule II of the CGST Act 2017.
19. Supply to SEZ for authorized operations only to be treated as a zero rated supply
Source
Clause 114(a) of the Finance Bill, 2021.
Effective Date
Affected Provision
Section 16(1)(b) & (3) of the IGST Act, 2017
New Provision
Section 16(4) of the IGST Act, 2017

Amendment
been inserted:

16(1)(b) - supply of goods or services or both to a Special Economic Zone developer or
a Special Economic Zone unit

16(1)(b) - supply of goods or services or both for authorised operations to a Special
Economic Zone developer or a Special Economic Zone unit

Earlier all supplies made to SEZ unit were covered under the definition of Zero
Rated Supply. However, Rule 89(1) of the CGST Rules, 2017 provided that refund
would be allowed to be claimed by a supplier only when such supplies have
been admitted for authorized operations. The department in its circular use to
take reference of this rule to conclude that a supply to SEZ would be zero rated
only when it is admitted for authorized operations. This conclusion however did
not have any statutory backing. Thus, the aforesaid amendment was carried out
to include only supply on account of authorized operations as zero rated
supplies.
20. Export with payment of tax to be allowed to notified persons or notified goods
/services only
Source
Clause 114(b) of the Finance Bill, 2021.
Effective Date

16(3) - A registered person making zero rated supply shall be eligible to claim refund
under either of the following options, namely:––
(a) he may supply goods or services or both under bond or Letter of Undertaking,
subject to such conditions, safeguards and procedure as may be prescribed, without
payment of integrated tax and claim refund of unutilised input tax credit; or
(b) he may supply goods or services or both, subject to such conditions, safeguards
and procedure as may be prescribed, on payment of integrated tax and claim refund
of such tax paid on goods or services or both supplied, in accordance with the
provisions of section 54 of the Central Goods and Services Tax Actor the rules made
thereunder.


16(3) - A registered person making zero rated supply shall be eligible to claim refund
of unutilised input tax credit on supply of goods or services or both, without payment
of integrated tax, under bond or Letter of Undertaking, in accordance with the
provisions of section 54 of the Central Goods and Services Tax Act or the rules made
thereunder, subject to such conditions, safeguards and procedure as may be
prescribed:
Provided that the registered person making zero rated supply of goods shall, in case
of non-realisation of sale proceeds, be liable to deposit the refund so received under
this sub-section along with the applicable interest under section 50 of the Central
Goods and Services Tax Act within thirty days after the expiry of the time limit
prescribed under the Foreign Exchange Management Act, 1999 for receipt of foreign
exchange remittances, in such manner as may be prescribed.

Rule 96B provides for recovery of refund in case of non-realization of sale
proceeds in case of export of goods. Till now, there was no empowering
provision for this rule under the Act. Now, the Act itself provides that the
registered person making zero rated supplies in case of non-realization of sale
proceeds within the specified time is liable to deposit the refund received along
with interest. The time limit provided is 30 days after the expiry of time limit
prescribed under the FEMA Act 1999 for receipt of foreign exchange
remittances.
21. Export with payment of tax to be allowed to notified persons or notified goods
/services only
Source
Clause 114(b) of the Finance Bill, 2021.
Effective Date
New Provision
Section 16(4) of the IGST Act, 2017
Amendment
16(4) - The Government may, on the recommendation of the Council, and subject to
such conditions, safeguards and procedures, by notification, specify––
(i) a class of persons who may make zero rated supply on payment of integrated tax
and claim refund of the tax so paid;
(ii) a class of goods or services which may be exported on payment of integrated tax
and the supplier of such goods or services may claim the refund of tax so paid.”.


It is proposed that the benefit of export with payment of tax would not be
allowed in cases. The government has been empowered to notify class of
persons or class of goods / services on which the benefit of claiming refund of
export with payment of integrated tax will be allowed.
This publication contains information for general guidance only. It is not intended to address
the circumstances of any particular individual or entity. Although the best of endeavour has
been made to provide the provisions in a simpler and accurate form, there is no substitute to
detailed research with regard to the specific situation of a particular individual or entity. S.
Khaitan & Associates or any of its officials do not accept any responsibility for loss incurred by
any person for acting or refraining to act as a result of any matter in this publication

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Union Budget 2021 - Direct Tax Highlights
Dear Readers,
As you are aware the Hon’ble Finance Minister today presented the Union Budget
2021 for fiscal year 2021-22. I have provided below an overview of key tax
announcements and proposals made in the Union Budget in a simplified manner
for easy understanding.
Personal Tax
Corporate Tax
Assessment and Litigation
Other Key Proposals

1
CA Akash Shah
A N Shah & Associates
Executive Summary
This executive summary is subject to and should be read in conjunction with the
detailed information provided in the ensuing slides.
Personal Tax
Senior Citizen
Taxability of Interest Income from various funds (Provident Fund) where

income is exempt
Key changes in Affordable Housing Projects
Corporate Tax
Key changes for start-ups
Employees Contribution to welfare funds 2
CA Akash Shah
Executive Summary
Assessment and Litigation
Power to issue the Inquiry notice before
Assessment
Income escaping assessment, re-assessments
and search assessments
Reduction of time limit for completion of
assessment proceedings
Reduction of time limit for sending intimation
Reduction of time limit for issuance of Scrutiny
Notice
Others
CA Akash Shah
Executive Summary
Other Key Proposals
• Advance tax payable on Dividend Income
• Deduction of tax at source (TDS) on payment of Divided to

business trust
• Increase in Turnover threshold for Tax Audit
• Due dates of return of Income (ITR)
• Others
CA Akash Shah
Personal Tax
Senior Citizen
Relief provided to Senior Citizen (age of 75 years or above) from filing the return of
income provided that they only have pension income.
Taxability of Interest Income from various funds (Provident Fund) where

income is exempt
Interest income accrued during the previous year to the extent it relates to the
amounts of contribution made to the fund exceeding INR 2,50,000 in a previous year
will be taxable.
Please note that the interest income attributable to the initial contribution of
INR 2,50,000 made to the fund will be exempt.
Key changes in Affordable Housing Projects

 Additional deduction of INR 1.5 lakh for interest paid on loans taken for an
affordable house extended to 31 March 2022 from 31 March 2021.
 Tax holiday on profits earned by developers of affordable housing projects has
also been increased to 31 March 2022 from 31 March 2021. 5
CA Akash Shah
Corporate Tax
Key changes for start-ups
 Start-ups with turnover upto INR 100 crore to enjoy 100% deduction for 3
consecutive assessment years out of 10 years subject to its incorporation
between 1st April 2016 to 31 March 2022 (as against erstwhile outer limit for
incorporation of 31 March 2021).
 Capital gains which arises on transfer of residential house property owned is
exempt from taxation if the eligible assesse utilizes the net consideration for
subscription in the equity shares of eligible start-up on or before 31 March 2022
(as against erstwhile outer limit for incorporation of 31 March 2021).
Employees Contribution to welfare funds
Due date for payment by employer for employee’s contribution to any fund for the
welfare of such employees is the due date as per the statute of the respective fund
and not the due date for furnishing the return of the income.
Please note that the due date of employer’s contribution to the abovementioned
funds is on or before the due date for furnishing the return of the income. 6
CA Akash Shah
Assessments and Litigations
Power to issue the Inquiry notice before Assessment
At present, only the Assessing officer has the power to issue the Inquiry notice
before Assessment. However, it is proposed to empower the prescribed income-tax
authority besides the Assessing Officer to issue notice under the said clause.
Income escaping assessment, re-assessments and search

assessments
 A completely new procedure is proposed by the bill in case of Income escaping
assessment, re-assessments and search assessments.
 The cases initiated after 31 March 2021 shall be under the new procedure.
 Time limit for issuance of Notice is proposed to be:-
Cases Notice cannot be issued if:-
Normal 3 years have elapsed from the end of
the relevant assessment year.
Specific (Income escaping 10 years have elapsed from the end
CAassessment
Akash Shah is more than INR 50 lakh) of the relevant assessment year.
01-02-2021 7
CA Akash Shah
Assessments and Litigations
Reduction of time limit for completion of assessment proceedings
 It has been proposed that the time limit for completion of assessment
proceedings may be reduced further by 3 months.
 Thus, the time for completing of assessment is proposed to be 9 months from
the end of the assessment year in which the income was first assessable, for
Reduction of time limit for sending intimation
It has been proposed to reduce the time limit for sending intimation from 1 year to
9 months from the end of the financial year in which the return was furnished.
Reduction of time limit for issuance of Scrutiny Notice
It has been proposed to reduce the time limit for issue of scrutiny notice from
6 months to 3 months from the end of the financial year in which the return was
furnished. 8
CA Akash Shah
Summary of reduction of time limits
Notice/ Due date (from the end Erstwhile Due date (from
Intimation/ of the relevant the end of the relevant
Assessment assessment year) assessment year)
Intimation 9 months 12 months
Scrutiny Notice 3 months 6 months

Completion of 9 months 12 months
Assessment
Others
 Dispute Resolution Committee (DRC) is proposed to be to be constituted to

provide early tax certainty to small and medium taxpayers. The DRC will be
preventing new disputes and settling the issue at the initial stage.
 It is proposed to discontinue Income-tax Settlement Commission (ITSC) and
to constitute Interim Board of settlement for pending cases. This will impart
greater efficiency, transparency and accountability by eliminating the interface
between the Interim Board and the assessee in the course of proceedings to
the extent technologically feasible. 9
CA Akash Shah
Other Key Proposals
Advance tax payable on Dividend Income
 Advance tax liability on dividend income to arise on declaration of dividend.

 Consequentially, interest leviable for delayed payment of advance tax
installments at the rate of 1 percent per month or part thereof to be relaxed till
the quarter in which the dividend is actually declared.
Deduction of tax at source (TDS) on payment of Divided to business trust
Exemption from TDS on payment of Dividend to business trust (in whose hands
dividend is exempt) by a special purpose vehicle.
Increase in Turnover threshold for Tax Audit
Turnover threshold for conducting Tax Audit by MSMEs increased to INR 10 crore
from INR 5 crore for businesses carrying out less than 5% of business transactions
in cash.
10
CA Akash Shah
Due dates of return of Income (ITR)
Returns Due Date Erstwhile Due Date

Revised Return 3 months before the end of End of relevant assessment
relevant assessment year year or completion of
Belated Return
or completion of assessment, whichever is
assessment, whichever is earlier i.e. 31 March
earlier i.e. 31 December
Partner of a firm which is 30 November of the 31 October of the relevant
required to furnish report relevant assessment year assessment year
from an accountant
for entering into
international transaction
Other Proposals
 Section 44ADA presumptive taxation for professionals not applicable to LLPs.

 Blanket exemption available to educational institutions and hospitals run by Small
Charitable Trusts whose receipts does not exceed INR 5 crore (as against erstwhile limit
of INR 1 crore).
 Details of Salary, Tax payments, TDS, details of capital gains, dividend income and 11
interest from banks and post office etc. will be pre-filled in ITR.
CA Akash Shah
Contact Us
CA Akash Shah
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Analysis of Direct Tax Proposals
Budget 2021
as introduced by the Finance Bill, 2021 in the Lok Sabha on 01/02/2021
Table of Content
1 2021 Budget Key Highlights
2 Tax Rates
3 Procedural Changes
4 Proposals - Housing & Real Estate Developers
5 Business
6 Capital Gains / Deductions
7 Assessment & Appeal
8 TDS / TCS
9 Penalty
10 Misc. Amendments

Finance Minister
Smt. Nirmala Sitharaman
Finance Minister Nirmala Sitharaman presented the
Union Budget 2021-2022 in the Lok Sabha. For the
first time, Ms. Sitharaman presented a paperless
Budget.
The presentation of the Budget comes in the

shadow of the coronavirus pandemic and its
repercussion on the economy, which is facing its
worst contraction since 1952. In a two-hour long
(or short) speech, she announced a higher capital
expenditure for this fiscal and next, focused on
infrastructure building.
As expected, the health sector also received

additional money. She surprised bond markets with
a fiscal deficit number of 9.5% for FY21 and a very
long, slow glide path towards lowering it
“Dawn of a new era, where India is well-poised to be the land of

hope and promise.”
- Smt. Nirmala Sitharaman

2021 Budget Key Highlights
1. An Expenditure Budget: Nirmala Sitharaman has 5. Bad Bank – A Good Idea: After dithering for almost
found space for imparting a fiscal impulse in 2021- six years, the government has finally decided to set up
22. Compared with a capex of Rs 4.12 lakh crore in an asset reconstruction company that will take over the
Revised Estimate (RE) of 2020-21, she has hiked it bad loans of banks, giving them flexibility to finance the
34.46 per cent to Rs 5.54 lakh crore in 2021-22. economic recovery.
2. Budget for Health Sector: PM Atma Nirbhar

6. Growth Vs Prudence – Tilting Towards Growth:
Swasthya Bharat Yojana The increased allocation is
Fiscal deficit estimated at 6.8 per cent of GDP in
expected to expand and strengthen existing national
2021-22; it is estimated to touch 9.5% in 2020-21.
health institutions, National Centre for Disease
It will be brought down to 4.5 per cent of GDP by
Control (NCDC), Health Emergency Operation
2025-26.
Centers and mobile hospitals
3. A Reform Signal: Two public-sector banks and 7. Securities Market Code (SMC): A Unified
one state-owned general insurance company to be Securities Market Code to be created,
lined up for disinvestment. FDI in insurance to be consolidating provisions of the SEBI Act,
hiked to 74% from 49% now. LIC IPO. Depositories Act, and two other laws.
4. National Faceless Income Tax Appellate

8. Strategic Disinvestment – Again, Needs Political/
Tribunal Centre: Faceless Appellate Proceedings Bureaucratic Push: NITI Aayog asked to short list
before Tribunal (ITAT) in a jurisdiction less manner. It non-core PSUs for strategic sale. After a poor show
will reduce the cost of compliance for taxpayers, and in 2020-21, the government has estimated
increase transparency in the disposal of appeals. disinvestment receipts at Rs 1,75,000 crore.

• Government in previous budget had introduced

“Vivad Se Vishwas” scheme to settle pending
disputes. Indications are there that the scheme
has been a great success. While pending
disputes are being resolved or adjudicated, it is
important that in future there is less number of
disputes from fresh assessments. Hence, in order
to provide early tax certainty to small and
medium taxpayers, it is proposed to introduce a
new scheme for preventing new disputes and

Some key features of the said scheme is given below:
• Only those disputes where the returned income is fifty lakh rupee or less (if there is a return) and the aggregate amount
of variation proposed in assessment order is ten lakh rupees or less shall be eligible to be considered by the DRC.
• The DRC shall have the powers to reduce or waive any penalty imposable under this Act or grant immunity from
prosecution for any offence under this Act in case of a person whose dispute is resolved under this provision.
• Above procedure will remain faceless.
Following cases were not eligible for the said scheme:
Returned income is more than 50 lakhs.
Addition in the assessment order is more than 10 lakhs.
Assessment is based on search initiated u/s 132 or requisition made u/s 132A or based on Survey initiated u/s 133A or
information received under an agreement referred to in section 90 or section 90A of the Act.
Assessee would not be eligible for benefit of this provision if there is detention, prosecution or conviction under various laws as
specified in the proposed section
Ss
Tax Rates
(Unchanged)

Tax Rates | Individuals / HUF/ AoP / BoI
For Individuals (Other than Senior
Citizens and Super Senior Citizens) For Senior Citizens (60 – 80 years) For Super Senior Citizens (>80 years)
Income Slab Rate Income Slab Income Tax Income Slab Income Tax
Up to Rs 2,50,000 Nil Up to Rs. 3,00,000 Nil Up to Rs 5,00,000 Nil
Rs 2,50,001 to Rs 5,00,000 5% Rs. 3,00,001 to Rs. 5,00,000 5% Rs 5,00,001 to Rs 10,00,000 20%
Rs 5,00,001 to Rs 10,00,000 20% Rs 5,00,001 to Rs 10,00,000 20% Above Rs 10,00,000 30%
Above Rs 10,00,000 30% Above Rs 10,00,000 30%
For Individuals and Senior Citizens For Super Senior Citizens

• Surcharge: 10% if total income exceeds Rs. 50 lacs, 15% if total income exceeds Rs. 1 Crore but doesn't exceed • Surcharge: 10% if total income exceeds Rs. 50
Rs. 2 Crore, 25% if total income exceeds Rs. 2 Crore but doesn't exceed Rs. 5 Crore, 37% if total income lacs, 15% if total income exceeds Rs. 1 Crore but
exceeds Rs. 5 Crore doesn't exceed Rs. 2 Crore, 25% if total income
exceeds Rs. 2 Crore but doesn't exceed Rs. 5
• Health & Education cess at 4% of Income Tax & Surcharge
Crore, 37% if total income exceeds Rs. 5 Crore
• Relief u/s 87A up to Rs. 12,500 for resident individuals with total income of up to Rs. 5,00,000
• Health & Education cess at 4% of Income Tax &
• One can exercise option under Section 115BAC Surcharge
• One can exercise option under Section 115BAC

Tax Rates | Individuals / HUF
For Individuals and Hindu undivided Family Tax rate Conditions:
for Individual and HUF, if they so opt for, shall be as No deduction or Exemption for Leave Travel Concession, House Rent
follows subject to certain conditions Allowance, Miscellaneous Allowances under Rule 2BB, Allowances to
Members of Parliament, Special provisions of Special Economic Zone,
Standard Deduction of Salary income of Rs. 40,000, Professional Tax &
Income Slab Rate Entertainment Allowance, Interest Expenditure in respect of Self Occupied
House Property, Additional Depreciation, Donation to Scientific Association,
Up to Rs 2,50,000 Nil Social Science & Statistical Research , National Laboratory, University or IIT,
or under chapter VI A (except section 80JJAA and 80CCD (2))
Rs 2,50,001 to Rs 5,00,000 5%
No Set off of any loss:

Rs 5,00,001 to Rs 7,50,000 10%
(i) Carried forward or Depreciation if it arose due to any
exemption/deduction as above
Rs 7,50,001 to Rs 10,00,000 15%
(ii) under the head “Income from house property” with any other head of
income;
Rs 10,00,001 to Rs 12,50,000 20% (iii) by claiming the depreciation, if any, under any provision of section 32,
except clause (iia) of sub-section (1) of the said section, determined in
such manner as may be prescribed; and
Rs 12,50,001 to Rs 15,00,000 25%
(iv) without any exemption or deduction for allowances or perquisite, by
whatever name called, provided under any other law for the time being
Above 15,00,000 30% in force

Tax Rates | Companies
Domestic Company
Particulars Rate Foreign Companies

• Tax Rate: 40%
Company opting for section 115BA* 25% • Surcharge: 2% if total income exceeds Rs. 1 Crore
and 5% if total income exceeds Rs. 10 Crores
Company having turnover or gross receipt of up to Rs. 400 • Health & Education cess at 4% of Income Tax &
25%
crore in the previous year 2017-18* Surcharge
Company opting for section 115BAA** 22%
Company opting for section 115BAB** 15% Partnership Firm

• Tax Rate: 30%
Any other company* 30%
• Surcharge at 12% if total income exceeds Rs. 1
MAT** 15% Crore
• * Health & Education cess at 4% of Income Tax &
Surcharge
For Domestic Company
* Surcharge: 7% if total income exceeds Rs. 1 Crore and 12% if total income exceeds Rs. 10
Crores
** Surcharge shall be levied at the flat rate of 10%.
*** MAT shall not be applicable in case of Insurance & Shipping Cos. and Cos. opting for
Section 115BAA or Section 115BAB
Note: Health & Education cess at 4% of Income Tax & Surcharge
Ss
Key Direct Tax

Amendments
11 | Copyright © 2020
2021 Surana Maloo & Co. All rights reserved.
Procedural Changes
No ITR filing for senior citizens aged 75 years and more if earning is only pension, interest
Sec. 139
• New Insertion of section 194P - Specified Senior citizens who are 75 years or above and have only pension and interest income in a
financial year, are exempted from filing income tax returns (ITR) anymore. The bank paying income to them will deduct the
necessary tax from their bank account.
• Four conditions to be fulfilled
1. The senior citizen is resident in India- aged of 75 or more during the Previous Yea
2. Has pension income, interest income from same bank in which he receives pension
3. Bank is a specified bank as per Govt.
4. File a declaration to the specified bank.
• Once declaration is furnished, now the specified bank would have to compute the income of such senior citizen after giving effect to
the deduction like 80C, 80D,80 DDB, etc. and rebate allowable u/s 87A and deduct income tax for relevant AY. No ITR is to be filed
by Specified Senior Citizen.

Procedural Changes
New deadline for filing revise return and belated return:
• It is proposed that the last date for filing of belated or revised returns of income, as the case may be, be reduced by three months.
Thus the belated return or revised return could now be filed three months before the end of the relevant assessment year or before
• Amendment shall become effective from 1st April, 2021 and will accordingly apply to Assessment year 2021-22 and subsequent
Assessment years.

Procedural Changes
GST Fake Invoice of more than Rs.2 Cr shall attracts Provisional Attachment of Assets
Sec 281B vis a vis 271AAD
Existing Proposed
Provisional Attachment u/s 281B in cases of assessment or Now, the Section 281B is amended and along with income
reassessment the AO may provisionally attach any property of escapement the words “or imposition of penalty u/s 271AAD
the assessee, if necessary, in order to protect the interest of where the aggregate amount of penalty imposed is 2 crores
revenue. Prior approval of Pr. Chief Commissioner/Principal or above.” Meaning penalty imposed on a person or a persons
Director or Commissioner or Director, of Income-tax. Such who causes such person to make a false entry or omit an
attachment valid for 6 months. entry from his books of accounts
Allowing assessee to furnish a bank guarantee of value of the

property attached for revocation of the provisional
attachment.
Bank guarantee invoked if there is failure to pay tax demand
on time
Section 271AAD is an anti abuse provision, safeguarding the revenues interest from situation where the tax payer evade such
payment of penalty such power to make provision attachment is now given to the AO in case the aggregate amount exceeds 2
crore. This staunch step of the government against the fraudsters will curb the practice of making fake GST invoices and
wrongful availment of ITC.

• In order to boost the demand in the real-estate sector and to enable the real-estate developers to liquidate their unsold inventory
at a lower rate to home buyers, and considering the decline in prices of the residential unit due to economic slowdown, there is an
increase in the tolerable limit from earlier 10% to proposed 20%. However, this increase in the threshold from 10% to 20% shall
be effective under Section 43CA and Section 56(2)(x) for a limited time period (from 12th November 2020 to 30 June -2021) on
primary sale of residential units having value up to Rs 2 crores to first time house owners/buyers (w.e.f. 1/04/2022)
43CA-Special Provision for full value of consideration for transfer of assets other than capital assets in certain cases
Existing Proposed
If value adopted by the stamp duty authority for payment of The limit of Ten percent has been relaxed to twenty percent
stamp duty does not exceed 110% of consideration received only if following conditions are satisfied;
by the real estate developer for transfer of land or building or
both (other than capital asset), then value so received by the •The Transfer/Sale of Residential between 12/11/2020-
real estate developer shall be deemed to be consideration for 30/06/2021
the purpose of section 43CA of the Act. • First-time allotment of the residential unit to any person
•Consideration for transfer/sale shall not exceed 2 Cr

• 56(2)(x)-Acquisition of Immovable Property for a consideration less than the value adopted by stamp duty authority for the
payment of stamp duty
Existing Proposed
If value adopted by the stamp duty authority for payment of Consequential amendment has been made to section 56(2)(x)
stamp duty does not exceed 110% of purchase consideration of the Act where tolerable limit of 10% has been relaxed to
of an immovable property, then value so paid shall be deemed 20%.
to be cost of acquisition and nothing shall be taxable u/s
56(2)(x) of the Act. - Applicable in case of all Assessee

Deduction for Developing & Building Rental Housing Projects – Sec 80-IBA
• Due to Covid, the Government saw the problems faced by the migrant workers and to help migrant labourers and to
promote affordable rental - amendment in earlier 80-IBA was made
Existing Proposed
Profits and gains derived from the business of developing Insertion of 80-IBA(1A)
and building affordable housing project, there shall, be To allow deduction under section 80-IBA of the Act to allow
100% deduction of Profit and gain from such rental housing
allowed a deduction of an amount equal to 100%of the profits
project which is notified by the Central Government in the
derived from such business Official Gazette and fulfills such conditions
The time period of the project approved between - 01/06/16 Extension of Sunset date- 31/03/2022 for both affordable
to 31/3/2021 housing and affordable rental housing

Additional tax deduction of Rs 1.5 lakh for interest on home loan for affordable housing
extended- Sec 80EEA
Existing Proposed
Section 80-EEA, Deduction of interest on residential housing Amended Section - It is proposed to extend the sunset
loan taken from financial institute upto 1.5 lakh and loan date and now loan sanction upto 31/03/2022
sanctioned between 1/04/2019 to 31/03/2021
Following Condition:
• Housing loan must be taken from a financial institution such as a bank or a housing finance company for buying a residential
house property.
• The home loan must be taken between April 1, 2021 and March 31, 2022.
• Stamp duty value of the house property should not exceed Rs 45 lakhs
• The taxpayer should not own any residential house property as on the date of sanction of loan.
• No deduction claimed u/s 80EE.
• (w.e.f. 1/04/2022)

Business
Depreciation on Goodwill not allowed whether purchased or not Sec 32
• Assessee’s have obtained Depreciation benefit @25% on

Goodwill arising out of Mergers, Acquisitions and
Amalgamations. Such claim was supported by Apex Court
decision in case of Smiff Securities Limited [(2012)348 ITR 302
(SC)]. However, it was prone to abuse by carrying out
restructuring exercise within the group entities and it had
resulted into increased litigation. Furthermore, government is
of the opinion that goodwill is not a depreciable asset for the
reason that goodwill may see appreciation or in the alternative
no depreciation to its value. Therefore, series of amendments in
respective sections is carried out to carve out goodwill from
eligible assets for depreciation.
• Alternatively, cost of acquisition of acquired goodwill will be
allowed u/s 48 for computation of Capital gain on consequent
sale thereof.

Business
Employees’ Contribution towards PF and ESIC Section 36(1)(va) and Section 43B :
• Tax payers used to claim a deduction u/s 43B of the Act of employees’ contribution towards provident fund or ESIC deposited in to
the Govt. account after the due dates specified under respective statutes. (Several High Courts have upheld the same view)
• It is now proposed to amend Section 43B so as to disallow employees’ contribution towards PF and ESIC, if it is not deposited
within due dates specified under respective statute.
Increase in the threshold limit of Audit :
• Finance Act, 2021 has amended the provision of section 44AB of the Act wherein threshold limit for person carrying on business
was increased from five crore rupees to ten crore rupees

Business
Presumptive taxation for professionals under section 44ADA:
• Professional with Gross Receipts not more than 50 Lacs

• For Professional having gross receipts of not more than 50 Lacs, fifty percent of total gross receipts or a higher sum as declared by
assessee shall be deemed to be the profits and gains of such profession chargeable to tax.
• Such provisions were made applicable in case of Individual, Hindu undivided family (HUF) and partnership firm but not a Limited
Liability Partnership (LLP) as LLP was anyways required to maintain in books of accounts under the Limited Liability Partnership Act,
2008.
• Therefore, specific exclusion in this regard is provided to LLP’s and this section is made applicable only in case of Individual, Hindu
undivided family (HUF) and partnership firms.

Capital Gains on Dissolution or Reconstitution of Firm
Transfer of capital asset to partner on dissolution or Reconstitution under section 45(4) & 45(4A):
• In order to incentivize investment in eligible start-ups, extension of Tax holiday by One year
Existing Proposed
Existing Provisions taxed distribution of capital assets on the Profits and Gains arising on receipt of Capital Asset, Money or
dissolution of a firm or AOP or BOI or otherwise in the hands Other Asset on account of Dissolution or Reconstitution of
of such distributor Entity. Such word “Otherwise” was Firm shall be deemed to be taxable in hands of
interpreted to include Reconstitution by some courts while reconstituted/dissolved entity in the year of receipt of Capital
others had restricted interpretation that it will apply ejusdem Asset, Money or Other Asset by partner or member of
generis for akin to distribution cases. AOP/BOI .
Hence, the amendment to extend the scope towards Furthermore, Hyderabad Tribunal & Madras HC had given a
Reconstitution of Firm, AOP and BOI as well relief that increase in Capital account balance on account of
revaluation of assets and capitalization of Self- Generated
Goodwill will not be taxable. Effect of such judgement is
intended to be nullified by clarifying that balance in capital
account would be considered as cost of acquisition with
specific exclusion of revaluation of asset or self-generated
goodwill/asset.

Deductions
Leave Travel Concession Cash Scheme Cause of Covid – Sec 10(5)
• Leave Travel Concession Cash voucher Scheme was introduced in October 2020 to boost consumer demand and to provide tax
benefit to individuals who are unable to claim the usual LTC tax benefit due to covid-related travel restrictions.
Existing Proposed
Exemption in respect of the value of travel concession or Insertion of Second Proviso
assistance received by or due to an employee from his employer In view of the situation arising out of the outbreak of
or former employer for himself and his family, in connection with COVID pandemic, it is proposed to provide tax exemption
his proceeding on leave to any place in India to cash allowance in lieu of LTC - Subject to fulfilment
of conditions
To claim the benefit under the scheme, an individual is required to fulfill the following conditions:
• Spend three times the amount of deemed LTC fare on the purchase of goods/services attracting GST of 12% or more;
• Purchases must be made during the period between October 12, 2020 and March 31, 2021.
• Payment for the purchases must be made through a digital mode including cheque, UPI, etc.
• Invoices must be furnished to an employer containing details of the vendor, GST number and GST amount paid. Invoices in the
name of family members can also be submitted.
A private sector employee can claim a maximum tax exemption of Rs 36,000 per person. Thus, a family of four can claim a tax
exemption of Rs 1.44 lakh. If an individual opts for the new tax regime, then no tax benefit under the scheme will be available under
the old one. No exemption allowed under this clause for the same expenditure to other individual.

Assessment & Appeal
Summary Assessment u/s 143(1)(a) by CPC & Time Limit for issuance of Notice u/s 143(2)
• 143(1)(a)(iv)- adjustment on account of increase in income indicated in the audit report but not taken into account in computing
the total income. Such adjustment were already being proposed by CPC, now the statutory enactment provides specific rights
thereof.
• 143(1)(a)(v)- No deduction under Chapter VI-A under the heading "C.-Deductions in respect of certain incomes unless he furnishes
a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139.
• Time limit for processing of return of income u/s 143(1)(a) reduced from Tweleve months to Nine months from the end of FY in
which return was furnished.
• Time Limit for issuance of Notice u/s 143(2) is reduced to Three Months from six Months from the end of FY in which return was
furnished.

Assessment & Appeal
Tribunal proceedings to be conducted faceless jurisdictional less manner
• In order to impart greater efficiency, transparency and accountability to the assessment process, appeal process and penalty
process under the Act a new faceless assessment scheme, faceless appeal scheme and faceless penalty scheme have already been
introduced. In the same manner, Tribunal proceedings to be conducted faceless and jurisdictional manner.
Reduction of time limit for completing assessment:
• It is provided that tax assessments are to be competed with nine months from the end of relevant assessment years.
• This amendment will take effect from 1st April, 2021
Discontinuance of Income-tax Settlement Commission:

• It is proposed to discontinue on or after 1st February, 2021 Income-tax Settlement Commission and to constitute Interim Board of
settlement for pending cases. According, new applications cannot be filed after 1st Feb, 2021.
• These amendments will take effect from 1 st February, 2021.

Assessment & Appeal
Rampant changes in Reopening of assessment and Search assessment scheme:
The budget proposed to amend Reopening of assessment and Search assessment scheme and the time limit for reassessment has been
reduced to 3 years from 6 years/7 years. The proposal addresses serious tax evasion, where evasion evidence is Rs. 50 lakhs or more
can be reopened for last 10 years. Further, after 1st April, 2021, Search and requisition are to be governed by Section 148 instead of
Section 153A or 153C.
Salient features of new proposed scheme are given herewith:
• The provisions of section 153A and section 153C, of the Act are proposed to be made applicable to only search initiated under section 132 of
the Act or books of accounts, other documents or any assets requisitioned under section 132A of the Act, on or before 31st March 2021.
From, 1st April, 2021 Search and requisition are to be governed by Section 148.
• Ratio of Supreme Court judgment in the case of G.K.N.Driveshafts (India) Ltd. vs Income Tax Officers & others reported in (2003) 259 ITR 19
(SC), is incorporated in the Act itself, by inserting Section 148A, wherein it is mandatory for AO to conduct enquiries, and provide an
opportunity of being heard to the assessee. After considering his reply, the Assessing Office shall decide, by passing an order, whether it is a
fit case for issue of notice under section 148 and serve a copy of such order along with such notice on the assessee. After passing order u/s
148A, he can ask assessee to file return of income. However, Section 148A is not applicable in case of search or requisition cases
• Reopening of assessment can be made for only three years instead of six years or seven years. However, Assessing Officer has in his
possession evidence which reveal that the income escaping assessment, represented in the form of asset, amounts to or is likely to amount to
fifty lakh rupees or more, notice can be issued beyond the period of three year but not beyond the period of ten years from the end of the
relevant assessment years.
• Assessing Officer is empowered to assessee or re-compute the income in respect of any issue which has escaped assessment.

Tax Deduction at Source (TDS) on purchase of goods:
Applicable in case of payment to Resident for purchase of any goods of the value or aggregate of such value exceeding fifty lakh rupees in
any previous year.
Rate: 0.1% (5% where PAN of the Seller is not provided)
Person Responsible: A Buyer whose total sales, gross receipts or turnover from the business carried on by him exceed ten crore rupees
during the financial year immediately preceding the financial year in which the purchase of goods is carried out,
Point of Taxation: At the time of Payment or at the time of Credit of Sum to the account of Seller whichever is earlier
On What Amount: Amount exceeding fifty lakh rupees.
Exceptions: TDS shall not be deducted in case of

(b) tax is collectible under the provisions of section 206C other than a transaction to which sub-section (1H) of section 206C applies.’.
Whether GST to be included:

While there is a specific circular to the effect that amount shall include GST in case of TCS, there is also a specific CBDT circular that amount
shall not include GST in case of TDS. To avoid ambiguous interpretation and to adopt analogous interpretation, a clarificatory circular is
need of the hour.
Effective From : 1st day of July, 2021.

TDS/TCS on ITR non-filer at higher rates: 206AB & 206CCA
• Until now higher rate of TDS and TCS were applicable u/s 206AA and 206CC respectively for Non-PAN Payees. However, it is observed by
Government that PAN’s are obtained but Returns are not filed by unscrupulous assessee’s. Therefore, a new section 206AB providing for
higher deduction of TDS for return non-filer payees.
• Applicable for : Chapter XVII-B other than sections 192, 192A, 194B, 194BB, 194LBC or 194N
• TDS need to be deducted and TCS need to be collected at higher rate if the Payee has not filed the returns of income for both of the two
assessment years relevant to the two previous years which are immediately before the previous year and for which time limit for filing
tax return under sub-section (1) of section 139 of the Act has expired in which tax is required to be deducted or collected, as the case
may be.
• However, this section will be applicable only where the aggregate of tax deducted at source and tax collected at source in non-filer
payees case is rupees fifty thousand or more in each of these two previous years.

Misc. Amendments
• As part of BEPS measure, Government had unilaterally introduced Equalization Levy on consideration received by non-resident e-
commerce operators for e-commerce supply or services at 2%. E-Commerce Supply is defined to mean;
• (i) online sale of goods owned by the e-commerce operator;
• (ii) online provision of services provided by the e-commerce operator;
• (iii) online sale of goods or provision of services or both, facilitated by the e-commerce operator; or
• (iv) any combination of activities listed in clause (i), (ii) or clause (iii);
• There were many teething issues as to i) Whether Businesses solicited through online Portal but where actual delivery of Goods and
provision of Services happen physically would be liable for equalization levy or not?
• Further, where online marketplace are only aggregators who doesnot own goods or doesnot provide service, whether the EL would be
applicable only on Commission or entire transaction value ?
• Now, government has expanded scope of EL to include one or more of the following activities;

Misc. Amendments
• Furthermore, Government has further enhanced scope to include complete transaction value whether or not market place owns the
goods or services provided by such market place.
• Scope is reduced with amendment to exclude transaction from levy of EL where consideration is subject to taxability as royalty or fees
for technical services in India. These amendments will take effect retrospectively from 1st April, 2020.
Removal of Anamoly: Section 10(50) Exemption:
• Section 10(50) provided exemption to income of E-Commerce Operator provided EL was charged from 01st April, 2021. However, EL was
introduced w.e.f 01st April, 2020 and accordingly, exemption u/s 10(50) is also extended for AY 2020-21. These amendments will take
effect from 1st April, 2021.

Misc. Amendments
Clarification regarding the scope of Vivad se Vishwas Act, 2020 - Whether Settlement Cases can be
resolved through VsV?
• A Writ Petition was filed before Delhi High Court to adjudicate whether cases pending before Income Tax Settlement Commission (ITSC)
for settlement of case under Chapter XIX-A of the Income-tax Act would be eligible for opting VsV Scheme or not.
• A Retrospective amendment in respective sections have been made to clarify the position that cases pending before Settlement
Commission shall be outside the purview of VsV Scheme.
The said amendments are proposed to take effect retrospectively from the 17th March 2020.

Misc. Amendments
Tax Exemption On ULIP Proceeds Capped :
ULIP’s are a combination of insurance + investment. A small portion of the money invested goes to securing your life whereas the
rest of the money is invested in the market. Policyholders can pay premiums monthly/annually
Under the existing provisions, all proceeds from ULIPs are tax free, irrespective of the amount of premium paid by the individual
Budget 2021 proposed to limit exemptions on proceeds from unit-linked insurance plans that have so far allowed large investors to receive
tax-free returns.
For ULIPs taken on or after February, 1 2021, the maturity proceeds of policies with an annual premium of more than Rs 2.5 lakh will be
taxable on a par with equity-linked mutual fund schemes.
In the event of the policyholder’s demise, either the sum assured or proceeds of the investments, whichever is higher, are paid out to the
nominee. This amount paid to the nominee, budget said, will continue to be tax free.

Misc. Amendments
Relaxation to NRI for Income of Retirement Benefit Account:
In order to address the mismatch in the year of taxability of withdrawal from retirement funds by residents who opened such fund when
they were non-resident in India. Withdrawal from such funds may be taxable on receipt basis in notified country whereas it is taxable on
accrual basis in India. Because of this anomaly, such residents could not able to claim the credit for taxes paid in either of the countries.
Now, newly inserted Section provides for exemption from taxes on income accrued to specified account opened for the purpose of
retirement benefits in the notified country by a specified person who is the resident in India. Such account was opened by the specified
person when he was non-resident in India and a resident of other country.
Specified Person, Specified Account and notified country is defined under the Act.
Amendment shall become effective from 1st April, 2022 and will apply from AY 2022-23 and subsequent Assessment Year

Misc. Amendments
Elimination of possibility of double deduction while calculating application or accumulation in
Charitable Trust:
Corpus donation is exempted from tax. To eliminate the possibility of double deduction, it is provided that application out of such corpus
donation will not be considered as application as part of the mandatory 85% application from income other than such corpus.
Further, if charitable trust takes loans and make application for charitable or religious purpose out of the proceeds of loans and borrowing,
it will be considered as application. But, repayment of loans will not be considered as application.
These amendments will take effect from 1st April, 2022 and will accordingly apply to the assessment year 2022-23 and

Misc. Amendments
Amendment in Section 115JB to exclude Capital Gain, Interest, Royalty and FTS:
Income from Capital Gains on securities, interest, royalty and fees for the technical services are taxable at a rate lower than the tax rate
specified u/s 115JB of the Act in case of foreign companies and therefore, the legislature has directed to exclude the expenses debited to
Profit and Loss statement exclusively related to such sums for the purpose of computation of tax payable under section 115JB of the Act
vide clause-(fb) of Explanation-1 to sub section (2) of section 115JB of the Act.
Simultaneously, it was also provided to reduce income in the form of Capital Gains on securities, interest, royalty and fees for the technical
services from the computation of book profit u/s 115JB of the Act.
Amendment shall become effective from 1st April, 2021 and will apply to the Assessment Year 2021-22 and subsequent
Assessment Years
Exemption from levy interest u/s 234C on Dividend Income:

Exemption from levy of interest on default of advance tax instalment to dividend income only if advance tax due on dividend income is
deposited by the tax payer on or before the date of immediately succeeding advance tax instalment or 31st March whichever is earlier.
Amendment shall become effective from 1st April, 2021 and will accordingly apply to Assessment year 2021-22 and subsequent
Assessment years.

Misc. Amendments
Budget 2020 : Global Income of Indian Citizen & IDS
Definition of Liable to Tax Introduced Refund of excess deposit in Income Declaration Scheme:
• An individual, being a citizen of India, having total income, other • Section 191 of the Finance Act, 2016, provided that any
than the income from foreign sources, exceeding fifteen lakh amount of tax, surcharge and penalty paid in pursuance of a
rupees during the previous year shall be deemed to be resident declaration made under the Income Declaration Scheme shall
in India in that previous year, if he is not liable to tax in any not be refundable.
other country or territory by reason of his domicile or residence
or any other criteria of similar nature. • Vide Finance (No. 2) Act, 2019, A proviso to Section 191 of
Finance Act empowered the Board to specify a class of persons
• Liable to Tax was not defined in the Act raising scope for to whom tax paid in excess shall be refundable.
ambiguous interpretations. A definition u/s 2(29A) is
incorporated to mean • Now it is clarified that advance shall be refundable to the
• 2(29A) “liable to tax”, in relation to a person, means that there is
a liability of tax on such person under any law for the time being This amendment will take effect retrospectively from 1st June,
in force in any country, and shall include a case where 2016.
subsequent to imposition of tax liability, an exemption has been
provided.

Ss
Presenter
Information

Presented by
Vidhan Surana, FCA – Founding Partner and Dedicated team of Direct Tax
2nd Floor, Aakashganga Complex Parimal Under Bridge, Paldi, Ahmedabad
Gujarat (India) +91 79 266 51777/8 | www.suranamaloo.com
vidhansurana@suranamaloo.com | M. +91 98240 12724

Thank You
Disclaimer:
This document is intended for private circulation and knowledge sharing purpose only. All efforts have been made to
ensure the accuracy of information in this publication. The information contained in this document is published for the
knowledge of the recipient but is not to be relied upon as authoritative or taken in substitution for the exercise of
judgment by any recipient. The publication is a service to our clients to provide an overview of the Direct Tax Proposals
and shall not be construed as professional advice or an authoritative opinion. Whilst due care has been taken in the
preparation of this publication and information contained herein, we will not be responsible for any errors that may have
crept in inadvertently and do not accept any liability whatsoever, for any direct or consequential loss howsoever arising
from any use of this publication or its contents or otherwise arising in connection herewith.

U B G & COMPANY
CHARTERED ACCOUNTANTS
Union Budget 2021 – Economic Proposals
404, Skyline Wealth Space, Above D Mart, Premier Road, Vidyavihar West, Mumbai - 86
www.ubgco.in | office@ubgco.in | 022-7969 5333
CONTENTS
Introduction to the Budget 3
Health and Well Being 4
Physical and Financial Capital and Infrastructure 7
Inclusive Development of Aspirational India 12
Reinvigorating Human Capital 13
Innovation and R&D 14
Minimum Government, Maximum Governance 14
Breakup of Finance Budget- What goes in and What Goes out 15
Budget at a glance 16
2
Introduction to the Budget 2021 :
• “Faith is the bird that feels the light and sings when
the dawn is still dark.”
-Rabindranath Tagore
• This Budget is the first of this new decade with the only
fourth budget of the Free India following a contraction in the
economy.
• The Budget proposals rests into the six pillars:-
a) Health and WellBeing
b) Physical & Financial Capital, and Infrastructure
c) Inclusive Development for Aspirational India
d) Reinvigorating Human Capital
e) Innovation and R&D
f) Minimum Government and Maximum Governance
The proposals in the are to serve the governments intention of doubling Farmer’s income, Strong
Infrastructure, Healthy India, Good Governance, Opportunities of Youth, Education for All, Women
Empowerment and Inclusive Development, among others.
3
1. Health and Well Being
• PM Atmanirbhar Swasth Bharat Yojana:

A new centrally sponsored scheme to be launched with the
outlay of INR 64,180 crores over 6 years. This will help
develop capacities of Primary, Secondary and Tertiary care
health systems, strengthen existing national institutions and
create new institutions, to cater to detection and cure of new
and emerging diseases.
• Nutrition:
Mission Poshan 2.0 to be launched with a intensified strategy to
improve nutritional outcomes across 112 aspirational districts.
• Universal Coverage of Water Supply:

Jal Jeevan Mission to be launched with a outlay of INR 2,87,000 crores over 5 years with a aim for
universal water supply in all 4,378 urban local bodies with 2.86 household tap connections.
• Swachch Bharat:
Urban Swachch Bharat mission 2.0 to be implemented with a total financial allocation of Rs. 1,41,678 crores
over a period of 5 years from 2021-2026.
• Vaccine:
An amount of INR 35,000 crores for COVID-19 vaccine in BE 2021-22 has been provided with a
promise to provide more if required.
4
1. Health and Well Being
• Scrapping Policy
A voluntary vehicle scrapping policy to phase out old and unfit
vehicles is organized. Vehicles will undergo fitness tests in
automated fitness centres after 20 years in case of
personal vehicles and after 15 years in case of
commercial vehicles. Details of the scheme to be shared
separately by Ministry.
• The budget outlay for Health and wealthbeing is INR
2,23,846 crore in BE against this years BE of INR 94,452
crore an increase in 137 %.
• UBG Comments:
• Healthcare for all is an important and necessary goal for the country. We can gain the benefit of the large
population of the country only when we have jobs, good skills and healthy people. In comparison to the
other countries, India has been spending on healthcare much lower as a % of the GDP. Thus, the
fillip provided by the Hon’ble Finance Minister by more than doubling the allocation to the sector is well
come and applaudable move.
• Incentivising the motorists and freight operators to purchase new vehicles and discouraging the operation
old ones is going to be the crux of the vehicle scrappage policy. It is going to benefit the entire value
chain of commercial vehicles ranging from vehicle makers to ancillary making companies
including tyre and component manufacturers.
• The Government estimates that vehicles older than 15 years constitute about 5 percent of total fleet but
account for 70 percent of vehicle pollution.
5
2. Physical and Financial Capital and Infrastructure
• Production Linked Incentive:

For a USD 5 trillion economy, our mfg. sector has to grow in
double digits consistently by becoming a integral part of global
supply chains, possess core competency and cutting edge
technology. For, this the govt has committed nearly INR
1.97 Lakhs crores, over 5 years starting FY 2021-22
under this scheme to help bring scale and size in key 13
sectors and create jobs for the youth.
• Textiles:
A scheme of Mega Investment Textile Parks ( MITRA) will
be launched in addition to PLI scheme. World class infrastructur
with plug and play facilities to create global champions in exports. 7 Textile parks will be established over 3
years.
• Infrastructure Financing - Development Financial Institution (DFI):
A professional managed development financial institution will be set up through a Bill to act as provider,
enabler and catalyst for infrastructure financing. Currently, a sum of INR 20,000 crores has been
provided to capitalize the institution. The ambition is to have a lending portfolio of atleast INR 5
Lakhs crores for this DFI in three years time.
Debt Financing of InVITs and REITs by foreign portfolio investors shall be enabled to ease access of finance to
InVITS and REITs to augment funds for infrastructure and real estate sectors.
6
• Asset Monetisation:
A “National Monetisation Pipeline” of potential
brownfield infrastructure assets will be launched. Some of
the important measures are:
a. NHAI and PGCIL each have sponsored one InvIT that will
attract domestic and international investors with assets
amounting to INR 5,000 crores and INR 7,000 crores
respectively.
b. Railways will monetise Dedicated Freight Corridor assets for
operations and maintenance, after commissioning.
c. Other core assets to be monetized are – NHAI Operational
Toll roads, Transmission assets of PGCIL, Oil and Gas pipeline of GAIL, IOCL and HPCL, AAI airports in Tier 2 &
3, other railway infrastructure assets, Warehousing assets of CPSE and Sports Stadiums.
• Roads and Highway Infrastructure:
More than 13,000 km length of roads at a cost of INR 3.3 Lakhs crores already awarded under Bharatmala
Project of which 3,800 kms road constructed. By March 2022, another 8500 kms shall be awarded and
complete additional 11,000 kms of national highway corridors.
The outlay of INR 1,18,101 lakhs crores has been provided to Ministry of Road Transport and
Highways, of which INR 1,08,230 lakhs crores is towards capital expenditure, which is highest
ever.
7
• Railway Infrastructure:
Multiple measures under National Rail Plan for India – 2030
have been planned to make it future ready railway system by
2030. Bringing down logistics costs for industry is the core
strategy for Make in India and multiple measures proposed for
passenger safety and convenience.
A record sum of INR 1,10,055 crores has been provided
for Railways of which INR 1,07,100 crores is for Capital
Expenditure.
• Power Infrastructure:
i. Distribution Companies across the countries are monopolies – Private or Govt. With a need to provide a
choice to the consumer and promote competition, a framework will be put in place to give consumers
alternatives in distribution company.
ii. A revamped reform based result linked power distribution sector scheme will be launched with an outlay of
INR 3,05,984 crores over 5 years to provide assistance to DISCOMs for infrastructure creation like prepaid
smart metering and feeder separation, upgradation of systems, etc tied to financial improvements.
• Ports, Shipping and Waterways:
i. A scheme to promote flagging of merchant ships in India will be launched by providing subsidy support to
Indian shipping companies in global tenders floated by Ministries and CPSEs.
ii. Efforts to be made to double to recycle capacity of around 4.5 mn LDT by 2024 and generate additional
1.5 lakh jobs for the youth.
8
• Financial Capital:
i. Consolidation of provisions of the SEBI Act, Depositories
Act, Securities Contracts (Regulation) Act and Government
Securities Act, 2007 into a rationalized single securities
market code.
ii. Support development of World class FINTECH hub at
GIFT-IFSC.
iii. Introduction of Investor Charter as a right of all financial
investors across all financial products.
• Stressed Asset resolution by setting up a new structure:
An Asset reconstruction Company and Asset Management company would be set up to consolidate and
take over existing stressed debt and then manage and dispose of the assets to Alternate Investment Funds
and other potential investors for eventual value realization.
• Deposit Insurance:
i. Amendments made in the DICGC Act, 1961 to ensure that if a bank is temporarily unable to fulfill its
obligations, the depositors can get easy and time bound access to their deposits to the extent of the
deposit insurance cover without having to wait till the Liquidation of the Bank.
• Company Matters:
i. Revision of definition of Small company by increasing the thresholds for paid up capital from not exceeding
INR 50 Lakhs to not exceeding INR 2 crore and turnover from not exceeding INR 2 crore to not exceeding
INR 20 crore.
9
ii. To ensure faster resolution of cases, strengthen the NCLT

framework, E-Courts to be implemented and alternate
method of debt resolution and special framework for MSMEs
shall be introduced.
iii. Data Analytics, Artificial Intelligence, Machine
Learning driven MCA 3.0 shall be introduced.
• Divestment and Strategic Sale:
i. BPCL, IDBI, Air India, SCI, IDBI Bank, Pawan Hans, CCIL,
BEML, Neelachal Ispat Nigam among other would be
privatized in FY 2021-22.
ii. Other than IDBI Bank, two more PSBs shall be privatized and one General Insurance Company in the year
2021-22.
iii. In 2021-22, IPO of LIC shall also be brought in.
iv. To incentivize the states to take to disinvestment of their Public Sector companies, incentive package shall
be worked out for states.
v. An estimate of INR 1,75,000 crores has been provided as receipts from disinvestment in BE
2021-22.
10
UBG Comments:
i. The Union ministry has recently stated that a Mega
Investment Textile park spread over 1,000 acres with state of
the art infrastructure, common utilities and R&D lab is under
consideration. This is an opportune time for India to give
a big boost to its textile sector with global sentiment
against China in manufacturing space.
ii. A 100% sovereign owned Development Financial Institution
under the act of Parliament, will have no limit on leverage. In
China, China Development Bank had, once in its history, leveraged 75 times. So, the new DFI
has the power to make the gap which is emanating because of the inability of states and private
sector to fund infrastructure.
iii. Asset monetization will help in unlocking the value of investment made in public assets which have not
yielded appropriate or potential returns so far.
iv. The enhanced capex for infrastructure is likely to be key in generating overall demand as well as drive
employment generation.
v. The reforms of DISCOMs will give a significant upside to the sector and will generate investments not only
in distribution but also in generation and transmission sectors.
vi. Fulfilling a long term demand of the industry, the government has set up a BAD bank to deal
with the NPAs which may see a surge once regulatory forbearance to deal with the impact of
COVID-19 is withdrawn.
11
3. Inclusive Development of Aspirational India
• Agriculture:
i. Earlier this year, PM launched SWAMITVA scheme giving a
record of rights to the property owners in the villages. This
scheme is being extended to all states/UTs in FY 21-22.
ii. Operation “Green Scheme” presently applicable to
Tomatoes, Onions and potatoes will be enlarged to include
22 perishable products.
Migrant Workers and Labourers:

A portal to be launched for migrant unorganized labour force that will collect relevant information on gig,
building and construction workers among others to formulate health, housing, skill, insurance,credit and food
schemes for migrant workers.
12
4. Reinvigorating Human Capital
School Education:
100 new sainik schools will be set up in partnership with
NGOs/private schools/states.
Higher Education:
Higher Education Commission of India will be setup with an
umbrella body having 4 separate vehicles for standard setting,
accreditation, regulation and funding.
5. Innovation and R&D

i. An outlay of INR 50,000 crores will be made over a period of 5 years for National Research
Foundation to strengthen research ecosystem with focus on identified national priority thrust
areas.
ii. INR 1500 crores earmarked for proposed scheme to incentivise digital payments in the country.
13
6. Minimum Government, Maximum Governance
• Conciliation mechanism to be setup for those dealing with
Government or CPSEs for quick resolution of contractual
disputes.
• Forthcoming Census to be the First Digital census in the
history of India.
14
Breakup of Government Budget- What Comes in & Goes Out:
Non Debt
Capital
Receipts
5%
Borrowings and
other Liabilities
36%
Income
Tax
14%
How Rupee comes in
(Budgetary Receipts)
Union Excise
Duties 8%
Non Tax
Revenue
6%
Corporation
Custom Tax
s 3% 13%
GST
15%
15
Breakup of Government Budget- What Comes in & Goes Out:
Pensions
Other Expenditure
10%
Schemes
9%
Central Sector
Schemes
Subsidies 14%
8%
How is the Rupee

spent (Budgetary
Defence Expenditure)
8%
Finance Commission
and Other Transfers
10%
Interest Payments
and Duties
16%
16
Budget at a Glance:
Capital Receipts (crore)
Revenue Receipts (crore)
2020926
1895152
1684059 1788424 1694812
1555153
1002271 1021304
2019-20 2020-21 2020-21 2021-22 2019-20 2020-21 2020-21 2021-22


3011142 2929000
554236
2630145 439163
412085
2350604 335726
2019-20 2020-21 2020-21 2021-22

2019-20 2020-21 2020-21 2021-22
(Actuals) (BE) (RE) (BE)
(Actuals) (BE) (RE) (BE)
17
THANK YOU
CONTACT DETAILS:
Registered Office: E-Mail ID: CA Gaurav J Parekh
404, Skyline Wealth Space, office@ubgco.in 098703 08636
Above D Mart, Premier Road,
Vidyavihar West, Mumbai - 86. Website: CA Umesh K Joshi
www.ubgco.in 098694 11579
U B G & Company - Linkedin Landline: CA Bhavya S Rambhia

022-79695333 098339 40401
18
U B G & COMPANY
CHARTERED ACCOUNTANTS
Union Budget 2021- Taxation Proposals

(Direct & Indirect Taxes)
404, Skyline Wealth Space, Above D Mart, Premier Road, Vidyavihar West, Mumbai - 86
www.ubgco.in | office@ubgco.in | 022-7969 5333
CONTENTS-DIRECT TAX PROVISIONS
Leave Travel Concessions 3
Depreciation on Goodwill 5
Tax on High Premium ULIPS 6
Contribution in Employee Funds 7
Sale Consideration vis-à-vis Stamp Duty Value 8
Income Tax Audit provisions 9
Startups 10
Belated return and revised return 12
Affordable Housing – Section 80 EEA 13
Assessments 14
TDS Provisions 17
Appellate Proceedings 20
2
Leave Travel Concession : Section 10(5) of Income Tax Act,1961
Leave travel concession is the amount received by a

employee from his employer for travel within India. Only
actual cost of travel is covered in this section.
Leave travel concession was allowed as an exemption on
the basis of expenditure incurred for travel. However, due
to Covid-19, it is proposed to provide tax exemption to
cash allowance in lieu of LTC.
The value in lieu of any LTC received by the employee is exempt subject to specific conditions as are prescribed:
i. The employee exercises the option for the deemed LTC in lieu of applicable LTC in the block year 2018-21.
ii. Specified Expenditure means Expenditure to be incurred by an individual or a member of his
family on goods or services which are taxed at an aggregate rate of 12% or above under GST
laws and goods or services to purchased from GST registered vendors or service providers.
iii. Specified Period means period commencing from 12th October,2020 and ending on 31st
March,2021.
3
Leave Travel Concession : Section 10(5) of Income Tax Act,1961
iv. The amount of exemption shall be lower of :

a)Rs. 36,000 per person
b) 1/3rd of Specified Expenditure
v. The payment to GST registered vendor or service provider
should be made by :
a) Account payee cheque
b) Account payee draft
c) Electronic clearing system
d) Credit cards, debit cards, Net banking, IMPS, UPI, RTGS, NEFT, BHIM.
vi. If the amount received by the employee is more than the amount allowable, then the exemption is limited
to the provision discussed in point 4 above
This amendment will take effect from 1st April ,2021 and will apply to assessment year 2021-22
only.
4
Depreciation on Goodwill
• Whether Depreciation on Goodwill is allowable expense under

Income Tax Act ?
U B G Comment.
• This issue came in light in case of Smiff Securities Limited
[(2012)348 ITR 302 (SC)] where Hon‘ble Supreme Court held that
the Goodwill of a business or profession is a depreciable asset under
section 32 of the Act.
• However Goodwill, in general, is not a depreciable asset and in fact
depending upon how the business runs; goodwill may see
appreciation or in the alternative no depreciation to its value.
• Accordingly, it has been decided to amend that goodwill of a business or profession will not be
considered as a depreciable asset and there would not be any depreciation on goodwill of a business or
profession in any situation by amending the section 32 of the Income Tax Act, 1961.
In case of goodwill of business or profession Cost of acquisition shall be purchase price reduced by
depreciation already claimed by assessee prior to PY 2020-21.
5
Tax on High Premium ULIP (Unit Linked Insurance Policy)
• Currently, in case you receive any sum assured under life insurance policy
the same proceed received in exempt under section 10(10D) provided
premium you paid does not exceed 10% of sum assured.
• It has been proposed that in case premium paid for any Unit linked
insurance policy issued on or after 01/02/2021 exceed 2,50,000 for any
of the previous year during the term of the policy the sum received
under policy shall be taxable under the head “Capital Gain” as per
amended section 45 and shall be deemed to be income of such person of
the previous year in which such amount was received. Tax Rate on the the
same shall be as per Section 112A @ 10%
Note:- The limit of Rs 2,50,000 on premium shall be in aggregate applied to all the ULIP taken.
Eg :- Mr Rakesh took 3 ULIP and paid premium of Rs 90,000 for each policy, even in such case the entire
sum received from all the policy shall be taxable.
However this provision will be not applicable in case any amount is received in case of death of insured.
This proviso is applicable from 01st April,2022.
6
Contribution in relevant funds: Section 36(1)(va) and Section 43B of
Income Tax Act,1961 (Applicable from 01.04.2021)
• Section 36(1)(va) of Income Tax Act,1961 provides for

deduction of any sum received by the assessee from any
of his employees i.e Employees contribution to which the
provisions of sub-clause (x) of clause (24) of section 2
apply, if such sum is credited by the assessee to the
employee's account in the relevant fund or funds on or
before the due date i.e 15th of the month next to the
month for which the contribution was collected.
• Section 43B specifies the list of deductions that are admissible under the Act only upon their actual payment.
Assessee would be entitled to deduction under section 43B , if any sum towards employer's contribution to any
provident fund or superannuation fund or gratuity fund or any other fund for the welfare of the employees is
actually paid by the assessee on or before the due date for furnishing the return of the income under sub-
• Though section 43B of the Act covers only employer‘s contribution and does not cover employee contribution,
some courts have applied the provision of section 43B on employee contribution as well, Budget 2021 amends
Section 36(1)(va) stating that provisions of 43B for due date doesn’t apply and also amends Section
43B stating that provisions of the said section does not apply to a sum received by the assessee
from any of his employees to which provisions of sub-clause (x) of clause (24) of section 2 applies.
7
Sale consideration vis a vis Stamp Duty Value: Section 43CA & Section 56 of
Income Tax Act,1961 (Applicable from 01.04.2021)
• Section 43CA of Income Tax Act,1961 provides that where
the sale consideration to be received is less than the Stamp
duty value of the property, than Stamp duty value shall be
deemed to be the Full value of Consideration. Also, if the
Stamp duty value is less than 110% of the sale
consideration, the Sale consideration shall be deemed to be
the Full value of Consideration.
• In order to boost the demand in the real-estate sector and to
enable the real-estate developers to liquidate their unsold
inventory at a lower rate to home buyers, it is proposed to
increase the safe harbour threshold from existing 10%
to 20% under section 43CA of the Act if the following
conditions are met:
1. The transfer should take place between 12th November,2020 to 30th June,2021.
2. The transfer is by way of first time allotment of the residential unit to any person
3. The consideration received or accruing as a result of such transfer does not exceed two crore rupees.
Also, consequential amendments have been made in Section 56(2)(X) of Income Tax Act,1961 to take care of
this change.
8
Income Tax Audit : Section 44AB of Income Tax Act,1961
(Applicable from 01.04.2021)
• Section 44AB provides that every person carrying on

business is required to get his accounts audited, if his total
sales, turnover or gross receipts, in business exceed or
exceeds one crore rupees in any previous year. The limit
for business is now increased to Rs 10 crore ( from
Rs 5 crore) where aggregate of all receipts and
payments in cash does not exceed 5% of such
receipts and payments respectively.
UBG Comments:
• In order to incentivise non-cash transactions to promote digital economy and to further reduce compliance
burden of small and medium enterprises, Budget 2021 has increased the threshold from five crore
rupees to ten crore rupees.
9
Exemption for Capital Gains : Section 54GB of Income Tax Act,1961
• Section 54GB provides exemption of capital gain which arises
from the transfer of a long-term capital asset, being a
residential property (a house or a plot of land), owned by the
eligible assesse. The assessee is required to utilise the net
consideration for subscription in the equity shares of an
eligible start-up, before the due date of furnishing of
return of income under sub-section (1) of section 139 of
the Act. The eligible start-up is required to utilise this amount
for purchase of new asset within one year from the date of
subscription in equity shares by the assesse
• This benefit is available when the residential property is
transferred on or before 31st March, 2022 (from March 2021).
UBG Comments:
• In order to help such eligible start-up and help investment in them, Budget 2021 amends the provisions of
section 54GB of the Act to extend the outer date of transfer of residential property from 31st March 2021
to 31st March 2022.
10
Deduction: 80-IAC of Income Tax Act,1961
• Section 80-IAC provides for a deduction of an amount equal to

hundred percent of the profits and gains derived from an
eligible business by an eligible start-up for three
consecutive assessment years out of ten years at the
option of the assessee.
• The eligible start-up is required to be incorporated on or after
1st day of April, 2016 but before 1st day of April 2021.
• In order to help such eligible start-up and help investment in
them, Budget 2021 amends the provisions of section 80-IAC of
the Act to extend the outer date of incorporation to before
1st April, 2022
11
Belated Returns and Revised Return
• Currently the belated under section 9(4) or revised

returns under section 9(5) respectively of the said
section at present could be filed before
i. the end of the assessment year or
ii. before the completion of the assessment
whichever is earlier.
• However as per proposed amendment last date for
filing of belated or revised returns of income, as
the case may be, be reduced by three months.
Thus the belated return or revised return could now be filed three months before the end of the relevant
assessment year or before the completion of the assessment, whichever is earlier.
i.e. 31st December of relevant assessment year.
These amendments will take effect from 01st April, 2021 and will accordingly apply to the assessment year
2021-22 and subsequent assessment years.
12
Deduction: 80EEA & 80 IBAof Income Tax Act,1961
(Applicable upto 01.04.2022)
• Section 80EEA provides a deduction in respect of interest
on loan taken for a residential house property from any
financial institution up to one lakh fifty-thousand rupees
subject to the condition that the loan has been sanctioned
during the period beginning on 1st April, 2019 and ending
on 31st March, 2021.
• This provision allows deduction to the first time home
buyers, in respect of interest on home loan
• In order to help such first time home buyers further,
Budget 2021 amends the provision of section 80EEA of the
Act to extend the outer date for sanction of loan from
31st March 2021 to 31st March 2022.
• Section 80IBA – One of the conditions to claim deduction under this section is that the project is approved
by the competent authority after 01st June’16 and before 31st March’21.
• It is proposed that this outer time limit for 31st March’21 be extended to 31st March’22.
13
Assessment
Income Escaping Assessment and Search Assessments

• The proposes to amend the section 147 , 148 and Search
assessments to reform the system of assessment or
reassessment or recomputation of income escaping
assessment and the search related assessments.
• The Bill proposes new procedure of assessment of such cases
which would be less litigation prone, provide ease of doing
business to taxpayers by reducing time limit by which notice
is to be issued. Salient features as follows:-
i. Provisions of section 153 A & 153C to be made applicable to
only search initiated under section 132 of the Act or books
of accounts requisitioned under section 132A of the Act, on
or before 31st March’21.
ii. Section 147 proposes to allow assessing officer to assess or reassess or recompute any income escaping
assessment for any assessment year.
iii. Before such assessment or reassessment, a notice to be issued under section 148, which can only be issued
when there is information with the AO which suggests that income chargeable to tax has escaped
assessment in case of assessee. Prior approval of authority is required before issuance of such
notice by AO.
iv. Any information flagged in the case of assessee in accordance with the risk management
strategy formulated by the board shall be considered information which suggests that the income
chargeable to tax has escaped assessment. This flagging would be largely computer based.
v. Further, a final objection raised by the comptroller and Auditor general of India shall also be considered as
information. 14
Assessment
vi. Further, in case of search, survey or requisition cases on or after 01st
April, 21, it shall be deemed that the AO has information which
suggests that the income chargeable to tax has escaped
assessment in case of the assessee for the three years
immediately preceding the assessment year relevant to the
previous year in which search was is initiated or requisition or
survey is conducted.
vii. New section 148A has been proposed that prior to issuance of
notice, the AO shall conduct enquiries, if required and provide
an opportunity of being heard to the Assessee. After
considering his reply, the AO shall pass an order, whether it is a fit
case for issue of notice under section 148 and serve a copy of order
alongwith notice to assessee.
viii. Time limit of issuance of notice shall be – in normal cases, within 3 years from end of relevant
assessment year. In specific cases, where AO has material to state that the income escaping assessment
represented in the form of asset, amounts or is likely to amount to 50 lakhs or more, notice can be issued
beyond period of 3 years but not beyond the period of 10 years from end of relevant of assessment year.
ix. It is also proposed that for the purposes of computing the period of limitation for issue of section 148 notice,
the time or extended time allowed to assessee in providing opportunity of being heard shall be excluded.
x. Specified authority for approval is – Principal Commissioner / Principal Director or Commissioner if less than
3 years have elapsed. If extended period is invoked, then PCIT or Principal Director General.
xi. Once reassessment has started, AO is empowered to reassess any income which comes to his
notice during said reassessement.
15
Time Limit for Assessment
• Time Limit to send intimation under section 143(1) has been reduced from
one year to nine months from end of financial year in which the return was
filed.
• Time limit for issue of notice under section 143(2) has been reduced from
six months to three months from the end of the financial year in which the
return is filed.
• Time limit for issuance of notice u/s 148 is specified in section 149 and is to
be issued wintin three years from the end of the relevant assessment year.
• Time limit for issuance of order u/s 153(1) has been reduced to nine
months from twenty-one months.
These amendments will take effect from 01st April, 2021.
16
Benefits to Senior Citizen
Section 139(1) provides relaxation to specified senior citizen from filing of

return.
• The senior citizen is resident in India and of the age of 75 or more during
the previous year;
• He has pension income and no other income. However, in addition to

such pension income he may have also have interest income from
the same bank in which he is receiving his pension income;
• The bank is a specified bank. The Government will be notifying a few banks,
which are banking company, to be the specified bank; and
• He shall be required to furnish a declaration to the specified bank. The

declaration shall be containing such particulars, in such form and verified in
such manner, as may be prescribed.
The Banks are required to deduct TDS u/s 194P as per rate in force in case of specified senior citizen
after considering Chapter VI-A Deduction and rebate u/s 87A.
17
TDS on purchase of goods- Section 194Q
Do your turnover exceed 10 crore

in immediately preceding financial
year ?
Yes
Are you liable to pay to your Deduct TDS u/s 194Q @ 0.01% on
resident seller for purchase of amount in excess of Rs. 50 Lakhs
goods exceeding 50 lakhs in a
year?
Yes No
Is the transaction liable for No Is the transaction liable for

deduction of TDS under any other deduction of TCS under section
section ? 206C ?
18
TDS in case of non-filers- Section 206AA
In case of payments made to specified person by a entity liable

to deduct TDS i.e.:-
• Person who has not filed returns of income for 2
consecutive Assessment year relevant to the previous year
in which tax is to be deducted &
• Time limit for filing return u/s 139(1) has expired &
• Aggregate TDS & TCS is 50,000 or more in each
previous year
• Specified person shall not include non-resident who does not
have PAN
Then deductor has to deduct tax at higher of the following
rates:
• Twice the rate specified in the relevant provision of the act
• At twice the rate or rate in force
• At 5%
Note :- This section shall not apply where the tax is required to be deducted under sections 192, 192A, 194B,
194BB, 194LBC or 194N of the Act.
This amendment will take effect from 01st July, 2021.
19
Interim Board Settlement
Income-tax Settlement Commission (ITSC) shall be discontinue and

Interim Board of settlement shall be constituted for pending cases.
• ITSC shall cease to operate on or after 01/02/2021.

• No application under section 245C of the Act for settlement of cases shall be
made on or after 01/02/2021
• All applications that were filed under section 245C and not declared invalid or
no order has been passed before 31/01/2021 or order/declaring application as
invalid was required to be done before 31/01/2021 but the same is not done all
such applications shall treated as pending application.
• CG shall constitute a Board & Every Interim Board shall consist of three
members, each being an officer of the rank of Chief Commissioner, as may be
nominated by the Board. If the Members of the Interim Board differ in opinion
on any point, the point shall be decided according to the opinion of majority.
• In case of pending application assessee can withdraw such application within a period of three months from
the date of commencement of the Finance Act, 2021 and intimate the Assessing Officer about the same.
• These amendments will take effect from 01st February, 2021.
20
Interim Board Settlement
• However, for the purposes of the time-limit under sections 149, 153,
153B, 154 and 155 and for the purposes of payment of interest under
section 243 or 244 or, as the case may be, section 244A, for making the
assessment or reassessment, the period commencing on and from
the date of the application to the ITSC under section 245C of the Act and
ending with the date on which application is withdrawn shall be
excluded.
• Income-tax authority shall not be entitled to use the material and other
information produced by the assessee before the ITSC.
• The Central Government may, for the purposes of giving effect to
the said scheme, by notification in the Official Gazette, direct that
any of the provisions of this Act shall not apply or shall apply with
such exceptions, modifications and adaptations as may be specified
in the notification. However, no such direction shall be issued after
the 31st March, 2023
21
Dispute Resolution Committee-Section 245MA
• The Central Government shall constitute one or more Dispute Resolution

Committee (DRC).
• This committee shall resolve disputes of such persons or class of person
which shall be specified by the Board. The assessee would have an option to
opt for or not opt for the dispute resolution through the DRC.
• Only those disputes where the returned income is fifty lakh rupee or
less and the aggregate amount of variation proposed in specified
order is ten lakh rupees or less shall be eligible to be considered by
the DRC.
• Assessee would not be eligible for benefit of this provision if there is
detention, prosecution or conviction under various laws.
• Board will prescribe some other conditions in due course which would also need to be satisfied for
being eligible under this provision.
• The DRC, subject to such conditions as may be prescribed, shall have the powers to reduce or waive any
penalty imposable under this Act or grant immunity from prosecution for any offence under this Act in case of
a person whose dispute is resolved under this provision.
22
Faceless proceedings at ITAT
• In order to impart greater efficiency, transparency and

accountability to the assessment process, appeal process and
penalty process under the Act a new faceless assessment
scheme, faceless appeal scheme and faceless penalty scheme
have been introduced via section 255 :-
• Eliminating the interface between the ITAT and parties
to the appeal in the course of proceedings to the
extent technologically feasible;
• Optimising utilisation of the resources through economies of
scale and functional specialisation;
• Introducing an appellate system with dynamic
jurisdiction.
This amendment will take effect from 01st April, 2021.
23
CONTENTS-INDIRECT TAX PROVISIONS
Supply of goods by Unincorporated Associations 25
GST Audits 26
Input Tax credit 27
Zero rated supplies- without payment of tax 28
24
Supply of Goods by Unincorporated association
• Paragraph 7 of Schedule II shall be omitted and shall be deemed

to been omitted from 01st July, 2017. Further, definition of
Supply shall be amended to include supply of goods or
services by an unincorporated club or association to its
members under the ambit of GST.
• The Supply of goods and services by an incorporated or
unincorporated club or association has in the view of the Supreme
Court in the Calcutta Club case gone out of the tax net after
deletion of clause (d) of the subsection 1 of section 7 of CGST Act,
2017.
• Thus, supplies made by clubs, associations, etc to its
members have been included in the definition of supply
itself and made taxable.
UBG Comment
This amendment has brought certainty in law and will reduce litigation.
25
GST Audits
• As per section 35(5) of the CGST Act, every registered person

whose turnover exceeded the prescribed limit during a financial
year was required to get his accounts audited by Chartered
Accountant or a Cost Accountant and submit Form GSTR 9C.
• This provision of audit has been omitted and instead requires the
self certification of the taxpayer.
• The requirement of filing reconciliation is still present but
with self certifications and audit requirement has been
dispensed with.
UBG Comment
The opportunity to rectify the mistakes through this reconciliation statement is still available with the taxpayers
and the management should take utmost care while filing their annual returns to avoid future penalties.
26
Input Tax Credit – GSTR 2A – Never Ending Saga..!!
• Section 16(2) has been amended to state that the details of

the invoices intended to be taken credit of need to be seen
in the GSTR 2A of the recipient. The amendment expressly
states that the input tax credit must be reflected in GSTR2A
for the availment of the input tax credit by the recipient.
• Now, the recipient needs to ensure timely and proper reporting of
corresponding invoices by their vendor in their respective GSTR-1
/IFFs.
UBG Comment
The department officials were repeatedly issuing notices to the taxpayers for the difference between the input
tax credit availed in GSTR 3B and input tax credit shown in GSTR 2A and was demanding reversal of input tax
credit not covered in GSTR 2A. However, the taxpayers had challenged such actions of the department
on the basis that it lacked statutory powers in the statute and this amendment has been brought to
overcome that deficiency.
27
Zero rated supplies without Payment of Tax
• Earlier, Exporter was provided with two options – Export

without payment of Tax and Export with Payment of Tax.
• After the proposed amendment, taxpayers cannot opt for
zero rated supplies on payment of integrated tax. Instead,
zero rated supplies without payment of integrated tax is the
default mechanism.
• Only notified class of persons and supplier of notified goods or
services can claim refund of IGST paid on zero rated supplies.
UBG Comment
Various instances were observed by the GST authorities especially in export of few specific commodities where
refunds on payment of IGST have been availed using fraudulent credit. Further, internationally, refund of IGST
paid is not available internationally.
Thus, to avoid distortions and bring uniformity this amendment has been proposed. However, it is observed that
practically, refund with payment of IGST were being processed automatically through the system in a time
bound manner while in case of refunds without payment of IGST were lagging due to human interventions. This
may cause delay in the refunds of the exporters hampering the working capital cashflows.
28
THANK YOU
CONTACT DETAILS:
Registered Office: E-Mail ID: CA Gaurav J Parekh
404, Skyline Wealth Space, office@ubgco.in 098703 08636
Above D Mart, Premier Road,
Vidyavihar West, Mumbai - 86. Website: CA Umesh K Joshi
www.ubgco.in 098694 11579
U B G & Company - Linkedin Landline: CA Bhavya S Rambhia

022-79695333 098339 40401
29
Key Highlights of Union Budget 2021
Changes under the Customs and Excise

KEY HIGHLIGHTS OF UNION BUDGET 2021 01/02/2021
Union Budget 2021 was presented in Parliament on Monday, February 1st, 2021. Presenting the
first ever digital Union Budget, Union Minister of Finance and Corporate Affairs Smt. Nirmala
Sitharaman stated that India’s fight against COVID-19 continues into 2021 and that this moment
in history, when the political, economic, and strategic relations in the post-COVID world are
changing, is the dawn of a new era – one in which India is well-poised to truly be the land of
promise and hope.
6 pillars of the Union Budget 2021-22:

The Budget proposals for this financial year rest on following six pillars:
✓ Health and Wellbeing

✓ Physical & Financial Capital and Infrastructure
✓ Inclusive Development for Aspirational India
✓ Reinvigorating Human Capital
✓ Innovation and R&D
✓ Minimum Government and Maximum Governance
This document summarises the changes made/ proposed under the Customs and Excise –
Section wise in comparative manner for easy digest.
[This space has been intentionally left blank]
©A2Z TAXCORP LLP 1

CUSTOMS
Unless otherwise stated, all changes in rate of Customs duty take effect from the midnight of 1st
February/ 2nd February 2021. A declaration has been made under the Provisional Collection of
Taxes Act, 1931 in respect of clauses 95(i) [Amendment of First Schedule to the Customs Tariff
Act, 1975], 115 [Agriculture Infrastructure and Development Cess on imported goods and 116
[Agriculture Infrastructure and Development Cess on excisable goods] of the Finance Bill, 2021
so that changes proposed therein takes effect from the midnight of 1 st February/2nd February
2021. The remaining legislative changes would come into effect only upon the enactment of the
Finance Bill, 2021.
Proposed Amendments in the Customs Act, 1962
Synopsis: Certain significant changes have been made in the Customs Act, 1962 (“the Customs
Act”). Mostly, these are for enhanced trade facilitation. A definite period of two year, extendable
by one year is being prescribed for completion of investigation. Also, it is being prescribed that
conditional exemption shall be having validity of two years unless specifically provided otherwise
or varied or rescinded earlier (the notification would end on 31st March falling immediately after
two years of issue of exemption).
IGCR Rules have been amended to allow job work on imported goods and also to allow disposal
of goods at payment of duty on depreciated value. A few changes are made for improving
compliance.
Current provisions Proposed provisions Effect of changes made

Section – 2 (Definitions)
……… New clause inserted after
clause (7A):
‘(7B) “common portal” In Section 2, a new clause

means the Common (7B) is being inserted
Customs Electronic Portal defining “common portal”
referred to in section 154C;’. (Common Customs
Electronic Portal)
Section - 5 (Powers of officers of customs)

“5(3) Notwithstanding “5(3) Notwithstanding Sub-section (3) to Section 5
anything contained in this anything contained in this of the Customs Act is being
section, a Commissioner section, a Commissioner amended to empower
(Appeals) shall not exercise the (Appeals) shall not exercise Commissioner (Appeals) to
powers and discharge the the powers and discharge carry out functions specified
©A2Z TAXCORP LLP 2

duties conferred or imposed on the duties conferred or under newly inserted sub-
an officer of customs other than imposed on an officer of section (1D) of Section 110
those specified in Chapter XV customs other than those [Seizure of goods,
and section 108” specified in Chapter XV, documents and things],
section 108 and sub-section apart from Chapter XV
(1D) of section 110” [Appeals and Revision] and
Section 108 [Power to
summon persons to give
evidence and produce
documents] contained
earlier.
Section - 25 (Power to grant exemption from duty)

……… New sub-section inserted
after sub-section (4):
“(4A) Where any exemption Section 25 of the Customs

is granted subject to any Act is being amended to
condition under sub-section prescribe that all conditional
(1), such exemption shall, exemptions, unless
unless otherwise specified otherwise specified or varied
or varied or rescinded, be or rescinded, given under the
valid upto 31st day of March Customs Act shall come to an
falling immediately after end on 31st March falling
two years from the date of immediately two years after
such grant or variation: the date of such grant or
variation.
Provided that in respect of Further, all existing
any such exemption in force conditional exemptions in
as on the date on which the force as on the date on which
Finance Bill, 2021 receives the Finance Bill, 2021
the assent of the President, receives the assent of the
the said period of two years President (unless having a
shall be reckoned from the prescribed end date), shall
1st day February, 2021.” come to an end on 31st
March 2023 (if not
specifically extended/
rescinded earlier) on review.
Section 28BB – Time limit for completion of certain actions.
©A2Z TAXCORP LLP 3

……… New Section inserted after

Section 28BA:
“28BB. (1) Any inquiry or A new Section 28BB is being

investigation under this Act, introduced prescribing a
culminating in the issuance two-year time limit, further
of a notice under sub- extendable by one year by
section (1) or sub-section (4) the Commissioner, for
of section 28 shall be completion of any
completed by issuing such proceedings under the
notice, within a period of Customs Act which would
two years from the date of culminate in issuance of a
initiation of audit, search, notice under Section 28 ibid
seizure or summons, as [i.e. recovery of duties not
the case may be: levied or short-levied or
Provided that the Principal erroneously refunded].
Commissioner of Customs
or the Commissioner of
Customs may, on sufficient
cause being shown and for
reasons to be recorded in
writing, extend the said
period to a further period of
one year.
(2) For computing the period
under sub-section (1), the
period during which stay
was granted by an order of
a court or tribunal, or the
period for seeking
information from an
overseas authority through
a legal process, shall be
excluded.
removal of doubts, it is
hereby declared that
nothing contained in this
section shall apply to any
such proceeding initiated
before the date on which the
Finance Bill, 2021 receives
©A2Z TAXCORP LLP 4

the assent of the

President.”.
Section 46 - Entry of goods on importation
(3) The importer shall present (3) The importer shall Sub section (3) of Section 46
the bill of entry under sub- present the bill of entry is being amended so as to:
section (1) before the end of the under sub-section (1) before
next day following the day the end of the day (including a) mandate filing of bill of
(excluding holidays) on which holidays) preceding the day entry before the end of
the aircraft or vessel or vehicle on which the aircraft or the day preceding the
carrying the goods arrives at a vessel or vehicle carrying the day (including holidays)
customs station at which such goods arrives at a customs of arrival of goods.
goods are to be cleared for station at which such goods
home consumption or are to be cleared for home b) A new proviso is being
warehousing: consumption or introduced therein, to
warehousing: enable the Board to
notify the time-period
Provided that the Board for presenting bill of
may, in such cases as it may entry in certain cases as it
deem fit, prescribe different may deem fit.
time limits for presentation
of the bill of entry, which
shall not be later than the
end of the day of such
arrival:
Provided that a bill of entry may Provided further that a bill

be presented at any time not of entry may be presented at
exceeding thirty days prior to any time not exceeding
the expected arrival of the thirty days prior to the
aircraft or vessel or vehicle by expected arrival of the
which the goods have been aircraft or vessel or vehicle
shipped for importation into by which the goods have
India: been shipped for
importation into India:
Provided further that where the Provided also that where

bill of entry is not presented the bill of entry is not
within the time so specified and presented within the time so
the proper officer is satisfied specified and the proper
that there was no sufficient officer is satisfied that there
cause for such delay, the was no sufficient cause for
importer shall pay such charges such delay, the importer
shall pay such charges for
©A2Z TAXCORP LLP 5

for late presentation of the bill late presentation of the bill

of entry as may be prescribed. of entry as may be
prescribed.
Section – 110 (Seizure of goods, documents and things)

…….. New sub-section inserted
after sub-section (1C):
“(1D) Where the goods Section 110 of the Customs

seized under sub-section (1) Act is being amended so as to
is gold in any form as revise the procedure for
notified under sub-section pre-trial disposal of seized
(1A), then, the proper officer gold, in any form as notified.
shall, instead of making an Commissioner (Appeals)
application under sub- having jurisdiction, to certify
section (1B) to the the correctness of inventory
Magistrate, make such of the seized goods and carry
application to the out other procedures as
Commissioner (Appeals) prescribed, before the
having jurisdiction, who disposal of the gold in a
shall, as soon as may be, manner as may be
allow the application and determined by the Central
thereafter, the proper Government. Other
officer shall dispose of such consequential amendments
goods in such manner as the to give effect to this
Central Government may provision are also being
determine.”. carried out.
Section - 113 (Confiscation of goods attempted to be improperly exported, etc)

New clause inserted after
……… clause (j):
“(ja) any goods entered for New clause (ja) is being

exportation under claim of added to Section 113 to
remission or refund of any provide for the confiscation
duty or tax or levy to make a of any goods entered for
wrongful claim in exportation under claim of
contravention of the remission or refund of any
provisions of this Act or any duty or tax or levy, so as to
other law for the time being make a wrongful claim in
in force;” contravention of the
provisions of the Customs
©A2Z TAXCORP LLP 6

Act or any other law for the

time being in force.
Section – 114AC (Penalty for Fraudulent utilisation of input tax credit for claiming refund)
………… New Section inserted after
Section 114AB:
“114AC. Where any person A new Section 114AC is being

has obtained any invoice by inserted in the Customs Act
fraud, collusion, willful to prescribe penalty in
misstatement or specific case where any
suppression of facts to person has obtained any
utilise input tax credit on the invoice by fraud, collusion,
basis of such invoice for wilful misstatement or
discharging any duty or tax suppression of facts to utilize
on goods that are entered Input Tax Credit on the basis
for exportation under claim of such invoice for
of refund of such duty or tax, discharging any duty or tax
such person shall be liable on goods that are entered
for penalty not exceeding for exportation under claim
five times the refund of refund of any duty or tax.
claimed.
purposes of this section, the
expression “input tax credit”
shall have the same
meaning as assigned to it in
clause (63) of section 2 of
the Central Goods and
Services Tax Act, 2017.”
Section – 139 (Presumption as to documents in certain cases)

“Explanation. - For the “Explanation. - For the Explanation to Section 139 of
purposes of this section, purposes of this section, the Customs Act is being
"document" includes "document" includes amended so as to include
inventories, photographs and inventories, photographs inventories, photographs
lists certified by a Magistrate and lists certified by a and lists certified by the
under sub-section (1C) of Magistrate under sub- Commissioner (Appeals)
section 110” section (1C), or under the new sub-section
Commissioner (Appeals) (1D) to the documents within
under sub-section (1D), of the meaning of that section
section 110.”
©A2Z TAXCORP LLP 7

to give evidentiary value to

such documents.
Section – 149 (Amendment of documents)

“Save as otherwise provided in “Save as otherwise provided Section 149 is being
sections 30 and 41, the proper in sections 30 and 41, the amended so as to:
officer may, in his discretion, proper officer may, in his
authorise any document, after discretion, authorise any a) introduce a second
it has been presented in the document, after it has been proviso which would
custom house to be amended in presented in the custom allow amendments to be
such form and manner, within house to be amended in done through the
such time, subject to such such form and manner, customs automated
restrictions and conditions, as within such time, subject to system on the basis of
may be prescribed: such restrictions and risk evaluation through
conditions, as may be appropriate selection
prescribed: criteria.
Provided that no amendment of Provided that no b) introduce a third proviso

a bill of entry or a shipping bill amendment of a bill of entry so that certain
or bill of export shall be so or a shipping bill or bill of amendments, as may be
authorised to be amended after export shall be so authorised specified by the Board,
the imported goods have been to be amended after the may be done by the
cleared for home consumption imported goods have been importer or exporter on
or deposited in a warehouse, or cleared for home the common portal.
the export goods have been consumption or deposited in
exported, except on the basis of a warehouse, or the export
documentary evidence which goods have been exported,
was in existence at the time the except on the basis of
goods were cleared, deposited documentary evidence
or exported, as the case may which was in existence at
be.” the time the goods were
cleared, deposited or
exported, as the case may
be.
Provided further that such

authorisation or
amendment may also be
done electronically through
the customs automated
system on the basis of risk
evaluation through
©A2Z TAXCORP LLP 8

appropriate selection
criteria:
Provided also that such

amendments, as may be
specified by the Board, may
be done by the importer or
exporter on the common
portal.”
Section – 153 (Service of order, decision, etc)
“(1) An order, decision, “(1) An order, decision, Section 153 is being
summons, notice or any other summons, notice or any amended so as to insert a
communication under this Act other communication under new clause (ca) under sub
or the rules made thereunder this Act or the rules made section (1) thereof so as to
may be served in any of the thereunder may be served in enable service of order,
following modes, namely:- any of the following modes, summons, notice, etc. by
............. namely:-.......... making it available on the
common portal.
(c) by sending it to the e-mail (c) by sending it to the e-
address as provided by the mail address as provided by
person to whom it is issued, or the person to whom it is
to the e-mail address available issued, or to the e-mail
in any official correspondence address available in any
of such person;” official correspondence of
such person;
(ca) by making it available

on the common portal;”
Section – 154C (Common Customs Electronic Portal)

……… New Section inserted after
Section 154B:
“154C. The Board may Chapter XVII is being

notify a common portal, to amended so as to insert a
be called the Common new Section 154C for
Customs Electronic Portal, notification of a common
for facilitating registration, portal for facilitating
filing of bills of entry, registration, filing of bills of
shipping bills, other entry, shipping bills, any
documents and forms other document or form
prescribed under this Act or prescribed under the
©A2Z TAXCORP LLP 9

under any other law for the Customs Act or under any
time being in force or the other law for the time being
rules or regulations made in force or the rules and
thereunder, payment of regulations made
duty and for such other thereunder, payment of duty
purposes, as the Board may, and for carrying out such
by notification, specify.”. other functions and for such
purposes as may be specified.
Proposed Amendments in the Customs Tariff Act, 1975

Synopsis: Certain changes have also been made in the Customs Tariff Act, 1975 (“the Customs
Tariff Act”) and Rules made thereunder in the provisions relating to trade remedial measures
(ADD/CVD and Safeguard Measures). Besides other changes, these changes introduce the
provisions for anti-absorption investigation in ADD/CVD, bringing in uniformity in the provisions.
Certain changes have also been made in the corresponding Rules.
Current provisions Proposed provisions Effect of the changes made

Section – 8B (Power of Central Government to apply safeguard measures)
“(6) Notwithstanding anything “(6) Notwithstanding Section 8B of the Customs
contained in the foregoing sub- anything contained in the Tariff Act is being amended to
sections, a notification issued foregoing sub-sections, a incorporate certain technical
under sub-section (1) or any notification issued under changes and include the
safeguard measures applied sub-section (1) or any meaning of SEZ.
under sub-sections (2), (3), (4) safeguard measures applied
and (5), shall not apply to under sub-sections (2), (3),
articles imported by a hundred (4) and (5), shall not apply to
per cent. export-oriented articles imported by a
undertaking or a unit in a hundred per cent. export-
special economic zone, unless- oriented undertaking or a
unit in a special economic
zone, unless-
(i) it is specifically made (i) it is specifically made

applicable in such notification applicable in such
or to such undertaking or unit; notification or to such
undertaking or unit or;
(ii) such article is either cleared (ii) such article is either

as such into the domestic tariff cleared as such into the
area or used in the domestic tariff area or used
©A2Z TAXCORP LLP 10

manufacture of any goods that in the manufacture of any

are cleared into the domestic goods that are cleared into
tariff area, in which case, the domestic tariff area, in
safeguard measures shall be which case, safeguard
applied on the portion of the measures shall be applied
article so cleared or used, as on the portion of the article
was applicable when it was so cleared or used, as was
imported into India. applicable when it was
imported into India.
Explanation.––For the purposes Explanation.––For the

of this section, the expressions purposes of this sub-
“hundred per cent. export- section,–
oriented undertaking”, and (a) the expression “hundred
“special economic zone” shall per cent. Export oriented
have the same meaning as undertaking” shall have
assigned to them in Explanation the same meaning as
2 to sub-section (1) of section 3 assigned to it in clause
of the Central Excise Act, 1944. (i) of Explanation 2 to
(1 of 1944.)” sub section (1) of section
3 of the Central Excise
Act, 1944;
(b) the expression “special
economic zone” shall
have the same meaning
as assigned to it in
clause (za) of section 2
of the Special Economic
Zones Act, 2005.”
Section – 9 (Countervailing duty on subsidized articles)

(1A) Where the Central (1A) Where the Central Section 9 and 9A of the
Government, on such inquiry as Government, on such Customs Tariff Act and
it considers necessary, is of the inquiry as it considers respective Rules are being
opinion that circumvention of necessary, is of the opinion amended to make following
countervailing duty imposed that circumvention of amendments in the provision
under sub-section (1) has taken countervailing duty imposed relating to ADD, CVD,
place, either by altering the under sub-section (1) has safeguard measures:
description or name or taken place, either by
composition of the article on altering the description or • imposition of duty from
which such duty has been name or composition of the the date of initiation of
imposed or by import of such article on which such duty
article in an unassembled or has been imposed or by

disassembled form or by import of such article in an anti-circumvention

changing the country of its unassembled or investigation;
origin or export or in any other disassembled form or by
manner, whereby the changing the country of its • anti-absorption provisions
countervailing duty so imposed origin or export or in any to counter situation
is rendered ineffective, it may other manner, whereby the where, by reduction of
extend the countervailing duty countervailing duty so export prices or otherwise,
to such other article also. imposed is rendered the ADD/CVD levied is
ineffective, it may extend sought to be absorbed,
the countervailing duty to diluting the intended
such other article also from impact of such ADD/CVD.
such date, not earlier than
the date of initiation of the • imposition of these duties
inquiry, as the Central on review for period upto
Government may, by 5 years at a time;
notification in the Official
Gazette, specify. • uniform provisions for
imposition ADD/CVD on
(1B) Where the Central account of inputs
Government, on such (attracting ADD or CVD)
inquiry as it considers used by EOUs and SEZs for
necessary, is of the opinion manufacture of goods that
that absorption of are cleared to Domestic
countervailing duty imposed Tariff Area;
under sub-section (1) has
taken place whereby the • whenever any particular
countervailing duty so ADD or CVD is temporarily
imposed is rendered revoked, such temporary
ineffective, it may modify revocation shall not
such duty to counter the exceed one year at a time.
effect of such absorption,
from such date, not earlier • final findings are to be
than the date of initiation of issued in ADD/CVD, in
the inquiry, as the Central investigation in review
Government may, by proceedings, by the
notification in the Official designated authority, at
Gazette, specify. least three months prior to
expiry of the ADD under
Explanation.––For the review (with effect from
purposes of this sub-section, the 1st Jul, 2021);
“absorption of
countervailing duty” is said
to have taken place,–

• provisional assessment in
a) if there is a decrease in anti-circumvention
the export price of an investigation and make
article without any some other technical
commensurate change changes in ADD/CVD
in the resale price in Rules;
imported from the • manner of application of
exporting country or safeguard measure,
territory; or including tariff-rate quota
b) under such other in the Safeguard Duty
circumstances as may be (name changed to
provided by rules. Safeguard Measures)
Rules.
(2) The Central Government
(2) The Central Government may.........
may.........
‘(2A) Notwithstanding
anything contained in sub-
sections (1) and (2), a
…….. notification issued under
sub-section (1) or any
countervailing duty imposed
under sub-section (2) shall
not apply to article imported
by a hundred per cent.
export-oriented undertaking
or a unit in a special
economic zone, unless, —
(i) it is specifically made
applicable in such
notification or to such
undertaking or unit; or
(ii) such article is either
cleared as such into the
domestic tariff area or used
in the manufacture of any
goods that are cleared into
the domestic tariff area, in
which case, countervailing
duty shall be imposed on
that portion of the article so

applicable when it was

purposes of this sub-
section,––
a) the expression “hundred
per cent. export-
oriented undertaking”
shall have the same
meaning as assigned to
it in clause (i) of
Explanation 2 to sub-
section (1) of section 3 of
the Central Excise Act,
1944;
b) the expression “special
(6) The countervailing duty

imposed under this section
shall, unless revoked earlier,
(6) The countervailing duty
cease to have effect on the
imposed under this section
expiry of five years from the
shall, unless revoked earlier,
date of such imposition :
cease to have effect on the
expiry of five years from the
Provided that if the Central
Government, in a review, is
Provided that if the Central of the opinion that the
Government, in a review, is of cessation of such duty is
the opinion that the cessation likely to lead to continuation
of such duty is likely to lead to or recurrence of
continuation or recurrence of subsidization and injury, it
subsidization and injury, it may, may, from time to time,
from time to time, extend the extend the period of such
period of such imposition for a imposition for a further
further period of five years and period upto five years and
such further period shall such further period shall

commence from the date of commence from the date of

order of such extension : order of such extension :
Provided further that where

a review initiated before the
Provided further that where a expiry of the aforesaid
review initiated before the period of five years has not
expiry of the aforesaid period of come to a conclusion before
five years has not come to a such expiry, the
conclusion before such expiry, countervailing duty may
the countervailing duty may continue to remain in force
continue to remain in force pending the outcome of
pending the outcome of such a such a review for a further
review for a further period not period not exceeding one
exceeding one year. year.
Provided also that if the said
duty is revoked temporarily,
the period of such
revocation shall not exceed
one year at a time.
Section – 9A (Anti-dumping duty on dumped articles)

(1A) Where the Central (1A) Where the Central Kindly read as above
Government, on such inquiry as Government, on such
it may consider necessary, is of inquiry as it may consider
the opinion that circumvention necessary, is of the opinion
of anti-dumping duty imposed that circumvention of anti-
under sub-section (1) has taken dumping duty imposed
place, either by altering the under sub-section (1) has
description or name or taken place, either by
composition of the article altering the description or
subject to such anti-dumping name or composition of the
duty or by import of such article article subject to such anti-
in an unassembled or dumping duty or by import
disassembled form or by of such article in an
changing the country of it origin unassembled or
or export or in any other disassembled form or by
manner, whereby the anti- changing the country of it
dumping duty so imposed is origin or export or in any
rendered ineffective, it may other manner, whereby the
extend the anti-dumping duty anti-dumping duty so
to such article or an article imposed is rendered

originating in or exported from ineffective, it may extend

such country, as the case may the anti-dumping duty to
be. such article or an article
originating in or exported
from such country, as the
case may be from such date,
………… not earlier than the date of
initiation of the inquiry, as
the Central Government
may, by notification in the
Official Gazette, specify.
(1B) Where the Central

Government, on such
inquiry as it may consider
necessary, is of the opinion
that absorption of anti-
dumping duty imposed
under sub-section (1) has
taken place whereby the
anti-dumping duty so
imposed is rendered
ineffective, it may modify
such duty to counter the
effect of such absorption,
from such date, not earlier
than the date of initiation of
the inquiry, as the Central
Government may, by
notification in the Official
Gazette, specify.
purposes of this sub-section,
“absorption of anti-
dumping duty” is said to
have taken place,––
(a) if there is a decrease in

the export price of an
article without any
commensurate change
in the cost of production

of such article or export

price of such article to
countries other than
India or resale price in
imported from the
exporting country or
territory; or
(b) under such other
circumstances as may be
provided by rules.’;
………………
(2A) Notwithstanding anything
contained in sub-section (1) and (2A) Notwithstanding
sub-section (2), a notification anything contained in sub-
issued under sub-section (1) or section (1) and sub-section
any anti-dumping duty imposed (2), a notification issued
under sub-section (2), shall not under subsection (1) or any
apply to articles imported by a anti-dumping duty imposed
hundred per cent, export- under subsection (2) shall
oriented undertaking unless,- not apply to articles
imported by a hundred per
cent. export-oriented
undertaking or a unit in a
special economic zone,
unless,—
(i) specifically made applicable
in such notifications or such (i) it is specifically made
impositions, as the case may applicable in such
be; or notification or to such
(ii) the article imported is either undertaking or unit; or
cleared as such into the (ii) such article is either
domestic tariff area or used cleared as such into the
in the manufacture of any domestic tariff area or
goods that are cleared into used in the manufacture
the domestic tariff area, and of any goods that are
in such cases anti-dumping cleared into the domestic
duty shall be levied on that tariff area, in which case,
portion of the article so antidumping duty shall
cleared or so used as was be imposed on that
portion of the article so

leviable when it was applicable when it was

imported into India imported into India.
Explanation.-For the purposes purposes of this section,––
of this sub-section, the
expression "hundred per cent (a) the expression “hundred
export-oriented undertaking" per cent. export-
shall have the meaning oriented undertaking”
assigned to it in Explanation 2 shall have the same
to sub-section (1) of section 3 of meaning as assigned to
the Central Excise Act, 1944; (1 it in clause (i) of
of 1944)] Explanation 2 to sub-
section (1) of section 3 of
the Central Excise Act,
1944;
………………. (b) the expression “special
………………..
(5) The anti-dumping duty

(5) The anti-dumping duty imposed under this section
imposed under this section shall, unless revoked earlier,
shall, unless revoked earlier, cease to have effect on the
cease to have effect on the expiry of five years from the
expiry of five years from the date of such imposition :
Provided that if the Central
Provided that if the Central Government, in a review, is
Government, in a review, is of of the opinion that the
the opinion that the cessation cessation of such duty is
of such duty is likely to lead to likely to lead to continuation
continuation or recurrence of or recurrence of dumping
dumping and injury, it may, and injury, it may, from time
from time to time, extend the to time, extend the period of
period of such imposition for a such imposition for a further
further period of five years and period upto five years and

such further period shall such further period shall

commence from the date of commence from the date of
order of such extension : order of such extension :
Provided further that where

Provided further that where a a review initiated before the
review initiated before the expiry of the aforesaid
expiry of the aforesaid period of period of five years has not
five years has not come to a come to a conclusion before
conclusion before such expiry, such expiry, the anti-
the anti-dumping duty may dumping duty may continue
continue to remain in force to remain in force pending
pending the outcome of such a the outcome of such a
review for a further period not review for a further period
exceeding one year. not exceeding one year.
Provided also that if the said

duty is revoked temporarily,
the period of such
revocation shall not exceed
one year at a time.
Amendments in First Schedule of the Customs Tariff Act, 1975

AMENDMENTS IN FIRST SCHEDULE OF THE CUSTOMS TARIFF ACT, 1975
In the Customs Tariff Act 1975, the First Schedule shall––
(a) be amended in the manner specified in the Second Schedule; and
(b) with effect from the 1st April, 2021, be also amended in the manner specified in the Third
Schedule; and
(c) with effect from the 1st January, 2022, be also amended in the manner specified in the
Fourth Schedule.
Amendments in the Customs Rules

Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 [“IGCR Rules”] are being
amended to provide the following facilities:
• to allow job-work of the materials (except gold and jewellery and other precious metals)
imported under concessional rate of duty
• to allow 100% out-sourcing for manufacture of goods on job-work

• to allow imported capital goods that have been used for the specified purpose to be
cleared on payment of differential duty, along with interest, on the depreciated value. The
depreciation norms would be the same as applied to EOUs, as per Foreign Trade Policy.
Gist of Various Customs Notifications
Following are the gist of the notifications which makes amendment in Customs Tariff and Non-
Tariff, with effect from midnight of Feb 01/Feb 02, 2021.
Customs: Tariff Notifications

S. Notification No. Description
No.
1. 02/2021-Customs, Seeks to further amend Notification No. 50/2017-Customs dated
dated February 1, 2021 30th June 2017 so as to prescribe effective rate of Basic Customs
Duty (BCD).
2. 03/2021-Customs, Seeks to further amend Notification No. 57/2017-Customs,
dated February 1, 2021 dated the 30th June 2017 so as to prescribe effective BCD rate
on IT/Electronics items.
dated February 1, 28th February 1999 so as to withdraw BCD exemption on the
2021 specified parts of transformers.
dated February 1, 1st March 2005 so as to clarify the scope of exemption under
2021 entry at S. No. 13S of the said notification.
5. 06/2021-Customs, Seeks to further amend Notification No. 08/2020-Customs
dated February 1, dated 2nd February 2020 so as to exempt the medical devices
2021 imported by international organizations and diplomatic
missions, from the levy of Health Cess.
6. 07/2021-Customs, Seeks to rescind Notification Nos. 1/2011-Customs, dated 6th
dated February 1, January 2011, 34/2017-Customs dated 30th June 2017 and
2021 75/2017-Customs dated 13th September 2017.
dated February 1, 13th July 1994 so as to include temporary imports of costumes
2021 and props for film making, in the goods exempted by the said
notification.


dated February 1, 23rd July, 1996 so as to make suitable amendments to the list of
2021 specified projects under heading 9801 of the First Schedule to
the Customs Tariff Act.
9. 10/2021-Customs, Seeks to amend Notification No. 230/86-Customs dated 3rd
dated February 1, April, 1986 so as to notify National High Speed Rail Corporation
2021 Ltd. as Sponsoring Authority for High-Speed Rail projects.
10. 11/2021-Customs, Seeks to prescribe effective rate of Agriculture Infrastructure

dated February 1, and Development Cess for specified goods (discussed
2021 separately).
11. 12/2021-Customs, Seeks to rescind Notification No. 12/2018-Customs dated

dated February 1, 02.02.2018 [exempt specified goods from the of levy of Social
2021 Welfare Surcharge in excess of 3%].
12. 13/2021-Customs, Seeks to exempt Social Welfare Surcharge leviable on

dated February 1, Agriculture Infrastructure and Development Cess on Gold and
2021 Silver.
13. 14/2021-Customs, Seeks to exempt Social Welfare Surcharge leviable on Crude

dated February 1, or roughly trimmed or Blocks Marble or travertine.
2021
14. 15/2021-Customs, Seeks to further amend Notification No. 82/2017-Customs

dated February 1, dated 27th October, 2017 [prescribes effective rate of duty
2021 under chapters 50 to 63 on textile products].
Customs: Non-Tariff Notifications

1. 09/2021-Customs (N.T.) Seeks to further amend Customs (Import of Goods at
dated February 1, Concessional Rate of Duty) Rules, 2017 (discussed separately).
2021
2. 10/2021-Customs (N.T.) Seeks to further amend Customs Tariff (Identification,
dated February 1, 2021 Assessment and Collection of Countervailing Duty on
Subsidized Articles and for Determination of Injury) Rules, 1995
to introduce anti-circumvention provisions in these rules and

make certain other miscellaneous changes.
3. 11/2021-Customs (N.T.) Seeks to further amend Customs Tariff (Identification,

dated February 1, 2021 Assessment and Collection of Countervailing Duty on
Subsidised Articles and for Determination of Injury) Rules, 1995
to enable provisional assessment in anti-circumvention
investigation and make certain other miscellaneous changes.
4. 12/2021-Customs (N.T.) Seeks to further amend Customs Tariff (Identification and
dated February 1, 2021 Assessment of Safeguard Duty) Rules, 1997 to provide for the
manner of application of safeguard measures including tariff-
rate quota and make certain other miscellaneous changes.
Customs: Anti-Dumping Duty

1. 05/2021- Seeks to amend Notification No. 54/2018 – Customs (ADD) dated 18th
Customs (ADD), October 2018 so as to temporarily revoke the operation of the said
dated February notification for the period from 2nd February 2021 to 30th September
1, 2021 2021.
2. 06/2021- Seeks to amend Notification No. 38/2019 – Customs (ADD) dated 25th
Customs (ADD), September 2019 so as to temporarily revoke the operation of the said
1, 2021 2021.
3. 07/2021- Seeks to amend Notification No. 16/2020 – Customs (ADD) dated 23rd
Customs (ADD), June 2020 so as to temporarily revoke the operation of the said
1, 2021 2021.
Customs: Countervailing Duty

1. 01/2021- Seeks to rescind Notification No. 02/2020 – Customs (CVD) dated 9th
Customs (CVD), October 2020.
dated February
1, 2021
2. 02/2021- Seeks to amend Notification No. 01/2017 – Customs (CVD) dated 7th
Customs (CVD), September 2017 so as to temporarily revoke the operation of the said
dated February

1, 2021 notification for the period from 2nd February 2021 to 30th September,
2021.
Agriculture Infrastructure and Development Cess (“AIDC”)

Synopsis: This new cess is being imposed on imports of certain items at specified rate.
Simultaneously, basic customs duty is being reduced on the items being brought under new cess.
This new cess is also being imposed as additional duty of excise on petrol and diesel. At the same
time, Basis Excise Duty and Special Additional Duty of Excise are being reduced.
These changes would become effective on 02.02.2021, 00:00 hours owing to the declaration
made under Provisional Collection of Taxes Act, 1931.
I. Customs
1) AIDC, as duty of customs has been proposed under Clause 115 of the Finance Bill, 2021.
Enabling provisions has been made for levy of this cess on all imported goods at the rate not
exceeding the rate specified in the First Schedule to the Customs Tariff Act, 1975. However,
it would be levied only on specified goods as detailed below. All other items are being
exempted from this Cess.
Further, the BCD rates have been simultaneously lowered on items on which cess is being
imposed. The list of items on which cess has been imposed and the applicable duty and AIDC
on them with effect from 02.02.2021, is as follows:
S. Heading, Commodity Basic Customs AIDC

No sub-heading Duty
tariff item
1. 0808 10 00 Apples 15% / 35%* 35%
2. 1511 10 00 Crude Palm Oil 15% 17.5%
3. 1507 10 00 Crude Soya-bean oil 15% 20%
4. 1512 11 10 Crude Sunflower seed oil 15% 20%
5. 0713 10 Peas (Pisum sativum) 10% 40%
6. 0713 20 10 Kabuli Chana 10% 30%

7. 0713 20 20 Bengal Gram (desichana) 10% 50%

8. 0713 20 90 Chick Peas (garbanzos) 10% 50%
9. 0713 40 00 Lentils (Mosur) 10% / 30%* 20%
10. 2204 All goods (Wine) 50% 100%
11. 2205 Vermouth and other wine of fresh 50% 100%
grapes, flavoured
12. 2206 Other fermented beverages for 50% 100%
example, Cider, Perry, Mead, sake,
mixture of fermented beverages or
fermented beverages and
non-alcoholic beverages
13. 2208 All goods (Brandy, Bourbon 50% 100%
whiskey, Scotch etc.)
14. 2701 Various types of coal 1% 1.5%
15. 2702 Lignite, whether or not 1% 1.5%
agglomerated
16. 2703 Peat, whether or not agglomerated 1% 1.5%
17. 3102 10 00 Urea Nil 5%
18. 3102 30 00 Ammonium nitrate 2.5% 5%
19. 31 Muriate of potash, for use as manure Nil 5%
or for the production of complex
fertilisers
20. 3105 30 00 Diammonium phosphate, for use as Nil 5%
manure or for the production of
complex fertilisers
21. 5201 Cotton (not carded or combed) 5% 5%
22. 7106 Silver (including imports by eligible 7.5% 2.5%
passengers)
23. 7106 Silver Dore 6.1% 2.5%
24. 7108 Gold (including imports by eligible 7.5% 2.5%
passengers)

25. 7108 Gold Dore 6.9% 2.5%

* All goods originating in or exported from the United States of America.
2) For the purpose of calculating the AIDC, the import value of such goods shall be calculated
in the same manner as the value of goods is calculated under the provisions of Section 14 of
the Customs Act, 1962.
3) Social Welfare Surcharge (SWS) would be levied on AIDC. However, exemption from SWS
on AIDC has been given to gold and silver.
4) Further, goods imported under Customs duty exemptions available under FTA and EOU as
well as under advance authorization schemes are being exempted from AIDC.
II. Excise
AIDC of Rs 2.5 per litre has been imposed on petrol and Rs 4 per litre on diesel as an additional
duty of excise is proposed under Clause 116 of the Finance Bill, 2021. Accordingly, Basic Excise
Duty and the Special Additional Excise Duty have been calibrated so that there would be no
additional burden on the consumer.
The table below summarizes the change in various duties applicable to Petrol and Diesel:
Commodity Duty rates applicable with effect from 02.02.2021 (Rs. per
litre)
BED SAED RIC AIDC Total
Petrol 1.40 11 18 2.5 32.90
(unbranded)
Petrol 2.60 11 18 2.5 34.10
(branded)
Diesel 1.80 8 18 4.0 31.80
(unbranded)
Diesel 4.20 8 18 4.0 34.10
(branded)
BED: Basic Excise Duty; SAED: Special Additional Excise Duty; RIC: Road and Infrastructure Cess;
AIDC: Agriculture Infrastructure and Development Cess.

CENTRAL EXCISE
Changes in Central Excise - Budget 2021
Following are the gist of the notifications which makes amendment in the Excise Tariff with
effect from February 02, 2021, unless otherwise specified.
Excise: Tariff Notifications

S. Notification No. Description
No.
1. 01/2021-Central Seeks to amend Notification No. 11/2017-Central Excise dated
Excise, dated February 30.06.2017, to prescribe effective rate of Basic Excise Duty and
1, 2021 to add the reference of Agriculture Infrastructure and
Development Cess (AIDC) in the appropriate duty of excise.
Excise, dated February 06.07.2019, to prescribe effective rate of Special Additional
1, 2021 Excise Duty for Petrol and Diesel.
3. 03/2021-Central Seeks to exempt AIDC on blended fuels.
Excise, dated
February 1, 2021
Excise, dated 13.05.2002, to exempt M-15 and E-20 fuels from Special
February 1, 2021 Additional Excise Duty and to add the reference of AIDC in the
appropriate duty of excise.
5. 05/2021-Central Seeks to exempt M-15 fuel from Road and Infrastructure Cess.
Excise, dated
February 1, 2021
6. 06/2021-Central Seeks to exempt E-20 fuel from Road and Infrastructure Cess.
Excise, dated
February 1, 2021
7. 07/2021-Central Seeks to amend Notification Nos. 10/2018-Central Excise,
Excise, dated 11/2018-Central Excise, 12/2018-Central Excise and 13/2018-
February 1, 2021 Central Excise, all dated 02.02.2018, to add the reference of
AIDC in the appropriate duty of excise.
Note:

(a) "Basic Excise Duty" means the excise duty set forth in the Fourth Schedule to the Central
Excise Act, 1944.
(b) “Road and Infrastructure Cess” means the additional duty of central excise levied under
section 112 of the Finance Act, 2018.
(c) “Special Additional Excise Duty” means a duty of excise levied under section 147 of the
Finance Act, 2002.
(d) NCCD means "National Calamity Contingent Duty" levied under Finance Act, 2001, as a duty
of Excise on specified goods at rates specified in the seventh schedule to Finance Act, 2001.
Amendments in Fourth Schedule to the Central Excise Act, 1944

AMENDMENTS IN FOURTH SCHEDULE TO THE CENTRAL EXCISE ACT, 1944
In the Central Excise Act, 1944, the Fourth Schedule shall––
(a) with effect from the 1st April 2021, be amended in the manner specified in the Fifth
Schedule; and
(b) with effect from the 1st January 2022, be also amended in the manner specified in the Sixth
Schedule.
Revised date of effect to amendments made in Fourth Schedule vide Notification issued
under Section 3C of the Central Excise Act, 1944
Notwithstanding anything contained in paragraph 2 of the notification of the Government of
India in the Ministry of Finance (Department of Revenue) number G.S.R 978 (E), dated the 31st
December, 2019, issued in exercise of the powers conferred under Section 3C of the Central
Excise Act, 1944, the amendments made in Chapter 27 of the Fourth Schedule thereto by the
said notification shall be deemed to have, and always to have had effect, for all purposes, on
and from the 1st day of January, 2020.
➔ Amendment in Fourth Schedule made by Notification No. 08/2019-CE (T) dated

31.12.2019 shall be made effective w.e.f. 01.01.2020, retrospectively.
Amendments in Schedule VII of the Finance Act 2001 (NCCD Schedule)

New tariff items [2404 11 00] and [2404 19 00] inserted in accordance with upcoming HS 2022
Nomenclature and prescribe NCCD of 25% on these tariff items with effect from 01.01.2022.
Note: For imposition of Agriculture Infrastructure and Development Cess (AIDC) as an
additional duty of excise proposed on Petrol and High speed diesel, refer discussion above.

From the Authors Desk
Hailed as the most crucial Budget of India in recent years, the Union Budget 2021-22 has
come in the backdrop of the largest GDP contraction that India has suffered post-
Independence due to the COVID-19 pandemic. In a significant departure from the tradition,
this year’s Budget was not printed and was only made available in a digital format. This
Budget focused on higher spending, healthcare expenditure with Rs. 35,000 crore on Covid-
19 vaccine development, infrastructure development and public sector bank privatisation.
But ironically, the experts’ speculations seem to have turned true as Nirmala Sitharaman's
first budget of the decade didn't have much hype for the common man.
Presenting the Union Budget for 2021-22, FM said that the Budget proposals for this
financial year rest on six pillars — health and well-being, physical, financial capital and
infrastructure, inclusive development for aspirational India, reinvigorating human capital,
innovation and R&D and minimum government and maximum governance. Significant
announcements included a slew of hikes in Customs duty to benefit ‘Make in India’,
proposal to disinvest two more PSBs and a general insurance company, and numerous
infrastructure pledges to poll-bound States. FM, in her speech, announced a push to the
textile industry, a new cess on agriculture development – Rs 2.5 per litre on petrol and Rs 4
per litre on diesel. Insurance Act amendment is also proposed to increase FDI limit from 49
to 74% with safeguards, while, the LIC IPO will be introduced in 2021.
In significant changes to the taxation process, FM announced the scrapping of income tax
return for senior citizens having pension and interest income only, new rules for removal of
double taxation for NRIs, and a reduction in the time period of tax assessments among
other measures. Start-ups will get an extension in their tax holiday for an additional year.
FM also announced that the advance tax liability on dividend income shall arise after
declaration or payment of dividend. On GST front, the FM said that record GST collections
have been made in the last few months. She said several measures have been taken to
further simplify the GST. The capacity of GSTN system has been enahnced. Deep analytics
and artificial intelligence have been deployed to identity tax evaders and fake billers,
launching special drives against them. The Finance Minister assured the House that every
possible measure shall be taken to smoothen the GST further and remove anomalies such
as the inverted duty structure.
Benchmark stock indices Nifty and Sensex gave a thumbs up to government's 'expansionary
budget' as FM Sitharaman chose the path of additional borrowing instead of taxing the
super-rich or raising taxes on high-income individuals. Market response to the budget
reflects growth optimism.

But this Budget may not bring cheer to pandemic-hit aam aadmi. The common man was
eyeing some income tax benefits from this budget as Covid-19 has burnt their pockets in
over a year. While no changes were made to the personal income tax, only senior citizens
were offered benefit. Under the proposal, those above the age of 75 will no longer have to
file IT returns. Moreover, a Covid-19 cess that was much speculated to be enforced to revive
the economy in post-coronavirus world did not find mention in the Union Budget 2021-22.
In nutshell, though this budget may be considered as growth oriented and visionary one
amidst the situation when India is slowly emerging from the Covid-19 crisis and the
economy is gradually returning to normal, but the present situation of the economy and
taxation system was requiring lot more for the aam aadmi. People had been anticipating
tax incentives to increase spending and reinvigorate household consumption demand,
and other benefits to grapple with the woes of the Covid-19 pandemic. Also, it is time
that we strive to maintain stability of provisions and systems under GST, as frequent
changes cause disruptions in business operations as well as increasing confusions in
trade. Though, Centre and States are quite receptive to resolve GST issues, but certain
level of steadiness is also required.

ABOUT US:
A2Z TAXCORP LLP is a boutique Indirect Tax firm having professionals from Multi disciplines
which includes Goods and Services Tax (GST), Central Excise, Custom, Service Tax, VAT,
DGFT, Foreign Trade Policy, SEZ, EOU, Export – Import Laws, Free Trade Policy etc.
Thanks & Best Regards,

Bimal Jain A2Z TAXCORP LLP
FCA, FCS, LLB, B. Com (Hons) Tax and Law Practitioners
Author of a book on Goods and Services Tax,
titled, “GST Law and Commentary (with Analyses Flat No. 34B,
and Procedures) [6thEdition – Nov 2020] Ground Floor, Pocket – 1,
Email: bimaljain@a2ztaxcorp.com Mayur Vihar Phase-1
Delhi – 110091 (India)
Connect With Us:
Tel: +91 11 42427056
Web: www.a2ztaxcorp.com
DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this
newsletter are solely for informational purpose. It does not constitute professional advice or
recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any
loss or damage of any kind arising out of any information in this newsletter nor for any actions taken
in reliance thereon.

Direct Tax Proposals

promise and hope.


This document summarises the key highlights of the Direct Tax Proposals for easy digest.
©A2Z TAXCORP LLP 1


• Relaxation for certain category of senior citizen from filing return of income-tax- To provide
relief to the senior citizens aged above 75 years from filing Income Tax Return who earn
income by the source of either pension or interest, if the following conditions are satisfied:
◦ He has pension and/or interest income from the same bank and the bank is specified
bank as notified by the Government;
◦ He is resident of India and of the age 75 years or more during the previous year;
◦ He shall be required to furnish a declaration to the specified bank in such form and verified
in such manner as prescribed.
• Rationalization of provisions relating to tax audit in certain cases- Earlier through Finance
Act, 2020, the threshold limit for tax audit for a person carrying on business is increased from
Rs. 1 crore to Rs. 5 crore in cases where aggregate of all receipts and payments in cash during
the previous year does not exceed 5% of such receipts/payments. In order to incentivize non-
cash transactions to promote digital economy and to further reduce compliance burden of
small and medium enterprises, it is proposed to increase the threshold from five crore rupees
to ten crore rupees in above cases.
• Extending due date for filing return of income in some cases, reducing time to file belated
return and to revise original return and also to remove difficulty in cases of defective
returns- Due date of filing of the original return of income to be extended to October 31 of
the assessment year in case of spouse of a partner of a firm whose accounts are required to
be audited under the provisions of IT Act.
Further, due date of filing of the original return of income to be extended to November 30 of
the assessment year in case of a partner of the firm which is required to furnish report from
an accountant for entering into international transaction or specified domestic transaction as
per Section 92E of the IT Act (i.e., Report from an accountant to be furnished by persons
entering into international transaction).
Furthermore, the belated or revised returns could now be filed three months before the
relevant assessment year or before the completion of assessment, whichever is earlier.
• Taxation of proceeds of high premium unit linked insurance policy (“ULIP”)- Limited
exemptions on proceeds from ULIP that have so far allowed large investors to receive tax-
free returns. Individuals holding multiple ULIPs with an aggregate premium in excess of Rs
2.5 lakh will have to pay tax on the proceeds.
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• TDS/TCS on non-filer at higher rates- To insert a new Section 206AB in the IT Act as a special
provision providing for higher rate for TDS for the non-filers of income-tax return. Similarly,
it is proposed to insert a new Section 206CCA in the IT Act as a special provision for providing
for higher rate of TCS for non-filers of income-tax return. Further, amended sub-section (1)
of Section 206AA of the IT Act (i.e., requirement to furnish Permanent Account Number) and
insert second proviso to further provide that where the tax is required to be deducted under
Section 194Q of the IT Act and Permanent Account Number is not provided, the TDS shall be
at the rate of 5%. These amendments will take effect from July 1, 2021.
• Exemption of deduction of tax at source on payment of dividend to business trust by a

special purpose vehicle in whose hand dividend is exempt under Section 194 of the IT Act
(i.e., dividends). This amendment will take effect retrospectively from 1st April, 2020.
• Advance tax liability on dividends will arise only after declaration of dividend.
• Exemption for LTC Cash Scheme- To provide tax exemption to cash allowance in lieu of leave
travel concession due to pandemic. Hence, for Assessment Year beginning on April 1, 2021
the value in lieu of any travel concession or assistance received by an individual shall also be
exempt by fulfilment of conditions as may be prescribed. This amendment is applicable to
assessment year 2021-2022 only.
• Raising of prescribed limit for exemption under sub-clause (iiiad) and (iiiae) of clause (23C)
of section 10 of the IT Act- Increase in exemption limit of income received by any person on
behalf of university or educational institution under Section 10(23C)(iiiad) and hospital under
Section 10(23C)(iiiae) from Rs. 1 crore to Rs. 5 crore. This amendment will take effect from
April 1, 2022.
• Payment by employer of employee contribution to a fund on or before due date- Employers

who mis-utilize employee’s contribution by way of late deposit will not be allowed as
deduction.
• Reduction of time limit for completing assessment- The time limit for completion of
assessment proceedings to be 9 months (previously 12 months) from the end of the
assessment year in which the income was first assessable.
• Discontinuance of Income-Tax Settlement Commission w.e.f. February 2021.
©A2Z TAXCORP LLP 3

The timeline of reopening of tax assessment cases has been reduced to 3 years from 6 years
and serious tax offences of concealment of income of over Rs. 50 lakhs can be reopened after
10 years.
Allowing prescribed authority to issue notice under Section 142 of the IT Act (i.e., inquiry
before assessment) for conduct of inquiry before assessment.
• Constitution of Dispute Resolution Committee for small and medium taxpayers to reduce
number of disputes.
• Constitution of the Board for Advance Ruling to give rulings to taxpayers in timely manner.
• Provision for faceless proceedings before the Income Tax Appellate Tribunal in a jurisdiction
less manner.
• Extension of date of sanction of loan for affordable residential house property- Previously
the condition to avail additional tax benefits of Rs 1.5 lakh under Section 80EEA of the Income
Tax Act, 1961 (“IT Act”) (i.e., deduction for interest paid on home loan for affordable housing)
stated that the loan to buy house should have been sanctioned between April 1, 2019 and
March 31, 2021. Now, it is proposed to extend the time limit given under Section 80EEA ibid
by 1 year i.e., from March 31, 2021 to March 31, 2022. This amendment will take effect from
April 1, 2022.
• Incentives for affordable rental housing- The outer time limit for getting the affordable
housing project approved has been extended from March 31, 2021 to March 31, 2022 under
Section 80-IBA of the IT Act. This amendment will take effect from April 1, 2022.
• Extension of date of incorporation for eligible start up for exemption and for investment in
eligible start-up- Extension of date of incorporation for eligible start up for exemption from
April 1, 2021 to April 1, 2022 under the provisions of Section 80-IAC of the IT Act (i.e., special
provision in respect of specified business). Similarly, extended the time limit under Section
54GB of the IT Act (i.e., capital gain on transfer of residential property not to be charged in
certain cases.) from March 31, 2021 to March 31, 2022
• Tax neutral conversion of Urban Cooperative Bank into Banking Company: Section 44DB of
the IT Act (i.e., special provision for computing deductions in the case of business
reorganization of co-operative banks) shall also be made applicable on conversion of primary
cooperative bank to the banking company. As a result of conversion shall not be treated as
transfer under Section 47 of the IT Act (i.e., transactions not regarded as transfer).
©A2Z TAXCORP LLP 4

• Facilitating strategic disinvestment of public sector company - Relaxing the provisions of

Section 2(19AA) (i.e., demerger) and Section 72A of the IT Act (i.e., provisions relating to carry
forward and set off of accumulated loss and unabsorbed depreciation allowance in
amalgamation or demerger, etc.) for the public sector companies in order to facilitate
strategic divestment by the Government.
• Tax incentives for units located in International Financial Services Centre (“IFSC”)-
Government has establishment a world class financial services centre. Units located in IFSC
enjoy some concession. Some more incentives are provided to them in this budget. This
amendment will take effect from April 1, 2022.
• Infrastructure debt fund can now issue Zero Coupon Bonds. This amendment will take effect
from April 1, 2022.
• Rationalisation of the provision concerning withholding on payment made to Foreign

Institutional Investors (FIIs)- TDS to be deducted on income of Financial Institution Investors
from securities under Section 196D of the IT Act (i.e., Income of Foreign Institutional Investors
from securities),
◦ At the rate of 20% or
◦ at the rate of income tax provided in such agreement,
whichever is lower.
• Rationalisation of provisions related to Sovereign Wealth Fund (SWF) and Pension Fund
(PF)- To encourage investments of Sovereign Wealth Fund and Pension Fund into
infrastructure sector of India, following amendments were proposed:
◦ Allowing Alternate Investment Fund (AIF) to invest up to 50%.
◦ Investment through holding company subject to some conditions.
◦ Investment in NBFC, IDF/IFC
◦ No loan or borrowings are allowed to them for the purpose of making investments in
India.
◦ They shall not participate in day to day operation of investee.
• Rationalization of the provision of slump sale- Amend the scope of definition of the Slump
Sale so that all types of ‘transfer’ are included in its scope.
©A2Z TAXCORP LLP 5

• Increase in safe harbour limit of 10% to 20% for home buyers and real estate developers
selling such residential units.
• Addressing mismatch in taxation of income from notified overseas retirement fund-

Insertion of new Section 89A to the IT Act in order to provide that the income of a specified
person from specified account shall be taxed in the manner and in the year as prescribed by
the Central Government in order to remove the genuine hardship faced by the NRIs in respect
of their income accrued on foreign retirement benefit account due to mismatch in taxation.
This amendment will take effect from April 1, 2022.
The above amendments will be effective from April 1, 2021 except otherwise specified.
©A2Z TAXCORP LLP 6

further simplify the GST. The capacity of GSTN system has been enhanced. Deep analytics
©A2Z TAXCORP LLP 7

©A2Z TAXCORP LLP 8

ABOUT US:

Connect With Us:
Tel: +91 11 42427056
©A2Z TAXCORP LLP 9

Changes under the GST Law

promise and hope.


This document summarises the changes made/ proposed under the GST Law – Section wise in
comparative manner for easy digest.
©A2Z TAXCORP LLP 1

GST
Amendments carried out in the Finance Bill, 2021 will come into effect from the date when the same
will be notified, as far as possible, concurrently with the corresponding amendments to the similar Acts
passed by the States and Union territories with Legislature.
Proposed Amendments in the CGST Act, 2017

Section 7(1) - Scope of supply – Clause 99 of the Finance Bill, 2021
After Section 7(1)(a): New
clause to be inserted
------- “(aa) the activities or Seeks to insert a new clause

transactions, by a person, other (aa) to Section 7(1) of the CGST
than an individual, to its Act to expand the scope of
members or constituents or supply to include activities or
viceversa, for cash, deferred transactions of supply of goods
payment or other valuable or services or both by any
consideration. person, other than an
individual, to its members or
Explanation.––For the purposes constituents or vice-versa.
of this clause, it is hereby
clarified that, notwithstanding Comments: This clause wants
anything contained in any to include supply of goods or
other law for the time being in services by clubs or
force or any judgment, decree associations to its members
or order of any Court, tribunal and that too retrospectively
or authority, the person and its from July 1, 2017, for cash,
members or constituents shall deferred payment or other
be deemed to be two separate valuable consideration.
persons and the supply of
activities or transactions inter Therefore, this inclusion wants
se shall be deemed to take to done away the effect of
place from one such person to Hon’ble Supreme Court
another” Judgment in State of West
Bengal & Ors. v Calcutta Club
Limited [2019 (29) G.S.T.L. 545
(S.C.)] for erstwhile Service tax
regime wherein it was held
that there cannot be the sale of
goods or provision of services
between the unincorporated
©A2Z TAXCORP LLP 2

private clubs/associations and

its members owing to the
principle of mutuality which
treats such clubs/associations
and its members as the same
person.
Hence, this amendment is

unsettling the settled
jurisprudence with
retrospective date.
Further, what will constitute

activities or transactions can
be litigative point so as to
tantamount as supply of goods
or services for levy of GST.
This amendment shall take

effect retrospectively from
July 1, 2017.
Section 16(2) - Eligibility and conditions for taking input tax credit – Clause 100 of the Finance
Bill, 2021
After clause (a), in sub-section
(2) of Section 16, the following
clause shall be inserted:
-------
“(aa) the details of the invoice Seeks to insert a new sub
or debit note referred to in clause (aa) after Section
clause (a) has been furnished by 16(2)(a) of the CGST Act, 2017
the supplier in the statement of (“CGST Act”) to provide that
outward supplies and such input tax credit (“ITC”) on
details have been invoice or debit note may be
communicated to the recipient availed only when the details
of such invoice or debit note in of such invoice or debit note
the manner specified under have been furnished by the
section 37.” supplier in the statement of
outward supplies (GSTR-1) as
specified in Section 37 of the
CGST Act and such details have
been communicated to the
©A2Z TAXCORP LLP 3

recipient of such invoice or

debit note.
Comments: Thus, one more

condition is added for
determining the eligibility of
ITC. ITC would not be available
to the recipient if the details of
such invoice or debit note has
been not furnished by the
supplier in GSTR-1 or using IFF.
In this regard it is important to

note that Rule 36(4) of the
CGST Rules, 2017 (“CGST
Rules”) was recently amended
vide Notification No. 94/2020-
Central Tax dated December
22, 2020 w.e.f. January 01,
2021 to restrict the ITC to 5% in
respect of invoices or debit
notes not furnished by supplier
in GSTR-1 or using IFF.
Therefore, this amendment

seems to be providing
statutory backing to much
debated Rule 36(4) of the CGST
Rules.
But even pre-GST legal

jurisprudence supports the
view that as long as the
purchasing dealer has taken all
the steps required for being
eligible for ITC, he could not be
expected to keep track of
whether the selling dealer has
in fact deposited the tax
collected with the government
or has lawfully adjusted it
against his output tax liability -
Arise India Limited and Ors v.
©A2Z TAXCORP LLP 4

Commissioner of Trade &

Taxes, Delhi and Ors [W.P.(C)
6093/2017 & connected
matters dated 26.10.2017 -
SLP filed by the revenue has
been dismissed with no
discussions on merit by the
Hon’ble SC in [Special Leave to
Appeal (C) No(s). 36750/2017
dated 10.01.2018].
Thus, this provision is still

prone to litigation.
Section 35(5) - Accounts and other records – Clause 101 of the Finance Bill, 2021
Sub-section (5) of Section 35
shall be omitted
“S. 35 (5): Every registered S. 35 (5): Every registered Seeks to omit Section 35(5) of
person whose turnover during a person whose turnover during a the CGST Act so as to remove
financial year exceeds the financial year exceeds the the mandatory requirement of
prescribed limit shall get his prescribed limit shall get his getting annual accounts
accounts audited by a chartered accounts audited by a audited by a chartered
accountant or a cost accountant chartered accountant or a cost accountant or a cost
and shall submit a copy of the accountant and shall submit a accountant and reconciliation
audited annual accounts, the copy of the audited annual statement (GSTR-9C) to be
reconciliation statement under accounts, the reconciliation submitted for registered
sub-section (2) of section 44 and statement under sub-section person whose turnover during
such other documents in such (2) of section 44 and such other a financial year exceeds the
form and manner as may be documents in such form and prescribed limit, which is 2
prescribed.” manner as may be prescribed. Crore but for FY 2018-19 &
2019-20, notified as Rs. 5
Crore.
Section 44 - Annual return – Clause 102 of the Finance Bill, 2021

Substituted as under:
“44. (1) Every registered person, “44. Every registered person, Seeks to substitute Section 44
other than an Input Service other than an Input Service of the CGST Act so as to
Distributor, a person paying tax Distributor, a person paying tax remove the mandatory
under section 51 or section 52, a under section 51 or section 52, requirement of furnishing a
casual taxable person and a non- a casual taxable person and a reconciliation statement
©A2Z TAXCORP LLP 5

resident taxable person, shall non-resident taxable person (GSTR-9C) duly audited by
furnish an annual return for shall furnish an annual return practicing chartered
every financial year which may include a self accountant or cost accountant
electronically in such form and certified reconciliation and to provide for filing of the
manner as may be prescribed on statement, reconciling the annual return (GSTR-9) on
or before the thirty-first day of value of supplies declared in the self-certification basis with
December following the end of return furnished for the reconciliation statement,
such financial year. financial year, with the audited reconciling the value of
annual financial statement for supplies declared in the return
Provided that the Commissioner every financial year furnished for the financial year,
may, on the recommendations of electronically, within such time with the audited annual
the Council and for reasons to be and in such form and in such financial statement for every
recorded in writing, by manner as may be prescribed: financial year electronically,
notification, extend the time within such time and in such
limit for furnishing the annual Provided that the form and in such manner as
return for such class of registered Commissioner may, on the may be prescribed.
persons as may be specified recommendations of the
therein: Council, by notification, exempt Further, it is also provided that
any class of registered persons the Commissioner may on
Provided further that any from filing annual return under recommendation of the GST
extension of time limit notified this section: Council may exempt a class of
by the Commissioner of State tax registered persons from the
or the Commissioner of Union Provided further that nothing filing the annual return.
territory tax shall be deemed to contained in this section shall
be notified by the Commissioner. apply to any department of the Comments: The responsibility
Central Government or a State of reconciliation has been
(2) Every registered person who Government or a local shifted to the taxpayers now
is required to get his accounts authority, whose books of instead of GST auditors earlier.
audited in accordance with the account are subject to audit by
provisions of sub-section (5) of the Comptroller and
section 35 shall furnish, AuditorGeneral of India or an
electronically, the annual return auditor appointed for auditing
under sub-section (1) along with the accounts of local
a copy of the audited annual authorities under any law for
accounts and a reconciliation the time being in force.”
statement, reconciling the value
of supplies declared in the return
furnished for the financial year
with the audited annual financial
statement, and such other
particulars as may be prescribed.
©A2Z TAXCORP LLP 6

Explanation.- For the purposes of

this section, it is hereby declared
that the annual return for the
period from the 1st July, 2017 to
the 31st March, 2018 shall be
furnished on or before the 31st
January, 2020 and the annual
return for the period from the 1st
April, 2018 to the 31st March,
2019 shall be furnished on or
before the 31st March, 2020.”
Proviso to Section 50(1) - Interest on delayed payment of tax – Clause 103 of the Finance Bill,
2021
For the proviso to Section
50(1), the following proviso
shall be substituted and shall
be deemed to have been
substituted with effect from
the 1st day of July 2017:
“Provided that the interest on “Provided that the interest on Seeks to substitute proviso to
tax payable in respect of supplies tax payable in respect of Section 50(1) of the CGST Act
made during a tax period and supplies made during a tax so as to charge interest only on
declared in the return for the said period and declared in the net cash liability.
period furnished after the due return for the said period
date in accordance with the furnished after the due date in This amendment shall take
provisions of section 39, except accordance with the provisions effect retrospectively from
where such return is furnished of section 39, except where July 1, 2017.
after commencement of any such return is furnished after
proceedings under section 73 or commencement of any Comments: Despite the 39th
section 74 in respect of the said proceedings under section 73 or GST Council’s
period, shall be levied on that section 74 in respect of the said recommendation in place with
portion of the tax that is paid by period, shall be payable on that regard to imposing interest
debiting the electronic cash portion of the tax which is paid liability retrospectively on net
ledger.” by debiting the electronic cash tax liability, the government
ledger.” still chose to appoint
01.09.2020 as the date when
proviso to Section 50(1) of the
CGST Act was made effective.
Though, press release and
instructions were issued to
clarify for recovery of interest
©A2Z TAXCORP LLP 7

on net cash tax liability w.e.f.

01.07.2017, but still litigations
were seen.
With this retrospective

amendment, the issue will now
finally settle.
Amendment in Explanation 1(ii) to Section 74 - Determination of tax not paid or short paid or
erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any
wilful-misstatement or suppression of facts – Clause 104 of the Finance Bill, 2021
“(ii) where the notice under the “(ii) where the notice under the Seeks to amend Explanation
same proceedings is issued to the same proceedings is issued to 1(ii) of Section 74 of the CGST
main person liable to pay tax and the main person liable to pay Act so as to make seizure
some other persons, and such tax and some other persons, (Section 129) and confiscation
proceedings against the main and such proceedings against proceedings (Section 130) of
person have been concluded the main person have been goods and conveyances in
under section 73 or section 74, concluded under section 73 or transit a separate proceeding
the proceedings against all the section 74, the proceedings from recovery of tax.
persons liable to pay penalty against all the persons liable to
under sections 122, 125, 129 and pay penalty under sections 122 Comments: Conclusion of
130 are deemed to be and 125 are deemed to be proceedings u/s 73 or 74 will
concluded.” concluded.” now mean conclusion of
proceedings u/s 122 and 125
but not the proceedings u/s
129 and 130.
Insertion of New Explanation in Section 75(12) - General provisions relating to determination of

tax – Clause 105 of the Finance Bill, 2021
In Section 75(12), the
following Explanation shall be
inserted:
-------
“Explanation.––For the Seeks to insert an explanation
purposes of this sub-section, under Section 75(12) of the
the expression "self-assessed CGST Act to clarify that “self-
tax" shall include the tax assessed tax” shall include the
payable in respect of details of tax payable in respect of
outward supplies furnished outward supplies furnished in
under section 37, but not GSTR 1 but not included in the
included in the return furnished return furnished in GSTR 3B.
under section 39.”
©A2Z TAXCORP LLP 8

Comments: The ambit of the

term “self-assessed tax” is
proposed to be widened.
Meaning thereby that now
recovery can be initiated by the
officer even for the outward
supply liability shown in the
GSTR-1 filled under Section 37.
Substitution of Sub-Section (1) in Section 83 - Provisional attachment to protect revenue in

certain cases – Clause 106 of the Finance Bill, 2021
“(1) Where during the pendency “(1) Where, after the initiation Seeks to substitute sub section
of any proceedings under section of any proceeding under (1) of Section 83 of the CGST
62 or section 63 or section 64 or Chapter XII, Chapter XIV or Act so as to provide that
section 67 or section 73 or Chapter XV, the Commissioner provisional attachment made
section 74, the Commissioner is is of the opinion that for the to any property, including bank
of the opinion that for the purpose of protecting the account, belonging to a taxable
purpose of protecting the interest of the Government person or any person specified
interest of the Government revenue it is necessary so to do, in Section 122(1A) of the CGST
revenue, it is necessary so to do, he may, by order in writing, Act (i.e., person who causes to
he may, by order in writing attach provisionally, any commit specified offences and
attach provisionally any property, including bank retains the benefit arising out
property, including bank account, belonging to the of such offences) shall remain
account, belonging to the taxable person or any person valid for the entire period
taxable person in such manner as specified in sub-section (1A) of starting from the initiation of
may be prescribed.” section 122, in such manner as any proceeding under Chapter
may be prescribed.” XII- Assessment, Chapter XIV-
Inspection, Search, Seizure &
Arrest, Chapter XV- Demand
and Recovery, till the expiry of
a period of one year from the
date of provisional order made
under Section 83(1) of the
CGST Act.
Proviso to be inserted in Section 107(6) - Appeals to Appellate Authority – Clause 107 of the
Finance Bill, 2021
In Section 107(6), inserted
following proviso:
Seeks to insert proviso under

“Provided that no appeal shall
------- Section 107(6) of the CGST Act
be filed against an order under
©A2Z TAXCORP LLP 9

sub-section (3) of section 129, to provide that an appeal

unless a sum equal to twenty- against order passed in Section
five per cent. of the penalty has 129(3) of the CGST Act i.e. in
been paid by the appellant” Form MOV-09 cannot be filed
unless 25% of the penalty has
Comments: Pre-deposit
requirement prior to this
amendment was only to the
extent of 10% of the disputed
tax liability which is now
proposed to be 25% of the
penalty amount in case of
detention and seizure of
conveyance and goods during
transit.
Clause (a) & (b) to be substituted in sub section (1) of Section 129 - Detention, seizure and
release of goods and conveyances in transit – Clause 108 of the Finance Bill, 2021
Sub-section (1)(a) of Section Sub-section (1)(a) of Section
129: 129:
“(a) on payment of the “(a) on payment of penalty Seeks to increase the payment
applicable tax and penalty equal equal to two hundred per cent. of penalty (previously penalty
to one hundred per cent. of the of the tax payable on such and tax) from 100% to 200%
tax payable on such goods and, goods and, in case of exempted for releasing of detained or
in case of exempted goods, on goods, on payment of an seized goods and conveyance.
payment of an amount equal to amount equal to two per cent.
two per cent. of the value of of the value of goods or twenty- Previously, tax and penalty
goods or twenty-five thousand five thousand rupees, equal to 100% were to be paid
rupees, whichever is less, where whichever is less, where the for release of detained or
the owner of the goods comes owner of the goods comes seized goods and conveyance.
forward for payment of such tax forward for payment of such
and penalty;” penalty.”
Sub-section (1)(b) of Section Sub-section (1)(b) of Section
129: 129:
(b) on payment of the applicable (b) on payment of penalty Seeks to change options for
tax and penalty equal to the fifty equal to fifty per cent. of the release of detained or seized
per cent. of the value of the value of the goods or two goods and conveyance for
goods reduced by the tax hundred per cent. of the tax
amount paid thereon and, in payable on such goods,

case of exempted goods, on whichever is higher, and in case taxable goods where owner
payment of an amount equal to of exempted goods, on does not come forward:
five per cent. of the value of payment of an amount equal to
goods or twenty-five thousand five per cent. of the value of • Penalty equal to 50% of
rupees, whichever is less, where goods or twenty-five thousand value of goods; or
the owner of the goods does not rupees, whichever is less, where • 200% of tax payable on
come forward for payment of the owner of the goods does such goods
such tax and penalty; not come forward for payment
of such penalty; Whichever is higher.
Section 129(2): Section 129(2) shall be omitted
“The provisions of sub-section (6) “The provisions of sub-section Seeks to provide that goods
of section 67 shall, mutatis (6) of section 67 shall, mutatis seized shall not be released on
mutandis, apply for detention mutandis, apply for detention provisional basis upon
and seizure of goods and and seizure of goods and execution of a bond and
conveyances.” conveyances.” furnishing of a security, in such
manner and of such quantum.
Comments: This means that

the penalty imposed by the
officer will have to be paid in
cash by the taxpayer.
Section 129(3): Sub-section (3) of Section 129:
“(3) The proper officer detaining “(3) The proper officer Seeks to amend Section 129(3)
or seizing goods or conveyances detaining or seizing goods or of the CGST Act to provide time
shall issue a notice specifying the conveyance shall issue a notice limit of 7 days’ notice of such
tax and penalty payable and within seven days of such detention or seizure,
thereafter, pass an order for detention or seizure, specifying specifying the penalty payable
payment of tax and penalty the penalty payable, and for issuance of MOV 07 and for
under clause (a) or clause (b) or thereafter, pass an order within passing an order in MOV 09
clause (c).” a period of seven days from the within a period of 7 days from
date of service of such notice, the date of service of such
for payment of penalty under MOV 07 under 129 (a) and (b)
clause (a) or clause (b) of sub- of the CGST Act.
section (1)”
Section 129(4): Section 129(4):
“No tax, interest or penalty shall “No penalty shall be Seeks to amend Section 129(4)
be determined under sub-section determined under sub-section of the CGST Act to provide that

(3) without giving the person (3) without giving the person no penalty shall be determined
concerned an opportunity of concerned an opportunity of without opportunity of hearing
being heard.” being heard.” where penalty is payable on
detention or seizure of goods
and conveyance.
Comments: It is to be noted
that tax and interest shall not
be demanded after the
amendment in law for release
of goods and conveyance.
Sub-section (6) of Section 129: Sub-section (6) of Section 129:
“(6) Where the person “(6) Where the person Seeks to amend Section 129(6)
transporting any goods or the transporting any goods or the of the CGST Act to delink the
owner of the goods fails to pay owner of such goods fails to pay proceedings under the section
the amount of tax and penalty as the amount of penalty under relating to detention, seizure
provided in sub-section (1) within sub-section (1) within fifteen and release of goods and
fourteen days of such detention days from the date of receipt of conveyances in transit, from
or seizure, further proceedings the copy of the order passed the proceedings under Section
shall be initiated in accordance under sub-section (3), the 130 of the CGST Act for
with the provisions of section goods or conveyance so confiscation of goods or
130: detained or seized shall be conveyances and levy of
liable to be sold or disposed of penalty.
Provided that where the otherwise, in such manner and
detained or seized goods are within such time as may be Comments: Earlier the
perishable or hazardous in prescribed, to recover the provision was if person does
nature or are likely to depreciate penalty payable under sub- not pay tax and penalty within
in value with passage of time, section (3): 14 days of seizure, the
the said period of seven days conveyance and goods
may be reduced by the proper Provided that the conveyance detained were liable for
officer.” shall be released on payment confiscation as per Section
by the transporter of penalty 130. But, after this
under sub-section (3) or one amendment, the goods or
lakh rupees, whichever is less: conveyance detained or seized
shall become liable to be sold
Provided further that where the or disposed off in the manner
detained or seized goods are prescribed in case the payment
perishable or hazardous in of imposed penalty is not made
nature or are likely to within 15 days from the date of
depreciate in value with receipt of copy of the order
passage of time, the said period imposing such penalty.

of fifteen ays may be reduced

by the proper officer.”
Amendment in Section 130 - Confiscation of goods or conveyances and levy of penalty - Clause
109 of the Finance Bill, 2021
Sub-section (1) of Section 130: Sub-section (1) of Section 130:
“(1) Notwithstanding anything “(1) Where, if any person-

contained in this Act, if any
person- …………..”
…………..” Seeks to amend Section 130 of

Second Proviso to Section Second Proviso to Section the CGST Act to delink the
130(2): 130(2): proceedings under that section
relating to confiscation of
“Provided further that the “Provided further that the goods or conveyances and levy
aggregate of such fine and aggregate of such fine and of penalty from the
penalty leviable shall not be less penalty leviable shall not be proceedings under Section 129
than the amount of penalty less than the penalty equal to of the CGST Act relating to
leviable under sub-section (1) of hundred per cent. of the tax detention, seizure and release
section 129” payable on such goods” of goods and conveyances in
Sub-section (3) of Section 130: Sub-section (3) of Section 130 transit.
shall be omitted.
“Where any fine in lieu of

“Where any fine in lieu of confiscation of goods or
confiscation of goods or conveyance is imposed under
conveyance is imposed under sub-section (2), the owner of
sub-section (2), the owner of such goods or conveyance or
such goods or conveyance or the the person referred to in sub-
person referred to in sub-section section (1), shall, in addition, be
(1), shall, in addition, be liable to liable to any tax, penalty and
any tax, penalty and charges charges payable in respect of
payable in respect of such goods such goods or conveyance.”
or conveyance.”
Substitution of Section 151 - Power to collect statistics - Clause 110 of the Finance Bill, 2021
“(1) The Commissioner may, if he “The Commissioner or an Seeks to substitute Section 151
considers that it is necessary so officer authorised by him may, of the CGST Act to empower
to do, by notification, direct that by an order, direct any person the jurisdictional
statistics may be collected to furnish information relating commissioner to call for

relating to any matter dealt with to any matter dealt with in information from any person
by or in connection with this Act. connection with this Act, within relating to any matter dealt
such time, in such form, and in with in connection with the
(2) Upon such notification being such manner, as may be CGST Act.
issued, the Commissioner, or any specified therein.”
person authorised by him in this
behalf, may call upon the
concerned persons to furnish
such information or returns, in
such form and manner as may be
prescribed, relating to any
matter in respect of which
statistics is to be collected.”
Amendment of Section 152 - Bar on disclosure of information - Clause 111 of the Finance Bill,
2021
Section 152: Section 152:
“(1) No information of any “(1) No information of any Seeks to amend Section 152 of
individual return or part thereof individual return or part thereof the CGST Act to provide that
with respect to any matter given with respect to any matter no information obtained
for the purposes of section 150 or given for the purposes of under Sections 150 (i.e.,
section 151 shall, without the section 150 or section 151 shall, obligation to furnish
previous consent in writing of the without the previous consent in information return) and 151
concerned person or his writing of the concerned person (i.e., power to collect statistics)
authorised representative, be or his authorised of the CGST Act shall be used
published in such manner so as representative, be published in for the purposes of any
to enable such particulars to be such manner so as to enable proceedings under the Act
identified as referring to a such particulars to be identified without giving an opportunity
particular person and no such as referring to a particular of being heard to the person
information shall be used for the person and no such information concerned.
purpose of any proceedings shall be used for the purpose of
under this Act. any proceedings under this Act
(2) Except for the purposes of without giving an opportunity
prosecution under this Act or any of being heard to the person
other Act for the time being in concerned.”
force, no person who is not
engaged in the collection of
statistics under this Act or
compilation or computerisation
thereof for the purposes of this
Act, shall be permitted to see or

have access to any information

or any individual return referred
to in section 151.”
Amendment in Section 168(2) - Power to issue instructions or directions - Clause 112 of the
Finance Bill, 2021
“The Commissioner specified in “The Commissioner specified in Seeks to amend Section 168 of
clause (91) of section 2, sub- clause (91) of section 2, sub- the CGST Act to enable the
section (3) of section 5, clause (b) section (3) of section 5, clause jurisdictional commissioner to
of sub-section (9) of section 25, (b) of sub-section (9) of section exercise powers under Section
sub-sections (3) and (4) of 25, sub-sections (3) and (4) of 44 (i.e., annual return) and
section 35, sub-section (1) of section 35, sub-section (1) of omitted Section 151 of the
section 37, sub-section (2) of section 37, sub-section (2) of CGST Act (i.e., power to collect
section 38, sub-section (6) of section 38, sub-section (6) of statistics) to call for
section 39, sub-section (1) of section 39, section 44, sub- information.
section 44, sub-sections (4) and sections (4) and (5) of section
(5) of section 52, sub-section (1) 52, sub-section (1) of section
of section 143, except the second 143, except the second proviso
proviso thereof, sub-section (1) thereof, sub-section (1) of
of section 151, clause (l) of sub- section 151, clause (l) of sub-
section (3) of section 158 and section (3) of section 158 and
section 167 shall mean a section 167 shall mean a
Commissioner or Joint Secretary Commissioner or Joint
posted in the Board and such Secretary posted in the Board
Commissioner or Joint Secretary and such Commissioner or Joint
shall exercise the powers Secretary shall exercise the
specified in the said sections with powers specified in the said
the approval of the Board.” sections with the approval of
the Board.”
Retrospectively Deletion of Paragraph 7 of Schedule II – Activities or Transactions to be Treated
as Supply of Goods or Supply of Services- Clause 113 of the Finance Bill, 2021
Paragraph 7: Paragraph 7 shall be omitted
and shall be deemed to have
been omitted with effect from
the 1st day of July, 2017.
“Supply of Goods: “Supply of Goods: Consequent to the insertion of

sub-clause (aa) in Section 7(1)
The following shall be treated as The following shall be treated of the CGST Act (supra),
supply of goods, namely:- as supply of goods, namely:- paragraph 7 of Schedule II to
the CGST Act is being omitted.
Supply of goods by any Supply of goods by any
unincorporated association or unincorporated association or

body of persons to a member body of persons to a member Therefore, supply of goods by

thereof for cash, deferred thereof for cash, deferred any unincorporated
payment or other valuable payment or other valuable association or body of persons
consideration.” consideration.” to a member thereof for cash,
deferred payment or other
valuable consideration will be
treated as supply of goods.
This deletion was made to

clarify that there is levy of taxes
on activities or transactions of
supply of goods or services or
both by any person, other than
an individual, to its members
or constituents or vice-versa
for cash, deferred payment or
other valuable consideration.
This amendment shall take

effect retrospectively from
July 1, 2017.
Proposed Amendments in the IGST Act, 2017

Section 16 - Zero rated supply - Clause 114 of the Finance Bill, 2021
Section 16(1)(b): Section 16(1)(b):
“Supply of goods or services or “Supply of goods or services or both Seeks to amend Section 16
both to a Special Economic for authorised operations to a of the IGST Act, 2017 (“IGST
Zone developer or a Special Special Economic Zone developer or Act”) to provide:
Economic Zone unit.” a Special Economic Zone unit.”
Sub-section (3) of Section 16: For Sub-section (3) of Section 16, • zero rated supply of
the following Sub-sections shall be goods or services to a
substituted: Special Economic Zone
developer or a Special
“(3) A registered person “(3) A registered person making Economic Zone unit only
making zero rated supply shall zero rated supply shall be eligible to when the said supply is
be eligible to claim refund claim refund of unutilised input tax for authorised
credit on supply of goods or services operations;
or both, without payment of

under either of the following integrated tax, under bond or Letter • restrict the zero-rated
options, namely:–– of Undertaking, in accordance with supply on payment of
the provisions of section 54 of the integrated tax only to a
(a) he may supply goods or Central Goods and Services Tax Act notified class of
services or both under bond or or the rules made thereunder, taxpayers or notified
Letter of Undertaking, subject subject to such conditions, supplies of goods or
to such conditions, safeguards safeguards and procedure as may services; and
and procedure as may be be prescribed:
prescribed, without payment of • link non realization of
integrated tax and claim Provided that the registered person sales proceeds of goods
refund of unutilised input tax making zero rated supply of goods exported liable for
credit; or shall, in case of non-realisation of refund so received along
sale proceeds, be liable to deposit with interest within 30
(b) he may supply goods or the refund so received under this days after expiry of
services or both, subject to such sub-section along with the specified time limit
conditions, safeguards and applicable interest under section 50 prescribed under FEMA
procedure as may be of the Central Goods and Services for receipt of sales
prescribed, on payment of Tax Act within thirty days after the proceeds.
integrated tax and claim expiry of the time limit prescribed
refund of such tax paid on under the Foreign Exchange Comments: Seemingly, now
goods or services or both Management Act, 1999 for receipt only notified class of
supplied” of foreign exchange remittances, in taxpayer or notified class of
such manner as may be prescribed. goods/services will be
eligible for claiming refund
(4) The Government may, on the of IGST paid on zero-rated
recommendation of the Council, supplies, unlike present
and subject to such conditions, provision which allows both
safeguards and procedures, by the options to all persons
notification, specify–– subject to Rule 96(10) of the
CGST Rules.
(i) a class of persons who may make
zero rated supply on payment of Other option left will be to
integrated tax and claim refund of claim refund of unutilized
the tax so paid; ITC.
(ii) a class of goods or services which

may be exported on payment of
integrated tax and the supplier of
such goods or services may claim
the refund of tax so paid.”

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Budget 2021
Key Tax Proposals
Draft for discussion purposes only
01 February 2021
Cash Voucher Scheme in lieu of Leave Travel
Allowance for Individuals
Section 10 – Clause (5) - Modified
► Applicable to an Individual
► Applicable for AY 2021-22 / FY 2020-21 only (12 October 2020 to 31 March 2021)
Pre-Amendment – Provides exemption in respect of the value of travel concession or assistance received by
or due to an employee from his employer / former employer for himself & his family, in connection with his
proceeding on leave to any place in India.
Post Amendment - Cash Voucher Scheme can be availed instead of LTA subject to prescribed conditions. If
following conditions are met, then the deemed LTA fare paid to the employee will be tax-exempt without the
employee having to actually travel (which was the original requirement for claiming LTA).
► Option for Cash Voucher availed in lieu of LTA in Block Year 2018-2021 (i.e. either for the year 2020 or
2021 since scheme is valid only till 31 March 2021);
► Maximum exemption is Rs 36,000 per person or 1/3rd of specified expenditure;
► Specified expenditure means expenditure incurred by individual or any family member during specified
period on goods or services (liable for GST @12% or above) purchased or availed from GST registered
vendors / service providers;
Note: Through Press Release dated October 12, 2020, FM announced the introduction of the LTA Cash Voucher
Scheme for Central Government employees and details issued vide Office Memorandum on October 12, 2020.
Scheme was extended to the non-Central Government employees vide press release dated October 29, 2020.
Necessary amendments is proposed now under the provisions of the Act.
Page 4
Taxation of proceeds of high premium unit linked
insurance policy (‘ULIP’)
Section 10(10D) – Modified
► Applicable to Individuals
► Effective from AY 2021-22 / FY 2020-21
Pre Amendment –
► Presently, there is no cap on the amount of annual premium being paid by any person during the term of
the policy. Instances have come to the notice where high net worth individuals are claiming exemption
under this clause by investing in ULIP with huge premium. Allowing such exemption in policy/policies with
huge premium defeats the legislative intent of this clause. The intention was to provide benefit to small
and genuine cases of life insurance.
Post Amendment –
► Exemption under this clause shall not apply with respect to any ULIP issued on or after the 1st February,
2021, if the amount of premium payable for any of the previous year during the term of the policy exceeds
Rs 2.50 lakhs. If premium is payable by a person for more than one ULIPs, issued on or after the 1st
February, 2021, exemption under this clause shall be available only with respect to such policies
aggregate premium whereof does not exceed the amount of Rs 2.50 lakhs, for any of the previous years
during the term of any of the policy.
► Exemption would be available on any sum received on the death of a person.
► It means if premium payable is greater than Rs 2.50 lakhs for any previous year, then maturity is taxable.
On maturity, ULIP’s would be taxable as capital gains u/s 45(1B).
Page 5
Deduction for interest on loan for affordable
residential house property
Section 80EEA - Modified
► Applicable to Individuals only
Pre-Amendment -
► Provides a deduction in respect of interest on loan taken for a residential house
property from any financial institution up to Rs 150,000 subject to the condition that
the loan has been sanctioned between 01 April 2019 to 31 March 2021.
► Stamp duty value of residential house property does not exceed Rs 4,500,000 and the
assessee does not own any residential house property on the date of sanction of loan.
Post Amendment –
► This provision allows deduction to the first time home buyers, in respect of interest on
home loan.
► In order to help such first time home buyers further, it is proposed to extend the outer
date for sanction of loan from 31st March 2021 to 31st March 2022.
Page 6
Relaxation for certain category of senior citizen
from filing return of income-tax
New Section 194P - Inserted
► Applicable to Resident Individual being Specified Senior Citizen (Aged 75 years or
more)
Post Amendment – In case of a specified senior citizen, the specified bank shall, after giving
effect to the deduction allowable under Chapter VI-A and rebate allowable under section 87A,
compute the total income of such specified senior citizen for the relevant assessment year and
deduct income-tax on such total income on the basis of the rates in force.
► Specified senior citizen will not be required to furnish ROI for such year.
► Specified senior citizen means an individual, being a resident in India:
► (i) who is of the age of seventy-five years or more at any time during the previous year;
► (ii) who is having income of the nature of pension and no other income except the
income of the nature of interest received or receivable from any account maintained by
such individual in the same specified bank in which he is receiving his pension
income; and
► (iii) has furnished a declaration to the specified bank containing such particulars, in
such form and verified in such manner, as may be prescribed.
Page 7
Taxability of Interest on various funds where
income is exempt
Section 10(11) - Modified
► Applicable to Individuals
Pre Amendment –
► It provides for exemption with respect to any payment from a provident fund to which the Provident
Funds Act, 1925 (19 of 1925) applies or from any other provident fund set up by the Central
Government.
► Similarly, Clause (12) of this section provides for exemption with respect to the accumulated
balance due and becoming payable to an employee participating in a recognised provident fund, to
the extent provided in rule 8 of Part A of the Fourth Schedule.
Post Amendment –
► Instances have come to the notice where some employees are contributing huge amounts to these
funds and entire interest accrued/received on such contributions is exempt from tax under clause
(11) and clause (12) of section 10 of the Act. This exemption without any threshold benefits only
those who can contribute a large amount to these funds as their share.
► It proposes taxability of Interest income accrued during the previous year in the account of the
person to the extent it relates to the amount or the aggregate of amounts of contribution made by
the person exceeding Rs 2.50 lakhs in a previous year in that fund.
Page 8
Taxation of income from notified overseas
retirement fund
New Section 89A – Inserted
► Applicable to specified person
Post Amendment – It is experienced that there is mismatch in the year of taxability of

withdrawal from retirement funds by residents who had opened such fund when they
were non-resident in India and resident in foreign countries. At present the withdrawal
from such funds may be taxed on receipt basis in such foreign countries, while on
accrual basis in India. In order to address this mismatch and remove this genuine
hardship, it is proposed:
► Income of a specified person from specified account shall be taxed in the manner and
in the year as prescribed by the Central Government;
► Specified person is a person resident in India who opened a specified account in a
notified country while being non-resident in India and resident in that country;
► Specified Account means an account maintained in a notified country by the specified
person in respect of his retirement benefits and the income from such account is not
taxable on accrual basis but is taxed by such country at the time of withdrawal or
redemption;
Page 9
TDS on Purchase of Goods
New Section 194Q - Inserted

► Applicable to specified person being a buyer of any goods
► Effective from 01 July 2021
Post Amendment –
► In relation to purchase of goods, it proposes that every buyer to deduct tax at source (at the time of
credit of such sum to the account of the seller or at the time of payment thereof by any mode,
whichever is earlier) on purchase of goods of value exceeding Rs 50 lakhs during the previous
year from resident sellers.
► Buyer should have turnover/ sales/ gross receipts greater than Rs 10 crores during FY immediately
preceding the FY in which purchase of goods is carried out.
► TDS rate is 0.1%.
► In absence of PAN of seller, TDS rate will be 5%.
► It may be interpreted that the same will apply even in case in case of export of goods to non-
residents. Same may be clarified at enactment stage.
► In case of conflict w.r.t. TCS u/s 206C(1H) and TDS u/s 194Q, it has been clarified that only TDS
will be applicable under the new provision. If turnover/ sales/ gross receipts of buyer is less than
prescribed threshold of Rs 10 crores, then provision of section 206C(1H) shall be applicable.
► If TDS or TCS is required under any other provisions, then TDS under thie provision shall not be
applicable.
Page 11
TDS/ TCS on Non-Filers of Return of Income at
Higher Rates
New Sections 206AB & 206CCA - Inserted
► Applicable to all Assessee
► Effective from 01 July 2021
Pre Amendment –
► Presently, sections 206AA & section 206CC provides penal TDS / TCS rates on non-furnishing of PAN by the other party.
Post Amendment –
► Proposed section 206AB would apply on any sum or income or amount paid, or payable or credited, by a person (herein
referred to as deductee) to a specified person. This section shall not apply where the tax is required to be deducted under
sections 192, 192A, 194B, 194BB, 194LBC or 194N of the Act. Proposed TDS rate in this section is higher of the followings
rates:-
► twice the rate specified in the relevant provision of the Act; or
► twice the rate or rates in force; or
► the rate of five per cent
► Proposed section 206CCA would apply on any sum or amount received by a person (herein referred to as collectee) from a
specified person. The proposed TCS rate in this section is higher of the following rates:-
► twice the rate specified in the relevant provision of the Act; or
► the rate of five percent
► Specified person is a person who has not filed the returns of income for both of the two assessment years relevant to the two
previous years which are immediately before the previous year in which tax is required to be deducted or collected, as the
case may be. Further the time limit for filing tax return under sub-section (1) of section 139 of the Act has expired for both
these assessment years. There is another condition that aggregate of tax deducted at source and tax collected at source in
his case is Rs 50,000 or more in each of these two previous years. Specified person shall not include a non-resident who
does not have a permanent establishment in India.
Page 12
Clarification regarding Depreciation on Goodwill
Sections 2, 32, 48, 55 - Modified

Pre Amendment –
► The question whether goodwill of a business is an asset within the meaning of section 32 of the Act and whether
depreciation on goodwill is allowable under the said section, is an issue which came up before Hon‘ble Supreme
Court in the case Smiff Securities Limited [(2012)348 ITR 302 (SC)]. Hon‘ble Supreme Court held that Goodwill of a
business or profession is a depreciable asset under section 32 of the Act.
► While Hon‘ble Supreme Court has held that the Goodwill of a business or profession is a depreciable asset, the
actual calculation of depreciation on goodwill is required to be carried out in accordance with various other
provisions of the Act. In some situations (like that of business reorganization) there could be no depreciation on
account of actual cost being zero and the written down value of that assets in the hand of
predecessor/amalgamating company being zero.
► However, in some other cases (like that of acquisition of goodwill by purchase) there could be valid claim of
depreciation on goodwill in accordance with the decision of Hon‘ble Supreme Court holding goodwill of a business
or profession as a depreciable asset.
Post Amendment –
► Propose that goodwill of a business or profession will not be considered as a depreciable asset and there would not
be any depreciation on goodwill of a business or profession in any situation.
► In a case where goodwill is purchased by an assessee, the purchase price of the goodwill will continue to be
considered as cost of acquisition for the purpose of computation of capital gains under section 48 of the Act subject
to the condition that in case depreciation was obtained by the assessee in relation to such goodwill prior to the
assessment year 2021-22, then the depreciation so obtained by the assessee shall be reduced from the amount of
the purchase price of the goodwill.
Page 13
Increased threshold for tax audit in case of
prescribed Digital Transactions
Section 44AB – Modified
Pre-Amendment - In order to reduce compliance burden on small and medium

enterprises, the threshold limit for a person carrying on business was increased in last
Budget 2020 from Rs 1 crores to Rs 5 crores in cases where,-
(i) aggregate of all receipts in cash during the previous year does not exceed five per
cent of such receipt; and
(ii) aggregate of all payments in cash during the previous year does not exceed five per
cent of such payment.
Post Amendment –
► In order to incentivise non-cash transactions to promote digital economy and to further
reduce compliance burden of small and medium enterprises, it is proposed to increase
the threshold from Rs 5 crores to Rs 10 crores.
Page 14
Advance tax instalment for dividend income
Section 234C – Modified

► Pre Amendment – Section 234C of the Act provides for payment of interest by an assessee who
does not pay or fails to pay on time the advance tax instalments as per section 208 of the Act. The
assessee is liable to pay a simple interest at the rate of 1% per month for a period of three months
on the amount of shortfall calculated with respect to the due dates for advance tax instalments.
► The first proviso of sub-section (1) provides for the relaxation that if the shortfall in the advance tax
instalment or the failure to pay the same on time is on account of the income listed therein, no
interest under section 234C shall be charged provided the assessee has paid full tax in subsequent
advance tax instalments. These exclusions are: -
► (a) the amount of capital gains; or
► (b) income of the nature referred to in sub-clause (ix) of clause (24) of section 2; or
► (c) income under the head "Profits and gains of business or profession" in cases where the income
accrues or arises under the said head for the first time; or
► (d) income of the nature referred to in sub-section (1) of section 115BBDA.
Post Amendment -
► Proposed to include dividend income in the above exclusion but not deemed dividend as per sub-
clause (e) of clause (22) of section 2 of the Act.
Page 15
Constitution of Dispute Resolution Committee
for small and medium taxpayers
New Section 245MA – Inserted
► Applicable to Eligible Assessee
► Effective from 01 April 2021
Post Amendment – In order to provide early tax certainty to small and medium
taxpayers, it is proposed to introduce a new scheme for preventing new disputes and
► CG shall constitute one or more Dispute Resolution Committee (‘DRC’).
► Only those disputes where the returned income is Rs 50 lakhs or less (if there is a
return) and the aggregate amount of variation proposed in specified order is Rs 10
lakhs or less shall be eligible to be considered by the DRC.
► If the specified order is based on a search initiated under section 132 or requisition
made under section 132A or a survey initiated under 133A or information received
under an agreement referred to in section 90 or section 90A,of the Act, such specified
order shall not be eligible for being considered by the DRC.
► Assessee would not be eligible for benefit of this provision if there is detention,
prosecution or conviction under various laws as specified in the proposed section.
► Subject to further conditions as may be prescribed by CG.
Page 16
Incentives for Affordable Rental Housing
Section 80-IBA - Modified

► Applicable to any Assessee deriving profits and gains from business of
developing and building affordable housing project
Pre-Amendment – Assessee deriving profits and gains from business of developing and
building affordable housing projects (subject to prescribed conditions) be allowed a
deduction of an amount equal to hundred per cent of the profits and gains derived from
such business for specified years.
► One of the conditions is that the project is approved by the competent authority after
the 1st day of June 2016 but on or before the 31st day of March 2021.
Post Amendment –
► To help migrant labourers and to promote affordable rental housing, benefit of section
also extended to such rental housing project which is notified by the Central
Government in the Official Gazette;
► Outer time limit for getting the affordable housing project approved extended till 31st
March 2022;
Page 17
Change in Timelines for filing Revised/ Belated Return
and Issuance of Intimation/ Completion of Assessment
Sections 139(4)/ (5), 143(1)/ (3), 153 – Modified

SI. No. Nature of Timelines Pre-Amendment Post Amendment
1. Filing of Belated and By end of relevant AY or 3 months before the end of
Revised Return – completion of assessment, relevant AY or completion of
139(4) / (5) whichever is earlier assessment, whichever is
earlier
2. ROI filing timeline for 31 October following the end 30 November following the
Partner of a Firm of the relevant AY end of the relevant AY
(requiring compliance
u/s 92E) – 139(1)
3. Issuance of intimation 12 months from the end of the 9 months from the end of the
u/s 143(1) FY in which return is furnished FY in which return is furnished
4. Selection for Scrutiny 6 months from the end of the 3 months from the end of the
Assessment u/s 143(3) FY in which return is furnished FY in which return is furnished
5. Completion of 12 months from the end of the 9 months from the end of the
Assessment u/s 143(3) AY in which income is first AY in which income is first
assessable assessable
Page 18
Income Escaping Assessment
Sections 147, 148, 149, 151 – Substituted / New Section 148A - Inserted
► Effective from 01 April 2021 (Upto AYs 2021-22, Pre-Amendment provision will be applicable)
SI. Nature of Timelines Pre-Amendment Post Amendment
No.
1. Time limit for issuance 4 years from the end of relevant 3 years from the end of relevant AY (no
of notice where income AY restriction on quantum of income escaped)
so escaped doesn’t
exceed Rs 1 lakhs
2. Time limit for issuance Within a period of 6 years from More than 3 years but within 10 years from
of notice where income the end of relevant AY unless the end of relevant AY unless the AO has in
so escaped is more income chargeable to tax has his possession books
than Rs 1 lacs escaped assessment for such of accounts or other documents or evidence
AY due to failure on assessee’s which reveal
part to file the return under that the income chargeable to tax,
section 139 or 142 or 148 or represented in the form
fully and truly disclosing all the of asset, which has escaped assessment
material facts required for the amounts to or is
assessment, for that AY. likely to amount to Rs 50 Lakhs or more for
that year
3. Income that has Within a period of 16 years from NA
escaped assessment the end of relevant AY
relates to assets located
outside India.
Page 19
Allowing prescribed authority to issue notice under
clause (i) of sub-section (1) of section 142
Section 142(1)(i) – Modified
Pre Amendment –
► Section 142 of the Act provides for conduct of inquiry before assessment.
► Clause (i) of sub section (1) of the said section gives the Assessing Officer the authority to issue
notice to an assessee, who has not submitted a return of income, asking for submission of return.
This is necessary to bring into the fold of taxation non-filers or stop filers who have transactions
resulting in income. However, this power can be currently invoked only by the Assessing Officer.
Post Amendment –
► The Central Government is following a conscious policy of making all the processes under the Act,
where physical interface with the assessee is required, fully faceless by eliminating person to
person interface between the taxpayer and the Department.
► In line with this policy, and in order to enable centralized issuance of notices etc. in an automated
manner, it is proposed to amend the provisions of clause (i) of the sub-section (1) of the section
142 to empower the prescribed income-tax authority besides the Assessing Officer to issue notice
under the said clause.
Page 20
Faceless ITAT and Discontinuance of ITSC
Section 255(7)/ (8) / (9) (ITAT) - Modified / Section 245C - D - Modified

Post Amendment –
► Provision for Faceless Proceedings before the Income-tax Appellate Tribunal (‘ITAT’) in a
jurisdiction less manner w.e.f. 01 April 2021:
► Eliminating the interface between the ITAT and parties to the appeal in the course of proceedings to
the extent technologically feasible;
► Optimising utilisation of the resources through economies of scale and functional specialisation;
► Introducing an appellate system with dynamic jurisdiction.
► Discontinue Income-tax Settlement Commission (‘ITSC’) w.e.f. 01 February 2021:
► No application under section 245C of the Act for settlement of cases shall be made on or after 1st
February, 2021;
► All applications that were filed under section 245C of the Act and not declared invalid under sub-
section (2C) of section 245D of the Act and in respect of which no order under section 245D(4) of
the Act was issued on or before the 31st January, 2021 shall be treated as pending applications;
► Time limit for rectification shall be extended to sixty days;
► With respect to a pending application, the assessee who had filed such application may, at his
option, withdraw such application within a period of three months from the date of commencement
of the Finance Act, 2021 and intimate the Assessing Officer, in the rescribed manner, about such
withdrawal.
Page 21
Rationalisation of the provision of Charitable Trust and Institutions
to eliminate possibility of double deduction while calculating
application or accumulation
Sections 11, 12, 12A, 10(23C) – Modified
► Applicable to Eligible Charitable / Religious Trust
Pre Amendment –
► Exemption to funds, institutions, trusts etc. carrying out religious or charitable activities is provided under clause
(23C) of section 10 of the Act and sections 11 and 12 of the Act.
► Corpus donations received by trusts, institutions, funds etc. are exempt presently.
Post Amendment –
► Corpus Donations - Instances have come to the notice where the these entities claim the corpus donations to be
exempt and at the same time claim their application as part of the mandatory 85% application from income other
than such corpus. This results in a situation where the corpus income has been exempted and its application has
been claimed as application against the mandatory 85% application of non-corpus income.
► Hence, application out of corpus shall not be considered as application for charitable or religious
purposes.
► Loans & Borrowings - Instances have also come to the notice where these entities take loans or borrowings and
make application for charitable or religious purposes out of the proceeds of loans and borrowings. Such loans or
borrowings when repaid, are again claimed as application. This results in unintended double deduction.
► Application from loans and borrowings shall not be considered as application for charitable or
religious purposes. However, when loan or borrowing is repaid from the income of the previous
year, such repayment shall be allowed as application in the previous year in which it is repaid to the
extent of such repayment.
Page 22
Rationalisation of provision of transfer of capital asset
to partner on dissolution or reconstitution
Sections 45(4) / (4A) – Substituted & Inserted
► Applicable to Firms/ AOP/ BOI (Specified Entity) and their Partners (Specified Persons)
Pre Amendment –
► At the time of dissolution of reconstitution, uncertainty exist regarding applicability of provisions to a
situation where assets are revalued or self-generated assets are recorded in the books of accounts and
payment is made to partner or member which is in excess of his capital contribution.
Post Amendment –
► In the hands of Specified Person – Capital gains payable on difference between the money or other
asset (fair value thereof) and capital account of such specified person in the books of accounts of the
specified entity at the time of its dissolution or reconstitution.
► Clarified that balance in the capital account of the specified person in the books of account of the
specified entity is to be calculated without taking into account increase in the capital account of the
specified person due to revaluation of any asset or due to self-generated goodwill or any other self-
generated asset.
► In the hands of Specified Entity – Capital gains payable on the difference between fair market value of
the capital asset on the date of receipt by specified person on dissolution or reconstitution and cost of
acquisition of the capital asset as determined.
► Moreover, amount included in the total income of such specified person which is attributable to the
capital asset being transferred, shall be reduced from the full value of the consideration to compute
income charged under the head capital gains to mitigate double taxation.
Page 23
Payment by employer of employee contribution
to a fund on or before due date - Clarified
Section 36(1)(va) – Modified
Pre Amendment –
► Deduction for employees contribution received by employer will be allowed only if the same is paid to the
employee's account in the relevant fund or funds on or before the Statutory due date.
► Basis several judicial pronouncements, a position was taken by employer that if the said amount is paid before the
due date of furnishing the ROI by the employer, then the same is claimed as deduction in its computation of income
(similar to section 43B).
Post Amendment –
► Though section 43B of the Act covers only employer‘s contribution and does not cover employee contribution, some
courts have applied the provision of section 43B on employee contribution as well. There is a distinction between
employer contribution and employee‘s contribution towards welfare fund.
► Employee‘s contribution towards welfare funds is a mechanism to ensure the compliance by the employers of the
labour welfare laws.
► Employee‘s contribution is employee own money and the employer deposits this contribution on behalf of the
employee in fiduciary capacity. By late deposit of employee contribution, the employers get unjustly enriched by
keeping the money belonging to the employees.
► Hence, if employees contribution is not deposited with Statutory due date as per relevant Statute, then
same will not be allowed as deduction and provisions of section 43B is not applicable to employees
contribution. Same will be a permanent disallowance for the company.
Page 24
Issuance of zero coupon bond by infrastructure
debt fund
Sections 2(48) & 194A(3)- Modified
► Applicable to any Infrastructure Debt Fund
Pre-Amendment – Clause (48) of section 2 of the Act provides for definition of zero
coupon bond, as a bond issued by any infrastructure capital company or infrastructure
capital fund or public sector company or scheduled bank and in respect of which no
payment and benefit is received or receivable before maturity or redemption. These are
required to be notified by the Central Government in the Official Gazette.
Post Amendment –
► In order to enable infrastructure debt fund [which are notified by the Central
Government in the Official Gazette under clause (47) of section 10 of the Act] to issue
zero coupon bond, necessary amendments are being carried out. Rules 2F and 8B of
Income Tax Rules shall also be amended subsequently after the Finance Bill 2021 is
enacted.
► TDS not applicable under section 194A(3)(x) on interest income which is paid or
payable by an infrastructure debt fund.
Page 25
Tax neutral conversion of Urban Cooperative
Bank into Banking Company
Sections 44DB and 47(vica) & (vicb) - Modified
► Applicable to conversion of a primary co-operative bank to a banking company
Pre-Amendment – Special provision for computing deductions in the case of business reorganisation
of cooperative banks which inter alia, provides that where business reorganisation of co-operative
banks takes place, the deductions under section 32, 35D, 35DD and 35DDA shall be apportioned
between the predecessor co-operative bank and the successor co-operative bank in the proportion of
the number of days before and after the date of business reorganisation.
Post Amendment –
► Amended to include conversion of a primary co-operative bank to a banking company under its
ambit and the deductions available shall also be made applicable in relation to such conversion of
primary co-operative bank to the banking company.
► Also transfer of a capital asset by the primary co-operative bank to the banking company as a
result of conversion shall not be treated as transfer under section 47 of the Act. Consequently, the
allotment of shares of the converted banking company to the shareholders of the predecessor
primary co-operative bank shall not be treated as transfer under the said section of the Act.
Page 26
Facilitating strategic disinvestment of public
sector company
Sections 2(19AA) & 72A - Modified
► Applicable to Public Sector Company
Pre-Amendment –
► “Demerger", in relation to companies, means the transfer, pursuant to a scheme of
arrangement under sections 391 to 394 of the Companies Act, 1956 (1 of 1956), by a
demerged company of its one or more undertakings to any resulting company on
satisfaction of conditions prescribed in the said clause.
► Sub-section (1) of section 72A of the Act provides that the accumulated loss and
unabsorbed depreciation of the amalgamating company or companies shall be
deemed to be the accumulated losses and unabsorbed depreciation of the
amalgamated company or companies in specified cases and subject to the conditions
specified in the said section.
Post Amendment –
► Proposed to relax the provisions of these two sections for public sector companies in
order to facilitate strategic disinvestment by the Government.
Page 27
Extension of date of incorporation for eligible start up
for exemption and for investment in eligible start-up
Sections 80-IAC & 54GB - Modified
► Applicable to Eligible Start-Up only
Pre-Amendment -
► Provides for a deduction of an amount equal to 100% of the profits and gains derived from an eligible
business by an eligible start-up for 3 consecutive AYs out of 10 years at the option of the assessee. This is
subject to the condition that the total turnover of its business does not exceed one hundred crore rupees.
► The eligible start-up is required to be incorporated on or after 01 April 2016 but before 01 April 2021.
► Section 54GB provide for exemption of capital gain which arises from the transfer of a long-term capital
asset, being a residential property (a house or a plot of land), owned by the eligible assessee if the
assessee utilise the net consideration for subscription in the equity shares of an eligible start-up, before
the due date of furnishing of ROI. The eligible start-up is required to utilise this amount for purchase of
new asset within one year from the date of subscription in equity shares by the assessee. Further, it has
been provided that benefit is available only when the residential property is transferred on or before 31
March 2021.
Post Amendment – In order to help such eligible start-up and help investment in them -
► For section 80-IAC, outer date of incorporation extended till 31 March 2022; and
► For section 54GB outer date of transfer of residential property extended till 31 March 2022.
Page 28
Increase in safe harbour limit of 10% for home buyers
and real estate developers selling such residential units
Sections 43CA & 56(2)(x) - Modified
Pre-Amendment -
► Section 43CA provides that where the stamp duty value on the transfer of land or building or both duty does not
exceed 110% of the consideration received or accruing as a result of the transfer, the consideration so received or
accruing as a result of the transfer shall, for the purposes of computing profits and gains from transfer of such
asset, be deemed to be the full value of the consideration.
► Section 56(2)(x) provides that where any person receives, in any previous year, from any person or persons on or
after 1st April 2017, any immovable property, for a consideration which is less than the stamp duty value of the
property by an amount exceeding Rs 50,000, then stamp duty value of such property as exceeds such
consideration shall be charged to tax under the head as income from other sources. It also provide that where the
assessee receives any immovable property for a consideration and the stamp duty value of such property exceeds
ten per cent of the consideration or fifty thousand rupees, whichever is higher, the stamp duty value of such
property as exceeds such consideration shall be charged to tax as Income from other sources.
Post Amendment – In order to boost the demand in the real-estate sector and to enable the real-estate developers to
liquidate their unsold inventory at a lower rate to home buyers and consequential relief to buyers, it is proposed to
increase the safe harbour threshold from existing 10% to 20%, if the following conditions are satisfied:
► Transfer of residential unit takes place during the period from 12 November 2020 to 30 June 2021;
► Transfer is by way of first time allotment of the residential unit to any person;
► Consideration received or accruing as a result of such transfer does not exceed Rs 2 crores;
Page 29
Rationalisation of provisions related to Sovereign
Wealth Fund (‘SWF’) and Pension Fund (‘PF’)
Section 10(23FE) – Modified
► Applicable to SWF and PF
Pre-Amendment – Exemption is provided to specified persons from the income in the nature of dividend, interest or
long-term capital gains arising from an investment made by it in India.
► Specified persons are SWF or PF which fulfils conditions prescribed and are specified for this purpose by CG.
► Provision was introduced through Finance Act, 2020 to encourage investments of SWF and PF into infrastructure
sector of India. Subsequent to enactment, a notification was also issued to enlarge the scope of infrastructure
activities eligible for investments. One SWF has already been notified under this provision.
Post Amendment – In order to rationalise the provision of this clause and to remove the difficulties in meeting some of
the conditions, following inter-alia amendments are proposed:
► Allowing Alternate Investment Fund (AIF) to invest up to 50% in non-eligible investments;
► Allowing Investment through holding company;
► Allowing Investment in NBFC – IDF / IFC (non-banking finance company-infrastructure debt fund /
Infrastructure finance company)
► Liable to Tax - Presently, some PFs are liable to tax in their country though given exemption subsequently. It
is proposed to amend this sub-clause to provide that if pension fund is liable to tax but exemption from
taxation for all its income has been provided by the foreign country under whose laws it is created or
established, then such pension fund shall also be eligible.
► SWF/PFs shall not participate in day to day operation of investee
► CG will further prescribe Rules for the method of calculation
Page 30
Rationalization of provisions of Minimum
Alternate Tax (‘MAT’)
Section 115JB – Modified
► Applicable to Company
Pre-Amendment – Section 115JB of the Act provides for MAT at the rate of 15% of its book profit, in case tax on the total income
of a company computed under the provisions of the Act is less than 15% of book profit.
► Book profit for this purpose is computed by making certain adjustments to the profit disclosed in the profit and loss account
prepared by the company in accordance with the provisions of the Companies Act, 2013.
Post Amendment – Representations were received that the computation of book profit under section 115JB does not provide for
any adjustment on account of additional income of past year(s) included in books of account of current year on account of
secondary adjustment under section 92CE or on account of an Advance Pricing Agreement (‘APA’) entered with the taxpayer
under section 92CC
► Proposed that in cases where past year income is included in books of account during the previous year on account of
an APA or a secondary adjustment, the Assessing Officer shall, on an application made to him in this behalf by the
assessee, recompute the book profit of the past year(s) and tax payable, if any, during the previous year, in the
prescribed manner. Further, the provision of section 154 of the Act shall apply so far as possible and the period of four
years specified in sub-section (7) of section 154 shall be reckoned from the end of the financial year in which the said
application is received by the Assessing Officer.
► Representation has also been received that since dividend income is now taxable in the hand of shareholders, dividend
received by a foreign company on its investment in India is required to be excluded for the purposes of calculation of book
profit in case the tax payable on such dividend income is less than MAT liability on account of concessional tax rate provided
in the Double Taxation Avoidance Agreement (DTAA).
► Proposed similar treatment to dividend as already there for capital gains on transfer of securities, interest, royalty and
Fee for Technical Services (FTS) in calculating book profit for the purposes of section 115JB of the Act, so that both
specified dividend income and the expense claimed in respect thereof are reduced and added back, while computing
book profit in case of foreign companies where such income is taxed at lower than MAT rate due to DTAA.
Page 31
Exemption of deduction of tax at source on payment of Dividend to
business trust in whose hand dividend is exempt
Section 194 – Modified
Pre-Amendment - Section 194 of the Act provides for deduction of tax at

source (TDS) on payment of dividends to a resident
Post Amendment – Second proviso to this section provides that the

provisions of this section shall not apply to such income credited or paid to
certain insurance companies or insurers. It is proposed to amend second
proviso to section 194 of the Act to further provide:
► Provisions of this section shall also not apply to such income credited or paid
to a business trust by a special purpose vehicle or payment of dividend to
any other person as may be notified.
► Consequentially no withholding tax obligation on distribution of dividend
income by business trust to unit-holders.
Page 32
Withholding tax on payment made to Foreign Institutional Investors
(‘FIIs’)
Section 196D – Modified

Pre-Amendment - Section 196D of the Act provides for deduction of tax on income of FII
from securities as referred to in clause (a) of sub-section (1) of section 115AD of the Act
(other than interest referred in section 194LD of the Act) at the rate of 20 percent.
► This rate of tax deduction on payment to FII’s without giving any DTAA benefit has
also been upheld by Hon‘ble Supreme Court in the case of PILCOM vs. CIT West
Bengal (Civil Appeal No. 5749 of 2012).
Post Amendment –
► Proposed to provide DTAA benefit provided such payee has furnished the tax
residency certificate.
Page 33
Raising of prescribed limit for exemption under sub-clause (iiiad)
and (iiiae) of clause (23C) of section 10 of the Act
Section 10(23C)(iiiad) / (iiiae) – Modified

► Applicable to Specified Person
Pre Amendment –
► Provides for exemption for income received by any person on behalf of university or
educational institution or hospital or prescribed institution.
► Presently prescribed limit for these two sub-clauses is Rs 1 crore as per Rule 2BC of
the Income-tax Rule.
Post Amendment – To provide benefit to small trust and institutions:

► Proposed that the exemption under sub-clause (iiiad) and (iiiae) shall be increased to
Rs 5 crore and such limit shall be applicable for an assessee with respect to the
aggregate receipts from university or universities or educational institution or
institutions as referred to in sub-clause (iiiad) as well as from hospital or hospitals or
institution or institutions as referred to in sub-clause (iiiae).
Page 34
Constitution of the Board for Advance Ruling
Section 245N to 245 V - Modified / New Section 245W - Inserted

► Effective from 01 April 2021
Post Amendment –
► Large numbers of applications are pending before Authority for Advance Rulings (‘AAR’) in absence of
Chairman and/ or Vice-Chairman.
► Need to look for an alternative method of providing advance ruling which can give rulings to taxpayers in
timely manner.
► Proposed to constitute a Board of Advance Ruling and AAR shall cease to operate with effect from
prescribed date to be notified by CG.
► Appeal can be filed to High Court against the order passed or ruling pronounced by the Board for Advance
Ruling. This appeal can be filed by the applicant as well as by the Department. Such appeal shall be filed
within sixty days from the date of the communication of such ruling or order, in such form and manner as
may be prescribed.
► However, where the High Court is satisfied, on an application made in this behalf, that the appellant was
prevented by sufficient cause from presenting the appeal within the period specified in this section, it may
allow a further period of thirty days for filing such appeal.
► CG empowered to notify a scheme for filing of appeal by the Assessing Officer so as to impart greater
efficiency, transparency and accountability.
Page 35
Provisional attachment in Fake Invoice cases
Sections 281B & 271AAD – Modified

Pre Amendment –
► Section 271AAD of the Act was inserted vide Finance Act, 2020 to impose penalty on
a person or a person who causes such person to make a false entry or omit an entry
from his books of accounts. It is an anti-abuse provision.
Post Amendment –
► Upon initiation of such penalty proceedings, it is highly likely that the taxpayer may
also evade the payment of such penalty, if imposed. Hence, in order to protect the
interest of revenue, it is proposed to amend the provision of section 281B of the Act to
enable the Assessing Officer to exercise the powers under this section during the
pendency of proceedings for imposition of penalty under section 271AAD of the Act, if
the amount or aggregate of amounts of penalty imposable is likely to exceed Rs 2
crores.
Page 36
Other Relevant Provisions
Various Sections - Modified

► Income Declaration Scheme, 2016 (‘IDS’) Amendment - It is stated under IDS that Board to specify a class of
persons to whom such tax paid in excess shall be refundable. It is further propose that excess amount of tax,
surcharge or penalty paid in pursuance of a declaration made under the Scheme shall be refundable to the
► Liable to Tax defined under 2(29A) - Liable to tax in relation to a person means that there is a liability of tax on
that person under the law of any country and will include a case where subsequent to imposition of such tax liability,
an exemption has been provided.
► Clarification regarding the scope of Vivad se Vishwas Act, 2020 (‘VSV’) - As VSV was enacted for the
resolution of disputed tax and not for the taxes covered by an order in pursuance to the settlement of a case
(ITSC), it is clarified that same is intended to be outside the purview of VSV.
► Presumptive taxation for professionals (Section 44ADA) – Applicable to assessee, being a resident in India
(Individual, HUF, Firm) engaged in a profession referred to in sub-section (1) of section 44AA and whose total gross
receipts do not exceed fifty lakh rupees in a previous year - A sum equal to fifty per cent of the total gross receipts
of the assessee in the previous year on account of such profession, or as the case may be, a sum higher than the
aforesaid sum claimed to have been earned by the assessee, shall be deemed to be the profits and gains of such
profession chargeable to tax. Clarified that it is not applicable to LLP.
► Additional Tax Incentives to units located in International Financial Services Centre (‘IFSC’)
► Rationalisation of the provision relating to processing of returned income [Section 143(1)] – Propose to
amend the following:
► (i) Amend sub-clause (iv) of clause (a) of sub-section (1) of the section 143 of the Act, to allow for the
adjustment on account of increase in income indicated in the audit report but not taken into account in
computing the total income.
► (ii) Amend sub-clause (v) of clause (a) of sub-section (1) of the section 143 of the Act so as to give
consequential effect to amendment carried out in section 80 AC vide Finance Act, 2018.
Page 37
Equalization Levy
Finance Act 2016/ 2020 + Section 10(50) - Modified

► Applicable to E-commerce operator means a NR who owns, operates or manages digital or
ecommerce facility or platform for the online sale of goods or online provision of services
or both.
► Pre-Amendment – Equalisation Levy (‘EL’) is to be levied at the rate of 2% of the amount of

consideration received or receivable by an e-commerce operator from ecommerce supply or
services made or provided or facilitated, by it- (i) to a person resident in India; or (ii) to a non-
resident in the specified circumstances as referred to in sub-section (3); or (iii) to a person who
buys such goods or services or both, using internet protocol.
► Post Amendment –
► Consideration received or receivable for specified services and consideration received or
receivable for e-commerce supply or services shall not include consideration which are taxable as
royalty or fees for technical services in India under the Income-tax Act read with the agreement
notified by the Central Government under section 90 or section 90A.
► Clarified that exemption under section 10(50) will apply for the e-commerce supply or services
made or provided or facilitated on or after 1st April, 2020.
Page 38
Scope Of Supply
Section 7- Sub-Section (1) – New clause (aa) Inserted
► Post Amendment – A new clause (aa) has been introduced after clause (a) in
subsection (1) of Section 7 which ensures levy of tax on activities or transactions
involving supply of goods or services by any person, other than an individual, to its
members or constituents or vice-versa, for cash, deferred payment or other valuable
consideration.
Thus the definition of supply is being proposed to be amended retrospectively wherein
the person and its members or constituent's shall be deemed to be two separate
persons and the supply of activities or transactions inter se shall be deemed to take
place from one person to another.
► Consequent to this amendment in section 7 of the CGST Act paragraph 7 of Schedule

II to the CGST Act which stated that supply of goods by any unincorporated
association or body of persons to a member thereof for cash, deferred payment or
other valuable consideration shall be treated as supply of goods is being omitted
retrospectively, with effect from the 1st July, 2017.
Page 40
Input Tax Credit
Section 16 – subsection (2) -Clause (aa) - Inserted
► Post Amendment – Input tax credit on invoice or debit note may be availed
only when the details of such invoice or debit note have been furnished by
the supplier in the statement of outward supplies and such details have been
communicated to the recipient of such invoice or debit note.
Rule 36(4) of the CGST Rules 2017 that restricts the availment of ITC based
on auto populated details in GSTR 2A/2B would be legalized by way of a
restriction imposed in the section itself.
Page 41
Accounts and Records
Section 35 (5) – Omitted
► Pre-Amendment – Every registered person whose turnover during a

financial year exceeds the prescribed limit shall get his accounts audited by
a chartered accountant or a cost accountant and shall submit a copy of the
audited annual accounts, the reconciliation statement under sub-section (2)
of section 44 and such other documents in such form and manner as may be
prescribed.
► Post Amendment – Sub-section (5) of section 35 of the CGST Act is being

omitted so as to remove the mandatory requirement of getting annual
accounts audited and reconciliation statement submitted by specified
professional.
Page 42
Annual Returns
Section 44 – Modified
► Pre-Amendment – Every registered person who is required to get his

accounts audited in accordance with the provisions of sub-section (5) of
section 35 shall furnish, electronically, the annual return under sub-section
(1) along with a copy of the audited annual accounts and a reconciliation
statement, reconciling the value of supplies declared in the return furnished
for the financial year with the audited annual financial statement, and such
other particulars as may be prescribed.
► Post Amendment- It removes the mandatory requirement of furnishing a

reconciliation statement duly audited by specified professional and to provide
for filing of the annual return on self-certification basis. It further provides for
the Commissioner to exempt a class of taxpayers from the requirement of
filing the annual return.
► The amendment in Sections 35(5) and 44 proposes to overhaul the
compliance procedure for GSTR 9 and 9C by combining the same in one
single form with self certification by the assessee.
Page 43
Interest on delayed payment of tax
Section 50(1) – Modified

► Pre-Amendment – Every person who is liable to pay tax in accordance with the provisions of this
Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government
within the period prescribed, shall for the period for which the tax or any part thereof remains
unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified
by the Government on the recommendations of the Council. [Provided that the interest on tax
payable in respect of supplies made during a tax period and declared in the return for the said
period furnished after the due date in accordance with the provisions of section 39except where
such return is furnished after commencement of any proceedings under section 73 or section 74 in
respect of the said period, shall be levied on that portion of the tax that is paid by debiting the
electronic cash ledger.]7
► Post Amendment- Section 50 of the CGST Act is being amended, retrospectively, to substitute the
proviso to sub-section (1) so as to charge interest on net cash liability with effect from the 1st July,
2017. “Provided that the interest on tax payable in respect of supplies made during a tax period
and declared in the return for the said period furnished after the due date in 78 accordance with the
provisions of section 39,except where such return is furnished after commencement of any
proceedings under section73 or section 74 in respect of the said period, shall be payable on that
portion of the tax which is paid by debiting the electronic cash ledger.”.
► By this amendment the effect of Interest on net cash liability has been given in the Act itself
which was earlier done through Orders.
Page 44
Demand and Recovery of Taxes
Sections 74 and 75 - Modified

► Post Amendment - Section 74 of the CGST Act is being amended so as make
seizure and confiscation of goods and conveyances in transit a separate proceeding
from recovery of tax.
► Pre-Amendment – Section 75(12) states that Notwithstanding anything contained in

section 73 or section 74, where any amount of self-assessed tax in accordance with a
return furnished under section 39 remains unpaid, either wholly or partly, or any
amount of interest payable on such tax remains unpaid, the same shall be recovered
under the provisions of section 79.
► Post Amendment - An explanation to sub-section (12) of section 75 of the CGST Act

is being inserted to clarify that “self-assessed tax” shall include the tax payable in
respect of outward supplies, the details of which have been furnished under section
37, but not included in the return furnished under section 39. The amendment brings
clarity that self assessment tax would include those which has not been
disclosed in GSTR 1 also.
Page 45
Provisional Attachment
Section 83 - Modified
► Pre-Amendment –Where during the pendency of any proceedings under

section 62 or section 63 or section 64 or section 67 or section 73 or section
74, the Commissioner is of the opinion that for the purpose of protecting the
interest of the Government revenue, it is necessary so to do, he may, by
order in writing attach provisionally any property, including bank account,
belonging to the taxable person in such manner as may be prescribed.
► Post Amendment - Where, after the initiation of any proceeding under

Chapter XII, Chapter XIV or Chapter XV, the Commissioner is of the opinion
that for the purpose of protecting the interest of the Government revenue it is
necessary so to do, he may, by order in writing ,attach provisionally, any
property, including bank account, belonging to the taxable person or any
person specified in sub-section (1A) of section122, in such manner as may
be prescribed.
► The amendment gives power to the Commissioner to attach property
and bank accounts of the taxable persons by order in writing.
Page 46
Appeals to Appellate Authority
Section 107(6) - Modified
► Pre-Amendment –No appeal shall be filed unless the appellant has paid in
full, such part of the amount of tax, interest, fine, fee and penalty arising from
the impugned order, as is admitted by him; and a sum equal to ten per cent.
of the remaining amount of tax in dispute arising from the said order, in
relation to which the appeal has been filed.
► Post Amendment - No appeal shall be filed against an order made under

sub-section (3) of section 129, unless a sum equal to twenty-five per cent. of
penalty has been paid by the appellant.
Page 47
Detention, Seizure and Release of Goods and
Conveyances in transit
Post Amendment –The amendments in section 129 of the CGST Act, 2017
are relating to procedure for detention and seizure of goods during transit and
has been totally overhauled. The new provisions provide for levy of penalty of
200% of the tax payable for release of goods. The confusion prevailing till this
amendment whether the tax as section 129 was payable as penalty or only
penalty was payable would be done away with and now penalty of 200% of tax
payable would be demanded in cases of detention where goods do not
accompany proper documents and thus are liable for seizure by the proper
officer. The entire process is being over hauledand time limit of 7 days has
been given to the proper officer to issue demand notice and further seven days
from the date of notice to issue the order for payment of penalty.
Page 48
Miscellaneous Provisions
Sections 151, 152, 168 - Modified
► Post- Amendment –Section 151 of the CGST Act is being substituted to

empower the jurisdictional commissioner to call for information from any
person relating to any matter dealt with in connection with the Act.
► Section 152 of the CGST Act is being amended so as to provide that no

information obtained under sections 150 and 151 shall be used for the
purposes of any proceedings under the Act without giving an opportunity of
being heard to the person concerned.
► Section 168 of the CGST Act is being amended to enable the jurisdictional
commissioner to exercise powers under section151 to call for information.
Page 49
Amendment in IGST Act 2017
► Changes in the refund mechanism have been proposed wherein the Govt.
would notify the class of tax payers and the class of goods and services
which can be exported with payment of IGST and refund claimed thereon.
► Also, SEZ supplies would be treated as ZERO RATED only if the same is
utilized for Authorised operations of the SEZ. This would ensure no fake
invoice ITC is being passed on to SEZ units.
Section 16 of the IGST Act is being amended so as to:

► zero rate the supply of goods or services to a Special Economic Zone
developer or a Special Economic Zone unit only when the said supply is for
authorized operations;
► restrict the zero-rated supply on payment of integrated tax only to a notified
class of taxpayers or notified supplies of goods or services; and
► link the foreign exchange remittance in case of export of goods with refund.
Page 50
Contact Us
Khushbu Agarwal, CA Ashish Agarwal, CA & CS Milesh Dokania, CA

M +91 9830579494 M +91 9903651717 M +91 9830449189
khushbu@kaagarwalassociates.com ashish@kaagarwalassociates.com milesh@kaagarwalassociates.com
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Proprietor in K A Agarwal & Associates Senior Advisor (Tax & Regulatory

Senior Advisor (Tax & Regulatory Services) Services, 11+ yrs). Focusing on
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Corporate Indirect Taxes which inter alia
advisory, compliances, litigation, Social Security services,
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Page 51
Thank You
Disclaimer: This note contains information in summary form and

is therefore intended for general guidance only. It is not intended
to be a substitute for detailed research or the exercise of
professional judgment. Fact specific advice should be sought
before taking any decision on the basis of this slides.
| S M MUNOT AND ASSOCIATES | CHARTERED ACCOUNTANTS |
- CA SWAPNIL MUNOT
SUMMARY OF IMPORTANT GST CHANGES BY
BUDGET – FINANCE BILL, 2021
❖ INTRODUCTION: Hon’ble Finance Minister Smt. Nirmala Sitharaman ji has placed her third consecutive
budget after taking charge of Finance Ministry. This Budget will be the first of this new decade 2021-2030.
This time, due to COVID-19, budget printing was not undertaken and therefore it is declared that, this
Budget is “Digital Budget”.
❖ BUDGET SPEECH – GST MATTER: Hon’ble Finance Minister Smt. Nirmala Sitharaman said, “As Chairperson
of the Council, I want to assure the House that we shall take every possible measure to smoothen the GST
further, and remove anomalies such as the inverted duty structure”.
She also categorically said below:
❖ ANALYSISI - BELOW IS ANALYSIS OF AMENDMENT MADE IN GST BY THE FINANCE BILL, 2021. SOME OF THE
AMENDMENTS ARE GOING TO BE ADVERSE IMPACT ON TRADE AND BUSINESS:
HEADING SECTION REFERENCE AMENDMENT MADE BY BUDGET

GST on Club/ Sec 7(1)(aa) introduced This section is introduced to clarify
Association retrospectively from 1st July governments stand on GST on AOP/ Societies
2017 etc. Section is introduced to ensure levy of tax
on activities or transactions involving supply of
goods or services by any person, other than an
individual, to its members or constituents or
Page 1 of 4
CA Swapnil Munot, Pune
- CA SWAPNIL MUNOT
vice-versa, for cash, deferred payment or other
valuable consideration.
ITC Matching Clause (aa) introduced in Sec This clause is being inserted to provide that
provision 16(2), to allow ITC only if input tax credit on invoice or debit note may
made more details are uploaded by be availed only when the details of such
stronger now supplier invoice or debit note have been furnished by
the supplier in the statement of outward
supplies and such details have been
communicated to the recipient of such invoice
or debit note. This amendment will ack like
backing up for Rule 36(4).
Audited GST Sec 35(5) Removed. This section is being omitted so as to remove
Reconciliation Also Amendment made in Sec the mandatory requirement of getting annual
Statement not 44 accordingly. accounts audited and reconciliation statement
required. submitted by specified professional.
Now GSTR 9C can be filed without certification.
This amendment will be effective from future
date.
In real sense, Tax payer will still get this work
done and verified from professionals, so as to
ensure that information is correctly reported
in, so that there will not be issue during
Departmental Audit / Assessment.
Interest on Net Proviso under Sec 50(1) is This provision is being amended,
Liability substituted retrospectively retrospectively from 1st July 2017, so as to
from 1st July 2017 charge interest on net cash liability.
Seizure and Amendment to Sec 74 Section 74 of the CGST Act is being amended
Confiscation so as make seizure and confiscation of goods
and conveyances in transit a separate
proceeding from recovery of tax.
Page 2 of 4
- CA SWAPNIL MUNOT
Provisional Sec 83(1) is replaced to allow Provision is being amended so as to provide
Attachment is attachment from day one that provisional attachment shall remain valid
now valid from for the entire period starting from the
day one of initiation of any proceeding under Chapter XII,
proceeding Chapter XIV or Chapter XV till the expiry of a
period of one year from the date of order
made thereunder
Filing of Appeal Proviso inserted in Sec 107(6), A proviso is being inserted to provide that no
under Sec to make 25% penalty payment appeal shall be filed against an order made
129(3) for mandatory for filing Appeal under Sec 129(3), unless a sum equal to 25% of
detention/sizer penalty has been paid by the appellant.
of goods
Penalty in case Sec 129 (1) Penalty in case of E • Now for release of goods/vehicle in case
of E Way Bill way Bill default increased to of default of E way bill, penalty equal to
default 200% 200% is payable. (Earlier it was 100%)
• Earlier for release of goods, tax was also
required to be paid. Now no such
requirement. Meaning thereby tax can be
paid on the same in GSTR 3B
• Time list of 7 days for notice and 7 days for
order provided in act. Earlier no such time
limit was provided.
• If vehicle is also detained, same can be
released by transporter, now on payment
of penalty or Rs 1 lakhs, whichever is
lower.
Para 7 of Sch II Para 7 of Schedule II omitted Consequent to the amendment in section 7 of
omitted retrospectively from 1st July the CGST Act paragraph 7 of Schedule II to the
2017 CGST Act is being omitted retrospectively, with
effect from the 1st July, 2017
Page 3 of 4
- CA SWAPNIL MUNOT
Export Sec 16(1) of IGST is amended to Section 16 of the IGST Act is being amended so
condition for add condition of authorised as to:
supply to SEZ operation for SEZ (i) zero rate the supply of goods or services to
SEZ unit only when the said supply is for
authorised operations;
(ii) restrict the zero-rated supply on payment
of integrated tax only to a notified class of
taxpayers or notified supplies of goods or
services; and
(iii) link the foreign exchange remittance in
case of export of goods with refund
❖ CONCLUSION: Vide The Finance Bill 2021, government has made some amendment, which is going to have
adverse impact Trade and Industry in big way. such as
o Allowability of ITC only if it is uploaded by supplier,
o E Way Bill Penalty increased to 200%,
o Supply to SEZ will be treated as Zero Rate only if it is for Authorised Operation,
o Limited applicability of Export on Payment of Tax,
o Compulsorily realization of Export proceeds within time limit for Refund
Said amendment are demotivating for Trade and Business. There is no such smell of simplifications as
assured by finance minister in her speech. Rather, now trade and industry need to more cautious and alert,
for GST Compliances.
[Disclaimer: This publication contains information in summary form and is therefore intended for general guidance
only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. We cannot
accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material
in this publication.]
Page 4 of 4
FINANCE BILL, 2021
PROVISIONS RELATING TO
DIRECT TAXES
Introduction
The provisions of Finance Bill, 2021 (hereafter referred to as "the Bill"), relating
to direct taxes seek to amend the Income-tax Act, 1961 (hereafter referred to as
'the Act'), Prohibition of Benami Property Transactions Act, 1988 (hereafter
referred to as ―PBPT Act‖), Finance (No 2) Act, 2004 and Finance Act, 2016 and
the Direct Tax Vivad se Vishwas Act, 2020 to continue reforms in direct tax system
through tax-incentives, removing difficulties faced by taxpayers and rationalization
of various provisions.
With a view to achieving the above, the various proposals for amendments are
organized under the following heads:—
(A) Rates of income-tax;
(B) Tax incentives;
(C) Removing difficulties faced by taxpayers;
(D) Rationalisation of various provisions.
DIRECT TAXES
A. RATES OF INCOME-TAX
I. Rates of income-tax in respect of income liable to tax for the assessment

year 2021-22.
In respect of income of all categories of assessee liable to tax for the

assessment year 2021-22, the rates of income-tax have either been specified in
specific sections (like section 115BAA or section 115BAB for domestic companies,
115BAC for individual/HUF and 115BAD for cooperative societies) or have been
specified in Part I of the First Schedule to the Bill. There is no change proposed in
tax rates either in these specific sections or in the First Schedule. The rates
provided in sections 115BAA or 115BAB or 115BAC or 115BAD for the
1
2
assessment year 2021-22 would be same as already enacted. Similarly rates laid
down in Part III of the First Schedule to the Finance Act, 2020, for the purposes of
computation of ―advance tax‖, deduction of tax at source from ―Salaries‖ and
charging of tax payable in certain cases for the assessment year 2021-22 would
now become part I of the first schedule. Part III would now apply for the
assessment year 2022-23 and would remain unchanged except that it would also
apply to proposed section 194P.
(1) Tax rates under section 115BAC and section 115BAD—

From the assessment year 2021-22 (FY 2020-21), individual and HUF tax payers
have an option to opt for taxation under section 115BAC of the Act and the resident
co-operative society has an option to opt for taxation under the newly inserted
section 115BAD of the Act.
On satisfaction of certain conditions as per the provisions of section 115BAC, an

individual or HUF shall, from assessment year 2021-22 onwards, have the option to
pay tax in respect of the total income at following rates:
Total Income (Rs) Rate
Upto 2,50,000 Nil
From 2,50,001 to 5,00,000 5 per cent.
From 5,00,001 to 7,50,000 10 per cent.
From 7,50,001 to 10,00,000 15 per cent.
From 10,00,001 to 12,50,000 20 per cent.
From 12,50,001 to 15,00,000 25 per cent.
Above 15,00,000 30 per cent.

Similarly, a co-operative society resident in India shall have the option to pay tax at
22 per cent for assessment year 2021-22 onwards as per the provisions of section
115BAD, subject to fulfilment of certain conditions.
(2) Tax rates under Part I of the first schedule applicable for the assessment
year 2021-22
3
A. Individual, HUF, association of persons, body of individuals, artificial

juridical person.
Paragraph A of Part-I of First Schedule to the Bill provides following rates of

income-tax:—
(i) The rates of income-tax in the case of every individual (other than those
mentioned in (ii) and (iii) below) or HUF or every association of persons or
body of individuals, whether incorporated or not, or every artificial juridical
person referred to in sub-clause (vii) of clause (31) of section 2 of the Act
(not being a case to which any other Paragraph of Part III applies) are as
under:—
Up to Rs. 2,50,000 Nil.
Rs. 2,50,001 to Rs.5,00,000 5 percent.
Rs. 5,00,001 to Rs.10,00,000 20 percent.
Above Rs. 10,00,000 30 percent.
(ii) In the case of every individual, being a resident in India, who is of the age
of sixty years or more but less than eighty years at any time during the
previous year,—
Up to Rs. 3,00,000 Nil.
Rs. 3,00,001 to Rs.5,00,000 5 percent.
Rs. 5,00,001 to Rs.10,00,000 20 percent.
Above Rs. 10,00,000 30 percent.

(iii) in the case of every individual, being a resident in India, who is of the age
of eighty years or more at any time during the previous year,—
Up to Rs.5,00,000 Nil.
Rs. 5,00,001 to Rs.10,00,000 20 percent.
Above Rs 10,00,000 30 percent.

4
b. Co-operativeSocieties
In the case of co-operative societies, the rates of income-tax have been

specified in Paragraph B of Part I of the First Schedule to the Bill. They remain
unchanged at (10% up to Rs 10,000; 20% between Rs 10,000 and Rs 20,000; and
30% in excess of Rs 30,000)
c. Firms
In the case of firms, the rate of income-tax has been specified in Paragraph C
of Part I of the First Schedule to the Bill. They remain unchanged at 30%
d. Local authorities
The rate of income-tax in the case of every local authority has been specified in
Paragraph D of Part I of the First Schedule to the Bill. They remain unchanged at
30%.
e. Companies
The rates of income-tax in the case of companies have been specified in

Paragraph E of Part I of the First Schedule to the Bill. In case of domestic
company, the rate of income-tax shall be twenty five per cent. of the total income, if
the total turnover or gross receipts of the previous year 2018-19 does not exceed
four hundred crore rupees and in all other cases the rate of Income-tax shall be
thirty per cent. of the total income.
In the case of company other than domestic company, the rates of tax are the
same as those specified for the FY 2019-20.
(3) Surcharge on income-tax
The amount of income-tax shall be increased by a surcharge for the purposes of

the Union,—
(a) in the case of every individual or HUF or association of persons or body of

individuals, whether incorporated or not, or every artificial juridical person
referred to in sub-clause (vii) of clause (31) of section 2 of the Act,
5
including an individual or HUF exercising option under section 115BAC,

not having any income under section 115AD of the Act,—
(i) having a total income (including the income by way of dividend or

income under the provisions of section 111A and 112A of the Act)
exceeding fifty lakh rupees but not exceeding one crore rupees, at
the rate of ten per cent. of such income- tax; and
(ii) having a total income (including the income by way of dividend or

exceeding one crore rupees but not exceeding two crore rupees, at
the rate of fifteen per cent. of such income-tax;
(iii) having a total income (excluding the income by way of dividend or

exceeding two crore rupees but not exceeding five crore rupees, at
the rate of twenty-five per cent. of such income-tax;
(iv) having a total income (excluding the income by way of dividend or

exceeding five crore rupees, at the rate of thirty-seven per cent. of
such income-tax;
(v) having a total income (including the income by way of dividend or

exceeding two crore rupees, but is not covered under clause (iii) or
(iv) above, at the rate of fifteen per cent of such incometax:
Provided that in case where the total income includes any income by way of
dividend or income chargeable under section 111A and 112A of the Act, the rate of
surcharge on the amount of income-tax computed in respect of that part of income
shall not exceed fifteen percent;
However, surcharge shall be at the rates provided in (i) to (v) above for all
category of income without excluding dividend or capital gains in case if the
income is taxable under section 115A, 115AB, 115AC, 115ACA and 115E.
(aa) in the case of individual or every association of person or body of

6
referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax

Act having income under section 115AD of the Act,-
(i) having a total income exceeding fifty lakh rupees but not exceeding
one crore rupees, at the rate of ten per cent of such income-tax; and
(ii) having a total income exceeding one crore rupees but not exceeding
two crore rupees, at the rate of fifteen per cent of suchincome-tax;
(iii) having a total income [excluding the income by way of dividend or

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

section 115AD of the Act] exceeding five crore rupees, at the rate of
thirty-seven per cent. of such income-tax;
(v) having a total income [including the income by way of dividend or

section 115AD of the Act] exceeding two crore rupees but is not
covered in sub-clauses (iii) and (iv), at the rate of fifteen per cent. of
suchincome-tax:
dividend or income chargeable under clause (b) of sub-section (1) of section
115AD of the Act, the rate of surcharge on the income-tax calculated on that part
of income shall not exceed fifteen percent;
(b) in the case of every co-operative society (except resident co-operative

society opting under section 115BAD) or firm or local authority, at the rate
of twelve per cent of such income-tax, where the total income exceeds one
crore rupees;
(c) In case of resident co-operative society opting under section 115BAD, at

the rate of ten percent of such income tax.
(d) in the case of every domestic company, except such domestic company
7
whose income is chargeable to tax under section 115BAA or section

115BAB of the Act,—
(i) at the rate of seven per cent. of such income-tax, where the total
income exceeds one crore rupees but does not exceed ten
crorerupees;
(ii) at the rate of twelve per cent. of such income-tax, where the total
income exceeds ten crore rupees;
(e) in the case of domestic company whose income is chargeable to tax

under section 115BAA or 115BAB of the Act, at the rate of ten percent;
(f) in the case of every company, other than a domestic company,—
(i) at the rate of two per cent. of such income-tax, where the total
income exceeds one crore rupees but does not exceed ten
crorerupees;
(ii) at the rate of five per cent. of such income-tax, where the total income
exceeds ten crorerupees;
(g) In other cases (including sections 92CE, 115-O, 115QA, 115R, 115TA or
115TD), the surcharge shall be levied at the rate of twelve percent.
(4) Marginal Relief—
Marginal relief has also been provided in all cases where surcharge is proposed
to be imposed.
(5) Education Cess—
For assessment year 2021-22, ―Health and Education Cess‖ is to be levied at

the rate of four per cent. on the amount of income tax so computed, inclusive of
surcharge wherever applicable, in all cases. No marginal relief shall be available in
respect of such cess.
II. Rates for deduction of income-tax at source during the financial year (FY)
2021-22 from certain incomes other than“Salaries”.
The rates for deduction of income-tax at source during the FY 2021-22 under
the provisions of section 193, 194A, 194B, 194BB, 194D, 194LBA, 194LBB,
8
194LBC and 195 have been specified in Part II of the First Schedule to the Bill.
The rates will remain the same as those specified in Part II of the First Schedule to
the Finance Act, 2020, for the purposes of deduction of income-tax at source
during the FY 2020-21. For sections specifying the rate of deduction of tax at
source, the tax shall continue to be deducted as per the provisions of these
sections.
Surcharge—
The amount of tax so deducted shall be increased by a surcharge,—
(a) in the case of every individual or HUF or association of persons or body of

referred to in sub-clause (vii) of clause (31) of section 2 of the Act, being a
non-resident, calculated,—
(i) at the rate of ten per cent. of such tax, where the income or
aggregate of income (including the income by way of dividend or
income under the provisions of sections 111A and 112A of the Act)
paid or likely to be paid and subject to the deduction exceeds fifty
lakh rupees but does not exceed one crore rupees;
(ii) at the rate of fifteen per cent. of such tax, where the income or
income under the provisions of sections 111A and 112A of the
Act)paid or likely to be paid and subject to the deduction exceeds
one crore rupees but does not exceed two crore rupees;
(iii) at the rate of twenty-five per cent. of such tax, where the income or
aggregate of income (excluding the income by way of dividend or
paid or likely to be paid and subject to the deduction exceeds two
crore rupees but does not exceed five crore rupees;
(iv) at the rate of thirty-seven per cent. of such tax, where the income or
aggregate of income (excluding the income by way of dividend or
paid or likely to be paid and subject to the deduction exceeds five
9
crore rupees;
(v) at the rate of fifteen per cent. Of such tax, where the income or
paid or likely to be paid and subject to the deduction exceeds two
crore rupees, but is not covered under (iii) and (iv) above
provided that in case where the total income includes any income by way
of dividend of income chargeable under section 111A and section 112A of
the Act, the rate of surcharge on the amount of income-tax deducted in
respect of that part of income shall not exceed fifteen per cent.
(b) in the case of every co-operative society or firm, being a non-resident,

calculated at the rate of twelve per cent. of such tax, where the income or
the aggregate of such incomes paid or likely to be paid and subject to the
deduction exceeds one crorerupees;
(c) in the case of every company, other than a domestic company,

calculated,—
(i) at the rate of two per cent. of such tax, where the income or the
aggregate of such incomes paid or likely to be paid and subject to
the deduction exceeds one crore rupees but does not exceed ten
crorerupees;
(ii) at the rate of five per cent. of such tax, where the income or the
aggregate of such incomes paid or likely to be paid and subject to
the deduction exceeds ten crorerupees.
No surcharge will be levied on deductions in other cases.
(2) Education Cess—
―Health and Education Cess‖ shall continue to be levied at the rate of four per
cent. of income tax including surcharge wherever applicable, in the cases of
persons not resident in India including company other than a domestic company.
III. Rates for deduction of income-tax at source from “Salaries”, computation

10
of “advance tax” and charging of income-tax in special cases during the

FY2021-22.
The rates for deduction of income-tax at source from ―Salaries‖ or under

section 194P of the Act during the FY 2021-22 and also for computation of
―advance tax‖ payable during the said year in the case of all categories of
assessee have been specified in Part III of the First Schedule to the Bill. These
rates are also applicable for charging income-tax during the FY 2021-22 on current
incomes in cases where accelerated assessments have to be made, for instance,
provisional assessment of shipping profits arising in India to non-residents,
assessment of persons leaving India for good during the financial year,
assessment of persons who are likely to transfer property to avoid tax, assessment
of bodies formed for a short duration, etc. There is no change in the tax rates from
last year. The salient features of the rates specified in the said Part III are indicated
in the following paragraphs-
A. Individual, HUF, association of persons, body of individuals, artificial

juridicalperson.
Paragraph A of Part-III of First Schedule to the Bill provides following rates of

income-tax:—
(i) The rates of income-tax in the case of every individual (other than those
mentioned in (ii) and (iii) below) or HUF or every association of persons or
body of individuals, whether incorporated or not, or every artificial juridical
person referred to in sub-clause (vii) of clause (31) of section 2 of the Act
(not being a case to which any other Paragraph of Part III applies) are as
under:—
UptoRs.2,50,000 Nil.
Rs. 2,50,001 to Rs.5,00,000 5 percent.
Rs. 5,00,001 to Rs.10,00,000 20 percent.
AboveRs10,00,000 30 percent.
11
(ii) In the case of every individual, being a resident in India, who is of the age
of sixty years or more but less than eighty years at any time during the
previousyear,—
Rs. 3,00,001 to Rs.5,00,000 5 percent.
Rs. 5,00,001 to Rs.10,00,000 20 percent.
(iii) in the case of every individual, being a resident in India, who is of the age
of eighty years or more at any time during the previousyear,—
Rs. 5,00,001 to Rs.10,00,000 20 percent.
The amount of income-tax computed in accordance with the preceding

provisions of this Paragraph (including capital gains under section 111A, 112 and
112A) as well as income tax computed under section 115BAC, shall be increased
by a surcharge at the rateof,—
(a) having a total income (including the income by way of dividend or income
under the provisions of sections 111A and 112A of the Act) exceeding fifty
lakh rupees but not exceeding one crore rupees, at the rate of ten per cent.
of such income-tax;
(b) having a total income (including the income by way of dividend or income
under the provisions of sections 111A and 112A of the Act) exceeding one
crore rupees, at the rate of fifteen per cent. of such income-tax;
(c) having a total income (excluding the income by way of dividend or income
under the provisions of sections 111A and 112A of the Act) exceeding two
crore rupees but not exceeding five crore rupees, at the rate of twenty-five
per cent. of such income-tax;
(d) having a total income (excluding the income by way of dividend or income
12
under the provisions of sections 111A and 112A of the Act) exceeding five
crore rupees, at the rate of thirty-seven per cent. of such income-tax;
(e) having a total income (including the income by way of dividend or income
under the provisions of section 111A and section 112A of the Act)
exceeding two crore rupees, but is not covered under clauses (c) and (d),
shall be applicable at the rate of fifteen per cent. of such income-tax:
dividend or income chargeable under section 111A and section 112A of the Act, the
rate of surcharge on the amount of Income-tax computed in respect of that part of
income shall not exceed fifteen percent..
Marginal relief is provided in cases of surcharge.
On satisfaction of certain conditions as per the provisions of section 115BAC, an

individual or HUF shall, from assessment year 2021-22 onwards, have the option to
pay tax in respect of the total income at following rates:
Total Income (Rs) Rate
Upto 2,50,000 Nil
From 2,50,001 to 5,00,000 5 per cent.
From 5,00,001 to 7,50,000 10 per cent.
From 7,50,001 to 10,00,000 15 per cent.
From 10,00,001 to 12,50,000 20 per cent.
From 12,50,001 to 15,00,000 25 per cent.
Above 15,00,000 30 per cent.
B. Co-operativeSocieties
In the case of co-operative societies, the rates of income-tax have been

specified in Paragraph B of Part III of the First Schedule to the Bill. These rates will
continue to be the same as those specified for FY 2020-21. The amount of
income-tax shall be increased by a surcharge at the rate of twelve per cent. of
such income-tax in case of a co-operative society having a total income exceeding
13
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.
On satisfaction of certain conditions, a co-operative society resident in India shall

have the option to pay tax at 22 per cent for assessment year 2021-22 onwards as
per the provisions of section 115BAD. Surcharge would be at 10% on such tax.
C. Firms
In the case of firms, the rate of income-tax has been specified in Paragraph C
of Part III of the First Schedule to the Bill. This rate will continue to be the same as
that specified for FY 2020-21. The amount of income-tax shall be increased by a
surcharge at the rate of twelve per cent. of such income-tax in case of a firm
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.
D. Local authorities
The rate of income-tax in the case of every local authority has been specified in
Paragraph D of Part III of the First Schedule to the Bill. This rate will continue to be
the same as that specified for the FY 2020-21. The amount of income-tax shall be
increased by a surcharge at the rate of twelve per cent. of such income-tax in case
of a local authority 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.
E. Companies
The rates of income-tax in the case of companies have been specified in

Paragraph E of Part III of the First Schedule to the Bill. In case of domestic
14
company, the rate of income-tax shall be twenty five per cent. of the total income, if
the total turnover or gross receipts of the previous year 2019-20 does not exceed
four hundred crore rupees and in all other cases the rate of Income-tax shall be
thirty per cent. of the total income. However, domestic companies also have an
option to opt for taxation under section 115BAA or section 115BAB of the Act on
fulfillment of conditions contained therein. The tax rate is 15 per cent. in section
115BAB and 22 per cent. in section 115BAA. Surcharge is 10 per cent. in both
cases.
In the case of company other than domestic company, the rates of tax are the same
as those specified for the FY 2020-21.
Surcharge at the rate of seven per cent. shall continue to be levied in case of a
domestic company (except those opting for taxation under section 115BAA and
section 115BAB of the Act), if the total income of the domestic company exceeds
one crore rupees but does not exceed ten crore rupees. Surcharge at the rate of
twelve per cent shall continue to be levied, if the total income of the domestic
company (except those opting for taxation under section 115BAA and section
115BAB of the Act) exceeds ten crore rupees.
In case of companies other than domestic companies, the existing surcharge of

two per cent shall continue to be levied, if the total income exceeds one crore
rupees but does not exceed ten crore rupees. Surcharge at the rate of five per
cent shall continue to be levied, if the total income of the company other than
domestic company exceeds ten crore rupees.
Marginal relief is provided in surcharge in all cases.
In other cases [including sub-section (2A) of section 92CE, sections 115-O,

115QA, 115R, 115TA or 115TD], the surcharge shall be levied at the rate of twelve
per cent.
For FY 2021-22, additional surcharge called the ―Health and Education Cess
on income-tax‖ shall be levied at the rate of four per cent on the amount of tax
computed, inclusive of surcharge (wherever applicable), in all cases. No marginal
relief shall be available in respect of such cess.
[Clause 2 & the First Schedule]

15
Tax Incentives
Exemption for LTC Cash Scheme
Under the existing provisions of the Act, clause (5) of section 10 of the Act provides
for exemption in respect of the value of travel concession or assistance received by
or due to an employee from his employer or former employer for himself and his
family, in connection with his proceeding on leave to any place in India. In view of the
situation arising out of outbreak of COVID pandemic, it is proposed to provide tax
exemption to cash allowance in lieu of LTC.
Hence, it is proposed to insert second proviso in clause 5 of section 10, so as to

provide that, for the assessment year beginning on the 1st day of April, 2021, the
value in lieu of any travel concession or assistance received by, or due to, an
individual shall also be exempt under this clause subject to fulfilment of conditions to
be prescribed. It is also proposed to clarify by way of an Explanation that where an
individual claims and is allowed exemption under the second proviso in connection
with prescribed expenditure, no exemption shall be allowed under this clause in
respect of same prescribed expenditure to any other individual.
The conditions for this purpose shall be prescribed in the Income-tax Rules in due
course and shall, inter alia, be as under:
(a) The employee exercises an option for the deemed LTC fare in lieu of the
applicable LTC in the Block year 2018-21;
(b) ―specified expenditure‖ means expenditure incurred by an individual or a

member of his family during the specified period on goods or services which
are liable to tax at an aggregate rate of twelve per cent or above under various
GST laws and goods are purchased or services procured from GST registered
vendors/service providers;
(c) ―specified period‖ means the period commencing from 12th day of October,
2020 and ending on 31st day of March, 2021;
(d) the amount of exemption shall not exceed thirty-six thousand rupees per
person or one-third of specified expenditure, whichever is less;
16
(e) the payment to GST registered vendor/service provider is made by an

account payee cheque drawn on a bank or account payee bank draft, or use of
electronic clearing system through a bank account or through such other
electronic mode as prescribed under Rule 6ABBA and tax invoice is obtained
from such vendor/service provider;
(f) If the amount received by, or due to an individual as per the terms of his
employment, from his employer in relation to himself and his family, for the LTC
is more than what is allowable to such person under the above discussed
provisions, the exemption under the proposed amendment would be available
only to the extent of exemption admissible under above listed provisions.
This amendment will take effect from 1st April, 2021 and will, apply in relation to the
assessment year 2021-2022 only.
[Clause 5]
Incentives for affordable rental housing
The existing provision of the section 80-IBA of the Act provides that where the gross
total income of an assessee includes any profits and gains derived from the business
of developing and building affordable housing project, there shall, subject to certain
conditions specified therein, be allowed a deduction of an amount equal to hundred
per cent. of the profits and gains derived from such business. One of the conditions
is that the project is approved by the competent authority after the 1 st day of June
2016 but on or before the 31st day of March 2021.
To help migrant labourers and to promote affordable rental, it is proposed to allow

deduction under section 80-IBA of the Act also to such rental housing project which
is notified by the Central Government in the Official Gazette and fulfils such
conditions as specified in the said notification.
Further, it is also proposed that the outer time limit for 31st March 2021 in this section
for getting the affordable housing project approved be extended to 31st March 2022
and same outer time limit be also provided for the proposed affordable rental
housing project.
17
This amendment will take effect from 1st April, 2022 and will accordingly apply to the
assessment year 2022-23 and subsequent assessment years.
[clause 26]
Tax incentives for units located in International Financial Services Centre (IFSC)
Government has establishment a world class financial services centre. Units located
in IFSC enjoy some concession. In order to make location in IFSC more attractive, it
is proposed to provide the following additional incentives:
(i) It is proposed to amend section 9A of the Act to provide that the Central
Government may, by notification in the Official Gazette, specify that any one or
more of the conditions specified in clauses(a) to (m) of sub-section(3) or
clauses (a) to (d) of sub-section (4) of section 9A of the Act shall not apply (or
apply with modification) to an eligible investment fund or its eligible fund
manager, if the fund manager is located in an International Financial Services
Centre and has commenced operations on or before the 31st day of March,
2024.
(ii) It is also proposed to amend clause (4D) of section 10 of the Act so as to

provide that the exemption under this clause shall also be available in case of
any income accrued or arisen to, or received to the investment division of
offshore banking unit to the extent attributable to it and computed in the
prescribed manner.
(iii) It is also proposed to amend the expression ―specified fund‖ to include

under the purview the investment division of offshore banking unit which has
been granted a category III AIF registration and fulfils other conditions to be
prescribed including the condition of maintaining separate books for its
investment division. The investment division of offshore banking unit is
proposed to be defined as an investment division of a banking unit of a non-
resident located in an International Financial Services Centre and which has
18
(iv) It is also proposed to insert new clause (4E) in of section 10 of the Act so as
to exempt any income accrued or arisen to, or received by a non-resident as a
result of transfer of non-deliverable forward contracts entered into with an
offshore banking unit of International Financial Services Centre which
commenced operations on or before the 31st day of Mach, 2024 and fulfils
prescribed conditions.
(v) It is also proposed to insert new clause (4F) in of section 10 of the Act so as
to exempt any income of a non-resident by way of royalty on account of lease
of an aircraft in a previous year paid by a unit of an International Financial
Services Centre, if the unit is eligible for deduction under section 80LA for that
previous year and has commenced operation on or before the 31st day of the
March, 2024.
(vi) It is also proposed to insert new clause (23FF) in of section 10 of the Act so
as to exempt any income of the nature of capital gains, arising or received by a
non-resident, which is on account of transfer of share of a company resident in
India by the resultant fund and such shares were transferred from the original
fund to the resultant fund in relocation, if capital gains on such shares were not
chargeable to tax had that relocation not taken place.
―Original Fund‖ is proposed to be defined as a fund established or incorporated

or registered outside India, which collects funds from its members for investing
it for their benefit and fulfils the following conditions, namely:—
(a) the fund is not a person resident in India;
(b) the fund is a resident of a country or a specified territory with which an

agreement referred to in sub-section (1) of section 90 or sub-section (1)
of section 90A has been entered into; or is established or incorporated or
registered in a country or a specified territory notified by the Central
Government in this behalf;
(c) the fund and its activities are subject to applicable investor protection
regulations in the country or specified territory where it is established or
incorporated or is a resident; and
19
(d) fulfils such other conditions as prescribed;
―Relocation‖ is proposed to be defined as transfer of assets of the original

fund to a resultant fund on or before the 31st day of March, 2023, where
consideration for such transfer is discharged in the form of share or unit or
interest in the resulting fund to the shareholder or unit holder or interest holder
of the original fund in the same proportion in which the share or unit or interest
was held by such shareholder or unit holder or interest holder in such original
fund.
―Resultant fund‖ is proposed to be defined as a fund established or

incorporated in India in the form of a trust or a company or a limited liability
partnership, which-
(a) has been granted a certificate of registration as a Category I or

Category II or Category III Alternative Investment Fund, and is regulated
under the Securities and Exchange Board of India (Alternative Investment
Fund) Regulations, 2012, made under the Securities and exchange Board
of India Act, 1992 (15 of 1992); and
(b) is located in any International Financial Services Centre as referred to

in sub-section (1A) of section 80LA.
(vii) It is also proposed to amend section 47 of the Act to insert new clauses in
the said section so as to provide that any transfer, in relocation, of a capital
asset by the original fund to the resultant fund shall not be considered as
transfer for capital gain tax purpose. It is also proposed to provide another
clause to provide that any transfer by a shareholder or unit holder or interest
holder, in a relocation, of a capital asset being a share or unit or interest held by
him in the original fund in consideration for the share or unit or interest in the
resultant fund shall not be treated as transfer for the purpose of capital gains.
The definition of ―Original Fund‖, ―Relocation‖ and Resultant Fund shall be as
already described above.
(vii) Consequential amendments shall be proposed in section 49, 56 and 79 of

the Act on account of such relocation.
20
(ix) It is also proposed to amend the section 80LA of the Act to:
 provide that deduction under said section is also available to a unit of

International Financial Services Centre if it is registered under the
International Financial Services Centre Authority Act, 2019 and thereby
removing the earlier requirement of obtaining permission under any other
relevant law.
 provide that the income arising from transfer of an asset, being an aircraft
or aircraft engine which was leased by a unit referred to in clause (c) of
sub-section (2) of said section to a domestic company engaged in the
business of operation of aircraft before such transfer shall also be eligible
for 100% deduction subject to condition that the unit has commenced
operation on or before the 31st March 2024.
 to provide that in case the unit is registered under the International
Financial Services Centre Authority Act, 2019 then the copy of permission
shall mean a copy of the registration obtained under the International
Financial Services Centre Authority Act, 2019.
(x) It is proposed to amend section 115AD to make the provision of this section
applicable to investment division of an offshore banking unit in the same
manner as it applies to specified fund. However, the provisions of this section
shall apply to the extent of income that is attributable to the investment division
of such banking unit as a Category-III portfolio investor under the Securities
and exchange Board of India (Foreign Portfolio investors) Regulations, 2019
made under the Securities And Exchange Board of India Act, 1992 (15 of
1992), calculated in the prescribed manner.
The expression ―investment division of offshore banking unit‖ is also proposed

to have the meaning as defined in Para (iii).
These amendments will take effect from 1st April, 2022 and will accordingly apply to
[Clauses 4,5,15, 17, 21, 23 and 30]
Issuance of zero coupon bond by infrastructure debt fund

21
Clause (48) of section 2 of the Act provides for definition of zero coupon bond, as a
bond issued by any infrastructure capital company or infrastructure capital fund or
public sector company or scheduled bank and in respect of which no payment and
benefit is received or receivable before maturity or redemption. These are required to
be notified by the Central Government in the Official Gazette.
In order to enable infrastructure debt fund [which are notified by the Central
Government in the Official Gazette under clause (47) of section 10 of the Act] to
issue zero coupon bond necessary amendments are proposed in clause (48) of
section 2 of the Act. Rules 2F and 8B of Income-tax Rules shall be amendment
subsequently after the Finance Bill 2021 is enacted.
[Clause 3]
Consequential amendment has also been proposed in clause (x) of sub-section (3)
of section 194A of the Act which will take effect from 1st April, 2021
[Clause 45]
Tax neutral conversion of Urban Cooperative Bank into Banking Company
Section 44DB of Act provides for computing deductions in the case of

business re-organization of cooperative banks. Further, the said section, inter alia,
provides that where such business reorganization of co-operative banks takes place,
the deductions under sections 32, 35D, 35DD and section 35DDA will be
apportioned between the predecessor co-operative bank and the successor co-
operative bank in the proportion of the number of days before and after the date of
business reorganization. Further transfer of a capital asset by the predecessor co-
operative bank to the successor co-operative bank, as well as transfer of shares by
the shareholders in the predecessor co-operative bank, in a case of business
reorganization under section 47 of the Act, is also not regarded as transfer.
22
The Reserve Bank of India (RBI) has permitted voluntary transition of primary co-
operative bank [urban co-operative banks (UCB)] into a banking company by way of
transfer of Assets and Liabilities vide Circular reference no. DCBR.CO.LS.PCB.
Cir.No.5/07.01.000/2018-19 dated September 27, 2018.
It is proposed to expand the scope of business reorganization to include conversion

of a primary co-operative bank to a banking company and the deductions available
under section 44DB of the Act shall also be made applicable in relation to such
conversion of primary co-operative bank to the banking company. Further it is also
proposed that transfer of a capital asset by the primary co-operative bank to the
banking company as a result of conversion shall not be treated as transfer under
section 47 of the Act. Consequently, the allotment of shares of the converted
banking company to the shareholders of the predecessor primary co-operative bank
shall not be treated as transfer under the said section of the Act.
Necessary amendments to this effect have been proposed in section 44DB and in
clause (vica) and clause (vicb) of section 47 of the Act.
[Clauses 13 and 15]
Facilitating strategic disinvestment of public sector company
Section 2 of the Act provides the definitions for the purposes of the Act. Clause
(19AA) of the said section defines that ―demerger", in relation to companies, means
the transfer, pursuant to a scheme of arrangement under sections 391 to 394 of the
Companies Act, 1956 (1 of 1956), by a demerged company of its one or more
undertakings to any resulting company on satisfaction of conditions prescribed in the
said clause.
Section 72A of the Act provides provisions relating to carry forward and set off of
accumulated loss and unabsorbed depreciation allowance in amalgamation or
demerger, etc. Sub-section (1) of section 72A of the Act provides that the
accumulated loss and unabsorbed depreciation of the amalgamating company or
companies shall be deemed to be the accumulated losses and unabsorbed
23
depreciation of the amalgamated company or companies in specified cases and

subject to the conditions specified in the said section.
It is proposed to relax the provisions of these two sections for public sector
companies in order to facilitate strategic disinvestment by the Government.
Accordingly, it is proposed to carry out the following amendments-
(i) It is proposed to amend clause (19AA) of section 2 of the Act to

insert Explanation 6 to clarify that the reconstruction or splitting up of a public
sector company into separate companies shall be deemed to be a demerger, if
 such reconstruction or splitting up has been made to transfer any

asset of the demerged company to the resultant company; and
 the resultant company is a public sector company on the appointed
date indicated in the scheme approved by the Government or any other
body authorised under the provisions of the Companies Act, 2013 or any
other Act governing such public sector companies in this behalf; and
 fulfils such other conditions as may be notified by the Central
Government in the Official Gazette.
(ii) It is proposed to amend sub-section (1) of section 72A of the Act,
(a) to substitute clause (c) to provide that the provision of sub-

section (1) of section 72A shall also apply in case of amalgamation of one
or more public sector company or companies with one or more public
sector company or companies.
(b) to insert clause (d) to provide that the provision of sub-section (1) of
section 72A shall also apply in case of amalgamation of an erstwhile
public sector company with one or more company or companies, if
 the share purchase agreement entered into under strategic

disinvestment restricted immediate amalgamation of the said public
sector company; and
 the amalgamation is carried out within five year from the end of the
previous year in which the restriction on amalgamation in the share
purchase agreement ends.
24
(c) to insert a proviso to sub-section (1) to provide that the

accumulated loss and the unabsorbed depreciation of the amalgamating
company, in case of an amalgamation referred to in clause (d), which is
deemed to be loss or, as the case may be, allowance for unabsorbed
depreciation of the amalgamated company shall not be more than the
accumulated loss and unabsorbed depreciation of the public sector
company as on the date on which the public sector company ceases to be
a public sector company as a result of strategic disinvestment;
(d) to insert an Explanation to sub-section (1) to define the followings:-
(A) ―Control‖ shall have the same meaning as assigned to in clause

(27) of Section 2 of the Companies Act, 2013;
(B) ―Erstwhile public sector company‖ means a company which was

a public sector company in earlier previous years and ceases to be a
public sector company by way of strategic disinvestment by the
Government.
(C) ―Strategic disinvestment‖ shall mean sale of shareholding by the

Central Government or any State Government in a public sector
company which results in reduction of its shareholding to below 51%,
along with transfer of control to the buyer.
[Clauses 3 and 22]
Extension of date of sanction of loan for affordable residential house property
The existing provision of the section 80EEA of the Act, inter alia, provides a
deduction in respect of interest on loan taken for a residential house property from
any financial institution up to one lakh fifty-thousand rupees subject to the condition
that the loan has been sanctioned during the period beginning on 1 st April, 2019 and
ending on 31st March, 2021. There are further conditions that the stamp duty value of
residential house property does not exceed forty-five lakh rupees and the assessee
25
does not own any residential house property on the date of sanction of loan. This
provision allows deduction to the first time home buyers, in respect of interest on
home loan. In order to help such first time home buyers further, it is proposed to
amend the provision of section 80EEA of the Act to extend the outer date for
sanction of loan from 31st March 2021 to 31st March 2022.
[Clause 24]
Extension of date of incorporation for eligible start up for exemption and for
investment in eligible start-up
The existing provisions of the section 80-IAC of the Act, inter alia, provides for a
deduction of an amount equal to hundred percent of the profits and gains derived
from an eligible business by an eligible start-up for three consecutive assessment
years out of ten years at the option of the assessee. This is subject to the condition
that the total turnover of its business does not exceed one hundred crore rupees.
The eligible start-up is required to be incorporated on or after 1st day of April, 2016
but before 1st day of April 2021.
The existing provisions of the section 54GB of the Act, inter alia, provide for
exemption of capital gain which arises from the transfer of a long-term capital asset,
being a residential property (a house or a plot of land), owned by the eligible
assessee. The assessee is required to utilise the net consideration for subscription in
the equity shares of an eligible start-up, before the due date of furnishing of return of
income under sub-section (1) of section 139 of the Act. The eligible start-up is
required to utilise this amount for purchase of new asset within one year from the
date of subscription in equity shares by the assessee. Further, it has been provided
that benefit is available only when the residential property is transferred on or before
31st March, 2021.
In order to help such eligible start-up and help investment in them,-

26
(i) it is proposed to amend the provisions of section 80-IAC of the Act to extend
the outer date of incorporation to before 1st April, 2022; and
(ii) it is proposed to amend the provisions of section 54GB of the Act to extend
the outer date of transfer of residential property from 31 st March 2021 to 31st
March 2022.
[Clauses 19 and 25]
Removing difficulties faced by taxpayers
Increase in safe harbour limit of 10% for home buyers and real estate developers
selling such residential units
Section 43CA of the Act, inter alia, provides that where the consideration declared to
be received or accruing as a result of the transfer of land or building or both, is less
than the value adopted or assessed or assessable by any authority of a State
Government (i.e. ―stamp valuation authority‖) for the purpose of payment of stamp
duty in respect of such transfer, the value so adopted or assessed or assessable
shall for the purpose of computing profits and gains from transfer of such assets, be
deemed to be the full value of consideration. The said section also provide that
where the value adopted or assessed or assessable by the authority for the purpose
of payment of stamp duty does not exceed one hundred and ten per cent of the
consideration received or accruing as a result of the transfer, the consideration so
received or accruing as a result of the transfer shall, for the purposes of computing
profits and gains from transfer of such asset, be deemed to be the full value of the
consideration.
Clause (x) of sub-section (2) of section 56 of the Act, inter alia, provides that where
any person receives, in any previous year, from any person or persons on or after
1st April, 2017, any immovable property, for a consideration which is less than the
stamp duty value of the property by an amount exceeding fifty thousand rupees, the
stamp duty value of such property as exceeds such consideration shall be charged
to tax under the head ―income from other sources‖. It also provide that where the
27
assessee receives any immovable property for a consideration and the stamp duty
value of such property exceeds ten per cent of the consideration or fifty thousand
rupees, whichever is higher, the stamp duty value of such property as exceeds such
consideration shall be charged to tax under the head ―Income from other sources‖.
In order to boost the demand in the real-estate sector and to enable the real-estate
developers to liquidate their unsold inventory at a lower rate to home buyers, it is
proposed to increase the safe harbour threshold from existing 10% to 20% under
section 43CA of the Act, if the following conditions are satisfied:-
 The transfer of residential unit takes place during the period from 12th
November, 2020 to 30th June, 2021
 The transfer is by way of first time allotment of the residential unit to any
person
 The consideration received or accruing as a result of such transfer does not
exceed two crore rupee
Further it is proposed to provide the consequential relief to buyers of these

residential units by way of amendment in clause (x) of sub-section (2) of section 56
of the Act by increasing the safe harbour from 10% to 20%. Accordingly, for these
transactions, circle rate shall be deemed as sale/purchase consideration only if the
variation between the agreement value and the circle rate is more than 20%.
[Clauses 10 and 21]
Relaxation for certain category of senior citizen from filing return of income-tax
Section 139 of the Act provides for filing of return of income. Sub-section (1) of the
section provides that every person being an individual, if his total income or the total
income of any other person in respect of which he is assessable under this Act
during the previous year exceeded the maximum amount which is not chargeable to
income-tax, shall, on or before the due date, furnish a return of his income.
28
In order to provide relief to senior citizens who are of the age of 75 year or above
and to reduce compliance for them, it is proposed to insert a new section to provide
a relaxation from filing the return of income, if the following conditions are satisfied:-
(i) The senior citizen is resident in India and of the age of 75 or more during the
previous year;
(ii) He has pension income and no other income. However, in addition to such
pension income he may have also have interest income from the same bank in
which he is receiving his pension income;
(iii) This bank is a specified bank. The Government will be notifying a few
banks, which are banking company, to be the specified bank; and
(iv) He shall be required to furnish a declaration to the specified bank. The

declaration shall be containing such particulars, in such form and verified in
such manner, as may be prescribed.
Once the declaration is furnished, the specified bank would be required to compute
the income of such senior citizen after giving effect to the deduction allowable under
Chapter VI-A and rebate allowable under section 87A of the Act, for the relevant
assessment year and deduct income tax on the basis of rates in force. Once this is
done, there will not be any requirement of furnishing return of income by such senior
citizen for this assessment year.
[Clause 47]
Rationalisation of provisions related to Sovereign Wealth Fund (SWF) and Pension

Fund (PF)
Clause (23FE) of section 10 of the Act provides for the exemption to specified
persons from the income in the nature of dividend, interest or long-term capital gains
arising from an investment made by it in India. Specified persons are SWF or PF
which fulfils conditions prescribed therein and are specified for this purpose by the
Central Government through notification in the Official Gazette. This provision was
introduced through the Finance Act, 2020 to encourage investments of SWF and PF
into infrastructure sector of India. Subsequent to enactment, a notification was also
29
issued to enlarge the scope of infrastructure activities eligible for investments. One
SWF has already been notified under this provision. In order to rationalise the
provision of this clause and to remove the difficulties in meeting some of the
conditions, the followings amendments are proposed in the Bill:
 Allowing Alternate Investment Fund (AIF) to invest up to 50% in non-eligible

investments
Presently SWF/PFs may invest in a Category-I or Category-II Alternative

Investment Fund, having 100% investment in eligible infrastructure company. It
is proposed to:
(a) relax the condition of 100% to 50%.
(b) allow the investment by Category-I or Category-II AIF in an Infrastructure
Investment Trust (InvIT).
(c) Exemption under this clause shall be calculated proportionately, in case if
aggregate investment of AIF in infrastructure company or companies or in
InvIT is less than 100%.
 Investment through holding company
Presently, SWF/PFs are not allowed to invest through holding company. It is

proposed to allow the same subject to the following conditions:
(a) Holding company should be a domestic company.
(b) It should be set up and registered on or after 1st April, 2021.
(c) It should have minimum 75% investments in one or more infrastructure
companies.
(d) Exemption under this clause shall be calculated proportionately, in case if
aggregate investment of holding company in infrastructure company or
companies is less than 100%
 Investment in NBFC- IDF/IFC (non-banking finance company-infrastructure

debt fund/Infrastructure finance company)
Presently, SWF/PFs are not allowed to invest in NBFC-IFC/IDF. It is proposed

to allow the same subject to the following conditions:
30
(a) NBFC-IDF/IFC should have minimum 90% lending to one or more

infrastructure entities.
(b) Exemption under this clause shall be calculated proportionately, in case if
aggregate lending of NBFC-IDF or NBFC-IFC in infrastructure company or
companies is less than 100%.
 Loan or borrowings by SWF/Pension Fund
Presently, SWF/PFs are not allowed to have loans or borrowings or deposit or

investments as there is a condition that no benefit should enure to private
person. It is proposed to provide that there should not be any loan or borrowing
for the purpose of making investment in India. It is also proposed to provide that
the condition regarding no benefit to private person and assets going to
government on dissolution would not apply to any payment made to creditor or
depositor for loan taken or borrowing other than for the purpose of making
investment in India.
 Commercial activity
Presently, SWF/PFs are not allowed to undertake any commercial activity. This
condition is proposed to be removed and replaced with a condition that
SWF/PFs shall not participate in day to day operation of investee. However,
appointing director and executive director for monitoring the investment would
not amount to participation in day to day operation.The term "investee" is
propoed to define to mean a business trust or a company or an enterprise or an
entity or a category I or II Alternative Investment Fund or an Infrastructure
Investment Trust or a domestic company or an Infrastructure Finance Company
or an Infrastrure Debt Fund, in which the SWF or PF, as the case may be, has
made the investment, directly or indirectly, under the provisions of this clause.
 Liable to Tax
Presently, some PFs are liable to tax in their country though given exemption
subsequently. It is proposed to amend this sub-clause to provide that if pension
fund is liable to tax but exemption from taxation for all its income has been
31
provided by the foreign country under whose laws it is created or established,

then such pension fund shall also be eligible.
 Rules to prescribe the method of calculation
It is also proposed to provide that the Central Government may prescribe the
method of calculation of 50% or 75% or 90%referred above.
[Clause 5]
Addressing mismatch in taxation of income from notified overseas retirement fund
Representations have been received that there is mismatch in the year of

taxability of withdrawal from retirement funds by residents who had opened such
fund when they were non-resident in India and resident in foreign countries. At
present the withdrawal from such funds may be taxed on receipt basis in such
foreign countries, while on accrual basis in India. In order to address this mismatch
and remove this genuine hardship, it is proposed to insert a new section 89A to the
Act to provide that the income of a specified person from specified account shall be
taxed in the manner and in the year as prescribed by the Central Government. It is
also proposed to define the expression ―specified person‖, as a person resident in
India who opened a specified account in a notified country while being non-resident
in India and resident in that country. ―Specified account‖ is proposed to be defined as
an account maintained in a notified country which is maintained for retirement
benefits and the income from such account is not taxable on accrual basis and is
taxed by such country at the time of withdrawal or redemption. ―Notified country‖ is
proposed to be defined to mean a country notified by the Central Government for the
purposes of this section in the Official Gazette.
[Clause 28]
32
Rationalisation of provisions of Minimum Alternate Tax (MAT)
Section 115JB of the Act provides for MAT at the rate of fifteen per cent of its book
profit, in case tax on the total income of a company computed under the provisions
of the Act is less than the fifteen per cent of book profit. Book profit for this purpose
is computed by making certain adjustments to the profit disclosed in the profit and
loss account prepared by the company in accordance with the provisions of the
Companies Act, 2013.
Representations were received that the computation of book profit under section
115JB does not provide for any adjustment on account of additional income of past
year(s) included in books of account of current year on account of secondary
adjustment under section 92CE or on account of an Advance Pricing Agreement
(APA) entered with the taxpayer under section 92CC. Representation has also been
received that since dividend income is now taxable in the hand of shareholders,
dividend received by a foreign company on its investment in India is required to be
excluded for the purposes of calculation of book profit in case the tax payable on
such dividend income is less than MAT liability on account of concessional tax rate
provided in the Double Taxation Avoidance Agreement (DTAA). Hence it is proposed
to,-
(i) provide that in cases where past year income is included in books of account
during the previous year on account of an APA or a secondary adjustment, the
Assessing Officer shall, on an application made to him in this behalf by the
assessee, recompute the book profit of the past year(s) and tax payable, if any,
during the previous year, in the prescribed manner. Further, the provision of
section 154 of the Act shall apply so far as possible and the period of four years
specified in sub-section (7) of section 154 shall be reckoned from the end of the
financial year in which the said application is received by the Assessing Officer.
(ii) to provide similar treatment to dividend as already there for capital gains on
transfer of securities, interest, royalty and Fee for Technical Services (FTS) in
calculating book profit for the purposes of section 115JB of the Act, so that both
specified dividend income and the expense claimed in respect thereof are
reduced and added back, while computing book profit in case of foreign
companies where such income is taxed at lower than MAT rate due to DTAA.
33
[Clause 31]
Exemption of deduction of tax at source on payment of Dividend to business trust in

whose hand dividend is exempt
Section 194 of the Act provides for deduction of tax at source (TDS) on payment of
dividends to a resident. The second proviso to this section provides that the
provisions of this section shall not apply to such income credited or paid to certain
insurance companies or insurers. It is proposed to amend second proviso to section
194 of the Act to further provide that the provisions of this section shall also not apply
to such income credited or paid to a business trust by a special purpose vehicle or
payment of dividend to any other person as may be notified.
This amendment will take effect retrospectively from 1st April, 2020.
[Clause 44]
Rationalisation of the provision concerning withholding on payment made to Foreign

Institutional Investors (FIIs)
Section 196D of the Act provides for deduction of tax on income of FII from securities
as referred to in clause (a) of sub-section (1) of section 115AD of the Act (other than
interest referred in section 194LD of the Act) at the rate of 20 per cent.
Since the said section provides for TDS at a specific rate indicated therein, the
deduction is to be made at that rate and the benefit of agreement under section 90 or
section 90A of the Act cannot be given at the time of tax deduction. The situation is
different in cases where the provision mandates TDS at rate in force. This is for the
reason that the definition of the expression ―rate in force‖, in clause (37A) of section
2 of the Act, allows benefit of agreement under section 90 or section 90A in
determining the rate of tax at which the tax is to be deducted at source. This principle
of tax deduction has also been upheld by Hon‘ble Supreme Court in the case of
PILCOM vs. CIT West Bengal (Civil Appeal No. 5749 of 2012).
34
Representations have been received requesting that the benefit of agreements

under section 90 or section 90A of the Act may be considered at the time of tax
deduction on payments to FIIs. Accordingly, it is proposed to insert a proviso to sub-
section (1) of section 196D of the Act to provide that in case of a payee to whom an
agreement referred to in sub-section (1) of section 90 or sub-section (1) of section
90A applies and such payee has furnished the tax residency certificate referred to in
sub-section (4) of section 90 or sub-section (4) of section 90A of the Act, then the tax
shall be deducted at the rate of twenty per cent. or rate or rates of income-tax
provided in such agreement for such income, whichever is lower.
[Clause 49]
Rationalisation of provisions relating to tax audit in certain cases
Under section 44AB of the Act, every person carrying on business is required to get
his accounts audited, if his total sales, turnover or gross receipts, in business exceed
or exceeds one crore rupees in any previous year. In case of a person carrying on
profession he is required to get his accounts audited, if his gross receipt in
profession exceeds, fifty lakh rupees in any previous year. In order to reduce
compliance burden on small and medium enterprises, through Finance Act 2020, the
threshold limit for a person carrying on business was increased from one crore
rupees to five crore rupees in cases where,-
(i) aggregate of all receipts in cash during the previous year does not exceed
five per cent of such receipt; and
(ii) aggregate of all payments in cash during the previous year does not exceed
five per cent of such payment.
In order to incentivise non-cash transactions to promote digital economy and to

further reduce compliance burden of small and medium enterprises, it is proposed to
increase the threshold from five crore rupees to ten crore rupees in cases listed
above.
35
This amendment will take effect from 1st April, 2021 and will accordingly apply for the
[Clause 11]
Advance tax instalment for dividend income
Section 234C of the Act provides for payment of interest by an assessee who does
not pay or fails to pay on time the advance tax instalments as per section 208 of the
Act. The assessee is liable to pay a simple interest at the rate of 1% per month for a
period of three months on the amount of shortfall calculated with respect to the due
dates for advance tax instalments.
The first proviso of the sub section (1) provides for the relaxation that if the shortfall
in the advance tax instalment or the failure to pay the same on time is on account of
the income listed therein, no interest under section 234C shall be charged provided
the assessee has paid full tax in subsequent advance tax instalments. These
exclusions are: -
(a) the amount of capital gains; or
(b) income of the nature referred to in sub-clause (ix) of clause (24) of section 2;
or
(c) income under the head "Profits and gains of business or profession" in cases
where the income accrues or arises under the said head for the first time; or
(d) income of the nature referred to in sub-section (1) of section 115BBDA.
Aforesaid relaxation is to insulate the taxpayers from payment of interest under

section 234C of the Act in cases where accurate determination of advance tax
liability is not possible due to the intrinsic nature of the income. Therefore, after
considering various representations favourably, it is proposed to include dividend
income in the above exclusion but not deemed dividend as per sub-clause (e) of
clause (22) of section 2 of the Act.
[Clause 53]
36
Raising of prescribed limit for exemption under sub-clause (iiiad) and (iiiae) of clause
(23C) of section 10 of the Act
Clause (23C) of section 10 of the Act provides for exemption of income received by
any person on behalf of different funds or institutions etc. specified in different sub-
clauses.
Sub-clauses (iiiad) of clause (23C) of the section 10 provides for the exemption for
the income received by any person on behalf of university or educational institution
as referred to in that sub-clause. The exemptions under the said sub-clause are
available subject to the condition that the annual receipts of such university or
educational institution do not exceed the annual receipts as may be prescribed.
Similarly, sub-clauses (iiiae) of clause (23C) of the section provides for the
exemption for the income received by any person on behalf of hospital or institution
as referred to in that sub-clause. The exemptions under the said sub-clause are
available subject to the condition that the annual receipts of such hospital or
institution do not exceed the annual receipts as may be prescribed. The presently
prescribed limit for these two sub-clauses is Rs 1 crore as per Rule 2BC of the
Income-tax Rule.
Representations have been received to increase this limit of Rs 1 crore, as provided

under Rule 2BC. In order to provide benefit to small trust and institutions, it has been
proposed that the exemption under sub-clause (iiiad) and (iiiae) shall be increased to
Rs 5 crore and such limit shall be applicable for an assessee with respect to the
aggregate receipts from university or universities or educational institution or
institutions as referred to in sub-clause (iiiad) as well as from hospital or hospitals or
[Clause 5]
Extending due date for filing return of income in some cases, reducing time to file
belated return and to revise original return and also to remove difficulty in cases of
defective returns
37
Section 139 of the Act contains provisions in respect of the filing of return of income
for different persons or class of persons. The said section also provides the due
dates for filing of original, belated and revised returns of income for different classes
of assessee.
Sub-section (1) of the section provides for the filing of original return of income for an
assessment year. The Explanation 2 of the said section specifies the due-dates for
filing of original return for different class of persons. The sub-clause (iii) of clause (a)
of the said Explanation 2 provides that the due date for filing of original return of
income for the partner of a firm whose accounts are required to be audited under the
said Act or under any other law for the time being in force shall be 31 st day of
October of the assessment year.
Section 5A of the Act provides for taxation of spouses governed by Portuguese Civil
Code. On account of this provision any income earned by a partner of a firm whose
accounts are required to be audited shall be apportioned between the spouses and
included in their total income, if the section 5A applies to them.
Since the total income of a partner can be determined after the books of accounts of
such firm have been finalised, the due dates of partners are already aligned with the
due date of the firm. Thus, the due date for filing of original return of income of such
partner is 31st October of the assessment year. However, this relaxation is not there
for spouse of such partner to whom section 5A of the Act applies. Therefore, it is
proposed that the due date for the filing of original return of income be extended to
31st October of the assessment year in case of spouse of a partner of a firm whose
accounts are required to be audited under this Act or under any other law for the
time being in force, if the provisions of section 5A applies to them.
Further, in the case of a firm which is required to furnish report from an accountant
for entering into international transaction or specified domestic transaction, as per
section 92E of the Act, the due date for filing of original return of income is the 30th
November of the assessment year. Since the total income of such partner can be
determined after the books of accounts of such firm have been finalised, it is
38
proposed that the due date of such partner be extended to 30 th November of the
assessment year.
Sub-sections (4) and (5) of section 139 of the Act contain provisions relating to the
filing of belated and revised returns of income respectively. The belated or revised
returns under sub-sections (4) and (5) respectively of the said section at present
could be filed before the end of the assessment year or before the completion of the
assessment whichever is earlier. With the massive technological upgrade in the
Department where the processes under the Act are moving towards becoming
faceless and jurisdiction-less, the time taken to conduct and complete such
processes has greatly reduced. Therefore, it is proposed that the last date for filing of
belated or revised returns of income, as the case may be, be reduced by three
months. Thus the belated return or revised return could now be filed three months
before the end of the relevant assessment year or before the completion of the
assessment, whichever is earlier.
Sub-section (9) of section 139 of the Act lays down the procedure for curing a
defective return. It provides that in case a return of income is found to be defective,
the Assessing Officer will intimate the defect to the assessee and give him a period
of 15 days or more to rectify the said defect and if the defect is not rectified within the
said period, the return shall be treated as an invalid return and the assessee will be
considered to have never filed a return of income. The Explanation to the sub-
section lists the conditions in which a certain return of income shall be considered to
be defective. Representations have been received that the aforesaid conditions
create difficulties for both the taxpayer and the Department, as a large number of
returns become defective by application of the said conditions. This has resulted in a
number of grievances. It has been represented that the conditions given in the said
Explanation may be relaxed in genuine cases. Therefore, it is proposed that a
proviso be inserted to the said Explanation empowering the Board to specify, vide
notification thatany of the above conditions shall not apply for a class of assessee or
shall apply with such modifications, as maybe specified in such notification.
[Clause 32]
39
Rationalisation of various Provisions
Payment by employer of employee contribution to a fund on or before due date
Clause (24) of section 2 of the Act provides an inclusive definition of the income.
Sub-clause (x) to the said clause provide that income to include any sum received by
the assessee from his employees as contribution to any provident fund or
superannuation fund or any fund set up under the provisions of ESI Act or any other
fund for the welfare of such employees.
Section 36 of the Act pertains to the other deductions. Sub-section (1) of the said
section provides for various deductions allowed while computing the income under
the head ‗Profits and gains of business or profession‘.
Clause (va) of the said sub-section provides for deduction of any sum received by
the assessee from any of his employees to which the provisions of sub-clause (x) of
clause (24) of section 2 apply, if such sum is credited by the assessee to the
employee's account in the relevant fund or funds on or before the due date.
Explanation to the said clause provides that, for the purposes of this clause, "due
date‖ to mean the date by which the assessee is required as an employer to credit
an employee's contribution to the employee's account in the relevant fund under any
Act, rule, order or notification issued there-under or under any standing order, award,
contract of service or otherwise.
Section 43B specifies the list of deductions that are admissible under the Act only
upon their actual payment. Employer's contribution is covered in clause (b) of section
43B. According to it, if any sum towards employer's contribution to any provident
fund or superannuation fund or gratuity fund or any other fund for the welfare of the
employees is actually paid by the assessee on or before the due date for furnishing
the return of the income under sub-section (1) of section 139, assessee would be
entitled to deduction under section 43B and such deduction would be admissible for
the accounting year. This provision does not cover employee contribution referred to
in clause (va) of sub-section (1) of section 36 of the Act.
Though section 43B of the Act covers only employer‘s contribution and does not
cover employee contribution, some courts have applied the provision of section 43B
on employee contribution as well. There is a distinction between employer
40
contribution and employee‘s contribution towards welfare fund. It may be noted that
employee‘s contribution towards welfare funds is a mechanism to ensure the
compliance by the employers of the labour welfare laws. Hence, it needs to be
stressed that the employer‘s contribution towards welfare funds such as ESI and PF
needs to be clearly distinguished from the employee‘s contribution towards welfare
funds. Employee‘s contribution is employee own money and the employer deposits
this contribution on behalf of the employee in fiduciary capacity. By late deposit of
employee contribution, the employers get unjustly enriched by keeping the money
belonging to the employees. Clause (va) of sub-section (1) of Section 36 of the Act
was inserted to the Act vide Finance Act 1987 as a measures of penalizing
employers who mis-utilize employee‘s contributions.
Accordingly, in order to provide certainty, it is proposed to –
(i) amend clause (va) of sub-section (1) of section 36 of the Act by inserting
another explanation to the said clause to clarify that the provision of section
43B does not apply and deemed to never have been applied for the purposes
of determining the ―due date‖ under this clause; and
(ii) amend section 43B of the Act by inserting Explanation 5 to the said section
to clarify that the provisions of the said section do not apply and deemed to
never have been applied to a sum received by the assessee from any of his
employees to which provisions of sub-clause (x) of clause (24) of section 2
applies.
[Clauses 8 and 9]
Constitution of Dispute Resolution Committee for small and medium taxpayers
The Central Government has consciously adopted a policy to make the

processes under the Act, which require interface with the taxpayer, fully faceless. In
this backdrop, new schemes for faceless assessment, for faceless appeal at the
level of Commissioner (Appeals) and for faceless imposition of penalty have already
41
been made operational. Further, the Taxation and Other Laws (Relaxation and
Amendment of Certain Provisions) Act, 2020 has empowered the Central
Government to introduce similar schemes for other functions being performed by the
income-tax authorities.
It is expected that with these reforms, there would be lesser number of disputes.
However, some disputes would still be there. Government has always been striving
to reduce disputes and provide tax certainty. Vivad se Vishwas scheme was
launched last year to settle pending disputes. Indications are there that the scheme
has been a great success. While pending disputes are being resolved or
adjudicated, it is important that in future there is less number of disputes from fresh
assessments. Hence, in order to provide early tax certainty to small and medium
taxpayers, it is proposed to introduce a new scheme for preventing new disputes and
The new scheme is proposed to be incorporated in a new section 245MA and has
the following features
(i) The Central Government shall constitute one or more Dispute Resolution
Committee (DRC).
(ii) This committee shall resolve disputes of such persons or class of person
which shall be specified by the Board. The assessee would have an option to
opt for or not opt for the dispute resolution through the DRC.
(iii) Only those disputes where the returned income is fifty lakh rupee or less (if
there is a return) and the aggregate amount of variation proposed in specified
order is ten lakh rupees or less shall be eligible to be considered by the DRC.
(iv) If the specified order is based on a search initiated under section 132 or
requisition made under section 132A or a survey initiated under 133A or
information received under an agreement referred to in section 90 or section
90A,of the Act, such specified order shall not be eligible for being considered by
the DRC.
(v) Assessee would not be eligible for benefit of this provision if there is
detention, prosecution or conviction under various laws as specified in the
proposed section.
42
(vi) Board will prescribe some other conditions in due course which would also
need to be satisfied for being eligible under this provision.
(vii) The DRC, subject to such conditions as may be prescribed, shall have the
powers to reduce or waive any penalty imposable under this Act or grant
immunity from prosecution for any offence under this Act in case of a person
whose dispute is resolved under this provision.
(viii) The Central Government has also been empowered to make a scheme by
notification in the Official Gazette for the purpose of dispute resolution under
this provision. The scheme shall impart greater efficiency, transparency and
accountability by eliminating interface to the extent technologically feasible, by
optimising utilisation of resources and introducing dynamic jurisdiction.The
Central Government may, for the purposes of giving effect to the scheme, by
notification in the Official Gazette, direct that any of the provisions of this Act
shall not apply or shall apply with such exceptions, modifications and
adaptations as may be specified in the notification. However, no such direction
shall be issued after the 31st day of March, 2023. Every such notification shall,
as soon as may be after the notification is issued, be laid before each House of
Parliament.
[Clause 66]
Constitution of the Board for Advance Ruling
With a view to avoiding dispute in respect of assessment of tax liability and to

provide tax certainty, a scheme of Advance Rulings was incorporated in the Act vide
the Finance Act, 1993 by inserting a new Chapter XIX-B. Under these provisions the
Authority for Advance Rulings (AAR) pronounces rulings on the applications of the
non-resident/residents and such rulings are binding both on the applicants and the
Tax department. AAR consists of a Chairman and various Vice-Chairman, revenue
members and law members. There are three benches of the Authority. The principal
bench consists of Chairman, one revenue member and one law member. The other
benches consist of one Vice-Chairman, one revenue member and one law member,
43
each. A bench cannot function if the post of Chairman or Vice-Chairman is vacant.

As per section 245-O of the Act, persons eligible for appointment as Chairman of
AAR are retired judges of the Supreme Court, retired Chief Justice of a High Court or
retired Judge of a High Court who has served in that capacity for at least seven
years. Similarly, the persons eligible for appointment as Vice-Chairman are retired
judges of a High Court. As per past experience, the posts of Chairman and Vice-
Chairman have remained vacant for a long time due to non-availability of eligible
persons.
This has seriously hampered the working of AAR and a large number of applications
are pending since last many years. There is, therefore, a need to look for an
alternative method of providing advance ruling which can give rulings to taxpayers in
timely manner. Hence, it is proposed to constitute a Board of Advance Ruling and to
make the following amendments in the existing provisions of AAR:-
(i) The Authority for Advance Rulings shall cease to operate with effect from such
date, as may be notified by the Central Government in the Official Gazette
(hereinafter referred to as the notified date).
(ii) It is proposed that the Central Government shall constitute one or more Board
for Advance Rulings for giving advance rulings under the said Chapter on and
after the notified date. Every such Board shall consist of two members, each
being an officer not below the rank of Chief Commissioner. Advance rulings of
such Board shall not be binding on the applicant or the Department and if
aggrieved, the applicant or the Department may appeal against the ruling or
order passed by the Board before the High Court.
(iii) Since the work of Authority shall be carried out by the Board for Advance
Rulings on and after the notified date, amendments are proposed to be made to
the various provisions of the Chapter to this effect.
(iv) Section 245N is proposed to be amended to incorporate the definitions of the

Board of Advance Rulings, notified date, Member of the Board of Advance
Rulings and change in the definition of Authority to include the Board for
Advance Rulings.
44
(v) Section 245-O is proposed to be amended to provide that the Authority

constituted under the said section shall cease to operate on or after the notified
date.
(vi) Section 245-OB shall be inserted to provide for the constitution of the Board of
Advance Rulings.
(vii) Section 245P is proposed to be amended to provide that on or from the notified
date, the provisions of the said section shall have effect as if for the words
―Authority‖, the words ―Board for Advance Rulings‖ had been substituted;
(viii) Section 245Q (which deals with filing of application) is proposed to be amended
to provide that the pending application with the Authority i.e. in respect of which
order under section 245R(2) or section 245R(4) has not been passed before
the notified date shall be transferred to the Board for Advance Rulings along
with all records, documents or material, by whatever name called and shall be
deemed to be records before the Board for all purposes.
(ix) Section 245R (which deals with the procedure) is proposed to be amended to
provide that on or from the notified date, the provisions of the said section shall
have effect as if for the words ―Authority‖, the words ―Board for Advance
Rulings‖ had been substituted and the provisions of the said section shall apply
mutatis mutandi to the Board for Advance Rulings as they apply to the
Authority.
(x) The Central Government is also proposed to be empowered to make a scheme

by notification in the Official Gazette for the purpose of giving advance ruling by
Board of Advance Ruling under this provision. The scheme shall impart greater
efficiency, transparency and accountability by eliminating interface to the extent
technologically feasible, by optimising utilisation of resources and introducing
dynamic jurisdiction. The Central Government may, for the purposes of giving
effect to the scheme, by notification in the Official Gazette, direct that any of the
provisions of this Act shall not apply or shall apply with such exceptions,
modifications and adaptations as may be specified in the notification. However,
no such direction shall be issued after the 31st day of March, 2023. Every such
notification shall, as soon as may be after the notification is issued, be laid
before each House of Parliament.
45
(xi) Section 245S (which deals with the applicability of advance ruling and makes it
binding on the assessee and the Department) is proposed to be amended to
provide that nothing contained in the said section shall apply on and after the
notified date.
(xii) Section 245T (which deals with advance ruling to be void in certain situation) is
proposed to be amended to provide that on or from the notified date, the
provisions of the said section shall have effect as if for the words ―Authority‖,
the words ―Board for Advance Rulings‖ had been substituted. Also, a specific
reference to advance ruling pronounced by the Authority shall be amended to
make it advance ruling pronounced under sub-section (6) of section 245R so
that the Board for Advance Ruling can also exercise powers under the said
section in respect of rulings pronounced by the present Authority.
(xiii) Section 245U is proposed to be amended to provide that on or from the notified
date, the powers of the ―Authority‖ under the said section shall be exercised by
the ―Board for Advance Rulings‖ and the provisions of the said section shall
apply mutatis mutandi to the Board for Advance Rulings as they apply to the
Authority.
(xiv) Section 245V is proposed to be amended to provide that nothing contained in
the said section shall apply on and after the notified date
(xv) A new section 245W is proposed to be inserted to provide for appeal to High
Court against the order passed or ruling pronounced by the Board for Advance
Ruling. This appeal can be filed by the applicant as well as by the Department.
Such appeal shall be filed within sixty days from the date of the communication
of such ruling or order, in such form and manner as may be prescribed.
However, where the High Court is satisfied, on an application made in this
behalf, that the appellant was prevented by sufficient cause from presenting the
appeal within the period specified in this section, it may allow a further period of
thirty days for filing such appeal. The Central Government shall be empowered
to notify a scheme for filing of appeal by the Assessing Officer so as to impart
greater efficiency, transparency and accountability by optimising utilisation of
the resources through economies of scale and functional specialisation;
introducing a system with dynamic jurisdiction. The Central Government may,
for the purposes of giving effect to the scheme, by notification in the Official
Gazette, direct that any of the provisions of this Act shall not apply or shall
46
apply with such exceptions, modifications and adaptations as may be specified

in the notification. However, no such direction shall be issued after the 31st day
of March, 2023. Every such notification shall, as soon as may be after the
notification is issued, be laid before each House of Parliament.
(xvi) References to Customs Act, 1962, Central Excise Act, 1944 and Finance Act,
1994 in the definition of applicant in section 245N and in section 245Q relating
to application for advance ruling is proposed to be omitted.
[Clauses 67 to 77]
Income escaping assessment and search assessments
Under the Act, the provisions related to income escaping assessment provide that if
the Assessing Officer has reason to believe that any income chargeable to tax has
escaped assessment for any assessment year, he may assess or reassess or re-
compute the total income for such year under section 147 of the Act by issuing a
notice under section 148 of the Act. However, such reopening is subject to the time
limits prescribed in section 149 of the Act.
In cases where search is initiated u/s 132 of the Act or books of account, other
documents or any assets are requisitioned under section 132A of the Act,
assessment is made in the case of the assessee, or any other person, in accordance
with the special provisions of sections 153A, 153B, 153C and 153D, of the Act that
deal specifically with such cases. These provisions were introduced by the Finance
Act, 2003 to replace the block assessment under Chapter XIV-B of the Act. This was
done due to failure of block assessment in its objective of early resolution of search
assessments. Also, the procedural issues related to block assessment were proving
to be highly litigation-prone. However, the experience with this procedure has been
no different. Like the provisions for block assessment, these provisions have also
resulted in a number of litigations.
Due to advancement of technology, the department is now collecting all relevant

information related to transactions of taxpayers from third parties under section
285BA of the Act (statement of financial transaction or reportable account). Similarly,
information is also received from other law enforcement agencies. This information is
also shared with the taxpayer through Annual Information Statement under section
47
285BB of the Act. Department uses this information to verify the information declared
by a taxpayer in the return and to detect non-filers or or those who have not
disclosed the correct amount of total income. Therefore, assessment or
reassessment or re-computation of income escaping assessment, to a large extent,
is information-driven.
In view of above, there is a need to completely reform the system of assessment or

reassessment or re-computation of income escaping assessment and the
assessment of search related cases.
The Bill proposes a completely new procedure of assessment of such cases. It is

expected that the new system would result in less litigation and would provide ease
of doing business to taxpayers as there is a reduction in time limit by which a notice
for assessment or reassessment or re-computation can be issued. The salient
features of new procedure are as under:-
(i) The provisions of section 153A and section 153C, of the Act are proposed to
be made applicable to only search initiated under section 132 of the Act or
books of accounts, other documents or any assets requisitioned under section
132A of the Act, on or before 31st March 2021.
(ii) Assessments or reassessments or in re-computation in cases where search

is initiated under section 132 or requisition is made under 132A, after 31 st
March 2021, shall be under the new procedure.
(iii) Section 147 proposes to allow the Assessing Officer to assess or reassess
or re-compute any income escaping assessment for any assessment year
(called relevant assessment year).
(iii) Before such assessment or reassessment or re-computation, a notice is

required to be issued under section 148 of the Act, which can be issued only
when there is information with the Assessing officer which suggests that the
income chargeable to tax has escaped assessment in the case of the assessee
for the relevant assessment year. Prior approval of specified authority is also
required to be obtained before issuance of such notice by the Assessing
Officer.
48
(iv) It is proposed to provide that any information which has been flagged in the
case of the assessee for the relevant assessment year in accordance with the
risk management strategy formulated by the Board shall be considered as
information which suggests that the income chargeable to tax has escaped
assessment. The flagging would largely be done by the computer based
system.
(v) Further, a final objection raised by the Comptroller and Auditor General of
India to the effect that the assessment in the case of the assessee for the
relevant assessment year has not been in accordance with the provisions of the
Act shall also be considered as information which suggests that the income
chargeable to tax has escaped assessment.
(vi) Further, in search, survey or requisition cases initiated or made or

conducted, on or after 1st April, 2021, it shall be deemed that the Assessing
officer has information which suggests that the income chargeable to tax has
escaped assessment in the case of the assessee for the three assessment
years immediately preceding the assessment year relevant to the previous year
in which the search is initiated or requisition is made or any material is seized
or requisitioned or survey is conducted.
(vii) New Section 148A of the Act proposes that before issuance of notice the
Assessing Officer shall conduct enquiries, if required, and provide an
opportunity of being heard to the assessee. After considering his reply, the
Assessing Office shall decide, by passing an order, whether it is a fit case for
issue of notice under section 148 and serve a copy of such order along with
such notice on the assessee. The Assessing Officer shall before conducting
any such enquiries or providing opportunity to the assessee or passing such
order obtain the approval of specified authority. However, this procedure of
enquiry, providing opportunity and passing order, before issuing notice under
section 148 of the Act, shall not be applicable in search or requisition cases.
(viii) The time limitation for issuance of notice under section 148 of the Act is
proposed to be provided in section 149 of the Act and is as below:
 in normal cases, no notice shall be issued if three years have elapsed

from the end of the relevant assessment year. Notice beyond the period of
49
three years from the end of the relevant assessment year can be taken
only in a few specific cases.
 in specific cases where the Assessing Officer has in his possession
evidence which reveal that the income escaping assessment, represented
in the form of asset, amounts to or is likely to amount to fifty lakh rupees
or more, notice can be issued beyond the period of three year but not
beyond the period of ten years from the end of the relevant assessment
year;
 Another restriction has been provided that the notice under section 148 of
the Act cannot be issued at any time in a case for the relevant
assessment year beginning on or before 1st day of April, 2021, if such
notice could not have been issued at that time on account of being
beyond the time limit prescribed under the provisions of clause (b), as
they stood immediately before the proposed amendment.
 Since the assessment or reassessment or re-computation in search or
requisition cases (where such search or requisition is initiated or made on
or before 31st March 2021) are to be carried out as per the provision of
section 153A, 153B, 153Cand 153D of the Act, the aforesaid time
limitation shall not apply to such cases.
 It is also proposed that for the purposes of computing the period of
limitation for issue of section 148 notice, the time or extended time
allowed to the assessee in providing opportunity of being heard or period
during which such proceedings before issuance of notice under section
148 are stayed by an order or injunction of any court, shall be excluded. If
after excluding such period, time available to the Assessing Officer for
passing order, about fitness of a case for issue of 148 notice, is less than
seven days, the remaining time shall be extended to seven days.
(ix) The specified authority for approving enquiries, providing opportunity,

passing order under section 148A of the Act and for issuance of notice under
section 148 of the Act are proposed to be —
(a) Principal Commissioner or Principal Director or Commissioner or

Director, if three years or less than three years have elapsed from the end of
the relevant assessment year;
50
(b) Principal Chief Commissioner or Principal Director General or where

there is no Principal Chief Commissioner or Principal Director General, Chief
Commissioner or Director General, if more than three years have elapsed
from the end of the relevant assessment year.
(x) Once assessment or reassessment or re-computation has started the

Assessing officer is proposed to be empowered (as at present) to assess or
reassess the income in respect of any issue which has escaped assessment
and which comes to his notice subsequently in the course of the proceeding
under this procedure notwithstanding that the procedure prescribed in section
148A was not followed before issuing such notice for such income.
[Clauses 35 to 40 and 42 to 43]
Allowing prescribed authority to issue notice under clause (i) of sub-section (1) of
section 142
Section 142 of the Act provides for conduct of inquiry before assessment. Clause (i)
of sub section (1) of the said section gives the Assessing Officer the authority to
issue notice to an assessee, who has not submitted a return of income, asking for
submission of return. This is necessary to bring into the fold of taxation non-filers or
stop filers who have transactions resulting in income. However, this power can be
currently invoked only by the Assessing Officer.
The Central Government is following a conscious policy of making all the processes
under the Act, where physical interface with the assessee is required, fully faceless
by eliminating person to person interface between the taxpayer and the Department.
In line with this policy, and in order to enable centralized issuance of notices etc. in
an automated manner, it is proposed to amend the provisions of clause (i) of the
sub-section (1) of the section 142 to empower the prescribed income-tax authority
besides the Assessing Officer to issue notice under the said clause.
[clause 33]
51
Provision for Faceless Proceedings before the Income-tax Appellate Tribunal (ITAT)
in a jurisdiction less manner
In order to impart greater efficiency, transparency and accountability to the

assessment process, appeal process and penalty process under the Act a new
faceless assessment scheme, faceless appeal scheme and faceless penalty scheme
have already been introduced. Further, vide Taxation and Other Laws (Relaxation
and Amendment of Certain Provisions) Act, 2020 the Central Government has been
empowered to notify similar schemes in respect of many other processes under the
Act that require a physical interface with the taxpayers.
In order to ensure that the reforms initiated by the Department to reduce human
interface from the system reaches the next level, it is imperative that a faceless
scheme be launched for ITAT proceedings on the same line as faceless appeal
scheme. This will not only reduce cost of compliance for taxpayers, increase
transparency in disposal of appeals but will also help in achieving even work
distribution in different benches resulting in best utilisation of resources.
Therefore, it is proposed to insert new sub-sections in the section 255 of the Act so
as to provide that the Central Government may notify a scheme for the purposes of
disposal of appeal by the ITAT so as to impart greater efficiency, transparency and
accountability by,—
(a) eliminating the interface between the ITAT and parties to the appeal in the
course of proceedings to the extent technologically feasible;
(b) optimising utilisation of the resources through economies of scale and

functional specialisation;
(c) introducing an appellate system with dynamic jurisdiction. It is also

proposed to empower the Central Government, for the purpose of giving effect
to the scheme made under the proposed sub-section, for issuing notification in
the Official Gazette, to direct that any of the provisions of this Act shall not
apply or shall apply with such exceptions, modifications and adaptations as
may be specified in the notification. Such directions are to be issued on or
before 31st March, 2023. It is proposed that every notification issued shall, as
52
soon as may be after the notification is issued, be laid before each House of
Parliament.
[Clause 78]
Discontinuance of Income-tax Settlement Commission
It is proposed to discontinue Income-tax Settlement Commission (ITSC) and to

constitute Interim Board of settlement for pending cases. The various amendments
proposed are as under:
 ITSC shall cease to operate on or after 1st February, 2021

 No application under section 245C of the Act for settlement of cases shall be
made on or after 1st February, 2021;
 All applications that were filed under section 245C of the Act and not declared
invalid under sub-section (2C) of section 245D of the Act and in respect of
which no order under section 245D(4) of the Act was issued on or before the
31st January, 2021 shall be treated as pending applications.
 Where in respect of an application, an order, which was required to be passed

by the ITSC under section 245(2C) of the Act on or before the 31st day of
January, 2021 to declare an application invalid but such order has not been
passed on or before 31st January, 2021, such application shall be deemed to
be valid and treated as pending application.
 The Central Government shall constitute one or more Interim Board for
Settlement (hereinafter referred to as the Interim Board), as may be
necessary, for settlement of pending applications. Every Interim Board shall
consist of three members, each being an officer of the rank of Chief
Commissioner, as may be nominated by the Board. If the Members of the
Interim Board differ in opinion on any point, the point shall be decided
according to the opinion of majority.
53
 On and from 1st February, 2021, the provisions related to exercise of powers
or performance of functions by the ITSC viz. provisional attachment, exclusive
jurisdiction over the case, inspection of reports and power to grant immunity
shall apply mutatis mutandi to the Interim Board for the purposes of disposal
of pending applications and in respect of functions like rectification of orders
for all orders passed under sub-section (4) of section 245D of the Act.
However, where the time-limit for amending any order or filing of rectification
application under section 245(6B) of the Act expires on or after 1st February,
2021, in computing the period of limitation, the period commencing from 1 st
February, 2021 and ending on the end of the month in which the Interim
Board is constituted shall be excluded and the remaining period shall be
extended to sixty days, if less than sixty days.
 With respect to a pending application, the assessee who had filed such
application may, at his option, withdraw such application within a period of
three months from the date of commencement of the Finance Act, 2021 and
intimate the Assessing Officer, in the prescribed manner, about such
withdrawal.
 Where the option for withdrawal of application is not exercised by the
assessee within the time allowed, the pending application shall be deemed to
have been received by the Interim Board on the date on which such
application is allotted or transferred to the Interim Board.
 The Board may, by an order, allot any pending application to any Interim
Board and may also transfer, by an order, any pending application from one
Interim Board to another Interim Board.
 Where the pending application is allotted to an Interim Board or transferred to
another Interim Board subsequently, all the records, documents or evidences,
with whatever name called, with the ITSC shall be transferred to such Interim
Board and shall be deemed to be the records before it for all purposes.
 Where the assessee exercises the option to withdraw his application, the
proceedings with respect to the application shall abate on the date on which
such application is withdrawn and the Assessing Officer, or, as the case may
be, any other income-tax authority before whom the proceeding at the time of
making the application was pending, shall dispose of the case in accordance
54
with the provisions of this Act as if no application under section 245C of the
Act had been made. However, for the purposes of the time-limit
under sections 149, 153, 153B, 154 and 155 and for the purposes of payment
of interest under section 243 or 244 or, as the case may be, section 244A, for
making the assessment or reassessment, the period commencing on and
from the date of the application to the ITSC under section 245C of the
Act and ending with the date on which application is withdrawn shall be
excluded. Further, the income-tax authority shall not be entitled to use the
material and other information produced by the assessee before the ITSC or
the results of the inquiry held or evidence recorded by the ITSC in the course
of proceeding before it. However, this restriction shall not apply in relation to
the material and other information collected, or results of the inquiry held or
evidence recorded by the Assessing Officer, or, as the case may be, other
income-tax authority during the course of any other proceeding under this Act
irrespective of whether such material or other information or results of the
inquiry or evidence was also produced by the assessee or the Assessing
officer before the ITSC.
 The Central Government may make a scheme, by notification in the Official
Gazette, for the purposes of settlement in respect of pending applications by
the Interim Board, so as to impart greater efficiency, transparency and
accountability by eliminating the interface between the Interim Board and the
assessee in the course of proceedings to the extent technologically feasible;
optimising utilisation of the resources through economies of scale and
functional specialisation; and introducing a mechanism with dynamic
jurisdiction. The Central Government may, for the purposes of giving effect to
the said scheme, by notification in the Official Gazette, direct that any of the
provisions of this Act shall not apply or shall apply with such exceptions,
modifications and adaptations as may be specified in the notification.
However, no such direction shall be issued after the 31st March, 2023. Every
such notification issued shall, as soon as may be after the notification is
issued, be laid before each House of Parliament.
These amendments will take effect from 1st February, 2021.
[Clauses 54 to 65]
55
Reduction of time limit for completing assessment
Section 153 of the Act contains provisions in respect of time-limit for completion of
assessment, reassessment and re-computation under the Act. The sub-section (1) of
the said section provides that the time-limit for passing an assessment order under
section 143 or 144 of the Act shall be 21 months from the end of the assessment
year in which the income was first assessable. However, this time limit had earlier
been curtailed in order to improve the efficacy and efficiency of the Department to
give effect to computerization of processes under the Act. As a result, the time limit
for completion of assessment proceedings under sections 143 or 144 of the Act was
reduced to 18 months for A.Y. 2018-19 and 12 months for A.Y. 2019-20 and
subsequent assessment years vide the Finance Act, 2017.
Since then, the assessment procedure has been completely overhauled by the
introduction of the Faceless Assessment Scheme, 2019. The assessment procedure
is now conducted in a completely faceless and jurisdiction-less way where all internal
and external communication is made electronically and different aspects of the
assessment procedure like verification, scrutiny of books of accounts etc. are carried
on by different units. The person-to-person interface between the taxpayer and the
Department has been eliminated. This team-based approach for assessment with a
dynamic jurisdiction is technologically driven and very efficient. Thus, the time
required for completion of assessment procedure needs to be further reduced.
The benefits of shorter time period for scrutiny proceedings are manifold. On the one
hand, it reduces the compliance burden on the taxpayers who find it easier to explain
matters pertaining to a recent previous year which also improve the ease of doing
business. On the other hand, it enhances the ability of the Department to detect and
bring to tax any leakages of revenue as the instances of tax evasion come to the
notice of the Department within a shorter span of time.
Hence, it has been proposed that the time limit for completion of assessment
proceedings may be reduced further by three months. Thus the time for completing
of assessment is proposed to be nine months from the end of the assessment year
56
in which the income was first assessable, for the assessment year 2021-22 and
[Clause 41]
Rationalisation of the provision of Charitable Trust and Institutions to eliminate

possibility of double deduction while calculating application or accumulation
Exemption to funds, institutions, trusts etc. carrying out religious or charitable

activities is provided under clause (23C) of section 10 of the Act and sections 11 and
12 of the Act. Section 12A of the Act, inter alia, provides for procedure to make
application for the registration of the trust or institution to claim exemption under
section 11 and 12. Section 12AB is the new section which comes into effect from the
1st April, 2021.
Under the existing provisions of the Income-tax Act, 1961, corpus donations received
by trusts, institutions, funds etc. are exempt as follows:
a) Explanation to third proviso to clause (23C) of section 10 provides that income

of the funds or trust or institution or any university or other educational
institution or any hospital or other medical institution, shall not include income
in the form of voluntary contributions made with a specific direction that they
shall form part of the corpus.
b) Clause (d) of sub-section (1) of Section 11 provides that voluntary
contributions made with a specific direction that they shall form part of the
corpus of the trust or institution shall not be included in the total income of the
trust or institution.
These entities are not allowed to accumulate more than 15% of their income or
accumulate for specific purpose up to 5 years, other than corpus donations referred
above.Instances have come to the notice where the these entities claim the corpus
donations to be exempt and at the same time claim their application as part of the
mandatory 85% application from income other than such corpus. This results in a
57
situation where the corpus income has been exempted and its application has been
claimed as application against the mandatory 85% application of non-corpus income.
Instances have also come to the notice where these entities take loans or
borrowings and make application for charitable or religious purposes out of the
proceeds of loans and borrowings. Such loans or borrowings when repaid, are again
claimed as application. This results in unintended double deduction.
Both these situations, at times, also result in paper loss which is claimed by the
assessee as carry forward resulting in unintended short application (less than 85%)
in following years.
To ensure that there is no double counting while calculating application or

accumulation, it has been proposed that-
a) Voluntary contributions made with a specific direction that it shall form part of
the corpusshall be invested or deposited in one or more of the forms or
modes specified in sub-section (5) of section 11 maintained specifically for
such corpus.
b) Application out of corpus shall not be considered as application for charitable
or religious purposes for the purposes of third proviso of clause (23C) and
clauses (a) and (b) of section 11. However, when it is invested or deposited
back, into one or more of the forms or modes specified in sub-section (5) of
section 11 maintained specifically for such corpus from the income of the
previous year, such amount shall be allowed as application in the previous
year in which it is deposited back to corpus to the extent of such deposit or
investment.
c) Application from loans and borrowings shall not be considered as application
for charitable or religious purposes for the purposes of third proviso of clause
(23C) and clauses (a) and (b) of section 11. However, when loan or borrowing
is repaid from the income of the previous year, such repayment shall be
allowed as application in the previous year in which it is repaid to the extent of
such repayment.
d) Clarify in both clause (23C) of section 10 and section 11 that for the
computation of income required to be applied or accumulated during the
58
previous year, no set off or deduction or allowance of any excess application,

of any of the year preceding the previous year, shall be allowed
[Clauses 5 and 6]
Taxation of proceeds of high premium unit linked insurance policy (ULIP)
Clause (10D) of section 10 of the Act provides for the exemption for the sum
received under a life insurance policy, including the sum allocated by way of bonus
on such policy in respect of which the premium payable for any of the years during
the terms of the policy does not exceed ten percent of the actual capital sum
assured.
Under the existing provisions of the Act, there is no cap on the amount of annual
premium being paid by any person during the term of the policy. Instances have
come to the notice where high net worth individuals are claiming exemption under
this clause by investing in ULIP with huge premium. Allowing such exemption in
policy/policies with huge premium defeats the legislative intent of this clause. The
intention was to provide benefit to small and genuine cases of life insurance. Hence,
it is proposed to provide for the followings:
(i) Insert Explanation 3 to the clause (10D) of section 10 of the Act to define
ULIP as a life insurance policy which has components of both investment and
insurance and is linked to a unit as defined in clause (ee) of regulation (3) of the
Insurance Regulatory and Development Authority of India (Unit Linked
Insurance Products) Regulations, 2019 dated the 8th day of July, 2019.
(ii) insert fourth proviso to clause (10D) of section 10 of the Act to provide that
the exemption under this clause shall not apply with respect to any ULIP issued
on or after the 1st February, 2021, if the amount of premium payable for any of
the previous year during the term of the policy exceeds two lakh and fifty
thousand rupees.
59
(iii) insert fifth proviso to this clause to provide that, if premium is payable by a
person for more than one ULIPs, issued on or after the 1st February, 2021,
exemption under this clause shall be available only with respect to such policies
aggregate premium whereof does not exceed the amount of two lakh fifty
thousand rupees, for any of the previous years during the term of any of the
policy.
(iv) insert sixth proviso to this clause providing that the provisions of fourth and
fifth provisos shall not apply to any sum received on the death of a person.
(v) insert seventh proviso to this clause to enable CBDT to issue guidelines with
the approval of Central Government for the purpose of removing the difficulty
and to lay every guideline issued by the Board before each House of
Parliament and to make it binding on the income-tax authorities and the
assessee.
(vi) provide that a ULIP [to which exemption under clause (10D) of section 10 of
the Act does not apply on account of the applicability of the fourth and fifth
proviso] is a capital asset under clause (14) of section 2 of the Act.
(vii) provide for the deemed taxation of profit and gains from the redemption of
ULIP [to which exemption under clause (10D) of section 10 of the Act does not
apply on account of the applicability of the fourth and fifth proviso] as capital
gains by inserting new sub-section (1B) in section 45 and to take power to
prescribe rules for calculation of such capital gains.
(viii) Include such ULIPs [to which exemption under clause (10D) of section 10
of the Act does not apply on account of the applicability of the fourth and fifth
proviso] in the definition of equity oriented fund in section 112A so as to provide
them same treatment as unit of equity oriented fund. Thus provisions of section
111A and 112A would apply on sale/redemption of such ULIPs.
[Clauses 3, 5, 14 and 29]
Consequential amendment has also been proposed in Finance (No 2) Act, 2004 to
make security transaction tax applicable on maturity or partial withdrawal with
60
respect to unit linked insurance policy issued by insurance company on or after the
1st February, 2021 [to which exemption under clause (10D) of section 10 of the Act
does not apply on account of the applicability of the fourth and fifth proviso]
This amendment will take effect from 1st February, 2021.
[Clauses 154 to 158]
Rationalisation of the provision of slump sale
Section 50B of the Act contains special provision for computation of capital gains in
case of slump sale. Sub-section (42C) of section 2 of the Act defines ―slump sale‖ to
mean the transfer of one or more undertakings as a result of sale for lump sum
consideration without value being assigned to individual assets and liabilities in such
cases. This has been interpreted by some courts that other means of transfer listed
in sub-section (47) of section 2 of the Act, in relation to definition of the word
―transfer‖ in relation to capital asset like exchange, relinquishment etc, are excluded.
While discussing transfer as a result of sale it needs to be kept in mind that it is the
substance of transaction that is more important than the name given to it by the
parties to the transaction. For example, a transaction of ―sale‖ may be disguised as
―exchange‖ by the parties to the transaction, but such transactions may already be
covered under the definition of slump sale as it exists today on the basis that it is
transfer by way of sale and not by way of exchange. This principle was enunciated
by Hon'ble Supreme Court in CIT vs. R.R. Ramakrishna Pillai [(1967) 66 ITR 725
SC]. Thus, if a transfer of an asset is in lieu of another asset (non-monetary) it can
be said to be monetized in a situation where the consideration for the asset
transferred is ascertained first and is then discharged by way of non-monetary
assets. In this situation it would be a case of transfer by way of sale and would thus
be covered within existing provisions of section 50C of the Act. Based on this
principle, Hon‘ble SC in the case of Artex Manufacturing Company [(1997), 227 ITR
260] held that the sale of business on a going concern for a lump-sum non-monetary
consideration was transfer by way of sale on the ground that the slump price was
determined by the value on the basis of itemized assets, though this price was not
mentioned in the agreement. Similarly, Ho‘ble SC in the case of Dhampur Sugar
Mills [(2006) 147 STC 57] considered the case of a dealer who took a sugar mill on
long term lease for an agreed amount of license fee and in satisfaction therefore, the
61
dealer was required to give the entire quantity of molasses to the owner of the sugar
mill. It was held that the said transaction ―in effect and substance‖ involved passing
of monetary consideration and was accordingly liable to sales tax.
Thus, a transfer which ―in effect and substance‖ is by way of sale is also currently
covered in the definition of slump sale under section 50C of the Act as interpreted by
various courts. However, it is still seen that tax avoidance schemes are drawn to
defeat the intent of this provision and Courts can always intervene to find the true
substance of the transaction and purpose of section of 50C of the Act.
In order to make the intention clear, it is proposed to amend the scope of the
definition of the term ―slump sale‖ by amending the provision of clause (42C) of
section 2 of the Act so that all types of ―transfer‖ as defined in clause (47) of section
2 of the Act are included within its scope.
This amendment will take effect from the 1st April, 2021 and shall accordingly apply
to the assessment year 2021-22 and subsequent assessment years.
[Clause 3]
Rationalisation of provision of transfer of capital asset to partner on dissolution or

reconstitution
The existing provisions of section 45 of the Act inter alia, provides that any profits or
gains arising from the transfer of a capital asset shall be chargeable to income-tax
under the head Capital gains and shall be deemed to be the income of the previous
year in which such transfer takes place. Further sub-section (4) of the said section,
provides that the profits or gains arising from the transfer of a capital asset by way of
distribution of capital assets on the dissolution of a firm or other association of
persons or body of individuals (not being a company or a co-operative society)or
otherwise, shall be chargeable to tax as the income of such firm or other association
of persons or body of individuals of the previous year in which the said transfer takes
place. Further, the fair market value of the asset on the date of such transfer shall be
deemed to be the full value of the consideration for the purposes of section 48.
62
In this regard, it has been noticed that there is uncertainty regarding applicability of
provisions of aforesaid sub-section to a situation where assets are revalued or self-
generated assets are recorded in the books of accounts and payment is made to
partner or member which is in excess of his capital contribution.
Hence, it is proposed to substitute the existing sub-section (4) of section 45 of the

Act with a new sub-section (4) and also insert a new sub-section (4A) to this section.
New proposed sub-section (4) of section 45 of the Act applies in a case where a
specified person who receives during the previous year any capital asset at the time
of dissolution or reconstitution of the specified entity. The capital asset represents
the balance in the capital account of such specified person in the books of the
specified entity at the time of its dissolution or reconstitution. In this situation, the
profit and gains arising from the receipt of such capital asset by the specified person
shall be chargeable to income-tax as income of the specified entity under the head
―capital gains‖ and shall be deemed to be the income of such specified entity of the
previous year in which the capital asset was received by the specified person. For
the purposes of section 48 of the Act, the fair market value of the capital asset on the
date of such receipt shall be deemed to be the full value of the consideration
received or accruing as a result of the transfer of the capital asset. The balance in
the capital account of the specified person in the books of account of the specified
entity is to be calculated without taking into account increase in the capital account of
the specified person due to revaluation of any asset or due to self-generated
goodwill or any other self-generated asset.
New proposed section sub-section (4A) of section 45 of the Act applies in a case
where a specified person receives during the previous year any money or other
asset at the time of dissolution or reconstitution of the specified entity. The money or
other asset is required to be in excess of the balance in the capital account of such
specified person in the books of accounts of the specified entity at the time of its
dissolution or reconstitution. In this situation, the profits or gains arising from the
receipt of such money or other asset by the specified person shall be chargeable to
income-tax as income of the specified entity under the head "Capital gains" and shall
be deemed to be the income of such specified entity of the previous year in which
63
the money or other asset was received by the specified person. For the purposes of
section 48 of the Act,
 value of the money or the fair market value of other asset on the date of such
receipt shall be deemed to be the full value of the consideration received or
accruing as a result of the transfer of the capital asset; and
 the balance in the capital account of the specified person in the books of
accounts of the specified entity at the time of its dissolution or reconstitution
shall be deemed to be the cost of acquisition.
The balance in the capital account of the specified person in the books of account of
the specified entity is to be calculated without taking into account increase in the
capital account of the specified person due to revaluation of any asset or due to self-
generated goodwill or any other self-generated asset.
For the purposes of these two sub-sections,-
 specified person‖ is proposed to be defined as a person who is partner of a

firm or member of other association of persons or body of individuals (not
being a company or a cooperative society), in any previous year;
 ―specified entity‖ is proposed to be defined as a firm or other association of
persons or body of individuals (not being a company or a cooperative
society);and
 ―self-generated goodwill‖ and ―self –generated assets‖ are proposed to be
defined as goodwill or asset, as the case may be, which has been acquired
without incurring any cost for purchase or which has been generated during
the course of the business or profession.
Consequential amendment is also proposed in section 48 of the Act to provide that in

case of specified entity, the amount included in the total income of such specified
entity under sub-section (4A) of section 45 which is attributable to the capital asset
being transferred, shall be reduced from the full value of the consideration to
compute income charged under the head ―capital gains‖. This is to be calculated in
the manner to be prescribed later. This is to mitigate the double taxation which may
have happened but for this provision in a situation where an asset which was
revalued and for which income under the proposed sub-section (4A) of section 45 of
the Act was brought to tax is transferred subsequently by the specified entity.
64
These amendments will be effective from the 1 st April, 2021 and will accordingly
apply to the assessment year 2021-22 and subsequent assessment years.
[Clauses 14 and 16]
Provisional attachment in Fake Invoice cases
Section 281B of the Act contains provisions which provide that in cases of
assessment or reassessment the Assessing Officer may provisionally attach any
property of the assessee, if necessary, in order to protect the interest of revenue.
This can be done only with prior approval of Pr. Chief Commissioner or Pr Director
General or Chief Commissioner or Director General or Principal Commissioner or
Principal Director or Commissioner or Director, of Income-tax. Such provisional
attachment is valid for a period of 6 months. Further, the said section allows the
assessee to furnish a bank guarantee of the value of the property so attached for
revocation of the provisional attachment. The above bank guarantee shall be
invoked if the assessee fails to pay his tax demand on time. The powers under this
section can only be exercised by the Assessing Officer.
Section 271AAD of the Act was inserted vide the Finance Act, 2020 to impose
penalty on a person or a person who causes such person to make a false entry or
omit an entry from his books of accounts. It is an anti-abuse provision. Upon initiation
of such penalty proceedings, it is highly likely that the taxpayer may also evade the
payment of such penalty, if imposed. Hence, in order to protect the interest of
revenue, it is proposed to amend the provision of section 281B of the Act to enable
the Assessing Officer to exercise the powers under this section during the pendency
of proceedings for imposition of penalty under section 271AAD of the Act, if the
amount or aggregate of amounts of penalty imposable is likely to exceed two crore
rupees.
[Clause 79]
65
Rationalisation of the provisions of Equalisation Levy
Under section 165A of Finance Act, 2016, as inserted by section 153 of the Finance
Act, 2020, Equalisation Levy is to be levied at the rate of two per cent. of the amount
of consideration received or receivable by an e-commerce operator from e-
commerce supply or services made or provided or facilitated, by it-
(i) to a person resident in India; or

(ii) to a non-resident in the specified circumstances as referred to in sub-section
(3); or
(iii) to a person who buys such goods or services or both, using internet protocol
address located in India.
For this purpose, E-commerce supply or service is defined as to mean:-
(i) online sale of goods owned by the e-commerce operator;

(ii) online provision of services provided by the e-commerce operator;
(iii) online sale of goods or provision of services or both, facilitated by the
e-commerce operator; or
(iv) any combination of activities listed in clause (i), (ii) or clause (iii);
Clause (50) of section 10 of the Act provides for the exemption for the income arising
from any specified service provided on or after the date on which the provisions of
Chapter VIII of the Finance Act, 2016 comes into force or arising from any e-
commerce supply or services made or provided or facilitated on or after the 1st day
of April, 2021 and chargeable to equalisation levy under that Chapter.
It is seen that there is need for some clarification to correctly reflect the intention of
various provisions concerning this levy. Hence, it is proposed to carry out the
following amendments in the Finance Act, 2016:-
 Insert an Explanation to section 163 of the Finance Act, 2016, clarifying that
consideration received or receivable for specified services and consideration
received or receivable for e-commerce supply or services shall not include
consideration which are taxable as royalty or fees for technical services in
India under the Income-tax Act read with the agreement notified by the
Central Government under section 90 or section 90A of the Income-tax Act.
66
 Insert an Explanation to clause (cb) of section 164 of the Finance Act, 2016,
providing that for the purposes of defining e-commerce supply or service,
―online sale of goods‖ and ―online provision of services‖ shall include one or
more of the following activities taking place online:
(a) Acceptance of offer for sale;
(b) Placing the purchase order;
(c) Acceptance of the Purchase order;
(d) Payment of consideration; or
(e) Supply of goods or provision of services, partly or wholly
 Amend section 165A of the Finance Act, 2016, to provide that consideration
received or receivable from e-commerce supply or services shall include:
(i) consideration for sale of goods irrespective of whether the e-commerce
operator owns the goods; and
(ii) consideration for provision of services irrespective of whether service
is provided or facilitated by the e-commerce operator.
These amendments will take effect retrospectively from 1st April, 2020.
[Clause 159]
It is also proposed to amend section 10(50) of the Act to -

(i) provide that section 10(50) will apply for the e-commerce supply or services
made or provided or facilitated on or after 1st April, 2020.
(ii) clarify that exemption under section 10(50) will not apply for royalty or fees
for technical services which is taxable under the Act read with the agreement
notified by the Central Government under section 90 or section 90A of the
Act.
(iii) define e-commerce supply or services under section 10(50) as the
meaning assigned to it in clause (cb) of section 164 of Chapter VIII of the
Finance Act,2016.
This amendment will take effect from 1st April 2021 and will accordingly apply to the
assessment year 2021-22 and subsequent assessment years
67
[Clause 5]
Section 2 of the Act provides the definitions for the purposes of the Act. Clause (11)
of the said section defines―block of assets‖ to mean a group of assets falling within a
class of assets comprising, tangible assets, being buildings, machinery, plant or
furniture and intangible assets, being know-how, patents, copyrights, trade-marks,
licences, franchises or any other business or commercial rights of similar nature, in
respect of which the same percentage of depreciation is prescribed.
Section 32 of the Act relates to depreciation. Sub-section (1) of the said section
provides for deduction on account of depreciation on tangible assets (Building,
machinery, plant and furniture) and intangible assets (know-how, patents, copyrights,
trademarks, licenses, franchises or any other business or commercial rights of
similar nature) acquired on or after the 1st day of April, 1998 which are owned,
wholly or partly by the assessee which are used wholly and exclusively for the
purpose of business and profession while computing the income under the head
‗Profits and gains of business or profession‘.
Further, Explanation 3 to sub-section (1) provides that for the purposes of this sub-
section, the expression "assets" shall mean to be tangible assets, being buildings,
machinery, plant or furniture andintangible assets, being know-how, patents,
copyrights, trademarks, licences, franchises or any other business or commercial
rights of similar nature.
Section 50 of the Act provides for conditions for the applicability of provisions of
section 48 and 49 for computation of capital gains in case of depreciable assets
where the capital asset is an asset forming part of a block of asset in respect of
which depreciation has been allowed under this Act.
Section 55 of the Act provides meaning of terms "adjusted", "cost of improvement"

and "cost of acquisition"for the purposes of sections 48 and 49 of the Act. In relation
to a capital asset, being goodwill of a business or a trade mark or brand name
associated with a business or a right to manufacture, produce or process any article
or thing or right to carry on any business or profession, tenancy rights, stage carriage
68
permits or loom hours, it is defined to mean the purchase price if it is acquired by

purchase. In other cases it is nil except when it is covered by sub-clauses (i) to (iv) of
sub-section (1) of section 49.
It is seen that Goodwill of a business or a profession has not been specifically

provided as an asset either in the definition under clause (11) of section 2 of the Act
or in section 32 of the Act. The question whether goodwill of a business is an asset
within the meaning of section 32 of the Act and whether depreciation on goodwill is
allowable under the said section, is an issue which came up before Hon‘ble Supreme
Court in the case Smiff Securities Limited [(2012)348 ITR 302 (SC)]. Hon‘ble
Supreme Court answered the question in affirmative. Thus, as held by Hon‘ble
Supreme Court, Goodwill of a business or profession is a depreciable asset under
However, there are other sections of the Act which are relevant for calculation of
depreciation under section 32 of Act. These are as under:
 Sixth proviso the section 32 of the Act mandates that in a case of

succession/amalgamation/demerger during the previous year, depreciation is to
be calculated as if the succession or amalgamation or demerger has not taken
place during the previous year and apportioned between the predecessor and
the successor, or the amalgamating company and the amalgamated company,
or the demerged company and the resulting company, as the case may be, in
the ratio of the number of days for which the assets were used by them.
 Explanation 2 of sub-section (1) of section 32 of the Act provides that
the term ―written down value of the block of assets‖ shall have the same
meaning as in clause (c) of sub-section (6) of section 43 of the Act.
 Clause (c) of sub-section (6) of section 43 of the Act, with respect to
block of assets, inter-alia, provides that the aggregate of the written down
values of all the assets falling within that block of assets at the beginning of the
previous year is to be increased by the actual cost of any asset falling within
that block, acquired during the previous year.
 Sub-section (1) of section 43 of the Act which defines ―Actual cost‖ as
actual cost of the assets to the assessee. Explanation 7 to this section covers a
situation where in a scheme of amalgamation, any capital asset is transferred
69
by the amalgamating company to the amalgamated company and the

amalgamated company is an Indian company. It clarifies that in this situation,
the actual cost of the transferred capital asset to the amalgamated company
shall be taken to be the same as it would have been if the amalgamating
company had continued to hold the capital asset for the purposes of its own
business.
 Explanation 2 of clause (c) of sub-section (6) of section 43 of the Act
also covers a situation where in a scheme of amalgamation, any capital asset is
transferred by the amalgamating company to the amalgamated company and
the amalgamated company is an Indian company. It also clarifies that in this
situation, the actual cost of the block of asset in the hand of the amalgamated
company would be written down value of that block in the immediate preceding
previous year in the case of amalgamating company as reduced by
depreciation actually allowed in that preceding previous year.
Thus, while Hon‘ble Supreme Court has held that the Goodwill of a business or
profession is a depreciable asset, the actual calculation of depreciation on goodwill is
required to be carried out in accordance with various other provisions of the Act,
including the ones listed above. Once we apply these provisions, in some situations
(like that of business reorganization) there could be no depreciation on account of
actual cost being zero and the written down value of that assets in the hand of
predecessor/amalgamating company being zero.
However, in some other cases (like that of acquisition of goodwill by purchase) there
could be valid claim of depreciation on goodwill in accordance with the decision of
Hon‘ble Supreme Court holding goodwill of a business or profession as a
depreciable asset.
It is seen that Goodwill, in general, is not a depreciable asset and in fact depending
upon how the business runs; goodwill may see appreciation or in the alternative no
depreciation to its value. Therefore, there may not be a justification of depreciation
on goodwill in the manner there is a need to provide for depreciation in case of other
intangible assets or plant & machinery. Hence there appears to be little justification
70
for depreciation on goodwill even in the category of cases referred to in the

immediately preceding paragraph.
In view of above discussion, it has been decided to propose that goodwill of a

business or profession will not be considered as a depreciable asset and there would
not be any depreciation on goodwill of a business or profession in any situation. In a
case where goodwill is purchased by an assessee, the purchase price of the
goodwill will continue to be considered as cost of acquisition for the purpose of
computation of capital gains under section 48 of the Act subject to the condition that
in case depreciation was obtained by the assessee in relation to such goodwill prior
to the assessment year 2021-22, then the depreciation so obtained by the assessee
shall be reduced from the amount of the purchase price of the goodwill.
Therefore, to give effect to the above decision, it has been proposed to,
(a) amend clause (11) of section 2 of the Act to provide that ‗block of
asset‘ shall not include goodwill of a business or profession;
(b) amend clause (ii) of sub-section (1) of section 32 of the Act to

provide that goodwill of a business or profession shall not be considered as an
asset for the purpose of the said clause and therefore not eligible for
depreciation. Further, it is also proposed to amend Explanation 3 to sub-section
(1) of the said section to provide that goodwill of a business or profession shall
not be considered as an asset for the said sub-section.
(c) amend section 50 of the Act to provide that in a case where

goodwill of a business or profession formed part of a block of asset for the
assessment year beginning on the 1st April, 2020 and depreciation has been
obtained by the assessee under the Act, the written down value of that block of
asset and short term capital gain, if any, shall be determined in the manner as
may be prescribed.
(d) amend section 55 of the Act by substituting clause (a) of sub-

section (2) to provide that in relation to a capital asset, being goodwill of a
business or profession, or a trade mark or brand name associated with a
business or profession, or a right to manufacture, produce or process any
71
article or thing, or right to carry on any business or profession, or tenancy

rights, or stage carriage permits, or loom hours,—
(i) in the case of acquisition of such asset by the assessee by purchase

from a previous owner, means the amount of the purchase price; and
(ii) in the case falling under sub-clause (i) to (iv) of sub-section (1) of section
49 and where such asset was acquired by the previous owner (as defined in
that section) by purchase, means the amount of the purchase price for such
previous owner; and
(iii) in any other case, shall be taken to be nil
(e) provide that in case of goodwill of business or profession acquired

by the assessee by way of purchase from a previous owner (either directly or
through modes specified under sub-clause (i) to (iv) of sub-section (1) of
section 49) and any deduction on account of depreciation under section 32 of
the Act has been obtained by the assessee in any previous year preceding the
previous year relevant to the assessment year commencing on or after the 1st
April, 2021, then the cost of acquisition will be the purchase price as reduced
by the depreciation so obtained by the assessee before the previous year
relevant to assessment year commencing on 1st April, 2021.
[Clauses 7, 18 and 20]
Rationalisation of the provision relating to processing of returned income and

issuance of notice under sub-seciton (2) of section 143 of the Act
The existing provisions of clause (a) of sub-section (1) of section 143 of the Act
provides that at the time of processing of return of income made under section 139,
or in response to a notice under sub-section (1) of section 142, the total income or
loss shall be computed after making the adjustments specified in clauses (i) to (vi)
therein.
It is proposed to amend the following provisions of sub-section (1) of section 143 of

the Act,-
72
(i) Amend sub-clause (iv) of clause (a) of sub-section (1) of the section
143 of the Act, to allow for the adjustment on account of increase in income
indicated in the audit report but not taken into account in computing the total
income.
(ii) Amend sub-clause (v) of clause (a) of sub-section (1) of the section
143 of the Act so as to give consequential effect to amendment carried out in
section 80 AC vide Finance Act, 2018.
(iii) Amend the provisions of section 143 to reduce the time limit for
sending intimation under sub-section (1) of section 143 of the Act from one year
to nine months from the end of the financial year in which the return was
furnished.
Consequently, it is also proposed to reduce the time limit for issue of notice under
sub-section (2) of section 143 of the Act from six months to three months from the
end of the financial year in which the return is furnished.
[Clause 34]
Adjudicating authority under the PBPT Act
Section of the 71 of the PBPT Act, inter alia, provides that the Central Government
may, by notification, provide that until the Adjudicating Authorities are appointed and
the Appellate Tribunal is established under the PBPT Act, the Adjudicating Authority
appointed under sub-section (1) of section 6 of the Prevention of Money-Laundering
Act, 2002 (hereinafter referred to as the PMLA) and the Appellate Tribunal
established under section 25 of the PMLA may discharge the functions of the
Adjudicating Authority and the Appellate Tribunal, respectively, under the PBPT Act
for such period and in respect of such cases or class of cases as may be specified in
the said notification.
Since there is no appointment of the Adjudicating Authority under the PBPT Act, the
Adjudicating Authority under the PMLA is discharging the functions of the
Adjudicating Authority under the PBPT Act. It is now proposed to provide that the
Competent Authority constituted under sub-section (1) of section 5 of the Smugglers
73
and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA)

shall be the Adjudicating Authority under the PBPT Act which shall commence
discharging the function from 1st July, 2021. As the said Adjudicating Authority under
PBPT Act is proposed to commence the discharging the functions from 1st July,
2021, it is proposed to extend the period of limitation under sub-section (7) of section
26 of the PBPT Act to provide that where the time limit for passing order under sub-
section (7) of section 26 of the PBPT Act expires during the period beginning from 1 st
July, 2021 and ending on 29th September, 2021, the time limit for passing such order
shall stand extended to 30th September, 2021.
[Clauses 142 to 147]
Rationalisation of the provision of presumptive taxation for professionals under

section 44ADA
Section 44ADA of the Act relates to special provision for computing profits and gains
of profession on presumptive basis.
Sub-section (1) of the said section provides that notwithstanding anything contained
in sections 28 to 43C, in case of an assessee, being a resident in India engaged in a
profession referred to in sub-section (1) of section 44AA and whose total gross
receipts do not exceed fifty lakh rupees in a previous year, a sum equal to fifty per
cent of the total gross receipts of the assessee in the previous year on account of
such profession, or as the case may be, a sum higher than the aforesaid sum
claimed to have been earned by the assessee, shall be deemed to be the profits and
gains of such profession chargeable to tax.
The provisions of section 44ADA of the Act were made applicable to individual,
Hindu undivided family (HUF) and partnership firm but not a Limited Liability
Partnership (LLP) as defined under clause (n) of sub-section (1) of section 2 of
Limited Liability Partnership Act, 2008. This is for the reason that LLP are required to
maintain books of accounts in any case under LLP Act.
It is proposed to make this position clear in the law. Hence it is proposed to amend
sub-section (1) of section 44ADA of the Act to provide that the provision of this
section shall apply to an assessee, being an individual, HUF or partnership firm, not
74
being an LLP as defined under clause (n) of sub-section (1) of section 2 of Limited
Liability Partnership Act, 2008. All other provisions like being a resident in India
engaged in a profession referred to in sub-section (1) of section 44AA and whose
total gross receipts do not exceed fifty lakh rupees in a previous year, shall remain
same.
This amendment will take effect from 1st April, 2021 and will, accordingly, apply in
relation to the assessment year 2021-22 and subsequent assessment years.
[Clause 12]
Clarification regarding the scope of Vivad se Vishwas Act, 2020

With the objective of reducing pending income tax litigation, generating timely
revenue for the Government and giving benefit to taxpayers by providing them peace
of mind, certainty and savings on account of time and resources, the Direct Tax
Vivad se Vishwas Act, 2020 (hereinafter referred to as ‗VsV‘) was enacted on 17th
March, 2020.
The settlement provisions under the Income-tax Act, 1961 (Income-tax Act) provide
for an alternate mechanism to a taxpayer who chooses to exit the regular process of
assessment which would have resulted into determination of tax liability and instead
approached the Income Tax Settlement Commission (ITSC) for settlement of his
case under Chapter XIX-A of the Income-tax Act. As the VsV was enacted for the
resolution of disputed tax and not for the taxes covered by an order in pursuance to
the settlement of a case under Chapter XIX-A of the Income-tax Act, such cases as
are covered by Chapter XIX-A of the Income-tax Act (whether they have attained
finality or not) have always been, therefore, intended to be outside the purview of
VsV.
With a view to remove any ambiguity, it is proposed to amend the provisions of VsV
to clarify the original legislative intent for which the definitions of ―appellant‖ in
section 2(1)(a), ―disputed tax‖ in section 2(1)(j) and ―tax arrear‖ in section 2(1)(o), of
the VsV are proposed to be amended by way of removal of doubts by this Bill.
75
The said amendments are proposed to take effect retrospectively from the 17th
March 2020.
[Clause 160]
Definition of the term ―Liable to tax‖
The Act currently does not define the term ―liable to tax‖ though this term is used in
section 6, in clause (23FE) of section 10 and various agreements entered into under
section 90 or section 90A of the Act. Hence, it is proposed to insert clause (29A) to
section 2 of the Act providing its definition. The term ―liable to tax‖ in relation to a
person means that there is a liability of tax on that person under the law of any
country and will include a case where subsequent to imposition of such tax liability,
an exemption has been provided.
[Clause 3]
Income Declaration Scheme (IDS) amendment
The Income Declaration Scheme, 2016 (the Scheme) contained in Chapter-IX of the
Finance Act, 2016 provided an opportunity to the persons who had not disclosed any
income in the past to come clean and make payment of tax, surcharge and penalty
as per the provisions of the Scheme. The Scheme commenced on 01.06.2016.
Section 187 of the Finance Act, 2016 inter alia, provides that the tax, surcharge and
penalty payable under the Scheme shall be paid on or before the specified date and
if the declarant failed to pay such amount, the declaration filed by the declarant shall
be deemed invalid. Further, section 191 of the Finance Act, 2016, inter alia, provides
that any amount of tax, surcharge and penalty paid in pursuance of a declaration
made under the Scheme shall not be refundable. A proviso was inserted in section
191 of the Finance Act, 2016 vide Finance (No. 2) Act, 2019 empowering the Board
to specify a class of persons to whom such tax paid in excess shall be refundable. It
is now proposed to amend the proviso of section 191 of the Finance Act, 2016, so as
to provide that the excess amount of tax, surcharge or penalty paid in pursuance of a
76
declaration made under the Scheme shall be refundable to the specified class of
persons without payment of any interest.
This amendment will take effect retrospectively from 1st June, 2016.
[Clause 159]
Tax Deduction at Source (TDS) on purchase of goods
Chapter XVIIB of the Act relates to deduction of tax at source. The provisions of this
chapter provide for TDS on various payments at rates contained therein. It is
proposed to provide for TDS by person responsible for paying any sum to any
resident for purchase of goods. The rate of TDS is kept very low at 0.1%. To ensure
that compliance burden is only on those who can comply with it, it is proposed that
the tax is only required to be deducted by those person (i.e ―buyer‖) whose total
sales, gross receipts or turnover from the business carried on by him exceed ten
crore rupees during the financial year immediately preceding the financial year in
which the purchase of goods is carried out. Central Government is proposed to be
empowered by notification in the Official Gazette to exempt a person from obligation
under this section on fulfilment of conditions as may be specified in that notification.
Tax is required to be deducted by such person, if the purchase of goods by him from
the seller is of the value or aggregate of such value exceeding fifty lakh rupees in the
previous year. It is also proposed to provide that the provisions of this section shall
not apply to,-
(i) a transaction on which tax is deductible under any provision of the Act; and
(ii) a transaction, on which tax is collectible under the provisions of section
206C other than transaction to which sub-section (1H) of section 206C applies.
This means, if on a transaction a TDS or tax collection at source (TCS) is required to

be carried out under any other provision, then it would not be subjected to TDS
under this section. There is one exception to this general rule. If on a transaction
TCS is required under sub-section (1H) of section 206C as well as TDS under this
section, then on that transaction only TDS under this section shall be carried out.
Board with the approval of the Central Government has been empowered to issue
guidelines for removing difficulty in giving effect to the provisions of this section.
77
Every guideline issued by the Board is required to be laid before each House of
Parliament, and shall be binding on the income-tax authorities and the person liable
to deduct tax
It is also proposed to consequentially amend sub-section (1) of section 206AA of the

Act and insert second proviso to further provide that where the tax is required to be
deducted under section 194Q and Permanent Account Number (PAN) is not
provided, the TDS shall be at the rate of five per cent.
These amendments will take effect from 1st July, 2021.
[Clauses 48 and 50]
TDS/TCS on non filer at higher rates
Section 206AA of the Act provides for higher rate of TDS for non-furnishing of PAN.
Similarly section 206CC of the Act provides for higher rate of TCS for non-furnishing
of PAN. It is seen that while these provisions have served their purpose in ensuring
obtaining and furnishing of PAN by various person, there is need to have similar
provisions to ensure filing of return of income by those person who have suffered a
reasonable amount of TDS/TCS.
Hence, it is proposed to insert a new section 206AB in the Act as a special provision
providing for higher rate for TDS for the non-filers of income-tax return. Similarly it is
proposed to insert a section 206CCA in the Act as a special provision for providing
for higher rate of TCS for non-filers of income-tax return.
Proposed section 206AB of the Act would apply on any sum or income or amount
paid, or payable or credited, by a person (herein referred to as deductee) to a
specified person. This section shall not apply where the tax is required to be
deducted under sections 192, 192A, 194B, 194BB, 194LBC or 194N of the Act. The
proposed TDS rate in this section is higher of the followings rates:-
 twice the rate specified in the relevant provision of the Act; or

 twice the rate or rates in force; or
 the rate of five per cent
78
If the provision of section 206AA of the Act is applicable to a specified person, in

addition to the provision of this section, the tax shall be deducted at higher of the two
rates provided in this section and in section 206AA of the Act.
Proposed section 206CCA of the Act would apply on any sum or amount received by
a person (herein referred to as collectee) from a specified person. The proposed
TCS rate in this section is higher of the following rates:-
 twice the rate specified in the relevant provision of the Act; or

 the rate of five percent
If the provision of section 206CC of the Act is applicable to a specified person, in

addition to the provision of this section, the tax shall be collected at higher of the two
rates provided in this section and in section 206CC of the Act.
The specified person is a person who has not filed the returns of income for both of
the two assessment years relevant to the two previous years which are immediately
before the previous year in which tax is required to be deducted or collected, as the
case may be. Further the time limit for filing tax return under sub-section (1) of
section 139 of the Act has expired for both these assessment years. There is
another condition that aggregate of tax deducted at source and tax collected at
source in his case is rupees fifty thousand or more in each of these two previous
years. Specified person shall not include a non-resident who does not have a
permanent establishment in India
Consequential amendment is proposed in sub-section (4) of section 194-IB of the

Act
[Clauses 46, 51 and 52]
Taxability of Interest on various funds where income is exempt
Clause (11) of section 10 of the Act provides for exemption with respect to any
payment from a provident fund to which the Provident Funds Act, 1925 (19 of 1925)
applies or from any other provident fund set up by the Central Government and
79
notified by it in this behalf in the Official Gazette. Similarly, Clause (12) of this section
provides for exemption with respect to the accumulated balance due and becoming
payable to an employee participating in a recognised provident fund, to the extent
provided in rule 8 of Part A of the Fourth Schedule
Instances have come to the notice where some employees are contributing huge
amounts to these funds and entire interest accrued/received on such contributions is
exempt from tax under clause (11) and clause (12) of section 10 of the Act. This
exemption without any threshold benefits only those who can contribute a large
amount to these funds as their share. Accordingly, it is proposed to insert proviso to
clause(11) and clause (12) of section 10 of the Act, providing that the provisions of
these clauses shall not apply to the interest income accrued during the previous year
in the account of the person to the extent it relates to the amount or the aggregate of
amounts of contribution made by the person exceeding two lakh and fifty thousand
rupees in a previous year in that fund, on or after 1st April, 2021, computed in such
These amendments will take effect from 1st April, 2022 and shall apply to the
[Clause 5]
CUSTOMS
Note:
(a) “Basic Customs Duty” means the customs duty levied under the Customs Act, 1962.
(b) Clause nos. in square brackets [ ] indicate the relevant clause of the Finance Bill,
2021.
(c) Amendments carried out through the Finance Bill, 2021 will come into effect on the
date of its enactment, unless otherwise specified.
I. AMENDMENTS IN THE CUSTOMS ACT, 1962
Clause of the
S. No. Amendment Finance Bill,
2021
1. 1In Section 2, a new clause 7(B) is being introduced defining a “common
[ 80 ]
. portal” (Common Customs Electronic Portal )
2. 2Sub-section (3) to section 5 of Customs Act is being amended to

. empower Commissioner (Appeals) to carry out functions specified under
[ 81 ]
Chapter XV, Section 108 and the new sub-section (1D) of Section 110
of Customs Act
3. 3Section 25 of the Customs Act is being amended to prescribe that all
. conditional exemptions, unless otherwise specified or varied or
rescinded, given under Customs Act shall come to an end on 31st March
falling immediately two years after the date of such grant or variation.
[ 82 ]
All existing conditional exemptions in force as on the date on which the
Finance Bill 2021 receives the assent of the President unless having a
prescribed end date, shall come to an end on 31st March, 2023 (if not
specifically extended/ rescinded earlier) on review.
4. A new section 28BB is being introduced prescribing a two-year time-
limit, further extendable by one year by the Commissioner, for
[ 83 ]
completion of any proceedings under this act which would culminate in
issuance of a notice under section 28 of the Customs Act, 1962.
5. Sub section (3) of section 46 is being amended so as to-
a) mandate filing of bill of entry before the end of the day preceding [ 84 ]
the day (including holidays) of arrival of goods.
b) A new proviso is being introduced therein, to enable the Board to
81
82
notify the time period for presenting bill of entry in certain cases
as it may deem fit.
6. 4Section 110 of the Customs Act is being amended so as to revise the

. procedure for pre-trial disposal of seized gold, in any form as notified.
Commissioner (Appeals) having jurisdiction, to certify the correctness of
inventory of the seized goods and carry out other procedures as [ 85 ]
prescribed, before the disposal of the gold in a manner as may be
determined by the Central Government. Other consequential
amendments to give effect to this provision are also being carried out.
7. 5Sub-section (ja) is being added to section 113 to provide for the
confiscation of any goods entered for exportation under claim of
remission or refund of any duty or tax or levy, so as to make a wrongful [ 86 ]
claim in contravention of the provisions of the Customs Act, 1962 or any
other law for the time being in force.
8. 6A new section 114AC is being inserted in Customs Act to prescribe
penalty in specific case where any person has obtained any invoice by
fraud, collusion, willful misstatement or suppression of facts to utilize
[ 87 ]
Input Tax Credit on the basis of such invoice for discharging any duty or
tax on goods that are entered for exportation under claim of refund of
any duty or tax.
9. 7Explanation to section 139 of Customs Act is being amended so as to
include inventories, photographs and lists certified by the Commissioner
[ 88 ]
(Appeals) under the new sub-section (1D) to the documents within the
meaning of that section to give evidentiary value to such documents.
10. Section 149 is being amended so as to-
a) introduce a second proviso which would allow amendments to be
done through the customs automated system on the basis of risk
evaluation through appropriate selection criteria. [ 89 ]
b) introduce a third proviso so that certain amendments, as may be
specified by the Board, may be done by the importer or exporter
on the common portal.
11. Section 153 is being amended so as to insert a new clause „(ca)‟ under
sub section (1) thereof so as to enable service of order, summons, notice, [ 90 ]
etc. by making it available on the common portal.
12. Chapter XVII is being amended so as to insert a new section 154C for
notification of a common portal for facilitating registration, filing of bills
of entry, shipping bills, any other document or form prescribed under
[ 91 ]
this act or under any other law for the time being in force or the rules and
regulations made thereunder, payment of duty and for carrying out such
other functions and for such purposes as may be specified.
83
II. AMENDMENTS IN THE CUSTOMS TARIFF ACT, 1975
Clause of the
S. No. Amendment Finance Bill,
2021
1. 1Section 8B of the Customs Tariff Act is being amended to incorporate
[ 92 ]
. certain technical changes.
2. 2Section 9 of the Customs Tariff Act is being amended to include
. provisions for anti-absorption, retrospective levy from the date of
initiation of investigation in anti-circumvention cases, aligning
countervailing duty provisions with those in safeguard measures in
respect of levy on goods cleared from EOU and SEZ into Domestic Tariff [ 93 ]
Area, stipulating that when countervailing duty is revoked temporarily,
such revocation shall be for a period not exceeding one year at a time and
to provide for imposing Countervailing duty on review for period not
exceeding 5 years at a time, instead of the 5 years at present
3. 3Section 9A of the Customs Tariff Act is being amended to include
. provisions for anti-absorption, retrospective levy in anti-circumvention
cases, aligning anti-dumping duty provisions with those in safeguard
measures in respect of levy on goods cleared from EOU and SEZ into
[ 94 ]
Domestic Tariff Area, stipulating that when anti-dumping duty is revoked
temporarily, such revocation shall be for a period not exceeding one year
at a time and to provide for imposing ADD on review for period not
exceeding 5 years at a time, instead of the 5 years at present.
84
III. AMENDMENTS IN THE FIRST SCHEDULE TO THE CUSTOMS TARIFF

ACT, 1975
AMENDMENTS
A. Tariff rate changes for Basic Customs Duty [to be effective Rate of Duty
from 02.02.2021, unless otherwise specified] * [Clause [95 (i) ]
of the Finance Bill, 2021]
S. No. Heading, Commodity From To

sub-heading
tariff item
Chemicals
1. 2803 00 10 Carbon Black 5% 7.5%
Plastic items
2. 3925 Builder‟s ware of Plastics 10% 15%
Gems and Jewellery Sector
3. 7104 Cut and Polished Synthetic stones, including Cut 10% 15%
and Polished Cubic Zirconia
1 Electrical and Electronics Sector
4. 8414 30 00 Compressors of a kind used in refrigerating 12.5% 15%
equipment
5. 8414 80 11 Compressors of a kind used in air-conditioning 12.5% 15%
equipment
6. 8504 90 90 Printed Circuit Board Assembly [PCBA] of 10% 15%
charger or adapter
(All goods under this tariff item, other than above,
will continue to attract the existing effective rate of
BCD at 10%)
Parts of Automobiles
7. 7007 Safety glass, consisting of toughened (tempered) 10% 15%
or laminated glass.
(All goods under this heading, other than those
used with motor vehicles, will continue to attract
the existing effective rate of BCD at 10%)
8. 8512 90 00 Parts of Electrical lighting and signaling 10% 15%
equipment, windscreen wipers, defrosters and
demisters, of a kind used for cycles or motor
85
vehicles
9. 8544 30 00 Ignition wiring sets and other wiring sets of a kind 10% 15%
used in vehicles, aircraft or ships
10. 9104 00 00 Instrument Panel Clocks and Clocks of a similar 10% 15%
type for vehicles, Aircraft, Spacecraft or Vessels
B. Tariff rate changes (without any change in the effective rates Rate of Duty
of Basic Customs Duty)
S. No. Heading, Commodity From To

sub-heading
tariff item
1. 8414 40 Air compressors mounted on a wheeled chassis for 7.5% 15%
towing
2. 8414 80 Gas Compressors (other than of a kind used in air- 7.5% 15%
(except conditioning equipment), free-piston generators for
8414 80 11) gas turbine, turbo charger and other compressors
3. 8501 10 to Electric Motors 10% 15%
8501 53
4. 8536 41 00 Relays 10% 15%
and
8536 49 00
5. 8537 Boards, panels, consoles, etc. for electric control or 10% 15%
distribution of electricity
6. 9031 80 00 Other instruments, appliances and machines 7.5% 15%
7. 9032 89 Electronic automatic regulators and other 10% 15%
controlling instruments or apparatus
C. New entries added to the First Schedule [Clause 95 (ii) and 95 (iii) of the Finance Bill,
2021]
1. Harmonizing the Customs Tariff Act 1975 with the HSN 2022
a) Changes to the first schedule to the Customs Tariff Act are being proposed that are
to come into effect from 01.01.2022. This is in accordance with HSN 2022, which
proposes 351 amendments to the existing harmonized nomenclature, covering a
wide range of goods moving across borders.
b) The amendments are necessary to adapt to the current trade through the recognition
of new product streams, the changing nature of commodities being traded, advent of
new technologies and addressing the environmental and social issues of global
concern- all with a prime focus on the larger goal of ease of doing business and
trade facilitation.
86
2. New tariff lines under the heading 2709 in the Customs Tariff Act, 1975#:
2709 00 10 -- petroleum crude
2709 00 20 -- other
# Will come into effect on 1.4.2021.
* Will come into effect immediately owing to a declaration under the Provisional Collection of
Taxes Act, 1931.
IV. CHANGES IN CUSTOMS RULES

A. Trade Facilitation- Amendment to IGCR rules, 2017
1. Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 [IGCR Rules] are
being amended to provide the following facilities:
a. to allow job-work of the materials (except gold and jewellery and other precious
metals) imported under concessional rate of duty
b. to allow 100% out-sourcing for manufacture of goods on job-work
c. to allow imported capital goods that have been used for the specified purpose to
be cleared on payment of differential duty, along with interest, on the depreciated
value. The depreciation norms would be the same as applied to EOUs, as per
Foreign Trade Policy.
V. OTHER PROPOSALS INVOLVING CHANGES IN BASIC CUSTOMS DUTY

RATES IN RESPECTIVE NOTIFICATIONS [with effect from 2.2.2021, unless specified
otherwise]
S. No Chapter, Commodity From To

Heading,
sub-
heading,
tariff item
Agricultural Products and By Products
1. 2207 20 00 Denatured Ethyl Alcohol (ethanol) for use in 2.5% 5%
manufacture of excisable goods
2. 23 All goods except dog and cat food and shrimp larvae Nil/ 15%
feed 5%/
10%/
15%/
87
20%/
30%
Minerals
3. 2528 Natural borates and concentrates thereof Nil/5% 2.5%
Fuels, Chemicals and Plastics
3. 2710 Naphtha 4% 2.5%
5. 2907 23 00 Bis-phenol A Nil 7.5%
6. 2910 30 00 Epichlorohydrin 2.5% 7.5%
7. 2933 71 00 Caprolactam 7.5% 5%
8. 3907 40 00 Polycarbonates 5% 7.5%
9. 3908 Nylon chips 7.5% 5%
10. 3920 99 99 Other plates, sheets, films, etc. of other plastics 10% 15%
Leather
11 41 Wet blue chrome tanned leather, crust leather, Nil 10%
finished leather of all kinds, including splits and sides
of the aforesaid
Textiles
12. 5002 Raw Silk (not thrown) 10% 15%
13. 5004, 5005, Silk yarn, yarn spun from silk waste (whether or not 10% 15%
5006 put up for retail sale)
14. 5201 Raw Cotton Nil 5% +
5%
AIDC*
15. 5202 Cotton waste (including yarn waste or garneted Nil 10%
stock)
16. 5402, 5403, Nylon Fibre and Yarn 7.5% 5%
5404, 5405
00 00, 5406,
5501 to 5510
17. 7106 Silver 12.5.% 7.5%+
2.5%
AIDC*
18. 7106 Silver Dore 11% 6.1% +
2.5%
88
AIDC*
19. 7108 Gold 12.5% 7.5%+
2.5%
AIDC*
20. 7108 Gold Dore 11.85% 6.9%+
2.5%
AIDC*
21. 7107 00 00, Base metals or precious metals clad with precious 12.5% 10%
7109 00 00, metals
7111 00 00
22. 7110 Other precious metals like Platinum, Palladium, etc. 12.5% 10%
23. 7112 Waste and scrap of precious metals or metals clad 12.5% 10%
with precious metals
24. 7112 Spent catalyst or ash containing precious metals 11.85% 9.17%
25. 7113 Gold or Silver Findings 20% 10%
26. 7118 Coin 12.5% 10%
Metals
27. 7204 Iron and steel scrap, including stainless steel scrap 2.5% Nil
[up to 31.03.2022]
28. 7206 and Primary/Semi-finished products of non-alloy steel 10% 7.5%
7207
29. 7208, 7209, Flat products of non-alloy and alloy steel 10% 7.5%
7210, 7211, /12.5%
7212, 7225
(except 7225
11 00) and
7226 (except
7226 11 00)
30. 7213, 7214, Long product of non-alloy, stainless and alloy steel 10% 7.5%
7215, 7216,
7217, 7221,
7222, 7223,
7227 and
7228
31. 7225 Raw materials for use in manufacture of CRGO steel 2.5% Nil
[up to 31.03.2023]
32. 7404 Copper Scrap 5% 2.5%
33. 7318 Screw, bolts, nuts, etc. of iron and steel 10% 15%
89
Capital Goods
34. 8430 Tunnel boring machines Nil 7.5%
35. 8431 Parts and components for manufacture of tunnel Nil 2.5%
boring machines with actual-user condition
IT, Electronics and Renewable
36. 8544 (other Specified insulated wires and cables 7.5% 10%
than 8544 70
and 8544 30
00)
37. 39, 74 and Former, bases, bobbins, brackets; CP wires; Nil Applica
85 P.B.T.; Phenol resin moulding powder; Lamination/ ble rate
El silicon steel strips for use in manufacture of
transformers (entry at S.No. 198 of 25/1999-
Customs)
38. Any Chapter Inputs or parts for manufacture of Printed Circuit Nil 2.5%
Board Assembly (PCBA) of cellular mobile phone
(w.e.f. 1.4.2021)
39. Any Chapter Inputs or parts for manufacture of camera module of Nil 2.5%
cellular mobile phone
(w.e.f. 1.4.2021)
40. Any Chapter Inputs or parts for manufacture of connectors of Nil 2.5%
cellular mobile phone
(w.e.f. 1.4.2021)
41. Any Chapter Inputs or raw material for manufacture of specified Nil 2.5%
parts like back cover, side keys etc. of cellular mobile
phone
(w.e.f. 1.4.2021)
42. Any Chapter Inputs or raw material (other than PCBA and Nil 10%
moulded plastics) for manufacture of charger or
adapter of cellular mobile phones
43. 8504 90 90 Moulded plastics for manufacture of charger or 10% 15%
or adapter
3926 90 99
44. Any Chapter Inputs or parts of Printed Circuit Board Assembly of Nil 10%
charger or adapter of cellular mobile phones
45. Any Chapter Inputs or parts of Moulded Plastic of charger or Nil 10%
90
46. Any Chapter Inputs or raw materials (other than Lithium-ion cell Nil 2.5%
and PCBA) of Lithium-ion battery or battery pack
(w.e.f. 1.4.2021)
47. Any Chapter Parts or components of PCBA of Lithium-ion battery Nil 2.5%
or battery pack
(w.e.f. 1.4.2021)
48. Any Chapter Inputs or raw materials of following goods: - Nil 2.5%
(i) Other machines capable of connecting to an
automatic data processing machine or to a
network (8443 32 90)
(ii) Ink cartridges, with print head assembly (8443 99
51)
(iii)Ink cartridges, without print head assembly (8443
99 52)
(iv) Ink spray nozzle (8443 99 53) (w.e.f. 1.4.2021)
49. Any Chapter Inputs and parts of LED lights or fixtures including 5% 10%
LED Lamps
50. Any Chapter Inputs for use in the manufacture of LED driver or 5% 10%
MCPCB (Metal Core Printed Circuit Board) for LED
lights or fixtures including LED Lamps
51. 9405 50 40 Solar lanterns or solar lamps 5% 15%
52. 8504 40 Solar Inverters 5% 20%
53. 9503 Parts of Electronic Toys for manufacture of 5% 15%
electronic toys
Aviation Sector
54. Any Chapter Components or parts, including engines, for 2.5% 0%
manufacture of aircrafts or parts of such aircrafts, by
Public Sector Units under Ministry of Defence
subject to condition specified.
Medical devices
55. 9018-9022 Medical Devices imported by International Health Health
Organization and Diplomatic Missions Cess @ Cess @
5% Nil
Goods imported under Project Import Scheme
56. 9801 High Speed Rail Projects being brought under project Applica 5%
imports ble Rate
91
57. 8714 91 00, All goods other than Bicycle parts and components 10% 15%
8714 92,
8714 93,
8714 94 00,
8714 95,
8714 96 00,
8714 99
* Agriculture Infrastructure and Development Cess
VI Other miscellaneous changes
S.
Notification No. Notification Subject
No.
1. 42/1996 – High Speed Rail Projects are being included in list of projects to which
Customs dated Project Imports Scheme is applicable
23rd July, 1996
2. 230/1986 – National High Speed Rail Corporation Ltd. is being nominated as the
Customs dated „Sponsoring Authority‟ under Project Import Regulations, 1986 for
3rd April, 1986 approving the items required to be imported under the Project Imports
Scheme for High-Speed Rail Projects
VII Pruning and review of customs duty concessions/ exemptions:

A. Review of concessional rates of BCD prescribed in notification No. 50/2017 –
customs dated 30.6.2017: The BCD exemption hitherto available on certain goods are being
withdrawn by omitting following entries of notification No. 50/2017-Customs dated
30.6.2017.
S. No. S. No. of Notfn Description/ CTH

1. 209 Diphenylmethane 4, 4-diisocyanate (MDI) for use in the
manufacture of spandex yarn
2. 230 Ink cartridges, ribbon assembly, ribbon gear assembly, ribbon
gear carriage, for use in printers for computers
3. 229 71 items like wax items, wood polish materials, prints for photo
frames, velvet fabric/paper, handles/blades for cutlery, jigat, wine
[w.e.f 1.4.2021]
tools etc.
4. 311 35 items like fasteners, zippers, shoulder pads, buckles, rivets,
Velcro tape, toggles, stud, elastic cloth and band, bobbin, hooks,
[w.e.f 1.4.2021]
anglets etc.
5. 312 42 items like buckles, buttons, stamping foil, sewing thread,
92
[w.e.f 1.4.2021] Loop rivets, Glove Liners, shoe laces, inlay cards etc.
6. 313 18 items like lace, Velcro tape, curtain hooks, Tassel, Beads,
Sequins, sewing threads, poly wadding materials, quilted
[w.e.f 1.4.2021]
wadding materials etc.
B. Prescribing the condition of observance of the Customs (Import of Goods at
Concessional Rate of Duty) Rules, 2017 (IGCR Rules, 2017) for certain conditional
entries in notification No. 50/2017-Customs dated 30.06.2017, in lieu of certain
exiting conditions. Besides certain other conditions for imports are being
rationalized/simplified.
 Accordingly, the condition Nos. 22, 24, 30, 38, 51, 52, 53, 54, 60, 61 and 74, in
the said customs notification have been amended to prescribe condition of IGCR.
 In addition, it has been prescribed that the changed jurisdictional authority under
IGCR Rules, 2017, shall also issue the end use certificate for the past period after
due verification as per the rules.
C. Customs duty exemptions, including those which have been granted through certain other
stand-alone notifications, have also been reviewed by rescinding the notification:
S. No. Notification No. Notification Subject
1. 1/2011-Customs, Exemption to all items of machinery, instruments, appliances,
dated the components or auxiliary equipment for initial setting up of solar
6.1.2011 power generation project or facility
2. 34/2017- This notification provided exemption to tags or labels (whether made
Customs dated of paper, cloth, or plastic), or printed bags (whether made of
30th June, 2017 polyethene, polypropylene, PVC, high molecular or high density
polyethene) imported for fixing on articles for export or for the
packaging of such articles. Similar exemption exists at S. No.257 of
notification No. 50/2017-Cus. These have been merged in the said S.
No.257 and notification No 34/2017-Cus has been omitted.
3. 75/2017-
Customs dated Exemption for goods imported for organizing FIFA Under-17 World
13th September, Cup, 2017.
2017
VIII. IMPOSITION OF AGRICULTURE INFRASTRUCTURE AND

DEVELOPMENT CESS ON IMPORT OF CERTAIN ITEMS [to be effective from
02.02.2021] [Clause [115] of the Finance Bill, 2021]
An Agriculture Infrastructure and Development Cess (AIDC) has been proposed on import of
specified goods. To ensure that imposition of cess does not lead to additional burden in most
of these items on the consumer, the BCD rates has been lowered. This cess shall be used to
93
finance the improvement of agriculture infrastructure and other development expenditure.

The list of items on which cess has been imposed and the applicable duty and AIDC on them
would be as follows:
S. Heading, Commodity Basic customs AIDC
No sub-heading duty
tariff item
1. 0808 10 00 Apples 15% 35%
2. 1511 10 00 Crude Palm Oil 15% 17.5%
3. 1507 10 00 Crude Soya-bean oil 15% 20%
4. 1512 11 10 Crude Sunflower seed oil 15% 20%
5. 0713 10 Peas (Pisum sativum) 10% 40%
6. 0713 20 10 Kabuli Chana 10% 30%
7. 0713 20 20 Bengal Gram (desichana) 10% 50%
8. 0713 20 90 Chick Peas (garbanzos) 10% 50%
9. 0713 40 00 Lentils (Mosur) 10% 20%
10. 2204 All goods (Wine) 50% 100%
11. 2205 Vermouth and other wine of 50% 100%
fresh grapes, flavoured
12. 2206 Other fermented beverages 50% 100%
for example, Cider, Perry,
Mead, sake, mixture of
fermented beverages or
fermented beverages and
nonalcoholic beverages
13. 2208 All goods (Brandy, Bourbon 50% 100%
whiskey, Scotch etc.)
14. 2701 Various types of coal 1% 1.5%
15. 2702 Lignite, whether or not 1% 1.5%
agglomerated
16. 2703 Peat, whether or not 1% 1.5%
agglomerated
17. 3102 10 00 Urea Nil 5%
18. 3102 30 00 Ammonium nitrate 2.5% 5%
19. 31 Muriate of potash, for use as Nil 5%
manure or for the production
94
of complex fertilisers
20. 3105 30 00 Diammonium phosphate, for Nil 5%
use as manure or for the
production of complex
fertilisers
21. 5201 Cotton (not carded or 5% 5%
combed)
22. 7106 Silver (including imports by 7.5% 2.5%
eligible passengers)
23. 7106 Silver Dore 6.1% 2.5%
24. 7108 Gold (including imports by 7.5% 2.5%
eligible passengers)
25. 7108 Gold Dore 6.9% 2.5%
IX. OTHER CHANGES (INCLUDING CERTAIN CLARIFICATIONS/ TECHNICAL

CHANGES BY AMENDING NOTIFICATION NO. 50/2017-CUSTOMS DATED
30.06.2017
S.No. S.No. of Notfn Description

1. 20 a) The HS [0713 20 00] was split into [0713 20 10], [0713 20 20]
and [0713 20 90] vide notification 22/2018-Cus dated
20.03.2020. However, the transposition of the same has not been
done for entry 20 of notification No. 50/2017-Cus.
b) It is proposed to specifically mention Kabuli Chana & Bengal
gram (desichana) in the exclusions to this entry.
2. 21E The entry is redundant (was valid only upto 31.12.2020 and is
proposed to be omitted.
3. 44 The entry is redundant (was valid only upto 30.09.2017) and is
proposed to be omitted.
4. 131 Acid grade fluorspar attracts 5% BCD vide serial numbers 120 and
S.N. 131 of notification No. 50/2017-Customs dated 30.06.2017.
Entry at S.No. being redundant is being omitted.
5. 175 “Any Chapter” mentioned in the Chapter/heading etc. of this entry
is being replaced by the specific entry heading 2501.
6. 284 An explanation is being inserted in Sr. No. 284 of the notification
no. 50/2017-Customs dated 30th June 2017 so as to clarify that the
said exemption entry does not cover toy balloons made of natural
95
S.No. S.No. of Notfn Description

rubber latex as such toy balloons are classified under customs
heading 9503, so as to avoid misclassification.
7. 293A & 293B

The language of exemption entries providing concessional rates on
newsprint & other uncoated paper conforming to the specifications
of newsprint (other than its surface roughness) is being simplified
so as to remove any doubts regarding the specification of uncoated
papers used for printing of newspapers on which the concessional
rates apply.
8. First Proviso Clauses (b), (c) and (e) are being omitted as they are redundant.
X. Review of levy of Social Welfare Surcharge on various items.
A. Notification No. 12/2018-Customs, dated 02.02.2018 prescribing effective rates of 3%

on certain items, including gold and silver, is being rescinded.
B. SWS is also being rescinded on goods falling under heading 2515 11 and 2515 12
C. SWS is being exempted on the value of AIDC imposed on gold and silver.
Accordingly, these items would attract SWS, at normal rate, only on value plus basic
customs duty.
XI. Other Miscellaneous changes pertaining to Anti-Dumping Duty (ADD)/
Countervailing Duty (CVD)/ Safeguard Measures
1. Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped

Articles and for Determination of Injury) Rules, 1995 provide for manner and procedure for
investigation into dumping of goods that cause injury to domestic industry. Changes are being
made in the Rules, to provide that with effect from 01.07.2021, to provide that final findings
are to be issued by the designated authority, in review cases, at least three months prior to
expiry of the ADD under review. The ADD Rules are also being amended to provide for
provisional assessment in cases of anti-circumvention investigation. Certain other changes are
being made for bringing clarity in the scope of these rules.
2. Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on
Subsidized Articles and for Determination of Injury) Rules, 1995 provide for manner and
procedure for causing investigation into the cases of imports of subsidized goods that cause
injury to domestic industry. Changes are being made in the Rules to provide that with effect
from 01.07.2021, the final findings are to be issued by the designated authority, in review
cases, at least three months prior to expiry of the CVD under review. The CVD Rules are also
being amended to provide for provisional assessment in cases of anti-circumvention
96
investigation. Certain other changes are being made for bringing clarity in the scope of these
rules.
3 Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 (Safeguard
Duty being changed to Safeguard Measures) provide for manner and procedure for causing
investigation into the cases of imports in increased quantity that cause injury to domestic
industry. Changes in the rules are being proposed to elaborate in detailed manner the
modalities of implementation of safeguard measure, along with technical modifications
consequent to the changes made earlier in section 8B of the Customs Tariff Act vide Finance
Act, 2020.
4. Anti-Dumping duty is being temporarily revoked for the period commencing from 2.2.2021
till 30.09.2021, on imports of the following-
a) Straight Length Bars and Rods of alloy-steel, originating in or exported from People‟s
Republic of China, imposed vide notification No. 54/2018-Cus (ADD) dated 18.10.2018;
b) High Speed Steel of Non-Cobalt Grade, originating in or exported from Brazil, People‟s
Republic of China and Germany, imposed vide notification No. 38/2019-Cus (ADD) dated
25.09.2019;
c) Flat rolled product of steel, plated or coated with alloy of Aluminum or Zinc, originating in
or exported from People‟s Republic of China, Vietnam and Korea RP, imposed vide
notification No. 16/2020-Cus (ADD) dated 23.06.2020.
5. Countervailing duty is being temporarily revoked for the period commencing from 2.2.2021
till 30.09.2021, on imports of Certain Hot Rolled and Cold Rolled Stainless Steel Flat
Products, originating in or exported from People‟s Republic of China, imposed vide
notification No. 1/2017-Cus (CVD) dated 07.09.2017.
6. Provisional Countervailing duty is being revoked on imports of Flat Products of Stainless
Steel, originating in or exported from Indonesia, imposed vide notification No. 2/2020-
Customs (CVD) dated 9.10.2020.
7. In Sunset Review, anti-dumping duty on Cold-Rolled Flat Products of Stainless Steel of width
600 mm to 1250 mm and above 1250 mm of non bonafide usage originating in or exported
from People‟s Republic of China, Korea RP, European Union, South Africa, Taiwan, Thailand
and United States of America has been discontinued upon expiry of the anti-dumping duty
hitherto leviable vide notifications no. 61/2015-Customs (ADD) dated 11th December, 2015
and 52/2017-Customs (ADD) dated 24th October, 2017.
97
EXCISE
Note: (a) “Basic Excise Duty” means the excise duty set forth in the Fourth Schedule to the
Central Excise Act, 1944.
(b) “Road and Infrastructure Cess” means the additional duty of central excise levied
under section 112 of the Finance Act, 2018.
(c) “Special Additional Excise Duty” means a duty of excise levied under section 147 of
the Finance Act, 2002.
(d) “NCCD” means National Calamity Contingency Duty levied under Finance Act, 2001,
as a duty of excise on specified goods at rates specified in seventh schedule to Finance
Act, 2001
(e) Clause Nos. in square brackets [ ] indicate the relevant clause of the Finance Bill,
2021.
(f) Amendments carried out through the Finance Bill, 2021 come into effect on the date of
its enactment, unless otherwise specified.
I. AMENDMENT IN THE FOURTH SCHEDULE
S.No. Amendment Clause [ ] of the

Finance Bill, 2021
1. Amendment in Fourth Schedule made by Notification
No. 08/2019-CE (T) dated 31.12.2019 shall be made [98]
effective w.e.f. 01.01.2020, retrospectively.
2. New tariff items [2404 11 00] and [2404 19 00] inserted
in Chapter 24 in the fourth Schedule of the Central
Excise Act, 1944 accordance with upcoming
[96 (ii)]
Harmonised System 2022 Nomenclature and to
prescribe tariff rate of 81% on these tariff items with
effect from 01.01.2022.
II. Retrospective amendment in Chapter 27 of the Fourth Schedule to the Central

Excise Act, 1944.
No. Amendment Clause of the Finance
Bill, 2021
1. (i) It is proposed to specify correct IS “17076” against [97 (i)]
the tariff item 27101249 and made effective from
98
01.01.2020, retrospectively.
2. (ii) It is proposed that tariff rate of 14%+ Rs. 15.00 per
litre against tariff item 2710 20 10 and 2710 20 20 may
[97 (ii) and 97 (iii)]
be prescribed and made effective from 01.01.2020,
retrospectively.
III. Amendment in Chapter 27 of the Fourth Schedule to the Central Excise Act,
1944.
Tariff items 2709 10 00, 2709 20 00, and the entries are being substituted relating
thereto as under: [to be made effective from 01.04.2021] [Clause [96(i)] of the
Finance Bill, 2021]
Tariff Item Description of goods Unit Rate of duty
2709 Petroleum oils and oils obtained
from bituminous minerals, crude
2709 00 10 petroleum crude Kg. Nil
2709 00 20 other Kg. …..
IV. IMPOSITION OF AGRICULTURE INFRASTRUCTURE AND DEVELOPMENT

CESS (AIDC) ON PETROL AND DIESEL
An Agriculture Infrastructure and Development Cess (AIDC) as an additional duty of excise
has been proposed on Petrol and High speed diesel vide Clause [116] of the Finance Bill,
2021. This cess shall be used to finance the improvement of agriculture infrastructure and
other development expenditure. The details of the cess are as under:
S. No. Commodity Rate of AIDC [Clause [116] of the
Finance Bill, 2021]*
1 Motor spirit commonly known as petrol Rs. 2.5 per litre
2 High speed diesel Rs. 4 per litre
*Will come into effect immediately owing to a declaration under the Provisional Collection
of Taxes Act, 1931.
V. CHANGE IN EFFECTIVE RATE OF BASIC EXCISE DUTY AND SPECIAL

ADDITIONAL EXCISE DUTY ON PETROL AND DIESEL [to be effective from
02.02.2021]
Consequent to imposition of AIDC, the Basic Excise Duty (BED) and Special Additional
Excise Duty (SAED) on Petrol and High-speed diesel is being reduced so that consumer does
99
not have to bear any additional burden on account of imposition of AIDC. The revised duty
structure on petrol and HSD shall be as follows.
A Item BED SAED AIDC

(Rs/Ltr) (Rs/Ltr) (Rs/Ltr)
1 Petrol (unbranded) 1.4 11 2.5

2 Petrol (branded) 2.6 11 2.5
3 High speed diesel (unbranded) 1.8 8 4
4 High speed diesel (branded) 4.2 8 4
VI. EXEMPTIONS FOR M-15, E-20 AND OTHER BLENDED FUELS
S. No. Amendment to central excise notifications

1. Exemptions from cesses and surcharges on the lines of other blended fuels (like E-
5 and E-10) if these blended fuels are made of duty paid inputs
VII. Amendments in the Schedule VII of the Finance Act 2001 (NCCD Schedule)
1. New tariff items [2404 11 00] and [2404 19 00] inserted in accordance with
upcoming HS 2022 Nomenclature and prescribe NCCD of 25% on these tariff items
with effect from 01.01.2022.
100
Goods and Service Tax
Note: (a) CGST Act, 2017 means Central Goods and Services Tax Act, 2017
(b) IGST Act, 2017 means Integrated Goods and Services Tax Act, 2017
Amendments carried out in the Finance Bill, 2021 will come into effect from the date when
the same will be notified, as far as possible, concurrently with the corresponding amendments
to the similar Acts passed by the States and Union territories with Legislature.
I. AMENDMENTS IN THE CGST ACT, 2017:
S. No. Amendment Clause of the
Finance Bill, 2021
1. A new clause (aa) in sub-section (1) of Section 7 of the CGST [99]
Act is being inserted, retrospectively with effect from the 1st
July, 2017, so as to ensure levy of tax on activities or
transactions involving supply of goods or services by any
person, other than an individual, to its members or constituents
or vice-versa, for cash, deferred payment or other valuable
consideration.
2. A new clause (aa) to sub-section (2) of the section 16 of the [100]
CGST Act is being inserted to provide that input tax credit on
invoice or debit note may be availed only when the details of
such invoice or debit note have been furnished by the supplier
in the statement of outward supplies and such details have been
3. Sub-section (5) of section 35 of the CGST Act is being omitted [101]
so as to remove the mandatory requirement of getting annual
accounts audited and reconciliation statement submitted by
specified professional.
4. Section 44 of the CGST Act is being substituted so as to [102]
remove the mandatory requirement of furnishing a
reconciliation statement duly audited by specified professional
and to provide for filing of the annual return on self-
certification basis. It further provides for the Commissioner to
exempt a class of taxpayers from the requirement of filing the
annual return.
5. Section 50 of the CGST Act is being amended, retrospectively, [103]
to substitute the proviso to sub-section (1) so as to charge
101
interest on net cash liability with effect from the 1st July, 2017.
6. Section 74 of the CGST Act is being amended so as make [104]
seizure and confiscation of goods and conveyances in transit a
separate proceeding from recovery of tax.
7. An explanation to sub-section (12) of section 75 of the CGST [105]
Act is being inserted to clarify that “self-assessed tax” shall
include the tax payable in respect of outward supplies, the
details of which have been furnished under section 37, but not
included in the return furnished under section 39.
8. Section 83 of the CGST Act is being amended so as to provide [106]
that provisional attachment shall remain valid for the entire
period starting from the initiation of any proceeding under
Chapter XII, Chapter XIV or Chapter XV till the expiry of a
period of one year from the date of order made thereunder.
9. A proviso to sub-section (6) of section 107 of the CGST Act is [107]
being inserted to provide that no appeal shall be filed against
an order made under sub-section (3) of section 129, unless a
sum equal to twenty-five per cent. of penalty has been paid by
the appellant.
10. Section 129 of the CGST Act is being amended to delink the [108]
proceedings under that section relating to detention, seizure
and release of goods and conveyances in transit, from the
proceedings under section 130 relating to confiscation of goods
or conveyances and levy of penalty.
11. Section 130 of the CGST Act is being amended to delink the [109]
proceedings under that section relating to confiscation of goods
or conveyances and levy of penalty from the proceedings under
section 129 relating to detention, seizure and release of goods
and conveyances in transit.
12. Section 151 of the CGST Act is being substituted to empower [110]
the jurisdictional commissioner to call for information from
any person relating to any matter dealt with in connection with
the Act.
13. Section 152 of the CGST Act is being amended so as to [111]
provide that no information obtained under sections 150 and
151 shall be used for the purposes of any proceedings under
the Act without giving an opportunity of being heard to the
person concerned.
14. Section 168 of the CGST Act is being amended to enable the [112]
jurisdictional commissioner to exercise powers under section
102
151 to call for information.

15. Consequent to the amendment in section 7 of the CGST Act [113]
paragraph 7 of Schedule II to the CGST Act is being omitted
retrospectively, with effect from the 1st July, 2017.
II. AMENDMENTS IN THE IGST ACT, 2017:

S. No. Amendment Clause of the
Finance Bill, 2021
1. Section 16 of the IGST Act is being amended so as to: [114]
(i) zero rate the supply of goods or services to a Special
Economic Zone developer or a Special Economic Zone unit
only when the said supply is for authorised operations;
(ii) restrict the zero-rated supply on payment of integrated tax
only to a notified class of taxpayers or notified supplies of
goods or services; and
(iii) link the foreign exchange remittance in case of export of
goods with refund.
******
BILL No. 15 OF 2021
THE FINANCE BILL, 2021
(AS INTRODUCED IN LOK SABHA)

_______
ARRANGEMENT OF CLAUSES
______
CHAPTER I
PRELIMINARY
CLAUSES
1. Short title and commencement.
CHAPTER II
RATES OF INCOME-TAX
2. Income-tax.
CHAPTER III
DIRECT TAXES
Income-tax
3. Amendment of section 2.
4. Amendment of section 9A.
6. Amendment of section11.
9. Amendment of section 43B.
10. Amendment of section 43CA.
11. Amendment of section 44AB.
12. Amendment of section 44ADA.
13. Amendment of section 44DB.
19. Amendment of section 54GB.
ii
CLAUSES

24. Amendment of section 80EEA.
25. Amendment of section 80-IAC.
26. Amendment of section 80-IBA.
27. Amendment of section 80LA.
28. Insertion of new section 89A.
30. Amendment of section 115AD.
31. Amendment of section 115JB.
35. Substitution of new section for section 147.
43. Amendment of section 153C.
46. Amendment of section 194-IB.
47. Insertion of new section 194P.
48. Insertion of new section 194Q.
49. Amendment of section 196D.
50. Amendment of section 206AA.
51. Insertion of new section 206AB.
52. Insertion of new section 206CCA.
55. Insertion of new section 245AA.
56. Amendment of section 245B
57. Amendment of section 245BC.
58. Amendment of section 245BD.
60. Amendment of section 245D.
61. Amendment of section 245DD.
62. Amendment of section 245F.
iii
CLAUSES
63. Amendment of section 245G.

64. Amendment of section 245H.
65. Insertion of new section 245M.
66. Insertion of new Chapter XIX-AA.
67. Amendment of section 245N.
68. Amendment of section 245-O.
69. Insertion of new section 245-OB.
70. Amendment of section 245P.
71. Amendment of section 245Q.
72. Amendment of section 245R.
73. Amendment of section 245S.
74. Amendment of section 245T.
75. Amendment of section 245U.
76. Amendment of section 245V.
77. Insertion of new section 245W.
CHAPTER IV
INDIRECT TAXES
Customs
83. Insertion of new section 28BB.
87. Insertion of new section 114AC.
91. Insertion of new section 154C.
Customs Tariff

95. Amendment of First Schedule.
iv
CLAUSES
Excise
96. Amendment of Fourth Schedule.

97. Amendment of Chapter 27 of Fourth Schedule.
98. Revised date of effect to amendments made in Fourth Schedule vide notification issued
under section 3C of Central Excise Act, 1944.
Central Goods and Service Tax

113. Amendment of Schedule II.
Integrated Goods and Services Tax
CHAPTER V
AGRICULTURE INFRASTRUCTURE AND DEVELOPMENT CESS
115. Agriculture Infrastructure and Development Cess on imported goods.

116. Agriculture Infrastructure and Development Cess on excisable goods.
CHAPTER VI
MISCELLANEOUS
PART I
v
CLAUSES
117. Insertion of new section 8G.
PART II
AMENDMENT TO THE CONTINGENCY FUND OF INDIA ACT, 1950
118. Amendment of Act 49 of 1950.
PART III
AMENDMENTS TO THE LIFE INSURANCE CORPORATION ACT, 1956
119. Commencement of this Part.

121. Substitution of section 4.
133. Insertion of new sections 28B and 28C.
134. Substitution of sections 46 and 47.
137. Insertion of sections 50 and 51.
PART IV
AMENDMENTS TO THE SECURITIES CONTRACTS (REGULATION) ACT, 1956

140. Insertion of new section 30B.
vi
PART V
CLAUSES
PART VI
AMENDMENTS TO THE PROHIBITION OF BENAMI PROPERTY TRANSACTION ACT, 1988

145. Omission of sections 8 to 17.
PART VII
AMENDMENT TO THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992
PART VIII
AMENDMENT TO THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL
INSTITUTIONS ACT, 1993
PART IX
150. Amendment of Seventh Schedule.
PART X
AMENDMENT TO THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS
AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002

vii
PART XI
AMENDMENTS TO THE INDUSTRIAL DEVELOPMENT BANK (TRANSFER OF UNDERTAKING
AND REPEAL) ACT, 2003
CLAUSES

PART XII

PART XIII
PART XIV
AMENDMENT TO THE DIRECT TAX VIVAD SE VISHWAS ACT, 2020
THE FIRST SCHEDULE.

THE SECOND SCHEDULE.
THE THIRD SCHEDULE.
THE FOURTH SCHEDULE.
THE FIFTH SCHEDULE.
THE SIXTH SCHEDULE.
THE SEVENTH SCHEDULE.
AS INTRODUCED IN LOK SABHA
ON 1ST FEBRUARY, 2021
Bill No. 15 of 2021
BILL
to give effect to the financial proposals of the Central

Government for the financial year 2021-2022.
BE it enacted by Parliament in the Seventy-second Year of the

Republic of India as follows:––
CHAPTER I
PRELIMINARY
Short title and 1. (1) This Act may be called the Finance Act, 2021.
commencement.
(2) Save as otherwise provided in this Act,––
(a) sections 2 to 79 shall come into force on the 1st day of

April, 2021;
(b) sections 99 to 114 shall come into force on such date as

the Central Government may, by notification in the Official
Gazette, appoint.
CHAPTER II
RATES OF INCOME-TAX
Income-tax. 2. (1) Subject to the provisions of sub-sections (2) and (3), for
the assessment year commencing on the 1st day of April, 2021,
income-tax shall be charged at the rates specified in Part I of the
First Schedule and such tax shall be increased by a surcharge, for
the purposes of the Union, calculated in each case in the manner
provided therein.
(2) In the cases to which Paragraph A of Part I of the First

Schedule applies, where the assessee has, in the previous year,
2
any net agricultural income exceeding five thousand rupees, in

addition to total income, and the total income exceeds two lakh
fifty thousand rupees, then,—
(a) the net agricultural income shall be taken into

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

follows:—
(i) the total income and the net agricultural

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

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

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

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

individual, being a resident in India, who is of the
age of eighty years or more at any time during the
3
previous year, referred to in item (III) of Paragraph

A of Part I of the First Schedule, the provisions of
this sub-section shall have effect as if for the
words “two lakh fifty thousand rupees”, the words
“five lakh rupees” had been substituted.
(3) In cases to which the provisions of Chapter XII or Chapter

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

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

tax under section 115A, 115AB, 115AC, 115ACA, 115AD,
115B, 115BA, 115BB, 115BBA, 115BBC, 115BBD, 115BBF,
115BBG, 115E, 115JB or 115JC of the Income-tax Act, the
amount of income-tax computed under this sub-section shall be
increased by a surcharge, for the purposes of the Union,
calculated,—
(a) in the case of every individual or Hindu undivided

family or association of persons or body of individuals,
whether incorporated or not, or every artificial juridical
person referred to in sub-clause (vii) of clause (31) of
section 2 of the Income-tax Act, not having any income
under section 115AD of the Income-tax Act,—
(i) having a total income exceeding fifty lakh

rupees but not exceeding one crore rupees, at the
rate of ten per cent. of such income-tax;
(ii) having a total income exceeding one crore

rupees, but not exceeding two crore rupees, at the
rate of fifteen per cent. of such income-tax;
4
(iii) having a total income exceeding two crore

rupees, but not exceeding five crore rupees, at the
rate of twenty-five per cent. of such income-tax;
and
(iv) having a total income exceeding five crore

rupees, at the rate of thirty-seven per cent. of such
income-tax;
(aa) in the case of individual or every association of

person or body of individuals, whether incorporated or not,
or every artificial juridical person referred to in sub-clause
(vii) of clause (31) of section 2 of the Income-tax Act,
having income under section 115AD of the Income-tax
Act,––
(i) having a total income exceeding fifty lakh

rupees but not exceeding one crore rupees, at the
rate of ten per cent. of such income-tax;
(ii) having a total income exceeding one crore

rupees, but not exceeding two crore rupees, at the
rate of fifteen per cent. of such income-tax;
(iii) having a total income [excluding the

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

five crore rupees, at the rate of thirty-seven per
cent. of such income-tax; and
(v) having a total income [including the

two crore rupees, but is not covered in sub-clauses
(iii) and (iv), at the rate of fifteen per cent. of such
income-tax:
Provided that in case where the total income

includes any income by way of dividend or income
chargeable under clause (b) of sub-section (1) of
5
section 115AD of the Income-tax Act, the rate of

surcharge on the income-tax calculated on that
part of income shall not exceed fifteen per cent.;
(b) in the case of every co-operative society except a

co-operative society whose income is chargeable to tax
under section 115BAD of the Income-tax Act or firm or
local authority, at the rate of twelve per cent. of such
income-tax, where the total income exceeds one crore
rupees;
(c) in the case of every domestic company except such

domestic company whose income is chargeable to tax under
section 115BAA or section 115BAB of the Income-tax
Act,—
(i) at the rate of seven per cent. of such

income-tax, where the total income exceeds one
crore rupees but does not exceed ten crore rupees;
(ii) at the rate of twelve per cent. of such

income-tax, where the total income exceeds ten
crore rupees;
(d) in the case of every company, other than a domestic

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

tax, where the total income exceeds one crore
rupees but does not exceed ten crore rupees;
(ii) at the rate of five per cent. of such income-

tax, where the total income exceeds ten crore
rupees:
Provided also that in the case of persons

mentioned in (a) and (aa) above, having total
income chargeable to tax under section 115JC of
the Income-tax Act, and such income exceeds,—
(i) fifty lakh rupees but does not

exceed one crore rupees, the total
amount payable as income-tax and
surcharge thereon shall not exceed the
total amount payable as income-tax on
a total income of fifty lakh rupees by
more than the amount of income that
exceeds fifty lakh rupees;
6
(ii) one crore rupees but not

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

exceed five crore rupees, the total
and surcharge on a total income of two
of income that exceeds two crore
rupees;
(iv) five crore rupees, the total

and surcharge on a total income of five
of income that exceeds five crore
rupees:
Provided also that in the case of

persons mentioned in (b) above,
having total income chargeable to tax
under section 115JC of the Income-tax
Act, and such income exceeds one
crore rupees, the total amount payable
as income-tax on such income and
a total income of one crore rupees by
more than the amount of income that
exceeds one crore rupees:

every company having total income
chargeable to tax under section 115JB
of the Income-tax Act, and such
income exceeds one crore rupees but
does not exceed ten crore rupees, the
such income and surcharge thereon,
7
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:

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

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

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

individual or Hindu undivided family,
whose income is chargeable to tax
under section 115BAC of the Income-
tax, the income-tax computed under
this sub-section shall be increased by
a surcharge, for the purposes of the
Union, as provided in Paragraph A of
Part I of the First Schedule:
8

resident co-operative society, whose
income is chargeable to tax under
section 115BAD of the Income-tax
Act, the income tax computed under
this sub-section shall be increased by
a surcharge, for the purposes of the
Union, calculated at the rate of ten per
cent. of such “advance tax”.
(4) In cases in which tax has to be charged and paid under

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

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

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

section 2 of the Income-tax Act, being a non-resident
except in case of deduction on income by way of dividend
under section 196D of the Income-tax Act, calculated,—
(i) at the rate of ten per cent. of such tax, where

the income or the aggregate of such incomes paid or
likely to be paid and subject to the deduction exceeds
fifty lakh rupees but does not exceed one crore
rupees;
9
(ii) at the rate of fifteen per cent. of such tax,

where the income or the aggregate of such incomes
paid or likely to be paid and subject to the deduction
exceeds one crore rupees but does not exceed two
crore rupees;
(iii) at the rate of twenty-five per cent. of such tax,

where the income or the aggregate of such incomes
paid or likely to be paid and subject to the deduction
exceeds two crore rupees but does not exceed five
crore rupees;
(iv) at the rate of thirty-seven per cent. of such

tax, where the income or the aggregate of such
incomes paid or likely to be paid and subject to the
deduction exceeds five crore rupees;
(aa) in the case of every individual or Hindu undivided family

or association of persons or body of individuals, whether
incorporated or not, or every artificial juridical person referred
to in sub-clause (vii) of clause (31) of section 2 of the Income-
tax Act, being a non-resident, in case of deduction on income
by way of dividend under section 196D of that Act,
calculated,—
(i) at the rate of ten per cent. of such tax, where the
income or the aggregate of such incomes paid or likely to
be paid and subject to the deduction exceeds fifty lakh
rupees but does not exceed one crore rupees;
(ii) at the rate of fifteen per cent. of such tax, where the
income or the aggregate of such incomes paid or likely to
be paid and subject to the deduction exceeds one crore
rupees;
(b) in the case of every co-operative society or firm,

being a non-resident, calculated at the rate of twelve per
cent. of such tax, where the income or the aggregate of such
incomes paid or likely to be paid and subject to the
deduction exceeds one crore rupees;
(c) in the case of every company, other than a domestic

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

one crore rupees but does not exceed ten crore rupees;
10
(ii) at the rate of five per cent. of such tax, where

ten crore rupees.
(7) In cases in which tax has to be collected under the proviso

to section 194B of the Income-tax Act, the collection shall be
made at the rates specified in Part II of the First Schedule, and
shall be increased by a surcharge, for the purposes of the Union,
calculated, in cases wherever prescribed, in the manner provided
therein.
(8) In cases in which tax has to be collected under section

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

section 2 of the Income-tax Act, being a non-resident,
calculated,—
(i) at the rate of ten per cent. of such tax, where

the amount or the aggregate of such amounts
collected on likely to be collected and subject to the
collection exceeds fifty lakh rupees but does not
exceed one crore rupees;
(ii) at the rate of fifteen per cent. of such tax,

where the amount or the aggregate of such amounts
collection exceeds one crore rupees but does not
exceed two crore rupees;
(iii) at the rate of twenty-five per cent. of such tax,

where the income or the aggregate of such amounts
collection exceeds two crore rupees but does not
exceed five crore rupees;

tax, where the income or the aggregate of such
amounts collected on likely to be collected and
subject to the collection exceeds five crore rupees.
(b) in the case of every co-operative society or firm,

being a non-resident, calculated at the rate of twelve per
cent. of such tax, where the amount or the aggregate of such
11
amounts collected on likely to be collected and subject to

the collection exceeds one crore rupees;
(c) in the case of every company, other than a domestic

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

collection exceeds one crore rupees but does not
exceed ten crore rupees;
(ii) at the rate of five per cent. of such tax, where

collection exceeds ten crore rupees.
(9) Subject to the provisions of sub-section (10), in cases in

which income-tax has to be charged under sub-section (4) of
section 172 or sub-section (2) of section 174 or section 174A or
section 175 or sub-section (2) of section 176 of the Income-tax
Act or deducted from, or paid on, income chargeable under the
head “Salaries” under section 192 of the said Act or deducted
under section 194P of the said Act or in which the “advance tax”
payable under Chapter XVII-C of the said Act has to be computed
at the rate or rates in force, such income-tax or, as the case may
be, “advance tax” shall be charged, deducted or computed at the
rate or rates specified in Part III of the First Schedule and such
tax shall be increased by a surcharge, for the purposes of the
Union, calculated in such cases and in such manner as provided
therein:
Provided that in cases to which the provisions of Chapter XII

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

computed in accordance with the provisions of section 111A or
section 112 or 112A of the Income-tax Act shall be increased by
a surcharge, for the purposes of the Union, as provided in
Paragraph A, B, C, D or E, as the case may be, of Part III of the
First Schedule except in case of a domestic company whose
income is chargeable to tax under section 115BAA or section
115BAB of the Income-tax Act or in case of a resident co-
operative society whose income is chargeable to tax under section
115BAD of the Income-tax Act:
12
Provided also that in respect of any income chargeable to tax

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

section 2 of the Income-tax Act, not having any income
under section 115AD of the Income-tax Act,—
(i) at the rate of ten per cent. of such “advance

tax”, where the total income exceeds fifty lakh rupees
but does not exceed one crore rupees;
(ii) at the rate of fifteen per cent. of such “advance

tax”, where the total income exceeds one crore rupees
but does not exceed two crore rupees;
(iii) at the rate of twenty-five per cent. of such

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

“advance tax”, where the total income exceeds five
crore rupees;
(aa) in the case of individual or every association of

persons or body of individuals, whether incorporated or
not, or every artificial juridical person referred to in sub-
clause (vii) of clause (31) of section 2 of the Income-tax
Act, having income under section 115AD of the Income-
tax Act,—
(i) at the rate of ten per cent. of such “advance tax”,

where the total income exceeds fifty lakh rupees, but
does not exceed one crore rupees;
(ii) at the rate of fifteen per cent. of such “advance

but does not exceed two crore rupees;
(iii) at the rate of twenty-five per cent. of such

“advance tax”, where the total income [excluding the
referred to in clause (b) of sub-section (1) of section
13
115AD of the Income-tax Act] exceeds two crore

rupees but does not exceed five crore rupees;

“advance tax”, where the total income [excluding the
referred to in clause (b) of sub-section (1) of section
115AD of the Income-tax Act] exceeds five crore
rupees;
(v) at the rate of fifteen per cent. of such “advance

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

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

co-operative society whose income is chargeable to tax
under section 115BAD of the Income-tax Act or firm or
local authority at the rate of twelve per cent. of such
“advance tax”, where the total income exceeds one crore
rupees;
(c) in the case of every domestic company except such

domestic company whose income is chargeable to tax under
section 115BAA or section 115BAB of the Income-tax
Act,—
(i) at the rate of seven per cent. of such “advance

but does not exceed ten crore rupees;
(ii) at the rate of twelve per cent. of such “advance

tax”, where the total income exceeds ten crore rupees;
(d) in the case of every company, other than a domestic

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

but does not exceed ten crore rupees;
14
(ii) at the rate of five per cent. of such “advance

tax”, where the total income exceeds ten crore rupees:
Provided also that in the case of persons mentioned in (a) and

(aa) above, having total income chargeable to tax under section
115JC of the Income-tax Act, and such income exceeds,—
(a) fifty lakh rupees but does not exceed one crore
rupees, the total amount payable as “advance tax” on such
income and surcharge thereon shall not exceed the total
amount payable as “advance tax” on a total income of fifty
lakh rupees by more than the amount of income that
exceeds fifty lakh rupees;
(b) one crore rupees but does not exceed two crore
amount payable as “advance tax” on a total income of one
crore rupees by more than the amount of income that
exceeds one crore rupees;
(c) two crore rupees but does not exceed five crore
amount payable as “advance tax” on a total income of two
crore rupees by more than the amount of income that
exceeds two crore rupees;
(d) five crore rupees, the total amount payable as

“advance tax” on such income and surcharge thereon shall
not exceed the total amount payable as “advance tax” on a
total income of five crore rupees by more than the amount
of income that exceeds five crore rupees:
Provided also that in the case of persons mentioned in (b)

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

income chargeable to tax under section 115JB of the Income-tax
Act, and such income exceeds one crore rupees but does not
exceed ten crore rupees, the total amount payable as “advance
tax” on such income and surcharge thereon, shall not exceed the
total amount payable as “advance tax” on a total income of one
crore rupees by more than the amount of income that exceeds one
crore rupees:
15
Provided also that in the case of every company having total

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

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

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

undivided family, whose income is chargeable to tax under
section 115BAC of the Income-tax Act, the advance tax
computed under the first proviso shall be increased by a
surcharge, for the purposes of the Union, as provided in
Paragraph A of Part III of the First Schedule.
Provided also that in case of every resident co-operative

society whose income is chargeable to tax under section 115BAD
of the Income-tax Act, the advance tax computed under the first
proviso shall be increased by a surcharge, for the purposes of the
Union, calculated at the rate of ten per cent. of such “advance
tax”:
(10) In cases to which Paragraph A of Part III of the First

Schedule applies, where the assessee has, in the previous year or,
if by virtue of any provision of the Income-tax Act, income-tax is
to be charged in respect of the income of a period other than the
previous year, in such other period, any net agricultural income
exceeding five thousand rupees, in addition to total income and
the total income exceeds two lakh fifty thousand rupees, then, in
charging income-tax under sub-section (2) of section 174 or
section 174A or section 175 or sub-section (2) of section 176 of
the said Act or in computing the “advance tax” payable under
Chapter XVII-C of the said Act, at the rate or rates in force,—
16
(a) the net agricultural income shall be taken into

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

tax” shall be so charged or computed as follows:—
(i) the total income and the net agricultural

income shall be aggregated and the amount of
income-tax or “advance tax” shall be determined in
respect of the aggregate income at the rates specified
in the said Paragraph A, as if such aggregate income
were the total income;
(ii) the net agricultural income shall be increased

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

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

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

resident in India, who is of the age of eighty years or more at any
time during the previous year, referred to in item (III) of
Paragraph A of Part III of the First Schedule, the provisions of
this sub-section shall have effect as if for the words “two lakh
fifty thousand rupees”, the words “five lakh rupees” had been
substituted:
17
Provided also that the amount of income-tax or “advance tax”

so arrived at, shall be increased by a surcharge for the purposes
of the Union, calculated in each case, in the manner provided
therein.
(11) The amount of income-tax as specified in sub-sections

(1) to (3) and as increased by the applicable surcharge, for the
purposes of the Union, calculated in the manner provided therein,
shall be further increased by an additional surcharge, for the
purposes of the Union, to be called the “Health and Education
Cess on income-tax”, calculated at the rate of four per cent. of
such income-tax and surcharge so as to fulfil the commitment of
the Government to provide and finance quality health services
and universalised quality basic education and secondary and
higher education.
(12) The amount of income-tax as specified in sub-sections

(4) to (10) and as increased by the applicable surcharge, for the
purposes of the Union, calculated in the manner provided therein,
shall be further increased by an additional surcharge, for the
purposes of the Union, to be called the “Health and Education
Cess on income-tax”, calculated at the rate of four per cent. of
such income-tax and surcharge so as to fulfil the commitment of
the Government to provide and finance quality health services
and universalised quality basic education and secondary and
higher education:
Provided that nothing contained in this sub-section shall

apply to cases in which tax is to be deducted or collected under
the sections of the Income-tax Act mentioned in sub-sections (5),
(6), (7) and (8), if the income subjected to deduction of tax at
source or collection of tax at source is paid to a domestic company
and any other person who is resident in India.
(13) For the purposes of this section and the First Schedule,—
(a) “domestic company” means an Indian company or

any other company which, in respect of its income liable to
income-tax under the Income-tax Act, for the assessment
year commencing on the 1st day of April, 2018, has made
the prescribed arrangements for the declaration and
payment within India of the dividends (including dividends
on preference shares) payable out of such income;
(b) “insurance commission” means any remuneration or

reward, whether by way of commission or otherwise, for
soliciting or procuring insurance business (including
business relating to the continuance, renewal or revival of
policies of insurance);
18
(c) “net agricultural income” in relation to a person,

means the total amount of agricultural income, from
whatever source derived, of that person computed in
accordance with the rules contained in Part IV of the First
Schedule;
(d) all other words and expressions used in this section

and the First Schedule but not defined in this sub-section
and defined in the Income-tax Act shall have the meanings,
respectively, assigned to them in that Act.
CHAPTER III
DIRECT TAXES
Income-tax
Amendment of 3. In section 2 of the Income-tax Act,––

section 2.
(i) in clause (11), in sub-clause (b), after the words “or

commercial rights of similar nature,”, the words “not being
goodwill of a business or profession,” shall be inserted;
(ii) in clause (14), after sub-clause (b), the following sub-

clause shall be inserted, namely:––
“(c) any unit linked insurance policy to which

exemption under clause (10D) of section 10 does not
apply on account of the applicability of the fourth and
fifth proviso thereof;”;
(iii) in clause (19AA), after Explanation 5, the following

Explanation shall be inserted, namely:––
“Explanation 6.–– For the purposes of this clause,

the reconstruction or splitting up of a public sector
company into separate companies shall be deemed to be
a demerger, if such reconstruction or splitting up has been
made to transfer any asset of the demerged company to
the resulting company and the resulting company––
(i) is a public sector company on the appointed

day indicated in such scheme, as may be approved by
the Central Government or any other body authorised
under the provisions of the Companies Act, 2013 or 18 of 2013.
any other law for the time being in force governing
such public sector companies in this behalf; and
19
(ii) fulfils such other conditions as may be notified

by the Central Government in the Official Gazette in
this behalf;”;
(iv) clause (29A) shall be renumbered as clause (29AA)

thereof and before clause (29AA) as so renumbered, the
following clause shall be inserted, namely:––
‘(29A) “liable to tax”, in relation to a person, means

that there is a liability of tax on such person under any law
for the time being in force in any country, and shall
include a case where subsequent to imposition of tax
liability, an exemption has been provided;’;
(v) in clause (42C),──
(I) for the words “undertaking as a result of the sale”,

the words “undertaking, by any means,” shall be
substituted;
(II) after Explanation 2, the following Explanation

shall be inserted, namely:––
‘Explanation 3.––For the purposes of this clause,

“transfer” shall have the meaning assigned to it in
clause (47);’;
(vi) in clause (48), with effect from the 1st day of April,
2022,––
(I) in sub-clause (a), after the words “infrastructure

capital fund or”, the words “infrastructure debt fund or”
shall be inserted;
(II) in sub-clause (b), after the words “infrastructure

capital fund or”, the words “infrastructure debt fund or”
shall be inserted;
(III) the Explanation shall be numbered as

Explanation 1 thereof and after Explanation 1 as so
numbered, the following Explanation shall be inserted,
namely:––
‘Explanation 2.—For the purposes of this clause,

the expression “infrastructure debt fund” shall mean
the infrastructure debt fund notified by the Central
Government in the Official Gazette under clause (47)
of section 10.’.
20
Amendment of 4. In section 9A of the Income-tax Act, after sub-section (8),

section 9A. the following sub-section shall be inserted with effect from the
1st day of April, 2022, namely:––
“(8A) The Central Government may, by notification in

the Official Gazette, specify that any one or more of the
conditions specified in clauses (a) to (m) of sub-section (3)
or clauses (a) to (d) of sub-section (4) shall not apply or shall
apply with such modifications, as may be specified in such
notification, in case of an eligible investment fund and its
eligible fund manager, if such fund manager is located in an
International Financial Services Centre, as defined in clause
(a) of the Explanation to section 80LA, and has commenced
its operations on or before the 31st day of March, 2024.”.

section 10.
(a) with effect from the 1st day of April, 2022,––
(i) in clause (4D),––
(I) after the words “attributable to units held by

non-resident (not being the permanent establishment
of a non-resident in India)”, the words “or is
attributable to the investment division of offshore
banking unit, as the case may be,” shall be inserted;
(II) in the Explanation,––
(A) after clause (a), the following clause shall

be inserted, namely:––
‘(aa) “investment division of offshore

banking unit” means an investment division of
a banking unit of a non-resident located in an
International Financial Services Centre, as
referred to in sub-section (1A) of section 80LA
and which has commenced its operations on or
before the 31st day of March, 2024’;
(B) for clause (c), the following clause shall be

‘(c) “specified fund” means,––
(i) a fund established or incorporated in

India in the form of a trust or a company
or a limited liability partnership or a body
corporate,––
21
(I) which has been granted a

certificate of registration as a Category
III Alternative Investment Fund and is
regulated under the Securities and
Exchange Board of India (Alternative
Investment Fund) Regulations, 2012,
made under the Securities and Exchange
Board of India Act, 1992; 15 of 1992.
(II) which is located in any

International Financial Services Centre;
and
(III) of which all the units other than

unit held by a sponsor or manager are
held by non-residents; or
(ii) investment division of an offshore

banking unit, which has been––
(I) granted a certificate of

registration as a Category III
Alternative Investment Fund and is
regulated under the Securities and
Exchange Board of India (Alternative
Investment Fund) Regulations, 2012,
made under the Securities and
Exchange Board of India Act, 1992 or 15 of 1992.
which has commenced its operations
on or before the 31st day of March,
2024; and
(II) fulfils such conditions

including maintenance of separate
accounts for its investment division, as
may be prescribed;’;
(ii) after clause (4D), the following clauses shall be

inserted, namely:––
“(4E) any income accrued or arisen to, or received

by a non-resident as a result of transfer of non-
deliverable forward contracts entered into with an
offshore banking unit of an International Financial
Services Centre as referred to in sub-section (1A) of
section 80LA, which fulfils such conditions as may be
prescribed;
(4F) any income of a non-resident by way of

royalty, on account of lease of an aircraft in a previous
22
year, paid by a unit of an International Financial

section 80LA, if the unit––
(i) is eligible for deduction under the said section

for that previous year; and
(ii) has commenced its operations on or before the

31st day of March, 2024.”;
(b) in clause (5),––
(i) after the proviso and before the Explanation, the

following proviso shall be inserted, namely:––
“Provided further that for the assessment year

beginning on the 1st day of April, 2021, the value in
lieu of any travel concession or assistance received
by, or due to, such individual shall also be exempt
under this clause subject to the fulfillment of such
conditions (including the condition of incurring such
amount of such expenditure within such period), as
may be prescribed.”;
(ii) the Explanation shall be numbered as Explanation

1 thereof and after Explanation 1 as so numbered, the
following Explanation shall be inserted, namely:––
“Explanation 2.—For the removal of doubts, it is

hereby clarified that where an individual claims
exemption and the exemption is allowed under the
second proviso in connection with the prescribed
expenditure, no exemption shall be allowed under this
clause in respect of such prescribed expenditure to
any other individual.”;
(c) in clause (10D),––
(i) after the third proviso and before Explanation 1,

the following provisos shall be inserted, namely:––
“Provided also that nothing contained in this

clause shall apply with respect to any unit linked
insurance policy, issued on or after the 1st day of
February, 2021, if the amount of premium payable for
any of the previous year during the term of such
policy exceeds two lakh and fifty thousand rupees:
Provided also that if the premium is payable, by a

person, for more than one unit linked insurance
23
policies, issued on or after the 1st day of February,

2021, the provisions of this clause shall apply only
with respect to those unit linked insurance policies,
where the aggregate amount of premium does not
exceed the amount referred to in fourth proviso in any
of the previous year during the term of any of those
policies:
Provided also that the provisions of the fourth and

fifth provisos shall not apply to any sum received on
the death of a person:
Provided also that if any difficulty arises in giving

effect to the provisions of this clause, the Board may,
with the previous approval of the Central
Government, issue guidelines for the purpose of
removing the difficulty and every guideline issued by
the Board under this proviso shall be laid before each
House of Parliament, and shall be binding on the
income-tax authorities and the assessee.”;
(ii) after Explanation 2, the following Explanation

‘Explanation 3.— For the purposes of this clause,

“unit linked insurance policy” means a life insurance
policy which has components of both investment and
insurance and is linked to a unit as defined in clause
(ee) of regulation 3 of the Insurance Regulatory and
Development Authority of India (Unit Linked
Insurance Products) Regulations, 2019 issued by the
Insurance Regulatory and Development Authority
under the Insurance Act, 1938 and the Insurance 4 of 1938.
Regulatory and Development Authority Act, 1999.’; 41 of 1999.
(d) with effect from the 1st day of April, 2022,––
(i) in clause (11), the following proviso shall be inserted,

namely:––
“Provided that the provisions of this clause shall not

apply to the income by way of interest accrued during the
previous year in the account of a person to the extent it
relates to the amount or the aggregate of amounts of
contribution made by that person exceeding two lakh and
fifty thousand rupees in any previous year in that fund, on
or after the 1st day of April, 2021 and computed in such
manner as may be prescribed;”;
24
(ii) in clause (12), the following proviso shall be inserted,

namely:––
“Provided that the provisions of this clause shall not

apply to the income by way of interest accrued during the
previous year in the account of a person to the extent it
relates to the amount or the aggregate of amounts of
contribution made by that person exceeding two lakh and
fifty thousand rupees in any previous year in that fund, on
or after the 1st day of April, 2021 and computed in such
manner as may be prescribed;”;
(iii) in clause (23C),––
(I) in sub-clause (iiiad), for the words “receipts of such

university or educational institution do not exceed the amount
of annual receipts as may be prescribed”, the words “receipts
of the person from such university or universities or
educational institution or educational institutions do not
exceed five crore rupees” shall be substituted;
(II) in sub-clause (iiiae),––
(A) for the words “receipts of such hospital or

institution do not exceed the amount of annual receipts as
may be prescribed; or”, the words “receipts of the person
from such hospital or hospitals or institution or
institutions do not exceed five crore rupees.” shall be
substituted;
(B) after sub-clause (iiiae), the following Explanation

“Explanation.––For the purposes of sub-clauses

(iiiad) and (iiiae), it is hereby clarified that if the person
has receipts from university or universities or educational
institution or institutions as referred to in sub-clause
(iiiad), as well as from hospital or hospitals or institution
or institutions as referred to in sub-clause (iiiae), the
exemptions under these clauses shall not apply, if the
aggregate of annual receipts of the person from such
university or universities or educational institution or
institutions or hospital or hospitals or institution or
institutions, exceed five crore rupees; or”;
(III) in the third proviso,––
(A) the Explanation shall be numbered as Explanation

1 thereof and in Explanation 1 as so numbered, after the
words “medical institution:” occurring at the end, the
25
words, brackets and figures “subject to the condition that

such voluntary contributions are invested or deposited in
one or more of the forms or modes specified in sub-
section (5) of section 11 maintained specifically for such
corpus.” shall be inserted;
(B) after Explanation 1 as so numbered, the following

“Explanation 2.––For the purposes of determining the

amount of application under this proviso,-
(i) application for charitable or religious purposes

from the corpus as referred to in Explanation 1, shall not
be treated as application of income for charitable or
religious purposes:
Provided that the amount not so treated as application

or part thereof, shall be treated as application for
charitable or religious purposes in the previous year in
which the amount, or part thereof, is invested or deposited
back, into one or more of the forms or modes specified in
sub-section (5) of section 11 maintained specifically for
such corpus, from the income of that year and to the extent
of such investment or deposit; and
(ii) application for charitable or religious purposes,

from any loan or borrowing, shall not be treated as
application of income for charitable or religious purposes:
Provided that the amount not so treated as application

which the loan or borrowing, or part thereof, is repaid
from the income of that year and to the extent of such
repayment:”;
(IV) in the fourteenth proviso, after the figures and letters

“12AA”, the words, figures and letters “or section 12AB”
shall be inserted;
(V) after the twentieth proviso, the Explanation shall be

numbered as Explanation 1 thereof and after Explanation 1
as so numbered, the following Explanation shall be inserted,
namely:––
“Explanation 2.––For the purposes of this clause, it is

clarified that the calculation of income required to be
applied or accumulated during the previous year shall be
made without any set off or deduction or allowance of any
26
excess application of any of the year preceding to the

previous year;”;
(e) in clause (23FE),––
(A) in sub-clause (iii),––
(i) in item (c),––
(I) for the words “hundred per cent.”, the words

“not less than fifty per cent.” shall be substituted;
(II) after the word, brackets and letter “item (b)”,

the words, brackets, figures and letter “or in an
Infrastructure Investment Trust referred to in sub-
clause (i) of clause (13A) of section 2; or” shall be
inserted;
(ii) after item (c), the following items shall be

“(d) a domestic company, set up and registered on or

after the 1st day of April, 2021, having minimum seventy-
five per cent. investments in one or more of the
companies or enterprises or entities referred to in item (b);
or
(e) a non-banking financial company registered as an

Infrastructure Finance Company as referred to in
notification number RBI/2009-10/316 issued by the
Reserve Bank of India or in an Infrastructure Debt Fund,
a non-banking finance company, as referred to in the
Infrastructure Debt Fund-Non-Banking Financial
Companies (Reserve Bank) Directions, 2011, issued by
the Reserve Bank of India, having minimum ninety per
cent. lending to one or more of the companies or
enterprises or entities referred to in item (b):”;
(B) after the third proviso, the following provisos shall be

“Provided also that in case a Category-I or Category-

II Alternative Investment Fund referred to in item (c) of
sub-clause (iii) has investment of less than one hundred
per cent. in one or more of the companies or enterprises
or entities referred to in item (b) of the said sub-clause or
in an Infrastructure Investment Trust referred to in item
(c) of the said sub-clause, income accrued or arisen or
received or attributable to such investment, directly or
indirectly, which is exempt under this clause shall be
27
calculated proportionately to that investment made in one

or more of the companies or enterprises or entities
referred to in item (b) of the said sub-clause or in the
Infrastructure Investment Trust referred to in item (c) of
the said sub-clause, in such manner as may be prescribed:
Provided also that in case a domestic company

referred to in item (d) of sub-clause (iii) has investment
of less than one hundred per cent. in one or more of the
companies or enterprises or entities referred to in item (b)
of the said sub-clause, income accrued or arisen or
received or attributable to such investments, directly or
indirectly, which is exempt under this clause shall be
calculated proportionately to the investment made in one
or more of the companies or enterprises or entities
referred to in item (b) of the said sub-clause, in such
manner as may be prescribed:
Provided also that in case a non-banking finance

company registered as an Infrastructure Finance
Company or Infrastructure Debt Fund, referred to in item
(e) of sub-clause (iii), has lending of less than one
hundred per cent. in one or more of the companies or
enterprises or entities referred to in item (b) of the said
sub-clause, income accrued or arisen or received or
attributable to such lending, directly or indirectly, which
is exempt under this clause shall be calculated
proportionately to the lending made in one or more of the
companies or enterprises or entities referred to in item (b)
of the said sub-clause, in such manner as may be
prescribed:
Provided also that in case a sovereign wealth fund or

pension fund has loans or borrowings, directly or
indirectly, for the purposes of making investment in
India, such fund shall be deemed to be not eligible for
exemption under this clause.”;
(C) the Explanation shall be numbered as Explanation 1

thereof, and in Explanation 1 as so numbered,––
(i) in clause (b),––
(I) after sub-clause (iv), the following proviso

“Provided that the provisions of sub-clause

(iii) and (iv) shall not apply to any payment made
to creditors or depositors for loan taken or
28
borrowing for the purposes other than for making

investment in India;”;
(II) in sub-clause (v), for the words “undertake

any commercial activity whether within or outside
India”, the words “participate in the day to day
operations of investee but the monitoring mechanism
to protect the investment with the investee including
the right to appoint directors or executive director
shall not be considered as participation in the day to
day operations of the investee” shall be substituted;
(ii) in clause (c),––
(I) in sub-clause (ii), after the word “country”, the

words “or if liable to tax, exemption from taxation for
all its income has been provided by such foreign
country” shall be inserted;
(II) in sub-clause (iii), for the words “prescribed;

and”, the word “prescribed;”, shall be substituted;
(III) after sub-clause (iii), the following sub-

“(iiia) it does not participate in the day to day

operations of investee but the monitoring
mechanism to protect the investment with the
investee including the right to appoint directors or
executive director shall not be considered as
participation in day to day operations of the
investee; and”;
(D) after Explanation 1, the following Explanations shall

‘Explanation 2.— For the purposes of this clause,––
(i) “investee” means a business trust, or a company,

or an enterprise, or an entity, or a Category I or Category
II Alternative Investment Fund, or an Infrastructure
Investment Trust or a domestic company, or an
Infrastructure Finance Company or an Infrastructure Debt
Fund referred to in item (e) of sub-clause (iii), in which
the sovereign wealth fund or the pension fund, as the case
may be, has made the investment, directly or indirectly,
under the provisions of this clause;
(ii) “loan and borrowing” means—

29
(a) any loan taken or borrowing by a

sovereign wealth fund from, or any deposit or
investment made in a sovereign wealth fund by,
any person other than the Government of the
country in which the sovereign wealth fund is set
up;
(b) any loan taken or borrowing by a pension

fund from or any deposit or investment made in a
pension fund by, any person but shall not include
the deposit or investment which represents
statutory obligations and defined contributions of
one or more funds or plans established for
providing retirement, social security,
employment, disability, death benefits or any
similar compensation to the participants or
beneficiaries of such funds or plans, as the case
may be.
Explanation 3.––For the purposes of this clause,

the Central Government may prescribe that the
method of calculation of “fifty per cent.” referred to
in item (c) or “seventy-five per cent.” referred to in
item (d) or “ninety per cent.” referred to in item (e),
of sub-clause (iii) shall be such as may be
prescribed;’;
(f) after clause (23FE), the following clause shall be

inserted with effect from the 1st day of April, 2022,
namely:––
‘(23FF) any income of the nature of capital gains, arising

or received by a non-resident, which is on account of
transfer of share of a company resident in India, by the
resultant fund and such shares were transferred from the
original fund to the resultant fund in relocation, and where
capital gains on such shares were not chargeable to tax if
that relocation had not taken place.
Explanation.––For the purposes of this clause, the

expressions “original fund”, “relocation” and “resultant
fund” shall have the meanings respectively assigned to
them in the Explanation to clause (viiac) and clause (viiad)
of section 47;’;
(g) in clause (50),––
(I) for the figures “2021”, the figures “2020” shall be

substituted;
30
(II) for the Explanation, the following Explanations shall

be substituted, namely:––
‘Explanation 1.––For the removal of doubts it is

hereby clarified that the income referred to in this clause
shall not include and shall be deemed never to have been
included any income which is chargeable to tax as royalty
or fees for technical services in India under this Act read
with the agreement notified by the Central Government
under section 90 or section 90A.
Explanation 2.—For the purposes of this clause,––
(i) “e-commerce supply or services” shall have the

meaning assigned to it in clause (cb) of section 164 of
the Finance Act, 2016; 28 of 2016.
(ii) "specified service" shall have the meaning

assigned to it in clause (i) of section 164 of the
Finance Act, 2016.’. 28 of 2016.
Amendment of 6. In section 11 of the Income-tax Act, with effect from the

section 11. 1st day of April, 2022,––
(i) in clause (d), for the word “institution”, the words,

brackets and figures “institution, subject to the condition that
such voluntary contributions are invested or deposited in one
or more of the forms or modes specified in sub-section (5)
maintained specifically for such corpus” shall be substituted;
(ii) after Explanation 3, the following Explanations shall

“Explanation 4.––For the purposes of determining the

amount of application under clause (a) or clause (b),––
(i) application for charitable or religious purposes

from the corpus as referred to in clause (d) of this sub-
section, shall not be treated as application of income for
charitable or religious purposes:
Provided that the amount not so treated as application,

which the amount, or part thereof, is invested or deposited
back, into one or more of the forms or modes specified in
sub-section (5) maintained specifically for such corpus,
31

investment or deposit; and
(ii) application for charitable or religious purposes,

from any loan or borrowing, shall not be treated as
application of income for charitable or religious purposes:
Provided that the amount not so treated as application,

which the loan or borrowing, or part thereof, is repaid
repayment.
Explanation 5.––For the purposes of this sub-section,

it is hereby clarified that the calculation of income
required to be applied or accumulated during the previous
year shall be made without any set off or deduction or
allowance of any excess application of any of the year
preceding the previous year.”;
(b) in sub-section (2), in the Explanation, after the figures and

letters “12AA”, the words, figures and letters “or section 12AB”
shall be inserted;
(c) in sub-section (3), in clause (d), after the figures and letters
“12AA”, the words, figures and letters “or section 12AB” shall
be inserted.
Amendment of 7. In section 32 of the Income-tax Act, in sub-section (1),––

section 32.
(a) in clause (ii), after the words, figures and letters, “after
the 1st day of April, 1998,”, the words “not being goodwill
of a business or profession,” shall be inserted;
(b) in Explanation 3, in clause (b), after the words “or

commercial rights of similar nature”, the words “, not being
goodwill of a business or profession” shall be inserted.
Amendment of 8. In section 36 of the Income-tax Act, in sub-section (1), in

section 36. clause (va), the Explanation shall be numbered as Explanation 1
thereof and after Explanation 1 as so numbered, the following
‘Explanation 2.––For the removal of doubts, it is hereby

clarified that the provisions of section 43B shall not apply and
shall be deemed never to have been applied for the purposes
of determining the “due date” under this clause;’.
32
Amendment of 9. In section 43B of the Income-tax Act, after Explanation 4,

section 43B. the following Explanation shall be inserted, namely:––
“Explanation 5.––For the removal of doubts, it is hereby

clarified that the provisions of this section shall not apply and
shall be deemed never to have been applied to a sum received
by the assessee from any of his employees to which the
provisions of sub-clause (x) of clause (24) of section 2
applies.”.
Amendment of 10. In section 43CA of the Income-tax Act,––

section 43CA.
(a) in sub-section (1), after the proviso, the following
proviso shall be inserted, namely:––
‘Provided further that in case of transfer of an asset,

being a residential unit, the provisions of this proviso shall
have the effect as if for the words “one hundred and ten
per cent.”, the words “one hundred and twenty per cent.”
had been substituted, if the following conditions are
satisfied, namely:––
(i) the transfer of such residential unit takes place

during the period beginning from the 12th day of
November, 2020 and ending on the 30th day of June,
2021;
(ii) such transfer is by way of first time allotment

of the residential unit to any person; and
(iii) the consideration received or accruing as a

result of such transfer does not exceed two crore
rupees.’;
(b) after sub-section (4), the following Explanation shall

‘Explanation.––For the purposes of this section,

“residential unit” means an independent housing unit with
separate facilities for living, cooking and sanitary
requirement, distinctly separated from other residential
units within the building, which is directly accessible
from an outer door or through an interior door in a shared
hallway and not by walking through the living space of
another household.’.
Amendment of 11. In section 44AB of the Income-tax Act, in clause (a), in

section 44AB. the proviso, in long line, for the words “five crore rupees”, the
words “ten crore rupees” shall be substituted.
33
Amendment of 12. In section 44ADA of the Income-tax Act, in sub-section

section 44ADA. (1), for the words “in the case of an assessee, being a resident in
India, who”, the words, brackets, letter and figures “in case of an
assessee, being an individual, Hindu undivided family or a
partnership firm other than a limited liability partnership as
defined under clause (n) of sub-section (1) of section 2 of the
Limited Liability Partnership Act, 2008, who is a resident in 6 of 2009.
India, and” shall be substituted.
Amendment of 13. In section 44DB of the Income-tax Act,──

section 44DB.
(a) in sub-section (3), after the words “successor co-
operative bank”, the words “or to the converted banking
company” shall be inserted;
(b) in sub-section (4), after the words “a successor co-

operative bank”, and the words “the successor co-operative
bank” the words “or to a converted banking company” and
the words “or to the converted banking company” shall,
respectively, be inserted;
(c) in sub-section (5),––
(i) after clause (c), the following clause shall be

‘(ca) "banking company" shall have the meaning

assigned to it in clause (c) of section 5 of Banking
Regulation Act, 1949;’; 10 of 1949.
(ii) in clause (d), after the words “a co-operative

bank”, the words “or conversion of a primary co-
operative bank” shall be inserted;
(iii) after clause (d), the following clauses shall be

‘(da) “conversion” means transition of a primary

co-operative bank to a banking company under the
scheme of the Reserve Bank of India as notified vide its
circular number DCBR. CO. LS. PCB. Cir. No.
5/07.01.000/2018-19, dated the 27th September, 2018;
(db) “converted banking company” means a

banking company formed as a result of conversion from
primary co-operative bank;’ ;
(iv) in clause (h), after the words “the demerged co-

operative bank”, the words “or the primary co-operative
34
bank which has been succeeded as a result of conversion”

shall be inserted;
(v) after clause (h), the following clause shall be

‘(ha) “primary co-operative bank” shall have the

meaning assigned to it in clause (ccv) of section 5 of
the Banking Regulation Act, 1949;’. 10 of 1949.

section 45.
(a) after sub-section (1A), the following sub-section shall be
‘(1B) Notwithstanding anything contained in sub-section

(1), where any person receives at any time during any
previous year any amount under a unit linked insurance
policy, to which exemption under clause (10D) of section 10
does not apply on account of the applicability of the fourth
and fifth proviso thereof, including the amount allocated by
way of bonus on such policy, then, any profits or gains arising
from receipt of such amount by such person shall be
chargeable to income-tax under the head "Capital gains" and
shall be deemed to be the income of such person of the
previous year in which such amount was received and the
income taxable shall be calculated in such manner as may be
prescribed.’;
(b) for sub-section (4), the following sub-sections shall be

‘(4) Notwithstanding anything contained in sub-section (1),

where a specified person receives during the previous year any
capital asset at the time of dissolution or reconstitution of the
specified entity, which represents the balance in his capital
account in the books of accounts of such specified entity at the
time of its dissolution or reconstitution, then any profits or gains
arising from receipt of such capital asset by the specified person
shall be chargeable to income-tax as income of such specified
entity under the head "Capital gains" and shall be deemed to be
the income of such specified entity of the previous year in which
such capital asset was received by the specified person and
notwithstanding anything to the contrary contained in this Act,
for the purposes of section 48,––
(a) fair market value of the capital asset on the date of

such receipt shall be deemed to be the full value of the
consideration received or accruing as a result of the transfer
of such capital asset; and
35
(b) the cost of acquisition of the capital asset shall be

determined in accordance with the provisions of this Chapter:
Provided that the balance in the capital account of the

specified person in the books of account of the specified
entity is to be calculated without taking into account increase
in the capital account of the specified person due to
revaluation of any asset or due to self-generated goodwill or
any other self-generated asset.
Explanation.––For the purposes of this sub-section,––
(i) “specified entity” means a firm or other association of

persons or body of individuals (not being a company or a
cooperative society);
(ii) “self-generated goodwill” and “self-generated asset”

mean goodwill or asset, as the case may be, which has been
acquired without incurring any cost for purchase or which has
been generated during the course of the business or
profession;
(iii) “specified person” means a person who is partner of

a firm or member of other association of persons or body of
individuals (not being a company or a cooperative society),
in any previous year.
(4A) Notwithstanding anything contained in sub-section (1),

where a specified person receives during the previous year any
money or other asset at the time of dissolution or reconstitution
of the specified entity, which is in excess of the balance in his
capital account in the books of accounts of such specified entity
at the time of its dissolution or reconstitution, then any profits or
gains arising from receipt of such money or other asset by the
specified person shall be chargeable to income-tax as income of
such specified entity under the head "Capital gains" and shall be
deemed to be the income of such specified entity of the previous
year in which such money or other asset was received by the
specified person and notwithstanding anything to the contrary
contained in this Act, for the purposes of section 48,––
(a) value of any money or the fair market value of other

asset on the date of such receipt shall be deemed to be the full
value of the consideration received or accruing as a result of
the transfer of such capital asset; and
(b) the balance in the capital account of the specified

person in the books of accounts of the specified entity at the
36
time of its dissolution or reconstitution shall be deemed to be

the cost of acquisition:
Provided that the balance in the capital account of the

specified person in the books of account of the specified entity is
to be calculated without taking into account increase in the
capital account of the specified person due to revaluation of any
asset or due to self-generated goodwill or any other self-generated
asset.
Explanation.––For the purpose of this sub-section, the

expressions “specified entity”, “self-generated goodwill”, “self-
generated asset” and "specified person" shall have the meaning
respectively assigned to them in sub-section (4).’.
Amendment of 15. In section 47 of the Income-tax Act,──

section 47.
(a) in clause (vica), after the words “successor co-
operative bank”, the words “or to the converted banking
company” shall be inserted;
(b) in clause (vicb),––
(i) after the words “successor co-operative bank”, the

words “or to the converted banking company” shall be
inserted;
(ii) in the Explanation, for the words ‘expressions

“business reorganisation”, “predecessor co-operative
bank” and’, the words ‘expressions “business
reorganisation”, “converted banking company”,
“predecessor co-operative bank” and’ shall be
substituted;
(c) after clause (viiab), the following clauses shall be

inserted with effect from the 1st day of April, 2022,
namely:––
‘(viiac) any transfer, in a relocation, of a capital asset

by the original fund to the resulting fund;
(viiad) any transfer by a shareholder or unit holder or

interest holder, in a relocation, of a capital asset being a
share or unit or interest held by him in the original fund
in consideration for the share or unit or interest in the
resultant fund;
Explanation.–– For the purposes of clauses (viiac) and

(viiad),––
37
(a) “original fund” means a fund established or

incorporated or registered outside India, which collects
funds from its members for investing it for their benefit
and fulfills the following conditions, namely:—
(i) the fund is not a person resident in India;
(ii) the fund is a resident of a country or a

specified territory with which an agreement
referred to in sub-section (1) of section 90 or sub-
section (1) of section 90A has been entered into; or
is established or incorporated or registered in a
country or a specified territory as may be notified
by the Central Government in this behalf;
(iii) the fund and its activities are subject to

applicable investor protection regulations in the
country or specified territory where it is
established or incorporated or is a resident; and
(iv) fulfils such other conditions as may be

prescribed;
(b) “relocation” means transfer of assets of the

original fund to a resultant fund on or before the 31st
day of March, 2023, where consideration for such
transfer is discharged in the form of share or unit or
interest in the resulting fund to the shareholder or unit
holder or interest holder of the original fund in the same
proportion in which the share or unit or interest was
held by such shareholder or unit holder or interest
holder in such original fund;
(c) “resultant fund” means a fund established or

incorporated in India in the form of a trust or a company
or a limited liability partnership, which––
(i) has been granted a certificate of registration

as a Category I or Category II or Category III
Alternative Investment Fund, and is regulated under
the Securities and Exchange Board of India
(Alternative Investment Fund) Regulations, 2012
made under the Securities and exchange Board of
India Act, 1992; and 15 of 1992.
(ii) is located in any International Financial

section 80LA;’.
38
Amendment of 16. In section 48 of the Income-tax Act, after clause (ii) the
section 48. following clause shall be inserted, namely: ──
“(iii) in case of specified entity referred to in sub-section

(4A) of section 45, the amount included in the total income of
such specified entity under sub-section (4A) of section 45
which is attributable to the capital asset being transferred,
calculated in the prescribed manner:”.
Amendment of 17. In section 49 of the income-tax Act, in sub-section (1), in

section 49. clause (iii), in sub-clause (e), after the words, brackets, figures
and letters “clause (vicc) or”, the words, brackets, figures and
letters “clause (viiac) or clause (viiad) or” shall be inserted with
effect from the 1st day of April, 2022.
Amendment of 18. In section 50 of the Income-tax Act, in clause (2), the

section 50. following proviso shall be inserted, namely:––
“Provided that in a case where goodwill of a business or

profession forms part of a block of asset for the assessment
year beginning on the 1st day of April, 2020 and depreciation
thereon has been obtained by the assessee under the Act, the
written down value of that block of asset and short term
capital gain, if any, shall be determined in such manner as
may be prescribed.”.
Amendment of 19. In section 54GB of the Income-tax Act, in sub-section (5),

section 54GB. in the proviso, for the figures “2021”, the figures “2022” shall be
substituted.
Amendment of 20. In section 55 of the Income-tax Act, in sub-section (2),

section 55. for clause (a), the following clause shall be substituted,
namely:––
“(a) in relation to a capital asset, being goodwill of a

business or profession, or a trade mark or brand name
associated with a business or profession, or a right to
manufacture, produce or process any article or thing, or right
to carry on any business or profession, or tenancy rights, or
stage carriage permits, or loom hours,—
(i) in the case of acquisition of such asset by the

assessee by purchase from a previous owner, means the
amount of the purchase price; and
(ii) in the case falling under sub-clauses (i) to (iv) of

sub-section (1) of section 49 and where such asset was
acquired by the previous owner (as defined in that
39
section) by purchase, means the amount of the purchase

price for such previous owner; and
(iii) in any other case, shall be taken to be nil:
Provided that where the capital asset, being goodwill

of a business or profession, in respect of which a
deduction on account of depreciation under sub-section
(1) of section 32 has been obtained by the assessee in any
previous year preceding the previous year relevant to the
assessment year commencing on or after the 1st day of
April, 2021, the provisions of sub-clauses (i) and (ii) shall
apply with the modification that the total amount of
depreciation obtained by the assessee under sub-section
(1) of section 32 before the assessment year commencing
on the 1st day of April, 2021 shall be reduced from the
amount of purchase price;”.
Amendment of 21. In section 56 the Income-tax Act, in sub-section (2), in

section 56. clause (x),––
(a) in sub-clause (b), in item (B), after the third proviso,

the following proviso shall be inserted, namely:––
“Provided also that in case of property being referred

to in the second proviso to sub-section (1) of section
43CA, the provisions of sub-item (ii) of item (B) shall
have effect as if for the words “ten per cent.”, the words
“twenty per cent.” had been substituted;”;
(b) in the proviso, in clause (IX) after the words, brackets

and figures “clause (vii)”, the words, brackets, figures and
letters “or clause (viiac) or clause (viiad)” shall be inserted
with effect from the 1st day of April, 2022.
Amendment of 22. In section 72A of the Income-tax Act, in sub-section

section 72A. (1),––
(i) for clause (c), the following clauses shall be

“(c) one or more public sector company or companies

with one or more public sector company or companies; or
(d) an erstwhile public sector company with one or

more company or companies, if the share purchase
agreement entered into under strategic disinvestment
restricted immediate amalgamation of the said public
sector company and the amalgamation is carried out
within five year from the end of the previous year in
40
which the restriction on amalgamation in the share

purchase agreement ends,”;
(ii) after the long line, the following shall be inserted,

namely:––
‘Provided that the accumulated loss and the

unabsorbed depreciation of the amalgamating company,
in case of an amalgamation referred to in clause (d),
which is deemed to be the loss or, as the case may be, the
allowance for unabsorbed depreciation of the
amalgamated company, shall not be more than the
accumulated loss and unabsorbed depreciation of the
public sector company as on the date on which the public
sector company ceases to be a public sector company as
a result of strategic disinvestment.
Explanation.––For the purposes of clause (d),––
(i) “control” shall have the same meaning as

assigned to in clause (27) of section 2 of the
Companies Act, 2013; 18 of 2013.
(ii) “erstwhile public sector company” means a

company which was a public sector company in
earlier previous years and ceases to be a public sector
company by way of strategic disinvestment by the
Government;
(iii) “strategic disinvestment” means sale of

shareholding by the Central Government or any State
Government in a public sector company which results
in reduction of its shareholding to below fifty-one per
cent. along with transfer of control to the buyer.’.
Amendment of 23. In section 79 of the Income-tax Act, in sub-section (2), after

section 79. clause (d), the following clause shall be inserted with effect from
the 1st day of April, 2022, namely:––
“(e) to a company to the extent that a change in the

shareholding has taken place during the previous year on
account of relocation referred to in the Explanation to clause
(viiac) and (viiad) of section 47.”.
Amendment of 24. In section 80EEA of the Income-tax Act, in sub-section

section 80EEA. (3), in clause (i), for the figures “2021”, the figures “2022” shall
be substituted with effect from the 1st day of April, 2022.
41
Amendment of 25. In section 80-IAC of the Income-tax Act, in the

section 80-IAC. Explanation, in clause (ii), in sub-clause (a), for the figures
“2021”, the figures “2022” shall be substituted.
Amendment of 26. In section 80-IBA of the Income-tax Act, with effect from
section 80-IBA. the 1st day of April, 2022,––
(a) after sub-section (1) , the following sub-section shall

“(1A) Where the gross total income of an assessee

includes any profits and gains derived from the business
of developing and building rental housing project, there
shall be allowed a deduction of an amount equal to
hundred per cent. of the profits and gains derived from
such business.”;
(b) in sub-section (2), in clause (a), for the figures “2021”,

the figures “2022”shall be substituted;
(c) in sub-section (6), after clause (d), the following

‘(da) “rental housing project” means a project which

is notified by the Central Government in the Official
Gazette under this clause on or before the 31st day of
March, 2022 and fulfils such conditions as may be
specified in the said notification;’.
Amendment of 27. In section 80LA of the Income-tax Act, with effect from the
section 80LA. 1st day of April, 2022,––
(i) in sub-section (1A), for the words “any other relevant

laws was obtained”, the words “permission or registration
under the International Financial Services Centre Authority
Act, 2019 was obtained” shall be substituted; 50 of 2019.
(ii) in sub-section (2), after clause (c), the following clause

“(d) arising from the transfer of an asset, being an

aircraft or aircraft engine, which was leased by a unit
referred to in clause (c) to a domestic company engaged
in the business of operation of aircraft, before such
transfer subject to condition that the unit has commenced
operation on or before the 31st day of March, 2024.”;
(iii) in sub-section (3), for clause (ii), the following clause

shall be substituted, namely:––
42
“(ii) a copy of the permission obtained under clause (a)

of sub-section (1) of section 23 of the Banking Regulation
Act, 1949 or copy of permission or registration obtained 10 of 1949.
under the International Financial Services Centre
50 of 2019.
Authority Act, 2019.”.
Insertion of new 28. After section 89 of the Income-tax Act, the following
section 89A. section shall be inserted with effect from the 1st day of April,
2022, namely:––
Relief from ‘89A. Where a specified person has income accrued in a

taxation in specified account, such income shall be taxed in such manner
income from
retirement
and in such year as may be prescribed.
benefit account
maintained in a
notified country.
Explanation.––For the purposes of this section,––
(a) “specified person” means a person resident in India

who opened a specified account in a notified country
while being non-resident in India and resident in that
country;
(b) “specified account” means an account maintained

in a notified country by the specified person in respect of
his retirement benefits and the income from such account
is not taxable on accrual basis but is taxed by such country
at the time of withdrawal or redemption;
(c) “notified country” means a country as may be

notified by the Central Government in the Official
Gazette for the purposes of this section.’.
Amendment of 29. In section 112A of the Income-tax Act, in the

section 112A. Explanation, in clause (a), in the opening portion, after the word
and figures “section 10”, the words, brackets, figures and letter
“or under a scheme of an insurance company comprising unit
linked insurance policies to which exemption under clause (10D)
of the said section does not apply on account of the applicability
of the fourth and fifth proviso thereof” shall be inserted.
Amendment of 30. In section 115AD of the Income-tax Act, with effect from
section 115AD. the 1st day of April, 2022,––
(i) in sub-section (1),––
(a) in the opening portion, after the words “a specified

fund”, the words “or investment division of an offshore
banking unit” shall be inserted;
43
(b) in clause (b), in sub-clause (i), in item (B), after the

words “of specified fund”, the words “or investment
division of an offshore banking unit” shall be inserted;
(ii) after sub-section (1A), the following sub-section shall

“(1B) Notwithstanding anything contained in sub-

section (1), in case of investment division of an offshore
banking unit, the provisions of this section shall apply to
the extent of income that is attributable to the investment
division of such banking units, referred to in sub-clause
(ii) of clause( c) to the Explanation to clause (4D) of
section 10, as a Category-III portfolio investor under the
Securities and Exchange Board of India (Foreign
Portfolio Investors) Regulations, 2019 made under the
Securities And Exchange Board of India Act, 1992, 15 of 1992.
calculated in such manner as may be prescribed.”;
(iii) in sub-section (2), after the words “the specified fund”

at both the places where they occur, the words “or investment
division of an offshore banking unit” shall be inserted;
(iv) in the Explanation, after clause (a), the following

clause shall be inserted, namely:–––
“(aa) the expression “investment division of offshore

banking unit” shall have the meaning assigned to it in
clause (aa) of the Explanation to clause (4D) of section
10;”.
Amendment of 31. In section 115JB of the Income-tax Act, in sub-section

section 115JB. (2),––
(a) in Explanation 1,––
(i) in clause (fb), in sub-clause (B), for the words

“interest, royalty”, the words “interest, dividend, royalty”
shall be substituted;
(ii) in the long line, in clause (iid), in sub-clause (B),

for the words “interest, royalty”, the words “interest,
dividend, royalty” shall be substituted;
(b) after sub-section (2C), the following sub-section

shall be inserted, namely: ──
44
“(2D) In the case of an assessee being a company,

where there is an increase in book profit of the previous
year due to income of past year or years included in the
book profit on account of an advance pricing agreement
entered into by the assessee under section 92CC or on
account of secondary adjustment required to be made
under section 92CE, the Assessing Officer shall, on an
application made to him in this behalf by the asssessee,
recompute the book profit of the past year or years and
tax payable, if any, by the assessee during the previous
year under sub-section (1), in such manner as may be
prescribed and the provisions of section 154 shall, so far
as may be, apply and the period of four years specified in
sub-section (7) of that section shall be reckoned from the
end of the financial year in which the said application is
received by the Assessing Officer.”.
Amendment 32. In section 139 of the Income-tax Act,––

of section
139.
(a) in sub-section (1), in Explanation 2,––
(i) in clause (a), in sub-clause (iii), after the words

“any other law for the time being in force”, the words,
figure and letter “or the spouse of such partner if the
provisions of section 5A applies to such spouse” shall be
inserted;
(ii) in clause (aa), after the words “an assessee”, the

words “, including the partners of the firm being such
assessee,” shall be inserted;
(b) in sub-section (4), for the words “return for any

previous year at any time before”, the words “a return for any
previous year at any time within three months prior to” shall
be substituted;
(c) in sub-section (5), for the words “he may furnish a

revised return at any time”, the words “he may furnish a
revised return at any time within three months” shall be
substituted;
(d) in sub-section (9), in the Explanation, the following

“Provided that the Board may, by notification in the

Official Gazette, specify that any of the conditions
specified in clauses (a) to (f) to the Explanation shall not
apply to such class of assessees or shall apply with such
modifications, as may be specified in such notification.”.
45
Amendment 33. In section 142 of the Income-tax Act, in sub-section (1),

of section in clause (i), after the existing proviso, the following proviso shall
142.
“Provided further that a notice under this sub-section for

the purposes of this clause may also be served by the
prescribed income-tax authority,”.
Amendment of 34. In section 143 of the Income-tax Act,—

section 143.
(i) in the second proviso, for the words “one year”,

the words “nine months” shall be substituted;
(ii) in clause (a),––
(I) in sub-clause (iv), for the words “disallowance

of expenditure indicated”, the words “disallowance of
expenditure or increase in income indicated” shall be
substituted;
(II) in sub-clause (v), for the words, figures and

letters “sections 10AA, 80-IA, 80-IAB, 80-IB, 80-IC,
80-ID or section 80-IE, if”, the words, figures and
letters ‘section 10AA or under any of the provisions
of Chapter VI-A under the heading “C.-Deductions in
respect of certain incomes”, if’ shall be substituted;
(b) in sub-section (2), in the proviso, for the word “six”,

the word “three” shall be substituted.
Substitution of 35. For section 147 of the Income-tax Act, the following
new section for section shall be substituted, namely:—
section 147.
Income escaping “147. If any income chargeable to tax, in the case of an
assessment. assessee, has escaped assessment for any assessment year, the
Assessing Officer may, subject to the provisions of sections
148 to 153, assess or reassess such income or recompute the
loss or the depreciation allowance or any other allowance or
deduction for such assessment year (hereafter in this section
and in sections 148 to 153 referred to as the relevant
assessment year).
Explanation.—For the purpose of assessment or

reassessment under this section, the Assessing Officer may
assess or reassess the income in respect of any issue, which
has escaped assessment, and such issue comes to his notice
46
subsequently in the course of the proceedings under this

section, irrespective of the fact that the provisions of section
148A have not been complied with.”.
section 148.
Issue of notice “148. Before making the assessment, reassessment or
where income recomputation under section 147, and subject to the
has escaped
assessment.
provisions of section 148A, the Assessing Officer shall serve
on the assessee a notice, along with a copy of the order
passed, if required, under clause (d) of section 148A,
requiring him to furnish within such period, as may be
specified in such notice, a return of his income or the income
of any other person in respect of which he is assessable under
this Act during the previous year corresponding to the
relevant assessment year, in the prescribed form and verified
in the prescribed manner and setting forth such other
particulars as may be prescribed; and the provisions of this
Act shall, so far as may be, apply accordingly as if such return
were a return required to be furnished under section 139:
Provided that no notice under this section shall be issued

unless there is information with the Assessing Officer which
suggests that the income chargeable to tax has escaped
assessment in the case of the assessee for the relevant
assessment year and the Assessing Officer has obtained prior
approval of the specified authority to issue such notice.
Explanation 1.—For the purposes of this section and

section 148A, the information with the Assessing Officer
which suggests that the income chargeable to tax has escaped
assessment means,—
(i) any information flagged in the case of the assessee

for the relevant assessment year in accordance with the
risk management strategy formulated by the Board from
time to time;
(ii) any final objection raised by the Comptroller and

Auditor General of India to the effect that the assessment
in the case of the assessee for the relevant assessment year
has not been made in accordance with the provisions of
this Act.
Explanation 2.—For the purposes of this section,

where,—
(i) a search is initiated under section 132 or books of

account, other documents or any assets are requisitioned
47
under section 132A, on or after the 1st day of April, 2021,

in the case of the assessee; or
(ii) a survey is conducted under section 133A in the

case of the assessee on or after the 1st day of April, 2021;
or
(iii) the Assessing Officer is satisfied, with the prior

approval of the Principal Commissioner or
Commissioner, that any money, bullion, jewellery or
other valuable article or thing, seized or requisitioned in
case of any other person on or after the 1st day of April,
2021, belongs to the assessee; or
(iv) the Assessing Officer is satisfied, with the prior

approval of Principal Commissioner or Commissioner,
that any books of account or documents, seized or
requisitioned in case of any other person on or after the
1st day of April, 2021, pertains or pertain to, or any
information contained therein, relate to, the assessee,
the Assessing Officer shall be deemed to have information

which suggests that the income chargeable to tax has escaped
assessment in the case of the assessee for the three assessment
years immediately preceding the assessment year relevant to
the previous year in which the search is initiated or books of
account, other documents or any assets are requisitioned or
survey is conducted in the case of the assessee or money,
bullion, jewellery or other valuable article or thing or books
of account or documents are seized or requisitioned in case of
any other person.
Explanation.3—For the purposes of this section,

specified authority means the specified authority referred to
in section 151.”.
Insertion of new 37. After section 148 of the Income-tax Act, the following
section 148A. section shall be inserted, namely:—
Conducting “148A. The Assessing Officer shall, before issuing any

inquiry, notice under section 148, —
providing
opportunity
before issue of
notice under
section 148.
(a) conduct any enquiry, if required, with the prior

approval of specified authority, with respect to the
information which suggests that the income chargeable to
tax has escaped assessment;
48
(b) provide an opportunity of being heard to the

assessee, with the prior approval of specified authority, by
serving upon him a notice to show cause within such time,
as may be specified in the notice, being not less than seven
days and but not exceeding thirty days from the date on
which such notice is issued, or such time, as may be
extended by him on the basis of an application in this
behalf, as to why a notice under section 148 should not be
issued on the basis of information which suggests that
income chargeable to tax has escaped assessment in his
case for the relevant assessment year and results of
enquiry conducted, if any, as per clause (a);
(c) consider the reply of assessee furnished, if any, in

response to the show-cause notice referred to in clause
(b);
(d) decide, on the basis of material available on record

including reply of the assessee, whether or not it is a fit
case to issue a notice under section 148, by passing an
order, with the prior approval of specified authority,
within one month from the end of the month in which the
reply referred to in clause (c) is received by him, or where
no such reply is furnished, within one month from the end
of the month in which time or extended time allowed to
furnish a reply as per clause (b) expires:
Provided that the provisions of this section shall not

apply in a case where,—
(a) a search is initiated under section 132 or books

of account, other documents or any assets are
requisitioned under section 132A in the case of the
assessee on or after the 1st day of April, 2021; or
(b) the Assessing Officer is satisfied, with the

prior approval of the Principal Commissioner or
Commissioner that any money, bullion, jewellery or
other valuable article or thing, seized in a search under
section 132 or requisitioned under section 132A, in
the case of any other person on or after the 1st day of
April, 2021, belongs to the assessee; or
(c) the Assessing Officer is satisfied, with the

prior approval of the Principal Commissioner or
Commissioner that any books of account or
documents, seized in a search under section 132 or
requisitioned under section 132A, in case of any other
person on or after the 1st day of April, 2021, pertains
49
or pertain to, or any information contained therein,

relate to, the assessee.
Explanation.—For the purposes of this section,

specified authority means the specified authority referred
to in section 151.”.
new section for section shall be substituted, namely:––
section 149.
Time limit for “149. (1) No notice under section 148 shall be issued for
notice. the relevant assessment year,—
(a) if three years have elapsed from the end of the

relevant assessment year, unless the case falls under
clause (b);
(b) if three years, but not more than ten years, have
elapsed from the end of the relevant assessment year
unless the Assessing Officer has in his possession books
of accounts or other documents or evidence which reveal
that the income chargeable to tax, represented in the form
of asset, which has escaped assessment amounts to or is
likely to amount to fifty lakh rupees or more for that year:
Provided that no notice under section 148 shall be

issued at any time in a case for the relevant assessment
year beginning on or before 1st day of April, 2021, if such
notice could not have been issued at that time on account
of being beyond the time limit specified under the
provisions of clause (b) of sub-section (1) of this section,
as they stood immediately before the commencement of
the Finance Act, 2021:
Provided further that the provisions of this sub-section

shall not apply in a case, where a notice under section
153A, or section 153C read with section 153A, is required
to be issued in relation to a search initiated under section
132 or books of account, other documents or any assets
requisitioned under section 132A, on or before the 31st
day of March, 2021:
Provided also that for the purposes of computing the

period of limitation as per this section, the time or
extended time allowed to the assessee, as per show-cause
notice issued under clause (b) of section 148A or the
period during which the proceeding under section 148A
is stayed by an order or injunction of any court, shall be
excluded:
50
Provided also that where immediately after the

exclusion of the period referred to in the immediately
preceding proviso, the period of limitation available to the
Assessing Officer for passing an order under clause (d) of
section 148A is less than seven days, such remaining
period shall be extended to seven days and the period of
limitation in sub-section (1) shall be deemed to be
extended accordingly.
(2) The provisions of sub-section (1) as to the issue of

notice shall be subject to the provisions of section 151.”.
section 151.
Sanction for “151. Specified authority for the purposes of section 148
issue of notice. and section 148A shall be,—
(i) Principal Commissioner or Principal Director or

Commissioner or Director, if three years or less than three
years have elapsed from the end of the relevant
assessment year;
(ii) Principal Chief Commissioner or Principal

Director General or where there is no Principal Chief
Commissioner or Principal Director General, Chief
Commissioner or Director General, if more than three
years have elapsed from the end of the relevant
assessment year.”.
Amendment of 40. In section 151A of the Income-tax Act, in sub-section (1),

section 151A. in the opening portion, after the words and figures “issuance of
notice under section 148”, the words, figures and letter “or
conducting of enquiries or issuance of show-cause notice or
passing of order under section 148A” shall be inserted.
Amendment of 41. In section 153 of the Income-tax Act, in sub-section (1),

section 153. after the second proviso, the following proviso shall be inserted,
namely:––
“Provided also that in respect of an order of assessment

relating to the assessment year commencing on or after the
1st day of April, 2021, the provisions of this sub-section shall
have effect, as if for the words “twenty-one months”, the
words “nine months” had been substituted.”.

section 153A. in the opening portion, after the words, figures and letters “after
the 31st day of May, 2003”, the words, figures and letters “but on
or before the 31st day of March, 2021” shall be inserted.
51
Amendment of 43. In section 153C of the Income-tax Act, after sub-section

section 153C. (2), the following sub-section shall be inserted, namely:—
“(3) Nothing contained in this section shall apply in

relation to a search initiated under section 132 or books of
account, other documents or any assets requisitioned under
section 132A on or after the 1st day of April, 2021.”.
Amendment of 44. In section 194 of the Income-tax Act, in the second

section 194. proviso, after clause (c), the following clauses shall be inserted
and shall be deemed to have been inserted with effect from the
1st day of April, 2020, namely:––
‘(d) a “business trust”, as defined in clause (13A) of

section 2, by a special purpose vehicle referred to in the
Explanation to clause (23FC) of section 10;
(e) any other person as may be notified by the Central

Government in the Official Gazette in this behalf.’.

section 194A. in clause (x), after the words “infrastructure capital fund or”, the
words “infrastructure debt fund or” shall be inserted.
Amendment of 46. In section 194-IB of the Income-tax Act, in sub-section

section 194-IB. (4), for the words, figures and letters “section 206AA, such”, the
words, figures and letters “section 206AA or section 206AB,
such” shall be substituted with effect from the 1st day of July,
2021.
Insertion of new 47. After section 194-O of the Income-tax Act, the following
section 194P. section shall be inserted, namely:––
Deduction of tax ‘194P. (1) Notwithstanding anything contained in the

in case of provisions of Chapter XVII-B, in case of a specified senior
specified senior
citizen.
citizen, the specified bank shall, after giving effect to the
deduction allowable under Chapter VI-A and rebate
allowable under section 87A, compute the total income of
such specified senior citizen for the relevant assessment year
and deduct income-tax on such total income on the basis of
the rates in force.
(2) The provisions of section 139 shall not apply to a

specified senior citizen for the assessment year relevant to the
previous year in which the tax has been deducted under sub-
section (1).
Explanation.–– For the purposes of this section,––

52
(a) “specified bank” means a banking company as the

Central Government may, by notification in Official
Gazette, specify;
(b) “specified senior citizen” means an individual,

being a resident in India––
(i) who is of the age of seventy-five years or more

at any time during the previous year;
(ii) who is having income of the nature of pension

and no other income except the income of the nature
of interest received or receivable from any account
maintained by such individual in the same specified
bank in which he is receiving his pension income; and
(iii) has furnished a declaration to the specified

bank containing such particulars, in such form and
verified in such manner, as may be prescribed.’.
Insertion of new 48. After section 194P of the Income-tax Act, the following
section 194Q. section shall be inserted with effect 1st day of July, 2021,
namely:––
Deduction of tax ‘194Q. (1) Any person, being a buyer who is responsible
at source on for paying any sum to any resident (hereafter in this section
payment of
certain sum for
referred to as the seller) for purchase of any goods of the value
purchase of or aggregate of such value exceeding fifty lakh rupees in any
goods. previous year, shall, at the time of credit of such sum to the
account of the seller or at the time of payment thereof by any
mode, whichever is earlier, deduct an amount equal to 0.1 per
cent. of such sum exceeding fifty lakh rupees as income-tax.
Explanation.––For the purposes of this sub-section,

“buyer” means a person whose total sales, gross receipts or
turnover from the business carried on by him exceed ten crore
rupees during the financial year immediately preceding the
financial year in which the purchase of goods is carried out,
not being a person, as the Central Government may, by
notification in the Official Gazette, specify for this purpose,
subject to such conditions as may be specified therein.
(2) Where any sum referred to in sub-section (1) is

credited to any account, whether called “suspense account” or
by any other name, in the books of account of the person liable
to pay such income, such credit of income shall be deemed to
be the credit of such income to the account of the payee and
the provisions of this section shall apply accordingly.
53
(3) If any difficulty arises in giving effect to the provisions

of this section, the Board may, with the previous approval of
the Central Government, issue guidelines for the purpose of
removing the difficulty.
(4) Every guideline issued by the Board under sub-section

(3) shall, as soon as may be after it is issued, be laid before
each House of Parliament, and shall be binding on the income-
tax authorities and the person liable to deduct tax.
(5) The provisions of this section shall not apply to a

transaction on which––
(a) tax is deductible under any of the provisions of this

Act; and
(b) tax is collectible under the provisions of section

206C other than a transaction to which sub-section (1H) of
section 206C applies.’.
Amendment of 49. In section 196D of the Income-tax Act, in sub-section (1),

section 196D. the following proviso shall be inserted, namely:––
“Provided that where an agreement referred to in sub-

section (1) of section 90 or sub-section (1) of section 90A
applies to the payee and if the payee has furnished a certificate
referred to in sub-section (4) of section 90 or sub-section (4)
of section 90A, as the case may be, then, income-tax thereon
shall be deducted at the rate of twenty per cent. or at the rate
or rates of income-tax provided in such agreement for such
income, whichever is lower.”.
Amendment of 50. In section 206AA of the Income-tax Act, in sub-section

section 206AA. (1), after the proviso, the following proviso shall be inserted with
effect from the 1st day of July, 2021, namely:––
‘Provided further that where the tax is required to be

deducted under section 194Q, the provisions of clause (iii)
shall apply as if for the words “twenty per cent.”, the words
“five per cent.” had been substituted.’.
Insertion of new 51. After section 206AA of the Income-tax Act, the following
section 206AB. section shall be inserted with effect from the 1st day of July, 2021,
namely:––
Special ‘206AB. (1) Notwithstanding anything contained in any

provision for other provisions of this Act, where tax is required to be
deduction of tax
at source for
deducted at source under the provisions of Chapter XVIIB,
non-filers of other than sections 192, 192A, 194B, 194BB, 194LBC or
194N on any sum or income or amount paid, or payable or
54
income-tax credited, by a person (hereafter referred to as deductee) to a

return. specified person, the tax shall be deducted at the higher of the
following rates, namely:––
(i) at twice the rate specified in the relevant provision

of the Act; or
(ii) at twice the rate or rates in force; or
(iii) at the rate of five per cent..
(2) If the provisions of section 206AA is applicable to a

specified person, in addition to the provision of this section,
the tax shall be deducted at higher of the two rates provided
in this section and in section 206AA.
(3) For the purposes of this section “specified person”

means a person who has not filed the returns of income for
both of the two assessment years relevant to the two previous
years immediately prior to the previous year in which tax is
required to be deducted, for which the time limit of filing
return of income under sub-section (1) of section 139 has
expired; and the aggregate of tax deducted at source and tax
collected at source in his case is rupees fifty thousand or more
in each of these two previous years:
Provided that the specified person shall not include a non-

resident who does not have a permanent establishment in
India.
Explanation.––For the purposes of this sub-section, the

expression “permanent establishment” includes a fixed place
of business through which the business of the enterprise is
wholly or partly carried on.’.
Insertion of new 52. After section 206CC of the Income-tax Act, the following
section section shall be inserted with effect from the 1st day of July, 2021,
206CCA.
namely:––
Special ‘206CCA. (1) Notwithstanding anything contained in any

provision for other provisions of this Act, where tax is required to be
collection of tax
at source for
collected at source under the provisions of Chapter XVII-BB,
non-filers of on any sum or amount received by a person (hereafter referred
income-tax to as collectee) from a specified person, the tax shall be
return. collected at the higher of the following two rates, namely:––
(i) at twice the rate specified in the relevant provision

of the Act; or
(ii) at the rate of five per cent.

55
(2) If the provisions of section 206CC is applicable to a

specified person, in addition to the provisions of this section,
the tax shall be collected at higher of the two rates provided
in this section and in section 206CC.
(3) For the purposes of this section “specified person”

means a person who has not filed the returns of income for
both of the two assessment years relevant to the two previous
years immediately prior to the previous year in which tax is
required to be collected, for which the time limit of filing
return of income under sub-section (1) of section 139 has
expired; and the aggregate of tax deducted at source and tax
collected at source in his case is rupees fifty thousand or more
in each of these two previous years:
Provided that the specified person shall not include a non-

resident who does not have a permanent establishment in
India.
Explanation.––For the purposes of this sub-section, the

expression “permanent establishment” includes a fixed place
of business through which the business of the enterprise is
wholly or partly carried on.’.
Amendment 53. In section 234C of the Income-tax Act, in sub-section

of section (1),––
234C.
(i) in the first proviso, for clause (d), the following

clause shall be substituted, namely:––
“(d) the amount of dividend income,”;
(ii) the Explanation shall be numbered as Explanation 1

thereof and after Explanation 1 as so numbered, the
following Explanation shall be inserted, namely: ––
‘Explanation 2.––For the purposes of this sub-section,

the term “dividend” shall have the meaning assigned to it in
clause (22) of section 2, but shall not include sub-clause (e)
thereof.’.
Amendment of 54. In section 245A of the Income-tax Act, with effect from
section 245A. the 1st day of February, 2021,––
(i) after clause (d), the following clause shall be inserted

and shall be deemed to have been inserted, namely:––
‘(da) “Interim Board” means the Interim Board for

Settlement constituted under section 245AA;’;
56
(ii) after the clause (e), the following clauses shall be

inserted and shall be deemed to have been inserted,
namely:––
‘(ea) “Member of the Interim Board” means a

Member of the Interim Board;
(eb) “pending application” means an application

which was filed under section 245C and which fulfils the
following conditions, namely: —
(i) it was not declared invalid under sub-section

(2C) of section 245D; and
(ii) no order under sub-section (4) of section 245D

was issued on or before the 31st day of January, 2021
with respect to such application;’.
Insertion of new 55. After section 245A of the Income-tax Act, the following
section 245AA. section shall be inserted and shall be deemed to have been
inserted with effect from the 1st day of February, 2021,
namely:––
Interim Boards “245AA. (1) The Central Government shall constitute

for Settlement. one or more Interim Boards for Settlement, as may be
necessary, for the settlement of pending applications.
(2) Every Interim Board shall consist of three members,

each being an officer of the rank of Chief Commissioner, as
may be nominated by the Board.”.
(3) If the Members of the Interim Board differ in opinion

on any point, the point shall be decided according to the
opinion of the majority.”.
Amendment of 56. In section 245B of the Income-tax Act, in sub-section (1),

section 245B. the following proviso shall be inserted and shall be deemed to
have been inserted with effect from the 1st day of February, 2021,
namely:––
“Provided that the Income-tax Settlement Commission so

constituted shall cease to operate on or after the 1st day of
February, 2021.”.
Amendment of 57. In section 245BC of the Income-tax Act, the following

section 245BC. proviso shall be inserted and shall be deemed to have been
namely:––
57
“Provided that the provisions of this section shall not

apply on or after the 1st day of February, 2021.”.
Amendment of 58. In section 245BD of the Income-tax Act, the following

section 245BD. proviso shall be inserted and shall be deemed to have been
inserted, with effect from the 1st day of February, 2021,
namely:––
“Provided that the provisions of this section shall not

apply on or after the 1st day of February, 2021.”.
Amendment of 59. In section 245C of the Income-tax Act, after sub-

section 245C. section (4), the following sub-section shall be inserted and shall
be deemed to have been inserted with effect from the 1st day of
February, 2021, namely:––
“(5) No application shall be made under this section on or

after the 1st day of February, 2021.”.
Amendment of 60. In section 245D of the Income-tax Act, with effect from
section 245D. the 1st day of February, 2021,––
(i) in sub-section (2C), after the second proviso, the

following proviso shall be inserted and shall be deemed to
have been inserted, namely:––
“Provided also that where in respect of an application,

an order, which was required to be passed under this sub-
section on or before the 31st day of January, 2021, has
not been passed on or before the 31st day of January,
2021, such application shall deemed to be valid.”;
(ii) in sub-section (6B), for the words “amend any order

passed by it”, the words “amend any order passed” shall be
substituted and shall be deemed to have been substituted;
(iii) after sub-section (8), the following sub-sections shall

be inserted and shall be deemed to have been inserted,
namely:––
‘(9) On and from the 1st day of February, 2021, the

provisions of sub-sections (1), (2), (2B), (2C), (3), (4),
(4A), (5), (6) and (6B) shall apply to pending applications
allotted to Interim Board with the following
modifications, namely:––
(i) for the words “Settlement Commission”,

wherever they occur, the words “Interim Board” shall
be substituted;
58
(ii) for the word “Bench”, the words “Interim

Board” shall be substituted;
(iii) for the purposes of this section, the date

referred to in sub-section (2) of section 245M shall be
deemed to be date on which the application was made
under section 245C and received by the Interim
Board;
(iv) where the time-limit for amending any order

or filing of rectification application as per sub-section
(6B) expires on or after the 1st day of February, 2021,
in computing the period of limitation, the period
commencing from the 1st February, 2021 and ending
on the end of the month in which the Interim Board
is constituted shall be excluded and where
immediately after exclusion of such period, the
remaining period available to the Interim Board for
amending the order or to the Principal Commissioner
or Commissioner or the applicant for filing of
application is less than sixty days, such remaining
period shall be extended to sixty days and the period
of limitation shall be deemed to have been extended
accordingly.
(10) On and from the 1st day of February, 2021, the

provisions of sub-sections (6A) and (7) shall have effect as if
for the words “Settlement Commission”, the words
“Settlement Commission or Interim Board of Settlement”
had been substituted.
(11) The Central Government may by notification in the

Official Gazette, make a scheme, for the purposes of
settlement in respect of pending applications by the Interim
Board, so as to impart greater efficiency, transparency and
accountability by—
(a) eliminating the interface between the Interim

Board and the assessee in the course of proceedings to the
extent technologically feasible;
(b) optimising utilisation of the resources through

economies of scale and functional specialisation;
(c) introducing a mechanism with dynamic

jurisdiction.
(12) The Central Government may, for the purposes of

giving effect to the scheme made under sub-section (11), by
notification in the Official Gazette, direct that any of the
59
provisions of this Act shall not apply or shall apply with such
exceptions, modifications and adaptations as may be
specified in the said notification:
Provided that no such direction shall be issued after the

31st day of March, 2023.
(13) Every notification issued under sub-section (11) and

sub-section (12) shall, as soon as may be after the notification
is issued, be laid before each House of Parliament.”.
Amendment of 61. In section 245DD of the Income-tax Act, after sub-section

section 245DD. (2), the following sub-section shall be inserted and shall be
deemed to have been inserted with effect from the 1st day of
“(3) On and from the 1st day of February, 2021, the power
of the Settlement Commission under this section shall be
exercised by the Interim Board and the provisions of this
section shall mutatis mutandis apply to the Interim Board as
they apply to the Settlement Commission.”.
Amendment of 62. In section 245F of the Income-tax Act, after sub-section

section 245F. (7), the following sub-section shall be inserted and shall be
“(8) On and from the 1st day of February, 2021, the

powers and functions of the Settlement Commission under
this section shall be exercised or performed, by the Interim
Board and all the provisions of this section shall mutatis
mutandis apply to the Interim Board as they apply to the
Settlement Commission.”.
Amendment of 63. In section 245G of the Income-tax Act, after the first
section 245G. proviso, the following proviso shall be inserted and shall be
“Provided further that on or after the 1st day of February,

2021, functions of the Settlement Commission under this
section shall be performed by the Interim Board and the
provisions of this section shall mutatis mutandis apply to
Interim Board as they apply to the Settlement Commission.”.
Amendment of 64. In section 245H of the Income-tax Act, after sub-section

section 245H. (2), the following sub-section shall be inserted and shall be
60
“(3) On and from the 1st day of February, 2021, the power
of the Settlement Commission under this section shall be
exercised by the Interim Board and the provisions of this
section shall mutatis mutandis apply to the Interim Board as
they apply to the Settlement Commission.”.
Insertion of new 65. In the Income-tax Act, after section 245L, the following
section 245M. section shall be inserted and shall be deemed to have been
namely:––
Option to “245M. (1) With respect to a pending application, the

withdraw assessee who had filed such application may, at his option,
pending
application.
withdraw such application within a period of three months
from the date of commencement of the Finance Act, 2021 and
intimate the Assessing Officer, in the prescribed manner,
about such withdrawal.
(2) Where the option under sub-section (1) is not

exercised by the assessee within the time allowed under that
sub-section, the pending application shall be deemed to have
been received by the Interim Board on the date on which such
application is allotted or transferred to the Interim Board
under sub-section (3).
(3) The Board may, by an order, allot any pending

application to any Interim Board and may also transfer, by an
order, any pending application from one Interim Board to
another Interim Board.
(4) Where the pending application is allotted to an Interim

Board under sub-section (3) or transferred to another Interim
Board subsequently, all the records, documents or evidences,
by whatever name called, with the Settlement Commission
shall be transferred to such Interim Board and shall be
deemed to be the records before it for all purposes.
(5) Where the assessee exercises the option under sub-

section (1) to withdraw his application, the proceedings with
respect to the application shall abate on the date on which
such application is withdrawn and the Assessing Officer, or,
as the case may be, any other income-tax authority before
whom the proceeding at the time of making the application
was pending, shall dispose of the case in accordance with the
provisions of this Act as if no application under section 245C
had been made:
Provided that for the purposes of the time-limit under

sections 149, 153, 153B, 154 and 155 and for the purposes of
payment of interest under section 243 or 244 or, as the case
61
may be, section 244A, for making the assessment or re-

assessment under this sub-section, the period commencing on
and from the date of the application to the Settlement
Commission under section 245C and ending with the date
referred to in this sub-section shall be excluded:
Provided further that the income-tax authority shall not

be entitled to use the material and other information produced
by the assessee before the Settlement Commission or the
results of the inquiry held or evidence recorded by the
Settlement Commission in the course of proceedings before
it:
Provided also that nothing contained in the first proviso

shall apply in relation to the material and other information
collected, or results of the inquiry held or evidence recorded
by the Assessing Officer, or as the case may be, other income-
tax authority during the course of any other proceeding under
this Act irrespective of whether such material or other
information or results of the inquiry or evidence were also
produced by the assessee or the Assessing Officer before the
Settlement Commission.”.
Insertion of new 66. After Chapter XIX-A of the Income-tax Act, the following
Chapter XIX- Chapter shall be inserted, with effect from the 1st day of April,
AA.
2021, namely: —
‘CHAPTER XIX-AA
DISPUTE RESOLUTION COMMITTEE IN CERTAIN

CASES
Dispute 245MA. (1) The Central Government shall constitute, one

Resolution or more Dispute Resolution Committees, as may be necessary,
Committee.
in accordance with the rules made under this Act, for dispute
resolution in the case of such persons or class of persons, as
may be specified by the Board, who may opt for dispute
resolution under this Chapter in respect of dispute arising from
any variation in the specified order in his case and who fulfils
the specified conditions.
(2) The Dispute Resolution Committee, subject to such

conditions, as may be prescribed, shall have the powers to
reduce or waive any penalty imposable under this Act or grant
immunity from prosecution for any offence punishable under
this Act in case of a person whose dispute is resolved under
this Chapter.
(3) The Central Government may make a scheme, by

notification in the Official Gazette, for the purposes of dispute
62
resolution under this Chapter, so as to impart greater

efficiency, transparency and accountability by—
(a) eliminating the interface between the Dispute

Resolution Committee and the assessee in the course of
dispute resolution proceedings to the extent
technologically feasible;

(c) introducing a dispute resolution system with

dynamic jurisdiction.

in the said notification:

(5) Every notification issued under sub-sections (3) and

(4) shall, as soon as may be after the notification is issued, be
laid before each House of Parliament.
Explanation.— For the purposes of this section,—
(a) “specified conditions” in relation to a person means

a person who fulfils the following conditions, namely:—
(I) where he is not a person,—
(A) in respect of whom an order of detention

has been made under the provisions of the
Conservation of Foreign Exchange and Prevention 52 of 1974.
of Smuggling Activities Act, 1974:
Provided that—
(i) such order of detention, being an order

to which the provisions of section 9 or section
12A of the said Act do not apply, has been
revoked on the report of the Advisory Board
under section 8 of the said Act or before the
receipt of the report of the Advisory Board; or
63
(ii) such order of detention being an order

to which the provisions of section 9 of the said
Act apply, has not been revoked before the
expiry of the time for, or on the basis of, the
review under sub-section (3) of section 9, or on
the report of the Advisory Board under section
8, read with sub-section (2) of section 9, of the
said Act; or
(iii) such order of detention, being an order

to which the provisions of section 12A of the
said Act apply, has not been revoked before the
expiry of the time for, or on the basis of, the
first review under sub-section (3) of the said
section, or on the basis of the report of the
Advisory Board under section 8, read with sub-
section (6) of section 12A, of the said Act; or
(iv) such order of detention has not been set

aside by a court of competent jurisdiction;
(B) in respect of whom prosecution for any

offence punishable under the provisions of the
Indian Penal Code, the Unlawful Activities 45 of 1860.
(Prevention) Act, 1967, the Narcotic Drugs and 37 of 1967.
Psychotropic Substances Act, 1985, the 61 of 1985.
Prohibition of Benami Transactions Act, 1988, the 45 of 1988.
Prevention of Corruption Act, 1988 or the 49 of 1988.
Prevention of Money Laundering Act, 2002 has 15 of 2003.
been instituted and he has been convicted of any
offence punishable under any of those Acts;
(C) in respect of whom prosecution has been

initiated by an income-tax authority for any
offence punishable under the provisions of this Act
or the Indian Penal Code or for the purpose of 45 of 1860.
enforcement of any civil liability under any law for
the time being in force, or such person has been
convicted of any such offence consequent upon the
prosecution initiated by an Income-tax authority;
(D) who is notified under section 3 of the

Special Court (Trial of Offences Relating to
27 of 1962.
Transactions in Securities) Act, 1992;
(II) such other conditions, as may be prescribed.
(b) “specified order” means such order, including draft

order, as may be specified by the Board, and,—
64
(i) aggregate sum of variations proposed or made

in such order does not exceed ten lakh rupees;
(ii) such order is not based on search initiated

under section 132 or requisition under section 132A in
the case of assessee or any other person or survey
under section 133A or information received under an
agreement referred to in section 90 or section 90A;
(iii) where return has been filed by the assessee for

the assessment year relevant to such order, total
income as per such return does not exceed fifty lakh
rupees.’.
Amendment 67. In section 245N of the Income-tax Act,––

of section
245N.
(i) in clause (b), sub-clauses (B), (C) and (D) shall be
omitted with effect from such date as the Central
Government may, by notification in the Official Gazette,
appoint;
(ii) in clause (c), after the word “Authority”, the words

“or the Board for Advance Rulings” shall be inserted;
(iii) after clause (c), the following clause shall be

inserted, namely:—
‘(ca) “Board for Advance Rulings” means the Board

for Advance Rulings constituted by the Central
Government under section 245-OB;’;
(iv) in clause (f), after the word “Vice-Chairman”, the

words “or a Member of the Board for Advance Rulings”
shall be inserted.
Amendment of 68. In section 245-O of the Income-tax Act, in sub-section

section 245-O. (1), after the proviso, the following proviso shall be inserted,
namely:—
“Provided further that the Authority so constituted shall

cease to operate on and from such date as the Central
appoint.”.
Insertion of new 69. After section 245-OA of the Income-tax Act, the
section following section shall be inserted, namely:—
245-OB.
Board for “245-OB. (1) The Central Government shall constitute
Advance one or more Boards for Advance Rulings, as may be
Rulings.
necessary, for giving advance rulings under this Chapter on
65
or after such date as the Central Government may, by

notification in the Official Gazette, appoint.
(2) The Board for Advance Rulings shall consist of two

members, each being an officer not below the rank of Chief
Commissioner, as may be nominated by the Board.”.
Amendment 70. Section 245P of the Income-tax Act shall be numbered

of section as sub-section (1) thereof, and after sub-section (1) as so
245P.
numbered, the following sub-section shall be inserted,
namely:––
“(2) With effect from such date as the Central

appoint, the provisions of this section shall have effect as if
for the word “Authority”, the words “Board for Advance
Rulings” had been substituted.”.
Amendment 71. In section 245Q of the Income-tax Act,—

of section
245Q.
(a) in sub-section (1), the words, figures and letters “or

under Chapter IIIA of the Central Excise Act, 1944 or under 1 of 1944.
Chapter VA of the Finance Act, 1994” shall be omitted with 32 of 1994.
effect from such date as the Central Government may, by
notification in the Official Gazette, appoint;
(b) after sub-section (3), the following sub-section shall

be inserted, namely:—
“(4) Where an application is made under this section

before such date as the Central Government may, by
notification in the Official Gazette appoint, and in
respect of which no order under sub-section (2) of
section 245R has been passed or advance ruling under
sub-section (4) of section 245R has been pronounced
before such date, such application along with all the
relevant records, documents or material, by whatever
name called, on the file of the Authority shall be
transferred to the Board for Advance Rulings and shall
be deemed to be the records before the Board for
Advance Rulings for all purposes.”.
Amendment 72. In section 245R of the Income-tax Act, after sub-

of section section (7), the following sub-sections shall be inserted,
245R.
namely:—
‘(8) On and from such date as the Central Government

may, by notification in the Official Gazette, appoint, the
provisions of this section shall have effect as if for the word
66
“Authority”, the words “Board for Advance Rulings” had

been substituted and the provisions of this section shall
apply mutatis mutandis to the Board for Advance Rulings as
they apply to the Authority.
(9) The Central Government may, by notification in the

Official Gazette, make a scheme for the purposes of giving
advance rulings under this Chapter by the Board for
Advance Rulings, so as to impart greater efficiency,
transparency and accountability by—
(a) eliminating the interface between the Board for

Advance Rulings and the applicant in the course of
proceedings to the extent technologically feasible;

(c) introducing a system with dynamic jurisdiction.



sub-section (10) shall, as soon as may be after the
notification is issued, be laid before each House of
Parliament.’.
Amendment 73. In section 245S of the Income-tax Act, after sub-

of section section (2), the following sub-section shall be inserted, namely:—
245S.
“(3) Nothing contained in this section shall apply to any

advance ruling pronounced under section 245R on or after
such date as the Central Government may, by notification in
the Official Gazette, appoint.”.
Amendment 74. In section 245T of the Income-tax Act,—

of section
245T.
(a) in sub-section (1), the words “by it” shall be omitted;
(b) after sub-section (2), the following sub-section shall

67
‘(3) With effect from such date as the Central

appoint, the provisions of this section shall have effect
as if for the word “Authority”, the words “Board for
Advance Rulings” had been substituted.’.
Amendment 75. In section 245U of the Income-tax Act, after sub-section

of section (2), the following sub-section shall be inserted, namely:—
245U.
“(3) On and from such date as the Central Government

may, by notification in the Official Gazette, appoint, the
powers of the Authority under this section shall be exercised
by the Board for Advance Rulings and the provisions of this
section shall mutatis mutandis apply to the Board for
Advance Rulings as they apply to the Authority.”.
Amendment 76. In section 245V of the Income-tax Act, the following

of section proviso shall be inserted, namely:—
245V.
“Provided that nothing contained in this section shall

apply on or after such date as the Central Government may,
by notification in the Official Gazette, appoint.”.
Insertion of new 77. After section 245V of the Income-tax Act, the following
section section shall be inserted, namely:—
245W.
Appeal. “245W. (1) The applicant, if he is aggrieved by any ruling
pronounced or order passed by the Board for Advance
Rulings or the Assessing Officer, on the directions of the
Principal Commissioner or Commissioner, may appeal to
the High Court against such ruling or order of the Board of
Advance Rulings within sixty days from the date of the
communication of that ruling or order, in such form and
manner, as may be prescribed:
Provided that where the High Court is satisfied, on an

application made by the appellant in this behalf, that the
appellant was prevented by sufficient cause from presenting
the appeal within the period specified in sub-section (1), it
may grant further period of thirty days for filing such appeal.
(2) The Central Government may make a scheme, by

notification in the Official Gazette, for the purposes of filing
appeal to the High Court under sub-section (1) by the
Assessing Officer, so as to impart greater efficiency,
transparency and accountability by—
(a) optimising utilisation of the resources through

68
(b) introducing a team-based mechanism with

dynamic jurisdiction.



Amendment of 78. In section 255 of the Income-tax Act, after sub-section

section 255. (6), the following sub-sections shall be inserted, namely: ––
“(7) The Central Government may make a scheme, by

notification in the Official Gazette, for the purposes of
disposal of appeals by the Appellate Tribunal so as to impart
greater efficiency, transparency and accountability by—
(a) eliminating the interface between the Appellate

Tribunal and parties to the appeal in the course of
appellate proceedings to the extent technologically
feasible;

(c) introducing an appellate system with dynamic

jurisdiction.

provisions of this Act shall not apply to such scheme or shall
apply with such exceptions, modifications and adaptations as
may be specified in the said notification:


69
Amendment of 79. In section 281B of the Income-tax Act, in sub-section (1),

section 281B. after the words “escaped assessment”, the words, figures and
letters “or for imposition of penalty under section 271AAD where
the amount or aggregate of amounts of penalty likely to be
imposed under the said section exceeds two crore rupees” shall
be inserted.
CHAPTER IV
INDIRECT TAXES
Customs
Amendment of 80. In the Customs Act, 1962 (hereinafter referred to as the 52 of 1962.
section 2. Customs Act), in section 2, after clause (7A), the following clause
‘(7B) “common portal” means the Common Customs

Electronic Portal referred to in section 154C;’.
Amendment of 81. In section 5 of the Customs Act, in sub-section (3), for the
section 5. words and figures “Chapter XV and section 108”, the words,
figures, brackets and letter “Chapter XV, section 108 and sub-
section (1D) of section 110” shall be substituted.
Amendment of 82. In section 25 of the Customs Act, after sub-section (4),

section 25. the following sub-section shall be inserted, namely:––
“(4A) Where any exemption is granted subject to any

condition under sub-section (1), such exemption shall, unless
otherwise specified or varied or rescinded, be valid upto 31st
day of March falling immediately after two years from the
date of such grant or variation:
Provided that in respect of any such exemption in force

as on the date on which the Finance Bill, 2021 receives the
assent of the President, the said period of two years shall be
reckoned from the 1st day February, 2021.”.
Insertion of new 83. After section 28BA of the Customs Act, the following
section 28BB. section shall be inserted, namely:––
Time limit for “28BB. (1) Any inquiry or investigation under this Act,
completion of culminating in the issuance of a notice under sub-section
certain actions.
(1) or sub-section (4) of section 28 shall be completed by
issuing such notice, within a period of two years from the
date of initiation of audit, search, seizure or summons, as
the case may be:
70
Provided that the Principal Commissioner of Customs

or the Commissioner of Customs may, on sufficient cause
being shown and for reasons to be recorded in writing,
extend the said period to a further period of one year.
(2) For computing the period under sub-section (1), the

period during which stay was granted by an order of a court
or tribunal, or the period for seeking information from an
overseas authority through a legal process, shall be
excluded.
Explanation.––For the removal of doubts, it is hereby

declared that nothing contained in this section shall apply
to any such proceeding initiated before the date on which
the Finance Bill, 2021 receives the assent of the President.”.
Amendment of 84. In section 46 of the Customs Act, in sub-section (3),––

section 46.
(i) in the opening portion, for the words and brackets
“before the end of the next day following the day (excluding
holidays)”, the words and brackets “before the end of the day
(including holidays) preceding the day” shall be substituted;
(ii) for the words “Provided that”, the following shall be

“Provided that the Board may, in such cases as it may

deem fit, prescribe different time limits for presentation
of the bill of entry, which shall not be later than the end
of the day of such arrival:
Provided further that”;
(iii) for the words “Provided further that”, the words

“Provided also that” shall be substituted.
Amendment of 85. In section 110 of the Customs Act, after sub-section (1C),
section 110. the following sub-section shall be inserted, namely:––
“(1D) Where the goods seized under sub-section (1) is

gold in any form as notified under sub-section (1A), then,
the proper officer shall, instead of making an application
under sub-section (1B) to the Magistrate, make such
application to the Commissioner (Appeals) having
jurisdiction, who shall, as soon as may be, allow the
application and thereafter, the proper officer shall dispose
of such goods in such manner as the Central Government
may determine.”.
71
Amendment of 86. In section 113 of the Customs Act, after clause (j), the
section 113. following clause shall be inserted, namely:––
“(ja) any goods entered for exportation under claim of

remission or refund of any duty or tax or levy to make a
wrongful claim in contravention of the provisions of this Act
or any other law for the time being in force;”.
Insertion of new 87. After section 114AB of the Customs Act, the following
section 114AC. section shall be inserted, namely:––
Penalty for ‘114AC. Where any person has obtained any invoice by
fraudulent fraud, collusion, willful misstatement or suppression of facts
utilisation of
input tax credit
to utilise input tax credit on the basis of such invoice for
for claiming discharging any duty or tax on goods that are entered for
refund. exportation under claim of refund of such duty or tax, such
person shall be liable for penalty not exceeding five times the
refund claimed.
Explanation.––For the purposes of this section, the

expression “input tax credit” shall have the same meaning as
assigned to it in clause (63) of section 2 of the Central Goods
and Services Tax Act, 2017.’. 12 of 2017.
Amendment of 88. In section 139 of the Customs Act, in the Explanation, for
section 139. the words, brackets, figures and letter “a Magistrate under sub-
section (1C) of section 110”, the words, brackets, figures and
letters “a Magistrate under sub-section (1C), or Commissioner
(Appeals) under sub-section (1D), of section 110” shall be
inserted.
Amendment of 89. In section 149 of the Customs Act, after the proviso, the
section 149. following provisos shall be inserted, namely:––
“Provided further that such authorisation or amendment

may also be done electronically through the customs
automated system on the basis of risk evaluation through
appropriate selection criteria:
Provided also that such amendments, as may be specified

by the Board, may be done by the importer or exporter on the
common portal.”.
Amendment of 90. In section 153 of the Customs Act, in sub-section (1), after
section 153. clause (c), the following clause shall be inserted, namely:––
“(ca) by making it available on the common portal;”.
Insertion of new 91. After section 154B of the Customs Act, the following
section 154C. section shall be inserted, namely:––
72
Common “154C. The Board may notify a common portal, to be

Customs called the Common Customs Electronic Portal, for
Electronic
Portal.
facilitating registration, filing of bills of entry, shipping bills,
other documents and forms prescribed under this Act or under
any other law for the time being in force or the rules or
regulations made thereunder, payment of duty and for such
other purposes, as the Board may, by notification, specify.”.
Customs tariff
Amendment of 92. In the Customs Tariff Act, 1975 (hereinafter referred to 51 of 1975.
section 8B. as the Customs Tariff Act), in section 8B, in sub-section (6),––
(i) in clause (i), for the word “unit;”, the words “unit; or”
(ii) for the Explanation, the following Explanation shall

be substituted, namely:–
‘Explanation.––For the purposes of this sub-section,–
(a) the expression “hundred per cent. export-

oriented undertaking” shall have the same meaning as
assigned to it in clause (i) of Explanation 2 to sub-
section (1) of section 3 of the Central Excise Act, 1 of 1944.
1944;
(b) the expression “special economic zone” shall

have the same meaning as assigned to it in clause (za)
of section 2 of the Special Economic Zones Act, 28 of 2005.
2005.’.
Amendment of 93. In section 9 of the Customs Tariff Act,––

section 9.
(i) in sub-section (1A), after the words “such other article also”,
the words “from such date, not earlier than the date of
initiation of the inquiry, as the Central Government may, by
notification in the Official Gazette, specify” shall be inserted;
(ii) after sub-section (1A), the following sub-section shall be

‘(1B) Where the Central Government, on such inquiry as it

considers necessary, is of the opinion that absorption of
countervailing duty imposed under sub-section (1) has taken
place whereby the countervailing duty so imposed is rendered
ineffective, it may modify such duty to counter the effect of
such absorption, from such date, not earlier than the date of
73

notification in the Official Gazette, specify.

“absorption of countervailing duty” is said to have taken
place,–
(a) if there is a decrease in the export price of an article

without any commensurate change in the resale price
in India of such article imported from the exporting
country or territory; or
(b) under such other circumstances as may be provided by

rules.’;
(iii) after sub-section (2), the following sub-section shall be

inserted, namely: –
‘(2A) Notwithstanding anything contained in sub-sections (1)

and (2), a notification issued under sub-section (1) or any
countervailing duty imposed under sub-section (2) shall not
apply to article imported by a hundred per cent. export-oriented
undertaking or a unit in a special economic zone, unless, —
(i) it is specifically made applicable in such notification or to

such undertaking or unit; or
(ii) such article is either cleared as such into the domestic

tariff area or used in the manufacture of any goods that are
cleared into the domestic tariff area, in which case,
countervailing duty shall be imposed on that portion of the
article so cleared or used, as was applicable when it was
Explanation.––For the purposes of this sub-section,––
(a) the expression “hundred per cent. export-oriented

undertaking” shall have the same meaning as assigned
to it in clause (i) of Explanation 2 to sub-section (1) of
section 3 of the Central Excise Act, 1944; 1 of 1944.
(b) the expression “special economic zone” shall have the

same meaning as assigned to it in clause (za) of section
2 of the Special Economic Zones Act, 2005.’; 28 of 2005.
(iv) in sub-section (6),––
(a) in the first proviso, for the words “of five years”, the
words “upto five years” shall be substituted;
74
(b) after the second proviso, the following proviso shall

“Provided also that if the said duty is revoked temporarily, the

period of such revocation shall not exceed one year at a
time.”.
Amendment of 94. In section 9A of the Customs Tariff Act,––

section 9A.
(i) in sub-section (1A), after the words “as the case may be”,
the words “, from such date, not earlier than the date of
notification in the Official Gazette, specify” shall be
inserted;
(ii) after sub-section (1A), the following sub-section shall be

‘(1B) Where the Central Government, on such inquiry as it

may consider necessary, is of the opinion that absorption of
anti-dumping duty imposed under sub-section (1) has taken
place whereby the anti-dumping duty so imposed is rendered
ineffective, it may modify such duty to counter the effect of
such absorption, from such date, not earlier than the date of
notification in the Official Gazette, specify.

“absorption of anti-dumping duty” is said to have taken
place,––
(a) if there is a decrease in the export price of an article

without any commensurate change in the cost of
production of such article or export price of such article
to countries other than India or resale price in India of
such article imported from the exporting country or
territory; or
(b) under such other circumstances as may be provided by

rules.’;
(iii) for sub-section (2A), the following sub-section shall be

‘(2A) Notwithstanding anything contained in sub-section

(1) and sub-section (2), a notification issued under sub-
section (1) or any anti-dumping duty imposed under sub-
section (2) shall not apply to articles imported by a hundred
per cent. export-oriented undertaking or a unit in a special
economic zone, unless,—
75
(i) it is specifically made applicable in such notification or

to such undertaking or unit; or
(ii) such article is either cleared as such into the domestic

tariff area or used in the manufacture of any goods that are
cleared into the domestic tariff area, in which case, anti-
dumping duty shall be imposed on that portion of the article
so cleared or used, as was applicable when it was imported
into India.
Explanation.––For the purposes of this section,––
(a) the expression “hundred per cent. export-oriented

undertaking” shall have the same meaning as assigned
to it in clause (i) of Explanation 2 to sub-section (1) of
section 3 of the Central Excise Act, 1944; 1 of 1944.
(b) the expression “special economic zone” shall have the

same meaning as assigned to it in clause (za) of section 28 of 2005.
2 of the Special Economic Zones Act, 2005.’;
(iv) in sub-section (5),––
(a) in the first proviso, for the words “of five years”, the
words “upto five years” shall be substituted;
(b) after the second proviso, the following proviso shall

be inserted, namely:–
“Provided also that if the said duty is revoked temporarily,

the period of such revocation shall not exceed one year at
a time.”.
Amendment of 95. In the Customs Tariff Act, the First Schedule shall––
First Schedule.
(i) be amended in the manner specified in the Second
Schedule;
(ii) with effect from the 1st April, 2021, be also amended
in the manner specified in the Third Schedule; and
(iii) with effect from the 1st January, 2022, be also

amended in the manner specified in the Fourth Schedule.
Excise
Amendment of 96. In the Central Excise Act, 1944 (hereinafter referred to as 1 of 1944.
Fourth the Central Excise Act), the Fourth Schedule shall,––
Schedule.
76
(i) with effect from the 1st April, 2021, be amended in the
manner specified in the Fifth Schedule; and
(ii) with effect from the 1st January, 2022, be also

amended in the manner specified in the Sixth Schedule.
Amendment of 97. In the Fourth Schedule to the Central Excise Act, in

Chapter 27 of Chapter 27, with effect from the 1st day of January, 2020,––
Fourth Schedule.
(i) for the entry in column (2) occurring against tariff item
2710 12 49, the entry “---- M15 Fuel conforming to standard
IS 17076” shall be substituted and shall be deemed to have
been substituted;
(ii) for the entry in column (4) occurring against tariff

item 2710 20 10, the entry “14% + Rs.15.00 per litre” shall
be substituted and shall be deemed to have been substituted;
(iii) for the entry in column (4) occurring against tariff

item 2710 20 20, the entry “14% + Rs.15.00 per litre” shall
be substituted and shall be deemed to have been substituted.
Revised date of 98. Notwithstanding anything contained in paragraph 2 of the

effect to notification of the Government of India in the Ministry of Finance
amendments
made in Fourth
(Department of Revenue) number G.S.R 978 (E), dated the 31st
Schedule vide December, 2019, issued in exercise of the powers conferred under
notification section 3C of the Central Excise Act, 1944, the amendments 1 of 1944.
issued under made in Chapter 27 of the Fourth Schedule thereto by the said
section 3C of notification shall be deemed to have, and always to have had
Central Excise
Act, 1944.
effect, for all purposes, on and from the 1st day of January, 2020.
Central Goods and Services Tax
Amendment of 99. In the Central Goods and Services Tax Act, 2017 12 of 2017.
section 7. (hereinafter referred as the Central Goods and Services Tax Act),
in section 7, in sub-section (1), after clause (a), the following
clause shall be inserted and shall be deemed to have been inserted
with effect from the 1st day of July, 2017, namely:––
“(aa) the activities or transactions, by a person, other

than an individual, to its members or constituents or vice-
versa, for cash, deferred payment or other valuable
consideration.
Explanation.––For the purposes of this clause, it is

hereby clarified that, notwithstanding anything contained
in any other law for the time being in force or any
judgment, decree or order of any Court, tribunal or
authority, the person and its members or constituents shall
be deemed to be two separate persons and the supply of
77
activities or transactions inter se shall be deemed to take

place from one such person to another;”.
Amendment of 100. In section 16 of the Central Goods and Services Tax Act,
section 16. in sub-section (2), after clause (a), the following clause shall be
“(aa) the details of the invoice or debit note referred to in

clause (a) has been furnished by the supplier in the statement
of outward supplies and such details have been
communicated to the recipient of such invoice or debit note
section 35. sub-section (5) shall be omitted.
Substitution of 102. For section 44 of the Central Goods and Services Tax
new section for Act, the following section shall be substituted, namely:––
section 44.
Annual return. “44. Every registered person, other than an Input Service
Distributor, a person paying tax under section 51 or section
52, a casual taxable person and a non-resident taxable person
shall furnish an annual return which may include a self-
certified reconciliation statement, reconciling the value of
supplies declared in the return furnished for the financial
year, with the audited annual financial statement for every
financial year electronically, within such time and in such
form and in such manner as may be prescribed:
Provided that the Commissioner may, on the

recommendations of the Council, by notification, exempt any
class of registered persons from filing annual return under
this section:
Provided further that nothing contained in this section

shall apply to any department of the Central Government or
a State Government or a local authority, whose books of
account are subject to audit by the Comptroller and Auditor-
General of India or an auditor appointed for auditing the
accounts of local authorities under any law for the time being
in force.”.
section 50. in sub-section (1), for the proviso, the following proviso shall be
substituted and shall be deemed to have been substituted with
effect from the 1st day of July, 2017, namely:––
“Provided that the interest on tax payable in respect of

supplies made during a tax period and declared in the return
for the said period furnished after the due date in
78
accordance with the provisions of section 39, except where

such return is furnished after commencement of any
proceedings under section 73 or section 74 in respect of the
said period, shall be payable on that portion of the tax which
is paid by debiting the electronic cash ledger.”.
section 74. in Explanation 1, in clause (ii), for the words and figures
“sections 122, 125, 129 and 130”, the words and figures “sections
122 and 125” shall be substituted.
section 75. in sub-section (12), the following Explanation shall be inserted,
namely:––
‘Explanation.––For the purposes of this sub-section, the

expression "self-assessed tax" shall include the tax payable in
respect of details of outward supplies furnished under section
37, but not included in the return furnished under section 39.’.
section 83. for sub-section (1), the following sub-section shall be substituted,
namely:––
“(1) Where, after the initiation of any proceeding under

Chapter XII, Chapter XIV or Chapter XV, the Commissioner
is of the opinion that for the purpose of protecting the interest
of the Government revenue it is necessary so to do, he may,
by order in writing, attach provisionally, any property,
including bank account, belonging to the taxable person or
any person specified in sub-section (1A) of section 122, in
such manner as may be prescribed.”.
Amendment of 107. In section 107 of the Central Goods and Services Tax
section 107. Act, in sub-section (6), the following proviso shall be inserted,
namely:––
“Provided that no appeal shall be filed against an order

under sub-section (3) of section 129, unless a sum equal to
twenty-five per cent. of the penalty has been paid by the
appellant.”.
section 129. Act, ––
(i) in sub-section (1), for clauses (a) and (b), the following
clauses shall be substituted, namely:––
“(a) on payment of penalty equal to two hundred per

cent. of the tax payable on such goods and, in case of
79
exempted goods, on payment of an amount equal to two

per cent. of the value of goods or twenty-five thousand
rupees, whichever is less, where the owner of the goods
comes forward for payment of such penalty;
(b) on payment of penalty equal to fifty per cent. of

the value of the goods or two hundred per cent. of the tax
payable on such goods, whichever is higher, and in case
of exempted goods, on payment of an amount equal to
five per cent. of the value of goods or twenty-five
thousand rupees, whichever is less, where the owner of
the goods does not come forward for payment of such
penalty;”;
(ii) sub-section (2) shall be omitted;
(iii) for sub-section (3), the following sub-section shall be

“(3) The proper officer detaining or seizing goods or

conveyance shall issue a notice within seven days of such
detention or seizure, specifying the penalty payable, and
thereafter, pass an order within a period of seven days from
the date of service of such notice, for payment of penalty
under clause (a) or clause (b) of sub-section (1).”;
(iv) in sub-section (4), for the words “No tax, interest or

penalty”, the words “No penalty” shall be substituted;
(v) for sub-section (6), the following sub-section shall be

“(6) Where the person transporting any goods or the

owner of such goods fails to pay the amount of penalty under
sub-section (1) within fifteen days from the date of receipt
of the copy of the order passed under sub-section (3), the
goods or conveyance so detained or seized shall be liable to
be sold or disposed of otherwise, in such manner and within
such time as may be prescribed, to recover the penalty
payable under sub-section (3):
Provided that the conveyance shall be released on

payment by the transporter of penalty under sub-section (3)
or one lakh rupees, whichever is less:
Provided further that where the detained or seized

goods are perishable or hazardous in nature or are likely to
depreciate in value with passage of time, the said period of
fifteen days may be reduced by the proper officer.”.
80
section 130. Act,––
(a) in sub-section (1), for the words “Notwithstanding

anything contained in this Act, if ”, the word “Where” shall
be substituted;
(b) in sub-section (2), in the second proviso, for the

words, brackets and figures “amount of penalty leviable
under sub-section (1) of section 129”, the words “penalty
equal to hundred per cent. of the tax payable on such goods”
(c) sub-section (3) shall be omitted.
Substitution of 110. For section 151 of the Central Goods and Services Tax
new section for Act, the following section shall be substituted, namely: ––
section 151.
Power to call for “151. The Commissioner or an officer authorised by

information. him may, by an order, direct any person to furnish
information relating to any matter dealt with in connection
with this Act, within such time, in such form, and in such
manner, as may be specified therein.”.
section 152. Act,––
(i) the words “of any individual return or part thereof”

shall be omitted;
(ii) after the words “any proceedings under this Act”,

the words “without giving an opportunity of being heard to
the person concerned” shall be inserted;
(b) sub-section (2) shall be omitted.
section 168. Act, in sub-section (2),––
(i) for the words, brackets and figures “sub-section (1) of

section 44”, the word and figures “section 44” shall be
substituted;
(ii) the words, brackets and figures “sub-section (1) of

section 151,” shall be omitted.
81
Amendment to 113. In Schedule II of the Central Goods and Services Tax

Schedule II. Act, paragraph 7 shall be omitted and shall be deemed to have
been omitted with effect from the 1st day of July, 2017.
Amendment of 114. In the Integrated Goods and Services Tax Act, 2017, in 13 of 2017.
section 16. section 16, ––
(a) in sub-section (1), in clause (b), after the words “supply

of goods or services or both”, the words “for authorised
operations” shall be inserted;
(b) for sub-section (3), the following sub-sections shall be

“(3) A registered person making zero rated supply shall

be eligible to claim refund of unutilised input tax credit on
supply of goods or services or both, without payment of
integrated tax, under bond or Letter of Undertaking, in
accordance with the provisions of section 54 of the Central
Goods and Services Tax Act or the rules made thereunder,
subject to such conditions, safeguards and procedure as may
be prescribed:
Provided that the registered person making zero rated

supply of goods shall, in case of non-realisation of sale
proceeds, be liable to deposit the refund so received under
this sub-section along with the applicable interest under
section 50 of the Central Goods and Services Tax Act within
thirty days after the expiry of the time limit prescribed under
the Foreign Exchange Management Act, 1999 for receipt of 42 of 1999.
foreign exchange remittances, in such manner as may be
prescribed.
(4) The Government may, on the recommendation of the

Council, and subject to such conditions, safeguards and
procedures, by notification, specify––
(i) a class of persons who may make zero rated supply on

payment of integrated tax and claim refund of the tax so
paid;
(ii) a class of goods or services which may be exported on

payment of integrated tax and the supplier of such goods or
services may claim the refund of tax so paid.”.
82
CHAPTER V
AGRICULTURE INFRASTRUCTURE AND DEVELOPMENT CESS

Agriculture 115. (1) There shall be levied and collected, in accordance
Infrastructure with the provisions of this section, for the purposes of the Union,
and
Development
a duty of customs, to be called Agriculture Infrastructure and
Cess Development Cess, on the goods specified in the First Schedule
on imported to the Customs Tariff Act, 1975 (hereinafter referred to as the 51 of 1975.
goods. Customs Tariff Act), being the goods imported into India, at the
rate not exceeding the rate of customs duty as specified in the
said Schedule, for the purposes of financing the agriculture
infrastructure and other development expenditure.
(2) The Central Government may, after due appropriation

made by Parliament by law in this behalf, utilise such sums of
money of the Agriculture Infrastructure and Development Cess
levied under this section for the purposes specified in sub-section
(1), as it may consider necessary.
(3) Where the duty is leviable on the goods at any percentage

of its value, then, for the purposes of calculating the Agriculture
Infrastructure and Development Cess under this section, the value
of such goods shall be calculated in the same manner as the value
of goods is calculated for the purpose of customs duty under
section 14 of the Customs Act, 1962. 52 of 1962.
(4) The Agriculture Infrastructure and Development Cess on

imported goods shall be in addition to any other duties of customs
chargeable on such goods, under the Customs Act, 1962 or any 52 of 1962.
(5) The provisions of the Customs Act, 1962 and the rules and 52 of 1962.
regulations made thereunder, including those relating to
assessment, non-levy, short-levy, refund, exemptions, interest,
appeals, offences, and penalties shall, as far as may be, apply in
relation to the levy and collection of the Agriculture
Infrastructure and Development Cess on imported goods as they
apply in relation to the levy and collection of duties of customs
on such goods under the said Act, or the rules or regulations, as
the case maybe.
Agriculture 116. (1) There shall be levied and collected, in accordance

Infrastructure with the provisions of this section, for the purposes of the Union,
and
Development
an additional duty of excise, to be called Agriculture
Cess Infrastructure and Development Cess, on the goods specified in
on excisable the Seventh Schedule (hereinafter referred to as scheduled
goods. goods), being the goods manufactured or produced, at the rates
specified in column (3) of the said Schedule, for the purposes of
83
financing the agriculture infrastructure and other development

expenditure.
(2) The Central Government may, after due appropriation

made by Parliament by law in this behalf, utilise such sums of
money of the Agriculture Infrastructure and Development Cess
levied under this section for the purposes specified in sub-section
(1), as it may consider necessary.
(3) The cess leviable under sub-section (1), chargeable on

the scheduled goods, shall be in addition to any other duties of
excise chargeable on such goods under the Central Excise Act,
1944 or any other law for the time being in force. 1 of 1944.
(4) The provisions of the Central Excise Act, 1944 and the 1 of 1944.
rules and the regulations made thereunder, including those
relating to assessment, non-levy, short-levy, refund, exemptions,
interest, appeals, offences, and penalties shall, as far as may be,
apply in relation to the levy and collection of the cess leviable
under this section in respect of scheduled goods as they apply in
relation to the levy and collection of duties of excise on such
goods under the said Act or the rules or regulations, as the case
maybe.
CHAPTER VI
MISCELLANEOUS
PART I
Insertion of new 117. In the Indian Stamp Act, 1899, after section 8F, the 2 of 1899.
section 8G. following section shall be inserted, namely:––
Strategic sale, “8G. Notwithstanding anything contained in this Act or

disinvestment, any other law for the time being in force, any instrument for
etc., of
immovable
conveyance or transfer of a business or asset or right in any
property by immovable property from a Government company, its
Government subsidiary, unit or joint venture, by way of strategic sale or
company not disinvestment or demerger or any other scheme of
liable to stamp arrangement, to another Government company or to the
duty.
Central Government or any State Government, after the
approval of the Central Government, shall not be liable to
duty under this Act.
Explanation.––For the purposes of this section,

“Government company” shall have the same meaning as
assigned to it in clause (45) of section 2 of the Companies 18 of 2013.
Act, 2013.”.
84
PART II
AMENDMENT TO THE CONTINGENCY FUND OF INDIA

ACT, 1950
Amendment of 118. In section 2 of the Contingency Fund of India Act, 1950,

Act 49 of 1950. after sub-section (2), the following sub-section shall be inserted,
namely:––
“(3) On and from the date on which the Finance Bill, 2021
receives the assent of the President, the sum which shall be
paid from and out of the Consolidated Fund of India into the
Contingency Fund of India under sub-section (2) shall stand
enhanced to thirty thousand crores of rupees.”.
PART III
AMENDMENTS TO THE LIFE INSURANCE

CORPORATION ACT, 1956
Commencement 119. The provisions of this Part shall come into force on such
of this Part. date as the Central Government may, by notification in the
Official Gazette, appoint:
Provided that different dates may be appointed for different

provisions of this Part and any reference in any such provision to
the commencement of this Act shall be construed as a reference
to the coming into force of that provision.
Amendment of 120. In the Life Insurance Corporation Act, 1956 31 of 1956.

section 2. (hereinafter in this Part referred to as the principal Act), in section
2,—
(i) after clause (1), the following clauses shall be

‘(1a) “Audit Committee” means the Committee

constituted under section 19C;
(1b) “Board of Directors” or “Board” means the

collective body of the directors appointed or nominated
or deemed as such under section 4;
(1c) “Chairperson” means the Chairperson referred to

in clause (a) of sub-section (2) of section 4;
(1d) “Companies Act” means the Companies Act,

2013; 18 of 2013.
85
(1e) “court” means “Court” as defined in clause (29) 18 of 2013.

of section 2 of the Companies Act, 2013;’;
(ii) after clause (4), the following clauses shall be

‘(4a) “director” means a director appointed or

nominated or deemed as such under section 4;
(4b) “financial statement”, in relation to the

Corporation, includes—
(i) a balance-sheet as at the end of the financial

year;
(ii) a profit and loss account for the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if

applicable; and
(v) any explanatory note annexed to, or forming

part of, any document referred to in sub-clause (i) to
sub-clause (iv);
(4c) “fully diluted basis” shall mean, in relation to the

percentage holding of the Central Government on such
basis, the total number of shares held by the Central
Government expressed as a percentage of the total
number of shares of the Corporation that would be
outstanding if all possible sources of conversion are
exercised;
(4d) “independent director” means an independent

director referred to in clause (f) of sub-section (2) of
section 4;’;
(iii) after clause (6), the following clause shall be

‘(6a) “Managing Director” means a Managing

Director referred to in clause (b) of sub-section (2) of
section 4;’;
(iv) for clause (7), the following clauses shall be

substituted, namely:—
‘(7) “member” means every person holding shares of

the Corporation and whose name is entered in the register
86
of members maintained under clause (a) of sub-section

(1) of section 5C;
(7a) “Nomination and Remuneration Committee”

means the Committee constituted under section 19B;
(7b) “notification” means a notification published in

the Official Gazette, and the expression “notify” shall be
construed accordingly;’;
(v) after clause (8), the following clause shall be inserted,

namely:—
‘(8a) “special resolution” means a resolution for

which the intention to propose the same as a special
resolution has been duly specified in the notice given to
members for calling a general meeting, and the votes cast
in favour of the resolution by members are not less than
three times the number of votes, if any, cast against the
resolution;’;
(vi) for clause (10), the following clause shall be

“(10) unless there is anything repugnant in the subject

or context, all the words and expressions used herein but not
defined and defined in the Insurance Act, 1938 or in the 4 of 1938.
Companies Act, 2013 shall have the meanings respectively 18 of 2013.
assigned to them in the said Acts.”.
Substitution of 121. For section 4 of the principal Act, the following

section 4. sections shall be substituted, namely:––
Board of ‘4. (1) The general superintendence and direction of the

Directors. affairs and business of the Corporation shall vest in its Board of
Directors, which may exercise all such powers and do all such
acts and things as may be exercised or done by the Corporation
and are not by this Act expressly directed or required to be done
by the Corporation in general meeting.
(2) The Board of Directors of the Corporation shall consist

of the following directors, not exceeding fifteen, of whom at least
one shall be a woman, namely:—
(a) a Chairperson of the Board, to be appointed by the Central

Government, who shall be a whole-time director of the
Corporation;
87
(b) Managing Directors, not exceeding four, to be appointed

by the Central Government, who shall be whole-time directors of
the Corporation;
(c) not more than two officers of the Central Government not
below the rank of a Joint Secretary to the Government of India,
to be nominated by the Central Government;
(d) not more than two individuals, to be nominated by the

Central Government, who have special knowledge or
practical experience in actuarial science, business
management, economics, finance, human resources,
information technology, insurance, law, risk management, or
any other field the special knowledge or practical experience
of which would be useful to the Corporation in the opinion of
the Central Government or who represent the interests of
policyholders;
(e) where the total holding of members other than the

Central Government in the paid-up equity capital of the
Corporation is––
(i) not more than ten per cent., one individual;
(ii) more than ten per cent. but not more than
twenty-five per cent., two individuals; and
(iii) more than twenty-five per cent., three individuals,
elected by such members in such manner as may be specified

by regulations, to be appointed by the Board;
(f) such number of independent directors, not exceeding

three, to be recommended by the Nomination and
Remuneration Committee and appointed by the Board;
(g) at any time when the number of directors to be elected

under clause (e) is less than three, either due to the total
holding of members other than the Central Government in the
paid-up equity capital of the Corporation being not more than
twenty-five per cent. or due to vacancy in elected directors,
the Board may co-opt such number of individuals as
independent directors who taken together with elected
directors shall not exceed three:
Provided that such co-opted directors shall be

recommended by the Nomination and Remuneration
Committee and appointed by the Board, and shall continue to
be directors until elected directors assume charge, whereupon
88
an equal number of such co-opted independent directors shall

retire in the order of their co-option.
(3) An independent director of the Corporation shall, in

relation to the Corporation, meet the same criteria of
independence as an independent director of a company is
required to meet in relation to the company under sub-section
(6) of section 149 of the Companies Act:
Provided that such a director shall also meet, in addition

to the aforesaid criteria, any criteria that the Nomination and
Renumeration Committee may formulate regarding
qualifications, positive attributes and independence:
Provided further that every such director shall at the first

meeting of the Board in which he participates as a director
and thereafter at the first meeting of the Board in every
financial year or whenever there is any change in the
circumstances which may affect his status as an independent
director, give a declaration that he meets the criteria of
independence under this sub-section and that he is not aware
of any circumstance or situation, which exist or may
reasonably be anticipated, that could impair or impact his
ability to discharge his duties with an objective independent
judgment and without any external influence.
(4) An individual appointed by the Board as a director

under clause (e) or clause (f) or clause (g) of sub-section (2)
shall hold office up to the date of the next annual general
meeting or the last date on which the annual general meeting
should have been held, whichever is earlier, and shall hold
office beyond such date only if his appointment is approved
at the annual general meeting.
(5) Before an individual is appointed or nominated as a

director under sub-section (2), the Central Government or the
Nomination and Remuneration Committee, as the case may
be, shall satisfy itself that such an individual as a director
shall have no financial or other interest as is likely to affect
prejudicially the exercise or performance by him of the
functions of a director:
Provided that the Board shall satisfy itself from time to

time with respect to every director other than a director
nominated under clause (c) of sub-section (2) that he has no
such interest:
Provided further that, for the purposes of this sub-

section, any individual who is, or whose appointment or
nomination or election is proposed and who has consented to
89
be a director, shall furnish such information as the Central

Government or the Nomination and Remuneration
Committee or the Board, as the case may be, may require.
(6) Notwithstanding anything contained in sub-section

(2), on and from the appointed date, an individual appointed
under section 4 who is eligible to be or remain a director
under section 4A and who, immediately before such
appointed date, held the office of a member of the
Corporation—
(i) in the capacity as the Chairman of the

Corporation, shall be deemed to be a director and the
Chairperson under clause (a) of sub-section (2);
(ii) in the capacity as a Managing Director of the

Corporation, shall be deemed to be a director and a
Managing Director under clause (b) of sub-section (2);
(iii) and is an officer of the Central Government not

below the rank of a Joint Secretary to the Government of
India, shall be deemed to be a director nominated under
clause (c) of sub-section (2);
(iv) and has been in office for a duration which is the

longest or the second longest amongst members other
than members referred to in clauses (i), (ii) and (iii), shall
be deemed to be a director nominated under clause (d) of
sub-section (2):
Provided that every such individual shall hold office

until expiry of the term, if any, specified at the time of his
appointment as a member of the Corporation, or until a
director appointed or nominated, as the case may be,
under sub-section (2) in place of such an individual
assumes office:
Provided further that any act or proceeding of the

collective body of members constituting the Corporation
under section 4 before the appointed date, shall be
deemed to be an act or proceeding, as the case may be, of
the Board.
Explanation.—For the purposes of this sub-section,––
(a) notwithstanding anything contained in clause (7)

of section 2, the expression “member” shall mean a
member appointed to the Corporation constituted under
section 4 [as it stood before the coming into force of
section 121 of the Finance Act, 2021];
90
(b) “appointed date” means the date on which the

provisions of section 121 of the Finance Act, 2021 shall
come into force.
Disqualification 4A. An individual shall not be eligible to be or remain a

to be director. director if,—
(a) he is of unsound mind and stands so declared by

a competent court;
(b) he is an undischarged insolvent;
(c) he has applied to be adjudicated as an insolvent

and his application is pending;
(d) he has been convicted by a court of any offence,

whether involving moral turpitude or otherwise, and
sentenced in respect thereof to imprisonment for not less
than six months and a period of five years has not elapsed
from the date of expiry of the sentence:
Provided that if an individual has been convicted of

any offence and sentenced in respect thereof to
imprisonment for a period of seven years or more, he
shall not be eligible to be a director;
(e) an order disqualifying him to be a director has

been passed by a court or the National Company Law
Tribunal constituted under section 408 of the Companies
Act, and the order is in force;
(f) he has been convicted of the offence dealing with

related party transactions under section 188 of the
Companies Act or under any other law for the time being
in force during the preceding five years;
(g) he has not paid any calls in respect of any shares

of the Corporation held by him, whether alone or jointly
with others, and six months have elapsed from the last
day fixed for the payment of such call;
(h) he has not complied with the provisions of sub-

section (i) of section 165 of the Companies Act;
(i) he is disqualified from being appointed as a

director of a company under sub-section (2) of section
164 of the Companies Act;
91
(j) he is a salaried government official, other than an

individual nominated director under clause (c) of sub-
section (2) of section 4;
(k) he is an insurance agent or an intermediary or an

insurance intermediary;
(l) he is an employee of the Corporation, other than

the Chairperson or a Managing Director, or of its
subsidiary or associate company;
(m) he is a director of a subsidiary or an associate

company of the Corporation and is other than the
Chairperson or a Managing Director;
(n) he is an employee or a director or a promoter of

any insurer carrying on life insurance business anywhere
in the world, other than the Corporation or its subsidiary
or associate company, or of any holding company,
subsidiary or associate company of such an insurer;
(o) he absents himself from all the meetings of the

Board held during a period of twelve months, with or
without seeking leave of absence of the Board:
Provided that the disqualifications referred to in

clauses (d), (e) and (f) shall continue to apply even if an
appeal or petition has been filed against the order of
conviction or disqualification.
Disclosure of 4B. (1) Every director shall at the first meeting of the
interest by Board in which he participates as a director and thereafter at
director and
senior
the first meeting of the Board in every financial year, or
management. whenever there is any change in the disclosures already made,
then at the first Board meeting held after such change,
disclose his concern or interest in any body corporate, which
shall include shareholding, in such manner as may be
prescribed.
(2) Every director who is in any way, whether directly or

indirectly, concerned or interested in a contract or
arrangement or proposed contract or arrangement entered
into or to be entered into by the Corporation—
(a) with a body corporate in which such director or

such director in association with any other director, holds
more than two per cent. shareholding of that body
corporate, or is a promoter, manager, chief executive
officer or trustee of that body corporate, or
92
(b) with a firm or other entity in which such director

is a partner, owner or member, as the case may be,
shall not participate in any meeting of the Board or of its

Committee in which such contract or arrangement is
deliberated upon, or in any other deliberations or discussions
regarding such contract or arrangement, and shall, in the case
of such deliberations in a meeting of the Board or its
Committee, disclose the nature of his concern or interest to
the Board or the Committee, as the case may be:
Provided that where any director who is not so concerned

or interested at the time of entering into such contract or
arrangement, he shall, if he becomes concerned or interested
after the contract or arrangement is entered into, disclose his
concern or interest forthwith when he becomes concerned or
interested, or at the first meeting of the Board held after he
becomes so concerned or interested.
(3) A contract or arrangement entered into by the

Corporation without disclosure under sub-section (2) or with
participation by a director who is concerned or interested in
any way, whether directly or indirectly, in such contract or
arrangement, shall be voidable at the option of the
Corporation.
(4) Such employees as the Board may specify as

constituting the senior management of the Corporation shall
make disclosures to the Board relating to all material,
financial and commercial transactions, in which they have
personal interest that may have a potential conflict with the
interest of the Corporation, and the Board shall formulate a
policy on such transactions, including any materiality
threshold therefore, and shall review such policy at least once
every three years.
Explanation.—For the purposes of this sub-section,

conflict of interest relates to dealing in the shares of the
Corporation or any of its subsidiaries or associate companies,
commercial dealings with bodies in which the senior
management individual or his relatives have shareholding,
etc.
(5) If an individual who is a director contravenes the

provisions of sub-section (1) or sub-section (2), or an
employee referred to in sub-section (4), contravenes such
provisions, such an individual or employee shall be liable to
pay penalty of a sum of up to one lakh rupees.
93
(6) Without prejudice to anything contained in sub-

section (5), it shall be open to the Corporation to proceed
against a director or any other employee who had entered into
such contract or arrangement in contravention of the
provisions of this section for recovery of any loss sustained
by it as a result of such contract or arrangement.
Explanation.—For the purposes of sections 4B and 4C,

the expression “body corporate” shall include a company, a
body corporate as defined under clause (11) of section 2 of
the Companies Act, a firm, a financial institution or a
scheduled bank or a public sector enterprise established or
constituted by or under any Central Act or State Act, and any
other incorporated association of persons or body of
individuals.
Related party 4C. (1) Except with the consent of the Board and subject
transactions. to such conditions as may be prescribed, the Corporation shall
not enter into any contract or arrangement with a related party
with respect to—
(a) sale, purchase or supply of any goods or

materials;
(b) selling or otherwise disposing of, or buying,

property of any kind;
(c) leasing of property of any kind;
(d) availing or rendering of any services;
(e) appointment of any agent for purchase or sale of

goods, materials, services or property;
(f) such related party’s appointment to any office or

place of profit in the Corporation, its subsidiary or
associate company;
(g) underwriting the subscription of any securities,

or derivatives thereof, of the Corporation:
Provided that no contract or arrangement involving

transactions exceeding such sums as the Board may
specify, shall be entered into except with the prior
approval in the general meeting:
Provided further that no member shall vote in such

general meeting to approve any contract or arrangement
which may be entered into by the Corporation, if such
member is a related party:
94
Provided also that nothing in this sub-section shall

apply to any transactions entered into by the
Corporation in its ordinary course of business, other
than transactions which are not on an arm’s length
basis:
Provided also that the requirement of approval under

the first proviso shall not be applicable for transactions
entered into between the Corporation and its wholly
owned subsidiary, if any, whose financial statements
are consolidated with the Corporation and placed before
the members at the general meeting for adoption.
Explanation.—In this sub-section,—
(a) the expression “office or place of profit” means any

office or place—
(i) where such office or place is held by a director, if

the director holding it receives from the Corporation
anything by way of remuneration over and above the
remuneration to which he is entitled as director, by way of
salary, fee, commission, perquisites, any rent-free
accommodation, or otherwise;
(ii) where such office or place is held by an individual

other than a director or by any firm, private company or
other body corporate, if the individual, firm, private
company or body corporate holding it receives from the
Corporation anything by way of remuneration, salary, fee,
commission, perquisites, any rent-free accommodation, or
otherwise;
(b) the expression “arm’s length transaction” means a

transaction between two related parties that is conducted as if
they were unrelated, so that there is no conflict of interest.
(2) Every contract or arrangement entered into under sub-

section (1) shall be referred to in a report made by the Board
to the members, along with the justification for entering into
such contract or arrangement.
(3) Where any contract or arrangement is entered into by

a director or any other employee, without obtaining the
consent of the Board or approval by a resolution in the general
meeting under sub-section (1) and if it is not ratified by the
Board or, as the case may be, by the members at a meeting
within three months from the date on which such contract or
arrangement was entered into, such contract or arrangement
95
shall be voidable at the option of the Board or, as the case may
be, of the members and if the contract or arrangement is with
a related party to any director, or is authorised by any other
director, the directors concerned shall indemnify the
Corporation against any loss incurred by it.

section (3), it shall be open to the Corporation to proceed
against a director or any other employee who had entered into
such contract or arrangement in contravention of the
provisions of this section for recovery of any loss sustained by
it as a result of such contract or arrangement.
(5) Any director or any other employee of the Corporation

who had entered into or authorised a contract or arrangement
in violation of the provisions of this section, shall be liable to
pay penalty of a sum of up to twenty-five lakh rupees.
Adjudication of 4D. (1) The Central Government may, by an order

penalties. published in the Official Gazette, appoint an officer of the
Central Government, not below the rank of Joint Secretary to
the Government of India or equivalent, as adjudicating officer
for adjudging penalties under the provisions of this Act.
(2) The adjudicating officer may, on a complaint made in

writing by a person authorised by the Corporation, and after
giving a reasonable opportunity of being heard, by an order
impose penalty on a director or employee liable to penalty
under any provision of this Act on account of any
contravention or violation on his part.
(3) The adjudicating officer, for the purposes of

discharging his functions under this Act, shall have the same
powers as are vested in a civil court under the Code of Civil 5 of 1908.
Procedure, 1908 while trying a suit, to summon and enforce
the attendance of any person and examine him on oath and to
require the discovery and production of documents or other
electronic records, and shall be deemed to be a civil court for
5 of 1908.
purposes of Order XXI of the Civil Procedure Code, 1908.
(4) A director or employee aggrieved by any order made

by the adjudicating officer may prefer an appeal to such
officer to the Central Government of a rank higher than that
of the adjudicating officer as the Central Government may
appoint as appellate authority, within thirty days from the
date on which a copy of the order made by the adjudicating
officer is received by the aggrieved individual, and the officer
so appointed may, after giving the individual an opportunity
of being heard, pass such order as he may deem fit,
confirming, modifying or setting aside the order appealed
96
against, or remanding the case to the adjudicating officer for

disposal, with such directions as he may deem fit.
(5) Where a director or employee of the Corporation

having already been subjected to penalty under this Act for
any contravention or violation of any provision of this Act,
again commits such contravention or violation within a
period of three years from the date of order imposing such
penalty passed by the adjudicating officer, he shall be liable
for the second or subsequent contravention or violation for
twice the amount of penalty provided therefor.’.
Substitution of 122. For section 5 of the principal Act, the following sections
section 5. shall be substituted, namely:—
Capital of ‘5. (1) The authorised share capital of the Corporation

Corporation. shall be twenty-five thousand crore rupees, divided into two
thousand and five hundred crore shares of ten rupees each:
Provided that the Central Government may, by

notification, increase the authorised share capital or reduce
the authorised share capital to such amount not less than the
amount of the paid-up equity capital of the Corporation
immediately before the coming into force of section 122 of
the Finance Act, 2021, as it may deem fit:
Provided further that the Corporation may, with the

previous approval of the Central Government, consolidate or
reduce the nominal or face value of the shares, divide the
authorised share capital into equity share capital or a
combination of equity and preference share capital, and
divide the nominal or face value of shares into such
denomination as the Corporation may decide.
(2) The Corporation shall, with the previous approval of the

Central Government, issue equity shares to the Central
Government in consideration for the paid-up equity capital
provided by the Central Government to the Corporation as it
stood before the coming into force of section 122 of the
Finance Act, 2021.
(3) The share capital of the Corporation shall consist of equity

shares and preference shares, which may be fully paid-up or
partly paid-up:
Provided that the Board may determine the terms of issue

of partly paid-up shares and payment of calls for such partly
paid-up shares.
97
(4) The Corporation may from time to time increase its

issued share capital, with the previous approval of the Central
Government, whether by public issue or rights issue or
preferential allotment or private placement or issue of bonus
shares to existing members holding equity shares, or by issue
of shares to employees pursuant to share based employee
benefits schemes, or by issue of shares to life insurance
policyholders of the Corporation, or otherwise:
Provided that the Central Government shall, on a fully

diluted basis hold,—
(a) at all times, not less than fifty-one per cent. of

the issued equity share capital of the Corporation;
(b) during a period of five years from the date of

first issue of shares to any person other than the Central
Government, not less than seventy-five per cent. of the
issued equity share capital of the Corporation.
(5) Where the Corporation issues shares at a premium,

whether for cash or otherwise, a sum equal to the aggregate
amount of the premium received on those shares shall be
transferred to a share premium account, and the provisions of
sub-sections (7) and (8) shall, except as provided in sub-
section (6), apply as if the share premium account were the
paid-up share capital of the Corporation.
(6) The share premium account referred to in sub-

section (5) may be applied by the Corporation—
(a) towards the issue of unissued shares of the

Corporation to members as fully paid-up bonus shares;
(b) in writing off the expenses of, or the commission paid

or discount allowed on, any issue of shares or debentures of
the Corporation;
(c) in providing for the premium payable on the

redemption of any redeemable preference shares or of any
debentures or of any securities of the Corporation; or
(d) for the purchase of its own shares or other securities.
(7) The Corporation may, with the previous approval of

the Central Government, by a special resolution, reduce its
paid-up equity share capital in such manner as it may
determine.
98
(8) Without prejudice to the generality of the power under

sub-section (7), the Corporation may reduce its paid-up
equity share capital by—
(a) extinguishing or reducing the liability on any of its

equity shares in respect of share capital not paid-up; or
(b) cancelling, with or without extinguishing or reducing

liability on any of its paid-up equity shares, any paid-up
equity share capital which is either lost or is unrepresented by
available assets; or
(c) paying off, with or without extinguishing or reducing

liability on any of its paid-up equity shares, any paid-up
equity share capital which is in excess of the wants of the
Corporation.
(9) Notwithstanding anything contained in any other law

for the time being in force—
(a) regarding various categories of persons in favour of

whom an issuer may make reservations on a competitive
basis, in relation to a public issue, the Corporation may make
a reservation on a competitive basis, to an extent of up to ten
per cent. out of the issue size, in favour of its life insurance
policyholders as one of the reserved categories for such
public issue:
Provided that the value of the allotment of equity shares

to such a policyholder shall not exceed two lakh rupees, or
such higher amount as the Central Government may by
notification specify:
Provided further that, in the event of under-subscription

in the policyholder reservation portion, the unsubscribed
portion may be allotted on a proportionate basis, in excess of
the value referred to in the first proviso, subject to the total
allotment to a policyholder not exceeding five lakh rupees or
such higher amount as the Central Government may by
notification specify:
Provided also that the policyholders in favour of whom

reservation is made under this sub-section may be offered
shares at a price not lower than by more than ten per cent. of
the price at which net offer to public is made to other
categories of applicants;
(b) regarding ineligibility for computation of minimum

promoter’s contribution, in relation to a public issue by way
of an initial public offer, all equity shares of the Corporation
99
held by the Central Government, including all shares

acquired during the period of three years preceding the
opening of such public offer, resulting from a bonus issue or
otherwise, shall be eligible for such computation;
(c) requiring the holding of paid-up equity shares by the

sellers for a minimum holding period as a condition for
offering such shares for sale to the public, in relation to a
public issue by way of an initial public offer, all fully paid-up
equity shares of the Corporation held by the Central
Government shall be eligible for such an offer for sale.
Explanation.—Words and expressions used in this sub-

section but not defined either in this Act or in the Insurance
Act or in the Companies Act shall have the meanings
respectively assigned to them in regulations made by the
Securities and Exchange Board regarding issue of capital and
disclosure requirements, to the extent not repugnant with the
provisions of this Act.
(10) The Corporation may issue other securities,

including bonds, debentures, notes, commercial paper and
other debt instruments, for the purpose of raising funds to
meet its business requirements.
Transferability 5A. (1) Save as otherwise provided in sub-sections (2)

of shares. and (3), the shares of the Corporation shall be freely
transferable:
Provided that any arrangement between two or

more persons in respect of transfer of shares shall be
enforceable as a contract.
(2) Nothing contained in sub-section (1) shall entitle the

Central Government to transfer any shares held by it in the
Corporation, if as a result of such transfer, the shares held by
it, on a fully diluted basis, shall reduce to less than fifty-one
per cent. of the issued equity share capital of the Corporation.
(3) The Corporation shall not register any transfer of its

shares where, after the transfer, the total paid-up share capital
holding of the transferee in the Corporation is likely to exceed
five per cent. of its paid-up share capital, or such higher
percentage as the Central Government may by notification
specify.
Voting rights. 5B. Subject to the provisions of section 5A, no person,

other than the Central Government, acting individually or
with persons acting in concert with him, or constituents of a
group, shall be entitled to exercise voting rights in respect of
100
any equity shares held by him in excess of five per cent. of

the paid-up share capital, or such higher percentage as the
Central Government may by notification specify:
Provided that a member holding preference share

capital in the Corporation shall, in respect of such capital,
have a right to vote only on resolutions in a general meeting
which directly affect the rights attached to his preference
shares.
Explanation.—For the purposes of this section,––
(a) the expression “group” shall have the meaning

assigned to it in the Competition Act, 2002. 12 of 2003.
(b) the expression “persons acting in concert” shall have

the meaning assigned to it in regulations made by the
Securities and Exchange Board regarding substantial
acquisition of shares and takeovers.
Register of 5C. (1) The Corporation shall keep and maintain the
members, etc. following registers, in such form and in such manner as may
be specified by regulations, namely:—
(a) register of members, indicating separately each class

of equity and preference shares held by each member residing
in or outside India;
(b) register of debenture-holders; and
(c) register of any other security holders.
(2) Every register maintained under sub-section (1) shall

include an index of the names included therein.
(3) The register and index of beneficial owners

maintained by a depository under section 11 of the
Depositories Act, 1996 shall be deemed to be the 22 of 1996.
corresponding register and index for the purposes of this Act.
(4) No notice of any trust, whether express or implied or

constructive, shall be entered on the register of members or
be receivable by the Corporation:
Provided that nothing in this section shall apply to a

depository in respect of shares held by it as a registered owner
on behalf of the beneficial owners.
Explanation.—For the purposes of this section and

section 5D, the expressions “beneficial owner”, “depository”
101
and “registered owner” shall have the meanings respectively

assigned to them in clauses (a), (e) and (j) of sub-section (1)
of section 2 of the Depositories Act, 1996. 22 of 1996.
Declaration in 5D. (1) Where the name of a person is entered on the

respect of register of members of the Corporation as the holder of shares
beneficial in the Corporation but he does not hold beneficial interest in
interest in such shares, such person shall make, within such time and in
shares. such form as may be prescribed for a company under section
89 of the Companies Act, a declaration to the Corporation
specifying the name and other particulars of the person who
holds beneficial interest in such shares.
(2) Every person who holds or acquires a beneficial

interest in shares of the Corporation shall make, within such
time and in such form as may be prescribed for a company
under section 89 of the Companies Act, a declaration to the
Corporation specifying the nature of his interest, particulars
of the person in whose name the share stands registered in the
books of the Corporation and such other particulars as may
be prescribed under the said section.
(3) Where any change occurs in the beneficial interest in

shares of the Corporation, the person referred to in sub-
section (1) and the beneficial owner specified in sub-section
(2) shall, within a period of thirty days from the date of such
change, make a declaration to the Corporation in such form
and containing such particulars as may be prescribed for a
company under section 89 of the Companies Act.
(4) No right in relation to any share in respect of which a

declaration is required to be made under this section but has
not been made by the beneficial owner, shall be enforceable
by him or by any person claiming through him.
(5) For the purposes of this section, beneficial interest in

a share includes, directly or indirectly, through any contract,
arrangement or otherwise, the right or entitlement of a person
alone or together with any other person to—
(a) exercise or cause to be exercised any or all of the rights

attached to such share; or
(b) receive or participate in any dividend or other

distribution in respect of such share.
(6) Every individual who, acting alone or together or

through one or more persons, holds beneficial interests, of not
less than twenty-five per cent. or such other percentage as
may be prescribed for a company under section 90 of the
102
Companies Act, in the shares of the Corporation or the right

to exercise, or the actual exercising of significant influence or
control as defined in clause (27) of section 2 of the
Companies Act, over the Corporation (herein referred to as
“significant beneficial owner”), shall make a declaration to
the Corporation, specifying the nature of his interest and other
particulars, in such manner and within such period of
acquisition of the beneficial interest or rights and any change
thereof, as may be prescribed for a company under section 90
of the Companies Act.
(7) The Corporation shall maintain a register of the

interest declared by individuals under sub-section (6) and
changes therein, which shall include the name of individual,
his date of birth, address, details of ownership in the
Corporation and such other details as may be prescribed for a
company under section 90 of the Companies Act.
Shares to be 5E. Notwithstanding anything contained in the Securities

securities. Contracts (Regulation) Act, 1956 or any other law for the 42 of 1956.
time being in force, the shares of the Corporation shall be
deemed to be securities as defined under the said Act.
Right of 5F. (1) Every individual registered member may, at any

registered time, nominate, in such manner as may be specified by
members to
nominate.
regulations, an individual to whom all his rights in the shares
shall vest in the event of death of such member.
(2) Where the shares are registered in the name of more

than one individual jointly, the joint holders may together
nominate, in such manner as may be specified by regulations,
an individual to whom all their rights in the shares shall vest
in the event of the death of all such joint holders.
(3) Notwithstanding anything contained in any other law

for time being in force or in any disposition, whether
testamentary or otherwise, where a nomination in respect of
shares is made and which purports to confer on the nominee
the right to vest the shares, the nominee shall, on the death of
the member or, as the case may be, on the death of all the joint
holders, become entitled to all the rights of the member or, as
the case may be, of all the joint holders, in relation to such
shares, and all other persons shall be excluded unless the
nomination has been varied or cancelled before death in such
manner as may be specified by regulations.
(4) Where the nominee is a minor, it shall be lawful for

the individual registered holder of the shares to make
nomination to appoint, in such manner as may be specified
103
by regulations, any person to become entitled to the shares in

the event of his death during the minority of the nominee.’.

section 19. sections shall be substituted, namely:—
Executive ‘19. (1) The Board may constitute an Executive

Committee. Committee of the Board, consisting of—
(i) the Chairperson;
(ii) Managing Directors;
(iii) the directors referred to in clause (c) of sub-section

(2) of section 4; and
(iv) four directors nominated by the Board from amongst

the directors referred to in clauses (d), (e), (f) and (g) of sub-
(2) The Executive Committee of the Board shall exercise

such powers as the Board may entrust to it.”.
Investment 19A. The Board may, for such functions relating to

Committee. investment of the funds of the Corporation as the Board may
entrust, constitute an Investment Committee of the Board,
consisting of the Chairperson and not more than seven other
directors, of which a minimum two shall be directors other
than directors appointed under clause (a) or clause (b) of
sub-section (2) of section 4:
Provided that the officers of the Corporation heading the

functions dealing with finance, risk, investment and law as
well as its Appointed Actuary shall be invited to every
meeting of the Committee and shall have a right to be heard
at the meeting.
Explanation.—For the purposes of this section and

section 24B, “Appointed Actuary” means the actuary
appointed as such by the Corporation under the regulations
made by the Authority under the Insurance Act regarding
appointed actuaries.
Nomination and 19B. (1) The Board shall constitute a Nomination and
Remuneration Remuneration Committee of the Board, consisting of three
Committee. or more directors from amongst directors other than those
appointed under clauses (a) or (b) of sub-section (2) of
section 4, out of whom not less than one-half shall be
independent directors at any time when the number of
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independent directors in office is sufficient to constitute such

proportion of the membership of the Committee:
Provided that the Chairperson may be appointed as a

member of the Nomination and Remuneration Committee
but shall not chair the Committee.
(2) The Nomination and Remuneration Committee

shall—
(i) formulate the criteria for determining qualifications,

positive attributes and independence of a director to be
appointed under clause (e) or clause (f) or clause (g) of sub-
section (2) of section 4 and recommend the same to the
Board;
(ii) in accordance with the criteria referred to in clause (i),

identify individuals who are qualified to be appointed as
such a director:
Provided that while identifying individuals, the

Committee shall have due regard to the requirements under
the proviso to sub-section (1) of section 19C;
(iii) give its recommendations to the Board regarding

appointment and removal of such an individual, and carry
out evaluation of his performance; and
(iv) recommend to the Board a policy relating to the sum

payable as sitting fees to a director nominated or appointed
under clauses (d) or (e) or (f) or (g) of sub-section (2) of
section 4, subject to such fees not exceeding such limit as
may apply in respect of sitting fees payable to a director of
a company under the Companies Act.
Audit 19C. (1) The Board shall constitute an Audit Committee

Committee. of the Board, consisting of a minimum of three directors with
independent directors forming a majority when the number
of independent directors in office is sufficient to constitute
such proportion of the membership of the Audit Committee:
Provided that a majority of directors on the Audit

Committee, including its chairperson, shall be individuals
with ability to read and understand financial statements and
at least one individual shall have accounting or related
financial management expertise.
(2) The Audit Committee shall act in accordance with the

terms of reference specified by the Board, which shall
include, inter alia,—
105
(a) recommendations for appointment, remuneration and

terms of appointment of the auditors of the Corporation;
(b) review and monitoring of the independence and

performance of the auditors, and the effectiveness of the
audit process;
(c) examination of financial statements and auditor’s

report thereon;
(d) approval of transactions of the Corporation with

related parties:
Provided that the Audit Committee may make omnibus

approval for related party transactions proposed to be
entered into by the Corporation subject to such conditions as
may be prescribed:
Provided further that in case of transaction other than

transactions referred to in section 4C, and where the Audit
Committee does not approve a transaction, it shall make its
recommendations to the Board:
Provided also that in case any transaction involving any

amount not exceeding one crore rupees is entered into by a
director or an officer of the Corporation without obtaining
the approval of the Audit Committee and it is not ratified by
the Audit Committee within three months from the date of
the transaction, such transaction shall be voidable at the
option of the Corporation with the approval of the Audit
Committee and if the transaction is with the related party to
any director or is authorised by any other director, the
director concerned shall indemnify the Corporation against
any loss incurred by it:
Provided also that the provisions of this clause shall not

apply to a transaction, other than a transaction referred to in
section 4C, between the Corporation and its wholly owned
subsidiary;
(e) scrutiny of inter-corporate loans and investments;
(f) valuation of undertakings or assets of the Corporation,

wherever it is necessary;
(g) evaluation of internal financial controls and risk

management systems;
106
(h) monitoring the end use of funds raised through public

offers, and related matters.
(3) The Audit Committee may call for the comments of

the auditors about internal control systems, the scope of
audit, including the observations of the auditors and review
of financial statement before their submission to the Board
and may also discuss any related issues with the auditors and
the management of the Corporation.
(4) The Audit Committee shall have authority to

investigate any matter in relation to the items specified in
sub-section (2) or referred to it by the Board and, for this
purpose, shall have the power to obtain professional advice
from external sources and have full access to information
contained in the records of the Corporation.
(5) The auditors of the Corporation and such key

managerial personnel as the Board may specify shall have a
right to be heard in the meetings of the Audit Committee
when it considers the auditor’s report.
Other 19D. The Board may constitute such other Committees of

Committees. the Board as it may deem fit, to render advice to the Board
on such matters as may be generally or specially referred to
them, and to perform such duties as the Board may entrust
to them.’.
Substitution of 124. For section 20 of the principal Act, the following section
Chairperson and “20. (1) The Chairperson shall, subject to the

Managing superintendence, control and direction of the Board, be
Directors.
entrusted with substantial powers of management in respect
of the whole of the affairs of the Corporation.
(2) The Chairperson shall also perform such other duties

in relation to the affairs of the Corporation as the Board may
entrust to him from time to time and shall, for this purpose,
exercise such powers as may be conferred upon him by the
Board:
Provided that the Board may also empower the

Chairperson to entrust or delegate such of his duties and
powers, as it may deem fit.
(3) Every Managing Director, subject to the general

control of the Chairperson, shall perform such duties and
exercise such powers as may be entrusted or delegated to him
by the Board or, under sub-section (2), by the Chairperson.”.
107
Amendment of 125. In section 22 of the principal Act,—

section 22.
(i) in sub-section (1), for the words “a person whether a
member or not”, the words “an employee of the Corporation
other than a whole-time director” shall be substituted;
(ii) sub-section (2) shall be omitted.
Insertion of new 126. After section 23 of the principal Act, the following
section 23A. section shall be inserted, namely:—
Annual general “23A. (1) An annual general meeting or other general

meeting and meeting of members shall be held in each financial year at
other general
meetings.
such time as the Board may specify, at the central office of
the Corporation or at such other place in India as the Central
Government may permit on the recommendations of the
Board:
Provided that not more than fifteen months shall elapse

between the date of one annual general meeting of the
Corporation and that of the next:
Provided further that notwithstanding anything contained

in this section, general meeting shall be held only when the
Corporation has members other than the Central Government
who are entitled to vote:
Provided also that until the first annual general meeting

or other general meeting is held, the Board shall perform all
the functions required to be performed in such meeting.
(2) The members present at an annual general meeting

shall be entitled to—
(a) discuss the financial statements of the Corporation

as referred to in section 24B and the auditor’s report as
referred to in section 25B, which shall be accompanied by
the report of the Board as referred to in section 24C, and
to adopt the financial statements, along with all the
documents which are required to be attached to such
financial statements under this Act;
(b) discuss and adopt the Annual Report prepared

under section 27;
(c) approve a declaration of dividend under sub-

section (1) of section 28B;
108
(d) approve the appointment of directors under sub-

section (4) of section 4;
(e) approve the appointment of auditors under sub-

sections (1) and (4) of section 25 and fix their
remuneration under sub-section (7) of section 25.
(3) Every member shall be entitled to attend a general

meeting, whether in person or by proxy or by duly authorised
representative:
Provided that every director shall also be entitled to attend

a general meeting, whether in person or through electronic
means:
Provided further that all notices of, and other

communications relating to, any general meeting shall be
forwarded to the auditor appointed for the Corporation, and
such auditor shall, unless exempted by the Corporation,
attend any general meeting either in person or through
authorised representative who is qualified to be an auditor,
and shall have the right to be heard at such meeting on any
part of the business which concerns him as the auditor.
(4) A member who is entitled to vote may exercise his

vote at a general meeting in person or by proxy or by duly
authorised representative.
(5) Persons entitled to attend and to exercise vote at a

general meeting may also do so through electronic means,
and the manner of attendance and exercise of vote shall be
such as may be prescribed.
(6) No business other than that specified in sub-section

(2) shall be transacted or discussed at the annual general
meeting, except with the consent of the Chairperson, unless
not less than six weeks’ notice of the same has been given to
the Chairperson either by the Central Government or by at
least hundred members who have the right to vote at the
meeting:
Provided that such a notice shall be in the form of a

definite resolution to be put to the meeting, and that such
resolution shall be included in the notice of the meeting.
(7) Save and except with the consent of the Chairperson,

no business other than that for which a general meeting has
been convened shall be transacted or discussed at the
meeting.
109
(8) No general meeting shall be proceeded with and no

business shall be transacted at any general meeting unless
members constitute such quorum as may be prescribed:
Provided that where a meeting could not be held for want

of quorum, it may be adjourned and held in such manner as
may be prescribed.
(9) The Corporation shall cause the minutes of all

proceedings of general meetings to be entered in books kept
for that purpose.”.
Substitution of 127. For section 24 of the principal Act, the following sections
Funds of the ‘24. (1) The Corporation shall have its own fund or funds,
Corporation. and all receipts of the Corporation shall be credited thereto
and all payments of the Corporation shall be made therefrom:
Provided that the Board may, in relation to any of the

funds of the Corporation or otherwise, establish reserves
which may or may not be allocated for a specific purpose, and
such sums as the Board may determine, may be transferred to
or from such reserves.
(2) The Board shall, for every financial year after the
financial year in which the provisions of section 127 of the
Finance Act, 2021 come into force, cause to be maintained—
(a) a participating policyholders fund, to which all

receipts from participating policyholders shall be credited
and from which all payments to such policyholders shall be
made; and
(b) a non-participating policyholders fund, to which all

receipts from non-participating policyholders shall be
credited and from which all payments to such policyholders
shall be made:
Provided that the members, by resolution in a general

meeting, may exempt maintenance of such funds for one
financial year at a time up to two financial years.
Books of 24A. (1) The Corporation shall prepare and keep at its
account, etc. central office books of account and other relevant books and
records and financial statement for every financial year which
give a true and fair view of the state of its affairs, including
that of its zonal offices, and which explain the transactions
effected both at the central office and at its zonal offices.
110
(2) The Corporation shall prepare and keep at each zonal

office of the Corporation, books of account and other relevant
books and records and financial statement for every financial
year which give a true and fair view of the state of affairs of
every divisional office established in the zone corresponding
to such zonal office and which explain the transactions
effected thereat.
(3) The Corporation shall prepare and keep at each

divisional office of the Corporation, books of account and
other relevant books and records and financial statement for
every financial year which give a true and fair view of the
state of affairs of every branch established under such
divisional office and which explain the transactions effected
thereat.
(4) All or any of the books of account and other relevant

books and records referred to in sub-section (1) or sub-section
(2) or sub-section (3) may be kept at such other place or
places in India as the Board may decide.
(5) The Corporation shall be deemed to have complied

with the provisions of sub-section (1) or sub-section (2) or
sub-section (3), in respect of a zonal office or a divisional
office, other than the central office, or a branch of the
Corporation, whether within or outside India, if proper books
of account relating to the transactions effected at such office
or branch, are kept thereat and proper summarised returns are
sent periodically to the central office or the corresponding
zonal office or the corresponding divisional office, or to the
other place referred to in sub-section (4).
(6) The books of account and other relevant books and

records referred to in sub-section (1) or sub-section (2) or
sub-section (3) may be kept in electronic form, in such
manner as the Board may determine.
(7) The books of account of the Corporation relating to a

period of not less than ten financial years immediately
preceding a financial year, together with the vouchers
relevant to any entry in such books of account, shall be kept
in good order:
Provided that where the Central Government has

appointed a special auditor under section 25D or is of the
opinion that circumstances exist which render it necessary so
to do, it may direct the Corporation that the books of account
be kept for such longer period as the Central Government
may specify.
111
Financial 24B. (1) The financial statements of the Corporation shall

statements. give a true and fair view of the state of affairs of the
Corporation and shall be in conformity with the standards on
auditing issued by the Institute of Chartered Accountants of 38 of 1949.
India, constituted under section 3 of the Chartered
Accountants Act, 1949, and with the accounting standards
issued by the said Institute to the extent such accounting
standards are applicable to insurers carrying on life insurance
business and subject to any regulations made by the Authority
under the Insurance Act relating to preparation of financial
statements and auditor’s report:
Provided that the financial statements shall not be treated

as not disclosing a true and fair view of the state of affairs of
the Corporation, merely by reason of the fact that they do not
disclose any matters which are not required to be disclosed
by this Act or by the Insurance Act or by the Insurance
Regulatory and Development Authority Act, 1999 or by any
38 of 1999.
(2) At every annual general meeting, the Board shall place

before such meeting financial statements for the preceding
financial year.
(3) The Corporation shall, in addition to financial

statements provided under sub-section (2), prepare a
consolidated financial statement of the Corporation and of all
its subsidiaries and associate companies in conformity with
the auditing standards referred to in sub-section (1) and the
accounting standards applicable by law, and shall place the
same before the annual general meeting, along with the
placing of its financial statements under sub-section (2):
Provided that the Corporation shall also attach along with

its financial statements, a separate statement containing the
salient features of the consolidated financial statement in
respect of its subsidiaries and associate companies.
(4) The provisions of this Act applicable to financial

statements under sub-section (1) and under section 24C, the
inquiry by the auditor into matters referred to in and making
of the auditor’s report on accounts under section 25B, and
adoption of financial statements under section 23A at the
annual general meeting, shall, mutatis mutandis, apply to the
consolidated financial statement referred to in sub-section
(3).

section (1) or sub-section (3), where the financial statements
are not in conformity with the standards referred to therein,
112
the Corporation shall disclose in the financial statements the

deviation from such standards, the reasons therefor and the
financial effects, if any, arising out of such deviation.
(6) Financial statements including consolidated financial

statement, if any, shall be approved by the Board before they
are signed on behalf of the Board by the Chairperson, a
Managing Director, one director other than a whole-time
director, the heads of the finance and secretarial functions of
the Corporation and its Appointed Actuary, for submission to
the auditor for his report thereon.
(7) The auditor’s report shall be attached to every

financial statement.
(8) A signed copy of every financial statement, including

consolidated financial statement, if any, shall be issued,
circulated or published, along with a copy each of—
(a) any notes annexed to or forming part of such

financial statement;
(b) the auditor’s report; and
(c) the Board’s report referred to in sub-section (1) of

section 24C.
(9) The Central Government may, on its own or on an

application by the Corporation, by notification, exempt the
Corporation from complying with any of the requirements
under this section, if it is considered necessary to grant such
exemption in the public interest, and may grant any such
exemption either unconditionally or subject to such
conditions as it may specify in the notification.
Board’s report. 24C. (1) There shall be attached to financial statements

placed before general meeting, a report by the Board, which
shall include—
(a) number of meetings of the Board;
(b) a Directors’ Responsibility Statement;
(c) details in respect of frauds reported by auditors;
(d) a statement on declarations given by independent

directors under the second proviso to sub-section (3) of
section 4;
113
(e) the Corporation’s policy on directors’

appointment, including the criteria for determining
qualifications, positive attributes and independence of a
director, which are referred to in section 19B;
(f) explanations or comments by the Board on every

qualification, reservation or adverse remark or disclaimer
made in the auditor’s report;
(g) particulars in respect of investments in terms of

the provisions of section 27A of the Insurance Act as
made applicable to the Corporation by notification issued
under sub-section (2) of section 43;
(h) particulars of contracts or arrangements with

related parties, referred to in sub-section (1) of section
4C;
(i) the state of the Corporation’s affairs;
(j) the amounts, if any, which are carried to any

reserves;
(k) the amount, if any, which it recommends should

be paid by way of dividend;
(l) material changes and commitments, if any,

affecting the financial position of the Corporation, which
have occurred between the end of the financial year to
which the financial statements relate and the date of the
report;
(m) a statement indicating the manner in which annual

evaluation of the performance of individual directors has
been made under section 19B;
(n) such other matters as may be prescribed:
Provided that where disclosures referred to in this

sub-section have been included in the financial
statements, such disclosures may be referred to instead of
being repeated in the Board’s report:
Provided further that where the policy referred to in

clause (e) is made available on the Corporation’s website,
it shall be sufficient compliance of the requirement under
the said clause if the salient features of the policy and any
changes therein are specified in brief in the Board’s report
and the web-address at which the policy is available is
indicated therein.
114
(2) The Directors’ Responsibility Statement referred to in

clause (b) of sub-section (1) shall state that—
(a) in the preparation of the annual accounts, the

standards referred to in section 24B were followed, along
with proper explanation relating to material departures;
(b) accounting policies were selected and applied

consistently and the judgements made and estimates were
reasonable and prudent, so as to give a true and fair view
of the state of affairs of the Corporation at the end of the
financial year and of the profit and loss of the Corporation
for that period;
(c) proper and sufficient care for the maintenance of

adequate accounting records was taken in accordance
with the provisions of this Act for safeguarding the assets
of the Corporation and for preventing and detecting fraud
and other irregularities;
(d) the annual accounts were prepared on a going

concern basis;
(e) the vigilance administration referred to in clause

(h) of sub-section (1) of section 8 of the Central Vigilance
Commission Act, 2003 was in operation in the 45 of 2003.
Corporation under the superintendence of the Central
Vigilance Commission, and in addition, internal financial
controls to be followed by the Corporation had been laid
down and were operating effectively; and
(f) proper systems were devised to ensure compliance

with the provisions of applicable laws and were operating
effectively.
Explanation.—For the purposes of this sub-section, the

expression “internal financial controls” means the policies
and procedures adopted for ensuring the orderly and efficient
conduct of the Corporation’s business, including adherence
to its policies, safeguarding of its assets, prevention and
detection of errors, accuracy and completeness of accounting
records, and timely preparation of reliable financial
information.
(3) The Board’s report and any annexures thereto under

sub-section (1) shall be signed on behalf of the Board by the
Chairperson, a Managing Director and one director other than
a whole-time director.
115
Penalties. 24D. If the Chairperson or the Managing Director in

charge of finance or the head of the finance function of the
Corporation or any other person of the Corporation charged
by the Board with the duty of complying with the provisions
of section 24A or section 24B or section 24C contravenes any
of the said provisions, such Chairperson or Managing
Director or head of finance function or other person shall, for
each section whose provisions have been contravened, be
liable to pay penalty of a sum which shall not be less than
fifty thousand rupees but which may extend to five lakh
rupees.’.

section 25. sections shall be substituted, namely:—
Appointment of ‘25. (1) The Corporation shall, at its first annual general
auditors. meeting, appoint as many auditors (which may be individual
or firm) as it deems fit, and such auditor shall hold office from
the conclusion of that meeting till the conclusion of its sixth
annual general meeting thereafter, and shall similarly appoint
auditor for subsequent periods of five years at a time, and the
manner and procedure of selection of auditors by the
members at such a meeting shall be such as may be
prescribed:
Provided that before such appointment is made, the

written consent of the auditor to such appointment, and a
certificate from the auditor that the appointment, if made,
shall be in accordance with such conditions as may be
prescribed, shall be obtained from the auditor:
Provided further that such certificate shall also declare

that the auditor satisfies the criteria provided for eligibility
for appointment as an auditor of a company under section 141
of the Companies Act.
(2) The Corporation shall not appoint an auditor for more

than one term of five consecutive years:
Provided that an auditor who has completed the term of

appointment shall not be eligible for re-appointment or for
fresh appointment as auditor for a period of five years from
such completion:
Provided further that no audit firm shall be appointed as

auditor for a period of five years which, if appointed, as on
the date of its appointment, would have a common partner or
partners with the audit firm whose term as auditor in the
Corporation had expired in the financial year immediately
preceding the financial year in which fresh appointment is to
116
be made, or which is associated with the same network of

audit firms as the audit firm whose term had expired as
aforesaid:
Provided also that nothing contained in this sub-section

shall prejudice the right of the Corporation to remove an
auditor or the right of the auditor to resign from such office
of the Corporation.

expression “same network” includes firms operating or
functioning under a common brand name or trade name, or
under common control, or which are network firms as defined
under any guidelines for networking issued by the Institute of
Chartered Accountants of India, constituted under section 3
of the Chartered Accountants Act, 1949. 38 of 1949.
(3) Subject to the provisions of this Act, the Corporation

may resolve in a general meeting to provide that—
(a) in the audit firm appointed by it, the auditing

partner and his team shall be rotated at such intervals as
may be resolved by members;
(b) the audit shall be conducted by more than one

auditor.
(4) Any casual vacancy in the office of an auditor shall be

filled by the Board within thirty days, but if such casual
vacancy is as a result of the resignation of an auditor, such
appointment shall also be approved by the Corporation in a
general meeting convened within three months of the Board
making recommendations in this behalf, and the auditor so
appointed shall hold office till the conclusion of the next
annual general meeting.
(5) Where at any annual general meeting, no auditor is

appointed, the existing auditor shall continue to be the auditor
of the Corporation.
(6) All appointments, including the filling of a casual

vacancy of an auditor under this section, shall be made after
taking into account the recommendations of the Audit
Committee.
(7) The remuneration of the auditor shall be fixed in the

general meeting or in such manner as may be determined
therein.
117
(8) Until the first annual general meeting is held, auditors

duly qualified to act as auditors of companies under the law
for the time being in force relating to companies shall be
appointed by the Board with the previous approval of the
Central Government, and shall receive such remuneration
from the Corporation as the Central Government may fix.
(9) Notwithstanding anything contained in sub-section

(1), where an auditor has been appointed previous to the first
annual general meeting, either under section 25 [as it stood
before the coming into force of section 128 of the Finance
Act, 2021] or thereafter under sub-section (8), and the term
specified for such auditor’s appointment has not expired, and
the auditor meets the criteria referred to in sub-section (1),
such auditor shall continue till the expiry of the term so
specified:
Provided that nothing contained in this sub-section or in

section 25A shall prejudice the right of the Corporation to
remove such auditor or the right of the auditor to resign from
such office of the Corporation.
(10) An auditor appointed under sub-section (1) or sub-

section (8) or sub-section (9) shall provide to the Corporation
or its subsidiaries such other services as are approved by the
Board, but shall not include any of the services, whether
rendered directly or indirectly, that are enumerated in section
144 of the Companies Act:
Provided that an auditor who has been performing any

non-audit services on or before the coming into force of
section 128 of the Finance Act, 2021 shall comply with the
provisions of this sub-section before the close of the first
financial year in which the said section comes into force.
Explanation.—For the purposes of this section, the word

“firm” shall include a limited liability partnership
incorporated under the Limited Liability Partnership Act,
2008. 6 of 2009.
Removal and 25A. (1) The auditor appointed under section 25 may be
resignation of removed from office before expiry of the term of appointment
auditor.
only by a special resolution:
Provided that before taking any action under this sub-

section, an auditor proposed to be removed shall be given a
reasonable opportunity of being heard, which shall include
the right to represent in writing to the Corporation and, where
the auditor requests that such representation be notified to
members, to have a copy thereof sent to every member and in
118
case a copy is not sent as aforesaid because it was received

too late, to have the representation read out at the meeting,
without prejudice to the right to be heard orally.
(2) The auditor who has resigned from the Corporation

shall file within a period of thirty days from the date of
resignation, a statement in the prescribed form with the
Corporation, indicating the reasons and other facts as may be
relevant with regard to the resignation.
(3) Without prejudice to any action under this Act or any

other law, if the Central Government is satisfied, in
consultation with the Comptroller and Auditor General of
India, that any change of auditor is required, it may make an
order that the auditor shall not function as such and may
appoint another auditor in place of such auditor.
Powers and duties 25B. (1) Every auditor of the Corporation shall have a
of auditors and right of access at all times to the books of account and
auditor’s report. vouchers of the Corporation, and shall be entitled to require
from the officers of the Corporation such information and
explanation as the auditor may consider necessary for the
performance of his duties as auditor, and shall, amongst other
matters, inquire into the following matters, namely:—
(a) whether loans and advances made by the

Corporation on the basis of security have been properly
secured;
(b) whether the terms on which loans and advances

have been made are prejudicial to the interests of the
Corporation or its members;
(c) whether transactions of the Corporation which are

represented merely by book entries are prejudicial to its
interests;
(d) whether so much of the assets of the Corporation

as consist of shares, debentures and other securities have
been sold at a price less than that at which they were
purchased;
(e) whether loans and advances made by the

Corporation have been shown as deposits;
(f) whether personal expenses have been charged to

revenue account;
(g) where it is stated in the books and documents of

the Corporation that any shares have been allotted for
119
cash, whether cash has actually been received in respect

of such allotment, and if no cash has actually been so
received, whether the position as stated in the account
books and the balance-sheet is correct, regular and not
misleading:
Provided that the auditor shall also have the right of

access to the records of all the subsidiaries and associate
companies of the Corporation, in so far as they relate to
consolidation of the Corporation’s financial statements
with those of such subsidiaries and associate companies.
(2) The auditor shall make a report to the members on the

accounts examined by the auditor and on every financial
statement which is required by or under law to be placed in
general meeting, and such report shall, after taking into
account applicable provisions of this Act and any other law
for the time being in force, the standards referred to in section
24B, and matters that are required to be included in the audit
report under the provisions of this Act or any other law for
the time being in force, and to the best of the information and
knowledge of the auditor, state that the said accounts and
financial statements give a true and fair view of the state of
the Corporation’s affairs as at the end of its financial year and
profit or loss and cash flow for the year.
(3) The auditor’s report shall also state—
(a) whether the auditor has sought and obtained all the
information and explanations which to the best of the
auditor’s knowledge and belief were necessary for the
purpose of audit and if not, the details thereof and the
effect of such information on the financial statements;
(b) whether, in the auditor’s opinion, proper books of

account as required by law have been kept by the
Corporation so far as appears from the auditor’s
examination of those books and proper returns adequate
for the purposes of audit have been received from
branches not visited by the auditor;
(c) whether any report referred to in the proviso to

sub-section (6) has been sent to the Corporation’s auditor,
and the manner in which the Corporation’s auditor has
dealt with it in preparing the auditor’s report;
(d) whether the Corporation’s balance-sheet and

profit and loss account dealt within the report are in
agreement with the books of account and returns;
120
(e) whether, in the auditor’s opinion, the financial

statements comply with applicable standards;
(f) the observations or comments of the auditor on

financial transactions and matters which have any adverse
effect on the functioning of the Corporation;
(g) whether any director is disqualified to be or

remain a director under clause (i) of section 4A;
(h) any qualification, reservation or adverse remark

relating to the maintenance of accounts and matters
connected therewith;
(i) whether the Corporation has adequate internal

financial controls with reference to financial statements
in place and the operating effectiveness of such controls;
(j) such other matters as may be prescribed.
(4) Where any of the matters required to be included in

the audit report under this section is answered in the negative
or with a qualification, the report shall state the reasons
therefor.
(5) All qualifications, observations or comments

mentioned in the report of the auditor appointed for the
Corporation, in respect of financial transactions or matters
that have any adverse effect on the functioning of the
Corporation, shall be read out in general meeting and shall be
open to inspection by any member.
(6) In respect of a branch or an office of the Corporation,

the accounts shall be audited either by the auditor appointed
for the Corporation (herein referred to as Corporation’s
auditor) in this section or by any other person qualified for
appointment as an auditor of the Corporation and appointed
as such under section 25, or where the branch or office is
situated in a country outside India, the accounts of the branch
or office shall be audited either by the Corporation’s auditor
or by an accountant or by any other person duly qualified to
act as an auditor of the accounts of the branch or office in
accordance with the laws of that country, and the duties and
powers of the Corporation’s auditor with reference to the
audit of the branch or office and the auditor thereof, if any,
shall be such as may be prescribed:
Provided that the auditor for a branch or office shall

prepare a report on the accounts of the branch or office,
examined by such auditor and shall send it to the
121
Corporation’s auditor, who shall deal with it in the

Corporation’s auditor’s report in such manner as the
Corporation’s auditor may consider necessary.
Internal auditor. 25C. (1) The Board shall, on the recommendation of the
Audit Committee, appoint an internal auditor, who shall
either be a chartered accountant or a cost accountant, or such
other professional as may be determined by the Board to
conduct the internal audit of the functions and activities of the
Corporation.
(2) The Audit Committee shall—
(a) recommend to the Board for the appointment,

remuneration and terms of appointment of the internal
auditor;
(b) in consultation with the internal auditor, formulate

the scope, functioning, periodicity and methodology for
conducting the internal audit;
(c) review and monitor the internal auditor’s

performance and effectiveness of audit process.
Special auditor. 25D. Notwithstanding anything contained in sections

19C, 23A, 25, 25A and 25B, the Central Government may, at
any time, appoint such auditor as it deems fit as a special
auditor to examine and report on the accounts of the
Corporation, and such auditor shall have the same rights of
access to the books of account and vouchers of the
Corporation and entitlement to require information and
explanation from the officers of the Corporation as an auditor
of the Corporation has under section 25B.’.
Amendment of 129. In section 26 of the principal Act,—

section 26.
(i) for the words “The Corporation”, the words “The
Board” shall be substituted;
(ii) for the words “Central Government”, the word

“Board” shall be substituted.
Amendment of 130. In section 27 the principal Act, the words “and the report
section 27. shall also give an account of the activities, if any, which are likely
to be undertaken by the Corporation in the next financial year”
shall be omitted.
Amendment of 131. For section 28 of the principal Act, the following section
122
Surplus from “28. (1) If as a result of any investigation undertaken by

life insurance the Board under section 26, any surplus emerges,—
business, how to
be utilised.
(a) for every financial year previous to the financial
year for which the funds referred to in sub-section (2) of
section 24 are to be maintained, and for any subsequent
financial year for which members may exempt the
maintenance of such funds,—
(i) ninety per cent., or such higher percentage as

the Board may approve, of such surplus shall be
allocated to or reserved for the life insurance
policyholders of the Corporation; and
(ii) such percentage of the remaining surplus as

the Board may approve, shall be allocated to or
reserved for members and may either be credited to a
separate account maintained by the Corporation or be
transferred to such reserve or reserves as the Board
may specify;
(b) for every financial year other than that referred to

in clause (a),—
(i) in respect of participating policyholders,—
(I) ninety per cent., or such higher percentage

as the Board may approve, of surplus relating to
such policyholders, shall be transferred to the
participating policyholders fund, and shall be
allocated to or reserved for the life insurance
participating policyholders of the Corporation;
and
(II) such percentage of the remaining surplus

as the Board may approve, shall be allocated to or
reserved for members and may either be credited
to a separate account maintained by the
Corporation or be transferred to such reserve or
reserves as the Board may specify;
(ii) in respect of non-participating policyholders,

one hundred per cent. of surplus relating to such
policyholders shall be allocated to or reserved for
members and may either be credited to a separate
account maintained by the Corporation or be
transferred to such reserve or reserves as the Board
may specify.
123
(2) The remaining surplus referred to in sub-clause (ii)

of clause (a) of sub-section (1) or in item (II) of sub-clause (i)
of clause (b) of sub-section (1), as the case may be, and the
surplus referred to in sub-clause (ii) of clause (b) of sub-
section (1), and the profits allocated to or reserved for the
members under section 28A, shall be utilised for such
purposes as the Board may approve, including for the purpose
of declaration or payment of dividend, the issue of fully paid-
up bonus shares to members and crediting any of the reserves
that the Board may create for any purpose.
(3) The Corporation shall, with the approval of the Board,

publish on its website its surplus distribution policy at least
once in five years, or such shorter period not less than three
years as the Board may deem fit, and such policy shall
specify, among other things, the percentages referred to in
sub-section (1).”.
Amendment of 132. In section 28A of the principal Act, for the words “paid
section 28A. to the Central Government”, the words “allocated to or reserved
for the members” shall be substituted.
Insertion of new 133. In the principal Act, after section 28A, the following
sections 28B sections shall be inserted, namely:—
and 28C.
Declaration of “28B. (1) No dividend shall be declared or paid by the
dividend. Corporation for any financial year except out of the surpluses
and profits referred to in sub-section (2) of section 28 (after
excluding any amount representing unrealised gains, notional
gains or revaluation of assets and any change in carrying
amount of an asset or of a liability on measurement of the
asset or the liability at fair value) for such year arrived at after
providing for depreciation, or for any previous financial year
or years arrived at after providing for depreciation and
remaining undistributed, or out of both the aforesaid
surpluses and profits:
Provided that no dividend shall be declared or paid by the

Corporation from its reserves other than free reserves:
Provided further that no dividend shall be declared or

paid by the Corporation unless any losses carried over from
previous years and any depreciation not provided for in
previous years are set off against the surpluses and profits
referred to in sub-section (2) of section 28 for the financial
year for which the dividend is proposed to be declared or
paid.
(2) The Board may, during any financial year or at any

time during the period from the close of a financial year till
124
the holding of the annual general meeting for that financial

year, declare interim dividend out of the surpluses and profits
referred to in sub-section (2) of section 28 of the financial
year for which such interim dividend is sought to be declared,
or out of the surpluses and profits referred to in sub-section
(2) generated in the current financial year till the close of the
quarter preceding the date of declaration of such interim
dividend:
Provided that in case the Corporation has incurred loss

during the current financial year up to the close of the quarter
immediately preceding the date of declaration of interim
dividend, such interim dividend shall not be declared at a rate
higher than the average of the dividends declared by the
Corporation during the immediately preceding three financial
years.
(3) The amount of the dividend, including interim

dividend, shall be deposited in a scheduled bank in a separate
account within five days from the date of declaration of such
dividend.
(4) No dividend shall be paid by the Corporation in

respect of any share of the Corporation except to the member
in whose name such share is entered on the register of
members referred to in section 5C, or to his order, or to his
banker, and shall be payable in cash and not in stock or other
form of value:
Provided that nothing in this sub-section shall be deemed

to prohibit the capitalisation of the surpluses and profits
referred to in sub-section (2) of section 28 for the purpose of
issuing fully paid-up bonus shares or paying up any amount
for the time being unpaid on any share held by members:
Provided further that any dividend payable in cash may

be paid by cheque or warrant or in any electronic mode to the
member entitled to such payment.
Unpaid 28C. (1) Where a dividend has been declared by the

Dividend Corporation but has not been paid or claimed within thirty
Account.
days from the date of declaration to any member entitled to
payment thereof, the Corporation shall, within seven days
from the expiry of the said period of thirty days, transfer the
total amount of dividend which remains unpaid or unclaimed
to a special account to be opened by the Corporation in that
behalf in any scheduled bank, to be called the Unpaid
Dividend Account.
125
(2) The Corporation shall, within a period of ninety days

of making any transfer of an amount under sub-section (1) to
the Unpaid Dividend Account, prepare a statement containing
the name and last known address of, and the amount of the
unpaid dividend payable to, each member entitled to such
unpaid dividend, and shall place such statement on its website
and on any other website as the Central Government may
specify.
(3) If any default is made in transferring the total amount

referred to in sub-section (1) or any part thereof to the Unpaid
Dividend Account, the Corporation shall pay, from the date
of such default, interest on so much of the amount as has not
been transferred to the said account, at such rate as is
specified in section 123 of the Companies Act, and the
interest accruing on such amount shall ensure to the benefit
of the members in proportion to the amount remaining unpaid
to them.
(4) Any person claiming to be entitled to any money

transferred under sub-section (1) to the Unpaid Dividend
Account may apply to the Corporation for payment of the
money claimed.
(5) The amount remaining unclaimed and unpaid for a

period of seven year from the date it became due for payment
in the Unpaid Dividend Account shall be transferred to the
Investor Education and Protection Fund established under
sub-section (1) of section 125 of the Companies Act and shall
be deemed to be an amount credited to the said Fund under
sub-section (2) of the said section.”.
Substitution of 134. For sections 46 and 47 of the principal Act, the

sections 46 and following sections shall be substituted, namely:—
47.
Defects in ‘46. (1) No act or proceeding of the Corporation or of its
constitution of Board or any Committee thereof shall be called in question
Corporation or
Committees or
on the ground merely of the existence of any vacancy or
in appointment defect in the constitution of the Corporation or the Board or
or nomination of such Committee, as the case may be.
directors not to
invalidate acts
or proceedings.
(2) No act done by an individual as a director shall be
deemed to be invalid, notwithstanding that it was
subsequently noticed that his appointment or nomination, as
the case may be, was invalid by reason of any defect or
disqualification or had terminated by virtue of any provision
contained in this Act:
126
Provided that nothing in this sub-section shall be deemed

to give validity to any act done by such individual as director
after his appointment or nomination, as the case may be, has
been noticed by the Corporation to be invalid or to have
terminated.
Protection of 47. (1) No suit, prosecution or other legal proceeding

action taken shall lie against any director or employee of the Corporation
under this Act. for anything which is in good faith done or intended to be
done in pursuance of this Act or of any rules or regulations
made thereunder.
(2) A director who is not a whole-time director shall be

held liable only in respect of such acts of omission or
commission of the Corporation which had occurred with his
knowledge, attributable through Board processes, and with
his consent or connivance or where he had not acted
diligently.

reference to “Board” shall include Committees of the Board.’.
Amendment of 135. In section 48 of the principal Act, in sub-section (2),—

section 48.
(i) in clause (a), for the word “members”, the word
“directors” shall be substituted;
(ii) for clause (aa), the following clauses shall be

“(aa) the manner of disclosure of interest by a director

under section 4B;
(ab) the conditions subject to which the Board may

consent to related party transactions under section 4C;
(ac) the securities and instruments which may be

issued under section 5;
(ad) the manner of reservation in favour of life

insurance policyholders and allotment against such
reservation, in relation to a public issue, under clause (a)
of sub-section (9) of section 5;”;
(iii) for clause (g), the following clause shall be

“(g) the conditions under the first proviso to clause

(d) of sub-section (2) of section 19C;”;
127
(iv) after clause (h), the following clauses shall be

“(ha) the manner in which general meetings shall be

held, and the business to be transacted and procedure to
be followed thereat;
(hb) the quorum for a general meeting, and the

manner of holding the meeting if it could not be held for
want of quorum and was adjourned under section 23A;
(hc) the manner in which persons may attend a

general meeting and exercise their vote;
(hd) the manner in which notices may be served on

behalf of the Corporation upon members or other persons;
(he) the form and manner in which the financial

statements referred to in sub-section (8) of section 24B
may be issued, circulated or published;
(hf) matters that may be prescribed under clause (n)

of sub-section (1) of section 24C;
(hg) the manner and procedure of selection and

conditions of appointment of auditors under sub-section
(1) of section 25;
(hh) the form in which an auditor who has resigned

shall indicate the reasons and other facts relevant to the
resignation under sub-section (2) of section 25A;
(hi) the matters to be prescribed under clause (j) of

sub-section (3) of section 25B;
(hj) the duties and powers of the Corporation’s

auditor with reference to the audit of a branch or office of
the Corporation and the auditor thereof, under sub-section
(6) of section 25B;”.
Amendment of 136. In the principal Act, in section 49,—

section 49.
(i) in sub-section (1), for the word “Corporation”, the
word “Board” shall be substituted;
(ii) in sub-section (2),—
(a) in clause (a), for the word “Corporation”, the word

“Board” shall be substituted;
128
(b) clause (c) shall be omitted;
(c) in clause (e), for the word “Fund”, the words

“fund or funds” shall be substituted;
(d) for clause (h), the following clause shall be

“(h) the manner in which meetings of the Board

and its Committees shall be held, the business to be
transacted and procedure to be followed thereat, and
the quorum therefor;”;
(e) clause (i) shall be omitted;
(f) after clause (m), the following clauses shall be

“(n) the manner of election of directors under

clause (e) of sub-section (2) of section 4;
(o) the form and manner of registers to be kept

and maintained under sub-section (1) of section 5C;
(p) the manner of nomination by an individual

registered member or joint holder of shares, the
manner of variation or cancellation of such
nomination, and the manner of nomination in favour
of a minor, under section 5F;
(q) the manner in which and the conditions

subject to which shares, including partly paid-up
shares, may be issued, held, transferred and
registered;
(r) the maintenance and operation of the funds

and reserves under section 24;
(s) the form and manner in which the books and

records referred to in section 24A may be kept;”;
(iii) after sub-section (2), the following sub-section shall

“(2A) Any reference in the regulations as in force

immediately before the coming into force of section 123
of the Finance Act, 2021 to “Investment Committee”
shall be construed as a reference to the Investment
Committee of the Board referred to in section 19A.”.
129
Insertion of 137. After section 49 of the principal Act, the following

sections 50 and sections shall be inserted, namely:—
51.
Form, manner etc. “50. Where this Act provides that the form or manner or
for companies to period or details in respect of any declaration to be made or
apply with the particulars to be included in any register to be maintained
modifications. shall be such as may be prescribed for a company under the
Companies Act, such prescribed form or manner or period or
details or particulars, as the case may be, shall apply subject
to such modifications, exceptions and conditions that the
Central Government may by notification specify.
Power to 51. (1) If any difficulty arises in giving effect to the

remove provisions of this Act as amended by Part III of Chapter VI
difficulties.
of the Finance Act, 2021, the Central Government may, by
order published in the Official Gazette, make such provisions,
not inconsistent with the provisions of this Act, as appear to
it to be necessary or expedient for removing the difficulty:
Provided that no such order shall be made after the expiry

of a period of three years from the date of commencement of
Part III of Chapter VI of the Finance Act, 2021.
(2) Every order made under this section shall, as soon as

may be after it is made, be laid on the table of each House of
Parliament.”.
PART IV
AMENDMENTS TO THE SECURITIES CONTRACTS

(REGULATION) ACT, 1956
Commencement 138. The provisions of this Part shall come into force on the
of this Part. 1st day of April, 2021.
Amendment of 139. In the Securities Contracts (Regulation) Act, 1956 42 of 1956.

section 2. (hereafter in this Part referred to as the principal Act), in section
2,––
(i) after clause (d), the following clause shall be

‘(da) “pooled investment vehicle” means a fund

established in India in the form of a trust or otherwise,
such as mutual fund, alternative investment fund,
collective investment scheme or a business trust as
defined in sub-section (13A) of section 2 of the Income-
tax Act, 1961 and registered with the Securities and 43 of 1961.
Exchange Board of India, or such other fund, which
130
raises or collects monies from investors and invests

such funds in accordance with such regulations as may
be made by the Securities and Exchange Board of India
in this behalf;’;
(ii) in clause (h),––
(a) in sub-clause (i), for the words “other body

corporate”, the words “or a pooled investment vehicle
or other body corporate” shall be substituted;
(b) after sub-clause (id), the following sub-clause

“(ida) units or any other instrument issued by

any pooled investment vehicle;”.
Insertion of new 140. After section 30A of the principal Act, the following
section 30B. section shall be inserted, namely:––
Special “30B. (1) Notwithstanding anything contained in the

provisions Indian Trust Act, 1882 or in any other law for the time being 2 of 1882.
related to pooled
investment
in force or in any judgment, decree or order of any Court,
vehicle. Tribunal or any other authority, a pooled investment vehicle,
whether constituted as a trust or otherwise, and registered
with the Securities and Exchange Board of India shall be
eligible to borrow and issue debt securities in such manner
and to such extent as may be specified under the regulations
made by Securities and Exchange Board of India in this
behalf.
(2) Every pooled investment vehicle referred to in sub-

section (1) shall, subject to the provisions of the trust deed,
be permitted to provide security interest to lenders in terms
of the facility documents entered into by such pooled
investment vehicle.
(3) Where any pooled investment vehicle referred to in

sub-section (1) defaults in repayment of principal amount or
payment of interest or any such amount due to the lender, the
lender shall recover the defaulted amount and enforce
security interest, if any, against the trust assets, by initiating
proceedings against the trustee acting on behalf of such
pooled investment vehicle in accordance with the terms and
conditions specified in the facility documents:
Provided that on initiation of the proceedings against the

trust assets, the trustee shall not be personally liable and his
assets shall not be utilised towards recovery of such debt.
131
(4) The trust assets, which remain after recovery of

defaulted amount, shall be remitted to the unit holders on
proportionate basis.”.
PART V
Amendment of 141. In the Central Sales Tax Act, 1956, in section 8, in sub-
Act 74 of 1956. section (3), for clause (b), the following clause shall be
“(b) are goods of the class or classes specified in the

certificate of registration of the registered dealer purchasing
the goods as being intended for re-sale by him or subject to any
rules made by the Central Government in this behalf, for use
by him in the manufacture or processing for sale of goods
specified under clause (d) of section 2;”.
PART VI
AMENDMENTS TO THE PROHIBITION OF BENAMI

PROPERTY TRANSACTION ACT, 1988
Commencement 142. The provisions of this Part shall come into force on the
of this Part. 1st day of July, 2021.
Amendment of 143. In the Prohibition of Benami Property Transactions

section 2. Act, 1988 (hereinafter in this Part referred to as the principal 45 of 1988.
Act), in section 2, in clause (1), for the words “appointed under”,
the words “referred to in” shall be substituted.
Substitution of 144. For section 7 of the principal Act, the following section
section 7. shall be substituted, namely:––
Adjudicating “7. The competent authority authorised under sub-

Authority. section (1) of section 5 of the Smugglers and Foreign
13 of 1976.
Exchange Manipulators (Forfeiture of Property) Act, 1976
shall be the Adjudicating Authority to exercise jurisdiction,
powers and authority conferred by or under this Act.”.
Omission of 145. Sections 8 to 17 of the principal Act, shall be omitted.

sections 8 to 17.
Amendment of 146. In section 26 of the principal Act, in sub-section (7),

section 26. after the proviso to the Explanation, the following proviso shall
“Provided that where the time limit for passing order

under this sub-section expires during the period beginning
from the 1st day of July, 2021 and ending on the 29th day
132
of September, 2021, the time limit for passing such order

shall be extended to the 30th day of September, 2021.”.
Amendment of 147. In section 68 of the principal Act, in sub-section (2),

section 68. clauses (b) and (c) shall be omitted.
PART VII
AMENDMENT TO THE SECURITIES AND EXCHANGE

BOARD OF INDIA ACT, 1992
Amendment of 148. In the Securities and Exchange Board of India Act,

Act 15 of 1992. 1992, in section 12, after sub-section (1B), the following sub-
section shall be inserted with effect from the 1st day of April,
2021, namely:––
“(1C) No person shall sponsor or cause to be sponsored

or carry on or cause to be carried on the activity of an
alternative investment fund or a business trust as defined
in clause (13A) of section 2 of the Income-tax Act, 1961,
unless a certificate of registration is granted by the Board 43 of 1961.
in accordance with the regulations made under this Act.”.
PART VIII
AMENDMENT TO THE RECOVERY OF DEBTS DUE TO

BANKS AND FINANCIAL INSTITUTIONS ACT, 1993
Amendment of 149. In the Recovery of Debts Due to Banks and Financial

Act 51 of 1993. Institutions Act, 1993, in section 2, in clause (g), after the words
“from any person”, the words, brackets, letters and figures “or a
pooled investment vehicle as defined in clause (da) of section 2
of the Securities Contracts (Regulation) Act, 1956,” shall be
inserted with effect from the 1st day of April, 2021. 42 of 1956.
PART IX
Amendment of 150. In the Seventh Schedule to the Finance Act, 2001,–– 14 of 2001.
Seventh
Schedule.
(a) for the brackets, words and figures “(See section 138)”, the
brackets, words and figures “(See section 136)” shall be
substituted;
(b) after tariff item 2403 99 90 and the entries relating thereto, the
following tariff items and entries shall be inserted with effect
from the 1st day of January, 2022, namely:––
133
“ 2404 11 00 -- containing tobacco or Kg. 25%

reconstituted tobacco
2404 19 00 -- Other Kg. 25% ”.
PART X
AMENDMENT TO THE SECURITISATION AND

RECONSTRUCTION OF FINANCIAL ASSETS AND
ENFORCEMENT OF SECURITY INTEREST ACT, 2002
Amendment of 151. In the Securitisation and Reconstruction of Financial

Act 54 of 2002. Assets and Enforcement of Security Interest Act, 2002, in
section 2, in sub-section (1) with effect from the 1st day of April,
2021––
(i) in clause (f),––
(a) for the words “any person who”, the words “any
person who, or a pooled investment vehicle as defined
in clause (da) of section 2 of the Securities Contracts
(Regulation) Act, 1956 which,” shall be substituted; 42 of 1956.
(b) for the words “and includes a person who”, the

words “ and includes a person who, or a pooled
investment vehicle which,” shall be substituted;
(ii) in clause (zd), in sub-clause (iv), for the words “the

Board appointed by any company”, the words “the Board
and appointed” shall be substituted.
PART XI
AMENDMENTS TO THE INDUSTRIAL DEVELOPMENT

BANK (TRANSFER OF UNDERTAKING AND REPEAL)
ACT, 2003
Commencement 152. The provisions of this Part shall come into force on such
of this Part. date as the Central Government may, by notification in the
Official Gazette, appoint.
Amendment of 153. In the Industrial Development Bank (Transfer of 53 of 2003.

section 3. Undertaking and Repeal) Act, 2003, in section 3, in sub-section
(2),—
(i) in the opening paragraph, the words “in addition to the

business which may be carried on and transacted by the
Development Bank” shall be omitted;
134
(ii) after the proviso, the following proviso shall be

“Provided further that the provisions of clause (a) to

the proviso, shall cease to be applicable immediately
after the commencement of Part….. of the Finance Act,
2021, and from such commencement, the Company shall
be deemed to have obtained licence under section 22 of 10 of 1949.
the Banking Regulation Act, 1949.”.
PART XII
Commencement 154. The provisions of this Part shall come into force and
of this Part. shall be deemed to have come into force on the 1st day of
February, 2021.
Amendment of 155. In section 97 of the Finance Act (No.2) Act, 2004, 23 of 2004.
section 97. (hereafter in this Part referred to as the Principal Act),––
(i) in clause (13), in sub-clause (b), for the words

“Mutual Fund;”, the following shall be substituted, namely:–
–
“Mutual Fund; or
(ba) sale or surrender or redemption of a unit of an

equity oriented fund to an insurance company, on
maturity or partial withdrawal, with respect to unit linked
insurance policy issued by such insurance company on or
after the 1st day of February, 2021;”;
(ii) after clause (13), the following clause shall be

‘(13A) “unit linked insurance policy” shall have the

meaning assigned to it in Explanation 3 of clause (10D)
43 of 1961.
of section 10 of the Income-tax Act, 1961;’
Amendment of 156. In section 98 of the Principal Act, in the Table, after

section 98. serial number 5 and the entries relating thereto, the following
“5A. Sale or surrender or redemption of a unit [0.001] Seller”

of an equity oriented fund to an insurance per
company, on maturity or partial cent.
withdrawal, with respect to unit linked
135
insurance policy issued by such insurance

company on or after the first day of
February, 2021
Amendment of 157. In section 100 of the Principal Act, after the words
section 100. “Mutual Fund” wherever they occur, the words “or insurance
company” shall be inserted.
Amendment of 158. In section 101 of the Principal Act, after the words
section 101. “Mutual Fund” at both places where they occur, the words “or
insurance company” shall be inserted.
PART XIII
Amendment of 159. In the Finance Act, 2016,––

Act 28 of 2016.
(a) the following amendments shall be made and shall be
deemed to have been made with effect from the 1st day of April,
2020, namely:––
(i) in section 163, in sub-section (3), the following

“Provided that the consideration received or

receivable for specified services and for e-commerce
supply or services shall not include the consideration,
which are taxable as royalty or fees for technical services
in India under the Income-tax Act, read with the
agreement notified by the Central Government under
section 90 or section 90A of the said Act.”;
(ii) in section 164, in clause (cb), the following

‘Explanation.––For the purposes of this clause,

“online sale of goods” and “online provision of services”
shall include one or more of the following online
activities, namely:––
(a) acceptance of offer for sale; or
(b) placing of purchase order; or
(c) acceptance of the purchase order; or

136
(e) supply of goods or provision of services,

partly or wholly;’;
(iii) in section 165A, in sub-section (3),––
(A) in the opening portion, for the words ‘section,

“specified circumstances” mean––’, the following shall
be substituted, namely:––
‘section,––
(a) “specified circumstances” mean––’;
(B) after clause (a) as so amended, the following

“(b) consideration received or receivable from e-

commerce supply or services shall include––
(i) consideration for sale of goods

irrespective of whether the e-commerce operator
owns the goods;
(ii) consideration for provision of services

irrespective of whether service is provided or
facilitated by the e-commerce operator.”.
(b) in section 191, in the proviso, after the word

“refundable”, the words “without any interest” shall be
inserted and shall be deemed to have been inserted with
effect from the 1st day of June, 2016.
PART XIV
AMENDMENT TO THE DIRECT TAX VIVAD SE VISHWAS

ACT, 2020
Amendment of 160. In the Direct Tax Vivad se Vishwas Act, 2020, the
Act 3 of 2020. following amendments shall be made and shall be deemed to
have been made with effect from the 17th day of March, 2020,
namely:––
(a) in section 2, in sub-section (1),––
(i) in clause (a), the following Explanation shall be

137
‘Explanation.—For the removal of doubts, it is

hereby clarified that the expression “appellant” shall not
include and shall be deemed never to have been included
a person in whose case a writ petition or special leave
petition or any other proceeding has been filed either by
him or by the income-tax authority or by both before an
appellate forum, arising out of an order of the Settlement
Commission under Chapter XIX-A of the Income-tax
Act, and such petition or appeal is either pending or is
disposed of.’;
(ii) in clause (j), after the second proviso, the following

Explanation shall be inserted, namely:—
‘Explanation.––For the removal of doubts, it is

hereby clarified that the expression “disputed tax”, in
relation to an assessment year or financial year, as the
case may be, shall not include and shall be deemed never
to have been included any sum payable either by way of
tax, penalty or interest pursuant to an order passed by the
Settlement Commission under Chapter XIX-A of the
Income-tax Act.’;
(iii) in clause (o), the following Explanation shall be inserted,

namely:––
‘Explanation.––For the removal of doubts, it is hereby

clarified that the expression “tax arrear” shall not include and
shall be deemed never to have been included any sum payable
either by way of tax, penalty or interest pursuant to an order
passed by the Settlement Commission under Chapter XIX-A of
the Income-tax Act.’.
_____________
Declaration under the Provisional Collection of Taxes Act,

1931
It is hereby declared that it is expedient in the public

interest that the provisions of clauses 95 (i), 115 and 116 of this
Bill shall have immediate effect under the Provisional Collection
of Taxes Act, 1931. 16 of 1931.
______________
138
THE FIRST SCHEDULE

(See section 2)
PART I
INCOME-TAX
Paragraph A
(I) In the case of every individual other than the individual

referred to in items (II) and (III) of this Paragraph or Hindu undivided
family or association of persons or body of individuals, whether
incorporated or not, or every artificial juridical person referred to in
sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not
being a case to which any other Paragraph of this Part applies,—
Rates of income-tax
(1) where the total income does Nil;

not exceed Rs. 2,50,000
(2) where the total income 5 per cent. of the amount by

exceeds Rs. 2,50,000 but does which the total income exceeds
not exceed Rs. 5,00,000 Rs. 2,50,000;
(3) where the total income Rs.12,500 plus 20 per cent. of the
exceeds Rs. 5,00,000 but does amount by which the total
not exceed Rs. 10,00,000 income exceeds Rs. 5,00,000;
(4) where the total income Rs. 1,12,500 plus 30 per cent.
exceeds Rs. 10,00,000 of the amount by which the total
income exceeds Rs.10,00,000.
(II) In the case of every individual, being a resident in India,

who is of the age of sixty years or more but less than eighty years at
any time during the previous year,—
Rates of income-tax

not exceed Rs. 5,00,000 Rs. 3,00,000;
139
exceeds Rs. 5,00,000 but does amount by which the total
(4) where the total income Rs. 1,10,000 plus 30 per cent.
exceeds Rs. 10,00,000 of the amount by which the total
(III) In the case of every individual, being a resident in India, who

is of the age of eighty years or more at any time during the previous
year,—
Rates of income-tax


not exceed Rs. 10,00,000 Rs. 5,00,000;
(3) where the total income Rs. 1,00,000 plus 30 per cent. of
exceeds Rs. 10,00,000 the amount by which the total
income exceeds Rs. 10,00,000.
Surcharge on income-tax
The amount of income-tax computed in accordance with the

preceding provisions of this Paragraph, or the provisions of section
111A or section 112 or section 112A or the provision of section
115BAC of the Income-tax Act, shall be increased by a surcharge for
the purposes of the Union, calculated, in the case of every individual
or Hindu undivided family or association of persons or body of
individuals, whether incorporated or not, or every artificial juridical
person referred to in sub-clause (vii) of clause (31) of section 2 of the
Income-tax Act,—
(a) having a total income (including the income by way of

dividend or income under the provisions of section 111A and
section 112A of the Income-tax Act) exceeding fifty lakh rupees but
not exceeding one crore rupees, at the rate of ten per cent. of such
income-tax;
(b) having a total income (including the income by way of

section 112A of the Income-tax Act) exceeding one crore rupees,
but not exceeding two crore rupees, at the rate of fifteen per cent.
of such income-tax;
140
(c) having a total income (excluding the income by way of

section 112A of the Income-tax Act) exceeding two crore rupees
but not exceeding five crore rupees, at the rate of twenty-five per
cent. of such income-tax;
(d) having a total income (excluding the income by way of

section 112A of the Income-tax Act) exceeding five crore rupees at
the rate of thirty-seven per cent. of such income-tax; and
(e) having a total income (including the income by way of

section 112A of the Income-tax Act) exceeding two crore rupees,
but is not covered under clauses (c) and (d), shall be applicable at
the rate of fifteen per cent. of such income-tax:
Provided that in case where the total income includes any income
by way of dividend or income chargeable under section 111A and
section 112A of the Income-tax Act, the rate of surcharge on the
amount of income-tax computed in respect of that part of income
shall not exceed fifteen per cent.:
Provided further that in the case of persons mentioned above

having total income exceeding,—
(a) fifty lakh rupees but not exceeding one crore rupees, the
total amount payable as income-tax and surcharge on such
income shall not exceed the total amount payable as income-tax
on a total income of fifty lakh rupees by more than the amount
of income that exceeds fifty lakh rupees;
(b) one crore rupees but does not exceed two crore rupees,
the total amount payable as income-tax and surcharge on such
and surcharge on a total income of one crore rupees by more than
the amount of income that exceeds one crore rupees;
(c) two crore rupees but does not exceed five crore rupees,
the total amount payable as income-tax and surcharge on such
and surcharge on a total income of two crore rupees by more than
the amount of income that exceeds two crore rupees;
(d) five crore rupees, the total amount payable as income-tax

and surcharge on such income shall not exceed the total amount
payable as income-tax and surcharge on a total income of five
crore rupees by more than the amount of income that exceeds
five crore rupees.
141
Paragraph B
In the case of every co-operative society,—
Rates of income-tax
(1) where the total income does 10 per cent. of the total income;
not exceed Rs.10,000
exceeds Rs.10,000 but does not amount by which the total
exceed Rs. 20,000 income exceeds Rs. 10,000;
(3) where the total income Rs. 3,000 plus 30 per cent. of the
exceeds Rs. 20,000 amount by which the total
income exceeds Rs. 20,000

111A or section 112 or section 112A of the Income-tax Act, shall, in
the case of every co-operative society, having a total income exceeding
one crore rupees, be increased by a surcharge for the purposes of the
Union calculated at the rate of twelve per cent. of such income-tax:
Provided that in the case of every co-operative society

mentioned above having total income exceeding one crore rupees, the
total amount payable as income-tax and surcharge on such income
shall not exceed the total amount payable as income-tax on a total
income of one crore rupees by more than the amount of income that
exceeds one crore rupees.
Paragraph C
In the case of every firm,—
Rate of income-tax
On the whole of the total income 30 per cent.

the case of every firm, having a total income exceeding one crore
rupees, be increased by a surcharge for the purposes of the Union
calculated at the rate of twelve per cent. of such income-tax:
142
Provided that in the case of every firm mentioned above having

total income exceeding one crore rupees, the total amount payable as
income-tax and surcharge on such income shall not exceed the total
amount payable as income-tax on a total income of one crore rupees
by more than the amount of income that exceeds one crore rupees.
Paragraph D
In the case of every local authority,—
Rate of income-tax

the case of every local authority, having a total income exceeding one
crore rupees, be increased by a surcharge for the purposes of the Union
Provided that in the case of every local authority mentioned

above having total income exceeding one crore rupees, the total
amount payable as income-tax and surcharge on such income shall not
exceed the total amount payable as income-tax on a total income of
one crore rupees by more than the amount of income that exceeds one
crore rupees.
Paragraph E
In the case of a company,—
Rates of income-tax
I. In the case of a domestic company,—
(i) where its total turnover or the 25 per cent. of the total income;
gross receipt in the previous year
2018-19 does not exceed four
hundred crore rupees;
(ii) other than that referred to in 30 per cent. of the total income.
item (i)
II. In the case of a company other than a domestic company,—

143
(i) on so much of the total income

as consists of,— 50 per cent.;
(a) royalties received from Government or an

Indian concern in pursuance of an agreement
made by it with the Government or the Indian
concern after the 31st day of March, 1961 but
before the 1st day of April, 1976; or
(b) fees for rendering technical services

received from Government or an Indian
concern in pursuance of an agreement made
by it with the Government or the Indian
concern after the 29th day of February, 1964
but before the 1st day of April, 1976, and
where such agreement has, in either case,
been approved by the Central Government .
(ii) on the balance, if any, of the total income 40 per cent..

111A or section 112 or 112A of the Income-tax Act, shall, be increased
by a surcharge for the purposes of the Union calculated,—
(i) in the case of every domestic company,––
(a) having a total income exceeding one crore rupees but not
exceeding ten crore rupees, at the rate of seven per cent. of such
income-tax; and
(b) having a total income exceeding ten crore rupees, at the rate
of twelve per cent. of such income-tax;
(ii) in the case of every company other than a domestic

company,––
(a) having a total income exceeding one crore rupees but not
exceeding ten crore rupees, at the rate of two per cent. of such
income-tax; and
(b) having a total income exceeding ten crore rupees, at the rate
of five per cent. of such income-tax:
Provided that in the case of every company having a total income

exceeding one crore rupees but not exceeding ten crore rupees, the total
144
crore rupees:
Provided further that in the case of every company having a total

income exceeding ten crore rupees, the total amount payable as
amount payable as income-tax and surcharge on a total income of ten
crore rupees by more than the amount of income that exceeds ten crore
rupees.
PART II
RATES FOR DEDUCTION OF TAX AT SOURCE IN CERTAIN CASES
In every case in which under the provisions of sections 193,

194A, 194B, 194BB, 194D, 194LBA, 194LBB, 194LBC and 195 of
the Income-tax Act, tax is to be deducted at the rates in force,
deduction shall be made from the income subject to the deduction at
the following rates:–
Rate of income-
tax
1. In the case of a person other than a company—
(a) where the person is resident in India—
(i) on income by way of interest other than 10 per cent.;
“Interest on securities”
(ii) on income by way of winnings from 30 per cent.;

lotteries, puzzles, card games and other
games of any sort
(iii) on income by way of winnings from 30 per cent.;

horse races
(iv) on income by way of insurance 5 per cent.;

commission
(v) on income by way of interest payable 10 per cent.;
on—
(A) any debentures or securities for
money issued by or on behalf of any
local authority or a corporation
established by a Central, State or
Provincial Act;
145
(B) any debentures issued by a company

where such debentures are listed on
a recognised stock exchange in
India in accordance with the
Securities Contracts (Regulation)
Act, 1956 (42 of 1956) and any rules
made thereunder;
(C) any security of the Central or State

Government;
(vi) on any other income 10 per cent.;
(b) where the person is not resident in India—

(i) in the case of a non-resident Indian—
(A) on any investment income 20 per cent.;
(B) on income by way of long-term 10 per cent.;
capital gains referred to in section
115E or sub-clause (iii) of clause (c)
of sub-section (1)of section 112
(C) on income by way of long-term 10 per cent.;

capital gains referred to in section
112A
(D) on other income by way of long-term

capital gains [not being long-term 20 per cent.;
capital gains referred to in clauses
(33) and (36) of section 10] referred
to in section 112A exceeding one
lakh rupees
(E) on income by way of short-term

capital gains referred to in section 15 per cent.;
111A
(F) on income by way of interest payable

20 per cent.;
by Government or an Indian
concern on moneys borrowed or
debt incurred by Government or the
Indian concern in foreign currency
(not being income by way of interest
referred to in section 194LB or
section 194LC)
146
(G) on income by way of royalty payable 10 per cent.;

by Government or an Indian
concern in pursuance of an
agreement made by it with the
Government or the Indian concern
where such royalty is in
consideration for the transfer of all
or any rights (including the granting
of a licence) in respect of copyright
in any book on a subject referred to
in the first proviso to sub-section
(1A) of section115A of the Income-
tax Act, to the Indian concern, or in
respect of any computer software
referred to in the second proviso to
sub-section (1A) of section 115A of
the Income-tax Act, to a person
resident in India
(H) on income by way of royalty [not 10 per cent.;

being royalty of the nature referred
to in sub-item (b)(i)(G)] payable by
Government or an Indian concern in
pursuance of an agreement made by
it with the Government or the Indian
concern and where such agreement
is with an Indian concern, the
agreement is approved by the
Central Government or where it
relates to a matter included in the
industrial policy, for the time being
in force, of the Government of
India, the agreement is in
accordance with that policy
(I) on income by way of fees for

10 per cent.;
technical services payable by
in force, of the Government of
India, the agreement is in
accordance with that policy
147
(J) on income by way of winnings from 30 per cent.;

lotteries, crossword puzzles, card
games and other games of any sort
(K) on income by way of winnings from 30 per cent.;

horse races
(L) on the income by way of dividend 20 per cent.;
(M) on the whole of the other income 30 per cent.;
(ii) in the case of any other person—

(A) on income by way of interest 20 per cent.;
payable by Government or an Indian
concern on moneys borrowed or
debt incurred by Government or the
Indian concern in foreign currency
(not being income by way of interest
referred to in section 194LB or
section 194LC)
(B) on income by way of royalty payable

by Government or an Indian 10 per cent.;
concern in pursuance of an
Government or the Indian concern
where such royalty is in
consideration for the transfer of all
or any rights (including the granting
of a licence) in respect of copyright
in any book on a subject referred to
in the first proviso to sub-section
(1A) of section 115A of the Income-
tax Act, to the Indian concern, in
respect of any computer software
referred to in the second proviso to
sub-section (1A) of section 115A of
the Income-tax Act, to a person
resident in India
(C) on income by way of royalty [not

10 per cent.;
being royalty of the nature referred
to in sub-item (b)(ii)(B)] payable by
148

in force, of the Government of India,
the agreement is in accordance with
that policy
(D) on income by way of fees for

technical services payable by 10 per cent.;
in force, of the Government of India,
the agreement is in accordance with
that policy
(E) on income by way of winnings from

lotteries, crossword puzzles, card 30 per cent.;
games and other games of any sort
(F) on income by way of winnings from

horse races 30 per cent.;
(G) on income by way of short-term

111A
(H) on income by way of long-term

capital gains referred to in sub- 10 per cent.;
clause (iii) of clause (c) of sub-
section (1) of section 112
(I) on income by way of long-term

112A exceeding one lakh rupees
(J) on income by way of other long-term

capital gains [not being long-term 20 per cent.;
capital gains referred to in clauses
(33) and (36)of section 10]
(K) on income by way of dividend 20 per cent.;

149
(L) on the whole of the other income 30 per cent.;
2. In the case of a company—
(a) where the company is a domestic company—
(i) on income by way of interest other than

“Interest on securities” 10 per cent.;
(ii) on income by way of winnings from

lotteries, puzzles, card games and other 30 per cent.;
games of any sort
(iii) on income by way of winnings from

horse races 30 per cent.;
(iv) on any other income 10 per cent.;
(b) where the company is not a domestic

company—
(i) on income by way of winnings from 30 per cent.;

lotteries, crossword puzzles, card games
and other games of any sort
(ii) on income by way of winnings from horse 30 per cent.;

races
(iii) on income by way of interest payable by 20 per cent.;

Government or an Indian concern on
moneys borrowed or debt incurred by
Government or the Indian concern in
foreign currency (not being income by
way of interest referred to in section
194LB or section 194LC)
(iv) on income by way of royalty payable by 10 per cent.;

pursuance of an agreement made by it
with the Government or the Indian
concern after the 31st day of March,
1976 where such royalty is in
consideration for the transfer of all or
any rights (including the granting of a
licence) in respect of copyright in any
book on a subject referred to in the first
150
proviso to sub-section (1A) of section

115A of the Income-tax Act, to the
Indian concern, or in respect of any
computer software referred to in the
second proviso to sub-section (1A) of
section 115A of the Income-tax Act, to a
person resident in India
(v) on income by way of royalty [not being

royalty of the nature referred to in sub-
item (b)(iv)] payable by Government or
an Indian concern in pursuance of an
Government or the Indian concern and
where such agreement is with an Indian
concern, the agreement is approved by
the Central Government or where it
industrial policy, for the time being in
force, of the Government of India, the
agreement is in with that policy—
(A) where the agreement is made after 50 per cent.;

the 31st day of March, 1961 but
before the 1st day of April, 1976
(B) where the agreement is made after 10 per cent.;

the 31st day of March, 1976
(vi) on income by way of fees for technical

services payable by Government or an
Indian concern in pursuance of an
Government or the Indian concern and
where such agreement is with an Indian
concern, the agreement is approved by
the Central Government or where it
industrial policy, for the time being in
force, of the Government of India, the
agreement is in accordance with that
policy—
(A) where the agreement is made after

the 29th day of February, 1964 but 50 per cent.;
before the 1st day of April, 1976
151
(B) where the agreement is made after 10 per cent.;

the 31st day of March, 1976
(vii) on income by way of short-term capital 15 per cent.;

gains referred to in section 111A
(viii) on income by way of long-term capital 10 per cent.;

gains referred to in sub-clause (iii) of
clause (c) of sub-section (1) of section
112
(ix) on income by way of long-term capital 10 per cent.;

gains referred to in section 112A
exceeding one lakh rupees
(x) on income by way of other long-term 20 per cent.;

capital gains [not being long-term capital
gains referred to in clauses (33) and (36)
of section 10]
(xa) on income by way of dividend 20 per cent.;
(xi) on any other income 40 per cent.
Explanation.— For the purposes of item 1(b)(i) of this Part,

“investment income” and “non-resident Indian” shall have the
meanings assigned to them in Chapter XII-A of the Income-tax Act.
The amount of income-tax deducted in accordance with the

provisions of––
(i) item 1 of this Part, shall be increased by a surcharge, for the

purposes of the Union,––
(a) in the case of every individual or Hindu undivided family

or association of persons or body of individuals, whether
incorporated or not, or every artificial juridical person referred to
in sub-clause (vii) of clause (31) of section 2 of the Income-tax
Act, being a non-resident, calculated,––
I. at the rate of ten per cent. of such tax, where the income
or the aggregate of such incomes (including the income by
way of dividend or income under the provisions of sections
111A and 112A of the Income-tax Act) paid or likely to be
paid and subject to the deduction exceeds fifty lakh rupees but
does not exceed one crore rupees;
152
II. at the rate of fifteen per cent. of such tax, where the
income or the aggregate of such incomes (including the
income by way of dividend or income under the provisions of
sections 111A and 112A of the Income-tax Act) paid or likely
to be paid and subject to the deduction exceeds one crore
rupees but does not exceed two crore rupees;
III. at the rate of twenty-five per cent. of such tax, where

the income or the aggregate of such incomes (excluding the
to be paid and subject to the deduction exceeds two crore
rupees but does not exceed five crore rupees;
IV. at the rate of thirty-seven per cent. of such tax, where

the income or the aggregate of such incomes (excluding the
to be paid and subject to the deduction exceeds five crore
rupees; and
V. at the rate of fifteen per cent. of such tax, where the

income or the aggregate of such incomes (including the
to be paid and subject to the deduction exceeds two crore
rupees, but is not covered under sub-clauses III and IV:
Provided that in case where the total income includes any

income by way of dividend or income chargeable under
sections 111A and 112A of the Income-tax Act, the rate of
surcharge on the amount of Income-tax deducted in respect of
that part of income shall not exceed fifteen per cent.;
(b) in the case of every co-operative society or firm, being a

non-resident, calculated at the rate of twelve per cent., where the
income or the aggregate of such incomes paid or likely to be paid
and subject to the deduction exceeds one crore rupees;
(ii) Item 2 of this Part shall be increased by a surcharge, for the

purposes of the Union, in the case of every company other than a
domestic company, calculated,––
(a) at the rate of two per cent. of such income-tax where the
and subject to the deduction exceeds one crore rupees but does
not exceed ten crore rupees; and
153
(b) at the rate of five per cent. of such income-tax where the
and subject to the deduction exceeds ten crore rupees.
PART III
RATES FOR CHARGING INCOME-TAX IN CERTAIN CASES,

DEDUCTING INCOME-TAX FROM INCOME CHARGEABLE UNDER THE
HEAD “SALARIES” AND COMPUTING “ADVANCE TAX”
In cases in which income-tax has to be charged under sub-

section (4) of section 172 of the Income-tax Act or sub-section (2) of
section 174 or section 174A or section 175 or sub-section (2) of section
176 of the said Act or deducted from, or paid on, from income
chargeable under the head “Salaries” under section 192 of the said Act
or deducted under section 194P of the said Act or in which the
“advance tax” payable under Chapter XVII-C of the said Act has to be
computed at the rate or rates in force, such income-tax or, as the case
may be, “advance tax” [not being “advance tax” in respect of any
income chargeable to tax under Chapter XII or Chapter XII-A or
income chargeable to tax under section 115JB or section 115JC or
Chapter XII-FA or Chapter XII-FB or sub-section (1A) of section 161
or section 164 or section 164A or section 167B of the Income-tax Act
at the rates as specified in that Chapter or section or surcharge,
wherever applicable, on such “advance tax” in respect of any income
chargeable to tax under section 115A or section 115AB or section
115AC or section 115ACA or section 115AD or section 115B or
section 115BA or section 115BAA or section 115BAB or section
115BAD or section 115BB or section 115BBA or section 115BBC or
section 115BBD or section 115BBE or section 115BBF or section
115BBG or section 115E or section 115JB or section 115JC] shall be
charged, deducted or computed at the following rate or rates:—
Paragraph A
(I) In the case of every individual other than the individual

referred to in items (II) and (III) of this Paragraph or Hindu undivided
family or association of persons or body of individuals, whether
incorporated or not, or every artificial juridical person referred to in
sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not
being a case to which any other Paragraph of this Part applies,—
Rates of income-tax


not exceed Rs. 5,00,000 Rs. 2,50,000;
154
(3) where the total income Rs. 12,500 plus 20 per cent. of
exceeds Rs. 5,00,000 but does the amount by which the total
(II) In the case of every individual, being a resident in India,

who is of the age of sixty years or more but less than eighty years at
any time during the previous year,—
Rates of income-tax


exceeds Rs. 3,00,000 but which the total income exceeds
does not exceed Rs. 5,00,000 Rs.3,00,000;
(3) where the total income Rs. 10,000 plus 20 per cent. of
exceeds Rs. 5,00,000 but does the amount by which the total
income exceeds Rs. 10,00,000.
(III) In the case of every individual, being a resident in India,

who is of the age of eighty years or more at any time during the
previous year,—
Rates of income-tax
where the total income does not Nil;

exceed Rs. 5,00,000
where the total income exceeds 20 per cent. of the amount by

Rs. 5,00,000 but does not exceed which the total income exceeds
Rs. 10,00,000 Rs. 5,00,000;
where the total income exceeds Rs. 1,00,000 plus 30 per cent. of
Rs.10,00,000 the amount by which the total
income exceeds Rs. 10,00,000;
155

111A or section 112 or section 112A of the Income-tax Act or the
provisions of section 115BAC of the Income-tax Act, shall be
increased by a surcharge for the purposes of the Union, calculated, in
the case of every individual or Hindu undivided family or association
of persons or body of individuals, whether incorporated or not, or
every artificial juridical person referred to in sub-clause (vii) of clause
(31) of section 2 of the Income-tax Act,—
(a) having a total income (including the income by way of

section 112A of the Income-tax Act) exceeding fifty lakh rupees but
not exceeding one crore rupees, at the rate of ten per cent. of such
income-tax; and
(b) having a total income (including the income by way of

section 112A of the Income-tax Act) exceeding one crore rupees
but not exceeding two crore rupees, at the rate of fifteen per cent.
of such income-tax;
(c) having a total income (excluding the income by way of

section 112A of the Income-tax Act) exceeding two crore rupees
but not exceeding five crore rupees, at the rate of twenty-five per
cent. of such income-tax; and
(d) having a total income (excluding the income by way of

section 112A of the Income-tax Act)exceeding five crore rupees, at
the rate of thirty-seven per cent. of such income-tax;
(e) having a total income (including the income by way of

section 112A of the Income-tax Act) exceeding two crore rupees,
but is not covered under clauses (c) and (d), shall be applicable at
the rate of fifteen per cent. Of such income-tax:
Provided that in case where the total income includes any income
by way of dividend or income chargeable under section 111A and
section 112A of the Income-tax Act, the rate of surcharge on the
amount of Income-tax computed in respect of that part of income
shall not exceed fifteen per cent.:
Provided further that in the case of persons mentioned above having

total income exceeding,—
156
(a) fifty lakh rupees but not exceeding one crore rupees, the total
amount payable as income-tax and surcharge on such income shall
not exceed the total amount payable as income-tax on a total income
of fifty lakh rupees by more than the amount of income that exceeds
fifty lakh rupees;
(b) one crore rupees but does not exceed two crore rupees, the
shall not exceed the total amount payable as income-tax and
surcharge on a total income of one crore rupees by more than the
amount of income that exceeds one crore rupees;
(c) two crore rupees but does not exceed five crore rupees, the
shall not exceed the total amount payable as income-tax and
surcharge on a total income of two crore rupees by more than the
amount of income that exceeds two crore rupees;
(d) five crore rupees, the total amount payable as income-tax and
surcharge on such income shall not exceed the total amount payable
as income-tax and surcharge on a total income of five crore rupees
by more than the amount of income that exceeds five crore rupees;
Paragraph B
In the case of every co-operative society,—
Rates of income-tax
(1) where the total income does 10 per cent. of the total income;
not exceed Rs.10,000
(2)where the total income Rs. 1,000 plus 20 per cent. of the
exceeds Rs.10,000 but does not amount by which the total
exceed Rs. 20,000 income exceeds Rs. 10,000;
(3) where the total income Rs. 3,000 plus 30 per cent. of the
exceeds Rs. 20,000 amount by which the total
income exceeds Rs. 20,000.

the case of every co-operative society, having a total income exceeding
one crore rupees, be increased by a surcharge for the purposes of the
Union calculated at the rate of twelve per cent. of such income-tax:
157
Provided that in the case of every co-operative society mentioned

crore rupees.
Paragraph C
In the case of every firm,—
Rate of income-tax

the case of every firm, having a total income exceeding one crore
rupees, be increased by a surcharge for the purposes of the Union
Provided that in the case of every firm mentioned above having

total income exceeding one crore rupees, the total amount payable as
amount payable as income-tax on a total income of one crore rupees
by more than the amount of income that exceeds one crore rupees.
Paragraph D
In the case of every local authority,—
Rate of income-tax
On the whole of the total income 30 per cent.;

the case of every local authority, having a total income exceeding one
crore rupees, be increased by a surcharge for the purposes of the Union
Provided that in the case of every local authority mentioned

158

crore rupees.
Paragraph E
In the case of a company,—
Rates of income-tax
I. In the case of a domestic company,—
(i) where its total turnover or the 25 per cent. of the total income;
gross receipt in the previous year
2019-2020 does not exceed four
hundred crore rupees;
(ii) other than that referred to in 30 per cent. of the total income.
item (i)
II. In the case of a company other than a domestic company,—
(i) on so much of the total income

as consists of,— 50 per cent.;
(a) royalties received from Government or an

Indian concern in pursuance of an agreement
made by it with the Government or the Indian
concern after the 31st day of March, 1961 but
before the 1st day of April, 1976; or
(b) fees for rendering technical services received

from Government or an Indian concern in
pursuance of an agreement made by it with the
Government or the Indian concern after the 29th
day of February, 1964 but before the 1st day of
April, 1976,
and where such agreement has, in either case, been

approved by the Central Government 50 per cent.;
(ii) on the balance, if any, of the total income 40 per cent..

159
111A or section 112 or section 112A of the Income-tax Act, shall, be

increased by a surcharge for the purposes of the Union, calculated,––
(i) in the case of every domestic company,––
(a) having a total income exceeding one crore rupees but

not exceeding ten crore rupees, at the rate of seven per cent. of
such income-tax; and
(b) having a total income exceeding ten crore rupees, at the

rate of twelve per cent. of such income-tax;
(ii) in the case of every company other than a domestic

company,––
(a) having a total income exceeding one crore rupees but

not exceeding ten crore rupees, at the rate of two per cent. of
such income-tax; and
(b) having a total income exceeding ten crore rupees, at the

rate of five per cent. of such income-tax:
Provided that in the case of every company having a total income

exceeding one crore rupees but not exceeding ten crore rupees, the total
crore rupees:
Provided further that in the case of every company having a total

income exceeding ten crore rupees, the total amount payable as
amount payable as income-tax and surcharge on a total income of ten
crore rupees by more than the amount of income that exceeds ten crore
rupees.
PART IV
[See section 2(13)(c)]
RULES FOR COMPUTATION OF NET AGRICULTURAL
INCOME
Rule 1.—Agricultural income of the nature referred to in sub-

clause (a) of clause (1A) of section 2 of the Income-tax Act shall be
computed as if it were income chargeable to income-tax under that Act
under the head “Income from other sources” and the provisions of
sections 57 to 59 of that Act shall, so far as may be, apply accordingly:
Provided that sub-section (2) of section 58 shall apply subject to

the modification that the reference to section 40A therein shall be
160
construed as not including a reference to sub-sections (3), (3A) and (4)

of section 40A.

clause (b) or sub-clause (c) of clause (1A) of section 2 of the Income-
tax Act [other than income derived from any building required as a
dwelling-house by the receiver of the rent or revenue of the cultivator
or the receiver of rent-in-kind referred to in the said sub-clause (c)]
shall be computed as if it were income chargeable to income-tax under
that Act under the head “Profits and gains of business or profession”
and the provisions of sections 30, 31, 32, 36, 37, 38, 40, 40A [other
than sub-sections (3), (3A) and (4) thereof], 41, 43, 43A, 43B and 43C
of the Income-tax Act shall, so far as may be, apply accordingly.

clause (c) of clause (1A) of section 2 of the Income-tax Act, being
income derived from any building required as a dwelling-house by the
receiver of the rent or revenue or the cultivator or the receiver of rent-
in-kind referred to in the said sub-clause (c) shall be computed as if it
were income chargeable to income-tax under that Act under the head
“Income from house property” and the provisions of sections 23 to 27
of that Act shall, so far as may be, apply accordingly.
Rule 4.—Notwithstanding anything contained in any other

provisions of these rules, in a case—
(a) where the assessee derives income from sale of tea grown
and manufactured by him in India, such income shall be computed
in accordance with rule 8 of the Income-tax Rules, 1962, and sixty
per cent. of such income shall be regarded as the agricultural
income of the assessee;
(b) where the assessee derives income from sale of centrifuged

latex or cenex or latex based crepes (such as pale latex crepe) or
brown crepes (such as estate brown crepe, re-milled crepe,
smoked blanket crepe or flat bark crepe) or technically specified
block rubbers manufactured or processed by him from rubber
plants grown by him in India, such income shall be computed in
accordance with rule 7A of the Income-tax Rules, 1962, and sixty-
five per cent. of such income shall be regarded as the agricultural
income of the assessee;
(c) where the assessee derives income from sale of coffee

grown and manufactured by him in India, such income shall be
computed in accordance with rule 7B of the Income-tax Rules,
1962, and sixty per cent. or seventy-five per cent., as the case may
be, of such income shall be regarded as the agricultural income of
the assessee.
161
Rule 5.—Where the assessee is a member of an association of

persons or a body of individuals (other than a Hindu undivided family,
a company or a firm) which in the previous year has either no income
chargeable to tax under the Income-tax Act or has total income not
exceeding the maximum amount not chargeable to tax in the case of
an association of persons or a body of individuals (other than a Hindu
undivided family, a company or a firm) but has any agricultural income
then, the agricultural income or loss of the association or body shall be
computed in accordance with these rules and the share of the assessee
in the agricultural income or loss so computed shall be regarded as the
agricultural income or loss of the assessee.
Rule 6.—Where the result of the computation for the previous

year in respect of any source of agricultural income is a loss, such loss
shall be set off against the income of the assessee, if any, for that
previous year from any other source of agricultural income:
Provided that where the assessee is a member of an association of

persons or a body of individuals and the share of the assessee in the
agricultural income of the association or body, as the case may be, is a
loss, such loss shall not be set off against any income of the assessee
from any other source of agricultural income.
Rule 7.—Any sum payable by the assessee on account of any tax

levied by the State Government on the agricultural income shall be
deducted in computing the agricultural income.
Rule 8.—(1) Where the assessee has, in the previous year relevant
to the assessment year commencing on the 1st day of April, 2021, any
agricultural income and the net result of the computation of the
agricultural income of the assessee for any one or more of the previous
years relevant to the assessment years commencing on the 1st day of
April, 2013 or the 1st day of April, 2014 or the 1st day of April, 2015
or the 1st day of April, 2016 or the 1st day of April, 2017 or the 1st
day of April, 2018 or the 1st day of April, 2019, or the 1st day of April,
2020, is a loss, then, for the purposes of sub-section (2) of section 2 of
this Act,––
(i) the loss so computed for the previous year relevant to the
assessment year commencing on the 1st day of April, 2013, to the
extent, if any, such loss has not been set off against the agricultural
income for the previous year relevant to the assessment year
commencing on the 1st day of April, 2014 or the 1st day of April,
2015 or the 1st day of April, 2016 or the 1st day of April, 2017 or
the 1st day of April, 2018 or the 1st day of April, 2019 or the 1st
day of April, 2020,
(ii) the loss so computed for the previous year relevant to the
162

the 1st day of April, 2019 or the 1st day of April, 2020,
(iii) the loss so computed for the previous year relevant to the
the 1st day of April, 2020,
(iv) the loss so computed for the previous year relevant to the
2018 or the 1st day of April, 2019 or the 1st day of April, 2020,
(v) the loss so computed for the previous year relevant to the
2019 or the 1st day of April, 2020,
(vi) the loss so computed for the previous year relevant to the
2020,
(vii) the loss so computed for the previous year relevant to the
commencing on the 1st day of April, 2020,
(viii) the loss so computed for the previous year relevant to

shall be set off against the agricultural income of the assessee for the
previous year relevant to the assessment year commencing on the 1st
day of April, 2021.
(2) Where the assessee has, in the previous year relevant to the
assessment year commencing on the 1st day of April, 2022, or, if by
virtue of any provision of the Income-tax Act, income-tax is to be
163
charged in respect of the income of a period other than the previous

year, in such other period, any agricultural income and the net result
of the computation of the agricultural income of the assessee for any
one or more of the previous years relevant to the assessment years
commencing on the 1st day of April, 2014 or the 1st day of April, 2015
or the 1st day of April, 2016 or the 1st day of April, 2017 or the 1st
day of April, 2018 or the 1st day of April, 2019 or the 1st day of April,
2020 or the 1st day of April, 2021, is a loss, then, for the purposes of
sub-section (10) of section 2 of this Act,––
(i) the loss so computed for the previous year relevant to the
the 1st day of April, 2019 or the 1st day of April, 2020 or the 1st
day of April, 2021,
(ii) the loss so computed for the previous year relevant to the
the 1st day of April, 2020 or the 1st day of April, 2021,
(iii) the loss so computed for the previous year relevant to the
the 1st day of April, 2021,
(iv) the loss so computed for the previous year relevant to the
2019 or the 1st day of April, 2020 or the 1st day of April, 2021,
(v) the loss so computed for the previous year relevant to the
2020 or the 1st day of April, 2021,
164
(vi) the loss so computed for the previous year relevant to the
commencing on the or the 1st day of April, 2020 or the 1st day of
April, 2021,
(vii) the loss so computed for the previous year relevant to the
commencing on the 1st day of April, 2021,
(viii) the loss so computed for the previous year relevant to

shall be set off against the agricultural income of the assessee for the
previous year relevant to the assessment year commencing on the 1st
day of April, 2022.
(3) Where any person deriving any agricultural income from any
source has been succeeded in such capacity by another person,
otherwise than by inheritance, nothing in sub-rule (1) or sub-rule (2)
shall entitle any person, other than the person incurring the loss, to
have it set off under sub-rule (1) or, as the case may be, sub-rule (2).
(4) Notwithstanding anything contained in this rule, no loss which

has not been determined by the Assessing Officer under the provisions
of these rules or the rules contained in the First Schedule to the
Finance Act, 2013 (17 of 2013) or the First Schedule to the Finance
(No. 2) Act, 2014 (25 of 2014) or the First Schedule to the Finance
Act, 2015 (20 of 2015) or the First Schedule to the Finance Act, 2016
(28 of 2016) or the First Schedule to the Finance Act, 2017 (7 of 2017)
or the First Schedule to the Finance act, 2018 ( 13 of 2018) or the First
Schedule of the Finance (No. 2) Act, 2019 (23 of 2019) or the First
Schedule of the Finance Act, 2020 (12 of 2020) shall be set off under
sub-rule (1) or, as the case may be, sub-rule (2).
Rule 9.—Where the net result of the computation made in

accordance with these rules is a loss, the loss so computed shall be
ignored and the net agricultural income shall be deemed to be nil.
Rule 10.—The provisions of the Income-tax Act relating to

procedure for assessment (including the provisions of section 288A
relating to rounding off of income) shall, with the necessary
modifications, apply in relation to the computation of the net
agricultural income of the assessee as they apply in relation to the
assessment of the total income.
165
Rule 11.—For the purposes of computing the net agricultural

income of the assessee, the Assessing Officer shall have the same
powers as he has under the Income-tax Act for the purposes of
assessment of the total income.
166
THE SECOND SCHEDULE
[See section 95 (i)]
In the First Schedule to the Customs Tariff Act, 
(1) in Chapter 28, for the entry in column (4) occurring against tariff item 2803 00 10, the entry
“7.5%” shall be substituted;
(2) in Chapter 39, for the entry in column (4) occurring against all tariff items of heading 3925,
the entry “15%” shall be substituted;
(3) in Chapter 70, for the entry in column (4) occurring against all the tariff items of heading
7007, the entry “15%” shall be substituted;
“15%” shall be substituted;
(5) in Chapter 84,––
(i) for the entry in column (4) occurring against tariff item 8414 30 00, the entry “15%”
(ii) for the entry in column (4) occurring against all the tariff items of sub-heading 8414
(iii) for the entry in column (4) occurring against all the tariff items of sub-heading
8414 80, the entry “15%” shall be substituted;
(i) for the entry in column (4) occurring against all the tariff items of sub-heading 8501
(ii) for the entry in column (4) occurring against tariff item 8501 20 00, the entry “15%”
(iii) for the entry in column (4) occurring against all the tariff items of sub-headings
8501 31, 8501 32, 8501 33, 8501 34, 8501 40, 8501 51, 8501 52 and 8501 53, the entry
(iv) for the entry in column (4) occurring against tariff item 8504 90 90, the entry “15%”
(v) for the entry in column (4) occurring against tariff items 8512 90 00, 8536 41 00
and 8536 49 00, the entry “15%” shall be substituted;
167
(vi) for the entry in column (4) occurring against all the tariff items of heading 8537,
the entry “15%” shall be substituted;
(vii) for the entry in column (4) occurring against tariff item 8544 30 00, the entry
(i) for the entry in column (4) occurring against tariff item 9031 80 00, the entry “15%”
(ii) for the entry in column (4) occurring against all the tariff items of sub heading 9032
“15%” shall be substituted.
168
THE THIRD SCHEDULE
[See section 95 (ii)]
In the First Schedule to the Customs Tariff Act, in Chapter 27, for heading 2709, tariff items
2709 10 00 and 2709 20 00 and the entries relating thereto, the following shall be substituted
with effect from the 1st day of April, 2021, namely:–

Standard Preferential
(1) (2) (3) (4) (5)
“2709 PETROLEUM OILS AND OILS

OBTAINED FROM BITUMINOUS
MINERALS, CRUDE
2709 00 -- Petroleum oils and oils obtained

2709 00 10 --- Petroleum crude kg. 5% -
2709 00 90 --- Other kg. 5% -”.
169
THE FOURTH SCHEDULE
[See section 95 (iii)]
In the First Schedule to the Customs Tariff Act, 

Standard Preferential
(1) (2) (3) (4) (5)
(1) in Chapter 2, in the Note—
(i) after clause (a), the following clause shall be inserted, namely :—
“(b) edible, non-living insects (heading 0410);”;
(ii) the existing clauses (b) and (c) shall respectively be re-lettered as clauses (c) and (d);
(2) in Chapter 3, —
(i) after Note 2, the following Note shall be inserted, namely :—
“3. Headings 0305 to 0308 do not cover flours, meals and pellets, fit for human
consumption (heading 0309).”;
(ii) in heading 0302, for the entry in column (2), —
(a) occurring after tariff item 0302 29 00 and the entries relating thereto, the
following entry shall be substituted, namely :—
“ - Tunas (of the genus Thunnus), skipjack tuna (stripe-bellied bonito)

(Katsuwonus pelamis), excluding edible fish offal of sub-headings 0302 91 to
0302 99 :”;
(b) occurring against tariff item 0302 33 00, the following entry shall be substituted,
namely :—
“- - Skipjack tuna (stripe-bellied bonito) (Katsuwonus pelamis)”;
(c) occurring against tariff item 0302 55 00, the following entry shall be substituted,
namely :—
“- - Alaska Pollock (Theragra chalcogramma)”;
(iii) in heading 0303, for the entry in column (2), —

170
(a) occurring after tariff item 0303 39 00 and the entries relating thereto, the
“ - Tunas (of the genus Thunnus), skipjack tuna (stripe-bellied bonito)

(Katsuwonus pelamis), excluding edible fish offal of sub-headings 0303 91 to
0303 99 :”;
(b) occurring against tariff item 0303 43 00, the following entry shall be
substituted, namely :—
“- - Skipjack tuna (stripe-bellied bonito) (Katsuwonus pelamis)”;
namely :—
(iv) in heading 0304, for the entry in column (2),—
(a) occurring against tariff item 0304 75 00, the following entry shall be substituted,
namely :—
(b) occurring against tariff item 0304 87 00, the following entry shall be substituted,
namely :—
“- - Tunas (of the genus Thunnus), skipjack tuna (stripe-bellied bonito)

(Katsuwonus pelamis)”;
namely :—
(d) occurring against tariff item 0304 95 00, the following entry shall be substituted,
namely :—
“- - Fish of the families (Bregmacerotidae, Euclichthyidae, Gadidae,

Macrouridae, Melanonidae, Merlucciidae, Moridae and Muraenolepididae,)
other than Alaska Pollock (Theragra chalcogramma)”;
(v) in heading 0305, —
(a) for the entry in column (2) occurring against the heading 0305, the following
entry shall be substituted, namely :—
“FISH, DRIED, SALTED OR IN BRINE; SMOKED FISH, WHETHER OR

NOT COOKED BEFORE OR DURING THE SMOKING PROCESS”;
171
(b) tariff item 0305 10 00 and the entries relating thereto shall be omitted;
(vi) in heading 0306, for the entry in column (2),—
(a) occurring against the heading 0306, the following entry shall be substituted,
namely :—
“CRUSTACEANS, WHETHER IN SHELL OR NOT, LIVE, FRESH,

CHILLED, FROZEN, DRIED, SALTED OR IN BRINE; SMOKED
CRUSTACEANS, WHETHER IN SHELL OR NOT, WHETHER OR NOT
COOKED BEFORE OR DURING THE SMOKING PROCESS;
CRUSTACEANS, IN SHELL, COOKED BY STEAMING OR BY BOILING
IN WATER, WHETHER OR NOT CHILLED, FROZEN, DRIED, SALTED
OR IN BRINE”;
(b) occurring against tariff item 0306 19 00, the following entry shall be
“- - Other”;
(c) occurring against tariff item 0306 39 00, the following entry shall be
“- - Other”;
namely :—
“- - Other”;
(vii) in heading 0307, for the entry in column (2), —
namely :—
“MOLLUSCS, WHETHER IN SHELL OR NOT, LIVE, FRESH, CHILLED,

FROZEN, DRIED, SALTED OR IN BRINE; SMOKED MOLLUSCS,
WHETHER IN SHELL OR NOT, WHETHER OR NOT COOKED BEFORE
OR DURING THE SMOKING PROCESS”;
(b) occurring after tariff item 0307 19 00 and the entries relating thereto, the
“- Scallops and other molluscs of the family Pectinidae :”;
(c) occurring after tariff item 0307 88 00 and the entries relating thereto, the
“- Other”;
172
(viii) in the heading 0308, for the entry in column (2) occurring against the heading
0308, the following entry shall be substituted, namely :—
“AQUATIC INVERTEBRATES OTHER THAN CRUSTACEANS AND

MOLLUSCS, LIVE, FRESH, CHILLED, FROZEN, DRIED, SALTED OR IN
BRINE; SMOKED AQUATIC INVERTEBRATES OTHER THAN
CRUSTACEANS AND MOLLUSCS, WHETHER OR NOT COOKED BEFORE
OR DURING THE SMOKING PROCESS”;
(ix) after tariff item 0308 90 00 and the entries relating thereto, the following shall be
inserted, namely :—
“0309 FLOURS, MEALS AND PELLETS OF FISH,

CRUSTACEANS, MOLLUSCS AND OTHER
AQUATIC INVERTEBRATES, FIT FOR
HUMAN CONSUMPTION
0309 10 - Of fish:
0309 10 10 - - - Fresh or chilled kg. 30% -
0309 10 20 - - - Frozen kg. 30% -
0309 10 30 - - - Salted, in brine, dried or smoked kg. 30% -
0309 10 90 - - - Other kg. 30% -
0309 90 - Other:
- - - Of crustaceans, fresh or chilled:
0309 90 11 - - - - Vannamei shrimp (Litopenaeus vannamei) kg. 30% -
0309 90 12 - - - - Indian white shrimp (Fenneropenaeus kg. 30% -
indicus)
0309 90 13 - - - - Black tiger shrimp (Penaeus monodon) kg. 30% -
0309 90 14 - - - - Flower shrimp (Penaeus semisulcatus) kg. 30% -
0309 90 19 - - - - Other kg. 30% -
- - - Of crustaceans, frozen:
indicus)
0309 90 29 - - - - Other kg. 30% -
- - - Of crustaceans, salted, in brine, dried or
smoked:
indicus)
0309 90 39 - - - - Other kg. 30% -
0309 90 40 - - - Of crustaceans, other kg. 30% -
0309 90 50 - - - Of molluscs, fresh or chilled kg. 30% -
0309 90 60 - - - Of molluscs, frozen kg. 30% -
173
0309 90 70 - - - Of molluscs, salted, in brine, dried or kg. 30% -

smoked
0309 90 80 - - - Of molluscs, other kg. 30% -
0309 90 90 - - - Other kg. 30% -”;
“2. For the purposes of heading 0403, yogurt may be concentrated or flavoured and
may contain added sugar or other sweetening matter, fruit, nuts, cocoa, chocolate,
spices, coffee or coffee extracts, plants, parts of plants, cereals or bakers’ wares,
provided that any added substance is not used for the purpose of replacing, in whole or
in part, any milk constituent, and the product retains the essential character of yogurt.”;
(ii) the existing Notes 2 and 3 shall respectively be re-numbered as Notes 3 and 4;
(iii) for existing Note 4, the following Notes shall be substituted, namely:––
“5. This Chapter does not cover:
(a) non-living insects, unfit for human consumption (heading 0511);
(b) products obtained from whey, containing by weight more than 95 % lactose,
expressed as anhydrous lactose, calculated on the dry matter (heading 1702);
(c) products obtained from milk by replacing one or more of its natural constituents (for
example, butyric fats) by another substance (for example, oleic fats) (heading 1901 or
2106); or
(d) Albumins (including concentrates of two or more whey proteins, containing by

weight more than 80 % whey proteins, calculated on the dry matter) (heading 3502) or
globulins (heading 3504).
6. For the purposes of heading 0410, the term “insects” means edible non-living insects,
whole or in parts, fresh, chilled, frozen, dried, smoked, salted or in brine, as well as
flours and meals of insects, fit for human consumption. However, it does not cover
edible non-living insects otherwise prepared or preserved (generally Section IV).”;
(iv) in heading 0403, —
(a) for the entry in column (2) occurring against the heading 0403, the following entry
shall be substituted, namely :—
“YOGURT; BUTTERMILK, CURDLED MILK AND CREAM, KEPHIR AND

OTHER FERMENTED OR ACIDIFIED MILK AND CREAM, WHETHER OR NOT
CONCENTRATED OR CONTAINING ADDED SUGAR OR OTHER
SWEETENING MATTER OR FLAVOURED OR CONTAINING ADDED FRUIT,
NUTS OR COCOA ”;
174
(b) for tariff item 0403 10 00 and the entries relating thereto, the following shall be
“0403 20 00 - Yogurt kg. 30% -”;
(v) for heading 0410, sub-heading 0410 00, tariff items 0410 00 10 to 0410 00 90 and
the entries relating thereto, the following shall be substituted, namely:––
“0410 INSECTS AND OTHER EDIBLE

PRODUCTS OF ANIMAL ORIGIN, NOT
ELSEWHERE SPECIFIED OR
INCLUDED
0410 10 - Insects:
0410 10 10 - - - Fresh, chilled or frozen kg. 30% -

0410 10 20 - - - Salted, in brine, dried or smoked kg. 30% -
0410 10 90 - - - Other kg. 30% -
0410 90 - Other:
0410 90 10 - - - Of wild animals kg. 30% -
0410 90 20 - - - Turtle eggs and Salanganes’ nests kg. 30% -

(“birds’ nests”)
0410 90 90 - - - Other kg. 30% -”;
“5. Heading 0711 applies to vegetables which have been treated solely to ensure their
provisional preservation during transport or storage prior to use (for example, by
sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions),
provided they remain unsuitable for immediate consumption in that state.”;
(ii) in heading 0704, for the entry in column (2) occurring against tariff item 0704 10
“- Cauliflowers and broccoli”;
(iii) in heading 0709, after tariff item 0709 51 00 and the entries relating thereto, the
following shall be inserted, namely:––
“0709 52 00 - - Mushrooms of the genus Boletus kg. 30% 20%

0709 53 00 - - Mushrooms of the genus Cantharellus kg. 30% 20%
175
0709 54 00 - - Shiitake (Lentinus edodes) kg. 30% 20%

0709 55 00 - - Matsutake (Tricholoma matsutake, kg. 30% 20%
Tricholoma magnivelare, Tricholoma
anatolicum, Tricholoma dulciolens,
Tricholoma caligatum)
0709 56 00 - - Truffles (Tuber spp.) kg. 30% 20%”;
(iv) in heading 0711, for the entry in column (2) occurring against the heading 0711,
the following entry shall be substituted, namely:—
“VEGETABLES PROVISIONALLY PRESERVED, BUT UNSUITABLE IN THAT

STATE FOR IMMEDIATE CONSUMPTION”;
(v) in heading 0712, after tariff item 0712 33 00 and the entries relating thereto, the
“0712 34 00 - - Shiitake (Lentinus edodes) kg. 30% 20%”;
“4. Heading 0812 applies to fruit and nuts which have been treated solely to ensure their
provisional preservation during transport or storage prior to use (for example, by
sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions),
provided they remain unsuitable for immediate consumption in that state.”;
(ii) in heading 0802, for tariff item 0802 90 00 and the entries relating thereto, the
following shall be substituted, namely:––
“- Other:
0802 91 00 - - Pine nuts, in shell kg. 100% 90%
0802 92 00 - - Pine nuts, shelled kg. 100% 90%
0802 99 00 - - Other kg. 100% 90%”;
(iii) in heading 0805, for the entry in column (2) occurring against tariff item 0805 40
00, the following entry shall be substituted, namely:—
“- Grapefruit and pomelos”;
(iv) in heading 0812, for the entry in column (2) occurring against the heading 0812,
176
“FRUIT AND NUTS PROVISIONALLY PRESERVED, BUT UNSUITABLE IN

THAT STATE FOR IMMEDIATE CONSUMPTION”;
(6) in Chapter 10, in Note 1, for clause (B), the following clause shall be substituted, namely
:—
“(B) This Chapter does not cover grains which have been hulled or otherwise worked.
However, rice, husked, milled, polished, glazed, parboiled or broken remains classified
in heading 1006. Similarly, quinoa from which the pericarp has been wholly or partly
removed in order to separate the saponin, but which has not undergone any other
processes, remains classified in heading 1008.”;
(7) in Chapter 12, in heading 1211, after tariff item 1211 50 00 and the entries relating thereto,
the following shall be inserted, namely :—
“1211 60 00 - Bark of African cherry (Prunus africana) kg. 30% -”;
(8) in Section III, for the Section heading, the following Section heading shall be substituted,
namely:—
“ANIMAL, VEGETABLE OR MICROBIAL FATS AND OILS AND THEIR

CLEAVAGE PRODUCTS; PREPARED EDIBLE FATS; ANIMAL OR
VEGETABLE WAXES”;
(i) for the Chapter heading, the following Chapter heading shall be substituted,
namely:—
“Animal, vegetable or microbial fats and oils and their cleavage products; prepared
edible fats; animal or vegetable waxes”;
(ii) for Sub-heading Note, the following Sub-heading Notes shall be substituted,
namely:—
“Sub-heading Notes:
1. For the purposes of sub-heading 1509 30, virgin olive oil has a free acidity
expressed as oleic acid not exceeding 2.0 g/ 100 g and can be distinguished from the
other virgin olive oil categories according to the characteristics indicated in the Codex
Alimentarius Standard 33-1981.
2. For the purposes of sub-headings 1514 11 and 1514 19, the expression "low erucic
acid rape or colza oil" means the fixed oil which has an erucic acid content of less
than 2% by weight.”;
177
(iii) in heading 1509, for the tariff item 1509 10 00 and the entries relating thereto, the
“1509 20 00 - Extra virgin olive oil kg. 45% 35%

1509 30 00 - Virgin olive oil kg. 45% 35%
1509 40 00 - Other virgin olive oils kg. 45% 35%”;
(iv) for heading 1510, sub-heading 1510 00, tariff items 1510 00 10 to 1510 00 99 and
the entries relating thereto, the following shall be substituted, namely:––
“1510 OTHER OILS AND THEIR FRACTIONS,

OBTAINED SOLELY FROM OLIVES,
WHETHER OR NOT REFINED, BUT NOT
CHEMICALLY MODIFIED, INCLUDING
BLENDS OF THESE OILS OR
FRACTIONS WITH OILS OR
FRACTIONS OF HEADING 1509
1510 10 00 - Crude olive pomace oil kg. 45% 35%
1510 90 - Other:
1510 90 10 - - - Refined olive pomace oil kg. 45% 35%
1510 90 90 - - - Other kg. 45% 35%”;
(v) in heading 1515, ––
(a) in the entry in column (2) occurring against the heading 1515, for the words
“VEGETABLE FATS” the words “VEGETABLE OR MICROBIAL FATS” shall be
substituted;
(b) after tariff item 1515 50 99 and the entries relating thereto, the following shall be
“1515 60 00 - Microbial fats and oils and their kg. 100% 90%”;
fractions
(vi) in heading 1516, ––
(a) in the entry in column (2) occurring against the heading 1516, for the words “ OR
VEGETABLE FATS” the words “, VEGETABLE OR MICROBIAL FATS” shall be
substituted;
178
“1516 30 00 - Microbial fats and oils and their kg. 30% -”;
fractions
(vii) in heading 1517, for the entry in column (2) occurring against the heading 1517,
“MARGARINE; EDIBLE MIXTURES OR PREPARATIONS OF ANIMAL,

VEGETABLE OR MICROBIAL FATS OR OILS OR OF FRACTIONS OF
DIFFERENT FATS OR OILS OF THIS CHAPTER, OTHER THAN EDIBLE FATS
AND OILS OR THEIR FRACTIONS OF HEADING 1516”;
(viii) in heading 1518, —
(a) for the entry in column (2) occurring against the heading 1518, the following entry
shall be substituted, namely:—
“ANIMAL, VEGETABLE OR MICROBIAL FATS AND OILS AND THEIR

FRACTIONS, BOILED, OXIDISED, DEHYDRATED, SULPHURISED, BLOWN,
POLYMERISED BY HEAT IN VACUUM OR IN INERT GAS OR OTHERWISE
CHEMICALLY MODIFIED, EXCLUDING THOSE OF HEADING 1516;
INEDIBLE MIXTURES OR PREPARATIONS OF ANIMAL, VEGETABLE OR
MICROBIAL FATS OR OILS OR OF FRACTIONS OF DIFFERENT FATS OR
OILS OF THIS CHAPTER, NOT ELSEWHERE SPECIFIED OR INCLUDED”;
(b) sub-heading 1518 00 and the entries relating thereto shall be omitted;
(10) in Section IV, for the Section heading, the following Section heading shall be
“PREPARED FOODSTUFFS; BEVERAGES, SPIRITS AND VINEGAR;

TOBACCO AND MANUFACTURED TOBACCO SUBSTITUTES; PRODUCTS,
WHETHER OR NOT CONTAINING NICOTINE, INTENDED FOR INHALATION
WITHOUT COMBUSTION; OTHER NICOTINE CONTAINING PRODUCTS
INTENDED FOR THE INTAKE OF NICOTINE INTO THE HUMAN BODY”;
namely:—
“Preparations of meat, of fish, crustaceans, molluscs or other aquatic invertebrates,

or of insects”;
(ii) for Note 1, the following Note shall be substituted, namely:—

179
“1. This Chapter does not cover meat, meat offal, fish, crustaceans, molluscs or other
aquatic invertebrates, as well as insects, prepared or preserved by the processes
specified in Chapter 2 or 3, Note 6 to Chapter 4 or in heading 0504.”;
(iii) in Note 2, for the words “blood, fish”, the words “blood, insects, fish” shall be
substituted;
(iv) in Sub-heading Note 1,–
(a) for the words “preparations of meat, meat offal or blood”, the words “preparations
of meat, meat offal, blood or insects” shall be substituted;
(b) for the words “visible pieces of meat or meat offal”, the words “visible pieces of
meat or meat offal or insects” shall be substituted;
(v) for the entry in column (2) occurring against tariff item 1601 00 00, the following
entry shall be substituted, namely:—
“sausages and similar products, of meat, meat offal, blood or insects; food preparations
based on these products”;
(vi) in heading 1602, for the entry in column (2) occurring against the heading 1602,
“OTHER PREPARED OR PRESERVED MEAT, MEAT OFFAL, BLOOD OR

INSECTS”;
(vii) in heading 1604, for the entry in column (2) occurring against sub-heading 1604
14, the following entry shall be substituted, namely:—
“- - Tunas, skipjack tuna and bonito (Sarda spp.):”;
(12) in Chapter 18, for Note 1, the following Note shall be substituted, namely:—
“1. This Chapter does not cover:
(a) food preparations containing more than 20 % by weight of sausage, meat, meat offal,
blood, insects, fish or crustaceans, molluscs or other aquatic invertebrates, or any
combination thereof (Chapter 16);
(b) preparations of headings 0403, 1901, 1902, 1904, 1905, 2105, 2202, 2208, 3003 or
3004.”;
(13) in Chapter 19, in Note 1, in clause (a), for the words “blood, fish”, the words “blood,
insects, fish” shall be substituted;

180
(i) in Note 1, —
(A) for clause (b), the following clauses shall be substituted, namely:—
“(b) vegetable fats and oils (Chapter 15);
(c) food preparations containing more than 20 % by weight of sausage, meat, meat offal,
blood, insects, fish or crustaceans, molluscs or other aquatic invertebrates, or any
combination thereof (Chapter 16);”;
(B) the existing clauses (c) and (d) shall respectively be re-lettered as clauses (d) and
(e);
(ii) in heading 2008, for the entry in column (2) occurring against tariff item
2008 93 00, the following entry shall be substituted, namely:—
“- - Cranberries (Vaccinium macrocarpon, Vaccinium oxycoccos); lingonberries

(Vaccinium vitis-idaea)”;
(iii) in heading 2009, for the entry in column (2), —
namely:—
“FRUIT OR NUT JUICES (INCLUDING GRAPE MUST AND COCONUT WATER)

AND VEGETABLE JUICES, UNFERMENTED AND NOT CONTAINING ADDED
SPIRIT, WHETHER OR NOT CONTAINING ADDED SUGAR OR OTHER
SWEETENING MATTER”;
(b) occurring after tariff item 2009 19 00 and the entries relating thereto, the following
“- Grapefruit juice; pomelo juice :”;
(c) occurring after tariff item 2009 79 00 and the entries relating thereto, the following
“- Juice of any other single fruit, nut or vegetable :”;
namely:—
“- - Cranberry (Vaccinium macrocarpon, Vaccinium oxycoccos) juice; lingonberry

(Vaccinium vitis-idaea) juice”;
(15) in Chapter 21, in Note 1, —
(A) after clause (e), the following clause shall be inserted, namely:—
“(f) products of heading 2404;”;

181
(B) the existing clauses (f) and (g) shall respectively be re-lettered as clauses (g) and
(h);
(16) in Chapter 22, in heading 2202, in the entry in column (2) occurring against the heading
2202, for the words “INCLUDING FRUIT OR”, the words “INCLUDING FRUIT, NUT OR”
(17) in Chapter 23, in heading 2306, in the entry in column (2) occurring against the heading
2306, for the words “VEGETABLE FATS”, the words “VEGETABLE OR MICROBIAL
FATS” shall be substituted;
namely:—
“Tobacco and manufactured tobacco substitutes; products, whether or not containing

nicotine, intended for inhalation without combustion; other nicotine containing
products intended for the intake of nicotine into the human body”;
(ii) for the Note, the following Notes shall be substituted, namely:—
“Notes:
1. This Chapter does not cover medicinal cigarettes (Chapter 30);
2. Any products classifiable in heading 2404 and any other heading of the Chapter are
to be classified in heading 2404.
3. For the purposes of heading 2404, the expression “inhalation without combustion”
means inhalation through heated delivery or other means, without combustion.”;
(iii) after tariff item 2403 99 90 and the entries relating thereto, the following shall be
“2404 PRODUCTS CONTAINING TOBACCO,

RECONSTITUTED TOBACCO, NICOTINE,
OR TOBACCO OR NICOTINE
SUBSTITUTES, INTENDED FOR
INHALATION WITHOUT COMBUSTION;
OTHER NICOTINE CONTAINING
PRODUCTS INTENDED FOR THE INTAKE
OF NICOTINE INTO THE HUMAN BODY
- Products intended for inhalation without

combustion:
2404 11 00 - - Containing tobacco or reconstituted tobacco kg. 30% -

182
2404 12 00 - - Other, containing nicotine kg. 30% -

2404 19 00 - - Other kg. 30% -
- Other:
2404 91 00 - - For oral application kg. 30% -
2404 92 00 - - For transdermal application kg. 30% -
2404 99 00 - - Other kg. 30% -”;
(i) in Note 2, after clause (d), the following clause shall be inserted, namely :—
“(e) dolomite ramming mix (heading 3816);”;
(ii) the existing clauses (e), (f), (g), (h) and (ij) shall respectively be re-lettered as
clauses (f), (g), (h), (ij) and (k);
(iii) in heading 2518, —
(a) in the entry in column (2) occurring against the heading 2518, the words
“DOLOMITE RAMMING MIX” shall be omitted;
(20) in Chapter 27, in Sub-heading Note 5, for the words “animal or vegetable fats”, the words
“animal, vegetable or microbial fats” shall be substituted;
(21) in Section VI, after Note 3, the following Note shall be inserted, namely:—
“4. Where a product answers to a description in one or more of the headings in Section
VI by virtue of being described by name or function and also to heading 3827, then it
is classifiable in a heading that references the product by name or function and not
under heading 3827.”;
(i) in heading 2844, for the tariff item 2844 40 00 and the entries relating thereto, the
“- Radioactive elements and isotopes

and compounds other than those of
subheading 2844 10, 2844 20 or 2844
30; alloys, dispersions (including
cermets), ceramic products and mixtures
containing these elements, isotopes or
compounds; radioactive residues:
2844 41 00 - - Tritium and its compounds; alloys, kg. 10% -

dispersions (including cermets),
ceramic products and mixtures
containing tritium or its compounds
183
2844 42 00 - - Actinium-225, actinium-227, kg. 10% -

californium-253, curium-240,
curium-241, curium-242, curium-
243, curium-244, einsteinium-253,
einsteinium-254, gadolinium-148,
polonium-208, polonium-209,
polonium-210, radium-223, uranium-
230 or uranium-232, and their
compounds; alloys, dispersions
(including cermets), ceramic
products and mixtures containing
these elements or compounds
2844 43 00 - - Other radioactive elements and kg. 10% -
isotopes and compounds; other
alloys, dispersions (including
cermets), ceramic products and
mixtures containing these elements,
isotopes or compounds
2844 44 00 - - Radioactive residues kg. 10% -”;
(ii) in heading 2845, after tariff item 2845 10 00 and the entries relating thereto, the
“2845 20 00 - Boron enriched in boron-10 and its kg. 10% -

compounds
2845 30 00 - Lithium enriched in lithium-6 and its kg. 10% -

compounds
2845 40 00 - Helium-3 kg. 10% -”;
(i) in Note 1, in clause (g), after the words “odoriferous substance”, the words “or an
emetic” shall be inserted;
(ii) in Note 4, for the portion beginning with the words “For the purposes” and ending
with the words and figures “heading 2905 to 2920”, the following shall be substituted,
namely :—
‘For the purposes of headings 2911, 2912, 2914, 2918 and 2922, “oxygen function”,
the characteristic organic oxygen-containing group of those respective headings, is
restricted to the oxygen-functions referred to in headings 2905 to 2920.’;
(iii) in heading 2903, for tariff items 2903 29 00 to 2903 31 00, sub-heading 2903 39,
tariff items 2903 39 11 to 2903 76 30, the following shall be substituted, namely :—
“2903 29 00 - - Other kg. 10% -

184
- Saturated fluorinated derivatives of

acyclic hydrocarbons :
2903 41 00 - - Trifluoromethane (HFC-23) kg. 10% -
2903 42 00 - - Difluoromethane (HFC-32) kg. 10% -

2903 43 00 - - Fluoromethane (HFC-41), 1,2- kg. 10% -
difluoroethane (HFC-152) and 1,1-
difluoroethane (HFC-152a)
2903 44 00 - - Pentafluoroethane (HFC-125), 1,1,1- kg. 10% -

trifluoroethane (HFC-143a) and
1,1,2-trifluoroethane (HFC-143)
2903 45 00 - - 1,1,1,2-Tetrafluoroethane (HFC- kg. 10% -

134a) and 1,1,2,2-tetrafluoroethane
(HFC-134)
2903 46 00 - - 1,1,1,2,3,3,3-Heptafluoropropane kg. 10% -
(HFC-227ea), 1,1,1,2,2,3-
hexafluoropropane (HFC-236cb),
1,1,1,2,3,3-hexafluoropropane (HFC-
236ea) and 1,1,1,3,3,3-
hexafluoropropane (HFC-236fa)
2903 47 00 - - 1,1,1,3,3-Pentafluoropropane (HFC- kg. 10% -

245fa) and 1,1,2,2,3-
pentafluoropropane (HFC-245ca)
2903 48 00 - - 1,1,1,3,3-Pentafluorobutane (HFC- kg. 10% -

365mfc) and 1,1,1,2,2,3,4,5,5,5-
decafluoropentane (HFC-43-10mee)
2903 49 00 - - Other kg. 10% -

- Unsaturated fluorinated derivatives
of acyclic hydrocarbons :
2903 51 - - 2,3,3,3-Tetrafluoropropene (HFO- kg. 10% -

1234yf), 1,3,3,3-tetrafluoropropene
(HFO-1234ze) and (Z)-1,1,1,4,4,4-
hexafluoro-2-butene (HFO-1336mzz)
2903 59 - - Other :
2903 59 10 - - - 1,1,3,3,3-pentafluoro-2- kg. 10% -

(trifluoromethyl)prop-1-ene
[Perfluoroisobutene (PFIB)]
2903 59 90 - - - Other kg. 10% -
- Brominated or iodinated derivatives of

acyclic hydrocarbons:
185
2903 61 00 - - Methyl bromide (bromomethane) kg. 10% -
2903 62 00 - - Ethylene dibromide (ISO) (1,2- kg. 10% -

dibromoethane)
2903 69 00 - - Other kg. 10% -
- Halogenated derivatives of acyclic

hydrocarbons containing two or more
different halogen:
2903 71 00 - - Chlorodifluoromethane (HCFC-22) kg. 10% -
2903 72 00 - - Dichlorotrifluoroethanes (HCFC-123) kg. 10% -
2903 73 00 - - Dichlorofluoroethanes (HCFC-141, kg. 10% -

141b)
2903 74 00 - - Chlorodifluoroethanes (HCFC-142, kg. 10% -

142b)
2903 75 00 - - Dichloropentafluoropropanes (HCFC- kg. 10% -

225, 225ca, 225cb)
2903 76 - - Bromochlorodifluoromethane (Halon-

1211), bromotrifluoromethane
(Halon-1301) and
dibromotetrafluoroethanes (Halon-
2402):
2903 76 10 - - - Bromochlorodifluoromethane kg. 10% -
(Halon-1211)
2903 76 20 - - - Bromotrifluoromethane (Halon- kg. 10% -
1301)
2903 76 30 - - - Dibromotetrafluoroethanes (Halon- kg. 10% -”;
2402)
(iv) in heading 2909, in the entry in column (2) occurring against the heading 2909, for the
words “ETHER PEROXIDES”, the words “ETHER PEROXIDES, ACETAL AND
HEMIACETAL PEROXIDES” shall be substituted;
(a) after the entry in column (2) occurring against the heading 2930, the following shall
be inserted, namely :—
“2930 10 00 - 2-(N,N-Dimethylamino) ethanethiol kg. 10% -”;
186
(c) tariff item 2930 90 94 and the entries relating thereto shall be omitted;
(vi) for heading 2931, sub-heading 2931 10, tariff items 2931 10 10 to 2931 39 00, sub-heading
2931 90, tariff items 2931 90 10 and 2931 90 90 and the entries relating thereto, the following
shall be substituted, namely:––
“2931 OTHER ORGANO-INORGANIC

COMPOUNDS
2931 10 - Tetramethyl lead and tetraethyl lead:
2931 10 10 - - - Tetramethyl lead kg. 10% -

2931 10 90 - - - Tetraethyl lead kg. 10% -
2931 20 00 - Tributyltin compounds kg. 10% -
- Non-halogenated organo-phosphorous
derivatives:
2931 41 00 - - Dimethyl methylphosphonate kg. 10% -
2931 42 00 - - Dimethyl propylphosphonate kg. 10% -

2931 43 00 - - Diethyl ethylphosphonate kg. 10% -
2931 44 00 - - Methylphosphonic acid kg. 10% -
2931 45 00 - - Salt of methylphosphonic acid and kg. 10% -

(aminoiminomethyl)urea (1 : 1)
2931 46 00 - - 2,4,6-Tripropyl-1,3,5,2,4,6- kg. 10% -

trioxatriphosphinane 2,4,6-trioxide
2931 47 00 - - (5-Ethyl-2-methyl-2-oxido-1,3,2- kg. 10% -

dioxaphosphinan-5-yl) methyl methyl
methylphosphonate
2931 48 00 - - 3,9-Dimethyl-2,4,8,10-tetraoxa-3,9- kg. 10% -

diphosphaspiro[5.5] undecane 3,9-
dioxide
2931 49 - - Other:
2931 49 10 - - - Sodium 3-(trihydroxysilyl)propyl kg. 10% -
methylphosphonate
2931 49 20 - - - Bis[(5-ethy1-2-methy1-2-oxido-1,3,2- kg. 10% -
dioxaphosphinan-5-yl)methyl]
methylphosphonate
2931 49 90 - - - Other kg. 10% -
- Halogenated organo-phosphorous
derivatives:
2931 51 00 - - Methylphosphonic dichloride kg. 10% -

187
2931 52 00 - - Propylphosphonic dichloride kg. 10% -
2931 53 00 - - O-(3-chloropropyl) O-[4-nitro-3- kg. 10% -

(trifluoromethyl)phenyl]
methylphosphonothionate
2931 54 00 - - Trichlorfon (ISO) kg. 10% -
2931 59 00 - - Other kg. 10% -
2931 90 - Other:
- - - Organo-arsenic compounds:
2931 90 11 - - - - Methylarsonic acid and its salt kg. 10% -
2931 90 12 - - - - Cacodylic acid and its salt kg. 10% -
2931 90 13 - - - - p-Aminophenylarsonic acid and its kg. 10% -
salt
2931 90 14 - - - - Amino-hydroxyphenylarsonic acids, kg. 10% -
their formyl and acetyl derivatives and
their salts
2931 90 15 - - - - Arsenobenzene and its derivatives kg. 10% -
2931 90 19 - - - - Other kg. 10% -
2931 90 20 - - - Organo-silicon compounds kg. 10% -
2931 90 30 - - - o-Iodosobenzoic acid kg. 10% -
2931 90 90 - - - Other kg. 10% -”;
(vii) in heading 2932, after tariff item 2932 95 00 and the entries relating thereto, the following
shall be inserted, namely :—
“2932 96 00 - - Carbofuran (ISO) kg. 10% -”;
(a) for tariff item 2933 33 00 and the entries relating thereto, the following shall be
“2933 33 - - Alfentanil (INN), anileridine (INN),

bezitramide (INN), bromazepam
(INN), carfentanil (INN), difenoxin
(INN), diphenoxylate (INN),
dipipanone (INN), fentanyl (INN),
ketobemidone (INN),
methylphenidate (INN), pentazocine
(INN), pethidine (INN), pethidine
(INN) intermediate A, phencyclidine
(INN) (PCP), phenoperidine (INN),
pipradrol (INN), piritramide (INN),
propiram (INN), remifentanil (INN)
188
and trimeperidine (INN); salts

thereof:
- - - Alfentanil (INN), anileridine (INN),
bezitramide (INN), bromazepam
(INN), carfentanil (INN), difenoxin
(INN), diphenoxylate (INN),
dipipanone (INN); salts thereof:
2933 33 11 - - - - Alfentanil (INN) and its salt kg. 10% -
2933 33 12 - - - - Anileridine (INN) and its salt kg. 10% -
2933 33 13 - - - - Bezitramide (INN) and its salt kg. 10% -
2933 33 14 - - - - Bromazepam (INN) and its salt kg. 10% -
2933 33 15 - - - - Carfentanil (INN) and its salt kg. 10% -
2933 33 16 - - - - Difenoxin (INN) and its salt kg. 10% -
2933 33 17 - - - - Diphenoxylate (INN) and its salt kg. 10% -
2933 33 18 - - - - Dipipanone (INN) and its salt kg. 10% -
- - - Fentanyl (INN), ketobemidone
(INN), methylphenidate (INN),
pentazocine (INN), pethidine
(INN), pethidine (INN)
intermediate A, phencyclidine
(INN) (PCP), phenoperidine
(INN); salts thereof
2933 33 21 - - - - Fentanyl (INN) and its salt kg. 10% -
2933 33 22 - - - - Ketobemidone (INN) and its salt kg. 10% -
2933 33 23 - - - - Methylphenidate (INN) and its salt kg. 10% -
2933 33 24 - - - - Pentazocine (INN) and its salt kg. 10% -
2933 33 25 - - - - Pethidine (INN) and its salt kg. 10% -
2933 33 26 - - - - Pethidine (INN) intermediate A kg. 10% -
and its salt
2933 33 27 - - - - Phencyclidine (INN) (PCP) and its kg. 10% -
salt
2933 33 28 - - - - Phenoperidine (INN) and its salt kg. 10% -
- - - Pipradrol (INN), piritramide
(INN), propiram (INN),
remifentanil (INN) and
trimeperidine (INN); salts thereof:
2933 33 31 - - - - Pipradrol (INN) and its salt kg. 10% -
2933 33 32 - - - - Piritramide (INN) and its salt kg. 10% -
2933 33 33 - - - - Propiram (INN) and its salt kg. 10% -
2933 33 34 - - - - Remifentanil (INN) and its salt kg. 10% -
2933 33 35 - - - - Trimeperidine (INN) and its salt kg. 10% -
2933 34 00 -- Other fentanyls and their kg. 10% -
derivatives
2933 35 00 -- 3-Quinuclidinol kg. 10% -
2933 36 00 -- 4-Anilino-N-phenethylpiperidine kg. 10% -
(ANPP)
2933 37 00 -- N-Phenethyl-4-piperidone (NPP) kg. 10% -”;
(b) tariff items 2933 39 20 and 2933 39 30 and the entries relating thereto shall be omitted;
189
(ix) in heading 2934, after tariff item 2934 91 00 and the entries relating thereto, the following
shall be inserted, namely :—
“2934 92 00 -- Other fentanyls and their kg. 10% -”;

derivatives
(x) in heading 2936, for the entry in column (2) occurring against tariff item 2936 24 00, the
“- - D- or DL-Pantothenic acid (Vitamin B5) and its derivatives”;
(xi) in heading 2939, —
(a) for sub-headings and tariff items from 2939 30 00 to 2939 49 00 and the entries
relating thereto, the following shall be substituted, namely :—
“2939 30 00 - Caffeine and its salts kg. 10% 10%

- Alkaloids of ephedra and their
derivatives; salts thereof:
2939 41 00 - - Ephedrine and its salts kg. 10% 10%
2939 42 00 - - Pseudoephedrine (INN) and its salts kg. 10% 10%
2939 43 00 - - Cathine (INN) and its salts kg. 10% 10%
2939 44 00 - - Norephedrine and its salts kg. 10% -
2939 45 00 - - Levometamfetamine, kg. 10% 10%

metamfetamine (INN),
metamfetamine racemate and their
salts
2939 49 00 - - Other kg. 10% 10%”;
(b) for tariff items 2939 69 00 and 2939 71 00, sub-heading 2939 79, tariff items 2939 79 10
and 2939 79 90 and the entries relating thereto, the following shall be substituted, namely :—
“2939 69 00 - - Other kg. 10% -

- Other, of vegetal origin:
2939 72 00 - - Cocaine, ecgonine; salts, esters and kg. 10% -

other derivatives thereof
2939 79 00 - - Other kg. 10% -”;
(i) in Note 1, —
190
(A) for the clause (b), the following clause shall be substituted, namely :—
“(b) products, such as tablets, chewing gum or patches (transdermal systems),

containing nicotine and intended to assist tobacco use cessation (heading 2404);”;
(B) in clause (g), the word “or” shall be omitted;
(C) in clause (h), for the brackets, word and figures “(heading 3502).”, the brackets,
words and figures“(heading 3502); or” shall be substituted;
(D) after clause (h), the following clause shall be inserted, namely :—
“(ij) diagnostic reagents of heading 3822.”;
(ii) in Note 4, for clause (e), the following clause shall be substituted, namely :—
“(e) placebos and blinded (or double-blinded) clinical trial kits for use in recognised
clinical trials, put up in measured doses, even if they might contain active
medicaments;”;
“SIMILAR PRODUCTS”, the words “ETHER SIMILAR PRODUCTS; CELL
CULTURES, WHETHER OR NOT MODIFIED” shall be substituted;
(c) for sub-heading 3002 13, tariff item 3002 13 10, sub-heading 3002 14, tariff items
3002 14 10 to 3002 19 00, sub-heading 3002 20, tariff items 3002 20 11 to 3002 30 00,
sub-heading 3002 90, tariff items 3002 90 10 to 3002 90 90 and the entries relating
thereto, the following shall be substituted, namely :—
“3002 13 00 - - Immunological products, unmixed, kg. 10% 10%

not put up in measured doses or in
forms or packings for retail sale
3002 14 00 - - Immunological products, mixed, not kg. 10% 10%
put up in measured doses or in forms
or packings for retail sale
3002 15 00 - - Immunological products, put up in kg. 10% 10%
measured doses or in forms or
packings for retail sale
- Vaccines, toxins, cultures of micro-

organisms (excluding yeasts) and
similar products:
3002 41 - - Vaccines for human medicine:
- - - Single vaccines for:

191
3002 41 11 - - - - Cholera and typhoid kg. 10% 10%

3002 41 12 - - - - Hepatitis kg. 10% 10%
3002 41 13 - - - - Tetanus kg. 10% 10%
3002 41 14 - - - - Polio kg. 10% 10%
3002 41 15 - - - - Tuberculosis kg. 10% 10%
3002 41 16 - - - - Rabies kg. 10% 10%
3002 41 17 - - - - Japanese encephalitis kg. 10% 10%
3002 41 18 - - - - Whopping cough (pertussis) kg. 10% 10%
3002 41 19 - - - - Other kg. 10% 10%
- - - Mixed vaccines for:
3002 41 21 - - - - Diphtheria, pertussis and tetanus kg. 10% 10%
(DPT)
3002 41 22 - - - - Diphtheria and tetanus (DT) kg. 10% 10%
3002 41 23 - - - - Measles, mumps and rubella kg. 10% 10%
(MMR)
3002 41 24 - - - - Typhoid-paratyphoid (TAB) kg. 10% 10%
3002 41 25 - - - - Typhoid- paratyphoid-cholera kg. 10% 10%
(TABC)
3002 41 29 - - - - Other kg. 10% 10%
3002 42 00 - - Vaccines for veterinary medicine kg. 10% 10%
3002 49 - - Other
3002 49 10 - - - Cultures of micro-organisms kg. 10% 10%
(excluding yeast)
3002 49 20 - - - Toxins kg. 10% 10%
3002 49 90 - - - Other kg. 10% 10%
- Cell cultures, whether or not modified :
3002 51 00 - - Cell therapy products kg. 10% 10%
3002 59 00 - - Other kg. 10% 10%

3002 90 - Other:
3002 90 10 - - - Human blood kg. 10% 10%
3002 90 20 - - - Animal blood prepared for kg. 10% 10%
therapeutic, prophylactic or diagnostic
uses
3002 90 90 - - - Other kg. 10% 10%”;
(a) tariff item 3006 20 00 and the entries relating thereto shall be omitted;
inserted, namely: —
“3006 93 00 - - Placebos and blinded (or double- kg. 10% -”;

blinded) clinical trial kits for a
recognised clinical trial, put up in
measured doses”
192
(25) in Chapter 32, in heading 3204, after tariff item 3204 17 90 and the entries relating thereto,
the following shall be inserted, namely: —
“3204 18 00 - - Carotenoid colouring matters and kg. 10% -”;

preparations based thereon
(i) in Note 1, for clause (a), the following clause shall be substituted, namely: —
“(a) edible mixtures or preparations of animal, vegetable or microbial fats or oils of a

kind used as mould release preparations (heading 1517);”;
(ii) in heading 3402, for the entry in column (2) occurring after heading 3402 and the
entry relating thereto, sub-heading 3402 11, tariff items 3402 11 10 to 3402 19 00, sub-
heading 3402 20, tariff items 3402 20 10 to 3402 20 90 and the entries relating thereto,
the following shall be substituted, namely :—
“- Anionic organic surface active

agents, whether or not put up for retail
sale :
3402 31 00 - - Linear alkylbenzene sulphonic acids kg. 10% 10%

and their salts
3402 39 00 - - Other kg. 10% 10%
- Other organic surface active agents,

whether or not put up for retail sale:
3402 41 00 - - Cationic kg. 10% 10%
3402 42 00 - - Non-ionic kg. 10% 10%
3402 49 00 - - Other kg. 10% 10%
3402 50 00 - Preparations put up for retail sale kg. 10% -”;
(27) in Chapter 36, for heading 3603, sub-heading 3603 00, tariff items 3603 00 11 to 3603 00
59 and the entries relating thereto, the following shall be substituted, namely :—
“3603 SAFETY FUSES; DETONATING

CORDS; PERCUSSION OR
DETONATING CAPS; IGNITERS;
ELECTRIC DETONATORS
193
3603 10 00 - Safety fuses kg. 10% -
3603 20 00 - Detonating cords kg. 10% -
3603 30 00 - Percussion caps kg. 10% -
3603 40 00 - Detonating caps kg. 10% -
3603 50 00 - Igniters kg. 10% -
3603 60 00 - Electric detonators kg. 10% -”;
(28) in Chapter 37, in Note 2, for the words “photosensitive surfaces”, the words
“photosensitive, including thermosensitive, surfaces” shall be substituted;
(i) in Note 1, —
(A) after clause (b), the following clause shall be inserted, namely :—
“(c) products of heading 2404;”;
(B) the existing clauses (c), (d) and (e) shall respectively be re-lettered as clauses (d),
(e), and (f);
(ii) in Note 4, for clause (a), the following clause shall be substituted, namely :—
“(a) individual materials or articles segregated from the waste, for example wastes of
plastics, rubber, wood, paper, textiles, glass or metals, electrical and electronic waste
and scrap (including spent batteries) which fall in their appropriate headings of the
Nomenclature;”;
(iii) in Note 7, for the words “vegetable fats”, the words “vegetable or microbial fats”
(iv) for Sub-heading Note 1, the following Sub-heading Note shall be substituted,
namely:—
“1. Sub-headings 3808 52 and 3808 59 cover only goods of heading 3808, containing
one or more of the following substances : alachlor (ISO); aldicarb (ISO); aldrin (ISO);
azinphos-methyl (ISO); binapacryl (ISO); camphechlor (ISO) (toxaphene); captafol
(ISO); carbofuran (ISO); chlordane (ISO); chlordimeform (ISO); chlorobenzilate
(ISO); DDT (ISO) (clofenotane (INN), 1,1,1-trichloro-2,2-bis(p-chlorophenyl)ethane);
dieldrin (ISO, INN); 4,6-dinitro-o-cresol (DNOC (ISO)) or its salts; dinoseb (ISO), its
salts or its esters; endosulfan (ISO); ethylene dibromide (ISO) (1,2-dibromoethane);
ethylene dichloride (ISO) (1,2-dichloroethane); fluoroacetamide (ISO); heptachlor
(ISO); hexachlorobenzene (ISO); 1,2,3,4,5,6-hexachlorocyclohexane (HCH (ISO)),
194
including lindane (ISO, INN); mercury compounds; methamidophos (ISO);

monocrotophos (ISO); oxirane (ethylene oxide); parathion (ISO); parathion-methyl
(ISO) (methyl-parathion); pentachlorophenol (ISO), its salts or its esters;
perfluorooctane sulphonic acid and its salts; perfluorooctane sulphonamides;
perfluorooctane sulphonyl fluoride; phosphamidon (ISO); 2,4,5-T (ISO) (2,4,5-
trichlorophenoxyacetic acid), its salts or its esters; tributyltin compounds; trichlorfon
(ISO).”;
(v) for Sub-heading Note 3, the following Sub-heading Note shall be substituted,
namely:—
“3. Sub-headings 3824 81 to 3824 89 cover only mixtures and preparations containing
one or more of the following substances : oxirane (ethylene oxide); polybrominated
biphenyls (PBBs); polychlorinated biphenyls (PCBs); polychlorinated terphenyls
(PCTs); tris(2,3-dibromopropyl) phosphate; aldrin (ISO); camphechlor (ISO)
(toxaphene); chlordane (ISO); chlordecone (ISO); DDT (ISO) (clofenotane (INN);
1,1,1-trichloro-2,2-bis(p-chlorophenyl)ethane); dieldrin (ISO, INN); endosulfan (ISO);
endrin (ISO); heptachlor (ISO); mirex (ISO); 1,2,3,4,5,6-hexachlorocyclohexane (HCH
(ISO)), including lindane (ISO, INN); pentachlorobenzene (ISO); hexachlorobenzene
(ISO); perfluorooctane sulphonic acid, its salts; perfluorooctane sulphonamides;
perfluorooctane sulphonyl fluoride; tetra-, penta-, hexa-, hepta- or octabromodiphenyl
ethers; short-chain chlorinated paraffins.
Short-chain chlorinated paraffins are mixtures of compounds, with a chlorination

degree of more than 48 % by weight, with the following molecular formula : CxH(2x-
y+2)Cly, where x=10 - 13 and y= 1 – 13.”;
(vi) for the entry in column (2) occurring against tariff item 3816 00 00, the following
“refractory cements, mortars, concretes and similar compositions, including dolomite

ramming mix, other than products of heading 3801”;
(vii) for heading 3822, sub-heading 3822 00, tariff items 3822 00 11 to 3822 00 90 and
the entries relating thereto, the following shall be substituted, namely :—
“3822 DIAGNOSTIC OR LABORATORY

REAGENTS ON A BACKING,
PREPARED DIAGNOSTIC OR
LABORATORY REAGENTS
WHETHER OR NOT ON A
BACKING, WHETHER OR NOT PUT
UP IN THE FORM OF KITS, OTHER
THAN THOSE OF HEADING 3006;
CERTIFIED REFERENCE
MATERIALS
- Diagnostic or laboratory reagents on a
backing, prepared diagnostic or
195
laboratory reagents whether or not on a

backing, whether or not put up in the
form of kits:
3822 11 00 - - For malaria kg. 10% -
3822 12 00 - - For Zika and other diseases kg. 10% -

transmitted by mosquitoes of the
genus Aedes
3822 13 00 - - For blood-grouping kg. 10% -
3822 19 - - Other:
3822 19 10 - - - Pregnancy test kit kg. 10% -

3822 19 90 - - - Other kg. 10% -
3822 90 - Other:
3822 90 10 - - - Certified reference materials kg. 30% -
3822 90 90 - - - Other kg. 30% -”;
(a) for tariff items 3824 60 90 to 3824 79 00 and the entries relating thereto, the
following shall be substituted, namely :—
“3824 60 90 - - - Other kg. 30% -”;
(b) in the entry in column (2) occurring against tariff item 3824 88 00, for the words
“hexa, hepta –”, the words “hexa-, hepta-” shall be substituted;
(c) after tariff item 3824 88 00 and the entries relating thereto, the following shall be
“3824 89 00 - - Containing short-chain chlorinated kg. 10% -”;

paraffins
(d) after tariff item 3824 91 00 and the entries relating thereto, the following shall be
“3824 92 00 - - Polyglycol esters of kg. 10% -”;

methylphosphonic acid
(ix) after tariff item 3826 00 00 and the entries relating thereto, the following shall be
“3827 MIXTURES CONTAINING

HALOGENATED DERIVATIVES OF
196
METHANE, ETHANE OR PROPANE,

NOT ELSEWHERE SPECIFIED OR
INCLUDED
- Containing chlorofluorocarbons
(CFCs), whether or not containing
hydrochlorofluorocarbons (HCFCs),
perfluorocarbons (PFCs) or
hydrofluorocarbons (HFCs);
containing hydrobromofluorocarbons
(HBFCs); containing carbon
tetrachloride; containing 1,1,1-
trichloroethane (methyl chloroform):
3827 11 00 - - Containing chlorofluorocarbons kg. 10% -
(CFCs), whether or not containing
hydrochlorofluorocarbons (HCFCs),
hydrofluorocarbons (HFCs)
3827 12 00 - - Containing hydrobromofluorocarbons kg. 10% -
(HBFCs)
3827 13 00 - - Containing carbon tetrachloride kg. 10% -
3827 14 00 - - Containing 1,1,1-trichloroethane kg. 10% -
(methyl chloroform)
3827 20 00 - Containing kg. 10% -
bromochlorodifluoromethane (Halon-
1211), bromotrifluoromethane (Halon-
1301) or dibromotetrafluoroethanes
(Halon-2402)
- Containing hydrochlorofluorocarbons
(HCFCs), whether or not containing
hydrofluorocarbons (HFCs), but not
containing chlorofluorocarbons
(CFCs):
3827 31 00 - - Containing substances of subheadings kg. 10% -
2903.41 to 2903.48
3827 32 00 - - Other, containing substances of kg. 10% -
subheadings 2903.71 to 2903.75
3827 39 00 - - Other kg. 10% -
3827 40 00 - Containing methyl bromide kg. 10% -
(bromomethane) or
bromochloromethane
- Containing trifluoromethane (HFC-23)
or perfluorocarbons (PFCs) but not
containing chlorofluorocarbons (CFCs)
or hydrochlorofluorocarbons (HCFCs):
3827 51 00 - - Containing trifluoromethane (HFC-23) kg. 10% -
3827 59 00 - - Other kg. 10% -
- Containing other hydrofluorocarbons
(HFCs) but not containing
197
chlorofluorocarbons (CFCs) or
hydrochlorofluorocarbons (HCFCs) :
3827 61 00 - - Containing 15 % or more by mass of kg. 10% -
1,1,1-trifluoroethane (HFC-143a)
3827 62 00 - - Other, not included in the subheading kg. 10% -
above, containing 55 % or more by mass
of pentafluoroethane (HFC- 125) but not
containing unsaturated fluorinated
derivatives of acyclic hydrocarbons
(HFOs)
3827 63 00 - - Other, not included in the subheadings kg. 10% -

of pentafluoroethane (HFC-125)
3827 64 00 kg. 10% -
-- Other, not included in the subheadings
of 1,1,1,2-tetrafluoroethane (HFC-134a)
but not containing unsaturated
fluorinated derivatives of acyclic
hydrocarbons (HFOs)

of difluoromethane (HFC-32) and 20 %
or more by mass of pentafluoroethane
(HFC-125)

above, containing substances of
subheadings 2903 41 to 2903 48
3827 69 00 - - Other kg. 10% -
3827 90 00 - Other kg. 10% -.”;
(30) in Section VII, for Note 2, the following Note shall be substituted, namely :—
“2. Except for the goods of heading 3918 or 3919, plastics, rubber, and articles thereof,
printed with motifs, characters or pictorial representations, which are not merely
subsidiary to the primary use of the goods, fall in Chapter 49.”;

(i) in Note 2, in clause (x), for the words “lamps and lighting fittings”, the words
“luminaires and lighting fittings” shall be substituted;
(ii) in heading 3907, for sub-heading 3907 20, tariff items 3907 20 10 and 3907 20 90
and the entries relating thereto, the following shall be substituted, namely: —
“ - Other polyethers:
198
3907 21 00 - - Bis (polyoxyethylene) methylphosphonate kg. 10% -

3907 29 - - Other:
3907 29 10 - - - Poly (ether alcohols) kg. 10% -
3907 29 90 - - - Other kg. 10% -”;
(iii) in heading 3911, after tariff item 3911 10 90 and the entries relating thereto, the
following shall be inserted, namely:—
“3911 20 00 - Poly (1,3-phenylene methylphosphonate) kg. 10% -”;
(32) in Chapter 40, in heading 4015, for tariff items 4015 11 00 and the entries relating
thereto, the following shall be substituted, namely: —
“4015 12 00 - - Of a kind used for medical, surgical, dental pa 10% -”;

or veterinary purposes
(33) in Chapter 42, in Note 2, in clause (k), for the words “lamps and lighting fittings”, the
words “luminaires and lighting fittings” shall be substituted;
(i) in Note 1, in clause (o), for the words “lamps and lighting fittings”, the words
(ii) after Sub-heading Note 1, the following Sub-heading Notes shall be inserted, namely:
—
‘2. For the purposes of sub-heading 4401 32, the expression “wood briquettes” means by
products such as cutter shavings, saw dust or chips, of the mechanical wood processing
industry, furniture making or other wood transformation activities, which have been
agglomerated either directly by compression or by addition of a binder in a proportion not
exceeding 3% by weight. Such briquettes are in the form of cubiform, polyhedral or
cylindrical units with the minimum cross-sectional dimension greater than 25 mm.”;
3. For the purposes of sub-heading 4407 13, “S-P-F” refers to wood sourced from mixed
stands of spruce, pine and fir where the proportion of each species varies and is unknown.
4. For the purposes of sub-heading 4407 14, “Hem-fir” refers to wood sourced from mixed
stands of Western hemlock and fir where the proportion of each species varies and is
unknown.’;

199
(a) in the entry in column (2) occurring after the tariff item 4401 22 00, for the words
“agglomerated, in logs”, the words “agglomerated in logs” shall be substituted;
“4401 32 00 - - Wood briquettes mt 5% -”;
(c) for the tariff item 4401 40 00 and the entries relating thereto, the following shall be
substituted, namely: —
“- Sawdust and wood waste and scrap, not agglomerated:
4401 41 00 - - Sawdust mt 5% -
4401 49 00 - - Other mt 5% -”;
(iv) in heading 4402, for sub-heading 4402 90, tariff items 4402 90 10 and 4402 90 90 and the
entries relating thereto, the following shall be substituted, namely: —
“4402 20 - Of shell or nut:
4402 20 10 --- Of coconut shell mt 5% -
4402 20 90 --- Other mt 5% -
4402 90 00 - Other mt 5% -”;
(a) for the entry in column (2) occurring against sub-heading 4403 21, the following shall
be substituted, namely: —
“- - Of pine (Pinus spp.), of which the smallest cross-sectional dimension is 15 cm or
more:”;
(b) for the entry in column (2) occurring against sub-heading 4403 23, the following shall
“- - Of fir (Abies spp.) and spruce (Picea spp.), of which the smallest cross-sectional
dimension is 15 cm or more:”;
(c) for the entry in column (2) occurring against sub-heading 4403 25, the following shall
“ - - Other, of which the smallest cross-sectional dimension is 15 cm or more:”;
(d) for sub-heading 4403 49, tariff items 4403 49 10 and 4403 49 90 and the entries relating
“4403 42 00 -- Teak m3 5% -
200
4403 49 00 -- Other m3 5% -”;
(e) for the entry in column (2) occurring against tariff item 4403 93 00, the following entry
shall be substituted, namely: —
“ - - Of beech (Fagus spp.), of which the smallest cross-sectional dimension is 15 cm or

more”;
(f) for the entry in column (2) occurring against tariff item 4403 95 00, the following entry
“- - Of birch (Betula spp.), of which the smallest cross-sectional dimension is 15 cm

or more”;
(vi) in heading 4407, —
(a) after the tariff item 4407 12 00 and the entries relating thereto, the following shall be
“4407 13 00 - - Of S-P-F (spruce (Picea spp.), pine m3 10% -

(Pinus spp.) and fir (Abies spp.))
4407 14 00 - - Of Hem-fir (Western hemlock m3 10% -”;
(Tsuga heterophylla) and fir (Abies
spp.))
(b) after the tariff item 4407 22 00 and the entries relating thereto, the following shall be
“4407 23 00 - - Teak m3 10% -”;
(c) for sub-heading 4407 29, tariff items 4407 29 10 and 4407 29 90 and the entries relating
“4407 29 00 - - Other m3 10% -”;
(vii) in heading 4412, for the tariff items 4412 39 90 and 4412 94 00, sub-headings 4412 99,
tariff items 4412 99 10 to 4412 99 90 and the entries relating thereto, the following shall be
“4412 39 90 - - - Other m3 10% -

- Laminated veneered lumber (LVL):
4412 41 00 - - With at least one outer ply of tropical wood m3 10% -

4412 42 00 - - Other, with at least one outer ply of non- m3 10% -
coniferous wood
4412 49 00 - - Other, with both outer plies of coniferous m3 10% -
wood
- Blockboard, laminboard and battenboard:
4412 51 00 - - With at least one outer ply of tropical wood m3 10% -
201
4412 52 00 - - Other, with at least one outer ply of non- m3 10% -

coniferous wood
4412 59 00 - - Other, with both outer plies of coniferous m3 10% -
wood
- Other:
4412 91 - - With at least one outer ply of tropical wood:

4412 91 10 - - - Decorative plywood m3 10% -
4412 91 20 - - - Tea chest panel or shooks, packed in sets m3 10% -
4412 91 30 - - - Marine and aircraft plywood m3 10% -
4412 91 40 - - - Cuttings and trimmings of plywood of m3 10% -
which not exceeding 5cm
4412 91 90 - - - Other m3 10% -
4412 92 - - Other, with at least one outer ply of non-
coniferous wood:
4412 92 90 - - - Other m3 10% -
4412 99 - - Other, with both outer plies of coniferous
wood:
4412 99 90 - - - Other m3 10% -”;
(viii) for tariff item 4414 00 00 and the entries relating thereto, the following shall be
“4414 WOODEN FRAMES FOR PAINTINGS,

PHOTOGRAPHS, MIRRORS OR SIMILAR
OBJECTS
4414 10 00 - Of tropical wood kg. 10% -
4414 90 00 - Other kg. 10% -”;
(ix) in heading 4418, —
(a) for tariff item 4418 10 00, sub-heading 4418 20 and tariff items 4418 20 10 to 4418 20
90 and the entries relating thereto, the following shall be substituted, namely: —
“- Windows, French-windows and their frames:
4418 11 00 -- Of tropical wood kg. 10% -

4418 19 00 -- Other kg. 10% -
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- Doors and their frames and thresholds:

4418 21 -- Of tropical wood:
4418 21 10 - - - Flush doors kg. 10% -

4418 21 20 - - - Frames and thresholds of flush doors kg. 10% -
4418 21 90 - - - Other kg. 10% -
4418 29 -- Other:
4418 29 10 - - - Flush doors kg. 10% -

4418 29 20 - - - Frames and thresholds of flush doors kg. 10% -
4418 29 90 - - - Other kg. 10% -
4418 30 00 - Posts and beams other than products of kg. 10% -”;
sub-headings 4418 81 to 4418 89
(b) tariff item 4418 60 00 and the entries relating thereto shall be omitted”;
“ - Engineered structural timber products :

4418 81 00 - - Glue-laminated timber (glulam) kg. 10% -
4418 82 00 - - Cross-laminated timber (CLT or X-lam) kg. 10% -
4418 83 00 - - I beams kg. 10% -
4418 89 00 - - Other kg. 10% -”;
(d) after tariff item 4418 91 00 and the entries relating thereto, the following shall be
“4418 92 00 - - Cellular wood panels kg. 10% -”;
(x) after tariff item 4419 19 00 and the entries relating thereto, the following shall be inserted,
namely: —
“4419 20 00 - of tropical wood kg. 10% -”;
(xi) for tariff item 4420 10 00 and the entries relating thereto, the following shall be substituted,
namely: —
“- Statuettes and other ornaments:

4420 11 00 - - Of tropical wood kg. 10% -
4420 19 00 - - Other kg. 10% -”;
(xii) after tariff item 4421 10 00 and the entries relating thereto, the following shall be inserted,
namely: —
203
“4421 20 00 - Coffins kg. 10% -”;
(35) in Chapter 46, in Note 2, in clause (e), for the words “lamps and lighting fittings” , the
words “luminaires and lighting fittings” shall be substituted;
(i) in Note 2, for clause (q), the following clause shall be substituted, namely: —
“(q) articles of Chapter 96 (for example, buttons, sanitary towels (pads) and
tampons, napkins (diapers) and napkin liners).”;
(ii) in Note 4, for the word “apply”, the word “applies” shall be substituted;
(iii) in Note 5,—
(a) for the words, figures and letters “For paper or paperboard weighing not
more than 150 g/m2:”, the following shall be substituted, namely:–
“(A) For paper or paperboard weighing not more than 150 g/m2 :”;
(b) for the words, figures and letters “For papers or paperboard weighing more
than 150 g/m2:”, the following shall be substituted, namely:–
“(B) For paper or paperboard weighing more than 150 g/m2 :”;
(c) for the brackets and words “(including tea-bag paper) or felt paper of
paperboard, occurring at the end, the brackets and words “(including tea-
bag paper) or felt paper or paperboard” shall be substituted;
(iv) in Note 12, for the word “ incidental”, the word “subsidiary” shall be
substituted;
(37) in Chapter 49, in heading 4905, for tariff items 4905 10 00 and 4905 91 00, sub-heading
“4905 20 00 - In book form kg. Free -
4905 90 - Other:
4905 90 10 - - - Geographical, hydrological, astronomical kg. Free -

maps or charts
4905 90 20 - - - Globe kg. Free -

4905 90 90 - - - Other kg. Free -”;
204
(38) in Section XI, —
(i) in Note 1, —
(A) in clause (s), for the words “lamps and lighting fittings” , the words
(B) in clause (u), the words “for babies” shall be omitted:
(ii) after Note 14, the following Note shall be inserted, namely: —
“15. Subject to Note 1 of Section XI, textiles, garments and other textile articles,
incorporating chemical, mechanical or electronic components for additional
functionality, whether incorporated as built-in components or within the fibre or
fabric, are classified in their respective headings in Section XI provided that they
retain the essential character of the goods of this Section.”;
(39) in Chapter 55, in heading 5501, for tariff item 5501 10 00 and the entries relating thereto,
the following shall be substituted, namely: —
“- Of nylon or other polyamides :
5501 11 00 -- Of aramids kg. 20% -
5501 19 00 -- Other kg. 20% -”;
(40) in Chapter 56, in Note 1, in clause (f), the words “for babies” shall be omitted;
(41) in Chapter 57, for heading 5703, sub-heading 5703 10, tariff items 5703 10 10 to 5703 10
90, sub-heading 5703 20, tariff items 5703 20 10 to 5703 20 90, sub-heading 5703 30, tariff
items 5703 30 10 to 5703 30 90, sub-heading 5703 90, tariff items 5703 90 10 to 5703 90 90
“5703 CARPETS AND OTHER TEXTILE FLOOR

COVERINGS (INCLUDING TURF),
TUFTED, WHETHER OR NOT MADE UP
570310 - Of wool or fine animal hair:
5703 10 10 - - - Carpets m2 25% -

5703 10 20 - - - Mats and matting m2 25% -
5703 10 90 - - - Other m2 25% -
- Of nylon or other polyamides:

5703 21 00 - - Turf m2 25% or Rs. 70 -
per sq. metre,
whichever is
higher
205
5703 29 - - Other:
5703 29 10 - - - Carpets, carpeting and rugs m2 25% or Rs. 70 -

per sq. metre,
whichever is
higher
5703 29 20 - - - 100% polyamide tufted velour, cut pile m2 25% or Rs. 70 -
or loop pile carpet mats with jute, per sq. metre,
rubber latex or PU foam backing whichever is
higher
5703 29 90 - - - Other m2 25% or Rs. 70 -
per sq. metre,
whichever is
higher
- Of other man-made textile materials:
5703 31 00 - - Turf m2 25% or Rs. 55 -

per sq. metre,
whichever is
higher
5703 39 - - Other :
5703 39 10 - - - Carpets, carpeting and rugs m2 25% or Rs. 55 -
per sq. metre,
whichever is
higher
5703 39 20 - - - 100%polypropylene carpet mats with jute, m2 25% or Rs. 55 -
rubber, latex or PU foam backing per sq. metre,
whichever is
higher
5703 39 90 - - - Other m2 25% or Rs. 55 -
per sq. metre,
whichever is
higher
5703 90 - Of other textile materials :
5703 90 10 - - - Carpets and other floor coverings, of m2 25% -

cotton,
other than durries
5703 90 20 - - - Carpets and floor coverings of coir m2 25% -
5703 90 90 - - - Other m2 25% -”;
(42) in Chapter 58, for heading 5802, tariff item 5802 11 00, sub-heading 5802 19, tariff items
5802 19 10 to 5802 19 90 and the entries relating thereto, the following shall be substituted,
namely: —
“5802 TERRY TOWELLING AND SIMILAR

WOVEN TERRY FABRICS, OTHER
206
THAN NARROW FABRICS OF

HEADING 5806; TUFTED TEXTILE
FABRICS, OTHER THAN
PRODUCTS OF HEADING 5703
5802 10 - Terry towelling and similar woven

terry fabrics, of cotton:
5802 10 10 - - - Unbleached m2 25% -
5802 10 20 - - - Bleached m2 25% or Rs. 60 per sq. -
meter, whichever is
higher
5802 10 30 - - - Piece dyed m2 25% or Rs. 60 per sq. -
meter, whichever is
higher
5802 10 40 - - - Yarn dyed m2 25% or Rs. 60 per sq. -
meter, whichever is
higher
5802 10 50 - - - Printed m2 25% or Rs. 60 per sq. -
meter, whichever is
higher
5802 10 60 - - - Of Handloom m2 25% or Rs. 60 per sq. -
meter, whichever is
higher
5802 10 90 - - - Other m2 25% or Rs. 60 per sq. -
meter, whichever is ”;
higher
(i) after Note 2, the following Note shall be inserted, namely: —
“3. For the purposes of heading 5903, “textile fabrics laminated with plastics” means
products made by the assembly of one or more layers of fabrics with one or more sheets
or film of plastics which are combined by any process that bonds the layers together,
whether or not the sheets or film of plastics are visible to the naked eye in the cross-
section.”;
(ii) the existing Notes 3, 4, 5, 6 and 7 shall respectively be re-numbered as Notes 4, 5,

6, 7 and 8 and in Note 8 as so re-numbered, in clause (a), for sub-clause (iii), the
following sub-clause shall be substituted, namely: —
“(iii) filtering or straining cloth of a kind used in oil presses or the like, of textile
material or of human hair;”;
(iii) in heading 5911 ,—
(a) in the entry in column (2) occurring against heading 5911, for the word and figure
“Note 7”, the word and figure “Note 8” shall be substituted;
207
(b) for the entry in column (2) occurring against tariff item 5911 40 00, the following
“- Filtering or straining cloth of a kind used in oil presses or the like, including that of
human hair”;
(44) in Chapter 61,—
(i) for Note 4, the following Note shall be substituted, namely: —
‘4. Headings 6105 and 6106 do not cover garments with pockets below the waist, with
a ribbed waistband or other means of tightening at the bottom of the garment, or
garments having an average of less than 10 stitches per linear centimeter in each
direction counted on an area measuring at least 10 cm x 10 cm. Heading 6105 does not
cover sleeveless garments.
“Shirts” and “shirt-blouses” are garments designed to cover the upper part of the body,
having long or short sleeves and a full or partial opening starting at the neckline.
“Blouses” are loose-fitting garments also designed to cover the upper part of the body
but may be sleeveless and with or without an opening at the neckline. “Shirts”, “shirt-
blouses” and “blouses” may also have a collar.’;
(ii) in heading 6116, for the entry in column (2) occurring against tariff item
6116 10 00, the following entry shall be substituted, namely: —
“6116 10 00 - Impregnated, coated, covered or laminated with plastics or rubber”;
4. Headings 6205 and 6206 do not cover garments with pockets below the waist, with
a ribbed waistband or other means of tightening at the bottom of the garment. Heading
6205 does not cover sleeveless garments.
“Shirts” and “shirt-blouses” are garments designed to cover the upper part of the body,
having long or short sleeves and a full or partial opening starting at the neckline.
“Blouses” are loose-fitting garments also designed to cover the upper part of the body
but may be sleeveless and with or without an opening at the neckline. “Shirts”, “shirt-
blouses” and “blouses” may also have a collar.’;
(ii) the existing Notes 4, 5, 6, 7, 8 and 9 shall respectively be re-numbered as Notes 5,

6, 7, 8, 9 and 10;
(iii) for heading 6201, tariff item 6201 11 00, sub-heading 6201 12, tariff items 6201
12 10 and 6201 12 90, sub-heading 6201 13, tariff items 6201 13 10 and 6201 13 90,
sub-heading 6201 19, tariff item 6201 19 10 to 6201 93 00, sub-heading 6201 99, tariff
208
items 6201 99 10 and 6201 99 90 and the entries relating thereto, the following shall be
“6201 MEN’S OR BOYS’ OVERCOATS, CAR-

COATS, CAPES, CLOAKS, ANORAKS
(INCLUDING SKI-JACKETS), WIND-
CHEATERS, WIND-JACKETS AND
SIMILAR ARTICLES, OTHER THAN
THOSE OF HEADING 6203
6201 20 - Of wool or fine animal hair :
6201 20 10 --- Overcoats, raincoats, car-coats, capes, u 25% or -
cloaks and similar articles Rs. 385
per piece,
whichever
is higher
6201 20 90 --- Other u 25% or
Rs.220
per piece,
whichever
is higher
6201 30 - Of cotton :
per piece,
whichever
is higher
6201 30 90 --- Other u 25% or -
Rs. 210
per piece,
whichever
is higher
6201 40 - Of man-made fibres :
per piece,
whichever
is higher
6201 40 90 --- Other u 25% or -
Rs.180
per piece,
209
whichever
is higher
6201 90 10 --- Overcoats, raincoats, car-coats, capes, u 25% -
cloaks and similar articles
6201 90 90 --- Other u 25% -”;
(iv) for heading 6202, sub-heading 6202 11, tariff items 6202 11 10 to 6202 13 00, sub-
heading 6202 19, tariff items 6202 19 10 to 6201 19 90, sub-heading 6202 91, tariff
item 6202 91 10 and 6202 91 90, sub-heading 6202 92, tariff items 6202 92 10 and
6202 92 90, sub-heading 6202 93, tariff items 620293 10 and 6202 93 90, sub-heading
6202 99, tariff items 6202 99 11 to 6202 99 90 and the entries relating thereto, the
following shall be substituted, namely: —
“6202 WOMEN’S OR GIRLS’ OVERCOATS,

CAR-COATS, CAPES, CLOAKS,
ANORAKS (INCLUDING SKI-
JACKETS), WIND-CHEATERS, WIND-
JACKETS AND SIMILAR ARTICLES,
OTHER THAN THOSE OF HEADING
6204
6202 20 - Of wool or fine animal hair :
per piece,
whichever
is higher
6202 20 90 --- Other u 25% or -
Rs.220
per piece,
whichever
is higher
6202 30 - Of cotton :
per piece,
whichever
is higher
210
6202 30 90 --- Other u 25% or -

Rs. 160
per piece,
whichever
is higher
6202 40 - Of man-made fibres :
per piece,
whichever
is higher
6202 40 90 --- Other u 25% or -
Rs.220
per piece,
whichever
is higher
6202 90 10 --- Overcoats, raincoats, car-coats, capes, u 25% -
cloaks and similar articles
6202 90 90 --- Other u 25% -”;
(v) in heading 6210, for the entry in column (2),–
(a) occurring against sub-heading 6210 20, the following entry shall be substituted,
namely :—
“- Other garments, of the type described in heading 6201”;
(b) occurring against sub-heading 6210 30, the following entry shall be
“- Other garments, of the type described in heading 6202”;
(46) in Chapter 63, in heading 6306, for the entry in column (2), —
(a) occurring against heading 6306, the following shall be substituted, namely: —
“TARPAULINS, AWNINGS AND SUNBLINDS; TENTS (INCLUDING

TEMPORARY CANOPIES AND SIMILAR ARTICLES); SAILS FOR BOATS,
SAILBOARDS OR LANDCRAFT; CAMPING GOODS”;
(b) occurring after tariff item 6306 19 90, the following entry shall be substituted,
namely: —
“ - Tents (including temporary canopies and similar articles) :”;

211
(i) in Note 1, in clause (k), for the words “lamps and lighting fittings”, the words
(ii) in heading 6802, for words “largest surface area”, the words “largest face” shall be
substituted;
(iii) in heading 6812, sub-heading 6812 92, tariff items 6812 92 11 to 6812 93 00 and
the entries relating thereto shall be omitted;
(a) for sub-heading 6815 10, tariff items 6815 10 10 to 6815 10 90 and the entries
relating thereto, the following shall be substituted, namely: —
“- Carbon fibres; articles of carbon fibres for non-
electrical uses; other articles of graphite or other
carbon for non-electrical uses :
6815 11 00 - - Carbon fibres kg. 10% -
6815 12 00 - - Fabrics of carbon fibres kg. 10% -
6815 13 00 - - Other articles of carbon fibres kg. 10% -
6815 19 00 - - Other kg. 10% -”;
(b) for the entry in column (2) occurring against tariff item 6815 91 00, the
following entry shall be substituted, namely: —
“- - Containing magnesite, magnesia in the form of periclase, dolomite

including in the form of dolime, or chromite”;
(i) for Note 1, the following Note shall be substituted, namely: —
“1. This Chapter applies only to ceramic products which have been fired after shaping:
(a) headings 6904 to 6914 apply only to such products other than those classifiable in headings
6901 to 6903;
(b) articles heated to temperatures less than 800 °C for purposes such as curing of resins,
accelerating hydration reactions, or for the removal of water or other volatile components, are
not considered to be fired. Such articles are excluded from Chapter 69; and
(c) Ceramic articles are obtained by firing inorganic, non-metallic materials which have been
prepared and shaped previously at, in general, room temperature. Raw materials comprise, inter
212
alia, clays, siliceous materials including fused silica, materials with a high melting point, such
as oxides, carbides, nitrides, graphite or other carbon, and in some cases binders such as
refractory clays or phosphates.”;
(ii) in Note 2, in clause (ij), for the words “lamps and lighting fittings”, the words “luminaires
and lighting fittings” shall be substituted;
(a) in the entry in column (2) occurring against heading 6903, for the words
“SHEATHS AND RODS”, the words “SHEATHS, RODS AND SLIDGE
GATES” shall be substituted;
(b) for sub-heading 6903 10, tariff items 6903 10 10 and 6903 10 90 and the entries
relating thereto, the following shall be substituted, namely: —
“6903 10 00 - Containing, by weight, more than 50 % of free carbon mt 10% -”;
(a) in Note 1,—
(i) after clause (c), the following clauses shall be inserted, namely: —
“(d) front windscreens (windshields), rear windows and other windows, framed,
for vehicles of Chapters 86 to 88;
(e) front windscreens (windshields), rear windows and other windows, whether
or not framed, incorporating heating devices or other electrical or electronic
devices, for vehicles of Chapters 86 to 88;”;
(ii) the existing clauses (d), (e), (f) and (g) shall respectively be re-lettered as (f),
(g), (h) and (ij), and in clause (g) as so re-lettered, for the words, “lamps or lighting
fittings”, the words “Luminaires and lighting fittings” shall be substituted;
(b) in heading 7001, —
(i) for the entry in column (2) occurring against heading 7001, the following shall be
“CULLET AND OTHER WASTE AND SCRAP OF GLASS, EXCLUDING

GLASS FROM CATHODE RAY TUBES OR OTHER ACTIVATED GLASS OF
HEADING 8549; GLASS IN THE MASS”;
(ii) for the entry in column (2) occurring against sub-heading 7001 00, the following
“- Cullet and other waste and scrap of glass, excluding glass from cathode ray
tubes or other activated glass of heading 8549; glass in the mass”;
213
(c) in heading 7011, in the entries in column (2) occurring against the heading 7011, for the
words “ELECTRIC LAMPS”, the words “ELECTRIC LAMPS AND LIGHT SOURCES”
(d) for heading 7019, tariff item 7019 11 00 to 7019 59 00, sub-heading 7019 90, tariff
items 7019 90 10 and 7019 90 90 and the entries relating thereto, the following shall be
“7019 GLASS FIBRES (INCLUDING GLASS WOOL)

AND ARTICLES THEREOF (FOR EXAMPLE,
YARN, ROVINGS, WOVEN FABRICS)
- Slivers, rovings, yarn and chopped strands and
mats thereof:
701911 00 - - Chopped strands, of a length of not more than 50 kg. 10% -
mm
7019 12 00 - - Rovings kg. 10% -
7019 13 00 - - Other yarn, slivers kg. 10% -
7019 14 00 - - Mechanically bonded mats kg. 10% -
7019 15 00 - - Chemically bonded mats kg. 10% -
7019 19 00 - - Other kg. 10% -
- Mechanically bonded fabrics:
7019 61 00 - - Closed woven fabrics of rovings kg. 10% -
7019 62 00 - - Other closed fabrics of rovings kg. 10% -
7019 63 00 - - Closed woven fabrics, plain weave, of yarns, not kg. 10% -
coated or laminated
7019 64 00 - - Closed woven fabrics, plain weave, of yarns, kg. 10% -
coated or laminated
7019 65 00 - - Open woven fabrics of a width not exceeding 30 kg. 10% -
cm
7019 66 00 - - Open woven fabrics of a width exceeding 30 cm kg. 10% -
7019 69 00 - - Other kg. 10% -
- Chemically bonded fabrics:
7019 71 00 - - Veils (thin sheets) kg. 10% -
7019 72 00 - - Other closed fabrics kg. 10% -
7019 73 00 - - Other open fabrics kg. 10% -
7019 80 00 - Glass wool and articles of glass wool kg. 10% -

214
7019 90 00 - Other kg. 10% -”;
(i) in heading 7104, for sub-heading 7104 20, tariff items 7104 20 10 and 7104 20 90, sub-
heading 7104 90, tariff items 7104 90 10 and 7104 90 90 and the entries relating thereto, the
“- Other, unworked or simply sawn or roughly shaped:
7104 21 00 - - Diamonds c/k 10% -
7104 29 00 - - Other kg. 10% -
- Other :
7104 91 00 - - Diamonds c/k 10% -
7104 99 00 - - Other kg. 15% -”;
(ii) in heading 7112, in the entry in column (2) occurring against heading 7112, after the words
“RECOVERY OF PRECIOUS METAL”, the words “RECOVERY OF PRECIOUS METAL
OTHER THAN GOODS OF HEADING 8549” shall be substituted;
(51) in Section XV, —
(ii) in Note 2, for clause (a), the following clause shall be substituted, namely: —
“(a) articles of heading 7307, 7312, 7315, 7317 or 7318 and similar articles of other
base metal, other than articles specially designed for use exclusively in implants in
medical, surgical, dental or veterinary sciences (heading 9021);”;
(iii) in Note 7, for the words “Interpretative Rules”, the words “General Interpretative
Rules” shall be substituted;
(iv) in Note 8, for clause (a), the following clause shall be substituted, namely: —
“(a) Waste and scrap:
(i) all metal waste and scrap;
(ii) metal goods definitely not usable as such because of breakage, cutting-up, wear or
other reasons.”;
(v) after Note 8, the following Note shall be inserted, namely: —

215
‘9. For the purposes of Chapters 74 to 76 and 78 to 81, the following expressions shall have
the meanings hereby assigned to them :
(a) Bars and rods
Rolled, extruded, drawn or forged products, not in coils, which have a uniform solid
cross-section along their whole length in the shape of circles, ovals, rectangles
(including squares), equilateral triangles or regular convex polygons (including
“flattened circles” and “modified rectangles”, of which two opposite sides are convex
arcs, the other two sides being straight, of equal length and parallel). Products with a
rectangular (including square), triangular or polygonal cross-section may have corners
rounded along their whole length. The thickness of such products which have a
rectangular (including “modified rectangular”) cross-section exceeds one-tenth of the
width. The expression also covers cast or sintered products, of the same forms and
dimensions, which have been subsequently worked after production (otherwise than by
simple trimming or de-scaling), provided that they have not thereby assumed the
character of articles or products of other headings.
Wire-bars and billets of Chapter 74 with their ends tapered or otherwise worked simply
to facilitate their entry into machines for converting them into, for example, drawing
stock (wire-rod) or tubes, are however to be taken to be unwrought copper of heading
7403. This provision applies mutatis mutandis to the products of Chapter 81.
(b) Profiles
Rolled, extruded, drawn, forged or formed products, coiled or not, of a uniform cross-
section along their whole length, which do not conform to any of the definitions of bars,
rods, wire, plates, sheets, strip, foil, tubes or pipes. The expression also covers cast or
sintered products, of the same forms, which have been subsequently worked after
production (otherwise than by simple trimming or de-scaling), provided that they have
not thereby assumed the character of articles or products of other headings.
(c) Wire
Rolled, extruded or drawn products, in coils, which have a uniform solid cross-section
along their whole length in the shape of circles, ovals, rectangles (including squares),
equilateral triangles or regular convex polygons (including “flattened circles” and
“modified rectangles”, of which two opposite sides are convex arcs, the other two sides
being straight, of equal length and parallel). Products with a rectangular (including
square), triangular or polygonal cross-section may have corners rounded along their
whole length. The thickness of such products which have a rectangular (including
“modified rectangular”) cross-section exceeds one-tenth of the width.
(d) Plates, sheets, strip and foil
Flat-surfaced products (other than the unwrought products of heading 8001), coiled or
not, of solid rectangular (other than square) cross-section with or without rounded
216
corners (including “modified rectangles” of which two opposite sides are convex arcs,
the other two sides being straight, of equal length and parallel) of a uniform thickness,
which are :
- of rectangular (including square) shape with a thickness not exceeding one-tenth of

the width;
- of a shape other than rectangular or square, of any size, provided that they do not
assume the character of articles or products of other headings.
Headings for plates, sheets, strip, and foil apply, inter alia, to plates, sheets, strip, and
foil with patterns (for example, grooves, ribs, chequers, tears, buttons, lozenges) and to
such products which have been perforated, corrugated, polished or coated, provided
that they do not thereby assume the character of articles or products of other headings.
(e) Tubes and pipes
Hollow products, coiled or not, which have a uniform cross-section with only one
enclosed void along their whole length in the shape of circles, ovals, rectangles
(including squares), equilateral triangles or regular convex polygons, and which have a
uniform wall thickness. Products with a rectangular (including square), equilateral
triangularor regular convex polygonal cross-section, which may have corners rounded
along their whole length, are also to be considered as tubes and pipes provided the inner
and outer cross-sections are concentric and have the same form and orientation. Tubes
and pipes of the foregoing cross-sections may be polished, coated, bent, threaded,
drilled, waisted, expanded, cone-shaped or fitted with flanges, collars or rings.’;
(i) in the Note, clauses (d), (e), (f), (g) and (h) shall be omitted;
(ii) for heading 7419, sub-heading 7419 10, tariff items 7419 10 10 to 7419 91 00, sub-
heading 7419 99, tariff items 7419 99 10 to 7419 99 90 and the entries relating
“7419 OTHER ARTICLES OF COPPER
7419 20 00 - Cast, moulded, stamped or forged, but not kg. 10% -
further worked
7419 80 - Other:
7419 80 10 - - - Reservoirs, tanks, vats and similar kg. 10% -

containers
7419 80 20 - - - Articles of copper alloys electro-plated kg. 10% -
with nickel-silver
7419 80 30 - - - Articles of brass kg. 10% -
7419 80 40 - - - Copper worked articles kg. 10% -
7419 80 50 - - - Copper chain kg. 10% -
7419 80 90 - - - Other articles of copper kg. 10% -”;
217
(i) the Note shall be omitted;
(ii) for the words, figure, brackets and letter “Chapter Note 1 (c)”, the words, figures,
brackets and letter “Note 9 (c) to Section XV” shall be substituted;
(i) the Note shall be omitted;

(ii) in Sub-heading Note 2, for the words, figure, brackets and letter “Chapter Note 1 (c)”,
the words, figures, brackets and letter “Note 9 (c) to Section XV” shall be substituted;
(55) in Chapter 78, the Note shall be omitted;
(i) Sub-heading Note shall be omitted;
(ii) in heading 8103, for the tariff item 8103 90 00 and the entries relating thereto, the
“ - Other :
8103 91 00 - - Crucibles kg. 10% -

8103 99 00 - - Other kg. 10% -”;
(iii) in heading 8106, for sub-heading 8106 00, tariff items 8106 00 10 to 8106 00 90
“8106 BISMUTH AND ARTICLES THEREOF,

INCLUDING WASTE AND SCRAP
8106 10 - Containing more than 99.99 % of bismuth,

by weight
8106 10 10 - - - Bismuth, unwrought kg. 5% -

8106 10 20 - - - Article of bismuth kg. 5% -
8106 10 90 - - - Other kg. 10% -
8106 90 - Other:
8106 90 10 - - - Waste and scrap of bismuth and bismuth kg. 5% -
alloys
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8106 90 90 - - - Other kg. 10% -”;
(iv) heading 8107, tariff items 8107 20 00 and 8107 30 00, sub-heading 8107 90, tariff
items 8107 90 10 and 8107 90 90 and the entries relating thereto shall be omitted;
(v) for heading 8109, tariff items 8109 20 00 to 8109 90 00 and the entries relating
“- Unwrought zirconium; powders :

8109 21 00 - - Containing less than 1 part hafnium to 500 kg. 10% -
parts zirconium by weight
8109 29 00 - - Other kg. 10% -
- Waste and scrap:

8109 39 00 - - Other kg. 10% -
- Other:
8109 99 00 - - Other kg. 10% -”;
(a) for the entry in column (2) occurring against heading 8112, the following entry shall
“BERYLLIUM, CHROMIUM, HAFNIUM, RHENIUM, THALLIUM, CADMIUM,
GERMANIUM, VANADIUM, GALLIUM, INDIUM AND NIOBIUM
(COLUMBIUM), ARTICLES OF THESE METALS, INCLUDING WASTE AND
SCRAP”;
- “ Hafnium :
8112 31 - - Unwrought; waste and scrap; powders:
8112 31 10 - - - Unwrought kg. 10% -
8112 31 20 - - - Waste and scrap kg. 10% -
8112 31 30 - - - Powders kg. 10% -
8112 39 00 - - Other kg. 10% -
- Rhenium :
219
8112 41 - - Unwrought; waste and scrap; powders kg. 10% -
8112 41 10 - - - Unwrought kg. 10% -
8112 41 20 - - - Waste and scrap kg. 10% -
8112 41 30 - - - Powders kg. 10% -
8112 49 00 - - Other kg. 10% -”;
“- Cadmium :
8112 61 00 - - Waste and scrap kg. 10% -
8112 69 00 - - Other kg. 10% -”;
(59) in Section XVI, —
(i) in Note 2, in clause (b), for the portion beginning with the word “However” and
ending with the words and figures “in heading 8517”, the following shall be substituted,
namely:—
“However, parts which are equally suitable for use principally with the goods of
headings 8517 and 8525 to 8528 are to be classified in heading 8517, and parts which
are suitable for use solely or principally with the goods of heading 8524 are to be
classified in heading 8529”;
(ii) after Note 5, the following Note shall be inserted, namely :—
‘6. (A) Throughout the Nomenclature, the expression “electrical and electronic waste
and scrap” means electrical and electronic assemblies, printed circuit boards and
electrical or electronic articles that -
(i) have been rendered unusable for their original purposes by breakage, cutting-
up or other processes or are economically unsuitable for repair, refurbishment
or renovation to render them fit for their original purposes; and
(ii) are packaged or shipped in a manner not intended to protect individual

articles from damage during transportation, loading and unloading operations;
(B) mixed consignments of “electrical and electronic waste and scrap” and other waste
and scrap are to be classified in heading 8549;
(C) this Section does not cover municipal waste as defined in Note 4 to Chapter 38.’;
(i) for Note 2, the following Note shall be substituted, namely:—

220
“2. Subject to the operation of Note 3 to Section XVI and subject to Note 9 to
this Chapter, a machine or appliance which answers to a description in one or
more of the headings 8401 to 8424, or heading 8486 and at the same time to a
description in one or more of the headings 8425 to 8480 is to be classified under
the appropriate heading of the former group or under heading 8486, as the case
may be, and not the latter group.
(A) Heading 8419 does not, however, cover
(i) germination plant, incubators or brooders (heading 8436);
(ii) grain dampening machines (heading 8437);
(iii) diffusing apparatus for sugar juice extraction (heading 8438);
(iv) machinery for the heat-treatment of textile yarns, fabrics or made up

textile articles (heading 8451); or
(v) machinery or plant, designed for a mechanical operation, in which a

change of temperature, even if necessary, is subsidiary.
(B) Heading 8422 does not cover :
(i) sewing machines for closing bags or similar containers (heading

8452); or
(ii) office machinery of heading 8472.
(C) Heading 8424 does not cover :
(i) ink-jet printing machines (heading 8443); or
(ii) water-jet cutting machines (heading 8456).”;
(ii) after Note 4, the following Note shall be inserted, namely :—
‘5. For the purposes of heading 8462, a “slitting line” for flat products is a
processing line composed of an uncoiler, a coil flattener, a slitter and a recoiler.
A “cut-to-length line” for flat products is a processing line composed of an
uncoiler, a coil flattener and a shear.’;
(iii) the existing Notes 5, 6, 7 and 8 shall respectively be re-numbered as Notes

6, 7, 8 and 9, and after Note 9 as so re-numbered, the following Note shall be
‘10. For the purposes of heading 8485, the expression “additive manufacturing”
(also referred to as 3D printing) means the formation of physical objects, based
on a digital model, by the successive addition and layering, and consolidation
and solidification, of material (for example, metal, plastics or ceramics).
221
Subject to Note 1 to Section XVI and Note 1 to Chapter 84, machines answering
to the description in heading 8485 are to be classified in that heading and in no
other heading of the Nomenclature.’;
(iv) the existing Note 9 shall be renumbered as Note 11 thereof, and in Note 11 as so-
renumbered, in clause (A), for the words, figures, brackets and letters “Notes 9 (a) and
9 (b)”, the words, figures, brackets and letters “Note 12 (a) and 12 (b)” shall be
substituted;
(v) in Sub-heading Note (2), for the word, figure, brackets and letter “Note 5 (C)”, the
word, figure, brackets and letter “Note 6 (C)” shall be substituted;
(a) in the entry in column (2) occurring against heading 8414, for the word “FILTERS”,
the words “FILTERS; GAS-TIGHT BIOLOGICAL SAFETY CABINETS,
WHETHER OR NOT FITTED WITH FILTERS” shall be substituted;
“8414 70 00 - Gas-tight biological safety cabinets u 7.5%”; -
(vii) in heading 8418, for the entry in column (2) occurring against sub-heading 8418
“- Combined refrigerator-freezers, fitted with separate external doors or

drawers, or combinations thereof :”;
(a) after tariff item 8419 11 90 and the entries relating thereto, the following shall be
“8419 12 00 - - Solar water heaters u 10% -”;
(b) for tariff items 8419 31 00 and 8419 32 00 and the entries relating thereto, the
“8419 33 00 - - Lyophilisation apparatus, freeze drying u 7.5% -

units and spray dryers
8419 34 00 - - Other, for agricultural products u 7.5% -
8419 35 00 - - Other, for wood, paper pulp, paper or u 7.5% -”;
paperboard
(ix) in heading 8421, after tariff item 8421 31 00 and the entries relating thereto, the
following shall be inserted, namely :—
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“8421 32 00 - - Catalytic converters or particulate filters, u 15% -”;

whether or not combined, for purifying or
filtering exhaust gases from internal
combustion engines
(x) in heading 8428, after tariff item 8428 60 00 and the entries relating thereto, the
“8428 70 00 - Industrial robots u 7.5% -”;
(xi) in heading 8438, in the entry in column (2) occurring against heading 8438, for the
words “VEGETABLE FATS” the words “VEGETABLE OR MICROBIAL FATS”
(xii) for heading 8462 and the entries relating to, the following heading, sub-headings,
tariff item and entries shall be substituted, namely:–
“8462 MACHINE-TOOLS (INCLUDING

PRESSES) FOR WORKING METAL BY
FORGING, HAMMERING OR DIE
FORGING (EXCLUDING ROLLING
MILLS); MACHINE-TOOLS
(INCLUDING PRESSES, SLITTING
LINES AND CUT-TO-LENGTH LINES)
FOR WORKING METAL BY BENDING,
FOLDING, STRAIGHTENING,
FLATTENING, SHEARING,
PUNCHING, NOTCHING OR NIBBLING
(EXCLUDING DRAW-BENCHES);
PRESSES FOR WORKING METAL OR
METAL CARBIDES, NOT SPECIFIED
ABOVE
- Hot forming machines for forging, die
forging (including presses) and hot
hammers:
8462 11 00 - - Closed die forging machines u 7.5% -
8462 19 00 - - Other u 7.5% -
- Bending, folding, straightening or

flattening machines (including press brakes)
for flat products :
8462 22 00 - - Profile forming machines u 7.5% -
8462 23 00 - - Numerically controlled press brakes u 7.5% -

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8462 24 00 - - Numerically controlled panel benders u 7.5% -
8462 25 00 - - Numerically controlled roll forming u 7.5% -

machines
8462 26 00 - - Other numerically controlled bending, u 7.5% -

folding, straightening or flattening
machines
8462 29 00 - - Other u 7.5% -
- Slitting lines, cut-to-length lines and other

shearing machines (excluding presses) for
flat products, other than combined
punching and shearing machines :
8462 32 00 - - Slitting lines and cut-to-length lines u 7.5% -
8462 33 00 - - Numerically controlled shearing u 7.5% -

machines
8462 39 00 - - Other u 7.5% -
- Punching, notching or nibbling machines

(excluding presses) for flat products
including combined punching and shearing
machines :
84624200 - - Numerically controlled u 7.5% -
8462 49 00 - - Other u 7.5% -
- Machines for working tube, pipe, hollow

section and bar (excluding presses) :
8462 51 00 - - Numerically controlled u 7.5% -
8462 59 00 - - Other u 7.5% -
- Cold metal working presses :
8462 61 00 - - Hydraulic presses u 7.5% -
8462 62 00 - - Mechanical presses u 7.5% -
8462 63 00 - - Servo-presses u 7.5% -
846269 00 - - Other u 7.5% -
8462 90 00 - Other u 7.5% -”;
(xiii) in heading 8479, —

224
(a) for the entry in column (2) occurring against sub-heading 8479 20, the following
“- Machinery for the extraction or preparation of animal or fixed vegetable or microbial

fats or oils”;
“8479 83 00 - - Cold isostatic presses u 7.5% -”;
(xiv) in heading 8482, for tariff item 8482 40 00, sub-heading 8482 50, tariff items 8482
50 11 to 8482 50 23 and the entries relating thereto, the following shall be substituted,
namely :—
“8482 40 00 - Needle roller bearings, including cage u 7.5% -

and needle roller assemblies
8482 50 00 - Other cylindrical roller bearings, u 7.5% -”;
including cage and roller assemblies
(xv) after tariff item 8484 90 00 and the entries relating thereto, the following shall be
“8485 MACHINES FOR ADDITIVE

MANUFACTURING
8485 10 00 - By metal deposit u 7.5% -
8485 20 00 - By plastics or rubber deposit u 7.5% -
8485 30 00 - By plaster, cement, ceramics or glass u 7.5% -

deposit
8485 80 00 - Other u 7.5% -
8485 90 00 - Parts u 7.5% -”;
(xvi) in heading 8486, in the entry in column (2), —
(a) occurring against heading 8486, for the word, figure, brackets and letter “Note 9 (C)”,
the word, figures, brackets and letter “Note 11 (C)” shall be substituted;
(b) occurring against tariff item 8486 40 00, for the word, figure, brackets and letter “Note
9 (C)”, the word, figures, brackets and letter “Note 11 (C)” shall be substituted;

225
‘5. For the purposes of heading 8517, the term "smartphones” means telephones for cellular
networks, equipped with a mobile operating system designed to perform the functions of
an automatic data processing machine such as downloading and running multiple
applications simultaneously, including third-party applications, and whether or not
integrating other features such as digital cameras and navigational aid systems.’;
(ii) the existing Note 5 shall be re-numbered as Note 6 thereof, and after Note 6 as so re-
numbered, the following Note shall be inserted, namely: —
‘7. For the purposes of heading 8524, “flat panel display modules” refer to devices or
apparatus for the display of information, equipped at a minimum with a display screen,
which are designed to be incorporated into articles of other headings prior to use. Display
screens for flat panel display modules include, but are not limited to, those which are flat,
curved, flexible, foldable or stretchable in form. Flat panel display modules may
incorporate additional elements, including those necessary for receiving video signals and
the allocation of those signals to pixels on the display. However, heading 8524 does not
include display modules which are equipped with components for converting video signals
(e.g., a scaler IC, decoder IC or application processer) or have otherwise assumed the
character of goods of other headings.
For the classification of flat panel display modules defined in this Note, heading 8524 shall
take precedence over any other heading in the Nomenclature.’;
(iii) the existing Notes 6 and 7 shall respectively be re-numbered as Notes 8 and 9;
(iv) the existing Note 8 shall be re-numbered as Note 10 thereof, and ––
(a) the existing Note 10 shall be omitted;
(b) after Note 10 as so re-numbered, the following Note shall be inserted, namely: —
‘11. For the purposes of heading 8539, the expression “light-emitting diode (LED) light
sources” covers––
(a) “Light-emitting diode (LED) modules” which are electrical light sources based on light-
emitting diodes (LED) arranged in electrical circuits and containing further elements like
electrical, mechanical, thermal or optical elements. They also contain discrete active
elements, discrete passive elements, or articles of heading 8536 or 8542 for the purposes
of providing power supply or power control. Light-emitting diode (LED) modules do not
have a cap designed to allow easy installation or replacement in a luminaire and ensure
mechanical and electrical contact.
(b) “Light-emitting diode (LED) lamps” which are electrical light sources containing one
or more LED modules containing further elements like electrical, mechanical, thermal or
optical elements. The distinction between light-emitting diode (LED) modules and light-
emitting diode (LED) lamps is that lamps have a cap designed to allow easy installation or
replacement in a luminaire and ensure mechanical and electrical contact.’;
226
(v) the exiting Note 9 shall be re-numbered as Note 12 thereof and in Note 12 as so re-
numbered, —
(A) for the clause (a), the following clause shall be substituted, namely : —
‘(a) (i) “Semiconductor devices” are semiconductor devices, the operation of which
depends on variations in resistivity on the application of an electric field or
semiconductor-based transducers.
Semiconductor devices may also include assembly of plural elements, whether or not
equipped with active and passive device ancillary functions.
“Semiconductor-based transducers” are, for the purposes of this definition,

semiconductor-based sensors, semiconductor-based actuators, semiconductor-based
resonators and semiconductor-based oscillators, which are types of discrete
semiconductor-based devices, which perform an intrinsic function, which are able to
convert any kind of physical or chemical phenomena or an action into an electrical
signal or an electrical signal into any type of physical phenomenon or an action.
All the elements in semiconductor-based transducers are indivisibly combined, and

may also include necessary materials indivisibly attached, that enable their construction
or function.
The following expressions mean,––
(1) “Semiconductor-based” means built or manufactured on a semiconductor substrate

or made of semiconductor materials, manufactured by semiconductor technology, in
which the semiconductor substrate or material plays a critical and unreplaceable role of
transducer function and performance, and the operation of which is based on
semiconductor properties including physical, electrical, chemical and optical
properties.
(2) “Physical or chemical phenomena” relate to phenomena, such as pressure, acoustic

waves, acceleration, vibration, movement, orientation, strain, magnetic field strength,
electric field strength, light, radioactivity, humidity, flow, chemicals concentration, etc.
(3) “Semiconductor-based sensor” is a type of semiconductor device, which consists of

microelectronic or mechanical structures that are created in the mass or on the surface
of a semiconductor and that have the function of detecting physical or chemical
quantities and converting these into electric signals caused by resulting variations in
electric properties or displacement of a mechanical structure.
(4) “Semiconductor-based actuator” is a type of semiconductor device, which consists

of microelectronic or mechanical structures that are created in the mass or on the surface
of a semiconductor and that have the function of converting electric signals into
physical movement.
227
(5) “Semiconductor-based resonator” is a type of semiconductor device, which consists

of a semiconductor and that have the function of generating a mechanical or electrical
oscillation of a predefined frequency that depends on the physical geometry of these
structures in response to an external input.
(6) “Semiconductor-based oscillator” is a type of semiconductor device, which consists

of a semiconductor and that have the function of generating a mechanical or electrical
oscillation of a predefined frequency that depends on the physical geometry of these
structures.
(ii) “Light-emitting diodes (LED)” are semiconductor devices based on semiconductor

materials which convert electrical energy into visible, infra-red or ultra-violet rays,
whether or not electrically connected among each other and whether or not combined
with protective diodes. Light-emitting diodes (LED) of heading 85.41 do not
incorporate elements for the purposes of providing power supply or power control;’
(B) in clause (b), in sub-clause (iv), in sub-paragraph (3), for item (a), the following
item shall be substituted, namely:—
‘(a) “Silicon-based sensors” consist of microelectronic or mechanical structures that are

created in the mass or on the surface of a semiconductor and that have the function of
detecting physical or chemical phenomena and transducing these into electric signals,
caused by resulting variations in electric properties or displacement of a mechanical
structure. “Physical or chemical phenomena” relates to phenomena, such as pressure,
acoustic waves, acceleration, vibration, movement, orientation, strain, magnetic field
strength, electric field strength, light, radioactivity, humidity, flow, chemicals
concentration, etc.’;
(vi) for Sub-heading Note, the following Sub-heading Notes shall be substituted,
namely:—
‘Sub-heading Notes :
1. Sub-heading 8525 81 covers only high-speed television cameras, digital cameras and
video camera recorders having one or more of the following characteristics:––
- writing speed exceeding 0.5 mm per microsecond;
- time resolution 50 nanoseconds or less;
- frame rate exceeding 225,000 frames per second.
2. In respect of sub-heading 8525 82, radiation-hardened or radiation-tolerant television

cameras, digital cameras and video camera recorders are designed or shielded to enable
operation in a high-radiation environment. These cameras are designed to withstand a
228
total radiation dose of at least 50 × 103 Gy(silicon) (5 × 106 RAD (silicon)), without
operational degradation.
3. Sub-heading 8525 83 covers night vision television cameras, digital cameras and
video camera recorders which use a photocathode to convert available light to electrons,
which can be amplified and converted to yield a visible image. This sub-heading
excludes thermal imaging cameras (generally subheading 8525 89).
4. Sub-heading 8527 12 covers only cassette-players with built-in amplifier, without

built-in loudspeaker, capable of operating without an external source of electric power
and the dimensions of which do not exceed 170 mm x 100 mm x 45 mm.
5. For the purposes of subheadings 8549 11 to 8549 19, “spent primary cells, spent
primary batteries and spent electric accumulators” are those which are neither usable as
such because of breakage, cutting-up, wear or other reasons, nor capable of being
recharged.’;
(vii) in heading 8501,—
(a) for the entry in column (2) occurring after tariff item 8501 20 00 and the entries
relating thereto, the following entry shall be substituted, namely :—
“- Other DC motors; DC generators, other than photovoltaic generators :”;
(b) for the entry in column (2) occurring after tariff item 8501 53 90 and the entries
relating thereto, the following entry shall be substituted, namely :—
“- AC generators (alternators), other than photovoltaic generators :”
“- Photovoltaic DC generators :
8501 71 00 - - Of an output not exceeding 50 W u 10% -
8501 72 00 - - Of an output exceeding 50 W u 10% -
8501 80 00 - Photovoltaic AC generators u 10% -”;
(viii) in heading 8507, tariff item 8507 40 00 and the entries relating thereto shall be
omitted;
(ix) in heading 8514, —
(a) for tariff item 8514 10 00 and the entries relating thereto, the following shall be
substituted, namely : —
“- Resistance heated furnaces and ovens :

229
8514 11 00 - - Hot isostatic presses u 7.5% -
8514 19 00 - - Other u 7.5% -”;
(b) for sub-heading 8514 30, tariff items 8514 30 10 and 8514 30 90 and the entries
relating thereto, the following shall be substituted, namely : —
“- Other furnaces and ovens :
8514 31 00 - - Electron beam furnaces u 7.5% -
8514 32 00 - - Plasma and vacuum arc furnaces u 7.5% -
8514 39 00 - - Other u 7.5% -”;
(x) in heading 8517, —
“including TELEPHONES”, the words “including SMARTPHONES AND OTHER
TELEPHONES” shall be substituted;
(b) in the entry in column (2) occurring after the heading 8517 and the entry relating
thereto, for the words “including telephones”, the words “including smartphones and
other telephones” shall be substituted;
(c) for sub-heading 8517 12, tariff items 8517 12 11 to 8517 12 90 and the entries
“8517 13 00 - - Smartphones u 20% -
8517 14 00 - - Other telephones for cellular networks u 20% -”;

or for other wireless networks
(d) for sub-heading 8517 70, tariff items 8517 70 10 and 8517 70 90 and the entries
“- Parts :
8517 71 00 - - Aerials and aerial reflectors of all u 20% -
kinds; parts suitable for use therewith
8517 79 - - Other :
8517 79 10 - - - Populated, loaded or stuffed printed u 20% -
circuit boards
8517 79 90 - - - Other u 15% -”;
230
(xi) in heading 8519, tariff item 8519 50 00 and the entries relating thereto shall be
omitted;
(xii) after tariff item 8523 80 90, the following shall be inserted, namely :—
“8524 FLAT PANEL DISPLAY MODULES,

WHETHER OR NOT INCORPORATING
TOUCH-SENSITIVE SCREENS
- Without drivers or control circuits :
8524 11 00 - - Of liquid crystals
8524 12 00 - - Of organic light-emitting diodes u 15% -

(OLED)
8524 19 00 - - Other u 15% -
- Other :
8524 91 00 - - Of liquid crystals u 15% -
8524 92 00 - - Of organic light-emitting diodes u 15% -

(OLED)
8524 99 00 - - Other u 15% -”;
(xiii) in heading 8525, for sub-heading 8525 80, tariff items 8525 80 10 to 8528 80 90
and the entries relating thereto, the following shall be substituted, namely : —
“- Television cameras, digital cameras and

video camera recorders :
8525 81 00 - - High-speed goods as specified in Sub- u 20% -

heading Note 1 to this Chapter
8525 82 00 - - Other, radiation-hardened or radiation- u 20% -
tolerant goods as specified in Sub-heading
Note 2 to this Chapter
8525 83 00 - - Other, night vision goods as specified in u 20% -
Sub-heading Note 3 to this Chapter
8525 89 00 - - Other u 20% -”;
(xiv) in heading 8529, —
(a) in the entry in column (2) occurring against the heading 8529, for the figures “8525”,
the figures “8524” shall be substituted;
(xv) in heading 8539, —

231
(a) in the entry in column (2) occurring against the heading 8539, for the words and
brackets “LIGHT-EMITTING DIODE (LED) LAMPS”, the words and brackets
“LIGHT-EMITTING DIODE (LED) LIGHT SOURCES” shall be substituted;
“- Light-emitting diode (LED) light

sources :
8539 51 00 - - Light-emitting diode (LED) modules u 20% -
8539 52 00 - - Light-emitting diode (LED) lamps u 20% -”;
(xvi) in heading 8541, —
(a) for the entry in column (2) occurring against the heading 8541 , the following entry
“SEMICONDUCTOR DEVICES (FOR EXAMPLE, DIODES, TRANSISTORS,

SEMICONDUCTOR BASED TRANSDUCERS); PHOTOSENSITIVE
SEMICONDUCTOR DEVICES, INCLUDING PHOTOVOLTAIC CELLS
WHETHER OR NOT ASSEMBLED IN MODULES OR MADE UP INTO PANELS;
LIGHT-EMITTING DIODES (LED), WHETHER OR NOT ASSEMBLED WITH
OTHER LIGHT-EMITTING DIODES (LED); MOUNTED PIEZO-ELECTRIC
CRYSTALS”;
(b) for sub-heading 8541 40, tariff items 8541 40 11 to 8541 50 00 and the entries
relating thereto, the following shall be substituted, namely : —
“- Photosensitive semiconductor devices,

including photovoltaic cells whether or
not assembled in modules or made up into
panels; light-emitting diodes (LED) :
8541 41 00 - - Light-emitting diodes (LED) u free -
8541 42 00 - - Photovoltaic cells not assembled in u 20% -

modules or made up into panels
8541 43 00 - - Photovoltaic cells assembled in u 20% -
modules or made up into panels
8541 49 00 - - Other u 20% -
- Other semiconductor devices :
8541 51 00 - - Semiconductor-based transducers u 20% -

8541 59 00 - - Other u 20% -”;
232
(xvii) in heading 8543, after tariff item 8543 30 00 and the entries relating thereto, the
following shall be inserted , namely :—
“8543 40 00 - Electronic cigarettes and similar personal u 7.5% -”;

electric vaporising devices
(xviii) for heading 8548, sub-heading 8548 10, tariff items 8548 10 10 to 8548 90 00
and the entries relating thereto, the following shall be substituted, namely :—
“8548 00 00 electrical parts of machinery or apparatus, not u 10% -

specified or included elsewhere in this
chapter
8549 ELECTRICAL AND ELECTRONIC

WASTE AND SCRAP
- Waste and scrap of primary cells, primary
batteries and electric accumulators; spent
primary cells, spent primary batteries and
spent electric accumulators :
8549 11 00 - - Waste and scrap of lead-acid kg. 10% -

accumulators; spent lead-acid accumulators
8549 12 00 - - Other, containing lead, cadmium or kg. 10% -

mercury
8549 13 00 - - Sorted by chemical type and not kg. 10% -

containing lead, cadmium or mercury
8549 14 00 - - Unsorted and not containing lead, kg. 10% -

cadmium or mercury
8549 19 00 - - Other kg. 10% -
- Of a kind used principally for the recovery
of precious metal :
8549 21 00 - - Containing primary cells, primary kg. 10% -

batteries, electric accumulators, mercury-
switches, glass from cathode ray tubes or
other activated glass, or electrical or
electronic components containing cadmium,
mercury, lead or polychlorinated biphenyls
(PCBs)
8549 29 00 - - Other kg. 10% -
- Other electrical and electronic assemblies

and printed circuit boards :
233
8549 31 00 - - Containing primary cells, primary batteries, kg. 10% -

electric accumulators, mercury-switches, glass
from cathode ray tubes or other activated glass,
or electrical or electronic components
containing cadmium, mercury, lead or
polychlorinated biphenyls (PCBs)
8549 39 00 - - Other kg. 10% -
- Other :
8549 91 00 - - Containing primary cells, primary batteries, kg. 10% -
electric accumulators, mercury-switches, glass
from cathode ray tubes or other activated glass,
or electrical or electronic components
containing cadmium, mercury, lead or
polychlorinated biphenyls (PCBs)
8549 99 00 - - Other kg. 10% -”;
(62) in Section XVII, in Note 1, in clause (k), for the words “lamps or lighting fittings”, the
words “luminaires and lighting fittings and parts thereof” shall be substituted;
(i) after Note 4, the following shall be inserted, namely : —
“Sub-heading Note:
1. Sub-heading 8708 22 covers :
(a) front windscreens (windshields), rear windows and other windows, framed;
and
(b) front windscreens (windshields), rear windows and other windows,
whether or not framed, incorporating heating devices or other electrical or
electronic devices,
when suitable for use solely or principally with the motor vehicles of headings 8701
to 8705.”;
(ii) in heading 8701, for sub-heading 8701 20, tariff items 8701 20 10 and 8701 20 90
“- Road tractors for semi-trailers :
8701 21 00 - - With only compression-ignition internal u 10% -

combustion piston engine (diesel or semi-diesel)
8701 22 00 - - With both compression-ignition internal u 10% -

combustion piston engine (diesel or semi-diesel)
and electric motor as motors for propulsion
8701 23 00 - - With both spark-ignition internal combustion u 10% -

piston engine and electric motor as motors for
propulsion
234
8701 24 00 - - With only electric motor for propulsion u 10% -
8701 29 00 - - Other u 10% -”;
(iii) in heading 8702, in the entry in column (2) occurring against sub-heading 8702
30, the word “reciprocating” shall be omitted;
(iv) in heading 8703, in the entry in column (2),—
(a) occurring after tariff item 8703 10 90 and the entries relating thereto, the word
“reciprocating” shall be omitted;
(b) occurring against sub-heading 8703 40, the word “reciprocating” shall be omitted;
(c) occurring against sub-heading 8703 60, the word “reciprocating” shall be omitted;
(v) in heading 8704, for tariff item 8704 10 90, sub-heading 8704 21, tariff items 8704
21 10 to 8704 21 90, sub-heading 8704 22, tariff items 8704 22 11 to 8704 22 90, sub-
heading 8704 23, tariff items 8704 23 11 to 8704 23 90, sub-heading 8704 31, tariff
items 8704 31 10 to 8704 31 90, sub-heading 8704 32, tariff items 8704 32 11 to 8704
32 90 and the entries relating thereto, the following shall be substituted, namely :—
- Other, with only compression-ignition
internal combustion piston engine (diesel or
semi-diesel) :
8704 21 00 - - g.v.w. not exceeding 5 tonnes u 40% -
8704 22 00 - - g.v.w. exceeding 5 tonnes but not u 40% -

exceeding 20 tonnes
8704 23 00 - - g.v.w. exceeding 20 tonnes u 40% -
- Other, with only spark-ignition internal

combustion piston engine :
- Other, with both compression-ignition

internal combustion piston engine (diesel or
semi-diesel) and electric motor as motors
for propulsion :
8704 42 00 - - g.v.w. exceeding 5 tonnes but not u 40% -

exceeding 20 tonnes

235
- Other, with both spark-ignition internal

combustion piston engine and electric motor
as motors for propulsion :
8704 60 00 - Other with only electric motor for u 40% -”;

propulsion
(vi) in heading 8708, after tariff item 8708 21 00 and the entries relating thereto, the
“8708 22 00 - - Front windscreens (windshields), rear kg. 15% -”;

windows and other windows specified in Sub-
heading Note 1 to this Chapter
(vii) in heading 8711, in the entry in column (2),—
(a) occurring against sub-heading 8711 10, the word “reciprocating” shall be omitted;
(b) occurring against sub-heading 8711 20, the word “reciprocating” shall be omitted;
(c) occurring against sub-heading 8711 30, the word “reciprocating” shall be omitted;
(d) occurring against sub-heading 8711 40, the word “reciprocating” shall be omitted;
(e)) occurring against tariff item 8711 50 00, the word “reciprocating” shall be omitted;
(i) for the Note, the following shall be substituted, namely :—
‘Note:
1. For the purposes of this Chapter, the expression “unmanned aircraft” means any
aircraft, other than those of heading 8801, designed to be flown without a pilot on board.
They may be designed to carry a payload or equipped with permanently integrated
digital cameras or other equipment which would enable them to perform utilitarian
functions during their flight.
The expression “unmanned aircraft”, however, does not cover flying toys, designed
solely for amusement purposes (heading 9503).
Sub-heading Notes:
1. For the purposes of sub-headings 8802 11 to 8802 40, the expression “unladen
weight” means the weight of the machine in normal flying order, excluding the weight
of the crew and of fuel and equipment other than permanently fitted items of equipment.
236
2. For the purposes of sub-headings 8806 21 to 8806 24 and 8806 91 to 8806 94, the
expression "maximum take-off weight" means the maximum weight of the machine in
normal flying order, at take-off, including the weight of payload, equipment and fuel.’;
(ii) in heading 8802, in the entry in column (2) occurring against the heading 8802, for
the word “AIRCRFT”, the words “AIRCRAFT, EXCEPT UNMANNED AIRCRAFT
OF HEADING 8806” shall be substituted;
(iii) heading 8803, tariff items 8803 10 00 to 8803 90 00 and the entries relating thereto
shall be omitted;
(iv) after tariff item 8805 29 00 and the entries relating thereto, the following shall be
“8806 UNMANNED AIRCRAFT

8806 10 00 - Designed for the carriage of passengers u 10% -
- Other, for remote-controlled flight only :
8806 21 00 - - With maximum take-off weight not more u 10% -
than 250 g
8806 22 00 - - With maximum take-off weight more than u 10% -

250 g but not more than 7 kg
8806 23 00 - - With maximum take-off weight more than 7 u 10% -
kg but not more than 25 kg
8806 29 00 - - Other u 10% -
- Other :
8806 91 00 - - With maximum take-off weight not more u 10% -
than 250 g
8806 92 00 - - With maximum take-off weight more than u 10% -
250 g but not more than 7 kg
8806 99 00 - - Other u 10% -
8807 PARTS OF GOODS OF HEADING 8801, 8802

OR 8806
8807 10 00 - Propellers and rotors and parts thereof kg. 3% -
8807 20 00 - Under-carriages and parts thereof kg. 3% -
8807 30 00 - Other parts of airplanes, helicopters or kg. 3% -
unmanned aircraft
8807 90 00 - Other kg. 10% -”;
237
(65) in Chapter 89, in heading 8903, for tariff items 8903 10 00 to 8903 92 00, sub-heading
“- Inflatable (including rigid hull inflatable) boats :
8903 11 00 - - Fitted or designed to be fitted with a motor, u 25% -
unladen (net) weight (excluding the motor) not
exceeding 100 kg
8903 12 00 - - Not designed for use with a motor and unladen u 25% -
(net) weight not exceeding 100 kg
8903 19 00 - - Other u 25% -

- Sailboats, other than inflatable, with or without
auxiliary motor :
8903 21 00 - - Of a length not exceeding 7.5 m u 25% -
8903 22 00 - - Of a length exceeding 7.5 m but not exceeding u 25% -
24 m
8903 23 00 - - Of a length exceeding 24 m u 25% -
- Motorboats, other than inflatable, not including
outboard motorboats :
8903 32 00 - - Of a length exceeding 7.5 m but not exceeding u 25% -

24 m
8903 33 00 - - Of a length exceeding 24 m u 25% -
- Other :
8903 99 00 - - Other u 25% -”;
(i) in Note 1, for clause (f), the following clause shall be substituted, namely :–
“(f) parts of general use, as defined in Note 2 to Section XV, of base metal (Section
XV) or similar goods of plastics (Chapter 39); however, articles specially designed for
use exclusively in implants in medical, surgical, dental or veterinary sciences are to be
classified in heading 9021;”;
(ii) in heading 9006, —
(a) tariff items 9006 51 00 and 9006 52 00, and the entries relating thereto shall be
omitted;
(b) for the entry in column (2) occurring against sub-heading 9006 53, the following
238
“- - For roll film of a width of 35 mm:”;
(a) for the entry in column (2) occurring against heading 9013, the following entry shall
“LASERS, OTHER THAN LASER DIODES; OTHER OPTICAL APPLIANCES

AND INSTRUMENTS, NOT SPECIFIED OR INCLUDED ELSEWHERE IN THIS
CHAPTER”;
(b) for sub-heading 9013 80, tariff items 9013 80 10 and 9013 80 90, sub-heading
9013 90 and tariff items 9013 90 10 and 9013 90 90, the following shall be substituted,
namely: —
“9013 80 00 - Other devices, appliances and instrument u 7.5% -

9013 90 00 - Parts and accessories u 7.5% -”;
(a) in the entry in column (2) occurring against heading 9022, for the words “OR
GAMMA”, the words “, GAMMA OR OTHER IONISING” shall be substituted;
(b) in the entry in column (2) occurring after tariff item 9022 19 00 and the entries
relating thereto, for the words “or gamma”, the words “, gamma or other ionising” shall
be substituted;
(v) in heading 9027, for sub-heading 9027 80, tariff items 9027 80 10 to 9027 80 90
“- Other instruments and apparatus :
9027 81 00 - - Mass spectrometers u Free -
9027 89 - - Other:
9027 89 10 - - - Viscometers u Free -
9027 89 20 - - - Calorimeters u Free -
9027 89 30 - - - Instruments and apparatus for measuring the u Free -
surface or interfacial tension of liquids
9027 89 - - - Other u Free -”;
(a) in the entry in column (2) occurring after tariff item 9030 20 00 and the entries
relating thereto, for the word “power”, the words and brackets “power (other than those
for measuring or checking semiconductor wafers or devices)” shall be substituted;
(b) for the entry in column (2) occurring against tariff item 9030 82 00, the following
239
“- - For measuring or checking semiconductor wafers or devices (including integrated

circuits)”;
(vii) in heading 9031, for the entry in column (2) occurring against tariff item
9031 41 00, the following entry shall be substituted, namely :—
“- - For inspecting semiconductor wafers or devices (including integrated circuits) or

for inspecting photomasks or reticles used in manufacturing semiconductor devices
(including integrated circuits)”;
(i) sub-heading 9114 10, tariff items 9114 10 10 and 9114 10 20 and the entries relating
thereto shall be omitted;
(ii) after tariff item 9114 90 30 and the entries relating thereto, the following shall be
“9114 90 40 - - - Springs, including hair-springs kg. 10% -”;
(i) in the Chapter heading, for the words “lamps and lighting fittings”, the words
(ii) in Note 1,–
(A) in clause (f), for the words “lamps and lighting fittings”, the words “lamps or light
sources and parts thereof” shall be substituted;
(B) in clause (l),-
(a) for the words “lamps or lighting fittings”, the words “luminaires and lighting
fittings” shall be substituted;
(b) for the words “electric garlands”, the words “lighting strings” shall be substituted;
(iii) for Note 4, the following Note shall be substituted, namely :—
‘4. For the purposes of heading 9406, the expression “prefabricated buildings” means
buildings which are finished in the factory or put up as elements, presented together, to
be assembled on site, such as housing or worksite accommodation, offices, schools,
shops, sheds, garages or similar buildings.
“Prefabricated buildings include "modular building units" of steel, normally presented
in the size and shape of a standard shipping container, but substantially or completely
pre-fitted internally. Such modular building units are normally designed to be
assembled together to form permanent buildings.’;

240
(a) for tariff items 9401 30 00 and 9401 40 00 and the entries relating thereto, the
“- Swivel seats with variable height adjustment :
9401 31 00 - - Of wood u 25% -

9401 39 00 - - Other u 25% -
- Seats other than garden seats or camping
equipment, convertible into beds :
9401 41 00 - - Of wood u 25% -
9401 49 00 - - Other u 25% -”;
“- Parts :
9401 91 00 - - Of wood kg. 25% -
9401 99 00 - - Other kg. 25% -”;
(v) in heading 9403, for tariff item 9403 90 00 and the entries relating thereto, the
“- Parts :
9403 91 00 - - Of wood kg. 25% -
9403 99 00 - - Other kg. 25% -”;
(a) after tariff item 9404 30 90 and the entries relating thereto, the following shall be
“9404 40 - Quilts, bedspreads, eiderdowns and duvets

(comforters):
9404 40 10 - - - Quilts u 25% -
9404 40 20 - - - Bedspreads u 25% -
9404 40 30 - - - Eiderdowns u 25% -
9404 40 40 - - - Duvets (comforters) u 25% -”;
(b) for sub-heading 9404 90, tariff items 9404 90 11 to 9404 90 99 and the entries
“9404 90 00 - Other kg. 25% -”;
(vii) in heading 9405, —

241
(a) in the entry in column (2) occurring against heading 9405, for the words “LAMPS
AND LIGHTING FITTINGS”, the words “LUMINAIRES AND LIGHTING
FITTINGS” shall be substituted;
(b) for sub-heading 9405 10, tariff items 9405 10 10 to 9405 10 90, sub-heading 9405
20, tariff items 9405 20 10 to 9405 30 00, sub-heading 9405 40, tariff items 9405 40 10
and 9405 40 90, sub-heading 9405 50, tariff items 9405 50 10 to 9405 50 59, sub-
heading 9405 60, tariff items 9405 60 10 and 9405 60 90 and the entries relating thereto,
“- Chandeliers and other electric ceiling or wall lighting

fittings, excluding those of a kind used for lighting public
open spaces or thoroughfares :
9405 11 00 - - Designed for use solely with light-emitting diode u 25% -

(LED) light sources
9405 19 00 - - Other u 25% -
- Electric table, desk, bedside or floor-standing

luminaires :

(LED) light sources
9405 29 00 - - Other u 25% -
- Lighting strings of a kind used for Christmas trees :

(LED) light sources
9405 39 00 - - Other u 25% -

- Other electric luminaires and lighting fittings :
9405 41 00 - - Photovoltaic, designed for use solely with light- u 25% -

emitting diode (LED) light sources
9405 42 00 - - Other, designed for use solely with light-emitting diode u 25% -
(LED) light sources
9405 49 00 - - Other u 25% -
9405 50 00 - Non-electrical luminaires and lighting fittings u 25% -

- Illuminated signs, illuminated name-plates and the like :

(LED) light sources
9405 69 00 - - Other u 25% -”;
242
(viii) in heading 9406, after tariff item 9406 10 90 and the entries relating thereto, the
“9406 20 00 - Modular building units, of steel u 10% -”;
(i) in Note 1, —
(A) after clause (o), the following clause shall be inserted, namely :—
“(p) unmanned aircraft (heading 8806);”;
(B) the existing clauses (p), (q), (r), (s), (t), (u), (v) and (w) shall respectively be re-
lettered as clauses (q), (r), (s), (t), (u), (v), (w) and (x);
(b) after Note 5, the following Note shall be inserted, namely :—
‘6. For the purposes of heading 9508 :
(a) The expression “amusement park rides” means a device or combination of devices
or equipment that carry, convey, or direct a person or persons over or through a fixed
or restricted course, including watercourses, or within a defined area for the primary
purposes of amusement or entertainment. Such rides may be combined within an
amusement park, theme park, water park or fairground. These amusement park rides do
not include equipment of a kind commonly installed in residences or playgrounds;
(b) The expression “water park amusements” means a device or combination of devices
or equipment that are characterized by a defined area involving water, with no purposes
built path. Water park amusements only include equipment designed specifically for
water parks; and
(c) The expression “fairground amusements” means games of chance, strength or skill,
which commonly employ an operator or attendant and may be installed in permanent
buildings or independent concession stalls. Fairground amusements do not include
equipment of heading 9504.
This heading does not include equipment more specifically classified elsewhere in the
Nomenclature.’;
(ii) in heading 9504, for the entry in column (2) occurring against the heading 9504,
the following entry shall be substituted, namely :—
“VIDEO GAME CONSOLES AND MACHINES, TABLE OR PARLOUR GAMES,

INCLUDING PINTABLES, BILLIARDS, SPECIAL TABLES FOR CASINO
GAMES AND AUTOMATIC BOWLING EQUIPMENT, AMUSEMENT
MACHINES OPERATED BY COINS, BANK NOTES, BANK CARDS, TOKENS
OR BY ANY OTHER MEANS OF PAYMENT”;
243
(iii) for heading 9508, tariff items 9508 10 00 and 9508 90 00 and the entries relating
thereto, the following shall be substituted, namely :—
“9508 TRAVELLING CIRCUSES AND TRAVELLING

MENAGERIES; AMUSEMENT PARK RIDES
AND WATER PARK AMUSEMENTS;
FAIRGROUND AMUSEMENTS, INCLUDING
SHOOTING GALLERIES; TRAVELLING
THEATRES
9508 10 00 - Travelling circuses and travelling menageries kg. 20% -
- Amusement park rides and water park amusements

:
9508 21 00 - - Roller coasters u 20% -
9508 22 00 - - Carousels, swings and roundabouts u 20% -
9508 23 00 - - Dodge’em cars u 20% -
9508 24 00 - - Motion simulators and moving theatres u 20% -
9508 25 00 - - Water rides u 20% -
9508 26 00 - - Water park amusements u 20% -
9508 29 00 - - Other u 20% -
9508 30 00 - Fairground amusements u 20% -
9508 40 00 - Travelling theatres u 20% -”;
(ii) for the entry in column (2) occurring against tariff item 9609 10 00, the following
“- Pencils and crayons, with leads encased in a sheath”;
(iii) for heading 9617, sub-heading 9617 00, tariff item 9617 00 11 and the entries
“9617 VACUUM FLASKS AND OTHER VACUUM

VESSELS, COMPLETE; PARTS THEREOF
OTHER THAN GLASS INNERS
244
9617 00 - Vacuum flasks and other vacuum vessels, complete;

parts thereof other than glass inners:
- - - Vacuum flasks and other vacuum vessels,
complete:
9617 00 11 - - - - Vacuum flasks having a capacity not exceeding kg. 20% -”;
0.75 l
(iv) for heading 9619, sub-heading 9619 00 and the entries relating thereto, the
“9619 SANITARY TOWELS (PADS) AND TAMPONS,

NAPKINS (DIAPERS), NAPKIN LINERS AND
SIMILAR ARTICLES, OF ANY MATERIAL
9619 00 - Sanitary towels (pads) and tampons, napkins
(diapers), napkin liners and similar articles, of any
material:”;
“2. Heading 9701 does not apply to mosaics that are mass-produced reproductions,
casts or works of conventional craftsmanship of a commercial character, even if these
articles are designed or created by artists.”;
(ii) the existing Notes 2, 3, 4 and 5 shall respectively be re-numbered as Notes 3, 4, 5

and 6;
(iii) for heading 9701, sub-heading 9701 10, tariff items 9701 10 10 to 9701 10 90, sub-
heading 9701 90, tariff items 9701 90 91 to 9701 90 99, and the entries relating thereto,
“9701 PAINTINGS, DRAWINGS AND PASTELS,

EXECUTED ENTIRELY BY HAND, OTHER
THAN DRAWINGS OF HEADING 4906 AND
OTHER THAN HAND- PAINTED OR HAND-
DECORATED MANUFACTURED ARTICLES;
COLLAGES, MOSAICS AND SIMILAR
DECORATIVE PLAQUES
- Of an age exceeding 100 years :
9701 21 00 - - Paintings, drawings and pastels u 10% -
9701 22 00 - - Mosaics u 10% -
9701 29 00 - - Other u 10% -
- Other :
245
9701 91 00 - - Paintings, drawings and pastels u 10% -

9701 92 00 - - Mosaics u 10% -
9701 99 00 - - Other u 10% -”;
(iv) for tariff item 9702 00 00 and the entries relating thereto, the following shall be
9702 ORIGINAL ENGRAVINGS, PRINTS AND

LITHOGRAPHS
9702 10 00 - Of an age exceeding 100 years u 10% -
9702 90 00 - Other u 10% -”;
(v) for heading 9703, sub-heading 9703 00, tariff items 9703 00 10 to 9703 00 90 and
the entries relating thereto, the following shall be substituted, namely :—
“9703 ORIGINAL SCULPTURE AND STATUARY, IN

ANY MATERIAL
9703 10 - Of an age exceeding 100 years :
9703 10 10 - - - Of metal u 10% -

9703 10 20 - - - Of stone u 10% -
9703 10 90 - - - Other u 10% -
9703 90 - Other :
9703 90 10 - - - Of metal u 10% -
9703 90 20 - - - Of stone u 10% -
9703 90 90 - - - Other u 10% -”;
(vi) for heading 9705, sub-heading 9705 00, tariff items 9705 00 10 and 9705 00 90
“9705 COLLECTIONS AND COLLECTORS’ PIECES OF

ARCHAEOLOGICAL, ETHNOGRAPHIC,
HISTORICAL, ZOOLOGICAL, BOTANICAL,
MINERALOGICAL, ANATOMICAL,
PALEONTOLOGICAL, OR NUMISMATIC
INTEREST
9705 10 00 - Collections and collectors' pieces of u 10% -
archaeological, ethnographic or historical interest
- Collections and collectors' pieces of zoological,

botanical, mineralogical, anatomical or
paleontological interest :
9705 21 00 - - Human specimens and parts thereof u 10% -

246
9705 22 00 - - Extinct or endangered species and parts thereof u 10% -
9705 29 00 - - Other u 10% -
- Collections and collectors' pieces of numismatic

interest :
9705 31 00 - - Of an age exceeding 100 years u 10% -
9705 39 00 - - Other u 10% -”;
(vii) for tariff item 9706 00 00 and the entries relating thereto, the following shall be
“9706 ANTIQUES OF AN AGE EXCEEDING 100

YEARS
9706 10 00 - Of an age exceeding 250 years u 10% -
9709 90 00 - Other u 10% -”.

247
THE FIFTH SCHEDULE
[See section 96 (i)]
In the Fourth Schedule to the Central Excise Act, in Chapter 27, for heading 2709, tariff items
2709 10 00 and 2709 20 00 and the entries relating thereto, the following shall be substituted,
namely :––
____________________________________________________________________________________
Tariff Item Description of goods Unit Rate of Duty
____(1)___________________________(2)____________________(3)____________(4)_______
“2709 PETROLEUM OILS AND OILS

OBTAINED FROM BITUMINOUS
MINERALS, CRUDE
2709 00 -- Petroleum oils and oils obtained

2709 00 10 --- Petroleum crude kg. Nil
2709 00 90 --- Other kg. ….. ”.
248
THE SIXTH SCHEDULE
[See section 96 (ii)]
In the Fourth Schedule to the Central Excise Act,––
___________________________________________________________________________________
Tariff Item Description of goods Unit Rate of Duty
____(1)___________________________(2)____________________(3)____________(4)_______
(a) in SECTION IV, for Section heading, the following Section heading shall be substituted,
namely:––
“TOBACCO AND MANUFACTURED TOBACCO SUBSTITUTES; PRODUCTS,

WHETHER OR NOT CONTAINING NICOTINE, INTENDED FOR INHALATION
WITHOUT COMBUSTION; OTHER NICOTINE CONTAINING PRODUCTS
INTENDED FOR THE INTAKE OF NICOTINE INTO THE HUMAN BODY”;
(b) in Chapter 24,––
(i) for Chapter heading, the following Chapter heading shall be substituted, namely:––
“Tobacco and manufactured tobacco substitutes; products, whether or not containing

nicotine, intended for inhalation without combustion; other nicotine containing products
intended for the intake of nicotine into the human body”;
(ii) after Note 3, the following Notes shall be inserted, namely:––
“4. Any products classifiable in heading 2404 and any other heading of the Chapter are to
be classified in heading 2404.
5. For the purposes of heading 2404, the expression “inhalation without combustion” means
inhalation through heated delivery or other means, without combustion.”;
(iii) after tariff item 2403 99 90 and the entries relating thereto, the following shall be inserted,
namely :—
“2404 PRODUCTS CONTAINING

TOBACCO, RECONSTITUTED
TOBACCO, NICOTINE, OR TOBACCO
OR NICOTINE SUBSTITUTES,
INTENDED FOR INHALATION
WITHOUT COMBUSTION; OTHER
NICOTINE CONTAINING PRODUCTS
INTENDED FOR THE INTAKE OF
NICOTINE INTO THE HUMAN BODY
- Products intended for inhalation

without combustion:
249
2404 11 00 - Containing tobacco or reconstituted kg. 81%

tobacco
2404 12 00 - - Other, containing nicotine kg. …..
2404 19 00 - - Other kg. 81%
- Other:
2404 91 00 - - For oral application kg. …..
2404 92 00 - - For transdermal application kg. …..
2404 99 00 -- Other kg. …..”.
250
THE SEVENTH SCHEDULE
[See section 116 (1)]
Item No Description of goods Rate

(1) (2) (3)
1. Motor spirit commonly known as petrol Rs. 2.50 per litre
2. High speed diesel Rs. 4.00 per litre

251
STATEMENT OF OBJECTS AND REASONS
The object of the Bill is to give effect to the financial proposals of the Central
Government for the financial year 2021-2022. The notes on clauses explain the various
provisions contained in the Bill.
2. Part XIV of the Bill deals with amendments to the Direct Tax Vivad se Vishwas Act,
2020 (the Vivad se Vishwas Act). With the objective of reducing pending income tax litigation,
generating timely revenue for the Government and giving benefit to taxpayers by providing
them peace of mind, certainty and savings on account of time and resources, the Vivad se
Vishwas Act was enacted on the 17th March, 2020.
3. The settlement provisions under the Income-tax Act, 1961 provide for an alternate
mechanism to a taxpayer who chooses to exit the regular process of assessment which would
have resulted in determination of tax liability and instead approached the Settlement
Commission for settlement of his case under Chapter XIX-A of the Income-tax Act, 1961. As
the Vivad se Vishwas Act was enacted for the resolution of disputed tax and not for the taxes
covered by an order in pursuance to the settlement of a case under Chapter XIX-A of the
Income-tax Act, 1961, such cases as are covered by Chapter XIX-A of the Income-tax Act,
1961 (whether they have attained finality or not) have always been, therefore, intended to be
outside the purview of the Vivad se Vishwas Act.
4. With a view to remove any ambiguity, it is proposed to amend the provisions of the
Vivad se Vishwas Act to clarify the original legislative intent for which the definitions of
“appellant” in clause (a), “disputed tax” in clause (j) and “tax arrear” in clause (o) of sub-
section (1) of section 2 of the Vivad se Vishwas Act are proposed to be amended by way of
removal of doubts by this Bill. The amendments relating to the Vivad se Vishwas Act are
proposed to take effect retrospectively from the 17th March, 2020.
NIRMALA SITHARAMAN.
NEW DELHI;
The 31st January, 2021.
_____________
PRESIDENT’S RECOMMENDATION UNDER ARTICLES 117 AND 274 OF THE

CONSTITUTION OF INDIA
[Copy of letter No. F.2(1)-B(D)/2021, dated the 29th January, 2021 from Smt. Nirmala
Sitharaman, Minister of Finance, to the Secretary-General, Lok Sabha.]
The President, having been informed of the subject matter of the proposed Bill,
recommends, under clauses (1) and (3) of article 117 read with clause (1) of article 274 of the
Constitution of India, the introduction of the Finance Bill, 2021 to the Lok Sabha and also
recommends to the Lok Sabha the consideration of the Bill.
2. The Bill will be introduced in the Lok Sabha immediately after the presentation of the
Union Budget on the 1st February, 2021.
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NOTES ON CLAUSES
Clause 2 read with the First Schedule to the Bill, seeks to specify the rates at which
income-tax is to be levied on income chargeable to tax for the assessment year 2021-2022.
Further, it lays down the rates at which tax is to be deducted at source during the financial
year under the Income-tax Act; and the rates at which “advance tax” is to be paid, tax is to
be deducted at source from or paid on income chargeable under the head “Salaries” or
deducted under section 194P of the Income-tax Act and tax is to be calculated and charged
in special cases for the financial year 2021-2022.
Clause 3 of the Bill seeks to amend section 2 of the Income-tax Act relating to
definitions.
Clause (11) of the said section, inter alia, defines “block of assets” to mean a group of
assets falling within a class of assets comprising tangible assets, being buildings, machinery,
plant or furniture and intangible assets, being know-how, patents, copyrights, trademarks,
licences, franchises or any other business or commercial rights of similar nature.
It is proposed to amend the said clause so as to exclude goodwill of a business or

profession from the purview of “block of asset”.
It is further proposed to amend clause (14) of the said section which defines the
expression “capital asset. It is proposed to insert sub-clause (c) to the said clause so as to
include any unit linked insurance policy to which exemption under clause (10D) of section
10 does not apply on account of the applicability of the fourth and fifth proviso thereof.
It is also proposed to amend clause (19AA) of the said section which defines the term
“demerger", in relation to companies, means the transfer, pursuant to a scheme of
arrangement under sections 391 to 394 of the Companies Act, 1956, by a demerged company
of its one or more undertakings to any resulting company on satisfaction of conditions
provided by rules in the said clause.
It is proposed to amend the said clause to insert an Explanation so as to clarify that the
reconstruction or splitting up of a public sector company into separate companies shall be
deemed to be a demerger, if such reconstruction or splitting up has been made to transfer
any asset of the demerged company to the resulting company and such resulting company–
(i) is a public sector company on the appointed date indicated in such scheme as may
be approved by the Central Government or any other body authorised under the
provisions of the Companies Act, 2013 or any other law for the time being in force
governing such public sector companies in this behalf; and
(ii) fulfills such other conditions as may be notified by the Central Government in
the Official Gazette in this behalf.
It is also proposed to insert a new clause (29A) in the said section so as to define the
expression “liable to tax”, in relation to a person, means that there is a liability of tax on
such person under any law for the time being in force in any country, and shall include a
case where subsequent to imposition of tax liability, an exemption has been provided.
253
It is also proposed to amend clause (42C) of the said section which defines the
expression “slump sale” as the transfer of one or more undertakings as a result of the sale
for a lump sum consideration without values being assigned to the individual assets and
liabilities in such sales.
It is proposed to expand the scope of the definition of the term “slump sale” so as to
mean the transfer of one or more undertakings, by any means, for lump sum consideration
without value being assigned to individual assets and liabilities in such cases.
It is also proposed to insert an Explanation to the said clause so as to provide that the
word “transfer” shall have the meaning assigned to it in clause (47) of the said section.
These amendments will take effect from 1st April, 2021 and will, accordingly, apply in
It is also proposed to amend clause (48) of the said section provides for definition of
“zero coupon bond”, as a bond issued by any infrastructure capital company or infrastructure
capital fund or public sector company or scheduled bank and in respect of which no payment
and benefit is received or receivable before maturity or redemption from such infrastructure
capital company or infrastructure capital fund or public sector company or scheduled bank
and which is notified by the Central Government in the Official Gazette.
It is also proposed to amend the said clause so as to insert infrastructure debt fund in
sub-clauses (a) and (b) thereof so as to enable notified infrastructure debt fund also to issue
zero coupon bonds.
It is also proposed to insert a new Explanation 2 to define the expression “infrastructure

debt fund”.
Clause 4 of the Bill seeks to amend section 9A of the Income-tax Act relating to certain
activities not to constitute business connection in India.
Sub-section (3) and (4) of the said section provide for certain conditions for the
applicability of the section.
It is proposed to insert sub-section (8A) to the said section so as to provide that the
Central Government may, by notification in the Official Gazette, specify that any one or
more of the conditions specified in clauses (a) to (m) of sub-section (3) or clauses (a) to (d)
of sub-section (4) shall not apply or shall apply with such modifications, as specified in such
notification, in case of an eligible investment fund and its eligible fund manager, if such
fund manager is located in an International Financial Services Centre, as defined in clause
(a) of the Explanation to section 80LA, which has commenced its operations on or before
31st March, 2024.
254
Clause 5 of the Bill seeks to amend section 10 of the Income-tax Act relating to incomes
not included in total income.
The said section provides that in computing the total income of a previous year of any
person, certain categories of income shall not be included in the total income.
Clause 4D of said section provides exemption for any income accrued or arisen to,
or received by a specified fund as a result of transfer of capital asset referred to in clause
(viiab) of section 47, on a recognised stock exchange located in any International Financial
Services Centre and where the consideration for such transaction is paid or payable in
convertible foreign exchange or as a result of transfer of securities (other than shares in a
company resident in India) or any income from securities issued by a non-resident ( not
being a permanent establishment of a non-resident in India) and where such income
otherwise does not accrue or arise in India or any income from a securitisation trust which
is chargeable under the head “Profits and gains of business or profession”, to the extent such
income accrued or arisen to, or is received, is attributable to units held by non-resident (not
being the permanent establishment of a non-resident in India).
It is proposed to amend the said clause so as to provide that the said exemption shall
also be available in case of any income accrued or arisen to, or received to the investment
division of offshore banking unit to the extent attributable, and computed in the manner as
may be provided by rules.
It is further proposed to insert a new clause (4E) in the said section so as to exempt
any income accrued or arisen to, or received by a non-resident as a result of transfer of non-
deliverable forward contracts entered into with an offshore banking unit of an International
Financial Services Centre as referred to in sub-section (1A) of section 80LA, which fulfills
such conditions as may be provided by rules.
It is also proposed to insert a new clause (4F) in the said section so as to exempt any
income of a non-resident by way of royalty, on account of lease of an aircraft in a previous
year, paid by a unit of an International Financial Services Centre as referred to in sub-section
(1A) of section 80LA, if the unit is eligible for deduction under section 80LA for that
previous year and has commenced its operations on or before 31st March, 2024.
Clause (5) of the said section provides for exemption in respect of the value of travel
concession or assistance received by or due to an employee from his employer or former
employer for himself and his family, in connection with his proceeding on leave to any place
in India.
It is proposed to insert a second proviso in the said clause so as to provide that for the
assessment year beginning on the 1st day of April, 2021, in the case of an individual, the
value in lieu of any travel concession or assistance received by, or due to, such individual
shall also be exempted, subject to fulfillment of such conditions (including the condition of
incurring such amount of such expenditure within such period), as may be provided by rules.
255
It is further proposed to insert Explanation 2 so as to clarify that where an individual

claims such exemption and the same is allowed under the second proviso in connection with
the expenditure provided by rules, no exemption shall be allowed under the said clause in
respect of the same expenditure to any other individual.
Clause (10D) of the said section provides for the exemption for the sum received under
a life insurance policy in respect of which the premium payable for any of the years during
the terms of the policy does not exceed ten percent of the actual capital sum assured.
It is proposed to insert fourth, fifth, sixth and seventh proviso to the clause. Proposed
fourth proviso seeks to provide that the exemption under this clause shall not apply with
respect to any unit linked insurance policy, issued on or after the 1st day of February, 2021,
if the amount of premium payable for any of the previous year during the term of such policy
exceeds two lakh fifty thousand rupees.
Proposed fifth proviso seeks to provide that if the premium is payable, by a person,
for more than one unit linked insurance policies, issued on or after the 1st day of February,
2021, the provisions of this clause shall apply only with respect to those insurance policies,
where the aggregate amount of premium does not exceed the amount referred to in fourth
proviso in any of the previous year during the term of any of those policies.
Proposed sixth proviso seeks to provide that the provisions of the fourth and fifth
provisos shall not apply to any sum received on the death of a person.
Proposed seventh proviso seeks to provide that if any difficulty arises in giving effect
to the provisions of this clause, the Board may, with the approval of the Central Government,
issue guidelines for the purpose of removing the difficulty and every guideline issued by the
Board under this proviso shall be laid before each House of Parliament, and shall be binding
on the income-tax authorities and the assessee.
It is further proposed to insert Explanation 3 to the said clause so as to define the

expression “unit linked insurance policy” as a life insurance policy which has components
of both investment and insurance and is linked to a unit as defined in clause (ee) of regulation
(3) of the Insurance Regulatory and Development Authority of India (Unit Linked Insurance
Products) Regulations, 2019 issued by Insurance Regulatory and Development Authority
under the Insurance Regulatory Act, 1938 and the Insurance Regulatory and Development
Authority Act, 1999.
These amendments will take effect from 1st April, 2021 and will, accordingly, apply
in relation to the assessment year 2021-2022 and subsequent assessment years.
Clause (11) of the said section provides for exemption with respect to any payment
from a provident fund to which the Provident Funds Act, 1925 applies or from any other
provident fund set up by the Central Government and notified by it in this behalf in the
Official Gazette.
256
Clause (12) of the said section provides for exemption with respect to the accumulated
balance due and becoming payable to an employee participating in a recognised provident
fund, to the extent provided in rule 8 of Part A of the Fourth Schedule.
It is proposed to insert a proviso to such of the aforesaid clauses so as to provide that

the provisions of these clauses shall not apply to the income by way of interest accrued
during the previous year in the account of a person to the extent it relates to the amount or
the aggregate of amounts of contribution made by that person exceeding two lakh and fifty
thousand rupees in any previous year in that fund, on or after the 1st day of April, 2021 and
computed in such manner as may be provided by rules.
Sub-clause (iiiad) of clause (23C) of the said section provides for exemption for the
income received by any person on behalf of university or educational institution as referred
to in that sub-clause. The exemptions under the clause are available subject to the condition
that the annual receipts of such university or educational institution do not exceed the annual
receipts as may be prescribed.
Similarly, sub-clause (iiiae) of the said clause provides for exemption for the income
received by any person on behalf of hospital or institution as referred to in that sub-clause.
The exemptions under the clause are available subject to the condition that the annual
receipts of such hospital or institution do not exceed the annual receipts as may be
prescribed.
Presently, the amount prescribed for sub-clause (iiiad) as well as (iiiae) is one crore
rupees. It is proposed to increase the limit of annual receipts, for exemption under sub-clause
(iiiad) and (iiiae), to five crore rupees and provide that such limit shall be applicable for an
assessee with respect to the aggregate receipts from university or universities or educational
institution or institutions as referred to in sub-clause (iiiad) as well as from hospital or
hospitals or institution or institutions as referred to in sub-clause (iiiae).
Explanation to the third proviso to the said clause provides that income of the funds or
trust or institution or any university or other educational institution or any hospital or other
medical institution, shall not include income in the form of voluntary contributions made
with a specific direction that they shall form part of the corpus.
It is proposed to number the said Explanation as Explanation 1 thereof and to provide

that such voluntary contributions should be invested or deposited in one or more of the forms
or modes specified in sub-section (5) of section 11 maintained specifically for such corpus.
It is further proposed to insert Explanation 2 in the said proviso so as to provide that,––
(a) application out of such corpus shall not be considered as application for charitable
or religious purposes for the purposes of third proviso of clause (23C), provided when it is
invested or deposited back, into one or more of the forms or modes specified in sub-section
(5) of section 11 maintained specifically for such corpus from the income of the previous
year, such amount shall be allowed as application in the previous year in which it is
deposited back to corpus and to the extent it is deposited back;
257
(b) application from loans and borrowings shall not be considered as application for
charitable or religious purposes for the purposes of third proviso of clause (23C) provided
when loan or borrowing is repaid from the income of the previous year, such repayment
shall be allowed as application in the previous year in which it is repaid and to the extent it
is repaid.
Fourteenth proviso of the said clause provides that if any fund or institution or trust or
any university or other educational institution or any hospital or other medical institution
referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of said
clause of said section accumulates its income, then payment or credit out of such
accumulation, to exempt entities as prescribed in the proviso, shall not be treated as
application.
It is proposed to amend the said proviso to make a reference of section 12AB which
provides for the procedure of registration.
It is also proposed to number the Explanation as Explanation 1 thereof the twentieth

proviso to the said clause and to insert a new Explanation 2 therein so as to provide that for
the computation of income required to be applied or accumulated during the previous year,
no set off or deduction or allowance of any excess application, of any of the year preceding
the previous year, shall be allowed.
Clause (23FE) of the said section provides for the exemption to specified person from
the income in the nature of dividend, interest or long-term capital gains arising from an
investment made by it in India.
Item (c) of sub-clause (iii) of the said clause provides that the specified person may
invest in a Category-I or Category-II Alternative Investment Fund regulated under the
Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012,
made under the Securities and Exchange Board of India Act, 1992, having hundred per cent.
investment in one or more of the company or enterprise or entity referred to in item (b).
It is proposed to relax the said condition of “hundred per cent.” to “not less than fifty
per cent”. It is further proposed to allow the investment by such Category-I or Category-II
Alternative Investment Fund in an Infrastructure Investment Trust referred to in sub-clause
(i) of clause (13A) of section 2.
It is also proposed to insert item (d) in sub-clause (iii) of the said clause allowing the
investment by specified person in a domestic company set up and registered on or after 1st
April, 2021, having minimum seventy-five per cent. investments in one or more of the
company or enterprise or entity referred to in item (b).
It is also proposed to insert item (e) in the said sub-clause allowing the investment by
specified person in a non-banking financial company registered as an Infrastructure Finance
Company, as referred to in the notification number RBI/2009-10/316 issued by the Reserve
Bank of India or in an Infrastructure Debt Fund, a non banking finance company as referred
258
to in the master circular, namely, the Infrastructure Debt Fund-Non Banking Financial
Companies (Reserve Bank) Directions, 2011, issued by the Reserve Bank of India, having
minimum ninety per cent. investment in one or more of the companies or enterprises or
entities referred to in item (b).
It is also proposed to insert fourth proviso to the said clause so as to provide that in case
a Category-I or Category-II Alternative Investment Fund referred to in item (c) of sub-clause
(iii) has investment of less than one hundred per cent. in one or more of the companies or
enterprises or entities referred to in item (b) of the said sub-clause or in an Infrastructure
Investment Trust referred to in item (c) of that sub-clause, income, accrued or arisen to or
received or attributable to such investment, directly or indirectly, which is exempt under the
said clause shall be calculated proportionately to the investment made in one or more of the
companies or enterprises or entities referred to in item (b) of that sub-clause or in the
Infrastructure Investment Trust referred to in item (c) of that sub-clause, in such manner as
may be provided by rules.
It is also proposed to insert fifth proviso to the said clause so as to provide that in case
a domestic company referred to in item (d) of sub-clause (iii) has investment of less than
one hundred per cent. in one or more of the companies or enterprises or entities referred to
in item (b) of the said sub-clause, income, accrued or arisen to or received or attributable to
such investments, directly or indirectly, which is exempt under the said clause shall be
calculated proportionately to the investment made in one or more of the companies or
enterprises or entities referred to in item (b) of that sub-clause (iii), in such manner as may
be provided by rules.
It is also proposed to insert sixth proviso to the said clause so as to provide that in case
a non-banking financial company registered as an Infrastructure Finance Company or
Infrastructure Debt Fund referred to in item (e) of sub-clause(iii), has lending of less than
one hundred per cent. in one or more of the companies or enterprises or entities referred to
in item (b) of the said sub-clause, income, accrued or arisen to or received or attributable to
such lending, directly or indirectly, which is exempt under the said clause shall be calculated
proportionately to the lending made in one or more of the companies or enterprises or entities
referred to in item (b) of that sub-clause, in such manner as may be provided by rules.
It is also proposed to insert seventh proviso to the said clause so as to provide that in
case a sovereign wealth fund or pension fund has loan or borrowing, directly or indirectly,
for the purposes of making investment in India, such fund shall be deemed to be not eligible
for exemption under this clause.
It is also proposed to number the Explanation as Explanation 1 thereof.
It is also proposed to insert a proviso to the sub-clauses (iii) and (iv) of clause (b) of
the said Explanation 1 so as to provide that the provisions of sub-clauses (iii) and (iv) shall
not apply to any payment made to creditors or depositors for loan taken or borrowing for
purposes other than for making investment in India.
It is also proposed to amend sub-clause (v) of clause (b) of the said Explanation 1 so
as to provide that the sovereign wealth fund does not participate in the day to day operations
of investee but the monitoring mechanism to protect the investment with the investee
259
including the right to appoint directors or executive director shall not be considered as
participation in day to day operations of the investee.
It is also proposed to amend sub-clause (ii) of clause (c) of the said Explanation 1 so
as to provide that if pension fund is liable to tax but exemption from taxation for all its
income has been provided, by the foreign country under whose laws it is created or
established, then such pension fund also would satisfy the condition mentioned in sub-clause
(ii). It is also proposed to insert sub-clause (iiia) to the clause to provide that the pension
fund does not participate in the day to day operations of investee but the monitoring
mechanism to protect the investment with the investee including the right to appoint
directors or executive director shall not be considered as participation in day to day
operations of investee.
It is also proposed to insert a new Explanation 2 in the said clause to define the
expressions “loan and borrowing” and “investee”.
It is also proposed to insert a new Explanation 3 so as to provide that the Central

Government may, by rules, provide the method of calculation of “fifty per cent.” referred to
in item (c) or “seventy-five per cent.” referred to in item (d) or “ninety per cent.” referred to
in item (e), of sub-clause (iii) of the said clause.
It is also proposed to insert a new clause (23FF) in the said section so as to exempt
any income of the nature of capital gains, arising or received by a non-resident, which is on
account of transfer of share of a company resident in India, by the resultant fund and such
shares were transferred from the original fund to the resultant fund in relocation, and where
capital gains on such shares were not chargeable to tax if that relocation had not taken place.
It is also proposed to refer to the definitions of the expressions “investment division

of offshore banking unit”, “original fund”, “relocation” and “resultant fund” as defined in
the Explantion to clause (viiac) and clause (viiad) of section 47.
Clause (50) of the said section provides for the exemption for the income arising from
any specified service provided on or after the date on which the provisions of Chapter VIII
of the Finance Act, 2016 comes into force or arising from any e-commerce supply or
services made or provided or facilitated on or after 1st April, 2021 and chargeable to
equalisation levy under the provisions of that Chapter. It is proposed to change the said year
to 2020.
It is proposed to substitute the Explanation to the said clause with Explanations 1 and 2.
Explanation 1 proposes to clarify that the income referred to in this clause shall not include
and shall never be deemed to have included any income which is chargeable to tax as royalty
or fees for technical services in India under the said Act read with the agreement notified by
the Central Government under section 90 or section 90A.
260
Explanation 2 proposes to define the expressions “e-commerce supply or services” and

“specified service” for the purposes of the said clause.
Clause 6 of the Bill seeks to amend section 11 of the Income-tax Act relating to income
from property held for charitable or religious purposes.
Clause (d) of sub-section (1) of the said section provides that voluntary contributions
made with a specific direction that they shall form part of the corpus of the trust or institution
shall not be included in the total income of the trust or institution.
It is proposed to amend the said clause (d) so as to provide that such voluntary
contributions should be invested or deposited in one or more of the forms or modes specified
in sub-section (5) maintained specifically for such corpus.
It is further proposed to insert a new Explanation 4 to sub-section (1) so as to provide

that––
(A) application out of the corpus shall not be considered as application for charitable or
religious purposes for the purposes of clause (a) and (b) of sub-section (1), provided when
it is invested or deposited back, into one or more of the forms or modes specified in sub-
section (5) maintained specifically for such corpus, from the income of the previous year,
such amount shall be allowed as application in the previous year in which it is deposited
back to corpus and to the extent it is deposited back.
(B) application from loans and borrowings shall not be considered as application for
charitable or religious purposes for the purposes of clause (a) and (b) of sub-section (1),
provided when such loan or borrowing is repaid from the income of that previous year, such
repayment shall be allowed as application in the previous year in which it is repaid and to
the extent it is repaid.
It is also proposed to insert a new Explanation 5 to the said sub-section so as to provide

that for the computation of income required to be applied or accumulated during the previous
year, no set off or deduction or allowance of any excess application, of any of the year
preceding the previous year, shall be allowed.
Explanation to sub-section (2) provides that if any trust or institution accumulates or set
off apart its income then payment or credit out of such accumulation, to exempt entities as
prescribed in the Explanation, shall not be treated as application. Clause (d) of sub-section
(3) provides that such income, credited or paid to entities prescribed, shall be deemed to be
income of the trust or institution.
It is proposed to make a reference of section 12AB in the said Explanation to the said
sub-section (2) and clause (d) of sub-section (3), which provides for the procedure of
registration.
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depreciation.
Sub-section (1) of the said section provides for deduction on account of depreciation
on tangible assets (building, machinery, plant and furniture) and intangible assets (know-
how, patents, copyrights, trademarks, licences, franchises or any other business or
commercial rights of similar nature) acquired on or after the 1st day of April, 1998, and are
owned, wholly or partly by the assessee and are used wholly and exclusively for the purpose
of business and profession while computing the income under the head ‘Profits and gains of
business or profession’.
It is proposed to amend clause (ii) of the said sub-section (1) so as to provide that
goodwill of a business or profession shall not be considered as an asset for the purpose of
the said clause and, hence, not eligible for depreciation.
Explanation 3 to the said sub-section defines the expression “assets” to mean tangible
assets, being buildings, machinery, plant or furniture; and intangible assets, being know-
how, patents, copyrights, trademarks, licences, franchises or any other business or
commercial rights of similar nature.
It is proposed to amend the said Explanation 3 so as to provide that goodwill of a

business or profession shall not be considered as an asset for that purposes of the said sub-
section.
Clause 8 of the Bill seeks to amend section 36 of the Income-tax Act, relating to other
deductions.
Sub-section (1) of the said section provides for allowing of deductions provided for in
the clauses thereof for computing the income referred to in section 28 of the said Act. Clause
(va) of the said sub-section provides for allowance of deduction for any sum received by the
assessee from any of his employees to which the provisions of sub-clause (x) of clause (24)
of section 2 apply, if such sum is credited by the assessee to the employee's account in the
relevant fund or funds on or before the due date. Explanation to the said clause provides that
for the purposes of this clause, "due date" means the date by which the assessee is required
as an employer to credit an employee's contribution to the employee's account in the relevant
fund under any Act, rule, order or notification issued thereunder or under any standing order,
award, contract of service or otherwise.
It is proposed to insert Explanation 2 to clause (va) of sub-section (1) of the said section
so as to clarify that the provisions of section 43B shall not apply and shall be deemed never
to have been applied for the purposes of determining the “due date” under the said clause.
262
Clause 9 of the Bill seeks to amend section 43B of the Income-tax Act relating to
certain deductions to be only on actual payments.
Clause (b) of the said section provides that any sum payable by the assessee as an
employer by way of contribution to any provident fund or superannuation fund or gratuity
fund or any other fund for the welfare of employees shall be allowed (irrespective of the
previous year in which the liability to pay such sum was incurred by the assessee according
to the method of accounting regularly employed by him) only in computing the income
referred to in section 28 of that previous year, in which such sum is actually paid by him.
Proviso to the said section provides that nothing contained in this section shall apply in
relation to any sum which is actually paid by the assessee on or before the due date
applicable in his case for furnishing the return of income under sub-section (1) of section
139 in respect of the previous year in which the liability to pay such sum was incurred as
aforesaid and the evidence of such payment is furnished by the assessee along with such
return.
It is proposed to insert Explanation 5 to the said section so as to clarify that the

provisions of that section shall not apply and shall be deemed never to have been applied to
a sum received by the assessee from any of his employees to which the provisions of sub-
clause (x) of clause (24) of section 2 applies.
Clause 10 of the Bill seeks to amend section 43CA of the Income-tax Act relating to
special provision for full value of consideration for transfer of assets other than capital assets
in certain cases.
The proviso to sub-section (1) of the said section provides that where the value adopted
or assessed or assessable by the authority for the purpose of payment of stamp duty does not
exceed one hundred and ten per cent. of the consideration received or accruing as a result of
the transfer, the consideration so received or accruing as a result of the transfer shall, for the
purposes of computing profits and gains from transfer of such asset, be deemed to be the
full value of the consideration received or accruing as a result of such transfer.
It is proposed to insert a second proviso to said sub-section to provide that in case of

transfer of an asset, being a residential unit, the provisions of the first proviso shall have the
effect as if for the words “one hundred and ten per cent.”, the words “one hundred and twenty
per cent.” had been substituted, subject to the conditions that––
(a) the transfer of such residential unit takes place during the period beginning from
the 12th day of November, 2020 and ending on the 30th Day of June, 2021;
(b) such transfer is by way of first time allotment of the residential unit to any person;
and
(c) the consideration received or accruing as a result of such transfer does not exceed
two crore rupees.
263
It is further proposed to insert an Explanation to the said section to define the expression
“residential unit” to mean an independent housing unit with separate facilities for living,
cooking and sanitary requirement, distinctly separated from other residential units within
the building, which is directly accessible from an outer door or through an interior door in a
shared hallway and not by walking through the living space of another household.
Clause 11 of the Bill seeks to amend section 44AB of the Income-tax Act relating to
audit of accounts of certain persons carrying on business or profession.
Clause (a) of the said section provides for audit of accounts for every person carrying on
business, if his total sales, turnover or gross receipts, as the case may be, in business exceed
or exceeds one crore rupees in any previous year. The proviso to the said clause provides
that in the case of a person whose aggregate of all amounts received including amount
received for sales, turnover or gross receipts during the previous year, in cash, does not
exceed five per cent. of the said amount; and aggregate of all payments made including
amount incurred for expenditure, in cash, during the previous year does not exceed five per
cent. of the said payment, the said clause shall have effect as if for the words “one crore
rupees” the words “five crore rupees” had been substituted.
It is proposed to amend the said proviso so as to increase the threshold from “five crore
rupees” to “ten crore rupees”.
Clause 12 of the Bill seeks to amend section 44ADA of the Income-tax Act relating to
special provision for computing profits and gains of profession on presumptive basis.
Sub-section (1) of the said section provides that notwithstanding anything contained in
sections 28 to 43C, in the case of an assessee, being a resident in India engaged in a
profession referred to in sub-section (1) of section 44AA and whose total gross receipts do
not exceed fifty lakh rupees in a previous year, a sum equal to fifty per cent. of the total
gross receipts of the assessee in the previous year on account of such profession, or as the
case may be, a sum higher than the aforesaid sum claimed to have been earned by the
assessee, shall be deemed to be the profits and gains of such profession chargeable to tax
under the head “profits and gains of business of profession”.
It is proposed to amend the said sub-section so that the assessee referred to therein shall,
inter alia, mean an individual, Hindu undivided family or a partnership firm other than a
Limited Liability Partnership as defined under clause (n) of sub-section (1) of section 2 of
Limited Liability Partnership Act, 2008.
This amendment will come into force from 1st April, 2021 and will, accordingly, apply
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Clause 13 of the Bill seeks to amend section 44DB of the Income-tax Act relating to
special provision for computing deductions in the case of business reorganisation of co-
operative banks.
The said section, inter alia, provides that where business reorganisation of co-operative
banks takes place, the deductions under section 32, 35D, 35DD and 35DDA shall be
apportioned between the predecessor co-operative bank and the successor co-operative bank
in the proportion of the number of days before and after the date of business reorganisation.
It is proposed to expand the scope of the said section so as to include conversion of a

primary co-operative bank to a banking company under its ambit.
It is also proposed to define the expressions “banking company”, “converted banking

company”, “conversion” and “primary co-operative bank” and to make consequential
amendment to the definition of “predecessor co-operative bank”.
Clause 14 of the Bill seeks to amend section 45 of the Income-tax Act relating to Capital
gains.
The aforesaid section inter alia, provides that any profits or gains arising from the
transfer of a capital asset shall be chargeable to income-tax under the head “Capital gains”
and shall be deemed to be the income of the previous year in which such transfer took place.
Further, sub-section (4) of the said section, provides that the profits or gains arising from
the transfer of a capital asset by way of distribution of capital assets on the dissolution of a
firm or other association of persons or body of individuals (not being a company or a co-
operative society) or otherwise, shall be chargeable to tax as the income of the firm,
association or body, of the previous year in which the said transfer takes place.
It is proposed to insert sub-clause (1B) so as to provide that notwithstanding anything

contained in sub-section (1), where any person receives at any time during any previous
year any amount under a unit linked insurance policy, to which exemption under clause
(10D) of section 10 does not apply on account of the applicability of the fourth and fifth
proviso thereof, including the amount allocated by way of bonus on such policy, then, any
profits or gains arising from receipt of such amount by such person shall be chargeable to
income-tax under the head "Capital gains" and shall be deemed to be the income of such
person of the previous year in which such amount was received and the income taxable
shall be calculated in such manner as may be provided by rules.
It is further proposed to substitute sub-section (4) in the said section so as to provide that
where a specified person receives during the previous year any capital asset at the time of
its dissolution or reconstitution of the specified entity, which represents the balance in his
capital account in the books of accounts of such specified entity at the time of dissolution or
reconstitution, then any profits or gains arising from receipt of such capital asset by the
specified person shall be chargeable to income-tax as income of such specified entity under
the head "Capital gains" and shall be deemed to be the income of such specified entity of
the previous year in which such capital asset was received by the specified person.
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It is also proposed to amend the section to provide that fair market value of the capital
asset on the date of such receipt shall be deemed to be the full value of the consideration
received or accruing as a result of the transfer of such capital asset.
It is also proposed to amend the section to provide that the cost of acquisition of the
capital asset shall be determined in accordance with the provisions of this Chapter.
It is also proposed to amend the section to provide that the balance in the capital account
of the specified person in the books of account of the specified entity is to be calculated
without taking into account increase in the capital account of the specified person due to
revaluation of any asset or due to self-generated goodwill or any other self-generated asset.
It is also proposed to amend the section to define the expressions “self-generated

goodwill” and “self-generated assets”, “specified entity” and “specified person”.
It is also proposed to insert sub-section (4A) in the said section so as to provide that
where a specified person receives during the previous year any money or other asset at the
time of dissolution or reconstitution of the specified entity, which is in excess of the balance
in his capital account in the books of accounts of such specified entity at the time of its
dissolution or reconstitution, then any profits or gains arising from receipt of such money or
other asset by the specified person shall be chargeable to income-tax as income of such
specified entity under the head "Capital gains" and shall be deemed to be the income of such
specified entity of the previous year in which such money or other asset was received by
the specified person.
It is also proposed to amend the section to provide that value of any money or the fair
market value of other asset on the date of such receipt shall be deemed to be the full value
of the consideration received or accruing as a result of the transfer of such capital asset.
It is also proposed to amend the section to provide that the balance in the capital account
of the specified person in the books of accounts of the specified entity at the time of its
dissolution or reconstitution shall be deemed to be the cost of acquisition and the balance in
the capital account of the specified person in the books of account of the specified entity is
to be calculated without taking into account increase in the capital account of the specified
person due to revaluation of any asset or due to self-generated goodwill or any other self-
generated asset.
It is also proposed to amend the section to provide that for the purpose of this sub-
section, the expressions “specified entity”, “self-generated goodwill”, “self-generated asset”
and "specified person" shall have the meaning assigned to them in sub-section (4) of the
Act.
transactions not regarded as transfer.
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The said section, inter alia, provides that any transfer of a capital asset by the
predecessor co-operative bank to the successor co-operative bank in a case of business
reorganisation shall not be regarded as transfer.
It is proposed to amend clause (vica) of the said section to expand the scope of the said
clause so as to provide that any transfer of a capital asset by the primary co-operative bank
which has been converted into a banking company as a result of conversion shall not be
considered as transfer for the purposes of capital gains.
Further, it is also proposed to amend clause (vicb) of the said section so as to provide
that the allotment of shares of the converted banking company to the shareholders of the
predecessor co-operative bank as a result of this conversion shall not be treated as transfer
for the purposes of capital gains.
It is also proposed to amend the Explanation to clause (vicb) of the said section so as to
provide that the expression “converted banking company” shall have the meaning assigned
to it in section 44DB.
It is proposed to insert new clauses (viiac) and (viiad) in the said section so as to provide
that any transfer, in relocation, of a capital asset by the original fund to the resultant fund
shall not be considered as transfer for the purpose of Capital gains tax. It is further proposed
that the allotment of shares of the resultant fund to the shareholders of the original fund as
a result of this relocation shall not be treated as transfer for the purpose of capital gains.
It is also proposed to define the expressions “original Fund”, “relocation” and “resultant
fund”.
Clause 16 of the Bill seeks to amend section 48 of the Income-tax Act relating to mode
of computation for income chargeable under the head capital gains.
The section inter alia, provides for computation of capital gains arising out of transfer
of a capital asset by deducting from the full value consideration received or accruing as a
result of such transfer, the amounts of expenditure incurred wholly and exclusively for such
transfer and cost of acquisition as well as cost of any improvement thereto.
It is proposed to insert clause (iii) in the said section so as to provide in case of specified
entity referred to in sub-section (4A) of section 45, the amount included in the total income
of such specified entity under sub-section (4A) of section 45 which is attributable to the
capital asset being transferred, calculated in the prescribed manner, shall be reduced from
full value of consideration received or accruing as a result of transfer of the capital asset.
This amendment shall come into effect from the 1st day of April, 2021 and shall
accordingly apply to assessment year 2021-2022 and subsequent assessment years.
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Clause 17 of the Bill seeks to amend section 49 of the Income-tax Act relating to cost
with reference to certain modes of acquisition.
Sub-section (1) of the said section provides that where the capital asset became the
property of the assessee under certain situations, the cost of acquisition of the asset shall be
deemed to be the cost for which the previous owner of the property acquired it, as increased
by the cost of any improvement of the assets incurred or borne by the previous owner or the
assessee, as the case may be.
It is proposed to amend sub-clause (e) of clause (iii) of the said sub-section so as to

include the transfer referred to in clause (viiac) and (viiad) of section 47 also within the
purview of that sub-section (1).
This amendment will take effect from 1st April, 2022 and will, accordingly, apply
Clause 18 of the Bill seeks to amend section 50 of the Income–tax Act relating to special
provision for computation of capital gains in case of depreciable assets.
The said section, inter alia, provides for certain conditions for the applicability of
provisions of sections 48 and 49 for computation of capital gains in case of depreciable
assets, where the capital asset is an asset forming part of a block of asset in respect of which
depreciation has been allowed under the said Act.
It is proposed to insert a proviso in the said section so as to provide that in a case where
goodwill of a business or profession forms part of a block of asset for the assessment year
beginning on the 1st day of April, 2020 and depreciation thereon has been obtained by the
assessee under the Act, the written down value of that block of asset and short term capital
gain, if any, shall be determined in such manner as may be prescribed.
Clause 19 of the Bill seeks to amend section 54GB of the Income-tax Act relating to
capital gain on transfer of residential property not to be charged in certain cases.
The provisions of the said section, inter alia, provide for roll over benefit in respect of
capital gain arising from the transfer of a long-term capital asset, being a residential property
owned by the eligible assessee. In order to get benefit of this provision, the assessee is
required to utilise the net consideration for subscription in the equity shares of an eligible
company before the due date of filing of the return of income. Currently the benefit of this
section is only available for investment in the equity shares of eligible start-ups upto 31st
March 2021.
It is proposed to amend the proviso to sub-section (5) of the said section so as to provide
that in case of an eligible start-up, the capital gains arising from transfer of residential
property made upto 31st March, 2022 shall be eligible for the benefit under the said section.

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Clause 20 of the Bill seeks to amend section 55 of the Income –tax Act relating to
meaning of “adjusted”, “cost of improvement” and “cost of acquisition”.
Clause (a) of sub-section (2) of the said section provides that for the purposes of sections
48 and 49, "cost of acquisition" in relation to a capital asset, being goodwill of a business or
a trade mark or brand name associated with a business or a right to manufacture, produce or
process any article or thing or right to carry on any business or profession, tenancy rights,
stage carriage permits or loom hours,—
(i) in the case of acquisition of such asset by the assessee by purchase from a previous
owner, means the amount of the purchase price; and
(ii) in any other case [not being a case falling under sub-clauses (i) to (iv) of sub-section
(1) of section 49], shall be taken to be nil ;
It is proposed to substitute the said clause so as to provide that in relation to a capital

asset, being goodwill of a business or profession, or a trade mark or brand name associated
with a business or profession, or a right to manufacture, produce or process any article or
thing, or right to carry on any business or profession, or tenancy rights, or stage carriage
permits, or loom hours,—
(i) in the case of acquisition of such asset by the assessee by purchase from a previous
owner, means the amount of the purchase price; and
(ii) in the case falling under sub-clause (i) to (iv) of sub-section (1) of section 49 and
where such asset was acquired by the previous owner (as defined in that section) by
purchase, means the amount of the purchase price for such previous owner; and
(iii) in any other case, shall be taken to be nil.
It is also proposed to provide therein that in case of goodwill of business or profession

acquired by the assessee by way of purchase from a previous owner (either directly or
through modes specified under sub-clause (i) to (iv) of sub-section (1) of section 49) and
any deduction on account of depreciation under section 32 of the said Act has been obtained
by the assessee in any previous year preceding the previous year relevant to the assessment
year commencing on or after the 1st day of April, 2021, then the cost of acquisition will be
the purchase price as reduced by the depreciation so obtained by the assessee before the
previous year relevant to the assessment year commencing on the 1st day of April, 2021.
relation to assessment year 2021-2022 and subsequent assessment years.
Clause 21 of the Bill seeks to amend section 56 of the Income-tax Act relating to income
from other sources.
Sub-clause (b) of clause (x) of sub-section (2) of the said section, inter alia, provides
that where any person receives any immovable property in any previous year from any
person or persons on or after the 1st day of April, 2017 for a consideration, and where the
stamp duty value of such property exceeds ten per cent. of the consideration and the excess
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amount thereof is more than fifty thousand rupees, it shall be charged to tax under the head
income from other sources.
It is proposed to insert a fourth proviso to the said clause so as to provide that in case of
property being referred to in the second proviso to sub-section (1) of section 43CA, the
provisions of sub-item (ii) of item (B) of the said clause shall have the effect as if for the
words “ten per cent.”, the words “twenty per cent.” had been substituted.
Clause (x) of sub-section (2) of the said section, inter alia, provides that the assets
received without or inadequate consideration shall be charged to tax under the head “Income
from other sources”.
It is proposed to amend the proviso to said clause of the said sub-section so as to

exclude the transfer of capital asset between the original Fund and the resultant fund, which
are not regarded as transfer under clause (viiac) or clause (viiad) of section 47, from the
scope of clause (x) of the said sub-section.
Clause 22 of the Bill seeks to amend section 72A of the Income-tax Act relating to
provisions relating to carry forward and set off of accumulated loss and unabsorbed
depreciation allowance in amalgamation or demerger, etc.
Sub-section (1) of the said section provides that the accumulated loss and unabsorbed
depreciation of the amalgamating company or companies shall be deemed to be the
accumulated losses and unabsorbed depreciation of the amalgamated company or companies
in specified cases and subject to the conditions specified in the said section.
Clause (c) of the said sub-section, inter alia, provides that where there has been
amalgamation of one or more public sector company or companies engaged in the business
of operation of aircraft with one or more public sector company or companies engaged in
similar business then notwithstanding anything contained in any other provisions of the said
Act, the accumulated loss and the unabsorbed depreciation of the amalgamating company
shall be deemed to be the loss or, as the case may be, the allowance for unabsorbed
depreciation of the amalgamated company for the previous year in which the amalgamation
was effected.
It is proposed to substitute the said clause so as to provide that in case of amalgamation

of one or more public sector company or companies with one or more public sector company
or companies, the accumulated loss and the unabsorbed depreciation of the amalgamating
company shall be deemed to be the loss, or as the case may be, the allowance for unabsorbed
depreciation of the amalgamated company for the previous year in which the amalgamation
was effected.
It is further proposed to insert a new clause (d) to the said sub-section so as to provide
that in case of amalgamation of an erstwhile public sector company with one or more
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company or companies, if the share purchase agreement entered into under strategic
disinvestment restricted immediate amalgamation of the said public sector company and the
amalgamation is carried out within five years from the end of the previous year in which the
restriction on amalgamation in the share purchase agreement ends, the accumulated loss and
the unabsorbed depreciation of the amalgamating company shall be deemed to be the loss
or, as the case may be, allowance for unabsorbed depreciation of the amalgamated company
for the previous year in which the amalgamation was effected, and other provisions of the
said Act relating to set off and carry forward of loss, and the allowance for depreciation shall
apply accordingly.
It is also proposed to insert a proviso to the said sub-section so as to provide that the
accumulated loss and the unabsorbed depreciation of the amalgamating company, in case of
an amalgamation referred to in clause (d), which is deemed to be loss or, as the case may
be, allowance for unabsorbed depreciation of the amalgamated company, shall not be more
than the accumulated loss and unabsorbed depreciation of the public sector company as on
the date on which the public sector company ceases to be a public sector company as a result
of strategic disinvestment.
It is also proposed to insert an Explanation to define the expressions “control”,

“erstwhile public sector company” and “strategic disinvestment” for the purposes of clause
(d) of the said sub-section.
Clause 23 of the Bill seeks to amend section 79 of the Income-tax Act relating to carry
forward and set off of losses in case of certain companies.
Sub-section (1) of the said section provides that where a change in shareholding has
taken place during the previous year in the case of a company, not being a company in which
the public are substantially interested, no loss incurred in any year prior to the previous year
shall be carried forward and set off against the income of the previous year, unless on the
last day of the previous year, the shares of the company carrying not less than fifty-one per
cent. of the voting power were beneficially held by persons who beneficially held shares of
the company carrying not less than fifty-one per cent. of the voting power on the last day of
the year or years in which the loss was incurred. Further sub-section (2) of said section
provides that the exceptions to the above provision contained in the said sub-section.
It is proposed to insert a new clause in sub-section (2) to the said section so as to

provide that nothing contained in the section shall apply to a case to the extent that a change
in the shareholding takes place during the previous year on account of relocation referred to
in the Explanation to clause (viiac) and (viiad) of section 47.
Clause 24 of the Bill seeks to amend section 80EEA of the Income-tax Act relating to
deduction in respect of interest on loan taken for certain house property.
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The said section, inter alia, provides for deduction in respect of interest on loan taken
for a residential house property from any financial institution up to one lakh fifty-thousand
rupees subject to the condition that the loan has been sanctioned during the period beginning
on 1st April, 2019 and ending on 31st March, 2021. This is subject to further condition that
the stamp duty value of residential house property does not exceed forty-five lakh rupees
and the assessee does not own any residential house property on the date of sanction of loan.
It is proposed to amend sub-section (3) of the said section so as to provide that the
deduction under section 80EEA in respect of interest paid on loan sanctioned by a financial
institution for acquisition of a residential house property, shall be available if the loan has
been sanctioned during the period beginning on 1st April, 2019 and ending on 31st March,
2022, subject to other conditions specified in the said section.
Clause 25 of the Bill seeks to amend section 80-IAC of the Income-tax Act relating to
special provision in respect of specified business.
The existing provisions of the section 80-IAC of the said Act, inter alia, provide for a
deduction of an amount equal to one hundred per cent. of the profits and gains derived from
an eligible business by an eligible start-up for three consecutive assessment years out of ten
years at the option of the assessee subject to the condition that the total turnover of its
business does not exceed one hundred crore rupees for an eligible start-up incorporated on
or after the 1st day of April, 2016 but before the 1st day of April, 2021.
It is proposed to extend the period of incorporation of such eligible start-ups till 1st day
of April, 2022.
This amendment will take effect from the 1st April, 2021.
Clause 26 of the Bill seeks to amend section 80-IBA of the Income-tax Act relating to
deductions in respect of profits and gains from housing project.
The provisions of sub-section (1) of the said section provides for hundred per cent.
deductions of the profits and gains derived from the business of developing and building
affordable housing project subject to certain conditions. Further the provisions of clause (a)
of sub-section (2) of said section provide that the housing project shall be approved by the
competent authority after 1st June, 2016 but on or before 31st March, 2021.
It is proposed to insert sub-section (1A) in the said section so as to provide for hundred
per cent. deductions of the profits and gains derived from the business of developing and
building affordable rental housing project.
It is further proposed to amend clause (a) of sub-section (2) so as to allow the deduction
in respect of profits and gains derived from the business of developing and building housing
project for hundred per cent. of the profits and gains derived from the business of developing
and building such project approved by the competent authority after 1st day of June, 2016
but on or before 31st March, 2022.
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It is also proposed to insert a new clause (da) in sub-clause (6) to define the expression
“rental housing project”.
Clause 27 of the Bill seeks to amend section 80LA of the Income-tax Act relating to
deduction in respect certain incomes of Offshore Banking Units and International Financial
Services Centre.
The provisions of the said section, inter alia, provides that where the gross total
income of an assessee, (i) being a scheduled bank, or, any bank incorporated by or under the
laws of a country outside India; and having an Offshore Banking Unit in a Special Economic
Zone; or (ii) being a Unit of an International Financial Services Centre, includes any income
referred to in sub-section (2), there shall be allowed, in accordance with and subject to the
provisions of this section, a deduction from such income, of an amount equal to (a) one
hundred per cent. of such income for such assessment years mentioned in sub-section(1) and
sub-section(1A) of that section respectively.
It is proposed to amend the provisions of said sub-section (1A) so as to provide that

deduction can also be claimed if permission or registration under the International Financial
Services Centre Authority Act, 2019 was obtained.
Further sub-section (2) of the said section provides for the incomes which are eligible
for deduction under the said section.
It is proposed to amend the provisions of said sub-section (2) of the said section by
inserting new clause (d) so as to provide that the income from transfer of an asset ,being an
aircraft or aircraft engine which was leased by a unit referred to in clause (c) to a domestic
company engaged in the business of operation aircraft before such transfer subject to the
condition that the unit has commenced operation on or before the 31st day of 2024 shall
also be eligible for deduction.
Further sub-section (3) of the said section provides that no deduction under that
section shall be allowed unless the assessee furnishes the report by an accountant certifying
correct claim of deduction and a copy of permission obtained under clause (a) of sub-
section (1) of section 23 of the Banking Regulation Act, 1949.
It is proposed to amend clause (ii) of sub-section (3) of the said section so as to

provide that in case the unit is registered under the International Financial Services Centre
Authority Act, 2019 then the copy of permission shall mean a copy of the permission or
registration obtained under the International Financial Services Centre Authority Act, 2019.
in relation to the assessment year 2022-2023 and subsequent assessment year.
Clause 28 of the Bill seeks to insert a new section 89A in the Income-tax Act relating to
relief from taxation in income from retirement benefit account maintains in a notified
country.
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The proposed new section provides that the income of a specified person from specified
account shall be taxed in such manner and for such year as may be provided by rules and
also defines the expressions “specified person”, “specified account” and “notified country”.
Clause 29 of the Bill seeks to amend section 112A of the Income-tax Act relating to tax
on long-term capital gains in certain cases.
Explanation to the said section, inter alia, provides for the definition of the expression
“equity oriented fund”.
It is proposed to amend the said Explanation to the section so as to include a fund set up
under a scheme of an insurance company comprising unit linked insurance policies to which
exemption under clause (10D) of section 10 does not apply on account of the applicability
of the fourth and fifth proviso thereof within the definition of “equity oriented fund”.
Clause 30 of the Bill seeks to amend section 115AD of the Income-tax Act relating to
tax on income of Specified Fund or Foreign Institutional Investors from securities or capital
gains arising from their transfer.
It is proposed to amend the said section so as to provide that income of investment

division of an offshore banking unit of a non-resident from securities or capital gains arising
from their transfer shall also be taxed at the rate of ten per cent. under the provisions of the
said section.
It is further proposed to insert a new sub-section (1B) in the said section so as to

provide investment division of an offshore banking unit, the provision of this section shall
apply to the extent of income that is attributable to the investment division of such banking
unit referred to in sub-clause (ii) of clause (c) to the Explanation to clause (4D) of section
10 as a Category-III portfolio investor under the Securities and exchange Board of India
(Foreign Portfolio investors) Regulations, 2019 made under the Securities And Exchange
Board of India Act, 1992, calculated in the prescribed manner.
It is also proposed to define the expression “investment division of an offshore

banking unit”.
Clause 31 of the Bill seeks to amend section 115JB of the Income-tax Act relating to
special provision for payment of tax by certain company.
The said section provides for levy of tax on the basis of book profit which is determined
after making certain adjustments to the net profit disclosed in the profit and loss account
prepared in accordance with the provisions of the Companies Act, 2013.
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Clause (iid) of Explanation 1 of the said section provides that the amount of income in
the nature of capital gains, interest, royalty or fee for technical services accruing or arising
to an assessee, being a foreign company, will be reduced from the book profit if such income
is credited to the statement of profit and loss and tax on such income is at a rate less than the
rate specified under that section. Further such assessee will be allowed expenses relatable to
such income mentioned in the said clause under sub-clause (B) of clause (fb) of the said
Explanation.
It is proposed to amend the said clause (fb) and clause (iid), occurring in the long line of
Explanation 1, so as to provide similar relief to dividend as already there for capital gains,
interest, royalty and fee for technical services as provided in these clauses.
It is further proposed to insert a new sub-section (2D) in the said section so as to provide
that where in the case of the company there is an increase in book profit of the previous year
due to income of past year or years included in the book profit on account of an advance
pricing agreement entered into by the assessee under section 92CC or on account of
secondary adjustment required to be made under section 92CE, the Assessing Officer shall,
on an application made to him in this behalf by the asssessee, recompute the book profit of
the past year or years and tax payable, if any, by the assessee during the previous year under
sub-section (1), in such manner as may be provided by rules and the provisions of section
154 shall, so far as may be, apply and the period of four years specified in sub-section (7)
of that section shall be reckoned from the end of the financial year in which the said
Clause 32 of the Bill seeks to amend the section 139 of the Income-tax Act relating to
return of income.
The said section provides for the filing of return of income for different persons or class
of persons and time-limits for doing so.
It is proposed to amend sub-clause (iii), in clause (a), in Explanation 2, in sub-section

(1) of the said section so as to provide that the due date for filing return of income for the
spouse of the partner of a firm, if the governed by the provisions of section 5A of the said
Act, shall be 31st October of the assessment year.
It is further proposed to amend clause (aa) of the said Explanation so as to provide that
the due date for filing of return of income for partners of a firm, which is required to furnish
report referred to in section 92E, shall be 30th November of the assessment year.
It is also proposed to amend sub-section (4) of the said section so as to provide that any
person who has not furnished a return of income within the due date as per sub-section (1)
of the said section may furnish a return for any previous year at any time within three
months prior to the end of the relevant assessment year or before the completion of the
It is also proposed to amend sub-section (5) of the said section so as to provide that a
275
return of income filed under sub-sections (1) or (4) can be revised at any time within three
months prior to the end of the relevant assessment year or before the completion of the
It is also proposed to insert proviso before the Explanation to sub-section (9) of the said
section so as to provide that the Board may specify, by notification, that any of the
conditions specified in clauses (a) to (f) of the said Explanation shall not apply to such class
of assessees or shall apply with such modifications, as may be specified in such notification.
These amendments will take effect from lst April, 2021 and will, accordingly, apply in
inquiry before assessment.
Clause (i) of sub-section (1) of the said section empowers only the Assessing Officer to
serve notice to an assessee requiring him to file return of income.
It is proposed to insert a second proviso in the said clause so as to empower the

prescribed income-tax authority also to serve notice under clause (i) of sub-section (1) of
the said section for the purposes of that clause.
This amendment will take effect from lst day of April, 2021.
assessment.
Sub-clause (iv) of clause (a) of sub-section (1) of section 143 of the said Act provides
for adjustment on account of disallowance of expenditure indicated in the audit report but
not taken into account in calculating the total income of the assessee.
It is proposed to amend the said sub-clause so as to allow for the adjustment on account
of increase in income indicated in the audit report but not taken into account in computing
the total income.
Sub-clause (v) of clause (a) of sub-section (1) of the said section provides that any
deduction admissible under sections 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or section
80-IE, shall be allowed if the return of income is furnished on or before the due date specified
under sub-section (1) of section 139 of the Act.
It is proposed to amend the said sub-clause so as to provide that any deduction

admissible under section 10 AA or under any of the provisions of Chapter VIA under the
heading “C.—Deductions in respect of certain incomes” shall be allowed, if the return of
income is furnished on or before the due date specified under the sub-section (1) of section
139 of the said Act.
It is also proposed to amend the said section so as to reduce the time limit specified
for sending intimation under sub-section (1) from one year to nine months and to reduce
the time limit for sending notice under sub-section (2) from six months to three months
from the end of the financial year in which the return is furnished.
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income escaping assessment.
It is proposed to substitute the said section so as to provide that if any income chargeable to
tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing
officer may, subject to the provisions of sections 148 to 153, assess or reassess such income and
also any other income chargeable to tax which has escaped assessment and which comes to his
notice subsequently in the course of the proceedings under this section, or recompute the loss or
the depreciation allowance or any other allowance, as the case may be, for such assessment year.
Clause 36 of the Bill seeks to amend section 148 of the Income-tax Act relating to issue
of notice where income has escaped assessment.
It is proposed to substitute the said section so as to provide that before making the
assessment, reassessment or recomputation under section 147, and subject to the
provisions of section 148A, the Assessing Officer shall serve on the assessee a notice along
with a copy of order passed under clause (d) of section 148A, requiring him to furnish
within such period, as may be specified in such notice, a return of his income or the income
of any other person in respect of which he is assessable under this Act during the previous
year corresponding to the relevant assessment year, in the prescribed form and verified in
the prescribed manner and setting forth such other particulars as may be prescribed; and
the provisions of this Act shall, so far as may be, apply accordingly as if such return were
a return required to be furnished under section 139, provided that no notice under the said
section shall be issued unless there is information with the Assessing Officer which
suggests that the income chargeable to tax has escaped assessment in the case of the
assessee for the relevant assessment year and prior approval of the specified authority to
issue such notice has been obtained by the Assessing Officer. The proposed Explanation
1 to the said section provides for the purposes of the said section and section 148A, that
information which suggests that the income chargeable to tax has escaped assessment
means any information flagged in the case of the assessee for the relevant assessment year
in accordance with the risk management strategy formulated by the Board from time to
time or any final objection raised by the Comptroller and Auditor General of India to the
effect that the assessment in the case of the assessee for the relevant assessment year has
not been made in accordance with the provisions of this Act. The proposed Explanation 2
provides that where (i) a search is initiated under section 132 or books of account, other
documents or any assets are requisitioned under section 132A, on or after the 1st day of
April,2021, in the case of the assessee; or (ii) survey is conducted under section 133A in
the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval
of Principal Commissioner or Commissioner, that any money, bullion, jewellery or other
valuable article or thing, seized or requisitioned in case of any other person on or after the
1st day of April, 2021, belongs to the assessee; or (iv) the Assessing officer is satisfied,
with the prior approval of Principal Commissioner or Commissioner, that any books of
account or documents, seized or requisitioned in case of any other person on or after the
1st day of April, 2021, pertains or pertain to, or any information contained therein, relate
to, the assessee, the Assessing officer shall be deemed to have information which suggests
that the income chargeable to tax has escaped assessment in the case of the assessee for
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the three assessment years immediately preceding the assessment year relevant to the
previous year in which the search is initiated or books of account, other documents or any
assets are requisitioned or survey is conducted or money, bullion, jewellery or other
valuable article or thing or books of account or documents are seized or requisitioned in
case of any other person. The proposed Explanation 3 provides that the “specified
authority” shall mean the specified authority referred to in section 151.
Clause 37 of the Bill seeks to insert a new section 148A in the Income-tax Act relating
to Conducting inquiry, providing opportunity before issue of notice under section 148.
It is proposed to insert a new section 148A, which seeks to provide that the Assessing
Officer shall, before issuing any notice under section 148, - (a) conduct any enquiry, if
required, with the prior approval of specified authority, with respect to the information
which suggests that income chargeable to tax has escaped assessment; (b) provide an
opportunity of being heard to the assessee, with the prior approval of specified authority,
by serving upon him a notice to show cause within such time, as may be specified in the
notice, being not less than seven days but not exceeding thirty days from the date on which
such notice is issued, or such time, as may be extended by him on the basis of an
application in this behalf, as to why a notice under section 148 should not be issued on the
basis of information which suggests that income chargeable to tax has escaped assessment
in his case for the relevant assessment year and results of enquiry conducted, if any, as per
clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-
cause notice referred to in clause (b); and (d) decide, on the basis of material available on
record including reply of the assessee, whether or not it is a fit case to issue a notice under
section 148, by passing an order, with the prior approval of specified authority, within one
month from the end of the month in which the reply referred to in clause (c) is received by
him, or where no such reply is furnished, within one month from the end of the month in
which time or extended time allowed to furnish a reply as per clause (b) expires, provided
that the provisions of this sub-section shall not apply in a case, where a search is initiated
under section 132 or books of account, other documents or any assets are requisitioned
under section 132A in the case of the assessee on or after the 1st day of April, 2021 or the
Assessing officer is satisfied, with the prior approval of the Principal Commissioner or
Commissioner that any money, bullion, jewellery or other valuable article or thing, seized
in a search under section 132 or requisitioned under section 132A, in the case of any other
person on or after the 1st day of April, 2021, belongs to the assessee; or the Assessing
officer is satisfied, with the prior approval of the Principal Commissioner or
Commissioner that any books of account or documents, seized in a search under section
132 or requisitioned under section 132A, in case of any other person on or after the 1st
day of April, 2021, pertains or pertain to, or any information contained therein, relates to,
the assessee. Explanation 3 to the said section provides that “Specified authority” shall
mean specified authority referred to in section 151.
Clause 38 of the Bill seeks to amend section 149 of the Income-tax Act relating to time
limit for notice.
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It is proposed to substitute the said section so as to provide that no notice under section 148
shall be issued for the relevant assessment year - (a) if three years have elapsed from the end of the
relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than
ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer
has in his possession books of accounts or other documents or evidence which reveal that the
income chargeable to tax, represented in the form of asset, which has escaped assessment amounts
to or is likely to amount to fifty lakh rupees or more for that year. Provided that no notice under
section 148 shall be issued at any time in a case for the relevant assessment year beginning on or
before 1st day of April, 2021, if such notice could not have been issued at that time on account of
being beyond the time limit prescribed under the provisions of clause (b), as they stood immediately
before the commencement of the Finance Act, 2021. Further, the provisions of this section shall not
apply to cases where a notice under section 153A or section 153C read with section 153A is required
to be issued in relation to a search initiated under section 132 or books of account, other documents
or any assets requisitioned under section 132A on or before the 31st day of March, 2021 and for the
purposes of computing the period of limitation as per this section, the time or extended time allowed
to the assessee, as per show-cause notice under clause (b) of section 148A; or the period during
which the proceeding under section 148A is stayed by an order or injunction of any court shall be
excluded and also where immediately after the exclusion of such period, the period of limitation
available to the Assessing Officer for passing an order under clause (d) of section 148A is less than
seven days, such remaining period shall be extended to seven days and the period of limitation in
sub-section (1) shall be deemed to be extended accordingly.
Clause 39 of the Bill seeks to substitute of a new section for section 151 relating to
sanction for issue of notice.
It is proposed to substitute the said section so as to provide that for the purpose of section 148,
specified authority shall be (i) Principal Commissioner of Income-tax or Principal Director of
Income-tax or Commissioner of Income-tax or Director of Income-tax, if three years or less than
three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief
Commissioner of Income-tax or Principal Director General of Income-tax, or where there is no
Principal Chief Commissioner of Income-tax or Principal Director General of Income-tax, Chief
Commissioner of Income-tax or Director General of Income-tax, if more than three years have
elapsed from the end of the relevant assessment year.
faceless assessment of income escaping assessment.
It is proposed to amend the said section so as to provide that conducting of enquiries

or issuing show-cause notice or passing order under section 148A (before issuance of
notice under section 148) in the scheme to be notified as specified under the said section.
Clause 41 of the Bill seeks to amend section 153 of the Income-tax Act relating to time
limit for completion of assessment, reassessment and recomputation.
The said section provides for the time-limit for completion of assessment, reassessment
and recomputation in certain cases mentioned therein.
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It is proposed to amend sub-section (1) of the said section to insert the third proviso so
as to provide that for the assessment year commencing on or after the 1st April, 2021, the
time limit for making an assessment order under sections 143 or 144 shall be reduced from
the existing twenty-one months to nine months from the end of the assessment year in which
the income was first assessable.
This amendment will take effect from lst April, 2021.
assessment in case of search or requisition.
It is proposed to amend the said section so as to provide that the search or requisition shall
only apply where search or requisition is made on or before 31st March, 2021. Consequently,
assessments under section 153A and 153C shall not be made in respect of a search or requisition
made on or after 1st April, 2021.
Clause 43 of the Bill seeks to amend section 153C of the Income-tax Act relating to
assessment of income of any other person.
It is proposed to amend the said section so as to insert sub-section (3) therein to provide that
nothing contained in the said section shall apply in relation to a search initiated under section 132
or books of account, other documents or any assets requisitioned under section 132A on or after
1st day of April, 2021.
dividends.
The said section provides for deduction of tax at source on payment of dividends by an
Indian company including dividends on preference shares within India. The second proviso
to the said section provides that the provisions of that section shall not apply to such income
credited or paid to certain insurance companies or insurers.
It is proposed to amend the second proviso to the said section to provide that the
provisions of that section shall not apply to such income credited or paid to a business trust
as defined in clause (13A) of section 2 by a special purpose vehicle referred to in the
Explanation to clause (23FC) of section 10 or any other person as may be notified by the
Central government in this behalf.
This amendment will take effect retrospectively from 1st April, 2020.
interest other than “Interest on securities”.
Sub-section (3) of the said section provides that the provisions of sub- section (1) of that
section relating to deduction of tax on income by way of interest other than interest on
securities, shall not apply.
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It is proposed to include infrastructure debt fund also within the purview of clause (x) of
the said sub-section so as to provide that tax shall not be deducted on income in relation to
a zero coupon bond issued by infrastructure debt fund.
Clause 46 of the Bill seeks to amend section 194-IB of the of the Income-tax Act, relating
to payment of rent by certain individuals or Hindu undivided family.
Sub-section (1) of the said section provides that any person, being an individual or a
Hindu undivided family (other than those referred to in the second proviso to section 194-
I), responsible for paying to a resident any income by way of rent exceeding fifty thousand
rupees for a month or part of a month during the previous year, shall deduct an amount equal
to five per cent. of such income as income-tax thereon.
Sub-section (4) of the said section provides that in a case where the tax is required to be
deducted as per the provisions of section 206AA, such deduction shall not exceed the
amount of rent payable for the last month of the previous year or the last month of the
tenancy, as the case may be.
It is proposed to amend the said sub-section (4) so as to insert section 206AB for the
purposes of the said sub-section.
Clause 47 of the Bill seeks to insert a new section 194P of the Income-tax Act relating
to deduction of tax in case of specified senior citizen.
Sub-section (1) of the said section seeks to provide that notwithstanding anything
contained in the provisions of Chapter XVII-B, in case of a specified senior citizen, the
specified bank shall, after giving effect to the deduction allowable under Chapter VI-A and
rebate allowable under section 87A, compute the total income of such specified senior
citizen for the relevant assessment year and deduct income-tax on such total income on the
basis of the rates in force.
Sub-section (2) of the said section seeks to provide that the provisions of section
139 shall not apply to a specified senior citizen for the assessment year relevant to the
previous year in which the tax has been deducted under sub-section (1).
Explanation to the said section seeks to define the following expressions for the purposes
of the said section,––
(a) “specified bank” means a banking company as the Central Government may, by
notification in Official Gazette, specify;
(b) “specified senior citizen” means an individual, being a resident in India–
(i) who is of the age of seventy-five years or more at any time during the previous year;
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(ii) who is having income of the nature of pension and no other income except the
income of the nature of interest received or receivable from any account maintained by such
individual in the same specified bank in which he is receiving his pension income; and
(iii) has furnished a declaration to the specified bank containing such particulars, in such
form and verified in such manner, as may be prescribed.
Clause 48 of the Bill seeks to insert a new section 194Q in the Income-tax Act relating
the deduction of tax at source on payment of certain sum for purchase of goods.
Sub-section (1) of the proposed new section seeks to provide that any person, being a
buyer who is responsible for paying any sum to any resident (hereafter in this section
referred to as the seller) for purchase of any goods of the value or aggregate of such value
exceeding fifty lakh rupees in any previous year, shall, at the time of credit of such sum to
the account of the seller or at the time of payment thereof by any mode, whichever is earlier,
deduct an amount equal to 0.1 per cent. of such sum exceeding fifty lakh rupees as income-
tax.
The Explanation to the proposed sub-section (1) seeks to define “buyer” to mean a
person whose total sales, gross receipts or turnover from the business carried on by him
exceed ten crore rupees during the financial year immediately preceding the financial year
in which the purchase of goods is carried out, not being a person, as the Central Government
may, by notification in the Official Gazette, specify for this purpose, subject to such
conditions as may be specified therein.
Sub-section (2) thereof section seeks to provide that where any sum referred to in sub-
section (1) is credited to any account, whether called "Suspense account" or by any other
name, in the books of account of the person liable to pay such income, such credit of income
shall be deemed to be a credit of such income to the account of the payee and the provisions
of this section shall apply accordingly.
Sub-section (3) thereof seeks to provide that if any difficulty arises in giving effect to
the provisions of the said section, the Board may, with the previous approval of the Central
Government, issue guidelines for the purpose of removing the difficulty.
Sub-section (4) thereof seeks to provide that every guideline issued by the Board under
sub-section (3) shall be laid before each House of Parliament, and shall be binding on the
income-tax authorities and the person liable to deduct tax.
Sub-section (5) thereof seeks to provide that the provisions of the proposed section shall
not apply to a transaction on which––
(b) tax is collectible under the provisions of section 206C other than a transaction to
which sub-section (1H) of section 206C applies.

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Clause 49 of the Bill seeks to amend section 196D of the Income-tax Act relating to
income of Foreign Institutional Investors from securities.
Sub-section (1) of the said section provides for deduction of tax on any income referred
to in clause (a) of sub-section (1) of section 115AD, not being income by way of interest
referred to in section 194LD of the Income-tax Act, payable to a Foreign Institutional
Investor, being the person responsible for making the payment, at the rate of twenty per cent.
It is proposed to insert a proviso to the said sub-section so as to provide that where an

agreement referred to in sub-section (1) of section 90 or sub-section (1) of section 90A
applies to the payee and if the payee has furnished a certificate referred to in sub-section (4)
of section 90 or sub-section (4) of section 90A, as the case may be, then, income tax thereon
shall be deducted at the rate of twenty per cent. or at the rate or rates of income-tax provided
in such agreement for such income, whichever is lower.
Clause 50 of the Bill seeks to amend section 206AA of the Income-tax Act relating to
requirement to furnish Permanent Account Number.
Sub-section (1) of the said section provides that notwithstanding anything contained in
any other provisions of this Act, any person entitled to receive any sum or income or amount,
on which tax is deductible under Chapter XVIIB (hereafter referred to as deductee) shall
furnish his Permanent Account Number to the person responsible for deducting such tax
(hereafter referred to as deductor), failing which tax shall be deducted at the higher of the
following rates namely, at the rate specified in the relevant provision of this Act; or at the
rate or rates in force; or at the rate of twenty per cent.
It is proposed to insert the second proviso so as to provide that where the tax is required
to be deducted under section 194Q, the provisions of clause (iii) shall apply as if for the
words “twenty per cent.”, the words “five per cent.” had been substituted.
Clause 51 of the Bill seeks to insert section 206AB of the Income-tax Act relating to the
deduction of tax at source on non-filers of income-tax return.
Sub-section (1) of the proposed new section 206AB seeks to provide that
notwithstanding anything contained in any other provisions of this Act, where tax is required
to be deducted at source under the provisions of Chapter XVIIB, other than sections 192,
192A, 194B, 194BB, 194LBCor 194N on any sum or income or amount paid, or payable or
credited, by a person (hereafter referred to as deductee) to a specified person, the tax shall
be deducted at the higher of the following rates, namely, at twice the rate specified in the
relevant provision of the Act; or at twice the rate or rates in force; or at the rate of five per
cent..
Sub-section (2) thereof seeks to provide that if the provision of section 206AA is
applicable to a specified person, in addition to the provision of this section, the tax shall be
deducted at higher of the two rates provided in this section and in section 206AA.
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Sub-section (3) thereof seeks to define the expression “specified person” to mean a
person who has not filed the returns of income for both of the two assessment years relevant
to the two previous years immediately prior to the previous year in which tax is required to
be deducted, for which the time limit of filing return of income under sub-section (1) of
section 139 has expired; and the aggregate of tax deducted at source and tax collected at
source in his case is rupees fifty thousand or more in each of these two previous years.
Proviso to proposed sub-section (3) seeks to provide that the specified person shall not
include a non-resident who does not have a permanent establishment in India.
Explanation to the said section seeks to provide that for the purposes of this sub-section
the expression “permanent establishment” includes a fixed place of business through which
the business of the enterprise is wholly or partly carried on.
Clause 52 of the Bill seeks to insert section 206CCA of the Income-tax Act relating to
specified provisions for the collection of tax at source on non-filers of income-tax return.
Sub-section (1) of the proposed new section 206CCA seeks to provide that
notwithstanding anything contained in any other provisions of this Act, where tax is required
to be collected at source under the provisions of Chapter XVII-BB, on any sum or amount
received by a person (hereafter referred to as collectee) from a specified person, the tax shall
be collected at the higher of the following two rates, namely, at twice the rate specified in
the relevant provision of the Act; or at the rate of five per cent..
Sub-section (2) thereof seeks to provide, that if the provision of section 206CC is
applicable to a specified person, in addition to the provision of this section, the tax shall be
collected at higher of the two rates provided in this section and in section 206CC.
Sub-section (3) thereof seeks to define “specified person” tomean a person who has not
filed the returns of income for both of the two assessment years relevant to the two previous
years immediately prior to the previous year in which tax is required to be collected, for
which the time limit of filing return of income under sub-section (1) of section 139 has
expired; and the aggregate of tax deducted at source and tax collected at source in his case
is rupees fifty thousand or more in each of these two previous years.
Proviso to the proposed sub-section (3) provides that the specified person shall not
include a non-resident who does not have a permanent establishment in India.
Explanation to the said section seeks to provide that for the purposes of this sub-section
the expression “permanent establishment” includes a fixed place of business through which
the business of the enterprise is wholly or partly carried on.
Clause 53 of the Bill seeks to amend section 234C of the Income-tax Act relating to
interest for deferment of advance tax.
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The first proviso to sub-section (1) of the said section provides for categories of incomes
for which there will be no charge of interest under the said section, in the event of failure
to estimate such incomes resulting in a shortfall in the advance tax payments and tax due
has been paid in the subsequent advance tax instalments.
It is proposed to substitute clause (d) of the first proviso to said sub-section to include
dividend income along with capital gains therein, so as to provide that the interest under the
said section shall not be applicable to any shortfall in the payment of the tax due on the
returned income where such shortfall is on account of under-estimate or failure to estimate
dividend.
It is further proposed to insert Explanation 2 in the said sub-section to define the term
“dividend”.
These amendments will take effect from lst April, 2021 and will, accordingly, apply in
Clause 54 of the Bill seeks to amend the Chapter XIX-A of the Income-tax Act
relating to settlement of cases by the Income-tax Settlement Commission (ITSC).
It is proposed to amend section 245A of the said Act to define various expressions
such as “Interim Board” shall mean Interim Board for settlement constituted under section
245AA, “Member of the Interim Board” shall mean a Member of the Interim Board and
“Pending Application” shall mean an application which was filed under section 245C and
which was not declared invalid under sub-section (2C) of section 245D and no order under
sub-section (4) of section 245D was issued on or before the 31st day of January, 2021 with
respect to such application for the purposes of this Chapter.
This amendment will take effect retrospectively from lst February, 2021.
Clause 55 of the Bill seeks to insert a new section 245AA of the Income-tax Act so as
to provide for constitution of one or more Interim Board for settlement of pending
applications and to provide that every Interim Board shall consist of three members, each
being an officer of the rank of Chief Commissioner. If the members of the Interim Board
differ in opinion on any point, the point shall be decided according to the opinion of
majority.
Clause 56 of the Bill seeks to amend section 245B of the said Act so as to provide that
the Income tax Settlement Commission shall cease to operate on or after the 1st day of
February, 2021.
Clause 57 of the Bill seeks to amend section 245BC of the said Act so as to provide
that the existing provisions of the said section shall not apply on or after the 1st day of
February, 2021.
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Clause 58 of the Bill seeks to amend section 245BD of the said Act so as to provide
that the existing provisions of the said section shall not apply on or after the 1st day of
February, 2021.
Clause 59 of the Bill seeks to amend section 245C of the said Act so as to provide that
no application shall be made under this section on or after 1st day of February, 2021.
Clause 60 of the Bill seeks to amend section 245D of the said Act so as to provide
that where an order was required to be passed on an application made under sub-section
(2C) of the said section on or before the 31st day of January, 2021 and has not been passed
till such date, such application shall be deemed to be valid. It is further proposed to amend
sub-section (6B) to provide that any order passed under sub-section (4) may be amended
and specific reference to any amendment made by Settlement Commission be omitted. It is
further proposed to insert sub-section (9) to provide that on and from the 1st day of February,
2021, the provisions of sub-sections (1), (2), (2B), (2C), (3), (4), (4A), (5), (6) and section
(6B) shall apply to pending applications allotted to the Interim Board. Further, for the
purposes of the said section the date referred to in sub-section (2) of section 245M shall be
taken as the date on which the application was made and received under section 245C and
where the time-limit for amending any order or filing of rectification application as per sub-
section (6B) of the said section expires on or after the 1st day of February, 2021, the period
of limitation shall exclude the period commencing from the 1st February, 2021 and ending
on the end of the month in which the Interim Board is constituted. However, in cases where
the remaining period is less than sixty days the same shall be deemed to have been extended
to sixty days. It is also proposed to insert sub-section (10) so as to provide that the
provisions of sub-sections (6A) and (7) shall have effect as if for the words “Settlement
Commission”, the words “Settlement Commission or Interim Board of Settlement”.
It is also proposed to insert sub-sections (11), (12) and (13) in the said section so as to,
inter alia, provide for a scheme, by notification in the Official Gazette, for the disposal of
pending applications by the Interim Board. Proposed sub-section (11) provides that the
Central Government may make a scheme, by notification in the Official Gazette, for the
purposes of settlement in respect of pending applications by the Interim Board, so as to
impart greater efficiency, transparency and accountability by eliminating the interface
between the Interim Board and the assessee in the course of proceedings to the extent
technologically feasible, optimising utilisation of the resources through economies of scale
and functional specialisation and introducing a mechanism with dynamic jurisdiction.
Proposed sub-section (12) provides that the Central Government may, for the purposes of
giving effect to the scheme made under sub-section (11), by notification in the Official
Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such
exceptions, modifications and adaptations as may be specified in the notification provided
no direction shall be issued after the 31st day of March, 2023. Proposed sub-section (13)
provides that every notification issued under sub-section (11) and sub-section (12) shall, as
soon as may be after the notification is issued, be laid before each House of Parliament.
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Clauses 61, 62, 63 and 64 of the Bill seeks to amend sections 245DD, 245F, 245G and
245H of the Income-tax Act so as to provide that the powers and functions of Settlement
Commission under the said sections shall be exercised or performed by the Interim Board
on or after the 1st day of February, 2021 and all the provisions of the said sections shall
mutatis mutandis apply to Interim Board as they applied to Settlement Commission.
These amendments will take effect retrospectively from lst February, 2021.
Clause 65 of the Bill seeks to insert new section 245M in the Income-tax Act so as to
provide that the assessee an option to withdraw his application made under section 245C.
Proposed sub-section (1) thereof, inter alia, provides that the assessee who had filed an
application which is pending before the Interim Board has the option to withdraw such
application within three months from the date of commencement of Finance Act, 2021 and
intimate the Assessing Officer about such withdrawal in the manner prescribed. However,
if such option is not exercised by the assessee within the time allowed, the pending
application shall be deemed to have been received by the Interim Board on the date on which
it is allotted or transferred to it. The Board may, by an order, allot or transfer any pending
application from one Interim Board to another and upon allotment or transfer of a pending
application to an Interim Board, all records, documents or evidences with the Settlement
Commission, shall be deemed to be the records before such Interim Board.
Proposed sub-section (5) of the said section provides that where an assessee withdraws
his application, the proceedings with respect to such application shall abate on the date of
withdrawal and the Assessing Officer or any other income-tax authority before whom the
proceedings were pending prior to the application shall dispose the case in accordance with
the provisions of the said Act and in such case, for the purposes of the time-limit under
sections 149, 153, 153B, 154 and 155 and for the purposes of payment of interest under
section 243 or 244 or 244A, for making the assessment or re-assessment, the period
commencing on and from the date of the application to the Settlement Commission under
section 245C and ending with the date of withdrawal of application shall be excluded. It is
also proposed to provide that the income-tax authority shall not be entitled to use the material
and other information produced by the assessee before the Settlement Commission or the
results of the inquiry held or evidence recorded by the Settlement Commission in the course
of proceedings before it and the preceding conditions shall not apply in relation to the
material and other information collected, or results of the inquiry held or evidence recorded
by income-tax authority during the course of any other proceeding under this Act
irrespective of whether such material or other information or results of the inquiry or
evidence were also produced by the assessee or such income-tax authority before the
Settlement Commission.
Clause 66 of the Bill seeks to insert a new Chapter XIX-AA containing section 245MA
in the Income-tax Act, 1961 relating to Dispute Resolution Committee in certain cases.
Sub-section (1) of said section seeks to provide that the Central Government shall
constitute, one or more Dispute Resolution Committee, as may be necessary, in accordance
with the rules made under this Act, for dispute resolution in the case of such persons or class
of persons, as may be specified by the Board, and who may opt for dispute resolution under
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this Chapter in respect of dispute arising from any variation in the specified order in his case
for an assessment year and who fulfils the specified conditions.
Sub-section (2) of said section seeks to provide that the Dispute Resolution Committee,
subject to such conditions, as may be prescribed, shall have the powers to reduce or waive
any penalty imposable under this Act or grant immunity from prosecution for any offence
punishable under this Act in case of a person whose dispute is resolved under this Chapter.
Sub-section (3) of said section seeks to provide that Central Government may make a
scheme, by notification in the Official Gazette, for the purposes of dispute resolution under
this Chapter, so as to impart greater efficiency, transparency and accountability by
eliminating the interface between the Dispute Resolution Committee and the assessee in the
course of dispute resolution proceedings to the extent technologically feasible; optimising
utilisation of the resources through economies of scale and functional specialisation;
introducing a dispute resolution system with dynamic jurisdiction.
Sub-section (4) of said section seeks to provide that the Central Government may, for
the purposes of giving effect to the scheme made under sub-section (3), by notification in
the Official Gazette, direct that any of the provisions of this Act shall not apply or shall
apply with such exceptions, modifications and adaptations as may be specified in the
notification. However, no direction shall be issued after the 31st day of March, 2023.
Sub-section (5) of section 245MA seeks to provide that every notification issued under
sub-section (3) and sub-section (4) shall, as soon as may be after the notification is issued,
be laid before each House of Parliament.
Explanation to section 245MA seeks to provide that the “specified conditions” in

relation to a person means a person who is not a person in respect of whom an order of
detention has been made under the provisions of the Conservation of Foreign Exchange
and Prevention of Smuggling Activities Act, 1974 or in respect of whom prosecution for
any offence punishable under the provisions of the Indian Penal Code, 1860, the Unlawful
Activities (Prevention) Act, 1967, the Narcotic Drugs and Psychotropic Substances Act,
1985, the Prohibition of Benami Transactions Act, 1988, the Prevention of Corruption Act,
1988 or the Prevention of Money Laundering Act, 2002 has been instituted or such person
has been convicted of any offence punishable under any of those Acts; or in respect of whom
prosecution has been initiated by an income-tax authority for any offence punishable under
the provisions of this Act or the Indian Penal Code or for the purpose of enforcement of any
civil liability under any law for the time being in force, or such person has been convicted
of any such offence consequent to the prosecution initiated by an Income-tax authority or
who is notified under section 3 of the Special Court (Trial of Offences Relating to
Transactions in Securities) Act, 1992 or who fulfils such other conditions, as may be
prescribed. Also, “specified order” means such order, including draft order, as may be
specified by the Board, and, aggregate sum of variations proposed or made in such order
does not exceed ten lakh rupees; such order is not based on search initiated under section
132 or requisition under section 132A in the case of assessee or any other person or survey
under section 133A or information received under an agreement referred to in section 90 or
section 90A; where return has been filed by the assessee for the assessment year relevant to
such order, total income as per such return does not exceed fifty lakh rupees.
This amendment will take effect from the 1st day of April, 2021.
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Clause 67 of the Bill seeks to amend section 245N of the Income-tax Act relating to
definitions.
It is proposed to omit sub-clauses (B), (C) and (D) of said section with effect from
such date as may be appointed by the Central Government by notification in the Official
Gazette.
It is further proposed to amend clause (c) of said section so as to insert the words “or
the Board for Advance Rulings”. It is also proposed to insert clause (ca) to said section
so as to provide definitions of Board for Advance Rulings and members of the Board for
Advance Rulings.
Clause 68 of the Bill seeks to amend section 245-O of the Income-tax Act relating to
Authority for Advance Rulings.
It also proposed to insert a proviso in the sub-section (1) of said section so as to

provide that the Authority constituted under the said sub-section shall cease to operate on
and from such date as may be appointed by the Central Government by notification in the
Official Gazette.
Clause 69 of the Bill seeks to insert a section 245-OB relating to Board for Advance
Rulings so as to provide that the Central Government shall constitute one or more Board
for Advance Rulings, as may be necessary, for giving advance rulings under this Chapter
on or after such date as may be appointed by the Central Government by notification in
the Official Gazette. The Board for Advance Rulings constituted shall consist of two
members, each being an officer not below the rank of Chief Commissioner, as may be
nominated by the Board.
Clause 70 of the Bill seeks to amend section 245P of the Income-tax Act relating to
vacancies, etc., not to invalidate proceedings.
It is proposed to insert sub-section (2) in the said section so as to provide that on and
from the notified date, the provisions of the said section shall have effect as if for the words
“Authority”, the words “Board for Advance Rulings” had been substituted.
Clause 71of the Bill seeks to amend section 245Q of the Income-tax Act relating to
application for advance ruling.
It is proposed to amend sub-section (1) of said section so as to omit the portion “or
under Chapter IIIA of the Central Excise Act, 1944 under Chapter VA of the Finance Act,
1994” with effect from such date as may be appointed by the Central Government by
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notification in the Official Gazette.
It is further proposed to insert sub-section (4) so as to provide where an application

was made under the said section before the notified date but in respect of which no order
under sub-section (2) of section 245R has been passed or advance ruling under sub-section
(4) of section 245R has been pronounced before such date, such application along with all
the relevant records, documents or material, by whatever name called, on the file of the
Authority shall be transferred to the Board for Advance Rulings and shall be deemed to
be the records before it for all purposes.
Clause 72 of the Bill seeks to amend section 245R of the Income-tax Act relating to
procedure on receipt of application.
It is proposed to insert sub-sections (8), (9), (10) and (11) so as to provide that on
such date as may be appointed by the Central Government by notification in the Official
Gazette, the provisions of the said section shall have effect as if for the words “Authority”,
the words “Board for Advance Rulings” had been substituted and the provisions of that
section shall apply mutatis mutandis to the Board for Advance Rulings as they apply to
the Authority. Further, it provides that the Central Government may make a scheme, by
notification in the Official Gazette, for the purposes of giving advance ruling under
Chapter XIX-B by the Board for Advance Rulings, so as to impart greater efficiency,
transparency and accountability by eliminating the interface between the Board for
Advance Rulings and the applicant in the course of proceedings to the extent
technologically feasible; optimising utilisation of the resources through economies of
scale and functional specialisation; introducing a system with dynamic jurisdiction. It also
provides that the Central Government may, for the purposes of giving effect to the said
scheme, by notification in the Official Gazette, direct that any of the provisions of the
Income-tax Act shall not apply or shall apply with such exceptions, modifications and
adaptations as may be specified in the notification. However, no direction shall be issued
after 31st March, 2023. Every notification so issued shall, as soon as may be after the
notification is issued, be laid before each House of Parliament.
Clause 73 of the Bill seeks to amend section 245S of the Income-tax Act relating to
applicability of advance ruling.
It is proposed to amend the said section to insert sub-section (3) so as to provide that
nothing contained in this section shall apply to any advance ruling pronounced under
section 245R on or after on such date as may be appointed by the Central Government by
notification in the Official Gazette.
Clause 74 of the Bill seeks to amend section 245T of the Income-tax Act relating to
advanced ruling to be void in certain circumstances.
It is proposed to amend the said section so as to provide that the reference in sub-
290
section (1) to advance ruling pronounced by the Authority shall be omitted by omitting
the words “by it”. It is also proposed to insert sub-section (3) to the said section so as to
provide that on and from such date as may be appointed by the Central Government by
notification in the Official Gazette the provisions of that section shall have effect as if for
the word “Authority”, the words “Board for Advance Rulings” had been substituted.
Clause 75 of the Bill seeks to amend section 245U of the Income-tax Act relating to
powers of Authority.
It is proposed to insert sub-section (3) to the said section so as to provide that on and
from such date as may be appointed by the Central Government by notification in the
Official Gazette, the powers of the Authority under this section shall be exercised by the
Board for Advance Rulings and the provisions of this section shall apply mutatis mutandis
to the Board for Advance Rulings as they apply to the Authority.
Clause 76 of the Bill seeks to amend section 245V of the Income-tax Act relating to
procedure of Authority.
It is proposed to insert a proviso to the said section so as to provide that nothing

contained in that section shall apply on or after the notified date.
Clause 77 of the Bill seeks to insert a new section 245W to the Income-tax Act
relating to Appeal.
It is proposed to insert a new section 245W so as to provide that the applicant may,
if he is aggrieved by any ruling pronounced or order passed by the Board for Advance
Rulings; or the Assessing Officer, on the directions of the Principal Commissioner or
Commissioner, appeal to the High Court within sixty days from the date of the
communication of such ruling or order, in such form and manner as may be provided by
rules. However, where the High Court is satisfied, on an application made by the appellant
in this behalf, that the appellant was prevented by sufficient cause from presenting the
appeal within the period specified in sub-section (1), it may grant a further period of thirty
days for filing such appeal. It is also proposed that the Central Government may make a
scheme, by notification in the Official Gazette, for the purposes of preferring appeal to the
High Court by the Assessing Officer, so as to impart greater efficiency, transparency and
accountability by optimising utilisation of the resources through economies of scale and
functional specialisation; introducing a team-based mechanism with dynamic jurisdiction.
It is also proposed that the Central Government may, for the purposes of giving effect to
the said scheme, by notification in the Official Gazette, direct that any of the provisions
of the Income-tax Act shall not apply or shall apply with such exceptions, modifications
and adaptations as may be specified in the notification. However, no direction shall be
issued after 31st March, 2023.Every notification so issued shall, as soon as may be after
the notification is issued, be laid before each House of Parliament.
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Clause 78 of the Bill seeks to amend the section 255 of the Income-tax Act relating to
procedure of Appellate Tribunal.
It is proposed to insert sub-sections (7), (8) and (9) in the said section so as to, inter
alia, provide for a scheme, by notification in the Official Gazette, for the disposal of appeals
under that section.
Clause 79 of the Bill seeks to amend the section 281B of the Income-tax Act relating to
provisional attachment to protect revenue in certain cases.
The said section provides for the provisional attachment of any property belonging to
the assessee by the Assessing Officer, with the prior approval of the authorities specified
therein, in case of pending assessment or reassessment proceedings so as to protect the
interest of revenue.
It is proposed to amend sub-section (1) of the said section so as to provide that the
aforesaid provisional attachment of a property of the assessee may also be made during the
pendency of proceedings for imposition of penalty under section 271AAD where the
amount or aggregate of amounts of penalty likely to be imposed under that section exceeds
two crore rupees.
Customs
Clause 80 of the Bill seeks to amend section 2 of the Customs Act by inserting a new
clause (7B) therein so as to define the expression “common portal”.
Clause 81 of the Bill seeks to make amendment in sub-section (3) of section 5 of the
Customs Act so as to substitute the words and figures “Chapter XV and section 108” with
the words, figures, brackets and letter “Chapter XV, section 108 and sub-section (1D) of
section 110” for indicating the powers of the Commissioner (Appeals).
Clause 82 of the Bill seeks to insert a new sub-section (4A) in section 25 of the
Customs Act so as to provide that the exemption to be granted subject to conditions under
sub-section (1) shall, unless otherwise specified or varied or rescinded, be valid for a period
upto the 31st March falling immediately after two years from the date of such grant or
variation.
It further seeks to insert a proviso therein to provide that in respect of any such
exemption in force as on the date on which the Finance Bill, 2021 receives the assent of the
President, the said period of two years shall be reckoned from the 1st February, 2021.
Clause 83 of the Bill seeks to insert a new section 28BB in the Customs Act so as to
provide time limit for completion of certain actions under this Act.
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Clause 84 of the Bill seeks to amend sub-section (3) of section 46 of the Customs Act
so as to ensure mandatory filing of bill of entry in advance, i.e. before the day of arrival
(including holidays) of conveyance. It further seeks to insert a proviso therein to empower
the Board to provide different time limits for presentation of bill of entry in such cases, as it
deems fit, to ensure faster clearance.
Clause 85 of the Bill seeks to amend section 110 of the Customs Act and to insert a
new sub-section (1D) so as to provide that where gold in any form has been seized by a
proper officer under sub-section (1), he shall make the application referred to in sub-section
(1B) to the Commissioner (Appeals) having jurisdiction, who shall, as soon as may be, allow
the application and the proper officer shall thereafter dispose of the goods in such manner
as the Central Government may determine.
Clause 86 of the Bill seeks to insert a new clause (ja) in section 113 of the Customs
Act so as to provide that any goods entered for exportation under claim of remission or
refund of any duty or tax or levy, to make a wrongful claim in contravention of the Act or
any other law for the time being in force shall be liable to confiscation.
Clause 87 of the Bill seeks to insert a new section 114AC in the Customs Act so as to
provide penalty for fraudulent utilisation of input tax credit for discharging any duty or tax
on goods entered for exportation under claim of refund and such penalty shall be equivalent
to five times the refund claimed.
Clause 88 of the Bill also seeks to make consequential amendment in the Explanation
to section 139 of the Customs Act so as to include inventories, photographs and lists certified
by the Commissioner (Appeals) under sub-section (1D) to the documents within the
meaning of that section to give evidentiary value to such documents.
Clause 89 of the Bill seeks to amend section 149 of the Customs Act by inserting
second and third provisos therein so as to provide that documents may be amended
electronically through the customs automated system and also to enable certain amendments
to be done by the importer or exporter on common portal.
Clause 90 of the Bill seeks to amend sub-section (1) of section 153 of the Customs
Act by inserting clause (ca) therein so as to enable service of order, summons, notice or any
other communication under the said Act by making it available on the common portal.
Clause 91 of the Bill seeks to insert a new section 154C in the Customs Act so as to
empower the Board to notify a common portal to be called the Common Customs Electronic
Portal for facilitating registration, filing of bill of entry, shipping bill, other documents and
forms, payment of duty and for such other purposes as may be specified by the Board.
Customs tariff
Clause 92 of the Bill seeks to amend sub-section (6) of section 8B of the Customs
Tariff Act to make both conditions thereunder mutually exclusive and to define the
expression ‘special economic zone’ in the same manner as defined in the Special Economic
Zone Act, 2005 (28 of 2005).
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Clause 93 of the Bill seeks to amend sub-section (1A) of section 9 of the Customs
Tariff Act to provide for retrospective levy of countervailing duty to counter circumvention.
It further seeks to insert a new sub-section (1B) in the said section to provide for anti-
absorption measures in countervailing duty. It also seeks to insert a new sub-section (2A) in
that section to align it with the provisions contained in sub-section (6) of section 8B of the
said Act relating to safeguard measures. It also seeks to amend sub-section (6) thereof to
provide for further imposition of countervailing duty after review, for a period upto five
years. It also seeks to insert a third proviso therein so as to provide that if countervailing
duty is revoked temporarily, the period of such revocation shall not be more than one year
at a time.
Clause 94 of the Bill seeks to amend sub-section (1A) of section 9A of the Customs
Tariff Act to provide for retrospective levy of anti-dumping duty to counter circumvention.
It further seeks to insert a new sub-section (1B) in the said section to provide for anti-
absorption measures in anti-dumping duty. It also seeks to substitute sub-section (2A) in
that section to align it with the provisions contained in sub-section (6) of section 8B of the
said Act relating to safeguard measures. It also seeks to amend sub-section (5) thereof to
provide for further imposition of anti-dumping duty after review, for a period upto five
years. It also seeks to insert a third proviso therein so as to provide that if anti-dumping duty
is revoked temporarily, the period of such revocation shall not be more than one year at a
time.
Clause 95 of the Bill seeks to amend the First Schedule to the Customs Tariff Act, 1975,
so as to ––
(i) revise the tariff rates in respect of certain tariff items in the manner specified in
the Second Schedule with effect from the 2nd February, 2021;
(ii) amend certain tariff entries to align with the entries in the Fourth Schedule to the
Central Excise Act in the manner specified in the Third Schedule with effect from the
1st April, 2021;
(iii) harmonise certain entries with Harmonised System of Nomenclature and to

create new tariff lines in respect of certain entries in the manner specified in the Fourth
Schedule with effect from the 1st January, 2022.
Excise
Clause 96 of the Bill seeks to amend the Fourth Schedule to the Central Excise Act.
Sub-clause (i) of the said clause seeks to revise the heading, tariff items and entries
falling under the heading 2709 of Chapter 27 thereof, with effect from the 1st April, 2021 in
the manner specified in the Fifth Schedule;
Sub-clause (ii) of the said clause seeks to amend Section heading of SECTION IV
and certain entries of Chapter 24 thereof, with effect from the 1st January, 2022 in the
manner specified in the Sixth Schedule.
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Clause 97 of the Bill seeks to amend the Fourth Schedule to the Central Excise Act
so as to rectified errors in certain entries with retrospective effect from the 1st day of
January, 2020.
Clause 98 of the Bill seeks to revise the date of effect to the amendments made in the
Fourth Schedule to the Central Excise Act vide notification number G.S.R. 978 (E), dated
the 31st December, 2019, issued in exercise of powers under section 3C thereof, so as to
give effect to said amendments on and from the 1st day of January, 2020.
Central Goods and Services Tax
Clause 99 of the Bill seeks to amend section 7 of the Central Goods and Services Tax
Act, 2017, with retrospective effect from the 1st July, 2017, by inserting a new clause (aa) in
sub-section (1) thereof, so as to ensure levy of tax on activities or transactions involving
supply of goods or services by any person, other than an individual, to its members or
constituents or vice-versa, for cash, deferred payment or other valuable consideration.
It is also proposed to insert an Explanation therein, to clarify that the person or its
members or constituents shall be deemed to be two separate persons and the supply of
activities or transactions inter se shall be deemed to take place from one person to another.
Clause 100 of the Bill seeks to amend section 16 of the Central Goods and Services
Tax Act by inserting a new clause (aa) in sub-section (2) thereof, so as to provide that input
tax credit on invoice or debit note may be availed only when the details of such invoice or
debit note has been furnished by the supplier in the statement of outward supplies and such
details have been communicated to the recipient of such invoice or debit note.
Clause 101 of the Bill seeks to omit sub-section (5) of section 35 of the Central Goods
and Services Tax Act so as to remove the mandatory requirement of getting annual accounts
audited and the reconciliation statement submitted by specified professional.
Clause 102 of the Bill seeks to substitute a new section for section 44 of the Central
Goods and Services Tax Act so as to remove the mandatory requirement of furnishing a
reconciliation statement duly audited by specified professional and to provide for filing of
the annual return on self-certification basis. It further empowers the Commissioner to
exempt a class of taxpayers from the requirement of filing the annual return.
Tax Act to substitute the proviso to sub-section (1) so as to charge interest on net cash
liability retrospectively with effect from the 1st July, 2017.
Tax Act so as to make seizure and confiscation of goods and conveyances in transit a
separate proceeding from the recovery of tax.
Tax Act so as to insert an Explanation in sub-section (12) to clarify that “self-assessed tax”
shall include the tax payable in respect of details of outward supplies furnished under section
37, but not included in the return furnished under section 39.
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Clause 106 of the Bill seeks to substitute sub-section (1) of section 83 of the Central
Goods and Services Tax Act so as to provide that provisional attachment shall remain valid
for the entire period starting from the initiation of any proceeding under Chapter XII,
Chapter XIV or Chapter XV till the expiry of a period of one year from the date of order
made thereunder.
Clause 107 of the Bill seeks to insert a new proviso in sub-section (6) of section 107 of
the Central Goods and Services Tax Act so as to provide that no appeal shall be filed against
an order made under sub-section (3) of section 129, unless a sum equal to twenty-five per
cent. of the penalty has been paid by the appellant.
Tax Act so as to delink the proceedings under that section relating to detention, seizure and
release of goods and conveyances in transit, from the proceedings under section 130 relating
to confiscation of goods or conveyances and levy of penalty.
Tax Act, so as to delink the proceedings under that section relating to confiscation of goods
or conveyances and levy of penalty from the proceedings under section 129 relating to
detention, seizure and release of goods and conveyances in transit.
Clause 110 of the Bill seeks to substitute section 151 of the Central Goods and Services
Tax Act so as to empower the jurisdictional commissioner to call for information from any
person relating to any matters dealt with in connection with the Act.
Clause 111 of the Bill seeks to amend sub-section (1) of section 152 of the Central
Goods and Services Tax Act so as to provide that no information obtained under sections
150 and 151 shall be used for the purposes of any proceedings under the Act without giving
an opportunity of being heard to the person concerned.
Tax Act so as to enable the jurisdictional commissioner to exercise powers under section
151 to call for information.
Clause 113 of the Bill seeks to omit paragraph 7 of Schedule II to the Central Goods
and Services Tax Act, with retrospective effect from the 1st day of July, 2017, consequent
to the amendments made in section 7.
Clause 114 of the Bill seeks to amend section 16 of the Integrated Goods and Services
Tax Act, 2017 so as to make provisions for restricting the zero rated supply on payment of
integrated tax only to specified class of taxpayers or specified supplies of goods or services.
It further provides to link the foreign exchange remittance in case of export of goods with
refund and further restricting zero rating of supplies made to special economic zone only
when such supplies are for authorised operations.
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Agriculture Infrastructure and Development Cess
Clause 115 of the Bill seeks to provide for levy and collection of Agriculture
Infrastructure and Development Cess as duty of customs, on goods specified in the First
Schedule to the Customs Tariff Act, being goods imported into India, at the rate not
exceeding the rate of customs duty as specified in the said Schedule for the purposes of the
Union for financing the agriculture infrastructure and other development expenditure.
Clause 116 of the Bill seeks to provide for levy and collection of Agriculture
Infrastructure and Development Cess as an additional duty of excise, on excisable goods
specified in the Seventh Schedule, at the rate specified in the said Schedule, for the purposes
of the Union for financing the agriculture infrastructure and other development expenditure.
Miscellaneous
Clause 117 of the Bill seeks to insert a new section 8G in the Indian Stamp Act, 1899
to provide that strategic sale, disinvestment, etc., of immovable property by Government
company shall not be liable to stamp duty.
Clause 118 of the Bill seeks to insert a new sub-section (3) in section 2 of the
Contingency Fund of India Act, 1950 relating to enhancement of the Contingency Fund of
India so as to enhance the corpus of the Fund from five hundred crores of rupees, as at
present, to thirty thousand crores of rupees by transfer of an additional amount of twenty
nine thousand five hundred crores of rupees from the Consolidated Fund of India to the
Contingency Fund of India.
This amendment will take effect from the date on which the Finance Bill, 2021
receives the assent of the President.
Clauses 119 to 137 of the Bill seek to amend certain provisions of the Life Insurance
Corporation Act, 1956 (hereinafter referred to as “the LIC Act”).
It is proposed to amend section 2 of the LIC Act so as to insert new clauses to define the
expressions “Audit Committee”, “Board of Directors” or “Board”, “Chairperson”,
“Companies Act”, “court”, “director”, “financial statement”, “fully diluted basis”,
“independent director”, “Managing Director”, “Nomination and Remuneration Committee”,
“notification” and “special resolution”, to amend the definition of expression “member”,
and to provide that the words and expressions not defined in the LIC Act or in the Insurance
Act, 1938 but defined in the Companies Act, 2013, shall have the meanings respectively
assigned to them in the Companies Act, 2013. These amendments are consequential to the
other amendments proposed to the LIC Act.
It is further proposed to substitute section 4 of the LIC Act, to provide for the vesting of
the general superintendence and direction of the affairs and business of the Life Insurance
Corporation of India (hereinafter referred to as “LIC”) in its Board of Directors, the
composition thereof, the appointment or nomination of directors thereon, and deeming of
members constituting LIC immediately before the coming into force of this section as
directors under the substituted section 4, in order to bring the provisions relating to corporate
governance in alignment with the requirements under the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 made by the
297
Securities and Exchange Board of India under the provisions of the Securities and Exchange
Board of India Act, 1992, and thereby enabling the listing of LIC on recognised stock
exchanges and making of an initial public offer, through which Government may sell its
shares in LIC.
It is also proposed to insert new sections 4A, 4B, 4C and 4D in the LIC Act to provide
for disqualifications to be a director, disclosure of interest by director and senior
management, related party transactions and adjudication of penalties for contravention or
violation liable to penalty under the LIC Act, in order to bring the provisions relating to
corporate governance in alignment with listing requirements.
It is also proposed to substitute section 5 of the LIC Act, to provide for LIC’s capital,
issue of equity shares to the Central Government in consideration for paid-up equity capital
provided by the Central Government to LIC before the coming into force of the new section,
application of premiums received on issue of LIC’s shares, increase or reduction of share
capital by the Central Government, making of reservation on a competitive basis in favour
of LIC’s life insurance policyholders who may be offered shares at a price lower than that
offered to public, eligibility of all LIC shares acquired by the Central Government during
three years preceding an initial public offer for computation of minimum promoter’s
contribution and of all fully paid-up equity shares of LIC held by the Central Government
for an offer of sale by way of an initial public offer notwithstanding any ineligibility for
such computation or any condition for a minimum holding period under any law for the time
being in force, and issuing of other securities by LIC for raising funds to meet its business
requirements. These amendments will enable issue of shares to the Central Government
against paid-up capital invested by it in LIC as well as issue of bonus shares to the Central
Government, which could be offered for sale by way of an initial public offer, with resultant
receipt of money into the Consolidated Fund of India.
It is also proposed to insert new sections 5A, 5B, 5C, 5D, 5E and 5F in the LIC Act, to
provide respectively for transferability of shares, voting rights, register of members,
declaration in respect of beneficial interest in shares, deeming of LIC’s shares to be
securities and right of registered shareholders to nominate, in order to bring the provisions
relating to share transfer, rights of shareholders including voting in shareholder meeting,
disclosure of beneficial interest in securities and recognition of securities as shares in
alignment with the requirements under the Securities Contract (Regulation) Act, 1956 and
listing requirements.
It is also proposed to substitute section 19 of the LIC Act to provide for the constitution,
composition and powers of the Executive Committee of the Board, in order to bring the
provisions relating to corporate governance in alignment with listing requirements.
It is also proposed to insert new sections 19A, 19B, 19C and 19D in the LIC Act to
provide for the constitution, composition and the powers, functions and duties of various
committees of the Board, in order to bring the provisions relating to corporate governance
in alignment with listing requirements.
It is also proposed to substitute section 20 of the LIC Act to provide for entrustment and
delegation of powers and duties of the Chairperson and Managing Directors of LIC by its
Board, in order to bring the provisions relating to corporate governance in alignment with
listing requirements.
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It is also proposed to amend section 22 of the LIC Act to omit the existing provision
under sub-section (2) for constitution of a Board in each zone of LIC and to amend the
existing provision for a “member” of LIC (who corresponds to a director under the proposed
amendments) to be a Zonal Manager of LIC, consequential to proposed constitution of
Board of LIC under the substituted section 4 and the disqualification to be a director under
clause (l) of the new section 4A.
It is also proposed to insert new section 23A in the LIC Act, to provide for annual
general meeting and other general meetings of registered shareholders of LIC, in order to
bring the provisions relating to the rights of LIC’s shareholders in alignment with listing
requirements.
It is also proposed to substitute section 24 of the LIC Act, to provide for LIC having a
multiplicity of funds, establishment of reserves and maintenance of separate funds for
participating and non-participating policyholders of LIC, which are matters incidental to the
proposed new sections 28, 28B and 28C.
It is also proposed to insert new sections 24A, 24B, 24C and 24D in the LIC Act, to
provide respectively for books of account, financial statements, Board’s report and penalties
for contravention by person charged with the duty of complying with the provisions of new
sections 24A or 24B or 24C, in order to bring the provisions relating to the integrity of LIC’s
accounting and financial reporting systems, control systems and compliance with the law
and relevant standards in alignment with listing requirements.
It is also proposed to substitute section 25 of the LIC Act, to provide for appointment of
auditors, and bring the provisions relating to the integrity of LIC’s audit, accounting
standards and compliance with the law and relevant standards in alignment with listing
requirements.
It is also proposed to insert new sections 25A, 25B, 25C and 25D in the LIC Act, to
provide respectively for removal and resignation of auditor, powers and duties of auditor
and auditor’s report, internal auditor and special auditor, in order to bring the provisions
relating to the integrity of LIC’s audit, accounting standards and compliance with the law
and relevant standards in alignment with listing requirements.
It is also proposed to amend section 26 of the LIC Act to provide for substitution of the
reference to the Corporation with reference to the Board, consequential to constitution of
the Board of LIC under the proposed amended section 4 in place of the constitution of the
Corporation under the existing section 4.
It is also proposed to amend section 27 of the LIC Act, to omit the provisions relating
to giving in the Annual Report an account of activities likely to be taken by LIC in the next
financial year, in order to bring the provisions relating to the Annual Report in alignment
with listing requirements.
It is also proposed to substitute section 28 of the LIC Act, to provide for the allocation
to or reservation for registered shareholders of one hundred per cent. of the surplus relating
to non-participating policyholders in every financial year’s surplus, in addition to up to ten
per cent. of the surplus relating to participating policyholders, as against a maximum of ten
299
per cent. of the total surplus under the existing section 28, representing enhancement in
money receivable into the Consolidated Fund of India on account of such increased
allocation or reservation.
It is also proposed to amend section 28A and insert new sections 28B and 28C in the
LIC Act, to make provisions regarding the declaration of dividend and crediting of
unclaimed and unpaid dividend amount to an Unpaid Dividend Account, in order to bring
the provisions relating to dividends in alignment with listing requirements and consequential
to the provision under the proposed new section 5 for issue of equity share capital to persons
other than the Central Government.
It is also proposed to substitute section 46 of the LIC Act, to provide that defects in
constitution of the Board and committees thereof, or in appointment or nomination of
directors, will not invalidate their acts or proceedings, which are matters incidental to the
proposed creation of the Board and its committees under the proposed new sections 4, 19,
19A, 19B, 19C and 19D.
It is also proposed to substitute section 47 in the LIC Act, to provide for protection of
action taken by a director other than a whole-time director, which are matters incidental to
the provision for independent, elected and other categories of non-whole-time directors
under the proposed new section 4.
It is also proposed to amend sub-section (2) of section 48 of the LIC Act, to provide for
making of rules by the Central Government relating to various matters that are either
incidental to or consequent upon the various other amendments proposed in this Part.
It is also proposed to amend section 49 of the LIC Act, to provide for making of
regulations by the Board of LIC relating to various matters that are either incidental or
consequent upon the various other amendments proposed in this Part.
It is also proposed to insert new sections 50 and 51 in the LIC Act to provide for the
form, manner, etc. for companies to apply with modifications to LIC, and to provide for the
power of the Central Government to remove difficulties by order published in the Official
Gazette, which are matters incidental to the various other amendments proposed in this Part.
These amendments will take effect from such dates as the Central Government may, by
notification in the Official Gazette, appoint.
Clauses 138 to 140 of the Bill seeks to amend the provisions of the Securities Contracts
(Regulation) Act, 1956.
It is proposed to define the expression “pooled investment vehicle”. It is further proposed

to clarify that debt securities and such other marketable securities as well as the units issued
by pooled investment vehicles are “securities”.
It is also proposed to insert a new section 30B in the said Act to specify that a pooled
investment vehicle, whether constituted as a trust or otherwise, shall be eligible to borrow
and issue debt securities and shall be permitted to provide security interest to lenders, in
terms of the facility documents, entered into by such pooled investment vehicles. It further
provides that in case of default, the lenders shall recover the defaulted amount against the
300
trust assets, by initiating proceedings against the trustee acting on behalf of the pooled
investment vehicle, and whatever remains after paying the lenders shall be remitted to the
unit holders.
Clause 141 of the Bill seeks to amend sub-section (3) of section 8 of the Central Sales
Tax Act, 1956 by substituting clause (b) thereof, so as to exclude therefrom the goods used
in the telecommunication network or in mining or in generation or distribution of electricity
or any other form of power.
Clauses 142 to 147 of the Bill seeks to amend certain provisions of the Prohibition of
Benami Property Transactions Act, 1988.
Clause (1) of section 2 of the Act provides for the definition of the expression
Adjudicating Authority. It is proposed to amend said clause so as to substitute words
“referred to in” for the words “appointed under”.
Section 7 of the said Act empowers the Central Government to appoint one or more
Adjudicating Authority by notification to exercise jurisdiction, powers and authority
conferred by or under that Act. It is further proposed to substitute the said section 7 so as to
provide that the Competent Authority constituted under sub-section (1) of section 5 of the
Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 shall be
the Adjudicating Authority to exercise jurisdiction, powers and authority conferred by or
under this Act.
It is also proposed to consequentially omit sections 8 to 17 of the said Act.
It is also proposed to amend sub-section (7) of section 26 of the said Act so as to provide
that where the time limit for passing an order provided therein expires during the period
beginning from 1st July, 2021 and ending on 29th September, 2021, the time limit for passing
such order shall be extended to 30th September, 2021.
It is also proposed to consequentially omit clauses (b) and (c) of sub-section (2) of section
68 of the said Act.
Clause 148 of the Bill seeks to amend section 12 of the Securities and Exchange Board
of India Act, 1992 relating to regulation of stock-brokers, sub-brokers, share transfer, agents,
etc.
It is proposed to insert a new sub-section (1C) in the said section so as to provide that
any alternative investment fund or a business trust as defined in clause (13A) of section 2 of
the Income-tax Act, 1961, shall establish and operate only after the Securities and Exchange
Board of India grants a certificate of registration in accordance with the regulations made
under the said Act.

301
Clause 149 of the Bill seeks to amend section 2 of the Recovery of Debts Due to Banks
and Financial Institutions Act, 1993 relating to definitions.
It is proposed to amend clause (g) of the said section so as to clarify that definition of
“debt” shall also include debt incurred by pooled investment vehicles as defined in clause
(da) of section 2 of the Securities Contracts (Regulation) Act, 1956.
This amendment is consequential in nature in view of the insertion of new section 30B
in the Securities Contracts (Regulation) Act, 1956.
Clause 150 of the Bill seeks to amend the Seventh Schedule of the Finance Act, 2001,
with effect from 1st January, 2022.
Clause 151 of the Bill seeks to amend the provisions of section 2 of the Securitisation
and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
It is proposed to amend clause (f) of sub-section (1) of the said section so as to clarify
that the definition of “borrower” in the said Act shall also include a pooled investment
vehicle, consequent to insertion of section 30B in the Securities Contracts (Regulation) Act,
1956. Further, the definition of secured creditor is being expanded to include debenture
trustee appointed by a pooled investment vehicle also by removing the limitation of
appointment of a debenture trustee by a company.
Clauses 152 and 153 of the Bill seeks to amend the Industrial Development Bank
(Transfer of Undertaking and Repeal) Act, 2003.
It is proposed to amend section 3 of the said Act so as to provide that the existing
provision under the first proviso to clause (a) of sub-section (2) of section 3 of the said Act
to the effect that the Industrial Development Bank of India Limited shall not be required to
obtain licence under section 22 of the Banking Regulation Act, 1949, shall cease to be in
operation immediately after the commencement of Part…. of the Finance Act, 2021, and
that, from such commencement, the Industrial Development Bank of India Limited shall be
deemed to have obtained a licence under the said section 22, which will be a condition
precedent to disinvestment of Government’s stake in said Bank resulting in receipts to
Government.
These amendments will take effect from such date as the Central Government may, by
notification in the Official Gazette appoint.
Clause 154 and 155 of the Bill seeks to amend section 97 of the Finance Act (No.2) Act,
2004.
Chapter-VII of the said Act provides for Securities Transaction Tax.
It is proposed to amend sub-clause (b) of clause (13) of section 97 of the said Act so as
to include sale or surrender or redemption of a unit of an equity oriented fund to the
302
insurance company, on maturity or partial withdrawal, with respect to unit linked insurance
policy issued by such insurance company on or after 1st February, 2021, under the definition
of “taxable securities transaction”.
It is further proposed to insert clause (13A) to the said section define the expression “unit
linked insurance policy”.
These amendments will take effect retrospectively from 1st February, 2021.
Clause 156 of the Bill seeks to amend section 98 of the Finance Act (No.2) Act, 2004.
It is proposed to insert serial number 5A and entries relating thereto in the Table in
section 98 so to provide that the rate for sale or surrender or redemption of a unit of an equity
oriented fund to an insurance company, on maturity or partial withdrawal, with respect to
unit linked insurance policy issued by such insurance company on or after 1st February,
2021.
This amendment will take effect retrospectively from 1st February, 2021.
Clauses 157 and 158 of the Bill seeks to amend sections 100 and 101 of the Finance Act
(No.2) Act, 2004.
It is proposed to consequentially amend sections 100 and 101 of the said Act so as to
include insurance company within their purview.
This amendment will take effect retrospectively from 1st February, 2021.
Clause 159 of the Bill seeks to amend sections 163, 164,165A and 191 of the Finance
Act, 2016.
It is proposed to insert a proviso to sub-section (3) of section 163 of the said Act to
provide that the consideration received or receivable for specified services and consideration
received or receivable for e-commerce supply or services shall not include the consideration,
which are taxable as royalty or fees for technical services in India under the Income-tax Act
read with the agreement notified by the Central Government under section 90 or section 90A
of the said Act.
It is further proposed to insert an Explanation in clause (cb) of section 164 of the said
Act to provide that for the purpose of defining e-commerce supply or service, “online sale
of goods” and “online provision of services” shall include one or more of the following
online activities, namely:––

303
It is also proposed to amend sub-section (3) of section 165A of the said Act to provide
that consideration received or receivable from e-commerce supply or services shall include–
(i) consideration for sale of goods irrespective of whether the e-commerce operator owns
the goods;
(ii) consideration for provision of services irrespective of whether service is provided or

facilitated by the e-commerce operator.
It is also proposed to amend section 191 of the Finance Act, 2016 relating to exemption
from wealth-tax in respect of assets specified in declaration.
The said section, inter alia, provides that any excess amount of tax, surcharge or penalty
paid in pursuance of a declaration made under the Income Declaration Scheme, 2016 shall
not be refundable. The proviso to the said section provides that the Central Government
may, by notification, specify a class of persons to whom the excess amount so paid shall be
refundable.
It is proposed to amend the said proviso to provide that such excess amount of tax,
surcharge or penalty paid in pursuance of a declaration made under the aforementioned
Scheme shall be refundable to the specified class of persons without payment of any
interest.
This amendment will take effect retrospectively from 1st June, 2016.
Clause 160 of the Bill seeks to amend section 2 of the Direct Tax Vivad se Vishwas Act,
2020 relating to definitions.
It is proposed to make the following amendments in sub-section (1) of the said section,
namely:––
(i) clause (a) of the said sub-section provides the definition of appellant. It is proposed
to amend the said clause by inserting an Explanation for the removal of doubts, to clarify
that the expression “appellant” shall not include and shall be deemed never to have been
included a person in whose case a writ petition or special leave petition or any other
proceeding has been filed either by him or by the income-tax authority or both, before an
appellate forum arising out of an order of Income-tax Settlement Commission under
Chapter XIX-A of the Income-tax Act, and such petition or appeal is either pending or is
disposed of;
(ii) clause (j) of said sub-section provides definition of disputed tax. It is further
proposed to amend the said clause by inserting an Explanation for the removal of doubts,
to clarify that the expression “disputed tax”, in relation to an assessment year or financial
year, as the case may be, shall not include and shall be deemed never to have been included
any sum payable either by way of tax, penalty or interest pursuant to an order passed by the
Income-tax Settlement Commission under Chapter XIX-A of the Income-tax Act; and
304
(iii) clause (o) of the said sub-section provides for the definition of the expression “tax
arrear”. It is proposed to amend the said clause by inserting an Explanation for removal of
doubts to clarify that the expression “tax arrear” shall not include and shall be deemed never
to have been included any sum payable either by way of tax, penalty or interest pursuant to
an order passed by the Settlement Commission under Chapter XIX-A of the Income-tax Act.
These amendments will take effect retrospectively from 17th March, 2020.
305
MEMORANDUM REGARDING DELEGATED LEGISLATION
The provisions of the Bill, inter alia, empower the Central Government to issue
notifications and the Board to make rules for various purposes as specified therein.
Clause 3 of the Bill seeks to amend section 2 of the Income-tax Act, 1961 relating to
definitions.
It is proposed to amend clause (19AA) of the said section to define the term “demerger”
and to insert an Explanation so as to empower the Central Government to notify the
conditions governing for public sector companies for the purpose of the said clause.
Clause 5 of the Bill seeks to amend section 10 of the Income-tax Act relating to incomes
not included in total income.
It is proposed to amend clause (5) of the said section to insert a second proviso to
empower the Board to make rules to provide for the conditions (including the condition of
incurring the amount of the expenditure within the period specified therein) to claim the
exemption for the value in lieu of travel concession or assistance received for the assessment
year beginning on the 1st day April, 2021.
It is further proposed to amend clause (11) of the said section to empower the Central
Government to notify in the Official Gazette with respect to any other Provident Fund to
claim exemption under the said clause.
It is also proposed to amend clause (12) of the said section to empower the Board to
provide for the manner of computation of income by way of interest accrued during the
previous year in the account of a person to the extent it relates to the amount or the aggregate
of amounts of contribution made, by that person exceeding two lakh and fifty thousand
rupees in any previous year in that fund, on or after the 1st day of April, 2021.
It is also proposed to amend clause (23FE) of the said section to insert provisos and, inter
alia, empowers the Board to make rules to provide for the manner of calculations to the
investment made in one or more of the different companies or enterprises or entities to claim
exemption of income under the said clause.
Clause 14 of the Bill seeks to amend section 45 of the Income-tax Act relating to Capital
gains.
It is proposed to insert sub-clause (1B) in the said section so as to empower the Board to
make rules to provide for the manner of calculation of profits or gains received from unit
linked Insurance policy including bonus, to be charged under the head of capital gains.
Clause 18 of the Bill seeks to amend section 50 of the Income–tax Act relating to
special provision for computation of capital gains in case of depreciable assets.
It is proposed to insert a proviso to the said section so as to empower the Board to

make rules to provide for the manner of determining the written down value of the block of
306
assets and short-term capital gain, if goodwill of a business or profession form part of block
of assets and depreciation has been obtained by the assesse under the Act for the purposes
of the said section.
Clause 28 of the Bill seeks to insert a new section 89A in the Income-tax Act relating to
relief from taxation in income from retirement benefit account maintained in a notified
country.
The proposed new section empowers the Board to make rules to provide for the manner
and year, for imposing tax on income received from a specified account by a specified
person.
Clause 31 of the Bill seeks to amend section 115JB of the Income-tax Act relating to
special provision for payment of tax by certain company.
It is proposed to insert sub-section (2D) therein so as to empower the Board to make

rules to provide for the manner of recomputing the book of profit of the past year for the
purposes of payment of tax of the company, if there is any increase in book of profit in the
previous year due to income of a past year included in the book profit on account of an
advance pricing agreement or secondary adjustment.
dividends.
It is proposed to amend the second proviso of the said section so as to empower the
Central Government to notify any other person to claim exemption for the income credited
or paid to a business trust by a special purpose vehicle.
Indirect Taxes
Clause 84 of the Bill seeks to amend sub-section (3) of section 46 of the Customs
Act so as to insert a new proviso therein to empower the Board to provide by regulations
different time limits for presentation of the Bill of entry.
Clause 93 of the Bill seeks to amend section 9 of the Customs Tariff Act. The
proposed sub-section (1B) seeks to empower the Central Government to provide by rules the
circumstances in which absorption of countervailing duty have taken place.
Clause 94 of the Bill seeks to amend section 9A of the Customs Tariff Act. The
proposed sub-section (1B) seeks to empower the Central Government to provide by rules the
circumstances in which absorption of anti-dumping duty have taken place.
Tax Act so as to empower the Central Government to provide by rules the time within which
and the form and manner in which every registered person, other than an Input Service
Distributor, a person paying tax under section 51 or section 52, a casual taxable person and
a non-resident taxable person shall furnish an annual return.
307
Tax Act by substituting sub-section (1) thereof, which empowers the Central Government to
provide by rules the manner in which the Commissioner may attach provisionally any
property, including bank account, belonging to the taxable person or any person specified in
sub-section (1A) of section 122.
Tax Act. Sub-section (6) of the said section seeks to empower the Central Government to
provide by rules the manner in which and the time within which the goods or conveyance
detained or seized under that section shall be sold or disposed of.
Clause 114 of the Bill seeks to amend section 16 of the Integrated Goods and Services
Tax Act, 2017. Sub-section (3) of the said section seeks to empower the Central Government
to provide by rules the conditions subject to which and the safeguards and procedures in
respect of which a registered person making zero rated supply shall claim refund of
unutilized input tax credit on supply of goods or services or both. The proviso thereto seeks
to empower the Central Government to provide by rules the manner in which the registered
person making zero rated supply of goods shall deposit the refund received.
2. The matters in respect of which rules or regulations may be made or notifications or

order may be issued in accordance with the provisions of the Bill are matters of procedure
and detail and it is not practicable to provide for them in the Bill itself.
3. The delegation of legislative power is, therefore, of a normal character.

LOK SABHA
_________________________
BILL
to give effect to the financial proposals of the Central Government

for the financial year 2021-2022.
_________________________
(Smt. Nirmala Sitharaman,

Minister of Finance.)
Quick View Budget 2021
• Direct Tax
• Indirect Tax
NARESH J. PATEL & CO.

804, Mauryansh Elanza,
Shyamal Cross Roads,
Ahmedabad – 380 015
1st February, 2021
www.nareshco.com
Disclaimer: This Presentation has been prepared solely for general information purpose and is not intended to constitute a
recommendation, consulting or advise.
NJP Quick View - Budget 2021 2
Advance Tax payment for Dividend:

Particular Existing Proposed
Requirement of Advance income tax is payable Advance income tax is payable on
advance income tax on income including dividend on Dividend income only after
on dividend income estimated basis declaration / receipt of dividend
Tax Audit Limit relaxation:

Turnover Limit: Rs. 5 Crore Rs. 10 Crore

Tax Audit Not required if Cash Receipt
and Payment upto 5%
Naresh J. Patel & Co.

Reduced Time limit for sending intimation/notice:

Sr. Particular Existing Proposed
No.
1. Time limit for sending intimation u/s 143(1) 12 Month* 9 Month*

*from the end of the financial year in which return
was furnished
For example : Income Tax Return for A.Y. 2022-23 31-Mar-2024 31-Dec-2023
2. Time limit for issue of scrutiny notice u/s 143(2) 6 Months# 3 Months#
# from the end of the year in which return is
furnished
For example : Income Tax Return for A.Y. 2022-23 30-Sep-2023 30-June-2023

Reduced time limit for belated/revised ITRs:

Last date for filing of belated or revised returns of income 12 Months* 9 Months*
*from the end of the financial year or before the completion
of the assessment, whichever is earlier.
For example: Income Tax Return for A.Y. 2022-23 31-Mar-2023 31-Dec-2022
Reduced time limit for Reopening Assessment:

Time limit for 3 years from the end of relevant assessment year
Reopening of 4/6 years from the end
Assessment: of relevant assessment 10 years from the end of relevant assessment year
year Approval of Principal CIT required

Higher TDS/TCS for non-filer of Income Tax Return:

Higher rate for TDS for the non-filers of No such TDS at Higher of:
income-tax return: provision (a) Twice the rate specified in Act or
• Not applicable for TDS u/s 192, 192A, (b) Twice the rate or rates in force or
194B, 194BB, 194LBC or 194N (c) 5%
• Condition: Aggregate of TDS and TCS for
the same deductee is Rs. 50,000 or If PAN is not available than higher of
more in each of two previous years above or 20% as per sec. 206AA.
 Non-filer :
Not filed the returns of income for both of 2 Assessment Years relevant to 2 previous years,
immediately before the previous year in which tax is required to be deducted/collected and
Time limit for filing tax return u/s. 139(1) expired for both these assessment years.
 Not include a non-resident who does not have a permanent establishment in India.
 Effective from 1st July, 2021
TDS on purchase of goods (Section 194Q):

Particulars Existing Proposed
purchase of any goods of the value or No requirement Limit of Rs. 50 Lakhs
aggregate of such TDS @ 0.1 %
Due date of ITR filing of partners of the firm covered under

transfer pricing audit:
Due of Partners of the firm, filing 31- July (or 31- 30-November
transfer pricing report u/s. 92E October if audit)
Applicability of Presumptive taxation for professionals:

Applicability of Presumptive taxation Resident in India Individual, HUF or Partnership
for professionals (Sec. 44ADA) Firm other than LLP
Interest on loan for affordable housing (Section 80EEA):

Deduction Upto Rs. 1,50,000 in Loan sanctioned upto 31st Loan sanctioned upto 31st
respect of Payment of Interest on March, 2021. March, 2022.
Loan taken for Affordable Housing
Tax Holiday for Start up and capital gain exemption:

Eligibility for claiming tax holiday for start 31st March, 2021 31st March, 2022
up: date of incorporation upto
Capital gain exemption for date of 31st March, 2021 31st March, 2022
investment in start up upto

Easy dispute resolution for small tax payers :

• Small tax payer:
• Taxable income up to 50 Lakh and
• Disputed income up to 10 Lakh
• A separate Dispute Resolution Panel (Committee) to be constituted.
Faceless ITAT :
• Faceless Income Tax Appellate Tribunal to be introduced
Exemption to senior citizen from filing IT in specified cases:

• No need to file Income Tax Return subject to following conditions
• Senior Citizen above 75 year of age and having only income from Pension
• Interest Income from the same bank in which receiving Pension Income
• To furnish a declaration to the Bank.
• Bank to compute the income and deduct TDS after giving effect to the deduction allowable
under Chapter VI-A and rebate allowable under section 87A of the Act
Reducing hardhips to NRI:

• Government will notify the rule for reducing hardship of double taxation in case of NRI return to
India having accrued incomes from their foreign retirement accounts. They also face difficulties in
getting credit for Indian taxes in foreign jurisdictions.
Pre-filling of details while filing ITR:

• In order to ease of compliance for taxpayer, details of capital gains from listed securities, dividend
income, Interest from bank and post office will be prefilled in Income tax return.
No Deduction if delay in deposit of employee’s contribution

• Late deposit of contribution of employees towards Provident funds, superannuation funds, and
other social security funds will qualify as disallowance of expense to extent of employee
contribution to employer.

Tax exemption on ULIP proceeds capped:

• For ULIPs taken on or after 1st February, 2021, the maturity proceeds of policies with an annual
premium of more than Rs. 2.5 lakh will be taxable on par with equity linked mutual fund schemes.
• In the event of policyholder’s demise either the sum assured or proceeds of the investments,
whichever is higher, are paid out to the nominee. The amount paid to nominee will continue to be
tax free
Income adjustment based on TAR (Sec 143(1)(a)(iv))

• Amended to allow for the adjustment on account of increase in income indicated in the audit
report but not taken into computation of total income.
Discontinuation of Income tax settlement Commission

• Discontinue on or after 1st February, 2021 and to constitute Interim Board of settlement for
pending cases.

INDIRECT TAX
PROPOSALS

GST - Important Changes…..1

Sr. Particulars Existing Proposed
No.
1 ITC Matching The conditions for availing New sub clause added in section 16(2)(aa):
Input Tax Credit does not
require filing GSTR-1 as pre- ITC can be availed only when the details of such invoice or
condition. debit note have been furnished by the supplier in the
statement of outward supplies and such details have been
communicated to the recipient of such invoice or debit
note.
2 GSTR-9C Mandatory Filing of GSTR 9C • Removed the mandatory requirement of GSTR-9C
Reconciliatio Reconciliation Statement for • Filing of the annual return GSTR-9 on self-certification
n Statement turnover above 5 Crore basis
3 Interest Interest on Net Cash Liability • Liability to pay interest shall be computed on the net
basis not confirmed and was cash liability
under dispute. • Effective retrospectively from the 1st July, 2017


No.
4 Seizure and Conclusion of the proceedings Now it has been proposed to consider seizure
confiscation of against the main person as well as and confiscation of goods and conveyances in
goods and some other persons (e.g. transit as a separate proceeding from recovery
conveyances in transporter) if the main person of tax.
transit (e.g. supplier) exercises the option Therefore the other persons (e.g. transporter)
of paying the requisite amount of shall not get the closure of the proceedings even
tax, interest and penalties for if the main person (e.g. supplier) opts to close
concluding the proceedings. the proceedings
5 Self-assessment No such requirement • Liability declared in GSTR 1 but not included

tax and recovery in GSTR 3B will be considered as “self-
assessed tax”.
• Recovery proceedings can be initiated
without following the process of
adjudication.


No.
6 Provisional In limited types of Scope expanded to include any proceeding in the
attachment assessments nature of assessment (Chapter XIII), inspection,
search, seizure and arrest (Chapter XIV) and
demand & recovery (Chapter XV)
7 Pre-deposit for No such requirement Pre-deposit amount for filing the appeal before the
Appeal filing first appellate authority in cases of detention and
seizure of goods and conveyance during transit shall
be 25% of the penalty amount imposed.


No.
8 Penalty on Penalty equal to 100% of the tax Further the quantum of penalty u/s 129 has
Seizure and payable ( in case of exempted been doubled to 200% of the tax payable
confiscation of goods, on payment of an amount where the owner of the goods comes
goods and equal to two per cent. of the value forward for payment of such penalty.
conveyances in of goods or twenty-five thousand
transit rupees, whichever is less) where the
owner of the goods comes forward
for payment of such tax and penalty
9 Power to collect Limited Power to collect statistics Power to call for information
information


No.
10 Refunds on At present Sec. 16(3) provides for Option of making the supply on payment of
account of two routes for claiming the refund integrated tax shall only be granted to a
zero-rated of the accumulated ITC viz. notified class of taxpayers or notified
supplies (a) making the supplies with supplies of goods or services.
payment of IGST and claiming
refund thereof and
(b) making the supplies under LUT
without tax and claiming refund
of the accumulated ITC based
on the formula


No.
11 Clubs/ Supply of goods by any • The activities or transactions, by a
associations unincorporated association or body person, other
of persons to a member thereof for • than an individual, to its members or
cash, deferred payment or other constituents or vice versa, for cash,
valuable consideration. deferred payment or other valuable
consideration
• Retrospective amendment effective from
1st July, 2017
• Exemption (up to
Rs.7,500/month/member) in respect of
housing societies, shall be available

Custom Duty Rationalization

Items Existing Rates Proposed Rates
Textiles:
Nylon chips, fiber, Yarn 7.5% 5%
Chemicals
Caprolactam 7.5% 5%
Naptha 4% 2.5%
Agriculture products
Cotton Nil 10%
Raw silk and silk yarn 10% 15%
Gold 7.5% + 2.5%
Silver 12.5% AIDC*
Renewable energy
Solar Invertors 5% 20%
Solar Lanterns 5% 15%
Steel screws and plastic builder wares 10% 15%
Prawn feed 15% 5%
Relaxations for Companies / LLPs

One Person Company (OPC)
• No Restriction on turnover / paid up capital
• Coversion to any other type at any time
• Reducing residency limit for indian citizen from 182 days to 120 days
• Allowing NRI to incorporate OPC
Definition of small companies widened

Turnover Limit Rs. 2 crore Rs. 20 crore
Paid up capital limit Rs. 50 lakhs Rs. 2 crore
Decriminalisation of LLP will be done

Thank You
Naresh J Patel & Co.
info@nareshco.com
http//www.nareshco.com
Disclaimer: This presentation has been prepared solely for general information purposes and is not intended to constitute a
recommendation, offer or advice. It does not constitute a solicitation to any class of persons to act on the basis of opinions expressed
thereto in this presentation. The information contained herein is subject to change without prior notice. Before making any decision you
should consider whether the information is appropriate in light of your needs and you may wish to consult a professional adviser for further
advice. We do not warrant that the information contained in this presentation is accurate or complete and disclaim any and all liability to
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For information only

Resilience in face of Once in a Century Crisis
Confirmed Cases
Doubling time
Deaths
V Shaped Recovery
GDP Growth
IIP Inflation (%)

Atma Nirbhar Bharat Abhiyan
Stimulus provided under ANB out of total stimulus 9%
Stimulus by Govt and RBI combined 15%
GOVERNMENT REFORMS ENERGY

 Increase in borrowing limits of state o Liquidity support for
governments discoms
 Privatisation of Public Sector o Elimination of Regulatory
Enterprise Assets
o Commercial coal mining
MSMEs AND INDUSTRY o Reduction in cross-
 Collateral free loans for businesses subsidy
 Fund of funds will be set up for
MSMEs SOCIAL SECTOR
 PM Garib Kalyan Yojana  National Digital
 Subordinate debt for MSMEs Health Blueprint
 Disallowing global tenders of up to  Additional Allocation
Rs 200 crore for MGNREGS
 Change in definition of MSMEs  Technology driven
education: PM
eVidya, National
MIGRANT WORKERS Foundational Literacy
 One Nation One Card and Numeracy
 Free food grain Supply to migrants Mission
AGRICULTURE AND ALLIED SECTORS

 Concessional Credit Boost to farmers
 Agri Infrastructure Fund
 Emergency working capital for farmers
 Animal Husbandry infrastructure development
 Amendments to the Essential Commodities Act
 Agriculture marketing reforms
Holistic Approach to Health
Preventive
Supplementary Nutrition
Programme and Poshan
Abhiyan to be merged and
Approach
launched as Mission
Poshan 2.0
Curative Wellbeing
 Outlay ₹64180 crore over 6 years

 Support for Health and Wellness
centres
PM  Setting up of Integrated Public

AtmaNirbhar Health Labs
Swasth  Establishing critical care
hospital blocks
Bharat Yojana
 Strengthening NCDC
 Expanding integrated health
information portal
• Pnuemococcal vaccine to be rolled across the country

• ₹35000 crore for Covid-19 Vaccine in 2021-22
Health Outlay (₹ crore)
2021-22 BE 223846
2020-21 BE 94452
Introduction of National
Commission for Allied
Healthcare Professionals Bill
Industry
PLI launched to create manufacturing global champions across 13 sectors
with amount committed nearly ₹1.97 lakh crore in next 5 years starting
FY2021-22
NIP projects by sector 120

Sector wise share in GVA
Energy Road Urban Railways Others
100
24% 80
29%
60
18% 40
12%
17% 20
0
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
NIP Project pipeline expanded to 3rd RE 2nd RE 1st RE 1st AE
7400 projects Agriculture, forestry & fishing Industry Services
MITRA Scheme to create world class infrastructure for global champions in

textile sector leading to creation of 7 textile parks over 3 years.
Infrastructure
Road Construction Per Day in km
National Rail Plan
• Aims at developing adequate
rail infrastructure by 2030 to
cater to the projected traffic
requirements up to 2050.
• The objective is to increase the
modal share of rail in freight
from the current level of 27 per
cent to 45 per cent.
• 100% electrification of Broad Gauge Routes by 2023
• Indigenously developed automatic train protection system to be launched
 139 GW of installed capacity was added during 6 years

Installed Plant connecting additional 2.8 crore households with addition
Capacity (GW)
of 1.41 lakh circuit km of transmission lines
400
350
300  Revamped reforms-based result-linked power distribution
250 sector scheme will be launched with an outlay of
200 ₹3,05,984 crore over 5 years
150
100  Hydrogen energy mission will be launched
50
0
2013-14 2019-20
Ports, Shipping,
Waterways
PPP mode to be utilised Recycling of Ships Act,

Subsidy support to
for managing 2019 enacted and
promote flagging of
operational services of recycling capacity to be
merchant ships
major ports doubled by 2024
Logistics Performance
Index Rank PNG Infra
financing
54 Ujjwala scheme to
cover 1 crore more Bill to set up a DFI
beneficiaries will be introduced
100 more districts National monetisation

under city gas pipeline of brownfield
distribution network infra assets
44
Independent gas
transport system
2014 2018 operator to be set up
Urban Development
Jal Jeevan Mission (Urban) for universal
water supply in all ULBs
Urban Swachh Bharat Mission with

outlay ₹1,41,678 crore over 5 years
₹2,217 crore for 42 urban centres to

tackle air pollution
Innovative PPP models to augment

public bus transport
MetroLite and MetroNeo for tier 2 and

peripherals of tier 1 cities
Financial Reforms
 Rationalised single Securities Markets Code by 2022

 World class fintech hub at GIFT IFSC
 Permanent institutional framework for Corporate bond market
 SEBI as regulator and greater role for WDRA for development of
commodity market ecosystem
 Investor charter as a right across all financial products
 Amending the Insurance Act,1938 to increase the FDI limit with safeguards
 Asset Reconstruction Company Limited and Asset Management Company
to resolve stressed assets problem of PSBs.
AGRICULTURE MSP (crores)
80000
 Extending coverage of 160000
SWAMITVA Scheme to all 60000
130000
states/UTs
40000
 Expansion of Operation 100000
Green scheme to include 22
70000 20000
perishable products
 1000 more mandis to be 40000 0
integrated with e-NAM
FISHERIES MSP Paddy (LHS) MSP Wheat (RHS)
o Development of modern
fishing harbours and fish
landing centres
o Multipurpose Seaweed
Park to be set up in Tamil
Nadu
MIGRANT WORKERS AND LABOURERS
 One nation one ration Share of casual labour in 2018-19

card scheme under
implementation in 32
Total
states and UTs.
 A portal to be
launched for gig,
Urban
building and
construction workers
 Social security
benefits will be Rural
extended to gig and

platform workers 0 5 10 15 20 25 30
Human Capital
EDUCATION SKILLS GII Rank
 Revamped Post  Realigning
90
Matric National
Scholarship Apprenticeship 80
Scheme for Training scheme 70

welfare of SCs for graduates and
60
 100 new Sainik diploma holders in
schools Engineering 50
 750 Eklavya  Partnership with 40

schools in tribal UAE and Japan in
30
areas area of skill
development and 20
recognition 10
Accreditation Regulation
R&D
Standard setting Funding  National
Higher Research
Education
Commission Foundation with
of India
outlay of
₹50,000 crore
over 5 years
Expenditure on Education as per cent of GDP  National
2020-21 BE 3.5 Language
2019-20 RE 3
Translation
Mission to boost
2018-19 2.8
internet access
2017-18 2.8  Deep Ocean
2016-17 2.8 Mission for
ocean
2015-16 2.8
exploration and
2014-15 2.8 biodiversity
-0.5 0.5 1.5 2.5 3.5 conservation
Fiscal Position
• Allowing a normal ceiling of net borrowing for the
states at 4% of GSDP for 2021-22
1 • Additional Borrowing ceiling of 0.5% of GSDP subject
to conditions
2 NSSF loan to FCI for food subsidy to be replaced by

making budget provisions
3 ₹1,18,452 crore as Revenue Deficit grant to 17 states in

2021-22
10.00 9.50
Fiscal Deficit Capital Expenditure
9.00
Percent of GDP
8.00
6.80
7.00
6.00
4.60
5.00 4.10 3.90
4.00 3.50 3.50 3.40
3.00
2015-16
2014-15
2016-17
2017-18
2018-19
2019-20 Actuals
2020-21 RE
2021-22 BE
35 External Debt 12
30 10
25
8
Per cent
Per cent
20
6
15
GENERAL 4
10
GOVERNMENT
DEBT TO GDP 5 2
0 0
2013
2018
2019
2020
2020 (Sept-end)
Debt Service Ratio

External Debt to GDP
Ratio of Short-term debt to reserves
Tax proposals
Taxpayers
Tax Return Exemption from filing income tax returns for opted for Direct
Filers senior citizens (75 years and above) who only Tax Vivad se
(crore) Vishwas
have pension and interest income. The paying
7 Scheme
bank will deduct the necessary tax on their
6 120000.00
income.
5 100000.00
4
Reducing time limit for reopening of income tax
80000.00
assessment
3
60000.00
2 Constitution of a Dispute Resolution Committee for
small tax payers 40000.00
1
0 20000.00
Income Tax Appellate Tribunal to be made faceless
2014 2020
0.00
Increase in limit for tax audit Dividend payment to
for persons who carry out 95% REIT/InvIT to be exempted Additional deduction
of their transactions digitally from TDS of ₹1.5 lakh shall be
available for loans
Pre filling of returns will also Eligibility for claiming tax taken up till 31
cover capital gains from listed holiday for start ups March 2022 for
securities, dividend income, proposed to be extended by purchase of
etc. one more year affordable house
Indirect Tax
GST Collection  Rationalisation of customs duty
1.4 structure by eliminating outdated
2020-21 2019-20
exemptions
1.2 1.14 1.15  Support to MSMEs hit by recent
1.00 1.00 1.02 0.98
1.05 1.05 sharp rise in iron and steel prices
1.0 0.95 and relief to metal recyclers
1.031.03
 Rationalisation of duties on raw
In Rs Lakh crore
0.8 0.91
0.87 0.92 0.95 material inputs to man made
0.86
0.62 textiles
0.6  Rationalisation of custom duty on
gold and silver
0.4 0.32  Increase in duty on solar invertors
and lanterns to promote domestic
0.2 production
 Agriculture Infrastructure and
0.0 Development Cess on small
Apr May Jun Jul Aug Sep Oct Nov Dec
number of items
Rupee comes in
Non Debt Capital
Receipts
5%
Borrowings and other
Liabilities
36%
Income Tax
14%
Union Excise Duties

8%
Non Tax Revenue

6%
Corporation Tax
Customs 13%
3%
GST
15%
Rupee goes out

Pensions
Other Expenditure
10%
Schemes
9%
Central Sector
Schemes
Subsidies 14%
8%
Defence
8%
Finance Commission
and Other Transfers
10%
Interest Payments
and Duties
16%
Budget at a Glance
Revenue Receipts (crore) Capital Receipts (crore)
2020926 1895152
1788424
1684059 1694812
1555153
1021304
1002271
2019-20 2020-21 2020-21 2021-22 2019-20 2020-21 2020-21 2021-22

554236
3011142
2929000
2630145 439163
2350604 412085
335726
2019-20 2020-21 2020-21 2021-22 2019-20 2020-21 2020-21 2021-22

Allocation to major schemes
MGNREGA (crore) PM KISAN (crore)
111500
2021-22 BE
73000
2020-21 RE
0 10000 20000 30000 40000 50000 60000 70000
2020-21 RE 2021-22 BE
National Health Mission (crore)

National Education 37500
Mission (crore) 37000
36500
2021-22
BE, 36000
34300
2020-21
RE, 35500
28244
35000
34500
2020-21 RE 2021-22 BE
Jal Jeevan Mission (crore) Metro Projects (crore)
20000
2021-22 BE 2021-22
18000 BE,
16000 18998
2020-21 RE 14000
12000
0 20000 40000 60000 10000
8000 2020-21
6000 RE,
AMRUT and Smart Cities (crore) 6484
4000
2021-22 BE 2000
2020-21 RE 0
2020-21 RE 2021-22 BE
0 5000 10000 15000
Major Allocations
Ministry of Housing and Urban

54581
Affairs
Ministry of Health and Family

73932
Welfare
Ministry of Education 93224
Ministry of Railways 110055
Ministry of Road Transport and

118101
Highways
Ministry of Agriculture and

131531
Farmers' Welfare
Ministry of Rural Development 133690
Ministry of Home Affairs 166547
Ministry of Consumer Affairs, Food

256948
and Public Distribution
Ministry of Defence 478196
0 200000 400000 600000

Rs. Crore
CONTENTS
PART-A
Page No.
 Introduction 1
 Health and Wellbeing 5
 Physical and Financial Capital and Infrastructure 7
 Inclusive Development for Aspirational India 19
 Reinvigorating Human Capital 22
 Innovation and R&D 23
 Minimum Government, Maximum Governance 24
 Fiscal Position 25
PART B
Direct Tax Proposals 28
 Relief to Senior Citizens
 Reduction in Time for Income Tax Proceedings
 Setting up the Dispute Resolution Committee
 Faceless ITAT
 Relaxation to NRI
 Exemption from Audit
 Relief for Dividend
 Attracting foreign investment into infrastructure sector
 Affordable Housing/Rental Housing
 Tax incentives to IFSC
 Pre-filling of Returns
 Relief to Small Trusts
 Labour Welfare
Indirect Tax Proposals 33

 GST
 Custom Duty Rationalization
 Electronic and Mobile Phone Industry
 Iron and Steel
 Textile
 Chemicals
(ii)
 Gold and Silver

 Renewable Energy
 Capital Equipment
 MSME Products
 Agriculture Products
Annexures
Annexures to Part A of the Speech 37
 Health and Wellbeing – Expenditure

 Flagship Projects: Roads and Highways
 Highlights of Disinvestment/Strategic Disinvestment Policy
 MSP Purchases of Agricultural Commodities
 Initiatives on Education as part of NEP
 Statement of Extra Budgetary Resources
(Govt. fully serviced bonds, NSSF loan and other resources)
Annexures to Part B of the Speech 45

Direct Tax
Indirect Tax
Budget 2021-2022
Speech of
Nirmala Sitharaman
Minister of Finance
February 1, 2021
Hon’ble Speaker,
I present the Budget for the year 2021-2022.
Introduction
1. Honourable Speaker, the preparation of this Budget was undertaken

in circumstances like never before. We knew of calamities that have
affected a country or a region within a country, but what we have endured
with COVID-19 through 2020 is sui generis.
2. When I presented the Budget 2020-21, we could not have imagined

that the global economy, already in throes of a slowdown, would be pushed
into an unprecedented contraction.
3. We could not have also imagined then that our people as those in
other countries would have to endure the loss of near and dear ones and
suffer hardships brought about due to a health crisis.
4. The risk of not having a lockdown was far too high. Within 48 hours
of declaring a three-week-long complete lockdown, the Prime Minister
announced the Pradhan Mantri Garib Kalyan Yojana, valued at `2.76 lakh
crores – this provided, free food grain to 800 million people, free cooking
gas for 80 million families for months, and cash directly to over 400 million
farmers, women, elderly, the poor and the needy.
2
5. Even as a large section of citizens stayed home, milk, vegetable, and

fruit-suppliers, health and sanitary workers, truck drivers, railways and
public transport workers, bank employees, electricity workers, our
annadatas, police, firemen, and the armed forces, all had to go about their
work as normal, but with the additional anxiety of the virus hanging over
them. We recognise this, and I think I speak on behalf of everybody in this
august House, when I express my heartfelt gratitude to these men and
women, for how they were able to carry out their work and duty, to provide
for the nation’s basics, over those crucial months.
6. Speaker Sir, for public good, Honourable Members of Parliament

and Members of Legislative Assemblies too offered their salaries.
7. In May 2020, the government announced the AtmaNirbhar Bharat

package (ANB 1.0). To sustain the recovery, further into the year, we also
rolled out two more AtmaNirbhar Bharat packages (ANB 2.0 and ANB 3.0).
Total financial impact of all AtmaNirbhar Bharat packages including
measures taken by RBI was estimated to about `27.1 lakh crores which
amounts to more than 13% of GDP.
8. As a government, we kept a watch on the situation and were

proactive in our responses. The government, led by the Prime Minister,
stretched its resources to deliver for most vulnerable sections of our society
– the poorest of the poor, the Dalits, Tribals, the elderly, the migrant
workers, and our children. The PMGKY, the three ANB packages, and
announcements made later were like five mini-budgets in themselves.
9. The AtmaNirbhar Packages accelerated our pace of structural

reforms. Redefinition of MSMEs, Commercialisation of the Mineral Sector,
Agriculture and Labour Reforms, Privatisation of Public Sector Undertakings,
One Nation One Ration Card, and Production Linked Incentive Schemes are
some of the notable reforms carried out during this period. Faceless
Income Tax Assessment, DBT and Financial Inclusion are the others.
10. Today, India has two vaccines available, and has begun medically
safeguarding not only her own citizens against COVID-19, but also those of
100 or more countries. It is added comfort to know that two or more
vaccines are also expected soon.
3
11. Honourable Prime Minister launched the vaccination drive by

crediting and thanking our scientists. We are ever grateful for the strength
and rigour of their efforts.
12. Having said that, we are all reminded time and again that our fight
against COVID-19 continues into 2021.
13. Now, just as it had happened after the two World Wars, there are
signs that the political, economic, and strategic relations in the post COVID
world are changing. This moment in history is the dawn of a new era – one
in which India is well-poised to truly be the land of promise and hope.
''Faith is the bird that feels the light and sings when the dawn is still dark''.
-Rabindranath Tagore
(Fireflies – A Collection of Aphorisms)
14. In this spirit, I can’t help but recall the joy that we, as a cricket-loving
nation, felt after Team India’s recent spectacular success in Australia. It has
reminded us of all the qualities that we as a people, particularly our youth,
epitomise of having abundant promise and the unsuppressed thirst to
perform and succeed.
15. Today, data shows that India now has one of the lowest death rate
of 112 per million population and one of the lowest active cases of about
130 per million. This has laid the foundation to the revival we are seeing
now in the economy.
16. This Budget will be the first of this new decade. This Budget will also
be a digital Budget and that has happened with all your support.
17. So far, only three times has a Budget followed a contraction in the
economy. All such contractions were as a result of situations typical to
India. This time, the contraction in our economy is due to a global
pandemic, just like in several other countries.
18. Having said that, I want to confidently state that our Government is
fully prepared to support and facilitate the economy’s reset. This Budget
provides every opportunity for our economy to raise and capture the pace
that it needs for sustainable growth.
19. 2021 is the year of many important milestones for our history. I
mention a few of these: It is the 75th year of Independence; 60 years of
Goa’s accession to India; 50 years of the 1971 India-Pakistan War; it will be
4
the year of the 8th Census of Independent India; it will also be India’s turn
at the BRICS Presidency; the year for our Chandrayaan-3 Mission; and the
Haridwar Maha Kumbh.
20. Honourable Speaker, before I commence Part A of the Budget, I

want to take a moment to acknowledge how isolating and distancing
seemed like insurmountable challenges for a country like ours that has
people coming together in times of crises. It hurt us in many ways. I bow my
head in respect to every citizen, for the endurance shown in facing what
was an undeniably a tough year for all our physical and mental well-being.
PART A
21. In Part A, I wish to lay a vision for AtmaNirbhar Bharat.
22. AtmaNirbharta is not a new idea. Ancient India was largely self-
reliant, and equally, a business epicentre of the world.
23. AtmaNirbhar Bharat is an expression of 130 crores Indians who have

full confidence in their capabilities and skills.
24. We are already part of International groupings such as the G20 and
BRICS. The Coalition for Disaster Resilient Infrastructure and the
International Solar alliance are realities today due to India’s efforts.
25. The proposals in Part A will further strengthen the sankalp of Nation
First, Doubling Farmer’s Income, Strong Infrastructure, Healthy India, Good
Governance, Opportunities for Youth, Education for All, Women
Empowerment, and Inclusive Development, among others.
26. Additionally, also on the path to fast-implementation are the 13

promises we had made in the Budget of 2015-16 which were to materialise
during the Amrut Mahotsav of 2022, on the 75th year of our Independence.
They too resonate with this vision of AtmaNirbharta.
27. The Budget proposals for 2021-2022 rest on 6 pillars.

i. Health and Wellbeing
ii. Physical & Financial Capital, and Infrastructure
5
iii. Inclusive Development for Aspirational India

iv. Reinvigorating Human Capital
v. Innovation and R&D
vi. Minimum Government and Maximum Governance
1. Health and Wellbeing
28. Even at the outset, I would like to say that the investment on Health
Infrastructure in this Budget has increased substantially. Progressively, as
institutions absorb more, we shall commit more.
29. Taking a holistic approach to Health, we focus on strengthening

three areas: Preventive, Curative, and Wellbeing.
Health Systems
30. A new centrally sponsored scheme, PM AtmaNirbhar Swasth Bharat

Yojana, will be launched with an outlay of about ` 64,180 crores over 6
years. This will develop capacities of primary, secondary, and tertiary care
Health Systems, strengthen existing national institutions, and create new
institutions, to cater to detection and cure of new and emerging diseases.
This will be in addition to the National Health Mission. The main
interventions under the scheme are:
a. Support for 17,788 rural and 11,024 urban Health and Wellness
Centers
b. Setting up integrated public health labs in all districts and 3382 block
public health units in 11 states;
c. Establishing critical care hospital blocks in 602 districts and 12
central institutions;
d. Strengthening of the National Centre for Disease Control (NCDC), its
5 regional branches and 20 metropolitan health surveillance units;
e. Expansion of the Integrated Health Information Portal to all
States/UTs to connect all public health labs;
f. Operationalisation of 17 new Public Health Units and strengthening
of 33 existing Public Health Units at Points of Entry, that is at 32
Airports, 11 Seaports and 7 land crossings;
g. Setting up of 15 Health Emergency Operation Centers and 2 mobile
hospitals; and
6
h. Setting up of a national institution for One Health, a Regional

Research Platform for WHO South East Asia Region, 9 Bio-Safety
Level III laboratories and 4 regional National Institutes for Virology.
Nutrition
31. To strengthen nutritional content, delivery, outreach, and outcome,

we will merge the Supplementary Nutrition Programme and the Poshan
Abhiyan and launch the Mission Poshan 2.0. We shall adopt an intensified
strategy to improve nutritional outcomes across 112 Aspirational Districts.
Universal Coverage of Water Supply
32. The World Health Organisation has repeatedly stressed the

importance of clean water, sanitation, and clean environment, as a pre
requisite to achieving universal health.
33. The Jal Jeevan Mission (Urban), will be launched. It aims at universal
water supply in all 4,378 Urban Local Bodies with 2.86 crores household tap
connections, as well as liquid waste management in 500 AMRUT cities. It
will be implemented over 5 years, with an outlay of `2,87,000 crores.
Swachch Bharat, Swasth Bharat
34. For further swachhta of urban India, we intend to focus on complete

faecal sludge management and waste water treatment, source segregation
of garbage, reduction in single-use plastic, reduction in air pollution by
effectively managing waste from construction-and-demolition activities and
bio-remediation of all legacy dump sites. The Urban Swachh Bharat Mission
2.0 will be implemented with a total financial allocation of `1,41,678 crores
over a period of 5 years from 2021-2026.
Clean Air
35. To tackle the burgeoning problem of air pollution, I propose to

provide an amount of `2,217 crores for 42 urban centres with a million-plus
population in this budget.
7
Scrapping Policy
36. We are separately announcing a voluntary vehicle scrapping policy,

to phase out old and unfit vehicles. This will help in encouraging fuel-
efficient, environment friendly vehicles, thereby reducing vehicular
pollution and oil import bill. Vehicles would undergo fitness tests in
automated fitness centres after 20 years in case of personal vehicles, and
after 15 years in case of commercial vehicles. Details of the scheme will be
separately shared by the Ministry.
Vaccines
37. The Pneumococcal Vaccine, a Made in India product, is presently

limited to only 5 states will be rolled out across the country. This will avert
more than 50,000 child deaths annually.
38. I have provided `35,000 crores for Covid-19 vaccine in BE 2021-22. I

am committed to provide further funds if required.
39. The Budget outlay for Health and Wellbeing is `2,23,846 crores in BE
2021-22 as against this year’s BE of `94,452 crores an increase of 137
percentage. The details of the same are at Annexure I of the Speech.
AtmaNirbhar Bharat – Production Linked Incentive scheme (PLI)
40. For a USD 5 trillion economy, our manufacturing sector has to grow
in double digits on a sustained basis. Our manufacturing companies need to
become an integral part of global supply chains, possess core competence
and cutting-edge technology. To achieve all of the above, PLI schemes to
create manufacturing global champions for an AtmaNirbhar Bharat have
been announced for 13 sectors. For this, the government has committed
nearly `1.97 lakh crores, over 5 years starting FY 2021-22. This initiative will
help bring scale and size in key sectors, create and nurture global
champions and provide jobs to our youth.
8
Textiles
41. To enable the textile industry to become globally competitive,

attract large investments and boost employment generation, a scheme of
Mega Investment Textiles Parks (MITRA) will be launched in addition to the
PLI scheme. This will create world class infrastructure with plug and play
facilities to enable create global champions in exports. 7 Textile Parks will
be established over 3 years.
Infrastructure
42. The National Infrastructure Pipeline (NIP) which I announced in

December 2019 is the first-of-its-kind, whole-of-government exercise ever
undertaken by Government of India. The NIP was launched with 6835
projects; the project pipeline has now expanded to 7,400 projects. Around
217 projects worth `1.10 lakh crores under some key infrastructure
Ministries have been completed.
43. The NIP is a specific target which this government is committed to

achieving over the coming years. It will require a major increase in funding
both from the government and the financial sector. In this Budget, I
propose to take concrete steps to do this, in three ways:
44. Firstly, by creating the institutional structures; secondly, by a big

thrust on monetizing assets, and thirdly by enhancing the share of capital
expenditure in central and state budgets.
Infrastructure financing - Development Financial Institution (DFI)
45. Infrastructure needs long term debt financing. A professionally

managed Development Financial Institution is necessary to act as a
provider, enabler and catalyst for infrastructure financing. Accordingly, I
shall introduce a Bill to set up a DFI. I have provided a sum of `20,000 crores
to capitalise this institution. The ambition is to have a lending portfolio of at
least `5 lakh crores for this DFI in three years time.
9
46. Debt Financing of InVITs and REITs by Foreign Portfolio Investors will
be enabled by making suitable amendments in the relevant legislations. This
will further ease access of finance to InVITS and REITs thus augmenting
funds for infrastructure and real estate sectors.
Asset Monetisation
47. Monetizing operating public infrastructure assets is a very important

financing option for new infrastructure construction. A “National
Monetization Pipeline” of potential brownfield infrastructure assets will be
launched. An Asset Monetization dashboard will also be created for
tracking the progress and to provide visibility to investors. Some important
measures in the direction of monetisation are:
a. National Highways Authority of India and PGCIL each have

sponsored one InvIT that will attract international and domestic
institutional investors. Five operational roads with an estimated
enterprise value of ` 5,000 crores are being transferred to the NHAI
InvIT. Similarily, transmission assets of a value of `7,000 crores will
be transferred to the PGCIL InvIT.
b. Railways will monetise Dedicated Freight Corridor assets for
operations and maintenance, after commissioning.
c. The next lot of Airports will be monetised for operations and
management concession.
d. Other core infrastructure assets that will be rolled out under the
Asset Monetization Programme are: (i) NHAI Operational Toll Roads
(ii) Transmission Assets of PGCIL (iii) Oil and Gas Pipelines of GAIL,
IOCL and HPCL (iv) AAI Airports in Tier II and III cities, (v) Other
Railway Infrastructure Assets (vi) Warehousing Assets of CPSEs such
as Central Warehousing Corporation and NAFED among others and
(vii) Sports Stadiums.
Sharp Increase in Capital Budget
48. In the BE 2020-21, we had provided `4.12 lakh crores for Capital
Expenditure. It was our effort that in spite of resource crunch we should
spend more on capital and we are likely to end the year at around `4.39
10
lakh crores which I have provided in the RE 2020-21. For 2021-22, I propose
a sharp increase in capital expenditure and thus have provided `5.54 lakh
crores which is 34.5% more than the BE of 2020-21. Of this, I have kept a
sum of more than `44,000 crores in the Budget head of the Department of
Economic Affairs to be provided for projects/programmes/departments
that show good progress on Capital Expenditure and are in need of further
funds. Over and above this expenditure, we would also be providing more
than `2 lakh crores to States and Autonomous Bodies for their Capital
Expenditure.
49. We will also work out specific mechanisms to nudge States to spend
more of their budget on creation of infrastructure.
Roads and Highways Infrastructure
50. More than 13,000 km length of roads, at a cost of `3.3 lakh crores,
has already been awarded under the `5.35 lakh crores Bharatmala
Pariyojana project of which 3,800 kms have been constructed. By March
2022, we would be awarding another 8,500 kms and complete an additional
11,000 kms of national highway corridors.
51. To further augment road infrastructure, more economic corridors

are also being planned. Some are:
a. 3,500 km of National Highway works in the state of Tamil Nadu at an

investment of `1.03 lakh crores. These include Madurai-Kollam
corridor, Chittoor-Thatchur corridor. Construction will start next
year.
b. 1,100 km of National Highway works in the State of Kerala at an
investment of `65,000 crores including 600 km section of Mumbai-
Kanyakumari corridor in Kerala.
c. 675 km of highway works in the state of West Bengal at a cost of
`25,000 crores including upgradation of existing road-Kolkata –
Siliguri.
d. National Highway works of around `19,000 crores are currently in
progress in the State of Assam. Further works of more than `34,000
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crores covering more than 1300 kms of National Highways will be

undertaken in the State in the coming three years.
52. Some of the flagship corridors and other important projects that
would see considerable activity in 2021-22 are in Annexure-II.
53. I am also providing an enhanced outlay of `1,18,101 lakh crores for

Ministry of Road Transport and Highways, of which `1,08,230 crores is for
capital, the highest ever.
Railway Infrastructure
54. Indian Railways have prepared a National Rail Plan for India – 2030.
The Plan is to create a ‘future ready’ Railway system by 2030.
55. Bringing down the logistic costs for our industry is at the core of our
strategy to enable ‘Make in India’. It is expected that Western Dedicated
Freight Corridor (DFC) and Eastern DFC will be commissioned by June 2022.
The following additional initiatives are proposed:
a. The Sonnagar – Gomoh Section (263.7 km) of Eastern DFC will be

taken up in PPP mode in 2021-22. Gomoh-Dankuni section of 274.3
km will also be taken up in short succession.
b. We will undertake future dedicated freight corridor projects namely
East Coast corridor from Kharagpur to Vijayawada, East-West
Corridor from Bhusaval to Kharagpur to Dankuni and North-South
corridor from Itarsi to Vijayawada. Detailed Project Reports will be
undertaken in the first phase.
c. Broad Gauge Route Kilometers (RKM) electrified is expected to reach
46,000 RKM i.e., 72% by end of 2021 from 41,548 RKM on 1st Oct
2020. 100% electrification of Broad-Gauge routes will be completed
by December, 2023.
56. For Passenger convenience and safety the following measures are
proposed:
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a. We will introduce the aesthetically designed Vista Dome LHB coach

on tourist routes to give a better travel experience to passengers.
b. The safety measures undertaken in the past few years have borne
results. To further strengthen this effort, high density network and
highly utilized network routes of Indian railways will be provided
with an indigenously developed automatic train protection system
that eliminates train collision due to human error.
c. I am providing a record sum of `1,10,055 crores, for Railways of
which `1,07,100 crores is for capital expenditure.
Urban Infrastructure
57. We will work towards raising the share of public transport in urban
areas through expansion of metro rail network and augmentation of city bus
service. A new scheme will be launched at a cost of `18,000 crores to
support augmentation of public bus transport services. The scheme will
facilitate deployment of innovative PPP models to enable private sector
players to finance, acquire, operate and maintain over 20,000 buses. The
scheme will boost the automobile sector, provide fillip to economic growth,
create employment opportunities for our youth and enhance ease of
mobility for urban residents.
58. A total of 702 km of conventional metro is operational and another

1,016 km of metro and RRTS is under construction in 27 cities. Two new
technologies i.e., ‘MetroLite’ and ‘MetroNeo’ will be deployed to provide
metro rail systems at much lesser cost with same experience, convenience
and safety in Tier-2 cities and peripheral areas of Tier-1 cities.
59. Central counterpart funding will be provided to:

a. Kochi Metro Railway Phase-II of 11.5 km at a cost of `1957.05 crores.
b. Chennai Metro Railway Phase-II of 118.9 km at a cost of `63,246
crores.
c. Bengaluru Metro Railway Project Phase 2A and 2B of 58.19 km at a
cost of `14,788 crores.
d. Nagpur Metro Rail Project Phase-II and Nashik Metro at a cost of
`5,976 crores and `2,092 crores respectively.
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Power Infrastructure
60. The past 6 years have seen a number of reforms and achievements
in the power sector. We have added 139 Giga Watts of installed capacity,
connected an additional 2.8 crores households and added 1.41 lakh circuit
km of transmission lines.
61. The distribution companies across the country are monopolies,

either government or private. There is a need to provide choice to
consumers by promoting competition. A framework will be put in place to
give consumers alternatives to choose from among more than one
Distribution Company.
62. The viability of Distribution Companies is a serious concern. A

revamped reforms-based result-linked power distribution sector scheme
will be launched with an outlay of `3,05,984 crores over 5 years. The
scheme will provide assistance to DISCOMS for Infrastructure creation
including pre-paid smart metering and feeder separation, upgradation of
systems, etc., tied to financial improvements.
63. Prime Minister, while speaking at the 3rd Re-inVest Conference in

November 2020, had announced plans to launch a comprehensive National
Hydrogen Energy Mission. It is now proposed to launch a Hydrogen Energy
Mission in 2021-22 for generating hydrogen from green power sources.
Ports, Shipping, Waterways
64. Major Ports will be moving from managing their operational services
on their own to a model where a private partner will manage it for them.
For the purpose, 7 projects worth more than `2,000 crores will be offered
by the Major Ports on Public Private Partnership mode in FY21-22.
65. A scheme to promote flagging of merchant ships in India will be

launched by providing subsidy support to Indian shipping companies in
global tenders floated by Ministries and CPSEs. An amount of `1624 crores
will be provided over 5 years. This initiative will enable greater training and
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employment opportunities for Indian seafarers besides enhancing Indian

companies share in global shipping.
66. India has enacted Recycling of Ships Act, 2019 and acceded to the
Hong Kong International Convention. Around 90 ship recycling yards at
Alang in Gujarat have already achieved HKC-compliant certificates. Efforts
will be made to bring more ships to India from Europe and Japan. Recycling
capacity of around 4.5 Million Light Displacement Tonne (LDT) will be
doubled by 2024. This is expected to generate an additional 1.5 lakh jobs for
our youth.
Petroleum & Natural Gas
67. Our government has kept fuel supplies running across the country
without interruption during the COVID-19 lockdown period. Taking note of
the crucial nature of this sector in people’s lives, the following key initiatives
are being announced:
a. Ujjwala Scheme which has benefited 8 crores households will be

extended to cover 1 crores more beneficiaries.
b. We will add 100 more districts in next 3 years to the City Gas
Distribution network.
c. A gas pipeline project will be taken up in Union Territory of Jammu &
Kashmir.
d. An independent Gas Transport System Operator will be set up for
facilitation and coordination of booking of common carrier capacity
in all-natural gas pipelines on a non-discriminatory open access
basis.
Financial Capital
68. I propose to consolidate the provisions of SEBI Act, 1992,
Depositories Act, 1996, Securities Contracts (Regulation) Act, 1956 and
Government Securities Act, 2007 into a rationalized single Securities
Markets Code.
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69. The Government would support the development of a world class

Fin-Tech hub at the GIFT-IFSC.
70. To instill confidence amongst the participants in the Corporate Bond

Market during times of stress and to generally enhance secondary market
liquidity, it is proposed to create a permanent institutional framework. The
proposed body would purchase investment grade debt securities both in
stressed and normal times and help in the development of the Bond
market.
71. In the budget of 2018-19, Government had announced its intent to

establish a system of regulated gold exchanges in the country. For the
purpose, SEBI will be notified as the regulator and Warehousing
Development and Regulatory Authority will be strengthened to set up a
commodity market eco system arrangement including vaulting, assaying,
logistics etc in addition to warehousing.
72. Towards investor protection, I propose to introduce an investor

charter as a right of all financial investors across all financial products.
73. To give a further boost to the non-conventional energy sector, I

propose to provide additional capital infusion of `1,000 crores to Solar
Energy Corporation of India and `1,500 crores to Indian Renewable Energy
Development Agency.
Increasing FDI in Insurance Sector
74. I propose to amend the Insurance Act, 1938 to increase the

permissible FDI limit from 49% to 74% in Insurance Companies and allow
foreign ownership and control with safeguards. Under the new structure,
the majority of Directors on the Board and key management persons would
be resident Indians, with at least 50% of Directors being Independent
Directors, and specified percentage of profits being retained as general
reserve.
Stressed Asset Resolution by setting up a New Structure
75. The high level of provisioning by public sector banks of their stressed
assets calls for measures to clean up the bank books. An Asset
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Reconstruction Company Limited and Asset Management Company would

be set up to consolidate and take over the existing stressed debt and then
manage and dispose of the assets to Alternate Investment Funds and other
potential investors for eventual value realization.
Recapitalization of PSBs
76. To further consolidate the financial capacity of PSBs, further

recapitalization of `20,000 crores is proposed in 2021-22.
Deposit Insurance
77. Last year, Government had approved an increase in the Deposit

Insurance cover from `1 lakh to `5 lakhs for bank customers. I shall be
moving amendments to the DICGC Act, 1961 in this Session itself to
streamline the provisions, so that if a bank is temporarily unable to fulfil its
obligations, the depositors of such a bank can get easy and time-bound
access to their deposits to the extent of the deposit insurance cover. This
would help depositors of banks that are currently under stress.
78. To improve credit discipline while continuing to protect the interest

of small borrowers, for NBFCs with minimum asset size of `100 crores, the
minimum loan size eligible for debt recovery under the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest
(SARFAESI) Act, 2002 is proposed to be reduced from the existing level of
`50 lakhs to `20 lakhs.
Company Matters
79. The decriminalizing of the procedural and technical compoundable

offences under the Companies Act, 2013, is now complete. I now propose
to next take up decriminalization of the Limited Liability Partnership (LLP)
Act, 2008.
80. Sir, I propose to revise the definition under the Companies Act, 2013
for Small Companies by increasing their thresholds for Paid up capital from
“not exceeding `50 Lakh” to “not exceeding `2 Crore” and turnover from
“not exceeding `2 Crore” to “not exceeding `20 Crore”. This will benefit
17
more than two lakh companies in easing their compliance requirements.
81. As a further measure which directly benefits Start-ups and

Innovators, I propose to incentivize the incorporation of One Person
Companies (OPCs) by allowing OPCs to grow without any restrictions on
paid up capital and turnover, allowing their conversion into any other type
of company at any time, reducing the residency limit for an Indian citizen to
set up an OPC from 182 days to 120 days and also allow Non Resident
Indians (NRIs) to incorporate OPCs in India.
82. To ensure faster resolution of cases, NCLT framework will be

strengthened, e-Courts system shall be implemented and alternate
methods of debt resolution and special framework for MSMEs shall be
introduced.
83. During the coming fiscal 2021-22, we will be launching data

analytics, artificial intelligence, machine learning driven MCA21 Version 3.0.
This Version 3.0 will have additional modules for e-scrutiny, e-Adjudication,
e-Consultation and Compliance Management.
Disinvestment and Strategic Sale
84. In spite of COVID-19, we have kept working towards strategic

disinvestment. A number of transactions namely BPCL, Air India, Shipping
Corporation of India, Container Corporation of India, IDBI Bank, BEML,
Pawan Hans, Neelachal Ispat Nigam limited among others would be
completed in 2021-22. Other than IDBI Bank, we propose to take up the
privatization of two Public Sector Banks and one General Insurance
company in the year 2021-22. This would require legislative amendments
and I propose to introduce the amendments in this Session itself.
85. In 2021-22 we would also bring the IPO of LIC for which I am
bringing the requisite amendments in this Session itself.
86. In the AtmaNirbhar Package, I had announced that we will come out
with a policy of strategic disinvestment of public sector enterprises. I am
happy to inform the House that the Government has approved the said
policy. The policy provides a clear roadmap for disinvestment in all non-
strategic and strategic sectors. We have kept four areas that are strategic
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where bare minimum CPSEs will be maintained and rest privatized. In the
remaining sectors all CPSEs will be privatized. The main highlights of the
policy are mentioned at Annexure-III.
87. To fast forward the disinvestment policy, I am asking NITI to work

out on the next list of Central Public Sector companies that would be taken
up for strategic disinvestment.
88. To similarly incentivise States to take to disinvestment of their Public

Sector Companies, we will work out an incentive package of Central Funds
for States.
89. Idle assets will not contribute to AtmaNirbhar Bharat. The non-core
assets largely consist of surplus land with government
Ministries/Departments and Public Sector Enterprises. Monetizing of land
can either be by way of direct sale or concession or by similar means. This
requires special abilities and for this purpose, I propose to use a Special
Purpose Vehicle in the form of a company that would carry out this activity.
90. In order to ensure timely completion of closure of sick or loss

making CPSEs, we will introduce a revised mechanism that will ensure
timely closure of such units.
91. I have estimated ` 1,75,000 crores as receipts from disinvestment in

BE 2021-22.
Government Financial Reforms
92. Under the Treasury Single Account (TSA) System autonomous bodies
directly draw funds from the Government’s account at the time of actual
expenditure, saving interest costs. We will extend the TSA System for
universal application from 2021-22.
93. On the recommendation of the Fifteenth Finance Commission, we

have undertaken a detailed exercise to rationalise and bring down the
number of Centrally Sponsored Schemes. This will enable consolidation of
outlays for better impact.
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94. The Government is committed to the development of Multi-State

Cooperatives and will provide all support to them. To further streamline the
‘Ease of Doing Business’ for Cooperatives, I propose to set up a separate
Administrative Structure for them.
3. Inclusive Development for Aspirational India
95. Honourable Speaker Sir, under this pillar, I will cover Agriculture and
Allied sectors, farmers’ welfare and rural India, migrant workers and labour,
and financial inclusion.
Agriculture
96. Our Government is committed to the welfare of farmers. The MSP

regime has undergone a sea change to assure price that is at least 1.5 times
the cost of production across all commodities. The procurement has also
continued to increase at a steady pace. This has resulted in increase in
payment to farmers substantially.
97. In case of wheat, the total amount paid to farmers in 2013-2014 was
`33,874 crores. In 2019-2020 it was `62,802 crores, and even better, in
2020-2021, this amount, paid to farmers, was `75,060 crores. The number
of wheat growing farmers that were benefitted increased in 2020-21 to
43.36 lakhs as compared to 35.57 lakhs in 2019-20.
98. For paddy, the amount paid in 2013-14 was `63,928 crores. In 2019-
2020 this increased `1,41,930 crores. Even better, in 2020-2021, this is
further estimated to increase to `172,752 crores. The number of farmers
benefitted increased from 1.24 crores in 2019-20 to 1.54 crores in 2020-21.
99. In the same vein, in case of pulses, the amount paid in 2013-2014
was `236 crores. In 2019-20 it increased `8,285 crores. Now, in 2020-2021,
it is at `10,530 crores, a more than 40 times increase from 2013-14.
100. The receipts to cotton farmers have seen a stupendous increase

from `90 crores in 2013-14 to `25,974 crores (as on 27th January 2021).
The details are in Annexure IV.
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101. Early this year, Honourable Prime Minister had launched SWAMITVA
Scheme. Under this, a record of rights is being given to property owners in
villages. Up till now, about 1.80 lakh property-owners in 1,241 villages have
been provided cards. I now propose during FY21-22 to extend this to cover
all states/UTs.
102. To provide adequate credit to our farmers, I have enhanced the

agricultural credit target to `16.5 lakh crores in FY22. We will focus on
ensuring increased credit flows to animal husbandry, dairy, and fisheries.
103. We are enhancing the allocation to the Rural Infrastructure

Development Fund from `30,000 crores to `40,000 crores.
104. The Micro Irrigation Fund, with a corpus of `5,000 crores has been
created under NABARD, I propose to double it by augmenting it by another
`5,000 crores.
105. To boost value addition in agriculture and allied products and their
exports, the scope of ‘Operation Green Scheme’ that is presently applicable
to tomatoes, onions, and potatoes, will be enlarged to include 22 perishable
products.
106. Around 1.68 crores farmers are registered and ` 1.14 lakh crores of
trade value has been carried out through e-NAMs. Keeping in view the
transparency and competitiveness that e-NAM has brought into the
agricultural market, 1,000 more mandis will be integrated with e-NAM.
107. The Agriculture Infrastructure Fund would be made available to

APMCs for augmenting their infrastructure facilities.
Fisheries
108. I am proposing substantial investments in the development of

modern fishing harbours and fish landing centres. To start with, 5 major
fishing harbours – Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat –
will be developed as hubs of economic activity. We will also develop inland
fishing harbours and fish-landing centres along the banks of rivers and
waterways.
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109. Seaweed farming is an emerging sector with potential to transform

the lives of coastal communities. It will provide large scale employment and
additional incomes. To promote seaweed cultivation, I propose a
Multipurpose Seaweed Park to be established in Tamil Nadu.
Migrant Workers and Labourers
110. We have launched the One Nation One Ration Card scheme through
which beneficiaries can claim their rations anywhere in the country.
Migrant workers in particular benefit from this scheme – those staying away
from their families can partially claim their ration where they are stationed,
while their family, in their native places, can claim the rest. I am happy to
inform you that One Nation One Ration Card plan is under implementation
by 32 states and UTs, reaching about 69 crores beneficiaries – that’s a total
of 86% beneficiaries covered. The remaining 4 states and UTs will be
integrated in the next few months.
111. To further extend our efforts towards the unorganised labour force
migrant workers particularly, I propose to launch a portal that will collect
relevant information on gig, building, and construction-workers among
others. This will help formulate Health, Housing, Skill, Insurance, Credit, and
food schemes for migrant workers.
112. We will conclude a process that began 20 years ago, with the
implementation of the 4 labour codes. For the first time globally, social
security benefits will extend to gig and platform workers. Minimum wages
will apply to all categories of workers, and they will all be covered by the
Employees State Insurance Corporation. Women will be allowed to work in
all categories and also in the night-shifts with adequate protection. At the
same time, compliance burden on employers will be reduced with single
registration and licensing, and online returns.
Financial Inclusion
113. To further facilitate credit flow under the scheme of Stand Up India
for SCs, STs, and women, I propose to reduce the margin money
requirement from 25% to 15%, and to also include loans for activities allied
to agriculture.
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114. We have taken a number of steps to support the MSME sector. In

this Budget, I have provided `15,700 crores to this sector, more than double
of this year’s BE.
4. Reinvigorating Human Capital
115. The National Education Policy (NEP) announced recently has had
good reception.
School Education
116. More than 15,000 schools will be qualitatively strengthened to

include all components of the National Education Policy. They shall emerge
as exemplar schools in their regions, handholding and mentoring other
schools to achieve the ideals of the Policy.
117. 100 new Sainik Schools will be set up in partnership with NGOs/
private schools/states.
Higher Education
118. In Budget 2019-20, I had mentioned about the setting-up of Higher

Education Commission of India. We would be introducing Legislation this
year to implement the same. It will be an umbrella body having 4 separate
vehicles for standard-setting, accreditation, regulation, and funding.
119. Many of our cities have various research institutions, universities,

and colleges supported by the Government of India. Hyderabad for
example, has about 40 such major institutions. In 9 such cities, we will
create formal umbrella structures so that these institutions can have better
synergy, while also retaining their internal autonomy. A Glue Grant will be
set aside for this purpose.
120. For accessible higher education in Ladakh, I propose to set up a

Central University in Leh.
121. The other important projects to be taken up as part of NEP are listed
at Annexure V.
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Scheduled Castes and Scheduled Tribes Welfare
122. We have set ourselves a target of establishing 750 Eklavya model

residential schools in our tribal areas. I propose to increase the unit cost of
each such school from `20 crores to `38 crores, and for hilly and difficult
areas, to `48 crores. This would help in creating robust infrastructure
facilities for our tribal students.
123. We have revamped the Post Matric Scholarship Scheme, for the
welfare of Scheduled Castes. I have also enhanced the Central Assistance in
this regard. We are allotting ` 35,219 crores for 6 years till 2025-2026, to
benefit 4 crores SC students.
Skilling
124. In 2016, we had launched the National Apprenticeship Promotion

Scheme. The Government proposes to amend the Apprenticeship Act with a
view to further enhancing apprenticeship opportunities for our youth. We
will realign the existing scheme of National Apprenticeship Training Scheme
(NATS) for providing post-education apprenticeship, training of graduates
and diploma holders in Engineering. Over `3,000 crores will be provided for
this.
125. An initiative is underway, in partnership with the United Arab

Emirates (UAE), to benchmark skill qualifications, assessment, and
certification, accompanied by the deployment of certified workforce. We
also have a collaborative Training Inter Training Programme (TITP) between
India and Japan to facilitate transfer of Japanese industrial and vocational
skills, technique, and knowledge. We will take forward this initiative with
many more countries.
126. In my Budget Speech of July 2019, I had announced the National

Research Foundation. We have now worked out the modalities and the NRF
outlay will be of `50,000 crores, over 5 years. It will ensure that the overall
24
research ecosystem of the country is strengthened with focus on identified

national-priority thrust areas.
127. There has been a manifold increase in digital payments in the recent
past. To give a further boost to digital transactions, I earmark `1,500 crores
for a proposed scheme that will provide financial incentive to promote
digital modes of payment.
128. We will undertake a new initiative – National Language Translation

Mission (NTLM). This will enable the wealth of governance-and-policy
related knowledge on the Internet being made available in major Indian
languages.
129. The New Space India Limited (NSIL), a PSU under the Department of
Space will execute the PSLV-CS51 launch, carrying the Amazonia Satellite
from Brazil, along with a few smaller Indian satellites.
130. As part of the Gaganyaan mission activities, four Indian astronauts

are being trained on Generic Space Flight aspects, in Russia. The first
unmanned launch is slated for December 2021.
131. Our oceans are a storehouse of living and non-living resources. To

better understand this realm, we will launch a Deep Ocean Mission with a
budget outlay of more than `4,000 crores, over five years. This Mission will
cover deep ocean survey exploration and projects for the conservation of
deep sea bio-diversity.

132. Speaker Sir, I now come to the last of the six pillars. This will outline
plans for reforms in one of our core principles of minimum government,
maximum governance.
133. We have taken a number of steps to bring reforms in Tribunals in

the last few years for speedy delivery of justice. Continuing with the
reforms process, I now propose to take further measures to rationalize the
functioning of Tribunals.
134. We have introduced the National Commission for Allied Healthcare

Professionals Bill in Parliament, with a view to ensure transparent and
25
efficient regulation of the 56 allied healthcare professions. Additionally, to

bring about transparency, efficiency and governance reforms in the nursing
profession, The National Nursing and Midwifery Commission Bill will be
introduced by the government for passing.
135. To have ease of doing business for those who deal with Government
or CPSEs, and carry out contracts, I propose to set up a Conciliation
Mechanism and mandate its use for quick resolution of contractual
disputes. This will instil confidence in private investors and contractors.
136. The forthcoming Census could be the first digital census in the
history of India. For this monumental and milestone-marking task, I have
allocated `3,768 crores in the year 2021-2022.
137. Goa is celebrating the diamond jubilee year of the state’s liberation
from Portuguese rule. From the GoI’s side, I propose a grant of `300 crores
to the Government of Goa for the celebrations.
138. I propose to provide `1,000 crores for the welfare of Tea workers
especially women and their children in Assam and West Bengal. A special
scheme will be devised for the same.
Fiscal Position
139. In these last few paragraphs of Part A of my speech, I draw the

attention of this august House to the fact that, at the beginning of the
current Financial Year, the pandemic’s impact on the economy resulted in a
weak revenue inflow. This was combined with high expenditure to provide
essential relief to vulnerable sections of the society especially the poor,
women, SCs and STs.
140. Unlike many other countries, we opted for a series of medium-sized

packages during the pandemic so that we could calibrate and target our
response according to an evolving situation. Once the health situation
stabilised, and the lockdown was being slowly lifted, we switched to
ramping up Government spending so as to revive domestic demand. As a
result, against an original BE expenditure of `30.42 lakh crores for 2020-
2021, our RE estimates are `34.50 lakh crores. We have maintained the
26
quality of expenditure. The capital expenditure, estimated in RE is ` 4.39

lakh crores in 2020-2021 as against `4.12 lakh crores in BE 2020-21.
141. The fiscal deficit in RE 2020-21 is pegged at 9.5% of GDP. We have

funded this through Government borrowings, multilateral borrowings, Small
Saving Funds and short term borrowings. We would need another ` 80,000
crores for which we would be approaching the markets in these 2 months.
To ensure that the economy is given the required push, our BE estimates for
expenditure in 2021-2022, are `34.83 lakh crores. This includes ` 5.54 lakh
crores as capital expenditure, an increase of 34.5% over the BE figure of
2020-2021. The fiscal deficit in BE 2021-2022 is estimated to be 6.8% of
GDP. The gross borrowing from the market for the next year would be
around `12 lakh crores. We plan to continue with our path of fiscal
consolidation, and intend to reach a fiscal deficit level below 4.5% of GDP by
2025-2026 with a fairly steady decline over the period. We hope to achieve
the consolidation by first, increasing the buoyancy of tax revenue through
improved compliance, and secondly, by increased receipts from
monetisation of assets, including Public Sector Enterprises and land. The
Contingency Fund of India is being proposed to be augmented from `500
crores to `30,000 crores through Finance Bill.
142. In accordance with the views of the 15th Finance Commission, we

are allowing a normal ceiling of net borrowing for the states at 4% of GSDP
for the year 2021-2022. A portion of this ceiling will be earmarked to be
spent on incremental capital expenditure. Additional borrowing ceiling of
0.5% of GSDP will also be provided subject to conditions. States will be
expected to reach a fiscal deficit of 3% of GSDP by 2023-24, as
recommended by the 15th Finance Commission.
143. In the July 2019-2020 Budget, I introduced the Statement 27 on

Extra Budgetary Resources – it disclosed the borrowings of Government
agencies that went towards funding GoI schemes, and whose repayment
burden was on the Government. In my 2020-2021 Budget, I enhanced the
scope and coverage of the Statement, by including the loans provided by
Government to the FCI. Taking a step further in this direction, I propose to
discontinue the NSSF Loan to FCI for Food Subsidy and accordingly Budget
Provisions have been made in RE 2020-21 and BE 2021-22. The Extra
Budgetary Resources details are at Annexure VI.
27
144. We know that the FRBM Act mandates fiscal deficit of 3% of GDP to
be achieved by 31st March 2020-2021. The effect of this year’s unforeseen
and unprecedented circumstances has necessitated the submission of a
deviation statement under Sections 4 (5) and 7 (3) (b) of the FRBM Act
which I am laying on the Table of the House as part of the FRBM
Documents.
145. Towards achieving Central Government fiscal deficit along the broad
path that I have already indicated; I will be introducing an amendment to
the FRBM Act.
146. On 9th December 2020, the 15th Finance Commission submitted its
final report, covering the period 2021-2026 to the Rashtrapati ji. The
Government has laid the Commission’s report, along with the explanatory
memorandum in the Parliament retaining the vertical shares of the states at
41%. We recognise our commitment to fiscal federalism and propose
therefore to adhere to this recommendation. Jammu and Kashmir in the
14th Finance Commission was entitled to get devolution being a State. Now,
the funds to the UTs of Jammu and Kashmir and Ladakh would be provided
by the Centre. I have also provided, on the Commission’s recommendation,
`1,18,452 crores as Revenue Deficit Grant to 17 states in 2021-2022, as
against `74,340 crores to 14 States in 2020-2021.
I would, now, move to Part B of my speech.

28
PART B
147. Honourable Speaker, the world is facing a serious challenge of the

pandemic and its aftershock. In these trying times, when many economies
are struggling to revive, our people and our industry have exhibited
remarkable resilience.
148. As I mentioned already, post-pandemic, a new world order seems to

be emerging, one in which Asia is poised to occupy a prominent position
and India will have a leading role therein. In this scenario, our tax system
has to be transparent, efficient, and should promote investments and
employment in our country. At the same time it should put minimum
burden on our tax payers.
இய ற ஈ ட கா த கா த
வ த வ ல தர .
- தி ற 385
A King/Ruler is the one who creates and acquires wealth,

protects and distributes it for common good.
- Thirukkural 385

149. Keeping this in mind, our Government introduced a series of reforms
in the Direct tax system for the benefit of our taxpayers and economy. Few
months prior to the pandemic, in order to attract investments we slashed
our Corporate tax rate to make it among the lowest in the world. The
Dividend Distribution Tax too was abolished. The burden of taxation on
small taxpayers was eased by increasing rebates. In 2020, the return filers
saw a dramatic increase to 6.48 crore from 3.31 crore in 2014.
150. In the Direct Tax administration, we had recently introduced the

Faceless Assessment and Faceless Appeal. I now seek to take further steps
to simplify the tax administration, ease compliance, and reduce litigation.
29
Relief to Senior Citizens
151. I begin my direct tax proposals by offering my pranaam to our senior

citizens. Many of them, despite having foregone several basic necessities of
their own, have strived to build our nation.
152. Now in the 75th year of Independence of our country, when we

continue our endeavour with renewed vigour, we shall reduce compliance
burden on our senior citizens who are 75 years of age and above. For senior
citizens who only have pension and interest income, I propose exemption
from filing their income tax returns. The paying bank will deduct the
necessary tax on their income.
Reduction in Time for Income Tax Proceedings
153. Honourable Speaker, presently, an assessment can be re-opened up

to 6 years and in serious tax fraud cases for up to 10 years. As a result,
taxpayers have to remain under uncertainty for a long time.
154. I therefore propose to reduce this time-limit for re-opening of

assessment to 3 years from the present 6 years. In serious tax evasion cases
too, only where there is evidence of concealment of income of `50 lakh or
more in a year, can the assessment be re-opened up to 10 years. Even this
reopening can be done only after the approval of the Principal Chief
Commissioner, the highest level of the Income Tax Department.
Setting up the Dispute Resolution Committee
155. Honourable Speaker, it has been the resolve of this Government to

reduce litigation, which mars the present taxation system.
156. The Government came out with the Direct Tax Vivad Se Vishwas
Scheme to give taxpayers an opportunity to settle long pending disputes
and be relieved of further strain on their time and resources. The response
from the taxpayers has been the best ever as over 1 lakh ten thousand
taxpayers have already opted to settle tax disputes of over `85,000 crores
under this Scheme.
30
157. To further reduce litigation for small taxpayers, I propose to

constitute a Dispute Resolution Committee for them, which will be faceless
to ensure efficiency, transparency and accountability. Anyone with a taxable
income up to `50 lakh and disputed income up to `10 lakh shall be eligible
to approach the Committee.
Faceless ITAT
158. For ease of compliance and to reduce discretion, we are committed

to make the taxation processes faceless. The Government has already
introduced faceless assessment and appeal this year.
159. The next level of income tax appeal is the Income Tax Appellate
Tribunal. I now propose to make this Tribunal faceless. We shall establish a
National Faceless Income Tax Appellate Tribunal Centre. All communication
between the Tribunal and the appellant shall be electronic. Where personal
hearing is needed, it shall be done through video-conferencing.
Relaxation to NRI
160. When Non-Resident Indians return to India, they have issues with
respect to their accrued incomes in their foreign retirement accounts. This
is usually due to a mismatch in taxation periods. They also face difficulties
in getting credit for Indian taxes in foreign jurisdictions. I propose to notify
rules for removing their hardship of double taxation.
Exemption from Audit
161. Currently, if your turnover exceeds `1 crore, you have to get your
accounts audited. In the February 2020 Budget, I had increased the limit for
tax audit to `5 crore for those who carry out 95% of their transactions
digitally. To further incentivise digital transactions and reduce compliance
burden, I propose to increase this limit for tax audit for such persons from
`5 crore to `10 crore.
Relief for Dividend
162. In the previous Budget, I had abolished the Dividend Distribution Tax
(DDT) in order to incentivise investment. Dividend was made taxable in the
31
hands of shareholders. Now, in order to provide ease of compliance, I

propose to make dividend payment to REIT/ InvIT exempt from TDS.
Further, as the amount of dividend income cannot be estimated correctly
by the shareholders for paying advance tax, I propose to provide that
advance tax liability on dividend income shall arise only after the
declaration/payment of dividend. Also, for Foreign Portfolio Investors, I
propose to enable deduction of tax on dividend income at lower treaty rate.
Attracting foreign investment into infrastructure sector
163. In the last budget, for attracting foreign investment in the

infrastructure sector, we had granted 100% tax exemption, subject to
certain conditions, to foreign Sovereign Wealth Funds and Pension Funds,
on their income from investment in Indian infrastructure. We have noticed
that few of such Funds are facing difficulties in meeting some of these
conditions. In order to ensure that a large number of Funds invest in India, I
propose to relax some of these conditions relating to prohibition on private
funding, restriction on commercial activities, and direct investment in
infrastructure.
164. In order to allow funding of infrastructure by issue of Zero Coupon

Bonds, I propose to make notified Infrastructure Debt Funds eligible to raise
funds by issuing tax efficient Zero Coupon Bonds.
Affordable Housing/Rental Housing
165. This Government sees ‘Housing for All’ and affordable housing as
priority areas. In the July 2019 Budget, I provided an additional deduction of
interest, amounting to `1.5 lakh, for loan taken to purchase an affordable
house. I propose to extend the eligibility of this deduction by one more
year, to 31st March 2022. The additional deduction of `1.5 lakh shall
therefore be available for loans taken up till 31st March 2022, for the
purchase of an affordable house.
166. Further, to keep up the supply of affordable houses, I propose that

affordable housing projects can avail a tax holiday for one more year – till
31st March, 2022.
32
167. We are committed to promote supply of Affordable Rental Housing

for migrant workers. For this, I propose to allow tax exemption for notified
Affordable Rental Housing Projects.
Tax incentives to IFSC
168. As I mentioned in Part A of this speech, the Government is

committed to make the International Financial Services Centre (IFSC) in GIFT
City a global financial hub. In addition to the tax incentives already
provided, I propose to include, among others, tax holiday for capital gains
for aircraft leasing companies, tax exemption for aircraft lease rentals paid
to foreign lessors; tax incentive for relocating foreign funds in the IFSC; and
to allow tax exemption to the investment division of foreign banks located
in IFSC.
Pre-filling of Returns
169. Honourable Speaker, in order to ease compliance for the taxpayer,

details of salary income, tax payments, TDS, etc. already come pre-filled in
income tax returns. To further ease filing of returns, details of capital gains
from listed securities, dividend income, and interest from banks, post office,
etc. will also be pre-filled.
Relief to Small Trusts
170. We hope to reduce compliance burden on small charitable trusts

running educational institutions and hospitals. So far, there is a blanket
exemption to such entities, whose annual receipt does not exceed
`1 crore. I now propose to increase this amount to `5 crore.
Labour Welfare
171. We have noticed that some employers deduct the contribution of

employees towards Provident funds, superannuation funds, and other
social security funds but do not deposit these contributions within the
specified time. For the employees, this means a loss of interest or income.
In cases where an employer later becomes financially unviable, non-deposit
results in a permanent loss for the employees.
33
172. In order to ensure that employees’ contributions are deposited on

time, I reiterate that the late deposit of employee’s contribution by the
employer will not be allowed as deduction to the employer.
Incentives for Start-ups

173. In order to incentivise start-ups in the country, I propose to extend
the eligibility for claiming tax holiday for start-ups by one more year - till
31st March, 2022. Further, in order to incentivise funding of the start-ups, I
propose to extend the capital gains exemption for investment in start-ups
by one more year - till 31st March, 2022.
Indirect Tax Proposals
GST
174. Before I come to my Indirect Tax proposals, I would like to appraise

the House on GST. The GST is now four years old, and we have taken several
measures to further simplify it. Some of the measures include:
i. nil return through SMS,
ii. quarterly return and monthly payment for small taxpayers,
iii. electronic invoice system,
iv. validated input tax statement,
v. pre-filled editable GST return, and
vi. staggering of returns filing.
The capacity of GSTN system has also been enhanced. We have also
deployed deep analytics and Artificial Intelligence to identify tax evaders
and fake billers and launched special drives against them.
175. The results speak for themselves. We have made record collections
in the last few months.
176. The GST Council has painstakingly thrashed out thorny issues. As
Chairperson of the Council, I want to assure the House that we shall take
every possible measure to smoothen the GST further, and remove
anomalies such as the inverted duty structure.

177. Our Custom Duty Policy should have the twin objective of promoting
domestic manufacturing and helping India get onto global value chain and
34
export better. The thrust now has to be on easy access to raw materials and
exports of value added products.
178. Towards this, last year, we started overhauling the Customs Duty
structure, eliminating 80 outdated exemptions. I also thank everyone who
responded overwhelmingly to a crowd-sourcing call for suggestions on this
revamp. I now propose to review more than 400 old exemptions this year.
We will conduct this through extensive consultations, and from 1st October
2021, we will put in place a revised customs duty structure, free of
distortions. I also propose that any new customs duty exemption
henceforth will have validity up to the 31st March following two years from
the date of its issue.
Electronic and Mobile Phone Industry
179. Domestic electronic manufacturing has grown rapidly. We are now

exporting items like mobiles and chargers. For greater domestic value
addition, we are withdrawing a few exemptions on parts of chargers and
sub-parts of mobiles. Further, some parts of mobiles will move from ‘nil’
rate to a moderate 2.5%.
Iron and Steel
180. MSMEs and other user industries have been severely hit by a recent
sharp rise in iron and steel prices. Therefore, we are reducing Customs duty
uniformly to 7.5% on semis, flat, and long products of non-alloy, alloy, and
stainless steels. To provide relief to metal re-cyclers, mostly MSMEs, I am
exempting duty on steel scrap for a period up to 31st March, 2022. Further,
I am also revoking ADD and CVD on certain steel products. Also, to provide
relief to copper recyclers, I am reducing duty on copper scrap from 5% to
2.5%.
Textile
181. The Textiles Sector generates employment and contributes

significantly to the economy. There is a need to rationalize duties on raw
material inputs to manmade textiles. We are now bringing nylon chain on
par with polyester and other man-made fibers. We are uniformly reducing
35
the BCD rates on caprolactam, nylon chips and nylon fiber & yarn to 5%.
This will help the textile industry, MSMEs, and exports, too.
Chemicals
182. We have calibrated customs duty rates on chemicals to encourage

domestic value addition and to remove inversions. Apart from other items,
we are reducing customs duty on Naptha to 2.5% to correct inversion.
Gold and Silver
183. Gold and silver presently attract a basic customs duty of 12.5%.
Since the duty was raised from 10% in July 2019, prices of precious metals
have risen sharply. To bring it closer to previous levels, we are rationalizing
custom duty on gold and silver.
Renewable Energy
184. In Part A, we have already acknowledged that solar energy has huge
promise for India. To build up domestic capacity, we will notify a phased
manufacturing plan for solar cells and solar panels. At present, to encourage
domestic production, we are raising duty on solar invertors from 5% to 20%,
and on solar lanterns from 5% to 15%.
Capital Equipment and Auto Parts
185. There is immense potential in manufacturing heavy capital

equipment domestically. We will comprehensively review the rate structure
in due course. However, we are revising duty rates on certain items
immediately. We propose to withdraw exemptions on tunnel boring
machine. It will attract a customs duty of 7.5%; and its parts a duty of 2.5%.
We are raising customs duty on certain auto parts to 15% to bring them on
par with general rate on auto parts.
MSME Products
186. We are proposing certain changes to benefit MSMEs. We are

increasing duty from 10% to 15% on steel screws and plastic builder wares.
On prawn feed we increase it from 5% to 15%. We are rationalizing
exemption on import of duty-free items as an incentive to exporters of
36
garments, leather, and handicraft items. Almost all these items are made
domestically by our MSMEs. We are withdrawing exemption on imports of
certain kind of leathers as they are domestically produced in good quantity
and quality, mostly by MSMEs. We are also raising customs duty on finished
synthetic gem stones to encourage their domestic processing.
Agriculture Products
187. To benefit farmers, we are raising customs duty on cotton from nil
to 10% and on raw silk and silk yarn from 10% to 15%. We are also
withdrawing end-use based concession on denatured ethyl alcohol.
Currently, rates are being uniformly calibrated to 15% on items like maize
bran, rice bran oil cake, and animal feed additives.
188. There is an immediate need to improve agricultural infrastructure

so that we produce more, while also conserving and processing agricultural
output efficiently. This will ensure enhanced remuneration for our farmers.
To earmark resources for this purpose, I propose an Agriculture
Infrastructure and Development Cess (AIDC) on a small number of items.
However, while applying this cess, we have taken care not to put additional
burden on consumers on most items.
Rationalization of Procedures and Easing of Compliance
189. For their judicious application, we propose certain changes in the

provisions relating to ADD and CVD levies. To complete Customs
investigations, we are prescribing definite timelines. In 2020, we rolled out
the Turant Customs initiative, which brought in Faceless, Paperless, and
Contactless Customs measures. With effect from September 2020, we have
implemented a new procedure for administration of Rules of Origin. This
has helped in putting a check on misuse of FTAs.
190. The specific details of direct and indirect tax changes proposed are
listed in the Annexure to my speech.
191. Mr. Speaker Sir, with these words I commend the Budget to this
august House.
37
Annex to Part A of Budget Speech
ANNEXURE-I
Health and Wellbeing – Expenditure
(In ` crores)
Ministry/Department Actuals BE BE
2019-20 2020-21 2021-22
D/o Health & Family Welfare 62,397 65,012 71,269
D/o Health Research 1,934 2,100 2,663
M/o AYUSH 1,784 2,122 2,970
CoVID related Special Provisions
Vaccination 35,000
D/o Drinking Water & Sanitation 18,264 21,518 60,030
Nutrition 1,880 3,700 2,700
FC Grants for Water and Sanitation 36,022
FC Grants for Health 13,192
TOTAL 86,259 94,452 2,23,846

38
ANNEXURE-II
Flagship Projects: Roads and Highways
Major Expressways/Corridors
 Delhi-Mumbai Expressway: Remaining 260 km will be awarded

before 31.3.2021.
 Bengaluru – Chennai Expressway: 278 km will be initiated in the

current financial year. Construction will begin in 2021-22
 Delhi-Dehradun economic corridor: 210 km corridor will be

initiated in the current financial year. Construction will begin in
2021-22
 Kanpur-Lucknow Expressway: 63 km expressway providing an

alternate route to NH 27 will be initiated in 2021-22.
 Chennai – Salem corridor: 277 km expressway will be awarded

and construction would start in 2021-22.
 Raipur-Vishakhapatnam: 464 km passing through Chhattisgarh,

Odisha and North Andhra Pradesh will be awarded in the current
year. Construction will start in 2021-22.
 Amritsar-Jamnagar: Construction will commence in 2021-22
 Delhi –Katra: Construction will commence in 2021-22
Advanced Traffic management system with speed radars, variable message

signboards, GPS enabled recovery vans will be installed in all new four and
six lane highways.
39
ANNEXURE-III
Highlights of Disinvestment/Strategic Disinvestment Policy
Objectives
a) Minimising presence of Central Government Public Sector Enterprises

including financial institutions and creating new investment space for
private sector
b) Post disinvestment, economic growth of Central Public Sector
Enterprises (CPSEs)/ financial institutions will be through infusion of
private capital, technology and best management practices. Will
contribute to economic growth and new jobs.
c) Disinvestment proceeds to finance various social sector and
developmental programmes of the government.
Policy features
a) Policy covers existing CPSEs, Public Sector Banks and Public Sector
Insurance Companies.
b) Various sectors will be classified as strategic and non-strategic
sectors.
c) The strategic sectors classified are:
i) Atomic energy, Space and Defence
ii) Transport and Telecommunications
iii) Power, Petroleum, Coal and other minerals
iv) Banking, Insurance and financial services
d) In strategic sectors, there will be bare minimum presence of the
public sector enterprises. The remaining CPSEs in the strategic
sector will be privatised or merged or subsidiarized with other
CPSEs or closed.
e) In non-strategic sectors, CPSEs will be privatised, otherwise shall be
closed.
40
ANNEXURE-IV
MSP Purchases of Agricultural Commodities
Year Wheat Paddy Cotton Jute Pulses Oilseeds

and
Copra
MSP Number MSP Number of MSP Number MSP Number MSP Value MSP
Value of Value farmers Value of Value of (` crore) Value
farmers benefited famers farmers
(` crore) benefited (` crore) (lakhs) (` crore) benefited (` crore) benefited (` lakh)
(lakhs) (lakhs) (lakhs)
2010-11 24764.3 NA 52573.04 NA - - - - 1.75 149.03
2011-12 33152 NA 58084.48 NA 14 0.02 47.7 0.46 0.005 1.52
2012-13 49020.18 NA 65039.28 NA 4797 7.3 140.19 1.15 407.22 394.06
2013-14 33874.20 NA 63927.65 NA 90 0.14 53.98. 0.5 235.86 1626.39
2014-15 39232.20 NA 66948.00 NA 18506 29.5 6.56 0.06 1128.93 45.52
2015-16 40727.60 NA 73981.90 73.08 1825 1.91 - - - 15.90
2016-17 35015.53 20.47 85802.73 76.85 - - 28.79 0.17 1039.39. 946.71
2017-18 50089.00 31.87 90397.86 72.31 898 0.88 172.16 1.22 8566.13 5072.73
2018-19 6204.33 38.77 116839.47 96.94 2976 2.38 66.79 0.26 20145.60 7091.11
2019-20 62802.88 35.57 141928.08 124.59 28500 21.5 56.24 0.55 8284.45 8305.06
2020-21 75059.60 43.36 172752** 154** 25974* 18.26* 2.99 0.01 10530.20 3647.11
* upto 27.01.21; **Estimated value
NA= Not Available

41
ANNEXURE-V
Initiatives on Education as part of NEP
 Standards will be developed for all school teachers in the form of

National Professional Standards for Teachers- NPST. This will enhance
the capabilities of teachers and will be followed by all 92 lakh teachers
of public and private school system in the country.
 Toys are both an expression of entertainment and learning. A unique
indigenous toy-based learning – pedagogy for all levels of school
education will be developed. This will transform classroom
transactions from mundane and rote learning to an engaging and
joyful experience.
 A National Digital Educational Architecture (NDEAR) will be set up
within the context of a Digital First Mindset where the Digital
Architecture will not only support teaching and learning activities but
also educational planning, governance and administrative activities of
the Centre and the States/ Union Territories. It will provide a diverse
education eco-system architecture for development of digital
infrastructure, a federated but inter operable system that will ensure
autonomy of all stakeholders, specially States and UTs.
 For children with hearing impairments, the Government will work on
standardization of Indian Sign language across the country, and
develop National and State Curriculum materials for use by them.
 There are a number of senior and retired teachers. They will be used
for individual mentoring of school teachers and educators through
constant online/offline support on subjects, themes and pedagogy.
 Students have so far been evaluated on uni-dimensional parameters.
There will be a complete shift from using assessments to not only
judge the cognitive levels of the learner but also using it as an
opportunity to identify the unique strengths and the potential of the
child. To this effect, a holistic progress card is envisaged to provide
students with valuable information on their strengths, areas of
interest, needed areas of focus and thereby helping them in making
optimal career choices.
 To enable increased access of resources, online modules covering the
entire gamut of adult education will be introduced.
 During the year, despite the COVID-19 pandemic, we have trained
more than 30 lakh elementary school teachers digitally, covering the
42
whole gamut of education. Taking this further, in 2021-22, we will

enable the training of 56 lakh school teachers through the National
Initiative for School Heads and Teachers for Holistic Advancement
(NISTHA).
 For the past few years our Prime Minister has been engaging with
students every year before their Board Exams to help them overcome
anxiety and stress. In this direction, we will introduce CBSE Board
Exam reforms in a phased manner to be effective from the 2022-23
academic session. Exams will move away from rote-learning and
students shall be tested on their conceptual clarity, analytical skills and
application of knowledge to real life situations.
 To promote enhanced academic collaboration with foreign higher
educational institutions, it is proposed to put in place a regulatory
mechanism to permit dual degrees, joint degrees, twinning
arrangements and other such mechanisms.
43
ANNEXURE VI
Statement of Extra Budgetary Resources (EBRs) (Govt. fully serviced bonds, NSSF loan and other resources)
(In ` crores)
Part-A – EBRs mobilised through issue of Govt. fully serviced bonds
Demand Name of the Ministry/Department 2016-17 2017-18 2018-19 2019-20 2020-21 2020-21 2021-22
No. and Name of the Scheme
Actuals Actuals Actuals Actuals BE RE BE
24 Department of Higher Education
Revitalising Infrastructure and --- --- --- --- 3000.00 ---

Systems in Education (RISE)
44 Department of Health & Family
Welfare
Pradhan Mantri Swasthya Suraksha --- --- --- --- 3000.00 ---
Yojana
59 Ministry of Housing & Urban
Affairs
Pradhan Mantri Awas Yojana --- --- 20000.00 --- 10000.00 ---
(PMAY) - Urban
61 Department of Water Resources,
River Development & Ganga
Rejuvenation
Polavaram Irrigation Project --- --- 1400.00 1850.00 --- 2234.29
(ii) Pradhan Mantri Krishi Sinchai Yojana 4225.00
(Accelerated Irrigation Benefits 2187.00 3105.00 5493.40 1963.30 5000.00
Programme & other Projects)
62 Department of Drinking Water &
Sanitation
Swachh Bharat Mission (Rural) --- --- 8698.20 3600.00 ---- ---
Jal Jeevan Mission/National Rural --- --- --- --- 12000.00 --- NIL
Drinking Water Programme
70 Ministry of New & Renewable
Energy
Grid Interactive Renewable Power, 1640.00 --- --- --- --- ---
Off-Grid/ Distributed & Decentralized
Renewable Power
Pradhan Mantri-Kisan Urja --- --- --- --- 1000.00 ---

Sanrakshan Evam Utthan
Mahabhiyan (PM-KUSUM)
77 Ministry of Ports, Shipping and
Waterways
Inland Waterways Authority of India 340.00 660.00 --- ---- --- ---
(IWAI) Projects
78 Ministry of Power
Deen Dayal Upadhyaya Gram Jyoti 5000.00 4000.00 13827.00 3782.00 5500.00 5000.00
Yojana/SAUBHAGYA
(ii) Power System Development Fund --- 5504.70 --- --- ---
Projects
86 Department of Rural Development
Pradhan Mantri Awas Yojana --- 7330.00 10678.80 10811.00 10000.00 20000.00
(PMAY) - Rural
Total 9167.00 15095.00 65602.10 22006.30 49500.00 31459.29
44
Part-B – Financial support extended through loans from NSSF

(In ` crores)
Sl. Name of the Ministry/Department/ 2016-17 2017-18 2018-19 2019-20 2020-21 2020-21 2021-22
No. Name of the Entity
Actuals Actuals Actuals Actuals BE RE BE
1 Department of Food & Public

Distribution
Food Corporation of India# 70000.00 65000.00 97000.00 110000.00 136600.00 84636.00 ---
2 Ministry of Housing & Urban Affairs

Building Materials & Technology --- 8000.00 --- 15000.00 --- 10000.00
Promotion Council
3 Department of Fertilizers
Metals & Minerals Trading Corporation --- --- --- 1310.00 --- --- ---
4 Support to other public agencies (to 30000.00

meet requirement for additional
resources, if any, under some specific
scheme/project)
Total 70000.00 73000.00 97000.00 126310.00 136600.00 94636.00 30000.00
Grand Total (A+B) 79167.00 88095.00 162602.10 148316.13 186100.00 126095.29 30000.00
# NSSF loan amount outstanding with FCI as on 31.03.2020 was ` 2,54,600 crore.
Notes :
(i) Air India Asset Holding Limited (AIAHL) under M/o Civil Aviation was permitted to raise
EBRs by issuing Govt. Fully Serviced Bonds of upto ` 7,000 crore in FY 2019-20 to refinance AIs debt
transferred to AIAHL.
(ii) M/o Railways was permitted to meet fund requirement of upto `10,200 crore
(` 5,200 crore in FY 2018-19 & ` 5,000 crore in FY 2019-20) through borrowings for financing its
National Projects. The repayment liability is being borne on General Revenues of Govt.
(iii) Capital Infusion in Public Sector Banks: An amount of `80,000 crore in

2017-18, `1,06,000 crore in 2018-19 and ` 65,443 crore in 2019-20 was infused for recapitalisation of
Public Sector Banks (PSBs). For this purpose, a provision of ` 20,000 crore was made in 2020-21. In
the FY 2020-21 so far, an amount of ` 5,500 crore has been infused by Government as fresh capital in
PSBs through non-interest bearing special securities. GoI has also infused capital through issue of
bonds in 3 other banks namely IDBI (` 4,557 crore), EXIM Bank (` 5,050 crore) and IIFCL
(` 5,297.60 crore).
(iv) Statement of liability on annuity projects is given in Part-B of the Receipt Budget 2021-22.
Amount of unpaid annual liability at the end of financial year 2019-20 was `41,822.04 crore.
45
Annex to Part B of Budget Speech
Direct Tax Proposals:
Sl. Proposals Proposed Amendments in brief

No.
1. Relief to Senior Citizens In order to ease compliance burden on senior

citizen pensioners who are of 75 years of age
or above, it is proposed to exempt them from
the requirement of filing of income tax if the
full amount of tax payable has been deducted
by the paying bank. This exemption is
proposed to be made available to such senior
citizens who have only interest income apart
from the pension income.
2. Reduction in Time Limits In order to reduce compliance burden, the

time-limit for re-opening of assessment is
being reduced to 3 years from the current 6
years from the end of the relevant
assessment year. Re-opening up to 10 years
is proposed to be allowed only if there is
evidence of undisclosed income of ` 50 lakh
or more for a year. Further, it is proposed to
completely remove discretion in re-opening
and henceforth re-opening shall be made only
in cases flagged by system on the basis of data
analytics, objection of C&AG and in
search/survey cases.
Further, in order to bring certainty in income

tax proceedings at the earliest, it is also
proposed to reduce the time limits for general
assessment or processing of income tax
return by three months and also for filing of
returns.
46
3. Relief for Dividend In order to provide relief to taxpayers,

advance-tax liability on dividend income shall
arise only after the declaration/payment of
dividend. The dividend paid to Real Estate
Infrastructure Trusts or Infrastructure
Investment Trusts (REIT/InvIT) shall be
exempt from TDS. It is also proposed to clarify
that deduction of tax on incomes including
dividend income of Foreign Portfolio Investors
may be made at treaty rate. It is also
proposed to exempt dividend payment from
levy of Minimum Alternate Tax (MAT) for
foreign company if the applicable tax rate is
less than the rate of MAT.
4. Setting up of Dispute For reducing litigation and to give an impetus

Resolution Committee to the dispute resolution for small taxpayers,
(DRC) a Dispute Resolution Committee is proposed
to be constituted. A taxpayer having taxable
income up to ` 50 lakh and disputed income
up to ` 10 lakh shall be eligible to approach
the Committee. For ensuring efficiency,
transparency and accountability, the
procedure of the Committee will be
conducted in a faceless manner.
Consequently, the Settlement Commission

shall be discontinued from 01.02.2021.
However, the pending cases shall be decided
by an Interim Board if opted by the applicant.
5. Faceless Income Tax In order to provide transparent tax appellate

Appellate Tribunal (ITAT) mechanism, it is proposed to the make the
Income Tax Appellate Tribunal faceless and
jurisdiction-less. A National Faceless Income-
tax Appellate Tribunal Centre shall be
established and all the communication
between the Tribunal and the appellant shall
be made electronically. Wherever personal
hearing is needed, it shall be done through
47
video-conferencing.
6. Tax Neutrality of In order to facilitate the transition of UCBs to

conversion of Urban SFBs, it is proposed to provide tax neutrality
Cooperative Bank (UCB) for the transition of UCBs to SFBs. Hence, the
into a Small Finance Bank UCB shall not be required to pay capital gains
(SFB) for the assets transferred to the SFBs.
7. Tax incentives for In order to incentivise purchase of affordable

Affordable Housing and house, It is proposed to extend the eligibility
Affordable Rental period for claim of additional deduction for
Housing Project interest of ` 1.5 lakh paid for loan taken for
purchase of an affordable house to 31st March
2022.
In order to increase the supply of affordable

house, it is proposed to extend eligibility
period for claiming tax holiday for affordable
housing project by one more year to 31st
March, 2022.
In order to promote supply of Affordable

Rental Housing for the migrant workers, it is
also proposed to allow a new tax exemption
for the notified Affordable Rental Housing
Projects.
8. Tax benefit for Start-ups In order to incentivise setting-up of more

start-ups in the country, it is proposed to
extend the eligibility period to claim tax
holiday for the start-ups by one more year to
31st March, 2022.
In order to incentivise investment in start-up,

it is proposed to extend the eligibility period
of claiming capital gains exemption for
investment made in the start-ups by one
more year to 31st Match, 2022.
9. Relaxation to NRI for In order to remove the genuine hardship

Income of Retirement faced by the NRIs in respect of their income
accrued on foreign retirement benefit account
48
Benefit Account due to mismatch in taxation, it is proposed to

notify rules for aligning the taxation of income
arising on foreign retirement benefit account.
10. Exemption from Audit To incentivise digital transactions and to

reduce the compliance burden of the person
who is carrying almost all of their transactions
digitally, it is proposed to increase the limit
for tax audit for persons who are undertaking
95% of their transactions digitally from
` 5 crore to ` 10 crore.
11. Relaxation of Condition In order to promote strategic disinvestment of

for carry forward of loss PSU, it is proposed to relax the condition
for Disinvestment regarding carry forward of loss for disinvested
PSU in amalgamation.
12. Relaxation of Condition In order to promote strategic disinvestment, it

for tax neutral Demerger is proposed to deem the transfer of assets by
for disinvestment the PSU to the resulting company as tax
neutral demerger.
13. Zero Coupon Bonds by In order to allow funding of infrastructure, it is

Infrastructure Debt Fund proposed to make Zero Coupon Bonds issued
(IDF) by notified IDF eligible for tax benefit.
14. Rationalisation of In order to rationalise taxation of ULIP, it is

taxation of Unit Linked proposed to allow tax exemption for maturity
Insurance Plan (ULIP) proceed of the ULIP having annual premium
up to ` 2.5 lakh. However, the amount
received on death shall continue to remain
exempt without any limit on the annual
premium. The cap of ` 2.5 lakh on the annual
premium of ULIP shall be applicable only for
the policies taken on or after 01.02.2021.
Further, in order to provide parity, the non-
exempt ULIP shall be provided same
concessional capital gains taxation regime as
available to the mutual fund.
49
15. Rationalisation of Tax- In order to rationalise tax exemption for the

free Income on Provident income earned by high income employees, it
Funds is proposed to restrict tax exemption for the
interest income earned on the employees’
contribution to various provident funds to the
annual contribution of ` 2.5 lakh. This
restriction shall be applicable only for the
contribution made on or after 01.04.2021.
16. Taxability of Surplus In order to provide certainty, it is proposed to

amount received by rationalise the provisions relating to taxation
partners of the assets or amount received by partners
from the partnership firm in excess of their
capital contribution.
17. Clarification on In order to provide certainty, it is proposed to

Depreciation on Goodwill clarify that no depreciation on Goodwill shall
be allowed. However, the deduction for the
amount paid for acquiring Goodwill shall be
allowed on sale of Goodwill.
18. Clarification for the Slump In order to provide certainty, it is proposed to

Sale clarify that slump sale shall include all types of
transfer.
19. Fake Invoice/sham In order to protect the revenue, it is proposed

transaction to provide that the penalty proceedings
initiated for fake invoice/sham transactions of
more than ` 2 crore shall also be eligible for
provisional attachment of assets.
20. Exemption for Small In order to reduce compliance burden on the

Trusts small charitable trusts running educational
institutions and hospitals, it is proposed to
increase the limit on annual receipts for these
trusts from present ` 1 crore to ` 5 crore for
non-applicability of various compliances like
approval etc.
21 Carry Forward of loss by In order to provide certainty, it is proposed to

Charitable Organisations clarify that charitable trusts shall not be
50
permitted to claim carry forward of loss.

However, the loan repayment and
replenishment of corpus shall be allowed as
application.
22. Clarification for In order to provide certainty, it is being

Equalisation Levy expressly clarified that transaction taxable
under income-tax are not liable for
equalisation levy. Further, it is also proposed
to clarify regarding applicability of
equalisation levy on physical/offline supply of
goods and services.
23 Timely deposit of Delay in deposit of the contribution of

Employees’ contribution employees towards various welfare funds by
to labour welfare funds employers result in permanent loss of
by Due Date interest/income for the employees. In order
to ensure timely deposit of employees’
contribution to these funds by the employers,
it is proposed to reiterate that that the late
deposit of employees’ contribution by the
employer shall never be allowed as deduction
to the employer.
24 Relaxation in conditions In order to incentivise more number of

for exemption to SWF/PF to invest in Indian Infrastructure, it is
Sovereign Wealth Fund & proposed to relax some of conditions for
Pension Fund (SWF/PF) availing 100% tax exemption introduced in the
last budget. The conditions which are
proposed to be relaxed include prohibition on
loans or borrowings, restriction on
commercial activities, direct investment in
entity owning infrastructure, etc.
25. Tax incentives for IFSC In order to promote IFSC, It is proposed to

provide more tax incentives which includes
tax holiday for capital gains incomes of
aircraft leasing company, tax exemptions for
aircraft lease rental paid to foreign lessor, tax
incentive for re-location of foreign funds in
IFSC and tax exemptions to investment
51
division of the foreign banks located in IFSC.
26 Non-filing of Return by In order to discourage the practice of not

Deductee/Collectee filing returns by the persons in whose case
substantial amount of tax has been
deducted/collected, it is proposed to provide
that a person in whose case TDS/TCS of
`50,000 or more has been made for the past
two years and who has not filed return of
income, the rate of TDS/TCS shall be at the
double of the specified rate or 5%, whichever
is higher. This provision shall not be applicable
for the transactions where full amount of tax
is required to be deducted e.g. salary income,
payment to non-resident, lottery, etc.
27 Levy of TDS on Purchase In order to widen the scope of TDS, it is

of Goods proposed to levy a TDS of 0.1% on a purchase
transaction exceeding ` 50 lakh in a year. In
order to reduce the compliance burden, it is
also proposed to provide that the
responsibility of deduction shall lie only on
the persons whose turnover exceeds ` 10
crore.
28 Substitution of Authority To ensure faster disposal of cases, it is

for Advance Rulings with proposed to replace the Authority for
Board for Advance Advance Rulings with a Board for Advance
Rulings Rulings. It is also proposed to provide appeal
against the order of such Board to the High
Court.
29. Alignment of Minimum In order to provide relief to the taxpayers in
Alternate Tax (MAT) for whose case MAT liability has arisen in the year
Advanced Pricing of repatriation on account APA or secondary
Agreement (APA) and adjustment, it is proposed to provide relief by
secondary adjustment aligning the MAT provisions with the year of
taxability of such income.
30. Exemption for Leave In order to provide relief to employees, it is

Travel Concession (LTC) proposed to provide tax exemption to the
amount given to an employee in lieu of LTC
52
cash scheme subject to incurring of specified expenditure.
31 Increase in safe harbor In order to incentivise home buyers and real

limit for primary sale of estate developers, it is proposed to increase
residential units. safe harbour limit from 10% to 20% for the
specified primary sale of residential units.
32 Miscellaneous  It is proposed to make consequential

amendment in the provisions relating to
processing of returns for allowing certain
deductions and to provide clarification for
adjustment of income reported in Audit
Report.
 It is also proposed to enable issuance of
notice for calling for returns by the
prescribed authority.
 It is proposed to empower the Board to
relax the rule relating to defective return
for a class of taxpayers and to align due
dates of return for certain taxpayers,
 It is proposed to clarify that Limited Liability
Partnership shall not be eligible for
presumptive tax for professionals.
 It is proposed to define the term “liable to
tax” to provide certainty.
53
ANNEXURE TO THE BUDGET SPEECH
A. LEGISLATIVE CHANGES IN CUSTOMS AND CENTRAL EXCISE:
1. Major Amendments in the Customs Act, 1962:
S. No. Amendment
A. Reduce dwell time and EoDB (Trade facilitation)
1. It is proposed to mandate filing of bills of entry before the end of day
preceding the day of arrival of goods (Section 46).
2. It is proposed to allow the specified amendments by importer/exporter
on self-amendment basis. Hitherto all amendments were to be
approved by the officer. (Section 149).
3. To encourage paperless processing, it is proposed to recognize the use
of common portal to serve notice, order etc and the portal to act as a
one-point digital interface for the trade to interact with the Customs.
B. Efficiency and accountability
1 It is proposed to add a new provision in law to prescribe that all
conditional exemptions, unless otherwise specified or varied or
rescinded, given under Customs Act shall come to an end on 31st March
falling immediately two years after the date of such grant or variation.
(Section 25 of the Customs Act).
2. It is proposed to introduce a new section 28BB to prescribe a definite
time-period of two years subject to certain exceptions, for completion
of investigations.
C. Improving tax compliance
1. A new provision is being proposed that any goods entered for
exportation making wrongful claim of remission or refund shall be liable
to confiscation [sub-section (ja) is being added to section 113 of the
Customs Act].
2. A new provision is being inserted in the Customs Act (section 114AC) to
prescribe penalty in specific case where any person claims refund of tax
or duty discharge, using fraudulent invoices, on exports of goods.
E. Disposal of seized gold
1. Section 110 of the Customs Act is proposed to be amended to revise
the procedure for pre-trial disposal of seized gold for expediting such
disposals
54
2. Amendments to the Customs Tariff Act, 1975:
S. No. Amendment
A Amendment in First Schedule to the Customs Tariff Act, 1975
The first schedule to the Customs Tariff Act is being proposed to be

1. amended in accordance with HSN 2022 amendments. These changes
shall come into effect from 01.01.2022.
Besides certain new tariff lines are being created
B Amendment in the provisions relating to Anti-Dumping Duty (ADD),
Countervailing Duty (CVD), and Safeguard Measures
It is being proposed to make the following amendments in the provision
relating to ADD, CVD [ section 9, 9A of the Customs Tariff Act and
respective Rules] to provide for:
(i) imposition of duty from the date of initiation of anti-
circumvention investigation;
(ii) anti-absorption provisions;
(iii) imposition of these duties on review for period upto 5 years at
a time;
(iv) uniform provisions for imposition ADD/CVD on account of
1.
inputs (attracting ADD or CVD) used by EoUs and SEZs for manufacture
of goods that are cleared to Domestic Tariff Area;
(v) whenever any particular ADD or CVD is temporarily revoked,
such temporary revocation shall not exceed one year at a time;
(vi) final findings are to be issued in ADD/CVD, in investigation in
review proceedings, by the designated authority, at least three months
prior to expiry of the ADD under review (with effect from the 1st Jul,
2021);
Amendment at S. No. (vi) is being made in respective Rules and rest of
the other changes are being made in the Customs Tariff Act.
The Safeguard Rules are being amended to provide for the manner and
2. procedure for causing investigation into the cases of imports in
increased quantity that cause injury to domestic industry for imposition
of Safeguard TRQs.
3. Amendments to the Central Excise Act, 1944:

1.  Addition of new tariff lines consequent to review of Harmonised
System of Nomenclature (HSN) by World Customs Organisation.
 A few minor changes in the schedule of clarificatory nature are
being made.
4. Amendments in Customs Rules:

The Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 [IGCR]
are being made so as a trade facilitation measure to allow:
55
 job-work on the materials (except precious metals) imported under IGCR

 clearance of imported capital goods imported under IGCR on payment of
customs duty on the depreciated value.
B. Customs duty rate changes
1. Changes in basic customs duty for creating level playing field for the
benefit of farmer, MSME and other domestic manufacturers [with effect from
02.02.2021]:
S.No Rate of Duty

Category Specific items
. From To
1. Agricultural Cotton 0 5%*
products Cotton waste Nil 10%
and fishery Raw Silk (not thrown) and silk yarn 10% 15%
sector /yarn spun from silk waste
Denatured ethyl alcohol (ethanol) for 2.5% 5%
Prawn Feed 5% 15%
Fish feed in pellet form 5% 15%
Flours, meals and pellets of fish, 5% 15%
crustaceans, molluscs or other
aquatic invertebrates
Maize Bran Nil 15%
De-oiled rice bran cake Nil 15%
2. Chemicals Carbon Black 5% 7.5%
Bis-phenol A Nil 7.5%
Epichlorohydrin 2.5% 7.5%
3. Plastics Builder’s ware of plastic, not 10% 15%
elsewhere specified or included
Polycarbonates 5% 7.5%
4. Leather Wet blue chrome tanned leather, Nil 10%
crust leather, finished leather of all
kinds, including their splits and slides
5. Gems and Cut and Polished Cubic Zirconia 7.5% 15%
Jewellery Synthetic Cut and Polished Stones 7.5% 15%
6. Capital Tunnel Boring Machines Nil 7.5%
Goods and Parts and components for Nil 2.5%
Machinery manufacture of Tunnel Boring
Machines
7. Auto Sector Specified auto parts like ignition 7.5%/ 15%
wiring sets, safety glass, parts of 10%
signaling equipment, etc.
8. Metal Screws, Nuts, etc. 10% 15%
products
* Also, to attract Agriculture Infrastructure and development Cess at the rate of 5%
56
2. Changes in Customs duty to promote value addition in the Electronics

Sector [with effect from 2.2.2021, unless specified otherwise].
S.No. Description From To

1. Inputs, parts or sub-parts for manufacture of specified
parts of mobile phones, including:
(1) Printed Circuit Board Assembly (PCBA) 0 2.5%
(2) Camera module 0 2.5%
(3) Connectors 0 2.5%
[To apply with effect from 01.04.2021]
2. Printed Circuit Board Assembly [PCBA] and Moulded 10% 15%
Plastic, for manufacture of charger or adapter
3. Inputs and parts [other than PCBA and moulded Nil 10%
plastic] of mobile charger
4. Inputs, Parts and Sub-parts [other than PCBA and Li- 0 2.5%
ion Cell] for manufacture of Lithium-ion battery and
battery pack [w.e.f. 01.04.2021]
5. Compressor of Refrigerator/Air Conditioner 12.5% 15%
6. Specified insulated wires and cables 7.5% 10%
7. Specific parts of transformer such as Bobbins, Nil Applicable
brackets, wires, etc. Rate
8. Inputs and parts of LED lights or fixtures including LED 5% 10%
Lamps
9. Solar Inverters 5% 20%
10. Solar lanterns or solar lamps 5% 15%
3. Changes in Customs duty raw materials and inputs used by Domestic

Manufacturers for reducing cost of inputs and correction of inverted duty
structure:
Inputs/Raw Rate of duty

S. No. materials Specific Items
(for Sector) From To
1. Petrochemical
Naphtha 4% 2.5%
industry
2. Textile Caprolactam 7.5% 5%
industry Nylon Chips 7.5% 5%
Nylon fibre and yarn 7.5% 5%
3. Ferrous and Iron and Steel melting scrap, including 2.5% Nil
Non-Ferrous stainless steel scrap [upto 31.3.2022]
Metals Primary/Semi-finished products of non- 10% 7.5%
alloy steel
Flat products of non-alloy and alloy-steel 10%/ 7.5%
12.5%
Long products of non-alloy, stainless and 10% 7.5%
alloy steel
57
Raw materials used in manufacture of 2.5% Nil

CRGO Steel
Copper Scrap 5% 2.5%

6. Aviation Components or parts, including engines, 2.5% 0%
Sector for manufacture of aircrafts by Public
Sector Units of Ministry of Defence
7. Precious Gold and silver* 12.5% 7.5%*
Metals Gold dore bar* 11.85% 6.9%*
Silver dore bar* 11% 6.1%*
Platinum, Pallidum, etc. 12.5% 10%
Gold/silver findings 20% 10%
Waste & Scrap of Precious Metals 12.5% 10%
Spent Catalyst or ash containing precious 11.85% 9.2%
metals
Precious Metal Coins 12.5% 10%
8 Animal
Feed additives or pre-mixes 20% 15%
Husbandry
* Also, to attract Agriculture Infrastructure and development Cess at the rate of 2.5%
4. BCD rates has been reduced on following items with imposition of Agriculture
Infrastructure and Development Cess on these so that overall consumer does not
bear additional burden on most of the items. The revised rate of basic customs
duty on such items shall be as follows:
Item Revised basic customs duty

rate*
Apple 15%
Alcoholic beverages falling in Chapter 22 50%
Crude edible oil (Palm, Soyabean, sunflower) 15%
Coal, lignite and peat 1%
Specified fertilizers (Urea, MoP, DAP) 0%
Ammonium nitrate 2.5%
Peas, kabuli chana, Bengal gram, lentils 10%
* refer to part C for Agriculture Infrastructure and Development Cess rates on these items
58
5. Consequent to imposition of Agriculture Infrastructure and Development Cess

(AIDC) on petrol and diesel, the Basic excise duty (BED) and Special Additional
Excise Duty (SAED) rates have been reduced on them so that overall consumer
does not bear any additional burden. Consequently, unbranded petrol and diesel
will attract basic excise duty of Rs 1.4, and Rs 1.8 per litre respectively. The SAED
on unbranded petrol and diesel shall be Rs 11 and Rs 8 per litre respectively.
Similar changes have also been made for branded petrol and diesel. Refer to part C
for Agriculture Infrastructure and Development Cess rates on these items
6. Rationalization of exemptions
Category of
S. No. Specific items From To
goods
1. Minerals Natural borates and concentrates Nil/5% 2.5%

thereof
2. Chemicals Methyl Diphenyl Isocyanate (MDI) Nil 7.5%

for the manufacture of spandex yarn
3. Items allowed to Certain duty-free imports of items Nil Applicable

be imported like motif, glue, veneer, polish, rate
duty free based hooks, rivets, button, Velcro,
chaton, badges, beads, sewing
on export
thread etc, on the basis of export
performance in
made in the previous financial year,
handicrafts, are allowed to handicraft, garments
garments and and leather exporters.
leather
An end date of 31.3.2021 is being
provided for these concessions.
7. Revocation / Temporary Revocation / Discontinuance of Anti-Dumping

Duty and Countervailing Duty
S. No. Specific Items
1. Anti-Dumping duty is being temporarily revoked for the period

commencing from 2.2.2021 till 30.09.2021, on imports of the
following-
(a) Straight Length Bars and Rods of alloy-steel, originating in or

exported from People’s Republic of China, imposed vide notification
No. 54/2018-Cus (ADD) dated 18.10.2018;
59
(b) High Speed Steel of Non-Cobalt Grade, originating in or

exported from Brazil, People’s Republic of China and Germany,
imposed vide notification No. 38/2019-Cus (ADD) dated 25.09.2019;
(c) Flat rolled product of steel, plated or coated with alloy of
Aluminium or Zinc, originating in or exported from People’s Republic
of China, Vietnam and Korea RP, imposed vide notification No.
16/2020-Cus (ADD) dated 23.06.2020.
2. Countervailing duty is being temporarily revoked for the period

commencing from 2.2.2021 till 30.09.2021, on imports of Certain Hot
Rolled and Cold Rolled Stainless Steel Flat Products, originating in or
exported from People’s Republic of China, imposed vide notification
No. 1/2017-Cus (CVD) dated 7.09.2017.
3. Provisional Countervailing duty is being revoked on imports Flat

Products of Stainless Steel, originating in or exported from Indonesia,
imposed vide notification No. 2/2020-Customs (CVD) dated 9.10.2020.
4. In Sunset Review, anti-dumping duty on Cold-Rolled Flat Products of

Stainless Steel of width 600 mm to 1250 mm and above 1250 mm of
non bonafide usage originating in or exported from People’s Republic
of China, Korea RP, European Union, South Africa, Taiwan, Thailand
and United States of America has been discontinued upon expiry of
the anti-dumping duty hitherto leviable vide notifications no. 61/2015-
Customs (ADD) dated 11th December, 2015 and 52/2017-Customs
(ADD) dated 24th October, 2017.
8. Other miscellaneous changes
S. No. Category of Specific Items

Goods
1. Miscellaneous Exemption to temporary imports of costumes and

props by film-makers.
Exemption to all items of machinery, instruments,
appliances, components or auxiliary equipment for
setting up of solar power generation projects is being
rescinded [ Notif No. 1/2011-Cus]
2. Project Benefit is being extended to All High-Speed Railway
Imports projects
3. IT/Electronics Concessional rate of BCD on ink cartridges, ribbon
assembly, ribbon gear assembly, ribbon gear carriage,
60
for use in printers for computers is being withdrawn.

4. Toys Existing entries in exemption notification which
provide concessional BCD rate on various parts of
electronic toys, is being consolidated in a single entry
and a revised BCD rate of 15% is being prescribed for
the said new entry.
3. End use-based A number of cumbersome conditions in customs
exemptions to exemptions are now being replaced by the
be have requirement of observance of Import of Goods at
condition of Concessional rate (IGCR). This will simplify and
IGCR in lieu of standardized the compliance requirement for end
existing use-based exemptions.
miscellaneous
conditions.
C. Imposition of Agriculture Infrastructure and Development Cess on specified

goods [w.e.f. 2.2.2021]
An Agriculture Infrastructure and Development Cess has been proposed on
specified goods, as below:
(A) On customs side
Proposed cess
Items
(Customs)
Gold, Silver and dore bars 2.5%
Alcoholic beverages (falling under chapter 22) 100%
Crude palm oil 17.5%
Crude soyabean and sunflower oil 20%
Apples 35%
Coal, lignite and peat 1.5%
Specified fertilizers (Urea etc) 5%
Peas 40%
Kabuli Chana 30%
Bengal Gram/Chick peas 50%
Lentil (Mosur) 20%
Cotton (not carded or combed) 5%
For basic customs duty rates on these items refer to part B. Overall there would be
no additional burden on the consumer on most of these items.
61
(B) On excise side:

An agriculture Infrastructure and Development Cess (AIDC) of ` 2.5 per litre has
been imposed on petrol and ` 4 per litre on diesel. For other duties and cess, as
revised, consequent to imposition of AIDC) on these items refer to part B. Overall
there would be no additional burden on the consumer.
E. Social Welfare Surcharge (SWS)
a. Notification No. 12/2018-Customs dated 2.2.2018 is being

1. rescinded to keep only one SWS rate of 10% for all goods.
b. The SWS on Agriculture Infrastructure and Development Cess is
being exempted for Gold and Silver.
F. Miscellaneous changes in Central Excise:
1. Blended Fuel: Exemptions from cesses and surcharges on

the lines of other blended fuels (like E-5 and
M-15 Petrol and E-20
E-10) if these blended fuels are made of duty
Petrol paid inputs
G. Legislative Changes in the provisions of Central GST Act, 2017 (CGST Act)
and Integrated GST Act, 2017 (IGST Act):
Certain changes have been in the CGST Act and the IGST Act on the basis of
recommendations made by the GST Council. These changes will come into effect
from the date when the same will be notified, as far as possible, concurrently with
the corresponding amendments to the similar Acts passed by the States & Union
territories with legislature.
These includes measures for
(i) facilitating taxpayers, such as remove the mandatory requirement of

getting annual accounts audited and reconciliation statement, filing of the annual
return on self-certification basis and charging interest on net cash liability with
effect from the 1st July, 2017.
(ii) improving compliance, such as availment of input tax credit only when the
details have been furnished by the supplier in the statement of outward supplies,
validity of provisional attachment for a period, zero-rating on payment of IGST only
in specified cases and linking it to the receipt of foreign remittances
62
(iii) making certain other changes relating to seizure and confiscation, filing of
appeal only on payment of a sum equal to twenty-five per cent. of penalty
imposed
H. There are few other changes of minor nature. For details of the budget
proposals, the Explanatory Memorandum and other relevant budget documents
may be referred to.
Goods & Services Tax
Budget Proposals 2021-22
By CA. Keval Mota
Budget 2021 - GST Proposals CA. Keval Mota
Introduction to Budget 2021 - 22 Analysis: -

Before insertion of clause (aa), recipient was
The Goods and Services Tax (GST) has completed supposed to file return u/s 39 of CGST Act, and
around 3 years of its implementation. GST has supplier shall pay taxes so as to avail input tax credit.
been recently known for increasing compliance
burden on taxpayers in view of simplifying tax With insertion of clause (aa), supplier is supposed to
systems and making it online. show the details of such invoice or debit note in
GSTR - 1, then ITC would be eligible to recipient.
Further, GST was introduced with a motive to The, communication clause was already mentioned
remove cascading effect by introducing a system in section 37(1) of CGST Act, however, now it has
of seamless flow of credit, however, the word became the condition to avail ITC.
“seamless” has been done away with due to
insertion of various restrictions in form of Rule Such details will be communicated to recipient of
86B, 36(4), 2A reconciliation and such others. supply, which can be seen in user services >
Communication between taxpayers. Recipient is
The Union Budget 2021 - 22 has finally announced required to accept the same. In case of discrepancy a
on 1st February, 2021. From a taxpayer to a tax taxpayer can communicate with the recipient for
expert, everyone had some expectations from the issues like payment related issues or any other issue.
Finance Minister, Smt. Nirmala Sitharaman. In order to communicate with the suppliers, a
taxpayer need to click on “Compose” tab.
Trade & Industry in view of hardships faced
during this 3 years, expected department to be (2) No requirement of GST Audit by CA / CMA u/s
taxpayer-friendly system with an introduction of 35(5) [Clause 101 & 102]
various measures in order to make it Truly “Good
& Simple Tax”. The proposals made by Finance As per section 35(5) of CGST Act, GST Audit is
Minister are elaborated and analysed in detail in performed by CA / CMA if aggregate turnover
below paras. exceeds specific limit (Rs. 5 crore for FY 2019-20).
However, the said section is being proposed to be
(1) GSTR 1 be filed & Communication of Details deleted, meaning thereby there would be no
- to avail Input Tax Credit [Clause 100] requirement of GST Audit to be done by CA/CMA.
A new clause (aa) to sub-section (2) of the section A consequent amendment has been made in section
16 of the CGST Act is proposed to be inserted to 44 of CGST Act, so as to remove the mandatory
provide that input tax credit on invoice or debit requirement of furnishing a reconciliation statement
note may be availed only when the details of such (GSTR 9C) duly audited by specified professional
invoice or debit note have been and to provide for filing of the annual return on self
certification basis.
 furnished by the supplier in the statement of It provides for the Commissioner to exempt a
outward supplies and; class of taxpayers from the requirement of filing
the annual return.
 such details have been communicated to
the recipient of such invoice or debit Thus, GST Audit by CA / CMA would not be
note. required once such section is notified. At present
such provision is not notified. It is expected to
be notified from FY 2021-22.
M/s. Keval Mota & Associates 1

(3) Interest to be charged u/s 50(1) on Net Cash Conveyances in transit) & 130 (Confiscation of goods or
Liability [Clause 103] conveyances and levy of penalty.)
CBIC has clarified that the amendment in Section Thus, now amended explanation provides that,
50 was made prospectively in view of technical where main person has paid taxes, then
limitations. Also it had clarified that no recoveries proceedings u/s 122 & 125 shall be deemed to be
will be made for the past period to provide concluded (not for section 129 & section 130).
retrospective relief as decided by the GST Council.
(5) Insertion of meaning of Self Assessed Tax
Vide Finance Bill, 2021; government has finally [Clause 105]
proposed to give legal validity to charge interest on
net cash liability retrospectively w.e.f 1st July, 2017. Section 75 (12) of CGST Act, provides that where
any amount of self-assessed tax in accordance with
Section 50 of the CGST Act is being amended, a return furnished under section 39 (GSTR - 3B)
retrospectively, to substitute the proviso to sub- remains unpaid, either wholly or partly, or any
section (1) so as to charge interest on net cash amount of interest payable on such tax remains
liability with effect from the 1st July, 2017. unpaid, the same shall be recovered under the
(4) Recovery in case of seizure & confiscation of
goods & conveyance in case of Fraud shall be CBIC has proposed to clarify the meaning of self
proceeded separately [Clause 104]: - assessed tax by insering an explanation to Section
75(12), which states that, "self-assessed tax" shall
Section 74 of CGST Act, provides for assessment of include the tax payable in respect of details of
person in case of fraud, wilfull misstatement, etc. outward supplies furnished under section 37
For instance, as per section 64 of CGST Act, where (GSTR - 1), but not included in the return furnished
the taxable person to whom the liability pertains is under section 39 (GSTR 3B).
not ascertainable and such liability pertains to
supply of goods, the person in charge of such goods Thus, due care shall be excersised while filing
shall be deemed to be the taxable person liable to be GSTR - 1, because the details filled in GSTR - 1
assessed and liable to pay tax and any other amount but short paid in GSTR 3B, would amount to self
due under this section. assessed tax not paid in GSTR 3B.
Thus, notice can be issued to person in charge of Other Aspects & Effects: -
goods. Accordingly, the main person & person in
charge of goods are separate.  It is pertinent to note that if person has self-
As per explanation 1 to section 74, where the notice assessed its tax liability then he is required to
under the same proceedings is issued to the main pay the same within 30 days for becoming due,
person liable to pay tax and some other persons, otherwise penalty will be levied even if paid
and such proceedings against the main person have before issuance of show cause notice (SCN) or
been concluded under section 73 or section 74, the paid within 30 days of issuance of SCN. [S.
proceedings against all the persons liable to pay 73(11)]
penalty under sections 122, 125, 129 and 130 are (6) Enlarging the Scope of Provisional
deemed to be concluded. Attachement [Clause 106]
However, Finance Bill, 2021 proposes to recover tax
separately in for contravention under section 129 As per section 83(1) of CGST Act, there were only
(Detention, seizure and release of goods and few cases where provisional attachement can be

done i.e. where during the pendency of any (8) Plethora of Amendments in Section 129 of
proceedings under section 62 (Assessment of CGST Act [Clause 108]
Non-filers) or section 63 (Assessment of
unregistered persons) or section 64 (Summary If a person who has transport goods while in transit in
assessment) or section 67 (Inspection, search & contravention of provisions, such goods & conveyance
seizure) or section 73 or section 74. in which goods were transported shall be liable for
detention or seizure & shall be released on payment of
However, vide Finance Bill, 2021 it has been
below penalty or security: -
proposed that, where, after the initiation of any
proceeding under Chapter XII (Assessment),
Chapter XIV (Inspection, Search, Seizure and (a) Owner of the goods comes forward for
Arrest) or Chapter XV (Demands and Recovery), payment of such tax and penalty
the Commissioner is of the opinion that for the
purpose of protecting the interest of the
Government revenue it is necessary so to do, he Taxable Goods Exempt Goods
may, by order in writing, attach provisionally,
any property, including bank account, belonging 200% of Tax 2% of Value of Goods
to the taxable person or any person specified in Payable or Rs. 25000/-
Section 122(1A) of CGST Act (person who retains whichever is less
benefit of transaction), in such manner as may be
prescribed.
(b) Owner of the goods does not come
With this, the government has enlarged the forward for payment of such tax and penalty
scope of provisional attachement which was
limited to assessment pending section 62, 63, 64,
67, 73 & 74 to various chapters as enumerated
above. Taxable Goods Exempt Goods
(7) Pre - Deposit for Appeal against detention, Higher of: - 5% of the value of goods or
seizure and release of goods and conveyances in 50% of Value of Rs. 25,000/- whichever is
Goods or,
transit - 25% of Penalty [Clause 107] less
200% of Tax Payable
A person appealing before appellate authority
shall pay amount of Tax, interest, fine, fee & (2) The provisions of sub-section (6) of section 67
penalty, as is admitted, in full; and pre-deposit of shall, mutatis mutandis, apply for detention and
sum equal to 10% of remaining amount of tax in seizure of goods and conveyances. (Seeks to be
dispute (not interest & penalty) (subj. to max Rs. ommitted vide Finance Bill, 2021)
CGST 25 crores, SGST 25 crores) before appeal. [S.
107(6)]. Notice to Pay Penalty be passed within 7 days of
Detention or Seizure, Order to be passed within 7
Vide, Finance Bill, 2021, a person appealing days from service of such order [Section 129(3)]: -
before appellate authority against order of
detention, seizure & release of goods shall pay The proper officer detaining or seizing goods or
amount of 25% of penalty as pre-deposit. conveyance shall issue a notice within seven days of
such detention or seizure, specifying the penalty
payable, and thereafter, pass an order within a
period of seven days from the date of service of such
notice, for payment of penalty.

Disposal of Seized Goods or Conveyance to (10) Amendment in Redemption Fine

recover penalty [Section 129(6)]: - [Clause 109]
Where the person transporting any goods or the As per section 130(2), Maximum fine for redemption
owner of such goods fails to pay the amount of (release) of Confiscated Goods
penalty within 15 days from the date of receipt of [S. 130(2) of CGST]
the copy of the penalty order, the goods or
conveyance so detained or seized shall be liable (a) Market value of the confiscated goods
to be sold or disposed of otherwise, in such (-) Tax chargeable thereon or,
manner and within such time as may be (b) Penalty u/s 129(1) Penalty equal to 100% of the
prescribed, to recover the penalty payable. tax payable on such goods
whichever is higher.
However, the conveyance shall be released on
payment by the transporter of penalty as
Maximum fine for redemption (release) of
computed above or Rs. 1,00,000/-, whichever is
Confiscated Conveyance [S. 130(2) of CGST]
less.
(No Change)
In case of perishable or hazardous in nature or are
likely to depreciate in value with passage of time, Tax payable on the goods being transported.
the said period of 15 days may be reduced by the
proper officer. (11) Reduction in Penalty u/s 130 of CGST Act
[Clause 109]
Tax & Interest on such goods can be determined
without providing opportunity for being heard:
A person who was paying fine in lieu of confiscation
-
of goods or conveyance was supposed to pay tax,
As per section 129(4) of CGST Act, no tax, penalty & other charges as well in view of section
interest or penalty shall be determined under 130(3) of CGST Act. However, the said provision is
sub-section (3) without giving the person proposed to be omitted vide Finance Bill, 2021.
concerned an opportunity of being heard.
(12) Power to Collect Statistics [Clause 110]
(9) Amendments in Section 130 of CGST Act
[Clause 109]
The Commissioner or an officer authorised by him
Section 130 of CGST Act, was a non-obstante may, by an order, direct any person to furnish
clause, meaning thereby Section 130 of CGST Act information relating to any matter dealt with in
would prevail over other provisions of the act. connection with this Act, within such time, in such
Further, section 130 is punishable offence u/s 122 form, and in such manner, as may be specified
where penalty is Rs. 10,000/- or Amount Equal to therein.
Tax evasion whichever is higher.
(13) Bar on Disclosure of Information [Clause 111]
In view of non-obstante clause, it would be
difficult for government to levy penalty in excess
No information of any individual return or part
of what provided in section 122 of CGST Act.
thereof with respect to any matter given for the
Vide Finance Bill, 2021, it is proposed to remove purposes of section 150 or section 151 shall,
non-obstante clause from section 130. without the previous consent in writing of the
concerned person or his authorised
representative, be published in such manner so
as to enable such particulars to be identified as
referring to a particular person and no such

information shall be used for the purpose of any Schedule II can in no way determine an activity
proceedings under this Act “without giving an as a supply if the same activity falls out of
opportunity of being heard to the person purview of schedule I.
concerned” Accordingly, the supply of goods by
unincorporated association to its members is
(Amendments are in Bold Italic & Strike proposed to be shifted by inserting section
through) 7(1)(aa) which would read as “the activities or
transactions, by a person, other than an
(14) Amendment in Section 168 of CGST Act individual, to its members or constituents or
[Clause 112] vice versa, for cash, deferred payment or other
valuable consideration.
Section 168 of CGST Act empowers the
Competent Authority to issue orders, Explanation.–For the purposes of this clause, it
instruction or directions to the lower authorities is hereby clarified that, notwithstanding
to bring in uniformity in the implementation of anything contained in any other law for the time
the Act. being in force or any judgment, decree or order
of any Court, tribunal or authority, the person
The purpose is to bring in uniformity in the and its members or constituents shall be
implementation of the Act; and it is binding on deemed to be two separate persons and the
all GST officers. There are various supply of 77 activities or transactions inter se
commissioners who are empowered to issue shall be deemed to take place from one such
such orders, instructions or directions. Vide person to another.
CGST Amendment Act, 2019; following
Commissioners under section 44 (1) (relating to (16) Changes proposed in respect of Zero- Rated
annual return) / 52(4) (relating to monthly TCS supply [Section 16 of IGST Act] [Clause 114]
Return) / 52(5) (relating to annual return for
ECO) are further being empowered to issue “Zero rated supply” means any of the following
orders, instructions or directions. supplies of goods or services
or both, namely: –
Since section 44 will not have subsection after
notifying the amendment, words subsection (1) (a) export of goods or services or both; or
is proposed to be deleted. (b) supply of goods or services or both for
authorised operations to a Special Economic
(15) Supply of goods by unincorporated Zone developer or a Special Economic Zone unit
association to members shifted from Schedule (Bold, Italics, underlined are proposed to be
II to Section 7(1)(aa) (w.r.e.f. 1st July, 2017) inserted)
[Clause 99 r/w 113]
Section 16(3) to only limited upto Zero rated
It may be noted that determination of an activity supply under LUT: -
as whether or not a supply is the task of
schedule I r/w Section 7(1) of CGST Act As per Finance Bill, 2021, following is proposed to
whereas to classify a supply in goods or services be zero rated supply u/s 16(3) of IGST Act.
is the department of schedule II.
A registered person making zero rated supply shall
be eligible to claim refund of unutilised input
tax credit on supply of goods or services or

both, without payment of integrated tax, under

bond or Letter of Undertaking, in accordance For the purpose of this regulation, the “date of
with the provisions of section 54 of the Central export” in relation to the export of software in
Goods and Services Tax Act or the rules made other than physical form, shall be deemed to be
thereunder, subject to such conditions, the date of invoice covering such export.
safeguards and procedure as may be
prescribed. The same has been made in line with Rule 96B of
CGST Rules, 2017.
As per proviso to section 16(3), the registered Further, government may prescribe,
person making zero rated supply of goods shall,
in case of non-realisation of sale proceeds, be (i) a class of persons who may make zero rated
liable to deposit the refund so received under supply on payment of integrated tax and claim
this sub-section along with the applicable refund of the tax so paid;
interest under section 50 of the Central Goods
and Services Tax Act within 30 days after the (ii) a class of goods or services which may be
expiry of the time limit prescribed under the exported on payment of integrated tax and the
Foreign Exchange Management Act, 1999 for supplier of such goods or services may claim the
receipt of foreign exchange remittances. refund of tax so paid.
(Note: Government is only for supplier of Thus, it may be inferred that, government intends
goods) to reduce claims of refund on payment of
integrated tax because, such claims are directly
Time Limit under FEMA [Regulation 9 of credited to bank account without in depth scrutiny
Foreign Exchange Management (Export of of documents. Accordingly, it may prescribe
Goods and Services) Regulations, 2015: - classes of taxpayers who can claim such refund.
In ordinary case: The amount representing the Furthermore, it may prescribe certain goods or
full export value of goods / software/ services services on which such refunds can be claimed.
exported shall be realised and repatriated to
India within nine months from the date of
export.
However, where the goods are exported to a

warehouse established outside India with the
permission of the Reserve Bank, the amount
representing the full export value of goods
exported shall be paid to the authorised dealer
as soon as it is realised and in any case within
fifteen months from the date of shipment of
goods.
Extension of period: Further the Reserve Bank,

or subject to the directions issued by that Bank
in this behalf, the authorised dealer may, for a
sufficient and reasonable cause, extend the
period of nine months or fifteen months, as the
case may be.

Proposed finance Bill, 2021
Proposed Finance Bill, 2021

Direct Taxes
Khandelwal Jain & Associates 1

Business & Profession

Deprecation on Goodwill
Section 2 (11) & Section 32 has been amended to remove the

goodwill from the block of assets therefore deprecation will not be
allowed in case of Goodwill whether self generated or acquired.


Payment by employer of employee contribution to a fund
Section 36 & Section 43B has been amended to clarify that only
employers contribution will be eligible for deduction on payment
basis if the amounts to fund is deposited after due date but before
the filing of return.


Real Estate
Section 43CA & Section 56 (2) (x) has been amended to provide
relief to Builders and buyers that the notional income of
difference between Stamp duty value and Actual Consideration
shall not be taxable if such difference does not exceed 20% from
the actual consideration.


Real Estate
Section 80IBA has been amended to allow deduction of profits

and gains derived from the business of developing and building
affordable housing project. The said housing project shall be
approved by the competent authority before 31st March 2022.
Further, it is amended to allow deduction under Section 80IBA to
affordable rental housing projects.


Tax Audit
Section 44 AB has been amended to increase the audit limit from

5 crores to 10 crores in case of assessee who are carrying out
business through bank and their total cash receipts or cash
payments does not exceed 5% of the total turnover.


Presumptive Taxation of Profession
Section 44ADA has been amended to exclude all the assessee

except Individual, HUF and Partnership firm who can declare
50% of the total income as profession income


Withholding Tax
Section 194Q has been inserted to provide that TDS shall be

deducted on purchase of goods at the rate of 0.1 % of value
exceeding INR 50 lakhs by a buyer whose turnover exceeds INR
10 crores in previous year.
The provisions of this section shall not apply to a transaction on
which TDS\TCS is deducted\collected under any other provisions
of this act other than section 206C(1H)


MAT Provisions
Section 115 JB has been amended to provide that in case where

past year income is included in books of accounts due to
secondary adjustment or APA the Assessing Officer shall
recompute the book profit of the past years on application made
by the assessee
Further for foreign company Section 115 JB has been amended to
exclude income from dividend

Capital Gains
Taxation of Partner / Member in case of dissolution or reconstitution
Section 45 has been amended to tax the payment made to a

partner / member in excess of his capital contribution where the
assets are revalued or self generated assets are recorded in the
books of accounts

Capital Gains
Goodwill
Section 50 has been amended to provide that in a case where

goodwill of Business or Profession formed part of bock of asset
for the AY beginning on the 1/4/2020 and depreciation has been
claimed. The WDV and Short Term Capital Gain shall be
determined as prescribed
Section 55 has been amended to provided for the Cost of
Acquisition in case of goodwill

Personal Tax
Leave Travel Concession
Section 10 (5A) has been amended to provide tax exemption to

cash allowance in lieu of Leave Travel Concession or assistance
received by or due to an individual subject to fulfilment of certain
conditions to be prescribed
The amount of exemption shall not exceed INR 36,000 per
person or 1/3rd of specified expenditure whichever is less

Personal Tax
Taxation of Interest Income from Provident Fund
Section 10 (11) & 10 (12) has been amended to provide tax

exemption on interest accrued on PF scheme only on contribution
of INR 2.5 lakhs in a previous year

Personal Tax
International Tax Relief
Section 89A has been interested to provide relief to individual

who has income accrued from retirement benefit account
maintained in notified country

Personal Tax
Affordable Residential House Property
Section 80EEA has been amended to provide deduction in

respect of interest on loan taken for buying a new house the outer
date for sanction of loan has been changed to 31st March 2022

Personal Tax
Senior Citizen
Section 194P has been inserted to provide that in case of specified

senior citizen who is having pension & interest income, the bank
shall deduct TDS after giving effect of provisions of Chapter VI A
and section 87A
Further, provisions of Section 139 shall not be applicable to such
senior citizen

Personal Tax
Taxation of ULIP
Section 2 (14) has been amended to provide that capital assets

include ULIP if not exempt under section 10 (10D)
Section 10 (10D) has been amended to provide that if the
premium amount of ULIP is less than INR 2.5 lakhs then the
proceeds from such ULIP is exempt
Section 45 has been amended to provide for the deemed taxation
of profits and gains from the redemption of ULIP as capital gains

Start Up
Exemption
Section 80IAC has been amended to provide deduction in

respect of 100% profits earned by the start ups for 3 consecutive
years if the start up is incorporated on or after 1st April 2016 but
before 2021
Section 54 GB has been amended to provide for exemption from
capital gain of residential house property transferred before 31st
March 2020 is invested in eligible start up

Dividends
Advance Tax on Dividend
Section 234C has been amended to provide interest for

deferment of advance tax shall not be applicable on income
earned from dividends other than dividend specified under
section 2 (22) (e)

Dividends
Withholding Tax
Section 194 has been amended to provide that no TDS shall be

deducted on dividend income credited or paid to business trust or
any other person as may be notified by the Central Government

Assessments
Return of Income
Section 139 (1) has been amended to clarify that due date for
filing of return for a partner of the firm to which Transfer Pricing
is applicable shall be 30th November.
Section 139 (4) has been amended to reduce the time limit of
revised and belated return by 3 months

Assessments
Processing of Return of Income
Section 143 (1) has been amended to include adjustment made on

account of increase in income indicated in tax audit report but
not taken into account in computing the total income
Further, the section has been amended to disallow deduction

claimed under sections 10AA or under any of the provisions of
Chapter VI-A under the heading “C-Deductions in respect of
certain incomes”, if the return is furnished beyond the due date
specified under Section 139(1).
Assessments
Time Limits
Section 143 (1) has been amended to reduce the time limit for
sending the intimation from 1 year to 9 months from the end of
the financial year in which return was furnished
Section 143(2) has been amended to reduce the time limit for
issue of notice from 6 months to 3 months from the end of the
financial year in which return was furnished

Assessments
Time Limits
Section 149 has been amended to reduce the reopening of

assessment from 6 years to 3 years from the end of relevant
assessment year.
Further, in case where income escaping assessment amounts to

INR 50 lakhs or more the reassessment can be done beyond 3
years but not exceeding 10 years

Proposed Finance Bill, 2021

Indirect Taxes

Input tax credit

In section 16(2) additional subsection (aa) has been inserted to
provide that input tax credit on invoice or debit note may be
availed only if supplier furnishes details in his statement of
outward supplies[GSTR-1].

GST Audit
Section 35(5) has been omitted, therefore mandatory
requirement for filing GST Audit report has been removed for
which date is yet to be notified

Interest on net cash liability

Section 50(1) has been amended to provide that interest is to be
paid on net cash liability retrospectively

Detention, seizure and release of goods and
conveyances in transit
In section 129 (1) a and b earlier on detention, seizure and
release of goods and conveyance in transit the payment of tax
and penalty equal to 100 % of tax payable was required to be paid
on such goods but now it has been amended to payment of
penalty equal to 200% of tax payable

In section 129 (3) earlier no time limit was there for issuing the
notice it has been amended to and now officer shall issue notice
within 7 days of such detention or seizure, specifying penalty
payable and further pass notice within 7 days for payment of
penalty

In section 129 (4) previously opportunity of being heard was
given for tax, interest and penalty and now opportunity of being
heard is given for penalty only
In section 129 (6) If person fails to pay penalty as provided in

section 129 (1) within 15 days from date of receipt ,the goods so
detained or seized shall be liable to be sold or disposed off within
prescribed time to recover penalty payable under section 129 (3),
provided that conveyance shall be released on payment of penalty
under section 129 (3) or 1 Lakh whichever is lower
General provision relating to determination
of Tax
Section 75 (12) expression "self-assessed tax" shall include the tax
payable in respect of details of outward supplies furnished under
section 37(GSTR 1), but not included in the return furnished
under section 39(GSTR 3B) such can be recovered under section
79- Recovery of tax.

Appeals to appellate authority

Section 107 (6) has been amended to provide that for filing of
appeal relating to detention of goods or conveyance pre-deposit
of amount equal to 25% of penalty is required.

Refund
Section 16 of the IGST Act is being amended so as to provide that
Zero rate the supply of goods or services to a Special Economic
Zone developer or a Special Economic Zone unit only when the
said supply is for authorised operations
Restrict the zero-rated supply on payment of integrated tax only
to a notified class of taxpayers or notified supplies of goods or
services
Link the foreign exchange remittance in case of export of goods
with refund.

Miscellaneous
Commissioner has been empowered to call for information based
on order.
Information obtained under section 150 and 151 can be used only
after giving opportunity of being heard.
Para 7 of Schedule II which was relating to supply made by
person other than individual to members has been omitted and
said entry relating to same has been inserted under section 7
(1)(aa)

Contact Us
Khandelwal Jain & Associates
1st Floor, Alankar Cinema Building,
Above United Bank of India,
Agarkar Nagar, Near Railway Station,
Camp, Pune – 411 001
Tel: +91 20 2614 0560

Email –inquire@khandelwaljain.com
www.khandelwaljain.co.in

Disclaimer
All the information in this write-up is for illustrative purposes only and
should not be regarded or relied upon as legal advice by Khandelwal Jain
and Associates. The information contained in herein is of a general nature
and is not intended to address the circumstances of any particular individual
or entity. Although we endeavor to provide accurate and timely information,
there can be no guarantee that such information is accurate as of the date it
is received or that it will continue to be accurate in the future. No one should
act on such information without appropriate professional advice.

-21
BUDGET 2021
Taxgen.in
We Develop Professionals.
BENEFIT FOR SENIOR CITIZEN
DIRECT TAX
No tax returns for Senior Citizens,
age 75 years and above who have
pension and interest income
EASE OF DOING
Income Tax returns will have

prefilled data from capital gains
etc. To ease compliance for
taxpayers, details of salary
income, tax payment and TDS are
prefilled currently.
FACELESS ASSESSMENT
Faceless Income tax Appellate

Taxgen.in Tribunals National faceless ITAT
centre to be set up
TIME LIMIT FOR TAX ASSESSMENT
Reduce time limit for reopening of

tax assessments to 3 years.
DIRECT TAX
Reduction in Time for Income Tax
Proceedings – Presently an
assessment can be opened in 6
years, and in serious tax fraud
cases for up to 10 years. FM
proposes to revise this limit for
reopening of assessments to 3
years from the present 6 years.
TAX AUDIT THRESHOLD
Tax Audit threshold of turnover

further increased for digital
transactions to 10 crores.
A NEW RESOLUTION PANEL
Taxgen.in Dispute Resolution Panel for small

taxpayers.
DIVIDEND DISTRIBUTION TAX
Advance tax on dividend to accrue
DIRECT TAX
only after it is declared.
To enable deduction of tax on

dividend income at lower treaty
rates for FPIs.
DEDUCTION ON BUYING
AFFORDABLE HOUSE
Affordable housing 1.5 lac

deduction will now be even
available for loan taken till
31.3.2022.
INCOME TAX FOR TRUSTS
Trusts: educational and hospitals:

Taxgen.in limit increased from Rs.1 Cr to Rs.
5 crore (10(23C).
INDIRECT TAX
CLUBS & ASSOCIATIONS
GST Proposed to be levied on membership fees

collected by various clubs from its members subject
to some exemption.
INPUT TAX CREDIT - MATCHING
Additional condition to book ITC in books: ITC can be

booked in books only on such invoices that have been
inserted by the supplier in its statement of outward
supply.
Taxgen.in
GST AUDIT
GST Audit i.r Annual return 9C has been scrapped

from GST Act. We Develop Professionals.
INDIRECT TAX
INTEREST
Interest to be paid only on net cash Liability i.e Tax on

Outward Supply - Tax on Input Supply = Net cash
liability.
SEIZURE AND CONFISCATION OF GOODS AND

CONVEYANCE IN TRANSIT
Seizure and Confiscation of Goods and Conveyance is

proposed to be separate proceedings.
DEFINITION OF SELF ASSESSMENT TAX
Now GST liability declared in GSTR - 1 can also be

considered as self-assessment tax. Earlier liability
declared in GSTR - 3B was only considered to recover
tax.
Taxgen.in
INDIRECT TAX
PRE DEPOSIT OF PENALTY
A sum equal to 25% of the tax has to be paid as

penalty if assessee wants to go in appeal against
goods and conveyance detained in transit.
INCREASED PENALTY
Penalty u/s 129 i.e if goods and conveyance detained

in transit and owner comes forward to pay tax +
Penalty then he has to pay 200 % Penalty which was
100 % earlier.
POWER TO COLLECT INFORMATION
The jurisdiction commissioner has given more powers

to call for information.
Taxgen.in
BUDGET
2021
CA Bhavya Doshi
CA Ronit Shah
Introduction to Budget 2021-22
• The theme of this year’s budget largely circles around Covid-19, economic recovery & growth.
• As part of the central theme, the government has focused on demand and job creation through
targeted schemes and Incentives.
• This Year’s Fiscal deficit is pegged at 9.5% of GDP as against estimation of 3.5%. This vast
difference is caused by disruptions in economy due to COVID which has now shifted revised target
of 4.5% to F.Y. 2025-26.
• Government has kept it’s expenditure at all time high of Rs. 34.83 Lakh Crores even after there
being shortage in revenue. This expenditure is proposed to be met by record borrowings of
around Rs. 12 Lakhs Crores. This brings total borrowings of GOI to Rs. 135 Lakh Crores. Long term
effect of such high expenditure budget financed through borrowing remains to be seen.
BDRS
Introduction to Budget 2021-22
• To further support this high expenditure budget, government has resorted to disinvestment and
strategic sale of government assets. Major Ports, Airports, freight corridors, public sector
enterprises will be sold for operations & maintenance or fully disinvested. It is too early to gauge
broad economic impact of core public infrastructure being sold to private players and it’s effect on
cost of essential products.
• The allocation of funds has been increased for sectors like real estate, healthcare, education,
infrastructure and defense.
• FDI in Insurance sector has been proposed to be increased from 49% to 74%.
• Government will be bringing policies for giving an option to consumers to choose electricity
service provider of their choice by promoting healthy competition which will help in discovery of
fair prices.
BDRS
Takeaways – Direct Taxation
❖Relief to Senior Citizen: Exemption from Filing Income Tax Return for Senior Citizens (aged 75
years & above) having only pension and interest income.
❖Reduction in Time Limits for Assessment:
a) Re-opening of assessments being reduced to 3 years from current 6 years.
b) Re-opening of Assessments up to 10 years, only if there is any evidence against undisclosed
income more than Rs. 50 lakhs for a year.
❖Relief for Dividend: Dividend payment to REIT/InvIT exempt from TDS. Advance Tax liability on
dividend income shall arise only after the declaration/payment of dividend.
❖Dispute Resolution Committee (DRC): DRC for small taxpayers having taxable income up to Rs.50
lakh. The procedure of the committee will be conducted in faceless manner.
❖Faceless Income Tax Appellate Tribunal (ITAT): Establishment of National Faceless Income Tax
Appellate Tribunal Centre. It is Proposed to make faceless electronic communication between the
Tribunal and Appellant. In case of personal hearing, it shall be done through video conferencing.
BDRS
Takeaways – Direct Taxation
❖ Exemption from Tax Audit: Turnover limit for Tax Audit increased from Rs. 5 crore to Rs. 10 crore (for those who
carry out 95% of digital transactions).
❖ Affordable Housing/Rental Housing: Benefit of Rs. 1.5 lakhs deduction for interest on Affordable Housing loan is
extended by one more year (Till 31/03/2022).
❖ Pre-filling of Returns: The details of Salary, Tax payments, TDS, Capital Gains from listed securities, dividend and
interest from Post office and Banks etc. will be pre-filled in the Income Tax returns.
❖ Labour/Employees Welfare Fund: In case of late deposits, Employers will not get the benefit of deductions of the
labour/employees welfare fund (Provident Fund, Super Annuation Fund and other social security funds).
❖ Incentives for Start Ups: Capital Gains exemption for investing in start ups proposed to be extended till one more
year (Till 31/03/2022).
❖ Unit-Linked Insurance Plan: Amount received at maturity will be exempt for ULIP’s in which annual premium is up
to Rs. 2.5 Lakhs if such policies are taken on or after 01/02/2021.
❖ Provident Fund: Investment amount in provident fund in excess of Rs. 2.5 Lakhs during the financial year will
result in interest earned on such excess amount being taxable.
BDRS
Takeaways – Indirect Taxation
❖Measures taken for simplification of GST compliances:
• Facility of Nil Return filing through SMS.
• Introduction of Quarterly return and monthly payment for small taxpayers.
• Introduction of Electronic invoice system (Tax-payers having turnover above Rs.100 crores).
• Validated input tax statement.
• Pre-filled editable GST return.
BDRS
Takeaways – Custom Duty Rationalisation
❖Custom Duty Rationalisation:
Sr. No Industry Type Old Rate New Rate
1. Electronic and Mobile Phone Industry Nil 2.5%
2. a. Iron and Steel 10% 7.5%
b. Copper Scrap 5% 2.5%
3. Textiles (Caprolactam, Nylon chips, Nylon fibre & Yarn) 10% 5%
4. Chemicals (Naptha) 4% 2.5%
5. MSME Products (Steel Screws and Plastic Builder Wares) 10% 15%
6. Agriculture Products:
a. Raw Silk and Silk Yarn Nil 10%
b. Cotton Products 10% 15%
7. Gold & Silver 12.5% 7.5%
❖ Gold Rate & Steels Prices are expected to reduce.

❖ Electronic & Mobile Phone prices may rise further.
BDRS
Takeaways – Miscellaneous
❖Vehicles Scrapping Policy: A voluntary vehicle scrapping policy to phase out old & unfit vehicles.
Vehicles would undergo fitness test after 20 years in case of personal vehicles and after 15 years
in case of commercial vehicles.
❖AIDC Cess on Petrol, Diesel, Gold, Alcohol etc: Agriculture Infrastructure & Development Cess of
2.5% on gold, 100% on Alcohol, 35% on Apple, 5% on Cotton to be imposed.
❖It is proposed to clarify that Limited Liability Partnership shall not be eligible for presumptive tax
for professionals.
BDRS
Other Highlights
❑Economic Development
❖Health & Well Being: A sharp increase of 137% can be seen in this sector (Rs. 2,23,846 crores in 2021-22
against current year figures of Rs. 94,452 crores)
❖Drinking Water & Sanitation: Rs. 60,030 crore allocated for Drinking Water & Sanitation for F.Y 2021-22.
❖Nutrition: Rs. 2,700 crore allocated for Nutrition for F.Y 2021-22.
❖Increase in Capital Budget: Provided Rs. 5.54 lakh crores which is 34.5% more than the capital expenditure
allocated in budget of 2020-21.
❖Recapitalization of PSBs: Further recapitalization of Rs. 20,000 crore is proposed in F.Y. 2021-22.
❖Companies Act & LLP: It is proposed to revise the definition of small companies under Companies Act and
decriminalisation under LLP Act.
❖Covid-19 Vaccines: Rs.35,000 crore is allocated for Covid-19 vaccine.

BDRS
Thank You
BDRS
Budget Highlights 2021
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Budget stands on six pillars-health and wellness, physical and financial capital and infrastructure, inclusive development for aspiring India, To infuse new
life into human capital, innovation and R&D, and minimum government and maximum governance
Covid – Vaccine
 India has two COVID19 vaccines made available and two more will be made accessible soon.
 Rs 35,000 crore more allocated to Covid 19 vaccines in 2021-22; committed to providing more funds
Govt Finances
 FY21 fiscal deficit at 9.5%. As part of this, the government will borrow another Rs 80,000 crore in the next two months of this year alone.
 For FY22, the fiscal deficit is pegged at 6.8% of GDP. The fiscal deficit will be reduced to 4.5% by FY26.
 A bill to set up DFI providing Rs 20,000 crore will also be introduced to launch the National Asset Monetisation Pipeline to fund new infra projects
 Proposes capital expenditure at Rs 5.54 lakh crore, 34% higher than last year
Divestment
 The FY22 divestment target at Rs 1.75 lakh crore is lower than FY21 at Rs 2.1 lakh crore.
 All divestments announced so far will be carried out in 2021-22
Taxation & Administrative Reforms

 No change in income tax slabs
 Citizens of age 75 years and above who have only Pension and Interest income – Need not file Income Tax Returns
 A faceless Income Tax Appellate Tribunal (ITAT) for providing online resolution.
 The 'tax audit limit' under Section 44AB has been increased from Rs.10 crores to Rs.5 crores where 95% of business transactions are done in digital
mode.
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 The 'advance tax liability' on dividend income shall rise only after the declaration or payment of dividend.
 The deduction - for home loan for affordable housing (under section 80EEA ) is to be extended to loans taken up to 31st March 2022.
 The affordable housing projects can avail tax holiday until 31 March 2022.
 Advance tax on Dividend income shall be computed post receipt of dividend income
 Vivad Se Viswas Scheme Last Date of filing extended to 28th February, 2021.
 To review over 400 old exemptions in indirect taxes; to begin extensive consultation from October 2021
 Govt proposes to ease norms to attract more foreign investment in infrastructure sector; FDI in insurance companies hiked to 74%
 Delayed contribution to EPF by employers will not be allowed as a deduction to employers
 Tax holiday and exemption on capital gains on investment in startups extended by 1 year.
 Tax incentives for the IFSC and tax holiday for aircraft leasing and rental companies.
 Interest income on annual EPF contribution above Rs. 2.5 lakh to taxed.
 For ULIPs on or after Feb 1, 2021, the maturity proceeds of policies with an annual premium of more than Rs 2.5 lakh will be taxable on a par
with equity-linked mutual fund schemes. However the amount received on death shall continue to remain expect without any limit on the
annual premium.
Customs Duty Changes

 Exemption duty on steel scrap up to March 2022; customs duty on naphtha cut to 2.5%
 Rationalising customs duties on gold and silver, says FM in Budget for 2021-22
 Customs duty on cotton increased to 10%, silk to 15%
 Customs duty on solar lanterns cut to 5%
Industry
 PLI schemes to create manufacturing global champions for an AtmaNirbhar Bharat have been announced for 13 sectors.
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 For this, the government has committed nearly Rs.1.97 lakh crores, over 5 years starting FY 2021-22.
 An amount of Rs. 1.97 lakh crores, over 5 years, starting this FY to nurture global manufacturing champions and increase jobs for the youth
 Proposed a mega-investment textile park to be launched along with 7more textile parks to be established over the next 3 years.
Agriculture & Water

 Govt. has announced the launch of the Jal Jeevan Mission (Urban). It aims at universal water supply in all 4,378 Urban Local Bodies with 2.86 crores
household tap connections, as well as liquid waste management in 500 AMRUT cities. It will be implemented over 5 years, with an outlay of Rs
2,87,000 crores.
 To provide adequate credit to farmers, Govt. has enhanced the agricultural credit target to Rs 16.5 lakh crores in FY22. It will be to increase focus on
animal husbandry, dairy and fisheries.
 The Micro Irrigation Fund with a corpus of Rs 5,000 crores has been created under NABARD, which has been doubled in the current budget.
 To benefit farmers Govt. has raised customs duty on cotton from nil to 10% and on raw silk and silk yarn from 10% to 15%.
Auto Scrappage policy

 The voluntary vehicle scrapping policy aims to remove inefficient vehicles so as to reduce vehicular pollution and oil import bills.
Banking & insurance

 Increasing permissible limit of FDI from current 49% to 74% in Insurance sector.
 The FM announced plans to set up a new asset reconstruction company (ARC) and asset management company (AMC) as part of a strategy to clean
up banks’ balance sheets.
 Rs.20,000 Cr has been allocated for PSU Bank recapitalization.
 The government will look to privatise two public sector banks, along with IDBI Bank and one insurance company.
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Health
 PM AtmaNirbhar Swasth Bharat Yojna : Govt. has launched new scheme called PM AtmaNirbhar Swasth Bharat Yojna, with an outlay of Rs 64180cr
over the next 6 years.
 This will develop capacities of primary, secondary, and tertiary care Health Systems, strengthen existing national institutions, and create new
institutions, to cater to detection and cure of new and emerging diseases. This will be in addition to the National Health Mission.
 The Budget outlay for Health and Wellbeing is Rs 2,23,846 crores in BE 2021-22 as against Rs 94,452 crores with an sharp increase of 137% over
previous year. Key allocation the scheme is as under:
 Govt. has provided Rs 35000cr for Covid-19 vaccine in the budget and further committed to provide further funds if required.
 Expenditure on health and family welfare has been increased from Rs 65012cr to Rs 71269cr.
 Allocation for drinking water & sanitation has been increased sharply from Rs 21518cr to Rs 60030cr.
Information Technology
 Government to launch data analytics, artificial intelligence, machine learning driven MCA21 Version 3.0. This Version 3.0 will have additional
modules for e-scrutiny, e-Adjudication, e-Consultation and Compliance Management.
Infrastructure, Cement and building material

 Professionally managed development financial institution (DFI) will be introduced with an allocation of 20,000cr
 The Jal Jeevan Mission (Urban), will be launched. It aims at universal water supply in all 4,378 Urban Local Bodies with 2.86 crores household tap
connections, as well as liquid waste management in 500 AMRUT cities. It will be implemented over 5 years, with an outlay of Rs.2,87,000 crores.
 The National Infrastructure Pipeline (NIP) has expanded to 7,400 projects.
 Around 217 projects worth Rs.1.10 lakh crores under some key infrastructure Ministries have been completed.
 By March 2022, government would be awarding another 8,500 kms and complete an additional 11,000 kms of national highway corridors.
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 3,500 km of National Highway works in the state of Tamil Nadu at an investment of Rs.1.03 lakh crores. These include Madurai-Kollam corridor,
Chittoor-Thatchur corridor. Construction will start next year
 1,100 km of National Highway works in the State of Kerala at an investment of Rs.65,000 crores including 600 km section of Mumbai Kanyakumari
corridor in Kerala.
 675 km of highway works in the state of West Bengal at a cost of Rs.25,000 crores including upgradation of existing road-Kolkata-Siliguri.
 National Highway works of The State of Assam of more than Rs.34,000 crores covering more than 1300 kms of National Highways will be undertaken
in the State in the coming three years.
 Additional deduction of interest, amounting to Rs.1.5 lakh, for loan taken to purchase an affordable house. Extend the eligibility of this deduction by
one more year, to 31st March 2022. This deduction available for loans taken up till 31st March 2022, for the purchase of an affordable house.
 Affordable housing projects can avail a tax holiday for one more year – till 31st March, 2022.
 Affordable Rental Housing for migrant workers. Allow tax exemption for notified Affordable Rental Housing Projects.
Jewellery
 Announcement of raising of custom duty on Cut and Polished Cubic Zirconia, Synthetic Cut and Polished Stones to 15% from 7.5%
 Reduction of custom duty on following items:
Product Earlier Revised

Gold and Silver 12.5% 7.5%
Gold dore bar 11.85% 6.9%
Silver dore bar 11% 6.1%
Platinum, Pallidum, etc. 12.5% 10%
Waste & Scrap of Precious Metals 12.5% 10%
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National Rail mission
 Aims at developing adequate rail infrastructure by 2030 to cater to the projected traffic requirements up to 2050
 The objective is to increase the modal share of rail in freight from the current level of 27 per cent to 45 per cent.
 100% electrification of Broad Gauge Routes by 2023
 Indigenously developed automatic train protection system to be launched
Oil & Gas

 Announcement to monetize the pipelines of GAIL (India) Ltd, Indian Oil Corp (IOC) and HPCL,
 Announces the strategic disinvestment of BPCL in 2021-22.
 Decreased Custom duty on Naptha from 4% to 2.5%,
 Government has proposed Agriculture Infra Cess of Rs 2.5/litre on petrol, Rs 4 on diesel. Basic excise duty and Special Additional excise Duty have
been reduced – so impact on consumer will not be there.
Power
 139 GW of installed capacity was added during 6 years connecting additional 2.8 crore households with addition of 1.41 lakh circuit km of
transmission lines
 Revamped reforms-based result-linked power distribution sector scheme will be launched with an outlay of ₹3,05,984 crore over 5 years
 Hydrogen energy mission will be launched
PNG
 Ujjwala scheme to cover 1 crore more beneficiaries
 100 more districts under city gas distribution network
 Independent gas transport system operator to be set up
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Railways and logistics
 It is expected that Western Dedicated Freight Corridor (DFC) and Eastern DFC will be commissioned by June 2022.
 The Sonnagar – Gomoh Section (263.7 km) of Eastern DFC will be taken up in PPP mode in 2021-22. Gomoh-Dankuni section of 274.3 km will also be
taken up in short succession.
 Future dedicated freight corridor projects namely East Coast corridor from Kharagpur to Vijayawada, East-West Corridor from Bhusaval to
Kharagpur to Dankuni and North-South corridor from Itarsi to Vijayawada.
 Broad Gauge Route Kilometers (RKM) electrified is expected to reach 46,000 RKM i.e., 72% by end of 2021 from 41,548 RKM on 1st Oct 2020. 100%
electrification of Broad-Gauge routes will be completed by December, 2023.
 Announced Rs.1,10,055 crores, for Railways of which Rs.1,07,100 crores is for capital expenditure.
Shipping and ports

 7 ports projects worth more than Rs.2,000 crores will be offered by the Major Ports on Public Private Partnership mode in FY21-22.
 A scheme to promote flagging of merchant ships in India will be launched by providing subsidy support to Indian shipping companies in global
tenders floated by Ministries and CPSEs. An amount of Rs.1624 crores will be provided over 5 years.
 Around 90 ship recycling yards at Alang in Gujarat have already achieved HKC-compliant certificates. Efforts will be made to bring more ships to
India from Europe and Japan. Recycling capacity of around 4.5 Million Light Displacement Tonne (LDT) will be doubled by 2024.
Textile
 A scheme of Mega Investment Textiles Parks (MITRA) will be launched in addition to the PLI scheme.
 7 Textile Parks will be established over 3 years.
 Announced reduction of the BCD rates on caprolactam, nylon chips and nylon fiber & yarn to 5% from 7.5%
 Announcement of raising customs duty on cotton from nil to 10% and on raw silk and silk yarn from 10% to 15%.
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CONTENTS
Preface .................................................................... 03
Industry Speaks ....................................................... 04
Sector-wise Analysis ............................................... 07
Direct Tax ................................................................ 10
Goods and Services Tax .......................................... 21
Customs Act ............................................................ 24
Customs Tariff Act ................................................... 26
Regulatory............................................................... 36
Glossary .................................................................. 39
PREFACE
Budget 2021-22: A Bold & Positive Endeavour !!!
‘Economic revival and growth’ are the words to reckon if Hon’ble Finance Minister’s announcements today are implemented in letter
and spirit.
It wouldn’t be a shocker if our Minister introduced new levy to cope with COVID situations, which taxpayers too had swallowed with a
bit of displeasure. But it was a feeling of respite and a pleasant surprise for many to see no such levy along with unchanged Income tax
slabs. And although Customs duty saw a bit of surge, it seemed only to make domestic manufacturing conducive. A solid testament of
the economic resilience.
With once in a century event like pandemic, the expectation was too for a ‘once in a century’ budget, and that alongside the continued
hope for public welfare on one hand and to lay a road map for a double-digit growth on the other. For so many reasons, it was perhaps
one of the toughest times to present a budget and majority would see it as sufficiently addressed.
With time-to-time measures already taken to address the dearth during COVID situation, the budget was more of continuity of
initiatives already taken. The approach derived from ‘Atmanirbhar Bharat’ has certainly laid the foundation for a ‘V-shaped’ revival
trajectory. The budget has fostered this theme through policy announcements for aptly identified 6-pillars – Health, Infrastructure,
Inclusive development, Re-invigorating human capital, Innovation and R&D and Minimum Government Maximum Governance.
As a matter of fact, the budget is largely expenditure focused, with few important taxation proposals, that didn’t find its mention in the
speech such as the framework for corporate restructuring which defies Supreme Court’s decision in Smifs Securities and excludes
goodwill from scope of depreciation. Needless to say, all the restructurings, which were only spiked by COVID impact, now have to
factor in this change. The proposal is certainly an unexpected dampener.
However, some of the announcements such as increase in FDI limit for insurance sector from 49% to 74% to attract greater foreign
investment, creation of an Asset Reconstruction Company and Asset Management Company to help improve the health of the banking
sector, provide a glimpse of the FM and her teams keen attention to the fundamentals of the economy. The announcements also entail
some more of these welcome moves like reduced time limit for reopening of past cases from six to three years and benefit of lower
withholding rates under tax treaties for foreign shareholders in Indian companies. While faceless assessments are a move towards
technological advancements in faster and seamless assessments, it too has its own side story where assessees would be left wondering
if their issues have been understood and appreciated appropriately.
The indirect tax regime too saw some significant proposals such as removal of mandatory requirement to getting annual accounts
audited and reconciliation statement submitted by specified professional. Indeed, a major relief not only from the quantum of
compliance but also from the ever-changing statutory framework and timelines in this regard. It is also interesting to see how the
erstwhile mechanism of refund has been borrowed in the provisions of zero-rated supply and only allows a notified class of taxpayers or
notified supplies of goods or services to be covered thereunder.
It is a mix of sentiments so far as GST related proposals are concerned. On one hand it is a bit too strict to allow ITC only if the supplier
has furnished details of invoice or debit note in its return, on the other hand it is indeed a welcome step to see the budget finally
effectuate GST Council’s decision to retrospectively amend the law so as to charge interest only on net cash liability. Amongst all these
changes, one couldn’t fail to notice that while the Indian economy is very much on its way to emerge out of COVID -19 crisis, the display
of commitment and sheer will of the FM will act as a catalyst in the next phase of the growth process.
To sum up, it is an ambitious budget, that now needs focused execution to sail through! And we at TIOL, in association with Taxcraft
Advisors LLP, GST Legal Services LLP and VMG & Associates, have ventured to analyse its nitty-gritty for our esteemed readers.
We hope this booklet helps you to decipher key proposals of this budget. As always, we look forward to receiving your inputs, thoughts
and feedback.
Happy Reading!
Best Regards,
Team Vision 360
An Exclusive Budget Analysis | Special Edition 3

INDUSTRY SPEAKS
The Government is clearly seeing the heavy expenditure as a means to spike the momentum in the
economy. By pledging heavy investments in the National Highway projects to the tune of 8,500 km by
March 2022 and an additional 11,000 km of National Highway Corridor, the future for the infrastructure
and ancillary sectors like us, indeed seems to be very promising. Likewise, the proposed expenditure in the
Health care sector would certainly lead to many technological developments and boost to the domestic
manufacturing of medical devices. On the back-drop, though the BCD rate on certain electrical equipment,
signalling equipment, etc. have been increased, it may not adversely impact the overall business growth of
the automotive sector or rather would push for the re-location of supply alternatives in India itself.
SANJAI GUPTA
Vice President, Corporate Affairs
3M India Limited
While most of the Budget 2021 speculations such as the Customs Amnesty Scheme, COVID Cess, etc. have
proven to be a speculation, the Budget has surely sought to promote the domestic manufacturing of various
electronic items, even at the expense of injuring the importers. Being a pioneer in the LED sector, surely the
increase in Customs Duty rate for LED inputs and LED lamps, lanterns, etc. would increase the costing of our
products and would make even more difficult for us to compete with the Indian manufacturers. Having said
that, we are glad to see that Government has indeed taken a pro-Consumer/business approach by promising
1000 new electronic national markets.
RAJESH UTTAMCHANDANI
Managing Director
Syska LED Lights Private Limited
The hospitality, Travel & Tourism Sector has been going through a challenging time owing to COVID-19
disruptions. In this backdrop, as a sector we were expecting some significant benefits either in the form of a
fiscal incentive or reduction in tax rates or deferment of tax payments. Nonetheless, it seems that the
Government has not taken cognizance of the hardships faced by the Sector and therefore, nothing of this
sort has been announced.
AMIT GUPTA
India Tax Head
Oyo Hotels & Homes Private Limited

INDUSTRY SPEAKS
It is a progressive and inclusive budget. The Hon’ble FM has tried to capture critical aspects of the growth
right from divestment to increasing the revenue proceeds to more spending on public infrastructure and
healthcare. In direct tax proposals, Faceless ITAT, TDS on purchase of goods and rationalization of M&A
related provisions are key ones. In indirect taxes, proposal to do away with the requirement of getting the
reconciliation statement, which was required to be filed with the Annual Return, certified by a Chartered
Accountant and replace it with self-certification, is a welcome move. Overall a positive budget!
MANOJ AGARWAL
Chief Financial Officer
Gujarat Fluorochemicals Limited
Allocation of INR 3.06 lakh crores for financial revival of DISCOMs is indeed a welcome move. Nonetheless,
this of course is a short-term solution. We all know that in the long term the DISCOMs’ privatization is the
only feasible solution and the process has already begun with some of the DISCOMs being privatized in the
recent past.
Another impact area is that of BCD on modules – which has still not been announced which in a way is good
news as it appears (at least for the IPPs) that it has been deferred for the time being. On the other hand,
increase of BCD from 5% to 20% on inverters is an intelligent move as it would promote domestic
manufacturing and India as a country has sufficient capacity available.
The Industry though was expecting widening of definition of Sovereign funds [to include infra projects] which
enjoy a tax concession. Lastly, the capital infusion in Sector’s catalyst agencies such as SECI and IREDA is a
welcome move and a much needed at that. Overall, it is an average budget!
PARAG SHARMA
Chief Executive Officer
O2 Power
Given the scale of the COVID-19 pandemic, the Budget 2021 was definitely a herculean task on the
Finance Ministry to help get the economy back on track! The Government has indeed exercised a self
restraint in not introducing any new levy or cess to reduce the fiscal deficit. Instead, the Government has
chosen to spend excessively on health and infrastructure sector to promote economic growth.
While the budget is just as herculean as expected, there have been certain let-downs as well in the
absence of any Customs Amnesty Scheme or any increase in Custom Duty on processed goods in plastic
packaging industry. Owing to such leverage in Custom Duties, the Chinese and South East Asian Countries
has been constantly dumping the goods in the Indian market owing to which imports have increased
almost to five time in the last few quarters alone. Accordingly, it was expected that duties would be
increased on such products to strengthen the Domestic Manufactures. Nonetheless, considering the
trying times, this might as well be the best Budget one would have expected.
AKHILESH BHARGAVA
Managing Director
AVI Global Plast Private Limited

INDUSTRY SPEAKS
The FM seems to have struck a balancing act amidst the incumbent fiscal deficit and other economic
challenges posed by the pandemic. Sensex too has reacted positively. No change in corporate tax rates is an
extremely positive move from Hon’ble FM. Faceless litigation at ITAT level, introduction of dispute resolution
scheme and reduction in time limit for reopening cases are some of the bold moves to settle disputes in a
timely manner!
However, M&A space may take a hit owing to: (a) prospective disallowance of depreciation on goodwill; and
(b) augmenting the fold of capital gains on slump exchange. Possible overlapping of TDS and TCS on purchase/
sale of goods may prove to be draconian from compliance perspective. In all, a bold and positive budget!
NIPUN MOHANKA
In Country Tax and Treasury Lead
Mars International India Private Limited
A progressive and growth-oriented digital budget with focus on healthcare spending and PLI scheme for
various sectors would be much appreciated by Industry leaders and benefit Public at large.
Reduction of time-limit for reopening of tax assessments from 6 years to 3 years is much welcomed move
and will help reduce tax uncertainties however, disallowance of deduction of goodwill is a surprise and
will impact future M&A transactions. Additional Compliance burden under TDS and GST rules will require
further automation of processes and use of technological assistance.
Seeing the budget estimates of fiscal deficit, experts were apprehensive of increase in tax liability and
therefore in absence of any major change in Personal or Corporate tax rates, the markets reacted
positively.
SHALABH GOEL
Director Finance [India & APAC]
Centrient Pharmaceuticals

SECTOR-WISE ANALYSIS
Key Sector Wise announcements / Proposals
Health and Sanitation

• In addition to National Health Mission, new centrally sponsored scheme, PM AtmaNirbhar Swasth Bharat Yojana to be launched
with an outlay of about INR 64,180 crores over 6 years
• Increased budget outlay for Health and wellbeing of INR 223,846 crores [137% higher than previous year]
• Rs. 35,000 crores allocated for COVID-19 vaccine
• To strengthen nutritional content, delivery, outreach, and outcome Mission Poshan 2.0 has been launched
• The Jal Jeevan Mission (Urban) launched to ensure universal water supply in all 4,378 Urban Local Bodies with 2.86 crores
household tap connections, as well as liquid waste management in 500 AMRUT cities
• Urban Swachh Bharat Mission 2.0 will be implemented with a total financial allocation of INR 1,41,678 crores over a period of 5
years from 2021-2026
• To tackle the burgeoning problem of air pollution, allocated an amount of INR 2,217 crores for 42 urban centres with a million-
plus population
Infrastructure and Real Estate

• DFI is introduced as a catalyst for infrastructure sector long term financing. INR 20,000 allocated to DFI for FY 2021-22
• To boost infrastructure projects by creating financial structures, monetizing brown field assets and increasing capital expenditure
budgets at state and central level
• National Infra pipeline worth INR 103 lakh crores involving 6835 projects expanded to 7,400 projects
• Debt financing to be done for InVITs and REITs by making necessary amendments in regulations to ease access to finance by
infrastructure and real estate sectors
• Deduction of INR 1,50,000 for affordable housing extended by 1 more year, available for loans sanctioned up to March 2022
• Tax holiday on profits of developers involved in affordable housing projects extended by 1 year to March 2022
• Work underway on INR 5.35 lakh crores Bharatmala Pariyojana Project and further plans to develop national highways and
special corridors
Power
• Hydrogen energy mission to be launched to promote power generation from hydrogen
• Strengthening of DISCOMs by financial package of INR 3.06 lacs crores
• Infusion of capital in SECI and IREDA to the tune of INR 1,000 crores and INR 1,500 crores respectively
Railways
• National Rail Plan to create a future ready Railway system by 2030
• Planned reduction of freight cost by introducing dedicated Freight Corridors

in identified geographies

• 100% electrification of Broad Gauge line to be completed by 2023
• Metro services announced in 27 cities, plus additional allocations for Kochi Metro, Chennai Metro Phase 2, Bengaluru Metro
Phase 2A and B, Nashik and Nagpur Metros
Insurance
• Increase in FDI limit from 49% to 74% in Insurance Companies with specified terms for composition of Board
• Proposed Initial Public Offering of Life Insurance Corporation of India in FY 2021-22
• Under Disinvestment program, one General Insurance Company to be privatized
Agriculture
• 1,000 more Mandis to be integrated into the E-NAM market place
• Multipurpose Seaweed Park to be set up in Tamil Nadu
• Modern fishing harbors and fish landing centers has been developed including Chennai and Kochi
Shipping
• Public Private Partnership model to be institutionalized for managing operational services of major ports
• Subsidy program introduced with a budget of INR 1624 crores to promote Merchant Shipping and to enable domestic players to
work on international platforms
• Recycling of Ships Act, 2019 enacted and recycling capacity to be doubled by 2024
Employment
• One nation one ration card’ scheme is under implementation in 32 states and UTs for the ease of migrant worker and laborers
• Social security benefits will be extended to gig and platform workers
• A portal to be launched to maintain information on gig workers and construction workers
• Margin capital required for loans via Stand-up India scheme reduced from 25% to 15% for SCs, STs and women
Education
• An expenditure of 3.5% of GDP allocated on Education
• 100 new Sainik Schools will be set up in partnership with NGOs/private schools/states
• A Central University in Leh to provide accessible higher education
• Revamped Post Matric Scholarship Scheme for welfare of SCs
• An amount of 35,219 crores allocated for 6 years till 2025-2026 which is to benefit 4 crores SC students.
• 750 Eklavya model residential schools in our tribal areas
• Realigning National Apprenticeship Training scheme for graduates and diploma holders in Engineering

• Partnership with the UAE and Japan in area of skill development and recognition
• National Research Foundation with outlay of INR 50,000 crore over 5 years
Banking and Financial Sector

• Recapitalization of banking sector, allocation of INR 20,000 crores for better provisioning of NPAs
• Provisions introduced in necessary laws and enactments to institutionalize the increase in ceiling limit of deposit insurance
introduced during last year/- [From INR 1 lacs to INR 5 lacs]
• Regulated Gold exchanges to be set up, SEBI notified as a regulator and Warehousing Development and Regulatory Authority to
be set up for vaulting, assaying, warehousing and logistics
• Special Institution to invest into stressed and other bond securities to boost confidence into bond market investments
• A unified Securities Market Code to be launched which would subsume SEBI Act, SCRA Act, Government Securities Act and
Depositories Act
• Investor Charter outlining the rights of the financial investors across all financial products to be launched
• Minimum loan size eligible for debt recovery under the Securitization and Reconstruction of Financial Assets and Enforcement of
Security Interest (SARFAESI) Act, 2002 proposed to be reduced from the existing level of INR 50 lacs to INR 20 lakh
Textile Sector
• To enable the textile industry to become globally competitive, attract large investments and boost employment generation, a
scheme of Mega Investment Textiles Parks (MITRA) will be launched in addition to the PLI scheme
Petroleum and Natural gas

• Gas pipeline project to be set up in Jammu and Kashmir
• 100 more districts brought under the umbrella of city gas distribution network
• Independent gas transport system operator has to be set up for facilitation and coordination of booking of common carrier
capacity
• Ujjwala scheme for LPG connection to poor households extended to cover 1 crore more beneficiaries
Digital Sector
• An allocation of INR 1500 crores for a proposed scheme to give boost to digital transactions
• INR 3,768 crores allocated for forthcoming census which would be country’s first digital census

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Amendment in Section 2
• Bill proposes to insert definition of the term ‘liable to tax’ in sub-section 29A of Section 2 to include tax liability on a person under
any law of any country, and to include a case where an exemption has been provided subsequent to imposition of tax liability.
• Bill proposes to amend the definition of the term ‘block of assets’ defined in sub-section 11 of Section 2 to exclude ‘Goodwill’
from the same.
• Corresponding amendments are made in Clause (ii) of Section 32, insertion of Explanation 3 to Section 32, Section 50, and Section
55.
Author’s Note
The intent is clearly to exclude Goodwill from the definition of ‘block of assets’ resulting into prospective restriction on claiming
depreciation on Goodwill in all situations. It is important to note that Ind AS 103 – ‘Business Combinations’ does not permit to
recognize Goodwill in the books.
The amendment overrules the settled principle laid down by the Hon’ble SC in the case of Smifs Securities Limited [2012-TIOL-53
-SC-IT]
Increase in limit for Income Tax Audit

• Bill seeks to amend Section 44AB of the IT Act qua audit of accounts of certain persons carrying on business or profession.
• Bill proposes to increase the limit for tax audit from five crore rupees to ten crore rupees for a person carrying on business of
which aggregate of all receipts and payments in cash during the PY does not exceed five per cent of such receipt and payments
respectively.
Author’s Note
It is a welcome step to promote digital economy and reduce compliance for small businesses subject to the critical condition that
aggregate of cash receipts and payments is less than or equal to 5% of the total receipt and payments respectively.
Tax Deduction at Source on purchase of goods

• Introduction of new Section 194Q w.e.f. July 01, 2021 wherein any person (having total sales, gross receipts or turnover from the
business carried on by him exceeds ten crore rupees) who is responsible for paying any sum to any resident for purchase of any
goods of the value or aggregate of such value exceeding fifty lakh rupees in any FY shall at the time of payment to the seller
deduct an amount equal to 0.1% of such sum exceeding fifty lakh rupees as income tax.
• Such provisions shall not apply to a transaction on which TDS is deducted under any other provisions of the IT Act or tax is
collected under
• 06C (other than sub-section (1H)) of the IT Act.
Author’s Note
It is an additional burden on the businesses. Moreover, it entails cash flow issues for the seller of goods who are already
struggling on similar count owing to COVID-19 scenario. The practical application shall have its own set of challenges and suitable
timely clarifications would be highly appreciated.
Increase in Safe Harbour Limit u/s 43CA

• Bill proposes to increase the safe harbour threshold from existing 10% to 20% under Section 43CA of the IT Act.
• Transfer to satisfy following conditions to be eligible for increase limit:

 Transfer of residential unit takes place during from November 12, 2020 to June 30, 2021;

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 Transfer is by way of first-time allotment of the residential unit to any person; and
 Consideration received or accruing as a result of such transfer does not exceed INR 2 crore.
• Corresponding amendment is also made in Section 56 of the IT Act.

Author’s Note
Said amendment is for a limited period to cover the purchase of residential units subject to specified conditions. This should (to
some extent) help in boosting the demand in the real-estate sector and to enable the real-estate developers to liquidate their
unsold inventory of residential units.
Clarificatory amendment to exclude LLPs from the provision of presumptive taxation for
professionals under Section 44ADA
• Bill proposes to amend sub-section (1) of Section 44ADA of the IT Act to clarify that the said Section shall apply to an Assessee,
being an individual, HUF or partnership firm, not being an LLP.
Rationalization of provision of transfer of capital asset to partner on dissolution or

reconstitution
• Bill proposes to insert new sub-section (4A) to Section 45 which brings the (i) revalued assets or (ii) self-generated assets, under
the ambit of Capital Gain taxation.
• Receipt of such capital asset by the partners or members shall be chargeable to income tax as income of the specified entity
(partnership firm or AOP /BOI) under the head capital gains and shall be deemed to be the income of such specified entity
(partnership firm or AOP /BOI) of the PY in which the capital asset was received by the partner or member (as the case may be).
• These amendments shall be effective from AY 2021-22 and onwards.
Author’s Note
This amendment is in the nature of plugging the loop holes in the taxation for partnership firms, AOPs and BOIs. Coupled with a
higher tax rate, this will discourage formation of partnership structures.
Tax incentives for units located in International Financial Services Centre

• Bill proposes to amend Section 9A to empower Central Government to exempt or apply any conditions with modification
applicable to eligible investment fund and its manager if any located in IFSC.
• Further, Bill proposes to amend the expression ‘Specified Fund’ amended to include the investment division of Offshore Banking
Unit (‘OBU’) which has been granted category-III AIF registration and fulfills other conditions.
• Bill proposes to amend clause 4D u/s 10 to exempt any income accrued or arise to or received to the investment division of OBU.
• Furthermore, Bill proposes to insert new clause (4E) to Section 10 to exempt any income accrued or arise to or received by non-
resident on transfer of Non-deliverable forward contracts entered into with an OBU of IFSC and clause(4F) to Section 10 to
exempt any income of non-resident by way of royalty on account of lease of aircraft by a unit of IFSC which is eligible for
deduction u/s 80LA.
• Bill proposes to insert new clause (23FF) to Section 10 to exempt capital gain income arising or received by Non-resident on
account of share transfer of company resident in India by resultant fund on account of relocation.
• Bill proposes to make consequential amendments in Sections 80 LA, 47, 49, 56, 79 and 115AD.
• Said proposed amendments shall take effect from April 01, 2022.

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Author’s Note
In order to target more investments and make IFSC attractive, steps have been taken to cover investment divisions OBU under
the definition of ‘Specified Fund’.
Further, consequential amendments have been made to exempt the income in relation to forward contracts, in the form of
royalty and capital gains.
Relaxation to Specified Senior Citizen from filing IT return

• New Section 194P is sought to be introduced wherein the specified banks in case of a specified senior citizen shall compute total
income after giving effect to the deduction allowable under Chapter VI-A and rebate allowable u/s 87A and deduct income-tax on
such total income on the basis of the rates in force.
• Specified senior citizen have been defined to mean (i) who is of the age more than 75 years; and (ii) who is having income only of
the nature of pension and interest receivable on such bank account; and (iii) has furnished declaration containing such
particulars, in such form and verified in such manner, as may be prescribed.
• Filing of Income tax return under Section 139 shall not apply to such specified senior citizens.
Author’s Note
Relaxation is sought to be provided to the specified category of senior citizens which are either pensioners or earning income
from bank deposits.
This proposal would result into additional burden of compliance on the banks to compute the taxable income giving effect to
Chapter VI-A deductions and Section 87A.
Tax neutral conversion of Urban Co-operative Bank into Banking Company

• Bill proposes to extend the benefit of Section 44DB i.e., Business re-organization of Co-operative banks to the transition of
primary co-operative bank [Urban Co-Operative Banks (‘UCB’)] into a banking company as permitted by the RBI.
• It is further proposed that transfer of capital assets by the UCB to the banking company as a result of conversion shall NOT be
treated as transfer under Section 47 of the IT Act.
Facilitating strategic disinvestment of public sector company

• Section 72A of the IT Act inter alia provides that accumulated loss and unabsorbed depreciation of the amalgamating company or
companies shall be deemed to be accumulated losses and unabsorbed depreciation of the amalgamated company or companies
in specified cases and subject to the conditions specified in the said section.
• It is proposed to relax these provisions so as to facilitate strategic disinvestment by the Government. Accordingly, facility of
carrying forward accumulated losses and unabsorbed depreciation is now extended where one or more public sector company or
companies is amalgamated into one or more public sector company or companies.
• The bill also provides for following changes:

 Scope of clause (19AA) of Section 2 is proposed to be clarified by insertion of Explanation, to deemingly cover reconstruction
or splitting up of a public sector company into separate companies as a demerger;
 Section 72A shall also apply in case of amalgamation of an erstwhile public sector company with one or more company or
companies, subject to specified conditions;
 Accumulated loss and unabsorbed depreciation of the amalgamating company, in case of an amalgamation referred to in
clause (d), which is deemed to be loss or, as the case may be, allowance for unabsorbed depreciation of the amalgamated
company shall not be more than the accumulated loss and unabsorbed depreciation of the public sector company as on the

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date on which the public sector company ceases to be a public sector company as a result of strategic disinvestment; and
 Explanations to define Control, Erstwhile public sector company and Strategic disinvestment.
• These amendments are proposed to be effective from April 01, 2021 and thus be applicable to AY 2021-22 and subsequent years.
Extension of date of sanction of loan for affordable residential house property

• In order to help first time home buyers, it is proposed to amend the provision of Section 80EEA of the IT Act [which allows
deduction of interest paid on home loan]. The benefit was earlier available only to such loans sanctioned between April 01, 2019
to March 31, 2021. The proposed amendment now extends the limitation till March 31, 2022.
Extension of date of incorporation for eligible start-up for exemption and for investment in
eligible start-up
• In order to provide support to eligible start-up, it is proposed to amend the provision of Section 80-IAC of the IT Act [which allows
complete exemption from Income tax for three consecutive years out of initial ten years]. The benefit was earlier available only
to such start-ups incorporated between April 01, 2016 to March 31, 2021. The proposed amendment now extends the limitation
till March 31, 2022.
• The Bill also proposes to amend the provision of Section 54GB of the IT Act [which exempts capital gains out of LTCG, being
residential property, when utilized for subscribing equity shares in eligible start-up, which the start-up must utilize to purchase
new capital assets]. The benefit was earlier available only when the residential property was transferred on or before March 31,
2021. The proposed amendment now extends the limitation till March 31, 2022.
Incentives for affordable rental housing

• Section 80-IBA of the IT Act which provides complete exemption from Income tax to profits earned from developing and building
affordable housing project approved by the competent authority after the 1st day of June 2016 but on or before the 31st day of
March 2021 is also sought to be extended to notified rental housing projects.
• The provision is also proposed to amend the limitation for approval by competent authority from March 31, 2021 to on or before
March 31, 2022.
Author’s Note
The amendment is aimed at promoting affordable rental which is a key concern for migrant labors. It would be a boost for all the
migrant labour displaced by COVID-19 to return and resume in these post COVID times.

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Addressing mismatch in taxation of income from notified overseas retirement fund

• Section 89A is proposed to be inserted to provide that the income of a specified person from specified account shall be taxed in
the manner and in the year as prescribed by the Central Government.
Author’s Note
Presently withdrawal from retirement funds which were opened by a resident when they were non-resident are facing
mismatches in its taxation, given that these funds may be taxed on receipt basis in foreign countries, while on accrual basis in
India.
The newly inserted section provides a necessary tool to the Government to address such anomalies.
Taxation of proceeds of high premium unit linked insurance policy

• Clause (10D) of section 10 of the IT Act provides for exemption to sum received under a life insurance policy. Under the existing
provisions, there is no cap on the amount of annual premium being paid by any person during the term of the policy. The
provisions are being exploited by the high-net-worth individuals by investing in ULIP with huge premium, while the benefit was
actually framed for the small and genuine cases of life insurance.
• To plug this situation, the Bill proposes various amendments to clause 10D of Section 10, Section 45 and Section 3.
Rationalization of provisions of MAT

• It is proposed to insert sub-section (2D) in Section 115JB so as to empower the Board to make rules to provide for the manner of
recomputing the book of profit of the past year for the purposes of payment of tax of the company, if there is any increase in the
book profit in the previous year due to income of a past year included in the book profit on account of an advance pricing
agreement or secondary adjustment.
Extending due date for filing return of income in some cases, reducing time to file delayed
return and to revise original return and also to remove difficulty in cases of defective returns
• Section 139 provides for the filing of return of income for different persons and related time-limits. The Section is proposed to be
amended to following effect:
 Due date for filing return of income for the spouse of the partner of a firm, if governed by the provisions of Section 5A, shall
be October 31 of the AY;
 Due date for filing of return of income for partners of a firm, which is required to furnish report referred to in Section 92E,
shall be November 30 of the AY;
 Any person who has not furnished a return of income within due date may furnish a return for any previous year at any time
within three months prior to the end of the relevant AY or before the completion of the assessment, whichever is earlier;
 A return of income filed under sub-sections (1) or (4) can be revised at any time within three months prior to the end of the
relevant AY or before the completion of the assessment, whichever is earlier;
 Board is empowered to specify, by notification, that any of the conditions specified in clauses (a) to (f) of the Explanation to
Sub-section 9 shall not apply to such class of assessees or shall apply with such modifications, as may be specified in such
notification.
Allowing prescribed authority to issue notice under clause (i) of sub-section (1) of Section 142
• A proviso to Section 142 is proposed to be inserted to empower prescribed income-tax authority, in addition to Assessing Officer,
to serve notice under clause (i) of sub-section (1) of the said Section.

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Rationalization of the provision relating to processing of returned income and issuance of
notice under sub-Section (2) of Section 143 of the Act
• Section 143 of the IT Act is proposed to be amended to:
 allow adjustment on account of increase in income indicated in the audit report but not taken into account in computing the
total income;
 allow deduction admissible under Section 10AA or under any of the provisions of Chapter VIA under the heading “C.—
Deductions in respect of certain incomes”;
 reduce the time limit specified or sending intimation under sub-section (1) from one year to nine months and to reduce the
time limit for sending notice under sub-section (2) from six months to three months from the end of the financial year in
which the return is furnished.
Clarification regarding the scope of the Direct Tax Vivad se Vishwas Act
• Bill proposes to amend the provisions of VsV to clarify and keep case concluded / pending before Income-tax Settlement
Commission under Chapter XIX-A of the IT Act OUTSIDE the purview of the VSV scheme.
• Further in order to clarify the original legislative intent, the definitions of ‘appellant’ in Section 2(1)(a), ‘disputed tax’ in Section 2
(1)(j) and ‘tax arrears’ in Section 2(1)(o), of the VsV are proposed to be amended.
No interest under Section 234C on Advance Tax instalment for dividend income
• Provisions of Section 234C have been amended so as to provide that the interest under the said section shall not be applicable to
any shortfall in the payment of the tax due on the returned income where such shortfall is on account of failure to estimate the
dividend income accurately.
• It may be noted that the first proviso of the sub-section (1) to Section 234C already provides for the relaxation where the shortfall
in the advance tax installment or the failure to pay the same on time is on account of the income listed therein, as long as the
Assessee has paid full tax in subsequent advance tax instalments. It is proposed to include dividend income in the above
exclusion but not deemed dividend as per sub-clause (e) of clause (22) to Section 2 of the IT Act.
Special TDS/TCS rates for non-filer of IT return

• Stringent measures have been proposed to be introduced against taxpayers who have not filed return of income for two AYs
immediately prior to the PY in which tax is required to be deducted for which the time limit of filing return of income under
Section 139(1) has expired and the aggregate of TDS and TCS exceeds rupees fifty thousand in each of the two years. Specified
person shall not include a non-resident who does not have a permanent establishment in India.
• In order to ensure faster compliance, Section 206AB is being introduced w.e.f. 01.07.2021 wherein TDS is required to be
deducted by such persons from a specified person under the provisions of Chapter XVIIB other than Sections 192, 192A, 194B,
194BB, 194LBC or 194N on any sum or income or amount paid, the tax shall be deducted at higher of the following rates:
 At twice the rate specified in the relevant provision; or
 At twice the rate or rate in force; or
 At the rate of 5%.
• It is further clarified that if the provision of Section 206AA is applicable to specified person in addition to this provision, the tax
shall be deducted at higher of the two rates provided in this Section and Section 206AA.
• Similar provisions are introduced under TCS compliances, wherein Section 206CCA is introduced w.e.f. 01.07.2021 wherein TCS
required to be collected by a person from a specified person under the provisions of Chapter XVII-BB, the tax shall be collected at
higher of the following rates:

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 At twice the rate specified in the relevant provision; or
 At the rate of 5%.
Author’s Note
The Government, on several instances in the past, has already clarified its stand on zero-tolerance towards perceived lack of
discipline in compliances under various Acts. For instance, under GST, qua e-way bill, a taxpayer is not permitted to generate e-
waybills if returns are pending to be filed for two or more months. On similar lines, the Government is now looking to introduce
penal provisions for taxpayers not filing their income tax returns for two or more years.
Rationalization of the provision of slump sale

• Bill proposes to enlarge the scope of the definition of ‘slump sale’ by amending the provision of clause (42C) to Section 2 of the IT
Act so that all types of ‘transfer’ as defined in clause (47) to Section 2 of the IT Act are included within its fold.
• This amendment shall take effect from April 01, 2021 and shall accordingly apply to the AY 2021-22 and onwards.
Author’s Note
There have been divergent judicial views on the subject issue inasmuch as one school of thought advocated that transfer of an
asset in lieu of another asset (non-monetary), could not be considered as ‘sale’, leading to non-applicability of Section 50B; while
as per the other, such exchange of assets ought to be construed as 'sale' leading to applicability of Section 50B.
With this amendment, the said ambiguity is brought to an end and thus, certainty has been provided qua taxability on a
prospective basis. Nonetheless, past transactions shall have to pass the rigors of court room dramas.

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Constitution of the Board for Advance Ruling [Section 245N to Section 245U]
• The posts of Chairman and Vice-Chairman, critical to the functioning of the bench of an AAR, have been vacant for a long time and
it has seriously hampered the working of AAR resulting in a large number of applications remaining pending. In order to fast track
the process of advance ruling and grant relief to the taxpayers in a timely manner, alternative methods for providing advance
rulings need to be looked at. Consequently, it is proposed to constitute a Board of Advance Ruling and make the following
amendments in the existing provisions of AAR:
 Section 245-O to be suitably amended to provide that the Authority for Advance Ruling shall cease to operate with effect from
the notified date.
 Advance Ruling shall now be imparted by the Board for Advance Ruling, which shall consist of two members, each being not
below the rank of Chief Commissioner. Accordingly, Section 245N to be suitably amended to include the required definition.
 Advance Rulings shall not be made binding and can be appealed against by the Applicant or the Department before the High
Court by making suitable amendment in Section 245S. Further, Section 245W is proposed to be inserted to provide the
manner in which appeal to High Court can be made by the Applicant or the Department.
 The applications in respect of which order has not been passed before the notified date shall be transferred to the Board for
Advance Ruling.
 Section 245R, Section 245T and Section 245U shall be suitably amended to mutatis mutandis apply to the Board for Advance
Ruling as they applied to the Authority for Advance Ruling.
 Reference made to Customs Act, Central Excise Act and Finance Act under Section 245N and Section 245Q relating to
application for advance ruling is proposed to be omitted.
• The above amendment shall take effect from 01.04.2021.
Author’s Note
Advance Ruling mechanism was instituted with the intention to provide definite tax implications to the taxpayer before
undertaking such transaction and therefore, it can act as a powerful tool to curb litigations. However, as rightly noted by the
Government, owing to lack of its members, the AAR was not able to function at full capacity resulting in significant delays in
disposing off the applications. Accordingly, revamping of the entire AAR structure was the need of the hour!
Also, noteworthy is the fact that such rulings would no longer be binding on the taxpayer. However, as seen with advance rulings
under GST, having only technical members representing the Government, there is a risk that that rulings pronounced shall be pro
-revenue resulting in increase in appeals and overall litigation, beating the very purpose of having advanced ruling mechanism in
the first place.
Constitution of Dispute Resolution Committee for Small and Medium taxpayers [Introduction
of new section 245MA]
• Taking a leaf out of the success of the Vivaad-se-Vishwas scheme launched last year to settle pending disputes, it is proposed to
introduce a new scheme for preventing new disputes for small and medium taxpayers vide introduction of Section 245MA. The
Assessee would have an option to opt for dispute resolution through Dispute Resolution Committee (‘DRC’).
• Only those disputes where the returned income is INR 50 lakh or less (if there is a return) and the aggregate amount of variation
proposed in specified order is INR 10 lakhs or less shall be eligible to be considered by DRC.
• The Central Government shall constitute one or more DRC who shall resolve the dispute of such persons or class of persons who
shall be specified by the Board.
• Following specified orders shall not be eligible for being considered by DRC, if they are based on:
 search initiated u/s 132; or
 requisition u/s 132A; or
 survey initiated u/s 133A; or

DIRECT TAX
 information received under an agreement referred to in Section 90 or 90A.
• The Assessee would not be eligible for benefit of this provision if there is detention, prosecution or conviction under various laws as
specified in the proposed Section.
• The DRC subject to conditions prescribed shall have the power to reduce or waive penalty or grant immunity from prosecution for
any offence under the IT Act.
• The Central Government has also been empowered to make scheme by notification for the purpose of dispute resolution under this
provision. The Central Government may for the purpose of giving effect to such scheme may by notification in the Official Gazette
direct that any provision may apply or not apply with such modifications, exceptions etc. However, no such direction shall be
issued after 31.03.2023.
• This amendment shall take effect from 01.04.2021
Author’s Note
This is a welcome move for small and medium taxpayers who cannot afford to get into long litigations with the department.
Faceless proceeding before ITAT [Section 255]

• The Government seems to have committed to its stand of imparting greater efficiency, transparency and accountability to the
assessment, penalty and appeal processes. Accordingly, the Government has notified faceless schemes that otherwise required
physical interface with taxpayers. Taking the initiative to the next level, it is now proposed to amend the provisions of Section 255
qua procedure of filing appeal with Appellate Tribunal.
• The Central Government may notify a scheme for the purpose of disposal of appeals by:
 eliminating interference between the Appellate Tribunal and the parties to the Appeal during the proceedings to the extent
technologically feasible;
 making optimum utilization of resources through economies of scale and functional specialization;
 introducing an appellate system with dynamic jurisdiction; and
 the Central Government may direct that the provisions of the IT Act shall not apply to such scheme or apply with such
exception, modification and adaption as may be specified.
Provisional attachment in case of Fake invoices [Section 281B]

• Provisions of Section 281B qua provisional attachment of any property have been amended in order to provide that the aforesaid
provisional attachment of a property of the Assessee may also be made during the of proceedings for imposition of penalty under
Section 271AAD where the amount or aggregate of amounts of penalty likely to be imposed under that Section exceeds two crore
rupees.
Rationalisation of the provisions of Equalisation Levy

In the context of Equalisation Levy, it is proposed to carry out the following amendments to correctly reflect the intention of various
provisions concerning the said levy:
• Insert an Explanation to Section 163 of the Finance Act, 2016, clarifying that consideration received or receivable for specified
services and consideration received or receivable for e-commerce supply or services shall not include consideration which are
taxable as royalty or fees for technical services in India under the IT Act read with the agreement notified by the Central
Government under Section 90 or Section 90A of the IT Act.
• Insert an Explanation to clause (cb) of section 164 of the Finance Act, 2016, providing that for the purposes of defining e-
commerce supply or service, ― online sale of goods‖ and ―online provision of services‖ shall include one or more of the following

DIRECT TAX
activities taking place online:
 Acceptance of offer for sale;
 Placing the purchase order;
 Acceptance of the Purchase order;
 Payment of consideration; or
 Supply of goods or provision of services, partly or wholly
• Amend Section 165A of the Finance Act, 2016, to provide that consideration received or receivable from e-commerce supply or
services shall include:
 consideration for sale of goods irrespective of whether the e-commerce operator owns the goods; and
 consideration for provision of services irrespective of whether service is provided or facilitated by the e-commerce operator.
Payment by employer of employee contribution to a fund on or before due date

• Section 43B of the IT Act covers only employer‘s contribution and does not cover employee contribution, some courts have applied
the provision of section 43B on employee contribution as well. There is a distinction between employer contribution and
employee‘s contribution towards welfare fund. It may be noted that employee‘s contribution towards welfare funds is a
mechanism to ensure the compliance by the employers of the labour welfare laws.
• Hence, it needs to be stressed that the employer‘s contribution towards welfare funds such as ESI and PF needs to be clearly
distinguished from the employee‘s contribution towards welfare funds. Employee‘s contribution is employee own money and the
employer deposits this contribution on behalf of the employee in fiduciary capacity. By late deposit of employee contribution, the
employers get unjustly enriched by keeping the money belonging to the employees. Clause (va) of sub-section (1) of Section 36 of
the IT Act was inserted to the IT Act vide Finance Act 1987 as a measures of penalizing employers who mis-utilize employee‘s
contributions.
• Accordingly, in order to provide certainty, it is proposed to:

 Amend clause (va) of sub-section (1) of Section 36 of the IT Act by inserting another explanation to the said clause to clarify
that the provision of Section 43B does not apply and deemed to never have been applied for the purposes of determining the
‘due date’ under this clause; and
 Amend Section 43B of the IT Act by inserting Explanation 5 to clarify that the provisions of the said section do not apply and
deemed to never have been applied to a sum received by the assessee from any of his employees to which provisions of sub
clause (x) of clause (24) of section 2 applies.
• These amendments will take effect from 1st April, 2021 and will accordingly apply to the AY 2021-22 and subsequent AYs.
Time limit for completion of assessment, reassessment and recomputation

• Bill seeks to amend Section 153 of the IT Act relating to time limit for completion of assessment, reassessment and recomputation:
 It is proposed to amend sub-section (1) of the said section to insert the third proviso so as to provide that for the AY
commencing on or after the 1st April, 2021, the time limit for making an assessment order under Sections 143 or 144 shall be
reduced from the existing twenty-one months to nine months from the end of the AY in which the income was first
assessable. This amendment will take effect from lst April, 2021.
• Bill seeks to amend Section 153A of the IT Act relating to assessment in case of search or requisition:
 It is proposed to amend the said section so as to provide that the search or requisition shall only apply where search or
requisition is made on or before 31st March, 2021. Consequently, assessments under Section 153A and 153C shall not be
made in respect of a search or requisition made on or after 1st April, 2021. This amendment will take effect from 1st April,
2021.

DIRECT TAX
• Bill seeks to amend Section 153C of the IT Act relating to assessment of income of any other person
 It is proposed to amend the said section so as to insert sub-section (3) therein to provide that nothing contained in the said
section shall apply in relation to a search initiated under Section 132 or books of account, other documents or any assets
requisitioned under Section 132A on or after 1st day of April, 2021. This amendment will take effect from 1st April, 2021.

GOODS & SERVICES TAX
Widening the scope of supply so as to include transactions between a person (AOP/BOI) and its
members [Section 7 of the CGST Act]
• In order to widen the tax net, a new clause (aa) to sub Section (1) of Section 7 of the CGST Act has been inserted to include tax
activities or transactions involving supply of goods or services by any person, other than an individual, to its members or
constituents or vice – versa within the scope of ‘supply’. Such transactions shall be liable to GST irrespective of whether it is for
cash, deferred payment or other valuable consideration.
• An Explanation has also been inserted therein to clarify that the person, its members and its constituents shall be deemed to be
two separate persons and such supply shall be deemed to take place from one person to another.
• Consequent to above proposed amendment, Para 7 of Schedule II to the CGST Act, which provides for supply of goods from
unincorporated associations or body of persons to a member thereof to be treated as supply of goods, has also been omitted
with retrospective effect.
• The amendment will be made effective retrospectively from the date of introduction of the CGST Act i.e. 01.07.2017.
Author’s Note
Taxability on supply of service or goods by any association of person such as club or society has been a contentious issue both, in
pre and post era of GST. As per the principles of ‘doctrine of mutuality’, any supply made to self and consideration thereof would
not qualify as consideration. A view has been taken by the taxpayers in the past that the clubs or societies operate on the
concept of mutuality and therefore one cannot be said to be supplying goods or service to its own self. On the same issue,
recently Hon’ble Supreme Court in the case of State of West Bengal & Ors. vs. Calcutta Club Limited and Chief Commissioner of
Central Excise and Service & Ors. v Ranchi Club Limited [2019-TIOL-449-SC-ST-LB], it was held that the services rendered by an
unincorporated clubs to its members are exempted from service tax. In order to negate the effect of Supreme Court decision and
avoid similar litigation in the GST regime with respect to taxability of any activities or transactions by clubs / societies to its
members or constituents, the government has bought the said amendment in the provisions of Section 7 of the CGST Act.
Additional condition introduced to avail ITC [Section 16 of the CGST Act]

• To ensure uniformity and consistency between Rule 36(4) and the CGST Act itself, it is proposed to add a new condition for
availing ITC by inserting a clause (aa) to Section 16(2) of the CGST Act. The said amendment intends to allow ITC only when
details of underlaying invoice or debit note is appearing in the outward supplies of the said supplier and such details have been
• The amendment shall take effect from 01.04.2021
Author’s Note
Recently, the government had introduced Rule 36(4) of CGST Rules which intends to restrict the availment of ITC only after
matching the same with the Form GSTR 2A. Further, the ITC with respect to unmatched invoices can be availed only to the extent
of 5% of the total amount of ITC matched with Form GSTR-2A. It would be pertinent to note that the constitutional validity of the
provisions of Rule 36(4) was challenged in the cases of Bharti Telemedia Limited [W.P.(C) 6895/2020], Sales Tax Bar Association
[W.P.(C) 13097/2019] and Himanshu Mohta and Associates [W.P.(C) 13154/2019] before the Delhi HC, especially when there is
no similar restriction under the CGST Act itself. The said rule has also been challenged on similar grounds in the case of HSIL
Limited [CWP-9861-2020] before Punjab and Haryana HC, and in the case of Society for Tax Analysis and Research [R/Special
Civil Application No. 19529 of 2019] before the Gujarat HC.
The instant amendment aims to bring in the provisions of Section 16 of the CGST Act in line with the restriction under Rule 36(4)
of the CGST Rules to allow credit only in respect to the invoices which are being uploaded on the GST portal by the supplier and
communication is made to the recipient. Further, the Government is in process to introduce a robust system to implement such
provision of the Act. This is evident from by the introduction of recent facility enabled on the GSTN portal which will provide a
communication platform for taxpayers, wherein a recipient can ask his supplier to upload any invoice that has not been uploaded
but is required by the recipient to avail ITC.

Furnishing of Reconciliation Statement in Form GSTR-9C has been abolished [Section 35(5) r/w
Section 44(2) of the CGST Act]
• Section 35(5) requires every taxpayer with a turnover exceeding Five Crores to get his accounts audited and submit the
reconciliation statement along with copy of audited annual accounts. This sub-Section is proposed to be omitted thereby,
removing the mandatory requirement of conducting audit under the GST Law.
• Accordingly, Section 44 of the CGST Act has been amended to provide for submission of the annual return in Form GSTR-9 on self
-certification basis. Further, the Commissioner has been empowered to notify a class of taxpayers who will be exempted from the
requirement of filing the annual return.
• The amendment shall take effect from 01.04.2021.
Author’s Note
In view of the challenges in collating the information for filing the annual return in Form GSTR-9 and the reconciliation statement
in Form GSTR-9C, there have been multiple extension in the due dates for furnishing these documents for FY 17-8 and FY 18-19.
However, instead of simplifying the forms and rationalizing the requirements for reporting in GST Audit, the Government has
altogether abolished the requirement of GST Audit. Audit is a powerful tool to detect any tax leakages and ensure timely tax
payments at the time of audit itself and removing the requirement of audit may result in potential lowering of tax collections.
However, from the industry perspective, it’s a welcome move and would go a long way in reducing the compliance burden.
Interest to be paid on net cash liability with retrospective effect [Section 50 of the CGST Act]
• Section 16 of the IGST Act allows for refund to be claimed by the taxpayer in respect of zero-rated supplies which includes export
and supplies made to SEZ units and / or SEZ developers. However, the said Section is now being amended so as to:
 Restrict zero-rated supplies made to SEZ unit / developer only when the same are made in respect of authorized operations
of the said SEZ unit / developer.
 Restrict the zero-rated supplies on payment of IGST only to the notified class of taxpayers or notified goods or services.
 Restrict the refund in case of export of goods with refund to cases where the foreign currency remittance is within the period
specified under the FEMA Act.
Author’s Note
The Government has prescribed an important condition for realization of sale proceeds within the time limit prescribed under
the provisions of FEMA for the purpose of claiming refund of unutilized ITC in case of export of goods. It seems that such an
amendment has been brought with an objective to provide enabling provisions under the IGST Act for the operation of recently
introduced Rule 96B vide Notification No. 16/2020 – Central 23rd March 2020. The said Rule provides for recovery of refund
claimed for unutilized ITC or integrated tax paid on account of export of goods, in case where the export proceeds are not
realized within the time limit prescribed under the FEMA.
Further, in order to monitor and control the refund of integrated tax paid on making zero rated supplies, the Government has
restricted the refund of integrated tax paid on zero-rated supplies only to a notified class of taxpayers or notified supplies of
goods or services.

Summary of Other amendments in the CGST Act
Section reference Amendments
Seizure and confiscation of goods and conveyances in transit is proposed to be treated as a separate
Section 74
proceeding from recovery of tax.
An explanation is being inserted to clarify that “self-assessed tax” shall include tax payable in respect of
Section 75(12) outward supplies, the details of which have been furnished under Section 37, but not included in the
return furnished under Section 39.
The Section is being amended to provide that provisional attachment shall remain valid for the entire
Section 83 period starting from the initiation of any proceeding under till the expiry of a period of one year from the
date of order made thereunder.
A proviso is being inserted to provide that an appeal shall be filed against an order made under sub-
Section 107(6)
Section (3) of Section 129, only on payment of a sum equal to twenty-five per cent of the penalty levied.
Relevant amendment being made to delink the proceedings under Section 129 relating to detention,
Section 129 / 130 seizure and release of goods and conveyances in transit, from the proceedings under Section 130 relating
to confiscation of goods or conveyances and levy of penalty.
Section 151 is amended to Empower the Jurisdictional Commissioner to call for information from any
Section 151 r/w 168 person relating to any matter dealt with in connection with the CGST Act. Similarly, Section 168 of the
CGST Act is being amended to enable the Jurisdictional Commissioner to exercise such powers.
Provides that no information obtained under Sections 150 and 151 shall be used for the purposes of any
Section 152
proceedings under the Act without giving an opportunity of being heard to the person concerned.
Author’s Note
Pursuant to amendment in Section 83 of the CGST Act, the scope of the said section has been increased and such an action of
attaching property would be taken by department even in case of any proceeding under Chapter XII, Chapter XIV or Chapter XV.
Recently, the Hon’ble Gujarat HC in case of M/S Alfa Enterprise Vs State Of Gujrat [TS 945 GC 2019] and in case of Valerius
Industries Vs Union Of India [TS-1255-HC-2019(GUJ)-NT] has set aside the order passed by the department under Section 83 of
the CGST Act to attach bank account of the assessee and block its Electronic Credit Ledger. The attachment of the bank account
and trading assets should be resorted only as a last resort or measure. It is therefore expected that the Government shall issue
relevant guidelines in this regard in order to protect honest taxpayers from the harassment by the tax department.
With respect to provisions regarding detention and confiscation of goods in transit, the Hon’ble Karnataka HC in the case of M.S.
Logistics [TS-1152-HC-2020(KAR)-NT] has observed that the provisions of Section 129 are intended to ensure that there is no
contravention of provisions of Act or Rules whereas proceedings u/s 130 could be initiated only if there is a reason for authorities
to believe that there is contravention with provision of Act/Rules with an intention to evade tax. The Government has now
amended the provisions of both Section 129 and Section 130 to delink the respective proceedings which may provide some relief
to the taxpayers.

CUSTOMS ACT
Legislative Changes – Customs Act
• Section 25 of the Customs Act has been amended so as to include a sunset clause for the conditional exemptions. It has been
provided that all the conditional exemptions shall come to an end on 31st March falling immediately two years after the grant of
such exemption, unless specifically rescinded.
• As far as the existing conditional exemptions, the same shall come to an end on 31.03.2023 unless specifically extended or
rescinded.
 For example, if a particular grade of steel has been conditionally exempted w.e.f. 01.04.2021, such exemption shall come to
an end on 31.03.2023, unless otherwise provided or rescinded.
 Similarly, the existing exemption benefit of Notification No. 12/2012 – Customs dated 17.03.2012, shall continue until
31.03.2023, unless specifically rescinded or extended before such date.
Author’s Note
The Hon’ble Finance Minister in her Budget Speech had expressed that the Customs Duty Policy in India shall have a twin
objective of Domestic Manufacturing and help Indian get onto global value chain by increasing exports. Accordingly, with a view
to overhaul the Customs Duty structure, the Government had already eliminated 80 outdated exemptions in the previous year.
This year too, the Government has proposed to review about 400 old exemptions and put in place a new customs duty structure,
free from distortions.
• Section 28BB is being introduced so as to provide a limitation of two years, for completion of relevant proceedings which would
culminate into issuance of show cause notice. It can be further extended by another year by the Principal Commissioner or
Commissioner of Customs upon sufficient cause.
Author’s Note
Section 28(4) of the Customs Act provides a time-limit of five years for issuance of Show Cause Notice in cases of collusion, willful
mis-statement, suppression of facts. However, in absence of any specified limitation of time to conclude investigations, the
limitation provided under Section 28(4) was lefty unfructuous.
More often than not, and project industry in particular, faced investigations that extended for years together before a Show
Cause Notice is issued.
Now, with the insertion of Section 28BB, the investigation is capped with limitation, which would certainly minimise the
taxpayer's pain caused by erroneously lengthy investigations. The newly introduced limitation seems to be derived from
decisions of Hon’ble Tribunal in the case of Studioline Interior Systems Private Limited vs. Commissioner of Central Excise [2006
(201) ELT 250 Tri Bang] ; Dolphine Detective Agency vs. Commissioner of Central Excise [2006-TIOL-1238-CESTAT-BANG] ; Raja
Ram Corn Products Limited vs. Commissioner of Central Excise [2004-TIOL-242-CESTAT-DEL] .
• A proviso u/s. 149 of the Customs Act has been inserted which inter alia provides that certain documents, such as Bills of Entry,
Shipping Bills, etc. can be amended electronically on the customs system on the basis of risk evaluation through appropriate
selection criteria. A third proviso has also been added to provide that amendments, as may be specified by the CBIC, may be
done on the common portal itself.
Author’s Note
Section 149 of the Customs Act provides that documents under the Customs Act may be amended by the Proper Officer on the
basis of documentary evidence. It further provides that the Proper Officer shall scrutinize and verify the supporting documents
and subsequently put it up to the concerned Superintendent for approval.
However, the current process is rather time-consuming and the importers / exporters, more often than not, are forced to go into
litigation for amendment / re-assessment of document. This new provision would substantially speed-up the process of
amendment of documents as the same has now been made possible on the digital platform itself.

CUSTOMS ACT
Other Miscellaneous Amendments:
Section Reference Amendment
2(7)(B) Defines ‘Common Portal’ to mean Common Customs Electronic Portal
Empowers Commissioner (Appeals) to carry out the functions to summon persons to give evidence
5(3)
and produce documents
Mandates the filing of bills of entry before the end of the day preceding the day (including holidays)
46(3) of arrival of goods. Further, adds a new proviso to enable the CBIC to notify the time period for
presenting bill of entry in certain cases
Provides for Commissioner (Appeals) having jurisdiction, to certify the correctness of inventory of
110 the seized goods and carry out other procedures as prescribed, before the disposal of the gold in a
prescribed manner
Provides for confiscation of goods entered for exportation under claim of remission or refund of any
113
duty, so as to make a wrongful claim in contravention of the provisions of the Customs Act
Provides for the confiscation of goods entered for exportation under claim of remission or refund of
113(ja) any duty or tax, so as to make a wrongful claim in contravention of the provisions of the Customs
Act
Imposes penalty on persons who obtain any invoice by fraud, collusion, or suppression of facts, etc.
114AC to utilize ITC on the basis of such invoice for discharging any duty or tax on goods that are entered
for exportation under claim of refund of any duty or tax
Explanation amended to include inventories, photographs and lists certified by the Commissioner
139 (Appeals) to the documents within the meaning of that section to give evidentiary value to such
documents
153(1)(ca) Enables service of order, summons, notice, etc. by making it available on the common portal

CUSTOMS TARIFF ACT
Tariff Rate Changes:
Sr. Product Name Chapter Heading Sub- HSN Code Pre Post
2803 00
1 Carbon Black 28 2803 - 5% 7.5%
10
Builders’ Ware Of Plastics, Not Elsewhere
2 39 3925 - - 10% 15%
Specified Or Included
Safety Glass, Consisting Of Toughened
(Tempered) Or Laminated Glass
(All Goods Under This Heading, Other Than
3 70 7007 - - 10% 15%
Those Used With Motor Vehicles, Will Continue
To Attract The Existing Effective Rate Of BCD At
10%)
Synthetic or reconstructed precious or

semiprecious stones, whether or not worked or
graded but not strung, mounted or set; 71049090
4 71 7104 - 10% 15%
ungraded synthetic or reconstructed precious (OTHERS)
or semi-precious stones, temporarily strung
for convenience of transport.
Compressors of a kind used in refrigerating

5 84 8414 - 84143000 12.5% 15%
equipment
Air compressors mounted on a wheeled chassis
6 84 8414 8414 40 All 7.5% 15%
for towing :
Compressors of a kind used in air-conditioning
84148011 12.5% 15%
equipment.
7 Gas Compressors (other than of a kind used in 84 8414 8414 80

airconditioning equipment), free-piston
ALL 7.5% 15%
generators for gas turbine, turbo charger and
other compressors, (Except 84148011)
850110
8 Electric Motors 85 8501 to - 10% 15%
850153
Printed Circuit Board Assembly [PCBA] of
charger or adapter
9 (All goods under this tariff item, other than 85 8504 - 85049090 10% 15%
specified HSN,will continue to attract the existing
effective rate of BCD at 10%)
Parts of Electrical lighting and signaling
10 85 8512 - 85129000 10% 15%
vehicle
85 85364100 10%
11 Relays 8536 - 15%
85364900

CUSTOMS TARIFF ACT
Boards, panels, consoles, etc. for electric control

12 85 8537 - ALL 10% 15%
or distribution of electricity
Ignition wiring sets and other wiring sets of a
13 85 8544 - 85443000 10% 15%
kind used in vehicles, aircraft or ships
14 Other instruments, appliances and machines 90 9031 - 90318000 7.5% 15%
Electronic automatic regulators and other con-
15 90 9032 903289 All 10% 15%
trolling instruments or apparatus
Instrument Panel Clocks and Clocks of a similar
16 91 9104 - 91040000 10% 15%
type for vehicles, Aircraft, Spacecraft or Vessels
17 Agricultural Products and By Products
Denatured Ethyl Alcohol (ethanol) for use in 2207 20
22 2207 - 2.50% 5.00%
manufacture of excisable goods 00
Nil/ 5 % /
All goods except dog and cat food and shrimp
23 - - - 10%/ 15.00%
larvae feed
15%/
18 Minerals
Natural borates and concentrates thereof 25 2528 - - Nil / 5% 2.50%
19 Fuels, Chemicals and Plastics
Naphtha 27 2710 - - 4.00% 2.50%
Bis-phenol A 29 2907 - 2907 23 Nil 7.50%
Epichlorohydrin 29 2910 - 2910 30 2.50% 7.50%
Caprolactam 29 2933 - 2933 71 7.50% 5.00%
Polycarbonates 39 3907 - 3907 40 5.00% 7.50%

Nylon chips 39 3908 - - 7.50% 5.00%
Other plates, sheets, films, etc. of other plastics 39 3920 - 3920 99 10.00% 15.00%
20 Leather
Wet blue chrome tanned leather, crust leather,
finished leather of all kinds, including splits and 41 - - - NIL 10.00%
sides of the aforesaid
21 Textiles
Raw Silk (not thrown) 50 5002 - - 10.00% 15.00%
Silk yarn, yarn spun from silk waste (whether or 5004,
50 - - 10.00% 15.00%
not 5005,
5%+5%
Raw Cotton 52 5201 - - NIL
AIDC*
Cotton waste (including yarn waste or garneted
52 5202 - - NIL 10.00%
stock)

CUSTOMS TARIFF ACT
5402,
5403,
Nylon Fibre and Yarn 54 5404, - - 7.50% 5.00%
5405 00
00, 5406
Nylon Fibre and Yarn 55 5501 to - - 7.50% 5.00%
22 Gems and Jewellery Sector
7.5%
Silver 71 7106 - - 12.50%
+2.5%
Silver Dore 71 7106 - - 11.00% 6.1%
7.5%
Gold 71 7108 - - 12.50%
+2.5%
7107 00
7107, 00, 7109
Base metals or precious metals clad with pre-
71 7109, - 00 00, 12.50% 10.00%
cious metals
7111 7111 00
00
Other precious metals like Platinum, Palladium, 71 7110 - - 12.50% 10.00%
Waste and scrap of precious metals or metals

71 7112 - - 12.50% 10.00%
clad with precious metals
Spent catalyst or ash containing precious metals 71 7112 - - 11.85% 9.17%
Gold or Silver Findings 71 7113 - - 20.00% 10.00%
Coin 71 7118 - - 12.50% 10.00%
23 Metals
Iron and steel scrap, including stainless steel
72 7204 - - 2.50% NIL
scrap [up to 31.03.2022]
Primary/Semi-finished products of non-alloy 72 7206 & - - 10.00% 7.50%

7208,
7209,
All (except
7210,
7225 11 10% /
Flat products of non-alloy and alloy steel 72 7211, 7.50%
00 & 7226 12.5%
7212,
11 00)
7225,
7226
7213,
7214,
7215,
7216,
Long product of non-alloy, stainless and alloy 7217,
72 - - 10.00% 7.50%
steel 7221,
7222,
7223,
7227 &
7228

CUSTOMS TARIFF ACT
Raw materials for use in manufacture of CRGO

72 7225 - - 2.50% NIL
steel
Copper Scrap 74 7404 - - 5.00% 2.50%
Screw, bolts, nuts, etc. of iron and steel 73 7318 - - 10.00% 15.00%
24 Captial Goods
Tunnel boring machines 84 8430 - - Nil 7.50%
Parts and components for manufacture of tunnel
84 8431 - - Nil 2.50%
boring machines with actual-user condition
25 IT, Electronics and Renewable
All (except
8544 70 &
Specified insulated wires and cables 85 8544 - 7.50% 10.00%
8544 30
00)
Former, bases, bobbins, brackets; CP wires;

P.B.T.; Phenol resin moulding powder; Lamina-
39, 74 & Applicable
tion/ El silicon steel strips for use in manufacture - - - NIL
85 Rate
of transformers (entry at S.No. 198 of 25/1999-
Customs)
Inputs or parts for manufacture of Printed Circuit

Any
Board Assembly (PCBA) of cellular mobile phone - - - NIL 2.50%
Chapter
(w.e.f. 1.4.2021)
Inputs or parts for manufacture of camera mod-

Any
ule of - - - NIL 2.50%
Chapter
cellular mobile phone (w.e.f. 1.4.2021)
Inputs or parts for manufacture of connectors of Any
- - - NIL 2.50%
cellular mobile phone(w.e.f. 1.4.2021) Chapter
Inputs or raw material for manufacture of speci-

fied parts like back cover, side keys etc. of cellu- Any
- - - NIL 2.50%
lar mobile Chapter
phone(w.e.f. 1.4.2021)
Inputs or raw material (other than PCBA and

Any
moulded plastics) for manufacture of charger or - - - NIL 10.00%
Chapter
8504 90
Moulded plastics for manufacture of charger or 8504 /
- - 90 or 10.00% 15.00%
adapter 3926
3926 90
Inputs or parts of Printed Circuit Board Assembly Any

- - - NIL 10.00%
of charger or adapter of cellular mobile phones Chapter
Inputs or parts of Moulded Plastic of charger or Any
- - - NIL 10.00%
adapter of cellular mobile phones Chapter

CUSTOMS TARIFF ACT
Sr. Sub-
Product Name Chapter Heading HSN Code Pre Post
No Heading
Inputs or raw materials (other than Lithium-ion
Any
cell and PCBA) of Lithium-ion battery or battery - - - NIL 2.50%
Chapter
pack (w.e.f. 1.4.2021)
Parts or components of PCBA of Lithium-ion
Any
battery - - - NIL 2.50%
Chapter
or battery pack (w.e.f. 1.4.2021)
Inputs or raw materials of following goods: -
(i) Other machines capable of connecting to an
automatic data processing machine or to a net-
work (8443 32 90)
(ii) Ink cartridges, with print head assembly Any
- - - NIL 2.50%
(8443 99 51) Chapter
(iii)Ink cartridges, without print head assembly
(8443 99 52)
(iv) Ink spray nozzle (8443 99 53) (w.e.f.
1.4.2021)
Inputs and parts of LED lights or fixtures includ- Any

- - - 5.00% 10.00%
ing LED Lamps Chapter
Inputs for use in the manufacture of LED driver
Any
or MCPCB (Metal Core Printed Circuit Board) for - - - 5.00% 10.00%
Chapter
LED lights or fixtures including LED Lamps
9405 50
Solar lanterns or solar lamps 94 9405 - 5.00% 15.00%
40
Solar Inverters 85 8504 - 8504 40 5.00% 20.00%
Parts of Electronic Toys for manufacture of elec-
95 9503 - - 5.00% 15.00%
tronic toys
26 Aviation Sector
Components or parts, including engines, for
manufacture of aircrafts or parts of such air- Any
- - - 2.50% 0.00%
crafts, by Public Sector Units under Ministry of Chapter
Defence subject to condition specified.
27 Medical Devices
Medical Devices imported by International Or- 9018 -
90 - - 2.50% 0.00%
ganization and Diplomatic Missions 9022
28 Goods imported under Project Import Scheme
High Speed Rail Projects being brought under
Applica-
project 98 9801 - - 5.00%
ble Rate
imports
8714 91
00, 8714
92, 8714
93, 8714
All goods other than Bicycle parts and compo-
87 8714 94 00, 10.00% 15.00%
nents
8714 95,
8714 96
00, 8714
99

CUSTOMS TARIFF ACT
New items inserted/modified to the First Schedule of Customs Tariff Act
Sr. No Product name Heading Sub-heading HSN code BCD rate % Preferential %
Flours, meals and pellets of fish, crustaceans, molluscs

1 and other aquatic invertebrates, fit for human 309 - - 30% -
consumption
Insects and other edible products of animal origin, not Same as
2 410 - - -
elsewhere specified or included before
0709 52 00 to
3 Other vegetables, fresh or chilled 709 - 30% 20%
0709 56 00
Olive oil and its fractions, whether or not 1509 20 00 to Same as

4 1509 - Same as before
Refined, but not chemically modified 1509 40 00 before
Other oils and their fractions obtained solely from
olives, whether or not refined, but not chemically Same as
5 1510 1510 00 1510 10 00 Same as before
modified, including blends of these oils or fractions before
with oils or fractions of heading 1509
Other fixed vegetable fats and oils, (including jojoba
6 oil) and their fractions, whether or not refined, but not 1515 - 1515 60 00 100% 90%
chemically modified
Radioactive chemical elements and radioactive
isotopes (including the fissile or fertile chemical 2844 41 00 to Same as
7 2844 - -
elements and isotopes) and their compounds; mixtures 2844 44 00 before
and residues containing these products
isotopes other than those of heading 2844;
2845 20 00 to
8 Compounds, inorganic or organic, of such 2845 10% -
2845 40 00
Isotopes, whether or not chemically defined
2903 29 00 to
2903 31 00
and Same as
9 Halogenated derivatives of hydrocarbons 2903 2903 29/39 -
before
2903 39 11 to
2903 76 30
2931 10 10 -
2931 39 00
Same as
10 Other organo-inorganic compounds 2931 2931 10/ 90 -
before
2931 90 10-
2931 90 90

CUSTOMS TARIFF ACT
Sr. Sub- BCD Rate Preferential

Product Name Heading HSN Code
No Heading % %
Alfentanil (INN), anileridine (INN),

bezitramide (INN), bromazepam (INN),
2933 33 11 to 2933
difenoxin (INN), diphenoxylate (INN),
33 18/2933 33 21 to
dipipanone (INN), fentanyl (INN), keto
2933 33 28/ 2933 33
bemidone (INN), methylphenidate (INN),
11 2933 2933 33 31 to 2933 33 35/ 10% -
pentazocine (INN), pethidine (INN), pethidine
2933 34 00/ 2933 35
intermediate A, phencyclindine (INN) (PCP),
00/ 2933 36 00/ 2933
phenoperidine (INN), radrol (INN),
37 00
piritramide (INN), propiram (INN) and
trimeperidine (INN); salts thereof
Alkaloids, Natural Or Reproduced By

2939 30 00 to 2939 Same as Same as
12 synthesis, And Their Salts, Ethers, Esters And 2939 -
49 00 before before
Other Derivatives
3827 11 00 to 3827
14 00, 3827- 20 00,31
Mixtures Containing Halogenated Derivatives 00, 32 00, 39 00, 40
13 Of 196 Methane, Ethane Or Propane, Not 3827 - 00, 51 00, 59 00, 61 10% -
Elsewhere Specified Or Included 00, 62 00, 63 00, 64
00, 65 00, 68 00, 69
00, 90 00.
Fuel Wood, In Logs, In Billets, In Twigs, In
Faggots Or In Similar Forms; Wood In Chips
4401 41 00 and 4401
14 Or Particles; Sawdust And Wood Waste And 4401 - 5% -
49 00
Scrap, Whether Or Not Agglomerated In
Logs, Briquettes, Pellets Or Similar Forms
5703 10 10 to 5703
Carpets and other textile floor coverings, 5703 10 90/ 5703 2010 to Same as Same as
15 5501
tufted, whether or not made up 10/20/30 5703 2090/ 5703 90 before before
10 to 5703 90 90
Terry towelling and similar woven terry

fabrics, other than narrow fabrics of heading 5802 10 10 to 5802 Same as Same as
16 5802 5802 10
5806; tufted textile fabrics, other than 10 90 before before
products of heading 5703
Bismuth and articles thereof, including waste 8106 00 10 to 8106 Same as Same as
17 8106 8106 00
and scrap 00 90 before before

CUSTOMS TARIFF ACT
Sr. Sub- BCD Rate Preferential
Product Name Heading HSN Code
No Heading % %
MACHINE-TOOLS (INCLUDING PRESSES) FOR
WORKING METAL BY FORGING, HAMMERING
OR DIE FORGING (EXCLUDING ROLLING
MILLS); MACHINE-TOOLS (INCLUDING
PRESSES, SLITTING LINES AND CUT-TO-
LENGTH LINES) FOR WORKING METAL BY Same as Same as
18 8462 - -
BENDING, before before
FOLDING, STRAIGHTENING,FLATTENING,
SHEARING, PUNCHING, NOTCHING OR
NIBBLING (EXCLUDING DRAW-BENCHES);
PRESSES FOR WORKING METAL OR METAL
CARBIDES, NOT SPECIFIED ABOVE
19 MACHNES FOR ADDITIVE MANUFACTURING 8485 - 7.5% -
Petroleum Crude
20 2709 Nil
Others
Note: Only key entries/products have been included in the aforesaid table.
Imposition of Agriculture Infrastructure and Development Cess on Import of certain items (to
be effective from 02.02.2021)
Heading, sub-
Sr. Basic Customs
heading tariff Commodity AIDC
No. Duty
item
1 0808 10 00 Apples 15.0% 35.0%
2 1511 10 00 Crude Palm Oil 15.0% 17.5%
3 1507 10 00 Crude Soya-bean Oil 15.0% 20.0%
4 1512 11 10 Crude Sunflower seed oil 15.0% 20.0%
5 0713 10 Peas (Pisum sativum) 10.0% 40.0%
6 0713 20 10 Kabuli Chana 10.0% 30.0%
7 0713 20 20 Bengal Gram (desichana) 10.0% 50.0%
8 0713 20 90 Chick Peas (garbanzos) 10.0% 50.0%
9 0713 40 00 Lentils (Mosur) 10.0% 20.0%
10 2204 All goods (Wine) 50.0% 100.0%
11 2205 Vermouth and other wine offresh grapes, flavoured 50.0% 100.0%
Other fermented beverages for example, Cider, Perry, Mead, sake, mixture
12 2206 of fermented beverages or fermented beverages and nonalcoholic 50.0% 100.0%
beverages
13 2208 All goods (Brandy, Bourbon whiskey, Scotch etc.) 50.0% 100.0%
14 2701 Various types of coal 1.0% 1.5%
15 2702 Lignite, whether or not agglomerated 1.0% 1.5%
16 2703 Peat, whether or not agglomerated 1.0% 1.5%
17 3102 10 00 Urea Nil 5.0%

CUSTOMS TARIFF ACT
Heading, sub-
Sr. Basic Customs
heading tariff Commodity AIDC
No. Duty
item
18 3102 30 00 Ammonium nitrate 2.5% 5.0%
Muriate of potash, for use as manure or for the production of complex
19 31 Nil 5.0%
fertilisers
Diammonium phosphate, for use as manure or for the production of

20 3105 30 00 Nil 5.0%
complex fertilisers
21 5201 Cotton (not carded or combed) 5.0% 5.0%
22 7106 Silver (including imports by eligible passengers) 7.5% 2.5%
23 7106 Silver Dore 6.1% 2.5%
24 7108 Gold (including imports by eligible passengers) 7.5% 2.5%
25 7108 Gold Dore 6.9% 2.5%
Other Changes in Customs

• High Speed Rail Projects have been included in list of projects to which Project Imports Scheme would be applicable. Further,
National High Speed Rail Corporation Ltd. has been nominated as the 'Sponsoring Authority' under Project Import Regulations,
1986 for approving the items required to be imported under the Project Imports Scheme for High-Speed Rail Projects.
• Exemption from Basic Custom Duty has been withdrawn on many of the products inter-alia including ink cartridges, ribbon
assembly, wax items, fasteners, zippers, buckles, buttons, curtain hooks, Tassel, Beads,
Sequins, sewing threads, poly wadding materials etc.
• SWS prescribed vide NN. 12/2018-Customs dated 02.02.2018 on various certain items, including gold and silver, has now been
rescinded. Further, SWS has been exempted on the value of AIDC imposed on gold and silver. Accordingly, these items would
attract SWS, at normal rate, only on the value plus basic customs duty.
• Customs (Import of Goods at Concessional Rate of Duty) Rules, has been amended to provide the following facilities
 To allow job-work of the materials (except gold and jewelry and other precious metals) imported under concessional rate of
duty.
 To allow 100% out-sourcing for manufacture of goods on job-work.
 To allow imported capital goods that have been used for the specific purpose to be cleared on payment of differential duty,
along with interest, on the depreciated value. The depreciation norms would be the same as applied to EOUs, as per FTP.
• Other Miscellaneous changes pertaining to Anti-Dumping Duty and Countervailing Duty

 Changes are being made in the rules that provide for the manner and procedure for investigation into dumping of goods that
cause injury to domestic industry. It is provided w.e.f 01.07.2021 that final findings are to be issued by the designated
authority in review cases at least three months prior to expiry of ADD under review.
 Changes are being made in the rules that provide for the manner and procedure for causing investigation into the cases of
imports of subsidized goods that cause injury to domestic industry. It is provided that w.e.f .1.07.2021 that final findings are
to be issued by the designated authority, in review cases at least three months prior to expiry of CVD under review.
 Changes are being made in the rules that provide for manner and procedure for causing investigation into the cases of
imports in increased quantity that cause injury to domestic industry. It is proposed to elaborate in detailed manner the
modalities of implementation of safeguard measure, along with technical modalities consequent to changes made in sec 8D
of CTA vide Finance Act,.

CUSTOMS TARIFF ACT
 ADD is being temporarily revoked for the period commencing from 02.02.2021 till 30.09.2021 on the imports of the following
− Straight Length Bars and Rods of alloy-steel, originating in or exported from People's Republic of China
− High Speed Steel of Non-Cobalt Grade, originating in or exported Brazil, People's Republic of China and Germany
− Flat rolled product of steel, plated or coated with alloy of Aluminium or Zinc, originating in or exported from People's
Republic of China, Vietnam and Korea RP
 Countervailing duty is being temporarily revoked for the period commencing from 02.02.2021 till 30.09.2021, on imports of
Certain Hot Rolled and Cold Rolled Stainless Steel Flat Products, originating in or exported from People's Republic of China.
 Provisional Countervailing duty is being revoked on imports of Flat Products of Stainless-Steel originating in or exported from
Indonesia.
 ADD on Cold-Rolled Flat Products of Stainless Steel of width 600 mm to 1250 mm and above 1250 mm of non bonafide usage
originating in or exported from People's Republic of China, Korea RP, European Union, South Africa, Taiwan, Thailand and
United States of America has been discontinued upon expiry of the ADD hitherto leviable vide NN. 61/2015 - Customs (ADD)
dated 11.12.2015 and 52/2017 - Customs (ADD) dated 24.10.2017.

REGULATORY
Non-Applicability Of Stamp Duty On Disinvestment By Government Company
Stamp duty shall not be applicable if all following conditions are met:
• Transfer of a business or asset or right in immovable property;
• Transfer made by Government company;
• Transaction of transfer made by way of strategic sale or disinvestment or demerger or any other scheme of arrangement; and
• Transfer made to another Government Company or Government.
Amendment To The Definition Of Small Company

• A private company registered under the Companies Act which does not exceed a specified threshold is categorized as ‘small
company’. In this budget, the threshold limit has been increased as follows:
Particulars Old Provision New Provision
Definition (Small Paid-up capital ≤ INR 50 lakh Paid-up capital ≤ INR 2 crore
Companies) and and
Turnover ≤ INR 2 crore Turnover ≤ INR 20 crore
Author’s Note
The Companies Act provides many privileges to small company in terms of compliance requirements. Some of those benefits or
privileges are: no requirement of preparation of Cash flow statements, holding 2 board meetings instead of 4, and reduced
amount of penalties etc. This extension of limit will incentivize more than 2 lakh companies in easing their compliance burden.
One Person Company

• OPC concept was introduced in the past to facilitate small businesses to operate in company form with one member instead of
usual requirement of at least 2 members. Apart from this, there are numerous other benefits in terms of lesser compliances
which are available to OPC. In this Union Budget, the provisions with respect to such companies have been further relaxed to
help the small businesses. The key changes are as follows:
Particular Old Provision New Provision

NRI to setup OPC Only resident Individual persons could start the Now the limit of minimum 182 days for residing in
OPC in India. An individual shall be considered as India has now been reduced to 120 days for the
resident if it stays in India for at least 182 days purpose of setting up OPC which will allows NRI also
during the last financial year. to enter into Indian Market.
As per proposed amendments, an OPC can convert
Restriction on limit of Turnover and capital itself into any type of company without any restriction
If paid-up share capital of OPC and its average of turnover and paid-up capital. Conversion can be
turnover during the preceding of 3 consecutive done by OPC voluntarily at any time.
Removal of the
years exceed INR 50 lakh and INR 2 crores
restrictions on
respectively then it will lose the status of OPC.
conversion of OPC
Restriction on time period
Minimum 2 years have been elapsed to covert
voluntarily into any other type of company which
will be subject to above condition.

REGULATORY
Author’s Note
In India, the concept of OPC came into existence in 2005. This concept helps in giving a spotlight to single person economic
entities such as small traders. An OPC enjoys many benefits as the OPC is free from many stringent legal compliance such as
board meetings, financial statement inclusions, quorum, and mandatory rotation of auditors. Over the years, OPCs have
ventured into other sectors including construction, mining and quarry, and electricity, etc. Hence, this move will give more relief
to start ups and innovators. Also, it will ease the entry of the Indian diaspora into the market.
Prohibition Of Benami Property Transaction Act
Particulars Old Provision Amended Provision
It is now proposed that Competent Authority under

Sec 7 provides for appointment of AA Smugglers and Foreign Exchange Manipulators
specifically to exercise its powers provided in (Forfeiture of Property) Act, (SAFEMA) shall be the AA
PBPT Act. under PBPT Act.
Appointment of Accordingly, the provisions related to appointment,
Adjudicating Authority Further sec 28 provides that Unless the CG administration, composition, constitution etc. under
appoints AA, AA appointed under PMLA will sec 8 to 17 omitted.
discharge the functions and perform duties of Power of CG to make rules related to appointment and
AA under PBPT Act. salaries are also omitted.
Such AA shall start performing its functions wef 1st July,
One year from the end of the month in which If due date of passing order falls during the period from
Time-Limit for Passing
initiating officer sends the statement of the 1st July, 2021 to 29th September, 2021, such due date
Order
case. shall be extended to 30th September, 2021.

REGULATORY
Life Insurance Corporation Act
Bill proposes for following provisions:
• Insertion of Sections 4A, 4B, 4C and 4D in the LIC Act to provide for disqualifications of a director, and disclosure of interest by
director etc.
• Substitution of Section 5 of the LIC Act, to provide for LIC’s capital, issue of equity shares to the Central Government in
consideration for paid-up equity capital
• Insertion of provisions for transferability of shares, voting rights, register of members, declaration in respect of beneficial
interest in shares
• Insertion of provisions related to holding of AGM, books of account, financial statements, Boards report and penalties for
contravention
• Insertion of provisions related to the declaration of dividend and crediting of unclaimed and unpaid dividend amount to an
Unpaid Dividend Account
Securities And Exchange Board Of India Act

Bill proposes insertion of following clause:
• Any alternative investment fund or a business trust as defined in clause (13A) of Section 2 of the Income-tax Act, 1961, shall
establish and operate only after the Securities and Exchange Board of India grants a certificate of registration in accordance with
the regulations made under the said Act.

GLOSSARY
Abbreviation Meaning
AA Adjudicating Authority
AE Associated Enterprise
AGM Annual General Meeting
AIDC Agriculture Infrastructure and Development Cess
AIF Alternative investment fund
ALP Arm’s length price
AMT Alternate minimum tax
AO Assessing officer
AOP Association of persons
APA Advanced pricing agreement
ARE Alternate reporting entity
AVGC Animation, Visual effects, Gaming and Comics
AY Assessment year
BBT Buy-back tax
BCD Basic Customs Duty
BED Basic Excise Duty
BEPS Base erosion and profit shifting project
BOI Body of individuals
CAT Common aptitude test
CBCR Country by country reporting
CBDT Central Board of Direct Taxes
CBIC Central Board of Indirect Taxes and Customs
CGST Act Central Goods and Services Tax Act, 2017
CG Central Government
Customs Act Customs Act, 1962
CVD Countervailing Duty
DDT Dividend Distribution Tax
DTAA Double Taxation Avoidance Agreement entered into by India
FAME Faster Adoption and Manufacture of Hybrid and Electric Vehicles
FDI Foreign Direct Investment
Finance Bill Finance Bill, 2021
FM Finance Minister
FMV Fair market value
FPI Foreign Portfolio Investors
FTP Foreign trade policy
G2B Government to Business
GST Goods and Services Tax
CGST Act Central Goods and Services Act, 2017
HFC Housing Finance Company
HNI High net worth individual
HUF Hindu Undivided Family
IBC Insolvency and Bankruptcy Code, 2016
IFSC International Financial Services Centre
IGST Integrated Goods and Services Tax
IGST Act Integrated Goods and Services Tax Act, 2017
IIM Indian Institute of Management
Ind AS Indian Accounting Standards

GLOSSARY
Abbreviation Meaning
InvITs Infrastructure Investment Trusts
IT Act The Income-tax Act, 1961
ITC Input Tax Credit
KYC Know Your Customers
LIC Life Insurance Corporation
LLP Limited Liability Partnership
LTCG Long-term Capital Gains
MAT Minimum Alternate Tax
MoF Ministry of Finance
MSME Micro Small and Medium Enterprises
NBFC Non-Banking Finance Company
NCCD National Calamity Contingent duty
NCLT National Company Law Tribunal
NEFT National Electronic Funds Transfer
NELP New Exploration Licensing Policy
NHB National Housing Bank
NPA Non-performing assets
NRI Non-Resident Indian
OECD Organization for Economic Co-operation and Development
OBU Offshore Banking Unit
OPC One Person Company
PAN Permanent Account Number
PBPT Prohibition of Benami Property Act, 1988
PIV Pooled Investment Vehicle
PMLA Prevention of Money Laundering Act, 2002
PSU Public sector undertaking
RBI Reserve Bank of India
RBI Act Reserve Bank of India, Act, 1934
REITs Real Estate Investment Trusts
RIC Road and Infrastructure Cess
RTGS Real Time Gross Settlement
SAD Special Additional Duty
SAED Special Additional Excise Duty
SAFEMA Smugglers and Foreign Manipulators (Forfeiture of Property) Act, 1976
SCN Show Cause Notice
SCRA Securities Contracts (Regulation) Act, 1956
SEBI Securities and Exchange Board of India
SEBI Act Securities Exchange Board of India Act, 1992
SFT Statement of financial transaction
TCS Tax Collected at Source
TDS Taxes Deducted at Source
UCB Urban Co-operative Bank
UK United Kingdom
USA United States of America
u/s. Under Section
VsV Vivad se Vishwas
WTO World trade Organization

FIRM INTRODUCTION
Taxcraft Advisors LLP (‘TCA’) is a GST Legal Services LLP (‘GLS’) is a VMG & Associates (‘VMG’) is a multi-
multidisciplinary advisory, tax and consortium of professionals offering disciplinary consulting and tax firm. It
litigation firm having multi-jurisdictional services with seamless cross practice areas brings unique experience amongst
presence. TCA team comprises of and top of the line expertise to its clients/ consulting firms with its partners having
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ranging services across the entire itself to the changing dynamics of business offers comprehensive services across the
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regulatory requirements in the domain of spectrum of advisory, litigation, reporting, corporate & allied laws, Direct &
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financial reporting. (representation) requirements in the field
of Goods and Service Tax, Customs Act, VMG has worked with a range of
TCA’s tax practice offers comprehensive Foreign Trade, Income Tax, Transfer companies and have provided services in
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like. TCA (through its Partners) has also VMG team brings to the table a
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With a team of experienced and seasoned corporates in diverse sectors, GLS has
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and shall not accept any responsibility for loss occasioned and/or caused to any person acting or refraining from acting as a result of
any material contained in this booklet.
Union Budget 2021 Highlights
The Hon’ble Finance Minister Smt. Nirmala Sitharaman on Monday presented Union Budget in
Lok Sabha, Based on her speech on 1st Feb 2021, the following brief compilation made by;
CA. M.S.Prasad, FCA, MBA, LL.B, B.Com(H), 8802253937
The prominent themes of Union Budget is Aatma Nirbhar Bharat.
1. Individual Slab Rate; No change in slab rate i.e same as FA 2020, an option to select either OLD
or NEW Rate;
Total Income (Rs.) in between Old Rate (%) New Rate (%)
0 2,50,000 NIL NIL
2,50,001 5,00,000 5 5
5,00,001 7,50,000 20 10
7,50,001 10,00,000 20 15
10,00,001 12,50,000 30 20
12,50,001 15,00,000 30 25
15,00,001 Above 30 30
Exemption [ HRA,LTA, Standard Deduction YES NO
(50k) etc]
Deduction (Chapter VIA) [80C-LIC etc YES NO
80D-Mediclaim etc.
Interest on Housing Loan YES NO
Note; 1. Income below Rs.5 Lakh is tax free in both cases old & new after availing rebate u/s 87A.
2. Assessee is supposed to calculate taxes as per own opinion. Break even point of exemption is 2.50
lakh for income falling in maximum marginal slab. If total exemption is more than 2.50 Lakh go for
old rates else new rates.
2. Relief to Senior Citizens (>= 75 years age); in case of only pension and interest income,
exemption from filing ITR, paying bank will deduct the necessary tax (TDS) on their income.
3. Reduction in Time for Income Tax Proceedings / Assessment; Reopening of Assessments period
reduced from 6 years to 3 years. In cases of serious tax evasion cases, Re-assessment can be
done <10 years if the concealed income >= Rs. 50 lakhs subject to approval of Principal CCIT.
4. Setting up the Dispute Resolution Committee; Faceless assessment: anyone with total income
< Rs.50 lacs and disputed income <Rs.10 Lacs can approach this committee.
5. Faceless ITAT; All communication between the Tribunal and the appellant shall be
electronic (faceless), and through video-conferencing in case of personal hearing is
needed.
6. Relaxation to NRI; Govt. to notify rules to eliminate the double tax for NRIs on foreign
retirement funds.
7. Exemption from Audit; Tax audit limit exemption for digital transactions (95%) increased from
Rs. 5 Crores to Rs. 10 Crores.
8. Relief for Dividend; Advance tax liability on dividend will arise only after declaration / payment
of dividend. In case of Foreign Portfolio Investors (FPI), propose to enable deduction of tax on
dividend income at lower treaty rate.
9. Attracting foreign investment into infrastructure sector; In order to allow funding of
infrastructure by issue of Zero Coupon Bonds, propose to make notified Infrastructure Debt
Funds eligible to raise funds by issuing tax efficient Zero Coupon Bonds.
10. Affordable Housing / Rental Housing; The additional interest deduction of Rs.1.5 lakh shall
be available for loans taken up till 31.03.2022 (one more year extended), for the
purchase of an affordable house. Also propose that affordable housing projects can
avail a tax holiday till 31.03.2022 (for one more year). For migrant workers, propose to
allow tax exemption for notified Affordable Rental Housing Projects.
11. Tax incentives to IFSC; propose to include, tax holiday for capital gains for aircraft leasing
companies, tax exemption for aircraft lease rentals paid to foreign lessors; tax incentive
for relocating foreign funds in the IFSC; and to allow tax exemption to the investment
division of foreign banks located in IFSC.
12. Pre-filling of Returns (ITR); details of salary income, tax payments, TDS, capital gains from
listed securities, dividend income, and interest from banks, post office, etc. will be pre-
filled.
13. Relief to Small Charitable Trusts in compliance; running educational institutions and
hospitals, a blanket exemption to such entities, whose annual receipt <=Rs 5 crore (1 cr
earlier).
14. Labour Welfare; late deposit of employee’s contribution (PF, Superannuation funds,&
other social security funds) by the employer will not be allowed as deduction to the
employer.
15. Incentives for Start-ups; extend the eligibility for claiming tax holiday till 31.03.2022.
Also extend the capital gains exemption for investment in start-ups till 31.03.2022.
Disclaimer; It is based on available sources like FM speech, news agencies, medias etc., not
responsible for any misrepresentation.
BUDGET
2021
Summary, Key Takeaways,
Insights & More
by: Finance Lookup Advisors
01
www.FLOOKUP.com | www.15CACB.com | www.SourceYourTalent.com
Email: vaibhav@flookup.com | Phone: 9967110003 | WhatsApp/Signal: 7059010203
Health & Well-being
Budget increased to INR 223,846 Crores vis-a-vis PM AatmaNirbhar Swasth Bharat
94,452 Crores in the previous year Yojana of INR 64,180 Crores
Mission Poshan 2.0 Launched
Focus on strengthening three areas:
- Preventive Universal coverage of Water Supply
- Curative
- Wellbeing
Urban Swachh Bharat Mission 2.0
Budget for Covid-19 vaccine To tackle Air pollution, a budget
of INR 35,000 crores of INR 2217 crores is set aside
Pneumococcal vaccine to be
rolled out across the country
- 20 years for personal vehicle
- 15 years for commercial vehicle
02
Physical, Financial
Capital & Infrastructure
Production Linked Incentive Scheme of INR 1.97 Progress of Bharatmala
Lakh crore Pariyojana
7 TextilesParks (MITRA) to be launched under MetroLite and MetroNeo
Mega Investments Textiles Park Schemes (MITRA) technologies to provide
Setting up of a Development Financial Institution metro rail systems in Tier II
(DFI) - Budget 20,000 crore cities
Sharp increase in the Capital Budget by 34.5% to Launch of National Hydrogen
INR 5.54 lakh crore Energy Mission
Core Infrastructure Assets to be rolled out: Extention of Ujjwala scheme
Oil & Gas pipelines of GAIL, IOCL & HPCL Recapitalisation of PSBs by
AAI Airports in Tier II and III cities INR 20,000 crore
Railway Infrastructure Assets
Warehousing Assets
Sports Stadium
03
Divestment &
Strategic Sale
Strategic Financial Sector
Divestment Divestment
BPCL IDBI Bank
Air India 2 Public Sector Bank
Shipping Corporation of India Genetal Insurance
Container Corporation of Company
India
BEML IPO
Pawan Hans
Neelachal Ispat Nigam LIC (Life Insurance
Limited Corporation) of India
04 www.FLOOKUP.com | www.15CACB.com | www.SourceYourTalent.com

Inclusive
Development for
Aspirational India
Agriculture Minimum Selling Price at
minimum 1.5 times of
Cost of Production
Operation Extended to 22
Green Scheme perishable products
Five Major Kochi
Fishing Chennai
Harbours Visakhapatnam
Paradip
Petuaghat

Direct Taxes
Advance Tax Deduction of Complete new MSMEs Tax Blanket

payable on TDS on procedure for Audit threshold exemption
Dividend payment of limit increased to available to
Income Dividend to - Income escaping INR 10 Crores Educational
Business Trust assessment for businesses Institutions and
-Re assessments carrying out less Hospitals run by
-Search than 5% of Small
assessments business Charitable
transaction in Trusts whose
cash receipts does
not exceed INR
5 crore

06
TakeAway's
The tax holiday for startups has been extended
by one more year i.e. upto 31st March 2022
The tax holiday for startups has been extended

by one more year i.e. upto 31st March 2022
Single Securities Markets code to be evolved
World class Fin-Tech hub at the GIFT-IFSC
Setting up of Regulated Gold Exchanges
Decriminalize the Limited Liablity Partnership

(LLP) Act 2008
One Nation One Ration Card Scheme
First Digital Census budget of INR 3768 crores

TakeAway's
Increase in FDI Limits from 49% to 74%
in Insurance Sector.
Providing FPIs an entry into Debt
Financing of REITs and InvITs.
Agriculture Infrastructure And
Development Cess (AIDC) has been newly
imposed on petrol and diesel at Rs2.5 and
Rs.4 per litre respectively
A new initiative called Turant Customs
will be introduced for faceless, paperless,
and contactless customs measures.
Exemption to senior citizens from filing
income tax returns if pension income and
interest income are their only annual
income source.

What's Emphasied
Capital Rural Innovation
Manufacturing Relief
Expenditure Infrastructure and R&D
Push to make Increase in the Rural INR 4 crore for Time limit to open
India spending of Infrastructure Deep Ocean Income tax cases
manufacturing Capital Development Mission survey reduced
global champions Expenditure Fund to be
at AatmaNirbhar and Big thrust increased to Dispute resolution
Bharat on monetizing INR 40,000 committee to be
assets crore set-up

What will be cheaper ? What will be Expensive ?
Gold Air Conditioner

Silver Refrigerator
Platinium Spandex Fibre
Jewellery LED Lamps
Medical Devices Solar Lantern & Inverter
Leather Goods Raw Silk
Agricultural Equipments Mobile Phones
Steel Bars and Utensils Power Bank
Stainless Steel Imported Alcohol
Nylon Cloth Imported Gemstones
Copper Items Urea
Insurance
Electricity

Achievements
Income tax return filers doubled to
6.48 Crore
Faceless Assessment and Faceless
Appeals Introduced
Over 1 lakh tax payers opted to settle
tax disputes under Vivad se Vishwas
Scheme
Nil return through SMS in GST
Pradhan Mantri Garib Kalyan Yojana
(PMGKY) valued at INR 2.76 lakh
crore
AatmaNirbhar Bharat Package of INR
23 lakh crore

Strengthening the
"Sankalp" of..
Nation First
Doubling Farmer's Income
Strong Infrastructure
Healthy India
Good Governance
Opportunites for Youth
Education for All
Women Empowerment

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Synopsis of 2021
Union Budget
ALP & Associates

Kolkata | Forbesganj | Bengaluru | Mumbai

Synopsis of Finance Bill 2021 1st Feb, 2021
Foreword:
It was the third time Finance Minister Nirmala Sitharaman was presenting the Union
Budget but it was not a clinch this year for her. With economic growth currently at a
10-year low, widening fiscal deficit, and inflation at its highest, Madam Finance
Minister had a difficult task to manage to steer the economy back on the growth track
that has been marred by the coronavirus pandemic.
There was more interest and expectations this year from the budget due to the
coronavirus pandemic and the impact it has had on various segments of the economy.
With the cost of living on the rise and disposable income taking a hit on account of the
pandemic, the ‘Aam Aadmi’ was eagerly looking forward to the Budget in the hope of
their collective voices being heard.
The FM had already hinted that Budget 2021 will the one that will be hailed as "never
before". As a result, there were all eyes on Madam Sitharaman that how she will
priorities spending’s to get the coronavirus-ravaged economy back to one of the fastest-
growing major economies.
FM said that Budget proposals will further strengthen the Sankalp of Nation First,
Doubling Farmer’s Income, Strong Infrastructure, Healthy India, Good Governance,
Opportunities for youth, Education for All, Women Empowerment, and Inclusive
Development among others.
This year’s Budget lays focus on the six pillars for reviving the economy –
• Health and Wellbeing,

• Physical and Financial Capital and Infrastructure,
• Inclusive Development for Aspirational India,
• Reinvigorating Human Capital,
• Innovation and R&D, and
• Minimum Government Maximum Governance.
Our team have tried to summarize the relevant portion over a short span of time. We are
glad presenting you this small work. We sincerely hope it would meet the expectations
of the users and you would enjoy reading this as much as we enjoyed compiling it.
Looking forward for your reviews.
ALP & Associates 2 Kolkata | Forbesganj | Bengaluru | Mumbai

List of Contributors:
CA Mayur Agrawal CA Asim Prakash CA Anuj Lohia CA Nishant Goyal
CA Pratik Patawari CA Dipak Singh CA Nidish Agarwal CA Sneha Kedia
CA Subham Agarwal CS Komal Didwania CA Prince Agrawal CA Nandita Jain

Table of Contents:
Economic Corporate Direct In-direct

Highlights Law Tax Tax
Page Page Page Page
5-8 9-10 11-24 25-32

Economic Highlights:
Union Budget 2021-22 presented by Union Minister of Finance and Corporate Affairs Smt. Nirmala
Sitharaman is 1st ever Union Budget presented Digitally by Govt of India. After Budget 2020 within
few months World had to face the Global crisis named “Covid-19”. During in between last Budget and
this Budget many small Budgets were presented by Govt to support the Economy in this crisis.
India along with the World is still fighting the pandemic, and in the new era – India is poised to be the
land of promise & hope. The FM lays focus on the six pillars for reviving the economy and the details of
each pillars has been discussed in below paras.

Health and Wellbeing:

Rs. 2,23,846 Crore outlay for Health and Wellbeing in BE 2021-22 as against Rs. 94,452 Crore in
BE 2020-21 – an increase of 137%
Rs. 35,000 Crore for COVID-19 vaccine in BE 2021-22.
Rs. 64,180 Crore outlay over 6 years for PM Aatma Nirbhar Swasth Bharat Yojana – a new centrally
sponsored scheme to be launched, in addition to NHM.
Mission Poshan 2.0 to be launched.
Universal Coverage of Water Supply – Rs 2,87,000 Crore over 5 Years for Jal Jeevan Mission
(Urban).
Rs. 1,41,678 Crore over 5 years for Urban Swachh Bharat Mission 2.0
Rs. 2,217 Crore to tackle air pollution, for 42 urban centres with a million plus population
Voluntary vehicle scrapping policy to phase out old and unfit vehicles. Fitness Tests in automated
fitness centres: a) After 20 years in case of Personal Vehicles and b) After 15 years in case of
Commercial Vehicles.
Physical & Financial Capital, and Infrastructure:

Production Linked Incentive Scheme (PLI) Rs 1.97 Lakh Crore in next 5 years under 13 Sectors.
MITRA (Mega Investment Textile Parks) Scheme – 7 Textile Parks to be established over 3 Years
NIP (National Infrastructure Pipeline) expanded to 7400 Projects
Infrastructure Financing through DFI (Development Financial Institution) – Rs 5 Lakh Crore
portfolio to be created
National Monetization Pipeline to be launched
Sharp Increase in Capital Budget – Rs 5.54 Lakh Crore Capital Expenditure in BE 2021-22 sharp
increase of 34.5% over Rs 4.12 Lakh crore allocated in BE 2020-21
Rs. 5.35 Lakh Crore for Bharatmala Pariyojana
Economic Corridor – Rs 1.03 Lakh Crore in Tamil Nadu; Rs 65000 Crore in Kerala; Rs 25000
Crore in West Bengal.
Speed up of Flagship Express way – Delhi Mumbai, Bengaluru – Chennai, Kanpur-Lucknow, Delhi
– Dehradun etc.
Advance Traffic Management System to be implemented across all new 4 & 6 Lane highways.
Rs 1,10,055 Crore allocated for Railway Infrastructure
National Rail Plan for India – Future Ready Railway by 2030
100% Electrification of all Broad-Gauge Routes by Dec 2023
Urban Infrastructure development – Expansion of Metro Rail network, “Metro Lite” & “Metro
Neo” technologies to provide metro rail system at lower cost in Tier-2 Cities.
New Power Distribution Sector Scheme – Rs 3,05,984 Crore over 5 Years.
National Hydrogen Energy Mission 2021-22 policy to be launched
Operation of 7 Major Ports under PPP Model worth Rs 2,000 Crore
Ujjwala Scheme to be extended further to cover 1 Crore more beneficiary

Securities Markets Code to be evolved, Regulated Gold Exchange to be set up, Investor Charter to be
prepared etc
Increase of FDI in Insurance Sector from 49% to 74%
Rs. 20,000 crores in 2021-22 to further consolidate the financial capacity of PSBs
Minimum loan size eligible for debt recovery under the SARFAESI Act, 2002 proposed to be
reduced from Rs. 50 lakhs to Rs. 20 lakhs for NBFCs with minimum asset size of Rs. 100 crores
Rs. 1,75,000 crore estimated receipts from disinvestment in BE 2020-21
IPO of LIC in 2021-22
Strategic disinvestment of BPCL, Air India, Shipping Corporation of India, Container Corporation
of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited etc. to be completed in
2021-22
Inclusive Development for Aspirational India:

Agriculture – Ensured MSP of 1.5x Cost across all commodities, Agricultural credit target enhanced
to Rs 16.5 Lakh Crore.
Fisheries – Multipurpose Seaweed Park in Tamil Nadu along with 5 major fishing harbours to be
developed
Migrant Workers & Labour – One Nation One Ration Card scheme to be completed within coming
few months.
Implementation of 4 Labour Code is underway to ensure Social Security, Minimum Wages, ESIC
Benefits, Women workers development, Reduction in Compliance burden for Employers with
Single registration & licensing system.
Stand Up India Scheme for SCs, STs & Women – Margin requirement reduced to 15%.
Reinvigorating Human Capita:

School Education – 15,000 Schools to be strengthened, 100 New Sainik Schools to be set up in
partnership with NGO/Private Schools.
Legislation to be introduced to set up Higher Education Commission of India.
Central University to come up in Leh for accessibility of Higher Education in Ladakh UT.
750 Eklavya Model residential schools in tribal areas for SC/ST Welfare along with Post Matric
Scholarship Scheme.
Rs. 3000 crores for realignment of existing National Apprenticeship Training Scheme (NATS).
Innovation and R&D:

National Research Foundation – Rs 50,000 Crore outlay over next 5 Years.
To Promote Digital Payment – Rs 1,500 Crore
PSLV-CS51 to be launched by New Space India Limited (NSIL) carrying Brazil’s Amazonia
Satellite and some Indian satellites

Gaganyaan Mission – 4 Indian Astronauts being trained for the Mission.

Rs. 4,000 crores over five years for Deep Ocean Mission survey exploration and conservation of
deep-sea biodiversity
Minimum Government, Maximum Governance:

Rs. 3,768 crores allocated for first digital census in the history of India.
Rs. 300 crore grants to the Government of Goa for the diamond jubilee celebrations of the State’s
liberation from Portuguese.
Rs. 1,000 crores for the welfare of Tea workers especially women and their children in Assam and
West Bengal through a special scheme

Corporate Law:
Decriminalizing of Companies and LLP
1. The decriminalizing of the procedural and technical compoundable offences under the Companies
Act, 2013, has been completed.
2. It has been proposed to next take up decriminalization of the Limited Liability Partnership (LLP)
Act, 2008.
Decriminalizing was being asked since long by the industry and finally has been completed. Further
extending it for LLP shall be applauded by the industry.
Small Companies limits enhanced
3. The Proposed change in definition under the Companies Act, 2013 for Small Companies by
increasing their thresholds for Paid up capital from “not exceeding ₹ 50 Lakh” to “not exceeding ₹ 2
Crore” and turnover from “not exceeding ₹ 2 Crore” to “not exceeding ₹ 20 Crore”.
Welcome change as the compliances for the companies which will fall under the expanded definition of
small companies will be reduced.
Ease of setting up One Person Companies (OPCs)
4. It has been proposed to incentivize the incorporation of One Person Companies (OPCs) by allowing
OPCs to grow without any restrictions on paid up capital and turnover.
5. OPCs has been proposed to be allowed conversion into any other type of company at any time.
6. The residency limit for an Indian citizen to set up an OPC has been proposed to be reduced from 182
days to 120 days.
7. It has been proposed to allow Non-Resident Indians (NRIs) to incorporate OPCs in India.
NRIs will hail this decision wereby now they can setup an OPC whereas earlier they have to
incorporate Private limited companies in place of OPC by having an Indian resident as director.

Faster Resolution of Cases
8. To ensure faster resolution of cases, NCLT framework will be strengthened, e-Courts system shall be
implemented and alternate methods of debt resolution and special framework for MSMEs shall be
introduced.
Launch of new MCA21 Version 3.0
9. During the coming fiscal 2021-22, it has been proposed to launch data analytics, artificial
intelligence, machine learning driven MCA21 Version 3.0. This Version 3.0 will have additional
modules for e-scrutiny, e-Adjudication, e-Consultation and Compliance Management.
The need to revamp MCA Portal has been requested by professionals every now and then. The existing
portal crashed every now and the. Finger crossed whether MCA21 Verion 3.0 will be of any help for
professionals.

Direct Tax:
1. Exemption for LTC Cash Scheme
It is proposed to insert second proviso in clause 5 of section 10, so as to provide that, for the
assessment year beginning on the 1st day of April, 2021, the value in lieu of any travel concession or
assistance received by, or due to, an individual shall also be exempt under this clause subject to
fulfilment of conditions to be prescribed. It is also proposed to clarify by way of an Explanation that
where an individual claims and is allowed exemption under the second proviso in connection with
prescribed expenditure, no exemption shall be allowed under this clause in respect of same prescribed
expenditure to any other individual.
The conditions for this purpose shall be prescribed in the Income-tax Rules in due course and shall,
inter alia, be as under:
a. The employee exercises an option for the deemed LTC fare in lieu of the applicable LTC in the
Block year 2018-21;
b. Specified expenditure‖ means expenditure incurred by an individual or a member of his family during
the specified period on goods or services which are liable to tax at an aggregate rate of twelve per
cent or above under various GST laws and goods are purchased or services procured from GST
registered vendors/service providers;
c. Specified period means the period commencing from 12th day of October, 2020 and ending on 31st
day of March, 2021;
d. the amount of exemption shall not exceed thirty-six thousand rupees per person or one-third of
specified expenditure, whichever is less;
e. the payment to GST registered vendor/service provider is made by an account payee cheque drawn
on a bank or account payee bank draft, or use of electronic clearing system through a bank account or
through such other electronic mode as prescribed under Rule 6ABBA and tax invoice is obtained
from such vendor/service provider;
f. If the amount received by, or due to an individual as per the terms of his employment, from his
employer in relation to himself and his family, for the LTC is more than what is allowable to such
person under the above discussed provisions, the exemption under the proposed amendment would
be available only to the extent of exemption admissible under above listed provisions
Effective AY – 2021-22 only
2. Incentives for affordable rental housing
The due date to get approved under Section 80IBA is proposed to be extended to 31st March,2022
and same outer time limit be also provided for the proposed affordable rental housing project.

3. Tax incentives for units located in International Financial Services Centre (IFSC)
Government has established a world class financial services centre. Units located in IFSC enjoy some
concession. In order to make location in IFSC more attractive, it is proposed to amend/insert certain
sections such as Sec 9A,Sec 10(4D),10(4E),Sec 10(4F),Sec 10(23FF),Sec 47,Sec 80LA,Sec 115AD.
Effective AY – 2022-23 onwards
4. Issuance of zero coupon bond by infrastructure debt fund
In order to enable infrastructure debt fund [which are notified by the Central Government in the
Official Gazette under clause (47) of section 10 of the Act] to issue zero coupon bond necessary
amendments are proposed in clause (48) of section 2 of the Act. Rules 2F and 8B of Income-tax
Rules shall be amendment subsequently after the Finance Bill 2021 is enacted.
5. Tax neutral conversion of Urban Cooperative Bank into Banking Company
It is proposed to expand the scope of business reorganization to include conversion of a primary co-
operative bank to a banking company and the deductions available under section 44DB of the Act
shall also be made applicable in relation to such conversion of primary co-operative bank to the
banking company. Further it is also proposed that transfer of a capital asset by the primary co-
operative bank to the banking company as a result of conversion shall not be treated as transfer under
section 47 of the Act. Consequently, the allotment of shares of the converted banking company to the
shareholders of the predecessor primary co-operative bank shall not be treated as transfer under the
said section of the Act.
6. Facilitating strategic disinvestment of public sector company
It is proposed to relax the provisions of Section2(19AA) related to demerger and Sec 72A related to
carry forward of losses for public sector companies in order to facilitate strategic disinvestment by
the Government.

7. Extension of date of sanction of loan for affordable residential house property
In order to help such first time home buyers further, it is proposed to amend the provision of section
80EEA of the Act to extend the outer date for sanction of loan from 31st March 2021 to 31st March
2022.
8. Extension of date of incorporation for eligible start up for exemption and for
investment in eligible start-up
In order to help eligible start-up and help investment in them-
a. it is proposed to amend the provisions of section 80-IAC of the Act to extend the outer date of
incorporation to before 1st April, 2022; and
b. it is proposed to amend the provisions of section 54GB of the Act to extend the outer date of transfer
of residential property from 31st March 2021 to 31st March 2022.
9. Increase in safe harbour limit of 10% for home buyers and real estate developers
selling such residential units
In order to boost the demand in the real-estate sector and to enable the real-estate developers to
liquidate their unsold inventory at a lower rate to home buyers, it is proposed to increase the safe
harbour threshold from existing 10% to 20% under section 43CA of the Act, if the following
conditions are satisfied:-
a. The transfer of residential unit takes place during the period from 12th November, 2020 to 30th June,
2021
b. The transfer is by way of first time allotment of the residential unit to any person
c. The consideration received or accruing as a result of such transfer does not exceed two crore rupee
Further it is proposed to provide the consequential relief to buyers of these residential units by way of
amendment in clause (x) of sub-section (2) of section 56 of the Act by increasing the safe harbour
from 10% to 20%.

10. Relaxation for certain category of senior citizen from filing return of
income-tax
In order to provide relief to senior citizens who are of the age of 75 year or above and to reduce
compliance for them, it is proposed to insert a new section to provide a relaxation from filing the
return of income, if the following conditions are satisfied:-
a. The senior citizen is resident in India and of the age of 75 or more during the previous year;
b. He has pension income and no other income. However, in addition to such pension income he may
have also have interest income from the same bank in which he is receiving his pension income;
c. This bank is a specified bank. The Government will be notifying a few banks, which are banking
company, to be the specified bank; and
d. He shall be required to furnish a declaration to the specified bank. The declaration shall be containing
such particulars, in such form and verified in such manner, as may be prescribed.
11. Rationalisation of provisions related to Sovereign Wealth Fund (SWF) and

Pension Fund (PF)
SWFs and PFs are proposed to be given certain relaxations such as allowing Alternate Investment
Fund (AIF) to invest up to 50% in non-eligible investments, Investment through holding company,
Investment in NBFC- IDF/IFC (non-banking finance company-infrastructure debt fund/Infrastructure
finance company), Loan or borrowings by SWF/Pension Fund,etc.
12. Addressing mismatch in taxation of income from notified overseas

retirement fund
It is proposed to insert a new section 89A to theAct to provide that the income of a specified person
from specified account shall betaxed in the manner and in the year as prescribed by the Central
Government. It is also proposed to define the expression specified person‖, as a person resident in
India who opened a specified account in a notified country while being non-resident in India and
resident in that country. Specified account is proposed to be defined as an account maintained in a
notified country which is maintained for retirement benefits and the income from such account is not
taxable on accrual basis and is taxed by such country at the time of withdrawal or redemption.
Notified country is proposed to be defined to mean a country notified by the Central Government for
the purposes of this section in the Official Gazette.

13. Rationalisation of provisions of Minimum Alternate Tax (MAT)
It is proposed to,-
a. provide that in cases where past year income is included in books of account during the previous year
on account of an APA or a secondary adjustment, the Assessing Officer shall, on an application made
to him in this behalf by the assessee, recompute the book profit of the past year(s) and tax payable, if
any, during the previous year, in the prescribed manner. Further, the provision of section 154 of the
Act shall apply so far as possible and the period of four years specified in sub-section (7) of section
154 shall be reckoned from the end of the financial year in which the said application is received by
the Assessing Officer.
b. to provide similar treatment to dividend as already there for capital gains on transfer of securities,
interest, royalty and Fee for Technical Services (FTS) in calculating book profit for the purposes of
section 115JB of the Act, so that both specified dividend income and the expense claimed in respect
thereof are reduced and added back, while computing book profit in case of foreign companies where
such income is taxed at lower than MAT rate due to DTAA.
14. Exemption of deduction of tax at source on payment of Dividend to business

trust in whose hand dividend is exempt
It is proposed to amend second proviso to section 194 of the Act to further provide that the provisions
of this section shall also not apply to such income credited or paid to a business trust by a special
purpose vehicle or payment of dividend to any other person as may be notified. Retrospective effect
15. Rationalisation of provisions relating to tax audit in certain cases
In order to incentivise non-cash transactions to promote digital economy and to further reduce
compliance burden of small and medium enterprises, it is proposed to increase the threshold from
five crore rupees to ten crore rupees subject to compliance of the following conditions:
a. aggregate of all receipts in cash during the previous year does not exceed five per cent of such
receipt; and
b. aggregate of all payments in cash during the previous year does not exceed five per cent of such
payment.
16. Advance tax instalment for dividend income
It is proposed to include dividend income in the exclusion list for non-calculaion of interest unser Sec
234C provided the assessee has paid full tax in subsequent advance tax instalments. but not deemed
dividend as per sub-clause (e) of clause (22) of section 2 of the Act.

17. Raising of prescribed limit for exemption under sub-clause (iiiad) and (iiiae)
of clause (23C) of section 10 of the Act
In order to provide benefit to small trust and institutions, it has been proposed that the exemption
under sub-clause (iiiad) and (iiiae) shall be increased to Rs 5 crore and such limit shall be applicable
for an assessee with respect to the aggregate receipts from university or universities or educational
institution or institutions as referred to in sub-clause (iiiad) as well as from hospital or hospitals or
18. Extending due date for filing return of income in some cases, reducing time
to file belated return and to revise original return and also to remove difficulty in
cases of defective returns
a. It is proposed that the due date for the filing of original return of income be extended to 31st October
of the assessment year in case of spouse of a partner of a firm whose accounts are required to be
audited under this Act or under any other law for the time being in force, if the provisions of section
5A applies to them.
b. Further it is proposed that the due date for the filing of original return of income be extended to 30th
November in Sec 92E cases of the assessment year in case of spouse of a partner of a firm whose
accounts are required to be audited under this Act or under any other law for the time being in force,
if the provisions of section 5A applies to them.
c. It is proposed that the last date for filing of belated or revised returns of income, as the case may be,
be reduced by three months. Thus the belated return or revised return could now be filed three
months before the end of the relevant assessment year or before the completion of the assessment,
d. It is proposed that a proviso be inserted to the said Explanation empowering the Board to specify,
vide notification thatany of the above conditions shall not apply for a class of assessee or shall apply
with such modifications, as maybe specified in such notification.
19. Payment by employer of employee contribution to a fund on or before due

date
In order to provide certainty, it is proposed to –

a. amend clause (va) of sub-section (1) of section 36 of the Act by inserting another explanation to the
said clause to clarify that the provision of section 43B does not apply and deemed to never have been
applied for the purposes of determining the ―due date‖ under this clause; and

b. amend section 43B of the Act by inserting Explanation 5 to the said section to clarify that the
provisions of the said section do not apply and deemed to never have been applied to a sum received
by the assessee from any of his employees to which provisions of sub-clause (x) of clause (24) of
section 2 applies.
20. Constitution of Dispute Resolution Committee for small and medium

taxpayers
The new scheme is proposed to be incorporated in a new section 245MA and has the following
features:
a. The Central Government shall constitute one or more Dispute Resolution Committee (DRC).
b. This committee shall resolve disputes of such persons or class of person which shall be specified by
the Board. The assessee would have an option to opt for or not opt for the dispute resolution through
the DRC.
c. Only those disputes where the returned income is fifty lakh rupee or less (if there is a return) and the
aggregate amount of variation proposed in specified order is ten lakh rupees or less shall be eligible
to be considered by the DRC.
d. If the specified order is based on a search initiated under section 132 or requisition made under
section 132A or a survey initiated under 133A or information received under an agreement referred
to in section 90 or section 90A,of the Act, such specified order shall not be eligible for being
considered by the DRC.
e. Assessee would not be eligible for benefit of this provision if there is detention, prosecution or
conviction under various laws as specified in the proposed section.
f. Board will prescribe some other conditions in due course which would also need to be satisfied for
being eligible under this provision.
g. The DRC, subject to such conditions as may be prescribed, shall have the powers to reduce or waive
any penalty imposable under this Act or grant immunity from prosecution for any offence under this
Act in case of a person whose dispute is resolved under this provision.
h. The Central Government has also been empowered to make a scheme by notification in the Official
Gazette for the purpose of dispute resolution under this provision. The scheme shall impart greater
efficiency, transparency and accountability b eliminating interface to the extent technologically
feasible, by optimising utilisation of resources and introducing dynamic jurisdiction.The Central
Government may, for the purposes of giving effect to the scheme, by notification in the Official
Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such
exceptions, modifications and adaptations as may be specified in the notification. However, no such
direction shall be issued after the 31st day of March, 2023. Every such notification shall, as soon as
may be after the notification is issued, be laid before each House of Parliament.

21. Income escaping assessment and search assessments
The Bill proposes a completely new procedure of assessment or reassessment or re-computation of

income escaping assessment and the assessment of search related cases cases. It is expected that the
new system would result in less litigation and would provide ease of doing business to taxpayers as
there is a reduction in time limit by which a notice for assessment or reassessment or re-computation
can be issued. The salient features of new procedure are as under:-
a. The provisions of section 153A and section 153C, of the Act are proposed to be made applicable to
only search initiated under section 132 of the Act or books of accounts, other documents or any
assets requisitioned under section 132A of the Act, on or before 31st March 2021.
b. Assessments or reassessments or in re-computation in cases where search is initiated under section
132 or requisition is made under 132A, after 31st March 2021, shall be under the new procedure.
c. Section 147 proposes to allow the Assessing Officer to assess or reassess or re-compute any income
escaping assessment for any assessment year (called relevant assessment year).
d. Before such assessment or reassessment or re-computation, a notice is required to be issued under
section 148 of the Act, which can be issued only when there is information with the Assessing officer
which suggests that the income chargeable to tax has escaped assessment in the case of the assessee
for the relevant assessment year. Prior approval of specified authority is also required to be obtained
before issuance of such notice by the Assessing Officer.
e. It is proposed to provide that any information which has been flagged in the case of the assessee for
the relevant assessment year in accordance with the risk management strategy formulated by the
Board shall be considered as information which suggests that the income chargeable to tax has
escaped assessment. The flagging would largely be done by the computer based system.
f. Further, a final objection raised by the Comptroller and Auditor General of India to the effect that the
assessment in the case of the assessee for the relevant assessment year has not been in accordance
with the provisions of the Act shall also be considered as information which suggests that the income
chargeable to tax has escaped assessment.
g. Further, in search, survey or requisition cases initiated or made or conducted, on or after 1st April,
2021, it shall be deemed that the Assessing officer has information which suggests that the income
chargeable to tax has escaped assessment in the case of the assessee for the three assessment years
immediately preceding the assessment year relevant to the previous year in which the search is
initiated or requisition is made or any material is seized or requisitioned or survey is conducted.
h. New Section 148A of the Act proposes that before issuance of notice the Assessing Officer shall
conduct enquiries, if required, and provide an opportunity of being heard to the assessee. After
considering his reply, the Assessing Office shall decide, by passing an order, whether it is a fit case
for issue of notice under section 148 and serve a copy of such order along with such notice on the
assessee. The Assessing Officer shall before conducting any such enquiries or providing opportunity
to the assessee or passing such
i. order obtain the approval of specified authority. However, this procedure of enquiry, providing
opportunity and passing order, before issuing notice under section 148 of the Act, shall not be
applicable in search or requisition cases. (viii) The time limitation for issuance of notice under
section 148 of the Act is proposed to be provided in section 149 of the Act and is as below:

i. in normal cases, no notice shall be issued if three years have elapsed from the end of the relevant
assessment year. Notice beyond the period of three years from the end of the relevant assessment
year can be taken only in a few specific cases.
ii. in specific cases where the Assessing Officer has in his possession evidence which reveal that the
income escaping assessment, represented in the form of asset, amounts to or is likely to amount to
fifty lakh rupees or more, notice can be issued beyond the period of three year but not beyond the
period of ten years from the end of the relevant assessment year;
iii. Another restriction has been provided that the notice under section 148 of the Act cannot be issued at
any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if
such notice could not have been issued at that time on account of being beyond the time limit
prescribed under the provisions of clause (b), as they stood immediately before the proposed
amendment.
iv. Since the assessment or reassessment or re-computation in search or requisition cases (where such
search or requisition is initiated or made on or before 31st March 2021) are to be carried out as per
the provision of section 153A, 153B, 153Cand 153D of the Act, the aforesaid time limitation shall
not apply to such cases.
v. It is also proposed that for the purposes of computing the period of limitation for issue of section 148
notice, the time or extended time allowed to the assessee in providing opportunity of being heard or
period during which such proceedings before issuance of notice under section 148 are stayed by an
order or injunction of any court, shall be excluded. If after excluding such period, time available to
the Assessing Officer for
vi. passing order, about fitness of a case for issue of 148 notice, is less than seven days, the remaining
j. The specified authority for approving enquiries, providing opportunity, passing order under section
148A of the Act and for issuance of notice under
k. section 148 of the Act are proposed to be —
a. Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than
three years have elapsed from the end of the relevant assessment year;
b. Principal Chief Commissioner or Principal Director General or where there is no Principal Chief
Commissioner or Principal Director General, Chief Commissioner or Director General, if more than
three years have elapsed from the end of the relevant assessment year.
l. Once assessment or reassessment or re-computation has started the Assessing officer is proposed to
be empowered (as at present) to assess or reassess the income in respect of any issue which has
escaped assessment and which comes to his notice subsequently in the course of the proceeding
under this procedure notwithstanding that the procedure prescribed in section 148A was not followed
before issuing such notice for such income.

22. Allowing prescribed authority to issue notice under clause (i) of sub-section
(1) of section 142
In order to enable centralized issuance of notices etc. in an automated manner, it is proposed to

amend the provisions of clause (i) of the sub-section (1) of the section 142 to empower the prescribed
income-tax authority besides the Assessing Officer to issue notice under the said clause.
23. Provision for Faceless Proceedings before the Income-tax Appellate Tribunal
(ITAT) in a jurisdiction less manner
In order to ensure that the reforms initiated by the Department to reduce human interface from the
system reaches the next level, it is imperative that a faceless scheme be launched for ITAT
proceedings on the same line as faceless appeal scheme. This will not only reduce cost of compliance
for taxpayers, increase transparency in disposal of appeals but will also help in achieving even work
distribution in different benches resulting in best utilisation of resources.
24. Discontinuance of Income-tax Settlement Commission
It is proposed to discontinue Income-tax Settlement Commission (ITSC) and to constitute Interim

Board of settlement for pending cases.
Effective Date – 01st Feb,2021
25. Reduction of time limit for completing assessment
It has been proposed that the time limit for completion of assessment proceedings may be reduced
further by three months. Thus the time for completing of assessment is proposed to be nine months
from the end of the assessment year in which the income was first assessable, for the assessment year
2021-22 and subsequent assessment years.
26. Rationalisation of the provision of Charitable Trust and Institutions to

eliminate possibility of double deduction while calculating application or
accumulation
To ensure that there is no double counting while calculating application or accumulation, it has been
proposed that:

a. Voluntary contributions made with a specific direction that it shall form part of the corpus shall be
invested or deposited in one or more of the forms or modes specified in sub-section (5) of section 11
maintained specifically for such corpus.
b. Application out of corpus shall not be considered as application for charitable or religious purposes
for the purposes of third proviso of clause (23C) and clauses (a) and (b) of section 11. However,
when it is invested or deposited back, into one or more of the forms or modes specified in sub-section
(5) of section 11 maintained specifically for such corpus from the income of the previous year, such
amount shall be allowed as application in the previous year in which it is deposited back to corpus to
the extent of such deposit or investment.
c. Application from loans and borrowings shall not be considered as application for charitable or
religious purposes for the purposes of third proviso of clause (23C) and clauses (a) and (b) of section
11. However, when loan or borrowing is repaid from the income of the previous year, such
repayment shall be allowed as application in the previous year in which it is repaid to the extent of
such repayment.
d. Clarify in both clause (23C) of section 10 and section 11 that for the computation of income required
to be applied or accumulated during the previous year, no set off or deduction or allowance of any
excess application, of any of the year preceding the previous year, shall be allowed
27. Taxation of proceeds of high premium unit linked insurance policy (ULIP)
The high premiums paid in ULIPs to the tune of Rs. 2.50 lakhs per annum will not be eligible for
exemption u/s 10(10D).
28. Rationalisation of the provision of slump sale
It is proposed to amend the scope of the definition of the term slump sale by amending the provision
of clause (42C) of section 2 of the Act so that all types of transfer as defined in clause (47) of section
2 of the Act are included within its scope.
29. Rationalisation of provision of transfer of capital asset to partner on

dissolution or reconstitution
New proposed section sub-section (4A) of section 45 of the Act applies in a case where a specified
person receives during the previous year any money or other asset at the time of dissolution or
reconstitution of the specified entity. The money or other asset is required to be in excess of the
balance in the capital account of such specified person in the books of accounts of the specified entity

at the time of its dissolution or reconstitution. In this situation, the profits or gains arising from the
receipt of such money or other asset by the specified person shall be chargeable to income-tax as
income of the specified entity under the head "Capital gains" and shall be deemed to be the income of
such specified entity of the previous year in which the money or other asset was received by the
specified person. For the purposes of section 48 of the Act,
a. value of the money or the fair market value of other asset on the date of such receipt shall be deemed
to be the full value of the consideration received or accruing as a result of the transfer of the capital
asset; and
b. the balance in the capital account of the specified person in the books of accounts of the specified
entity at the time of its dissolution or reconstitution shall be deemed to be the cost of acquisition.
The balance in the capital account of the specified person in the books of account of the specified
entity is to be calculated without taking into account increase in the capital account of the specified
person due to revaluation of any asset or due to self- generated goodwill or any other self-generated
asset.
30. Provisional attachment in Fake Invoice cases

In order to protect the interest of revenue, it is proposed to amend the provision of section 281B of
the Act to enable the Assessing Officer to exercise the powers under this section during the pendency
of proceedings for imposition of penalty under section 271AAD of the Act, if the amount or
aggregate of amounts of penalty imposable is likely to exceed two crore rupees.
31. Depreciation on Goodwill
It has been decided to propose that goodwill of a business or profession will not be considered as a
depreciable asset and there would not be any depreciation on goodwill of a business or profession in
any situation. In a case where goodwill is purchased by an assessee, the purchase price of the
goodwill will continue to be considered as cost of acquisition for the purpose of computation of
capital gains under section 48 of the Act subject to the condition that in case depreciation was
obtained by the assessee in relation to such goodwill prior to the assessment year 2021-22, then the
depreciation so obtained by the assessee shall be reduced from the amount of the purchase price of
the goodwill.
32. Rationalisation of the provision relating to processing of returned income

and issuance of notice under sub-seciton (2) of section 143 of the Act
It is proposed to amend the following provisions of sub-section (1) of section 143 of the Act,-

a. Amend sub-clause (iv) of clause (a) of sub-section (1) of the section 143 of the Act, to allow for the
adjustment on account of increase in income indicated in the audit report but not taken into account
in computing the total income.
b. Amend sub-clause (v) of clause (a) of sub-section (1) of the section 143 of the Act so as to give
consequential effect to amendment carried out in section 80 AC vide Finance Act, 2018.
c. Amend the provisions of section 143 to reduce the time limit for sending intimation under sub-
section (1) of section 143 of the Act from one year to nine months from the end of the financial year
in which the return was furnished.
Consequently, it is also proposed to reduce the time limit for issue of notice under sub-section (2) of
section 143 of the Act from six months to three months from the end of the financial year in which
the return is furnished.
33. Rationalisation of the provision of presumptive taxation for professionals

under section 44ADA
It is proposed to make this position clear in the law. Hence it is proposed to amend sub-section (1) of
section 44ADA of the Act to provide that the provision of this section shall apply to an assessee,
being an individual, HUF or partnership firm, not being an LLP as defined under clause (n) of sub-
section (1) of section 2 of Limited Liability Partnership Act, 2008.
34. Tax Deduction at Source (TDS) on purchase of goods
It is proposed to provide for TDS by person responsible for paying any sum to any resident for
purchase of goods. The rate of TDS is kept very low at 0.1%. To ensure that compliance burden is
only on those who can comply with it, it is proposed that the tax is only required to be deducted by
those person (i.e ―buyer‖) whose total sales, gross receipts or turnover from the business carried on
by him exceed ten crore rupees during the financial year immediately preceding the financial year in
which the purchase of goods is carried out. It is also proposed to consequentially amend sub-section
(1) of section 206AA of the Act and insert second proviso to further provide that where the tax is
required to be deducted under section 194Q and Permanent Account Number (PAN) is not provided,
the TDS shall be at the rate of five per cent.
Effective Date – 1st July,2021

35. TDS/TCS on non filer at higher rates
It is proposed to insert a new section 206AB in the Act as a special provision providing for higher
rate for TDS for the non-filers of income-tax return. Similarly it is proposed to insert a section
206CCA in the Act as a special provision for providing for higher rate of TCS for non-filers of
income-tax return.
Effective Date – 1st July,2021
36. Taxability of Interest on various funds where income is exempt
It is proposed to insert proviso to clause(11) and clause (12) of section 10 of the Act, providing that
the provisions of these clauses shall not apply to the interest income accrued during the previous year
in the account of the person to the extent it relates to the amount or the aggregate of amounts of
contribution made by the person exceeding two lakh and fifty thousand rupees in a previous year in
that fund, on or after 1st April, 2021, computed in such manner as may be prescribed.

In-Direct Tax:

Amendment in CGST Act 2017
Amended Sections 7(1)

Chapter Levy & Colletion of Tax - Scope of Supply
Extracts of the sections/ schedule before amendment in Finance Bill Extracts of the sections/ schedule after amendment in Finance
2021 Bill 2021
in section 7, in sub-section (1), after clause (a), the following
clause shall be inserted:-
“(aa) the activities or transactions, by a person, other
New Insertion in Finance bill, 2021
than an individual, to its members or constituents or viceversa, for
cash, deferred payment or other valuable
consideration.
Impact :- The person (other than individual) and its members should mandatorily be treated as two separate legal entity.
Amended Sections 16 (2)

Input Tax Credit - Eligiblity & Conditions for taking input tax
Chapter
credit
2021 Bill 2021
In section 16 of the Central Goods and Services Tax Act,
in sub-section (2), after clause (a), the following clause shall be
“(aa) the details of the invoice or debit note referred to in clause
New Insertion in Finance bill, 2021 (a) has been furnished by the supplier in the statement of outward
supplies and such details have been communicated to the
recipient of such invoice or debit note in the manner specified
under section 37;”.
Impact :- Reflection of Input Tax Credit in GSTR 2A/2B mandatory condition for availment of Input tax credit

Amended Sections 35(5)

Chapter Accounts & Records - Accounts & Other records
2021 Bill 2021
(5) Every registered person whose turnover during a financial year
exceeds the prescribed limit shall get his accounts audited by a
chartered accountant or a cost accountant and shall submit a copy of the
audited annual accounts, the reconciliation statement under sub-section
(2) of section 44 and such other documents in such form and manner as
may be prescribed.
Omitted
Provided that nothing contained in this sub-section shall apply to any
authority, whose books of account are subject to audit by the
Comptroller and Auditor-General of India or an auditor appointed for
auditing the accounts of local authorities under any law for the time
being in force.
Impact :- Mandatory requirement of getting the GST Audit by specified professional removed.
Amended Sections 44
Chapter Return - Annual Return
2021 Bill 2021
(1) Every registered person, other than an Input Service Distributor, a
person paying tax under section 51 or section 52, a casual taxable
person and a non-resident taxable person, shall furnish an annual
“Every registered person, other than an Input Service
return for every financial year electronically in such form and
Distributor, a person paying tax under section 51 or section 52, a
manner as may be prescribed on or before the thirty-first day of casual taxable person and a non-resident taxable person shall
December following the end of such financial year. furnish an annual return which may include a selfcertified
reconciliation statement, reconciling the value of supplies
Provided that the Commissioner may, on the recommendations of the
declared in the return furnished for the financial year, with the
Council and for reasons to be recorded in writing, by notification,
audited annual financial statement for every financial year
extend the time limit for furnishing the annual return for such class of
electronically, within such time and in such form and in such
registered persons as may be specified therein:
manner as may be prescribed:
Provided that the Commissioner may, on the recommendations of the
Provided further that any extension of time limit notified by the
Council, by notification, exempt any class of registered persons from
Commissioner of State tax or the Commissioner of Union territory tax
filing annual return under this section:
shall be deemed to be notified by the Commissioner.
Provided further that nothing contained in this section
shall apply to any department of the Central Government or a State
(2) Every registered person who is required to get his accounts audited
Government or a local authority, whose books of account are subject
in accordance with the provisions of sub-section (5) of section 35 shall
to audit by the Comptroller and Auditor- General of India or an
furnish, electronically, the annual return under sub-section (1) along
auditor appointed for auditing the accounts of local authorities under
with a copy of the audited annual accounts and a reconciliation
any law for the time being in force.”.
statement, reconciling the value of supplies declared in the return
furnished for the financial year with the audited annual financial
statement, and such other particulars as may be prescribed.
Impact :- Mandatory requirement of getting the GST Audit by specified professional removed, taxpayer can selfcertify the
reconciliation statement.

Amended Sections 50
Chapter Payment of Tax - Interest on delayed payment of Taxes
2021 Bill 2021
Provided that the interest on tax payable in respect of
Provided that the interest on tax payable in respect of supplies made
supplies made during a tax period and declared in the return
during a tax period and declared in the return for the said period
for the said period furnished after the due date in accordance with the
furnished after the due date in accordance with the provisions of
provisions of section 39, except where
section 39, except where such return is furnished after
such return is furnished after commencement of any
commencement of any proceedings under section 73 or section 74 in
proceedings under section 73 or section 74 in respect of the
respect of the said period, shall be levied on that portion of the tax
said period, shall be payable on that portion of the tax which
that is paid by debiting the electronic cash ledger.
is paid by debiting the electronic cash ledger.”.
Impact :- Retrospective effect (from 01-07-2017) given to liability of interest on net tax liability payable through cash ledger
Amended Sections 74
Demands & Recovery - Determination of tax not paid,short
Chapter
paid,etc
2021 Bill 2021

(i) the expression “all proceedings in respect of the said notice” shall
(i) the expression “all proceedings in respect of the said notice” shall
not include proceedings under section 132;
not include proceedings under section 132;
person liable to pay tax and some other persons, and such
proceedings against the main person have been concluded under
against the main person have been concluded under section 73 or
section 73 or section 74, the proceedings against all the persons
section 74, the proceedings against all the persons liable to pay penalty
liable to pay penalty under sections 122 and 125 are deemed to be
under sections 122, 125, 129 and 130 are deemed to be concluded.
concluded.
Impact :- The proceedings of the detention , seizure and confiscation of goods and conveyance in transit separate from the demand
and recovery proceedings under section 73 and 74 of the CGST Act 2017.

Amended Sections 75
Demands & Recovery - General provisions relating to
Chapter
determination of tax
2021 Bill 2021
‘Explanation.––For the purposes of this sub-section, the expression
"self-assessed tax" shall include the tax payable in respect of details
New Insertion
of outward supplies furnished under section 37, but not included in
the return furnished under section 39.’.
Impact :- Outward supply included in GSTR 1 and not included in GSTR 3B , now recovery can be done without issue of SCN.
Amended Sections 83
Demands & Recovery - Provisional attachment to protect
Chapter
revenue in certain cases
2021 Bill 2021
(1) Where during the pendency of any proceedings under section 62 or “(1) Where, after the initiation of any proceeding under
section 63 or section 64 or section 67 or section 73 or section 74, the Chapter XII, Chapter XIV or Chapter XV, the Commissioner is of the
Commissioner is of the opinion that for the purpose of protecting the opinion that for the purpose of protecting the interest of the
interest of the Government revenue, it is necessary so to do, he may, by Government revenue it is necessary so to do, he may, by order in
order in writing attach provisionally any property, including bank writing, attach provisionally, any property, including bank account,
account, belonging to the taxable person in such manner as may be belonging to the taxable person or any person specified in sub-section
prescribed. (1A) of section 122, in such manner as may be prescribed.”.
Impact :- Provisional attachment can be done on initiation of any proceeding under chapters mentioned.
Amended Sections 107

Chapter Appeals & Revision - Appeals to Appellate Authority
2021 Bill 2021
A proviso to sub-section (6) of section 107 of the CGST Act is being

inserted -
Insertion “Provided that no appeal shall be filed against an order under sub-
section (3) of section 129, unless a sum equal to twenty-five per cent.
of the penalty has been paid by the appellant.”.
Impact :- 25% of the penalty to be paid for filing appeal against order under 129(3).


Offences & Penalities - detention , seizure & release of goods &
Chapter
2021 Bill 2021
“(a) on payment of penalty equal to two hundred percent.of the

(a) on payment of the applicable tax and penalty equal to one
tax payable on such goods and, in case of exempted goods, on
hundred per cent. of the tax payable on such goods and, in case of
payment of an amount equal to two per cent. of the value of goods or
exempted goods, on payment of an amount equal to two per cent. of the
twenty-five thousand rupees, whichever is less, where the owner of
value of goods or twenty-five thousand rupees, whichever is less,
the goods comes forward for payment of such penalty;
where the owner of the goods comes forward for payment of such tax
and penalty;
(b) on payment of penalty equal to fifty per cent. of
the value of the goods or two hundred per cent. of the tax payable
(b) on payment of the applicable tax and penalty equal to the fifty
on such goods, whichever is higher, and in case of exempted
per cent. of the value of the goods reduced by the tax amount paid
goods, on payment of an amount equal to five per cent. of the value of
thereon and, in case of exempted goods, on payment of an amount equal
goods or twenty-five
to five per cent. of the value of goods or twenty-five thousand rupees,
thousand rupees, whichever is less, where the owner of
whichever is less, where the owner of the goods does not come
the goods does not come forward for payment of such
penalty;”;
Impact :- Applicable tax to be paid in GSTR 3B and penalty amount in clause (a) increased from 100% to 200%, amd in clause (b) the
same will be higher of 50% of the value of goods or 200% of the tax payable

Offences & Penalities - confiscation of goods or conveyances &
Chapter
levy of penalty
2021 Bill 2021
(1) Notwithstanding anything contained in this Act, if any person— (1) where any person—
(i) supplies or receives any goods in contravention of any of the (i) supplies or receives any goods in contravention of any of the
provisions of this Act or the rules made thereunder with intent to evade provisions of this Act or the rules made thereunder with intent to
payment of tax; or evade payment of tax; or
(ii).. (ii)..

Chapter
levy of penalty
2021 Bill 2021
Provided further that the aggregate of such fine and penalty leviable Provided further that the aggregate of such fine and penalty leviable
shall not be less than the amount of penalty leviable under sub-section shall not be less than the penalty equal to hundred per cent. of the
(1) of section 129: tax payable on such goods


Chapter
levy of penalty
2021 Bill 2021
(3) Where any fine in lieu of confiscation of goods or conveyance is
imposed under sub-section (2), the owner of such goods or conveyance
or the person referred to in sub-section (1), shall, in addition, be liable Omitted
to any tax, penalty and charges payable in respect of such goods or
conveyance.

Chapter Miscellaneous - Power to collect statistics
2021 Bill 2021
1) The Commissioner may, if he considers that it is necessary so to do,
by notification, direct that statistics may be collected relating to any
matter dealt with by or in connection with this Act. “The Commissioner or an officer authorised by
him may, by an order, direct any person to furnish
(2) Upon such notification being issued, the Commissioner, or any information relating to any matter dealt with in connection
person authorised by him in this behalf, may call upon the concerned with this Act, within such time, in such form, and in such
persons to furnish such information or returns, in such form and manner manner, as may be specified therein.”.
as may be prescribed, relating to any matter in respect of which
statistics is to be collected .

Chapter Miscellaneous - Bar on disclosure of information
2021 Bill 2021
(1) No information with respect to any matter given for the purposes
(1) No information of any individual return or part thereof with
of section 150 or section 151 shall, without the previous consent in
respect to any matter given for the purposes of section 150 or section
writing of the concerned person or his authorised representative, be
151 shall, without the previous consent in writing of the concerned
published in such manner so as to enable such particulars to be
person or his authorised representative, be published in such manner so
identified as referring to a particular person and no such information
as to enable such particulars to be identified as referring to a particular
shall be used for the purpose of any proceedings under this Act,
person and no such information shall be used for the purpose of any
without giving an opportunity of being heard to the person
proceedings under this Act.
concerned

Chapter Miscellaneous - Bar on disclosure of information
2021 Bill 2021
(2) Except for the purposes of prosecution under this Act or any other
Act for the time being in force, no person who is not engaged in the
collection of statistics under this Act or compilation or computerisation
Omitted
thereof for the purposes of this Act, shall be permitted to see or have
access to any information or any individual return referred to in section
151.


Chapter Miscellaneous - Power to issue instructions or directions
2021 Bill 2021
(2) The Commissioner specified in clause (91) of section 2, sub-
(2) The Commissioner specified in clause (91) of section 2, sub-
section (3) of section 5, clause (b) of sub-section (9) of section 25, sub-
section (3) of section 5, clause (b) of sub-section (9) of section 25,
sections (3) and (4) of section 35, sub-section (1) of section 37, sub-
sub-sections (3) and (4) of section 35, sub-section (1) of section 37,
section (2) of section 38, sub-section (6) of section 39, 1sub-section
sub-section (2) of section 38, sub-section (6) of section 39, section
(1) of section 44, sub-sections (4) and (5) of section 52, sub-section (5)
44, sub-sections (4) and (5) of section 52, sub-section (5) of section
of section 66, sub-section (1) of section 143, sub-section (1) of
66, sub-section (1) of section 143, clause (l) of1 "sub-section (1) of
section 151 , clause (l) of1 "sub-section (1) of section 143, except the
section 143, except the second proviso thereof", sub-section (1) of
second proviso thereof", sub-section (1) of section 151, clause (l) of
section 151, clause (l) of sub-section (3) of section 158 and section
sub-section (3) of section 158 and section 167 shall mean a
167 shall mean a Commissioner or Joint Secretary posted in the
Commissioner or Joint Secretary posted in the Board and such
Board and such Commissioner or Joint Secretary shall exercise the
Commissioner or Joint Secretary shall exercise the powers specified in
powers specified in the said sections with the approval of the Board.
the said sections with the approval of the Board.
Amended Schedule Schedule - II
2021 Bill 2021
7) Supply of Goods
The following shall be treated as supply of goods, namely:—

Omitted
Supply of goods by any unincorporated association or body of persons
to a member thereof for cash, deferred payment or other valuable
consideration.
Amendment in IGST Act 2017

Amended Sections 16
2021 Bill 2021
Section 16(1)(b) supply of goods or services or both for authorised
Section 16(1)(b) supply of goods or services or both to a Special
operations to a Special Economic Zone developer or a Special
Economic Zone developer or a Special Economic Zone unit.
Economic Zone unit.
Impact :- Supply for authorised operations to a SEZ will only be treated as zero rated supplies.

Amended Sections 16
2021 Bill 2021
“(3) A registered person making zero rated supply shall

be eligible to claim refund of unutilised input tax credit on
(3) A registered person making zero rated supply shall be eligible to supply of goods or services or both, without payment of
claim refund under either of the following options, namely:–– integrated tax, under bond or Letter of Undertaking, in
accordance with the provisions of section 54 of the Central
(a) he may supply goods or services or both under bond or Letter of Goods and Services Tax Act or the rules made thereunder,
Undertaking, subject to such conditions, safeguards and procedure as subject to such conditions, safeguards and procedure as may
may be prescribed, without payment of integrated tax and claim refund be prescribed:
of unutilised input tax credit; or Provided that the registered person making zero rated
supply of goods shall, in case of non-realisation of sale
(b) he may supply goods or services or both, subject to such conditions, proceeds, be liable to deposit the refund so received under
safeguards and procedure as may be prescribed, on payment of this sub-section along with the applicable interest under
integrated tax and claim refund of such tax paid on goods or services or section 50 of the Central Goods and Services Tax Act within
both supplied, in accordance with the provisions of section 54 of the thirty days after the expiry of the time limit prescribed under
Central Goods and Services Tax Act or the rules made thereunder. the Foreign Exchange Management Act, 1999 for receipt of
foreign exchange remittances, in such manner as may be
prescribed.
Impact :- Realisation of sale proceeds in case of exports within 30 days from the time limit provided in FEMA Act 1999 , otherwise
refund so received to be deposited with interest.
Amended Sections 16
2021 Bill 2021
(4) The Government may, on the recommendation of the
Council, and subject to such conditions, safeguards and
procedures, by notification, specify––
(i) a class of persons who may make zero rated supply on
payment of integrated tax and claim refund of the tax so
paid;
(ii) a class of goods or services which may be exported on
payment of integrated tax and the supplier of such goods or
services may claim the refund of tax so paid.”.
Impact :- Government on recommendation of the GST council may provide the class of person and class of goods/services where
export with payment of IGST can be done and refund can be claimed.

Contact Us:
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Disclaimer: This publication contained herein is of a general nature and is not intended to address the
circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely
information, there can be no guarantee that such information is accurate as of the date it is received, or it will
continue to be accurate in the future. No one should act on such information without appropriate professional
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purpose. This report under no circumstances to be used or considered as financial or taxation advice. This
document belongs to ALP & Associates an Indian Chartered Accountant Firm. All Rights Reserved.

INTRODUCTION
The Union Budget 2021-22 was presented by the Hon’ble Finance Minister Nirmala
Sitharaman on 1st February, 2021 in the Parliament.
Substantial Changes in GST has to be now routed through GST Council, however
certain important procedural changes have been brought in the Budget. Some of
the major changes introduced are as follows:
a. GST Audit Abolished
b. Export Provisions Stringent
c. Input Tax Credit Conditions Extended
d. Interest on Net Cash Liability given retrospective effect
e. Other Procedural Changes
All the changes have been discussed in details below.

Unique House,
11/1A/1, East Topsia Road, Mirania Gardens,
Kolkata - 700046, WB
S. N. AMENDMENTS IN THE CGST ACT, 2017 Clause of the

Finance Bill
1. Addition to the Scope of Supply: Section 7(1)(aa) & Schedule II [99]
Activities or transactions involving supply of goods or services by any

person, other than an individual, to its members or constituents or vice-
versa, for cash, deferred payment or other valuable consideration shall be
liable to tax w.e.f 01-07-2017 retrospectively.
Implications- Various contradictory judgments have been pronounced

based on principle of mutuality as to whether transactions between
Association of Person or body of persons and its members are liable to
tax in GST and earlier tax regime. However, with this amendment, clarity
is brought that AOP & its members are two distinct person and
any transaction between them must be liable to GST.
Since retrospective amendment has been brought, any

transaction entered in the earlier period must now be covered
under the ambit of supply and necessary GST must be disposed
of, if not paid already.
2. Reflection in GSTR-2A/2B enumerated as one of the conditions [100]

to avail Input Tax Credit: Section 16(2)
A new clause (aa) to sub-section (2) of the section 16 of the CGST Act is
being inserted to provide that Input Tax Credit (ITC) on invoice or debit
note may be availed only when the details of such invoice or debit note
have been furnished by the supplier in GSTR 1 or IFF.
Implication: A very relevant condition is now added to avail Input tax

credit under Sec 16. The existing conditions specified that the taxes for
which ITC is availed must have been actually paid to the Government
either in cash or credit. However, now an additional requirement has
been included owing to which No ITC against an Invoice or Debit
Note can now be claimed unless the same is reflected in GSTR-
2A/2B.
3. Removing Mandatory requirement of GST Audit and instilling [101 & 102]
self-certified statement along with Annual Return: Section
35(5) & 44
Mandatory requirement of getting annual accounts audited and

reconciliation statement submitted by specified professional in GSTR-9C
is being omitted. Instead a reconciliation statement on self-certification
basis is to be furnished along with GSTR-9, reconciling the value of
supplies declared in the return furnished for the financial year, with the
audited annual financial statement annually.
1
Unique House,
It further provides for the Commissioner to exempt a class of taxpayers

from the requirement of filing the annual return.
Implication: It shall be noted that even if requirement of GST Audit is

to be omitted, scope of Annual Return is extended, thereby bringing
about less difference in the efforts made. Further, turnover limit for filing
GSTR-9 shall be notified. According to us, a lot of litigations could have
been avoided with filing of GSTR 9C.
4. Interest on Net Cash Liability now made effective [103]

retrospectively: Section 50
Amendment has been brought to levy Interest on net Cash Liability w.e.f
01-07-2017 retrospectively.
Implication: In the earlier finance bill notified, Interest on net cash

Liability was introduced on prospective basis creating huge hue and cry
in the commerce and industry with demand notices issued by the
department leading to various litigations. With these retrospective
amendment all such demand notices for Interest recovery on
Credit payments shall stand quashed.
5. Inclusion of Definition of Self Assessed Tax: (Section 75(12) [105]
It is clarified that “self-assessed tax” shall include the tax payable in

respect of outward supplies, the details of which have been furnished
under section 37, but not included in the return furnished under section
39.
Implications: Recovery provisions can now be initiated against

excess supplies declared in GSTR-1 but remained unpaid in
GSTR-3B
6. Pre-Deposit of 25% to file an appeal against an order u/s [107]

129(3): (Section 107(6))
No appeal shall be filed against an order made under sub-section (3) of

section 129, unless a sum equal to twenty-five per cent. of penalty
has been paid by the appellant.
Implication: Earlier Pre-deposit was restricted to 10% of tax in dispute.

Now it has been extended to also include 25% of the penalty amount
demanded in the notice. So, total pre-deposit = 10% of tax in
dispute + 25% of penalty.
2
Unique House,
7. Amendment in Procedural Provisions in Sec 129: [108]

a. In case of detention or seizure of goods, currently the officer at
the check post demands for tax and penalty. Now, on this event,
the tax will be payable at the time of filing GSTR-3B but penalty
has to be paid for release of goods.
b. However, the amount of such penalty have been
increased from 100% to 200% of the tax payable on such
goods for the release thereof.
c. The penalty provision has further been hardened in those cases
where the owner of the goods is not coming forward for payment
of the penalty.
d. The concept of provisional release on bond has totally been
withdrawn by omission of Sec 129(2).
e. The time period for issuing notice has been prescribed as within
7 days of detention or seizure of goods and similarly time period
for issuing the order has also been prescribed as further 7 days.
f. A stringent provision has been introduced for a transporter or
truck owner with respect to release of the truck/conveyance
which has been seized or detained, he has to either deposit the
penalty under subsection (3) or Rs 1 lakh whichever is less.
8. Export Provisions Stringent: [114]

(i) zero rate the supply of goods or services to a Special Economic Zone
developer or a Special Economic Zone unit only when the said supply is
for authorised operations;
(ii) restrict the zero-rated supply on payment of integrated tax only to a
notified class of taxpayers or notified supplies of goods or services; and
(iii) link the foreign exchange remittance in case of export of goods with
refund.
Implication:
a. Supply to and from SEZ developer and unit shall be
considered as Zero Rated supply only for authorised
operations.
b. Earlier any tax payer had the option to opt for Export with or
without payment of tax on receipt of LUT or Bond. However,
Exports with Payment of tax shall be now restricted to
only notified class of taxpayers or notified supplies of
goods or services.
c. In case of non-realization of sale proceeds of Exports,
any refund received for exports without payment of tax
be liable to deposit the refund so received along with
Interest u/s 50.
3
Unique House,
Other Miscellaneous Points:

a. Section 74 of the CGST Act is being amended so as to make seizure and [104]
confiscation of goods and conveyances in transit a separate proceeding
Detention, Seizure and Confiscation of goods have now become serious

provisions and must be taken care off.
b. Section 83 of the CGST Act is being amended so as to provide that [106]
provisional attachment shall remain valid for the entire period starting
from the initiation of any proceeding under Chapter XII, Chapter XIV or
Chapter XV till the expiry of a period of one year from the date of order
made thereunder.
c. Section 151 of the CGST Act is being substituted to empower the [110]
jurisdictional commissioner to call for information from any person
relating to any matter dealt with in connection with the Act.
d. Section 152 of the CGST Act is being amended so as to provide that no [111]
information obtained under sections 150 and 151 shall be used for the
purposes of any proceedings under the Act without giving an opportunity
of being heard to the person concerned.
------
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4
MAJOR CHANGES IN DIRECT TAXES
Personal Taxes
• No change in Personal or corporate tax rate
• Relaxation in filing tax returns by Senior Citizens- It has been proposed to

exempt the senior citizens from filing income tax returns if pension income and
interest income are their only source of income for the year. Section 194P has been
newly inserted to enforce the banks to deduct tax on senior citizens more than 75
years of age who have a pension and interest income from the bank. This will provide
relief to senior citizens by reducing compliance burden for them.
• Taxability of interest on Provident fund - The interest earned by the Provident

Fund contributions above Rs 2.5 lakh a year will now be taxed at the normal rates.
This will only apply to the employee’s contribution and not that of the employer. It
will hit high-income salaried people who use the Voluntary Provident Fund to earn
tax-free interest.
• LTC Cash Scheme- LTC/LTA cash voucher scheme allows employees eligible for
LTC/LTA to claim tax exempt reimbursement of similar amounts subject to certain
limits and spending conditions. This has been done as employees are unable to travel
due to the coronavirus pandemic. A private sector employee can claim maximum tax
exemption of Rs 36,000 per person. It may be noted that the benefit of the LTC Cash
Voucher scheme is available in the old tax regime. If an individual opts for the new
tax regime, then tax benefit under the scheme shall not be available. No extension of
Leave travel concession cash scheme for FY 2021-22.
Other Amendments
• Reassessment Cases: The budget proposes to amend section 148 of the Income
Tax where the time limit for reassessment has been reduced to 3 years from 6 years.
The proposal addresses serious tax evasion, where evasion evidence is Rs.50 lakhs or
more can be re-opened within 10 years but only with the approval of Principal CCIT.
• Extension of time limit for sanctioning of loan for affordable housing:

Section 80EEA was introduced in Finance (No. 2) Act, 2019 which aimed to provide
first time buyers to invest in residential house property whose stamp duty does not
exceed forty-five lakh rupees. The provisions of section 80EEA of the Act provide
deduction of maximum of INR 150,000 in respect of interest on loan taken from any
financial institution for acquisition of an affordable residential house property.
However, one of the conditions to avail deduction under section 80EEA was that the
loan should been sanctioned upto 31st March, 2021. In order to continue promoting
the purchase of affordable housing, the sunset date is proposed to be extended to 31st
March, 2022.
• Extension of time limit of affordable housing project: As per the existing

law, tax holiday is provided to the companies engaged in the business of developing
and building affordable housing subject to the condition that the project shall be
approved by 31 March 2021. The time line now is now proposed to be extended to 31
March 2022. This move is in alignment to the Government’s goal of “Housing for all”
and is expected to promote the affordable housing projects.
• Dispute resolution committee- It is proposed that any taxpayer with total

income less than Rs. 50 lacs and disputed income less than Rs. 10 Lacs can approach
this, faceless committee. This is a step forward in reducing litigation for small tax
payers. The assessee covered u/s 132A, 133A or u/s 90 or 90A shall not be eligible to
be considered by the Dispute Resolution Committee.
• Extending Faceless hearings before the Income-tax Appellate Tribunal

(ITAT) - The Government had earlier introduced the e–assessment scheme and
before Commissioner (Appeals). Now, in order to take the objective of greater
209, AJC BOSE ROAD, KARNANI ESTATE, 1ST FLOOR, SUITE NO. 39, KOLKATA – 700 017
efficiency, transparency and accountability in tax proceedings to one step further, the
Government has proposed to introduce faceless appeal scheme to eliminate human
interface in the second appeal process before the Tribunal.
The move is likely to help the tax department to harness the power of technology in
reforming the system. Further, this will assist in optimizing utilization of the
resources through economies of scale and functional specialization. Further, it will
also help achieve even distribution of work in different benches and ensure efficient
administration. However, the same may also pose challenges till the time of adaption
of the system of the taxpayer and the Tribunals. Moreover, it would be important to
see how it resolves critical and interpretational matters.
• No income tax depreciation on Goodwill: It has been proposed that goodwill
of a business or profession will not be considered as a depreciable asset.
Consequently, by virtue of this amendment, the taxpayer will not be eligible to claim
income tax depreciation on goodwill. This amendment is proposed to overrule the
judgement of Supreme Court.
• Payment by employer in respect of employee contribution- It is proposed

that any delay in payment by employer of employee’s contribution to a statutory fund
(such as provident fund etc) will not be tax deductible expenditure. At present there
are judgments allowing expenditure for such delays, if the ultimate payment were
done before the tax return filing.
• Timelines to file belated and revised return has been reduced by 3 months i.e. from
31st March to 31st December.
• Time limit for completion of assessment proceedings has been reduced by three
months i.e., the revised time limit to complete the assessment would be 9 months
from the end of the assessment year.
• It is also proposed to reduce the time limit for issue of notice under sub-section (2)
of section 143 of the Act from six months to three months from the end of the
financial year in which the return is furnished.
• Increase in safe harbor limit: At present, while taxing income from capital gains
(Sec 50C), business profits (Sec 43CA) and other sources (Sec 56) arising out of
transactions in immovable property, the sale consideration or stamp duty value,
whichever is higher, is adopted. Presently, it provides that no adjustments shall be
made in a case where the variation between stamp duty value and the sale
consideration is not more than 10% of the sale consideration. It is now proposed to
increase this limit to 20%, subject to fulfillment of certain conditions. This proposal
will boost the demand in the real-estate sector and enable the real-estate developers
to liquidate their unsold inventory at a lower rate to home buyers.
• Advance tax instalment for dividend income- Dividend will be exempt from
TDS. Advance tax liability on dividend income will arise only after declaration of
dividend.
• Rationalisation of provisions relating to tax audit in certain cases- No

requirement for Tax Audit if the turnover is below Rs. 10 crores (Rs. 5 crores in the
existing law) and 95% receipts and payments are done through non-cash mode.
• Deduction u/s 80-IAC- As per existing law, eligible start-up needed to be

incorporated before 31.03.2021, this has been further extended to 31.03.2022 and
corresponding amendment has been made in section 54GB for claiming exemption
on gain on sale of shares of eligible start-up.
• Rationalisation of Trusts- It is proposed that Corpus donations of

Trusts/institutions will be tax exempt only if it is invested in specified mode as
provided in Sec 11(5). Further, expenditure from Corpus Donation shall not be
treated as application of income. Also any expenditure incurred from loans and
borrowings shall not be treated as application. Repayment of loan and borrowing
shall, however, be treated as application of income.
• It is proposed that TDS/TCS is required to be deducted at a higher rate (i.e. higher of

twice the rate provided in the relevant section or five percent) in case of non-filers of
income tax return also. Earlier this was applicable for assessee not having PAN.
• Scope of TDS provision has been enlarged: New provision has been inserted
to provide applicability of TDS on purchase of goods by the buyer exceeding Rs 50
lacs during the year and the TDS rate would be 0.1%. This will be applicable from
01.07.2021.
___
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INTRODUCTION
While India is expected to emerge as the fastest growing economy in the next two years as per the
IMF (International Monetary Fund), Finance Minister Shrimati Nirmala Sitharaman Ji presented the
union budget 2021-2022 in the Parliament, on Monday 1st February 2021.
Main pillars of this budget were as follows: Budget 2021
a. Health & well-being

b. Physical & financial capital & infrastructure
c. Inclusive development for aspirational India
d. Reinvigorating human capital
e. Innovation & R&D
f. Minimum Govt & Maximum Governance
MACRO ECONOMIC INDICATORS
The Indian economy was negatively impacted due to the global pandemic as the real Gross Domestic Product
(GDP) growth is projected to contract by 7.7 percent in 2020-21 as compared to a growth of 4.2
percent in 2019-20.
GDP growth, however, is expected to rebound strongly in 2021-22.
Data Categories Unit 2017-18 2018-19 2019-20 2020-21

GDP & Related Indicators
GDP at Current Market Prices Rs. Lakh Core 171.0 189.7 203.4* 194.8**
GDP at Constant Market Prices Rs. Lakh Core 131.8 139.80 145.7* 134.4**
Growth Rate % 7.0 6.1 4.2* -7.7**
GVA at Current basic prices Rs. Lakh Core 155.10 171.40 183.4* 175.8**
GVA at constant basic prices Rs. Lakh Core 120.7 128.0 133.0* 123.4**
Growth Rate % 6.6 6.0 3.9* -7.2**
Gross Savings % of GDP 32.4 30.1 Na Na
Gross Capital Formation % of GDP 34.2 32.2 Na Na
Per Capita Net National Income Rs. 1,15,293 1,26,521 1,34,226* 1,26,968**
Production
Food Grains Million tonnes 285.0 285.20 296.7*³ 144.5*³
Index of Industrial Production
% 4.4 3.8 -0.8 -15.5*⁴
(growth)
Electricity Generation (growth) % 5.4 5.2 1.0 -4.6*⁴
Prices
WPI inflation (average) % 3.0 4.3 1.7 -0.1*⁵
CPI (Combined) inflation (average) % 3.6 3.4 4.8 6.6*⁵
External Sector
Merchandise export growth (in US$
% 10.0 8.8 -5.1 -15.7*⁵
term)
Merchandise import growth (in US$
% 21.1 10.4 -7.7 -29.1*⁵
term)
Current Account Balance % of GDP -1.8 -2.1 -0.9 3.1*⁶
Foreign Exchange Reserves (end of
US$ Billion 424.4 411.9 475.6 586.1***⁹
year)
Average Exchange rate Rs. / US$ 64.45 69.92 70.90 74.64**⁹
Money & Credit

Broad Money (M3) growth (Annual) % 7.8 10.2 10.1 12.4*⁷
Scheduled Commercial Bank Credit
% 10 13.3 6.1 6.1*⁷
(growth)
Fiscal Indicators (Centre)
Gross Fiscal Deficit % of GDP 3.5 3.4 4.6*⁸ 3.5*⁹
Revenue Deficit % of GDP 2.6 2.4 3.3*⁸ 2.7*⁹
Primary Deficit % of GDP 0.4 0.4 1.6*⁸ 0.4*⁹
Notes
Na- Not Applicable
* Provisional Estimates
** First advance estimate
*³ Fourth AE for 2019-20 and Fourth AE for 2020-21
*⁴ (April-November) 2020
*⁵ (April-December) 2020
*⁶ (April-September) 2020
*⁷ as on December 18, 2020
*⁸ Provisional Actuals
*⁹ Budget Estimates
**⁹ End of December 2020
***⁹ As on 8th January 2021.
Source: https://www.indiabudget.gov.in
As announced in the Budget Speech:
Fiscal deficit is estimated at 9.5% of GDP for 2020-21 and for 2021-22 at 6.8% of GDP.
SECTOR- WISE KEY ANNOUNCEMENTS
HEALTH AND WELL BEING
❖ The Budgeted outlay for health and well-being is fixed at Rs. 2,23,846 crores for 2021-22, as against
only Rs 94,452 crores for 2020-21) and it marks a 137 per cent hike in the health and wellness budget.
❖ Allocations for urban sanitation, liquid waste management water supply, mitigation of air pollution and
nutrition.
❖ Rs 35,000 crore for Covid-19 vaccine in the year 2021-22.
❖ The pneumococcal vaccine, a made-in-India product, is currently limited to only five states, but will be
rolled out across the country. This will avert more than 50,000 child deaths annually.
❖ PM Aatmanirbhar Swastha Bharat Yojana

o It will be launched with an outlay of Rs 64,180 crore over six years.
o This will be in addition to the National Health Mission.
o The main interventions under the new scheme are:
▪ support for 17,778 rural and 11,024 urban health and wellness centres
▪ setting up integrated public health labs in all districts and 3,382 block public health
units in 11 states
▪ establishing critical care, hospital blocks in 602 districts and 12 central institutions
▪ strengthening the National Centre for Disease Control, its five regional branches and
20 metropolitan health surveillance units
▪ In addition, there will be expansion of the integrated health information portal to all
states and UTs to connect all public health labs
▪ operationalization of 17 new public health units (PHUs) and strengthening of existing
public health units at points of entry i.e. at 32 airports, 11 seaports and 7 land crossings
▪ 15 health emergency operation centres and 2 mobile hospitals will also be set up
▪ A national institution for One Health will be set up — a regional research platform for
the WHO south-east Asia region office — apart from 9 bio-safety ‘level 3’ labs and 4
regional National Institutes of Virology.
❖ Mission Poshan 2.0

The supplementary nutrition programme and the Poshan Abhiyaan has been merged to launch
Mission Poshan 2.0 to strengthen nutritional content, delivery, outreach, and outcome with an
intensified strategy to improve nutritional outcomes across 112 aspirational districts
Out of Rs 24,435 crore allocated to the Women Child Development (WCD) Ministry, an amount
of Rs 20,105 crore has been assigned to Saksham Anganwadi and Poshan 2.0.
Poshan 2.0 scheme in an umbrella scheme covering the Integrated Child Development Services
(ICDS), Anganwadi Services, Poshan Abhiyaan, Scheme For Adolescent Girls, National Creche
Scheme).
❖ Voluntary scrapping policy for vehicles
o Personal vehicles would undergo fitness test after 20 years while commercial vehicles would
require it after completion of 15 years.
o The policy for the same will be announced separately.
o The policy will aid in reducing vehicular pollution and oil import bill.
o Automobile sales fell 18% to 21.5 million units’ last fiscal and by another 24% to 13 million units
till December’ 2020.
o Last month, the roads ministry had proposed to levy a ‘green tax’ on old transport vehicles.
According to the proposal, transport vehicles older than 8 years could be charged a green tax
at the rate of 10-25% of road tax at the time of renewal of fitness certificate. For personal
vehicles, the tax will be levied at the time of renewal of registration certificate after 15 years.
Industry executives had called the proposed green tax a step in the right direction
as it will disincentivize people from using older vehicles.
❖ Ujjawala scheme
o Free cooking gas LPG scheme Ujjwala to be extended to 1 cr more beneficiaries
o The scheme, which provides LPG connections with financial assistance from the central
government and currently benefits 12 crore households, will be extended further to provide
clean cheap cooking fuel.
NATIONAL INFRASTRUCTURE
❖ The Government had allocated sharp increase in capital expenditure at 5.54 lakh crore, from Rs 4.39
lakh crore in 2021 which is comparatively 34.5 percent more than the Budget Estimates 2020-21.
❖ National Infrastructure Pipeline

o The government has extended its Rs 111-lakh-crore ($1.5 trillion) National Infrastructure
Pipeline to cover more projects by 2025 in an effort to shore up economic growth.
o The National Infrastructure Pipeline, which was launched with 6,835 projects, has now
expanded to 7,400 projects.
o The national monetisation pipeline for potential brownfield infrastructure assets will be
launched and pipelines of GAIL (India) Ltd. Indian Oil Corp (IOC) and HPCL will be
monetised.
o The project will be funded from government as well as financial Sector through three concrete
steps such as-
▪ Creating institutional structure
▪ Big thrust on monetisation of assets
▪ Enhancing share of capital expenditure in central and state budget
o Besides, the government will set up a new development finance institution called the National
Bank for Financing Infrastructure and Development.
o The focus of the government is on infrastructure for economic development and as many as
6,500 infra projects across sectors under the NIP (National Infrastructure Pipeline) envisions
ease of living for Indian citizens.
o Infrastructure needs long-term debt financing. A professionally managed development

financial institution is necessary to act as provider, enabler and catalyst for infrastructure
financing.
❖ Seven textile parks to come up in 3 years.

o The parks to be setup over 1,000 acres of land with world class infrastructure, and plug-and-
play facilities, will be addition to the Rs 10,683-crore production linked incentive (PLI) scheme
for technical textiles and manmade fibre.
o The textiles ministry has proposed to develop seven Mega Integrated Textile Region and
Apparel (MITRA) parks as part of a plan to double the industry size to $300 billion by 2025-
26 aimed to position India as a fully integrated, globally competitive manufacturing and
exporting hub.
o The parks are targeted to have uninterrupted water and power supply, common utilities and
research and development labs.
❖ Rs 95,000 crore for roads development in Bengal

o Highway works proposed:
▪ 3,500 km corridor in Tamil Nadu with an investment of Rs 1.03 lakh crore.
▪ 1,500 km in Kerala at investment of Rs 65,000 cr
▪ 675 km in West Bengal at a cost of Rs 95,000 cr
▪ 1,300 km in Assam at a cost of Rs 3,400 crore in the next 3 years
❖ An enhanced outlay of Rs 1.18 lakh crore for Ministry of Road Transport and Highway
❖ To achieve electrification of 27,000-km of tracks
❖ 100 more airports would be developed by 2024 to support Udaan scheme
❖ A record sum of over 1.10 lakh crore rupees is provided for Railways of which over 1.07 lakh crores is
for capital expenditure. Indian Railways have prepared a National Rail Plan for India - 2030
to create a ‘future ready’ Railway system by 2030. It is expected that Western Dedicated Freight
Corridor (DFC) and Eastern DFC will be commissioned by June 2022.
❖ FM announces Rs 18,000 cr scheme to augment public transport in urban areas. Centre to provide Rs.
18,000 crore for public buses. A new scheme will be launched at a cost of 18,000 crore rupees to
support augmentation of public bus transport services. Two new technologies - ‘MetroLite’ and
‘MetroNeo’ will be deployed to provide metro rail systems in Tier-2 cities and peripheral areas of Tier-
1 cities.
❖ Central fiscal funding for Kochi Metro, Chennai Metro, Bengaluru Metro, Nagpur Metro and Nashik
Metro projects
❖ Eastern and western dedicated freight corridors to be commissioned by June 2022
❖ Seven projects worth Rs 2,000 crore in PPP mode for ports. 7 port projects to be offered in
private-public partnership mode; plan to support Indian shipping cos with subsidy.
❖ Govt will facilitate a world-class fintech hub at Gift city
❖ Scheme for promoting flagging of merchant ships in India will be launched by providing subsidy
support
❖ Allocation to rural infra development increased to Rs 40,000 cr in next fiscal from Rs 30,000 crore in
FY21
❖ FM announces development of 5 major fishing hubs.
❖ 1,000 more mandis will be integrated with electronic national market.
BANKING AND INSURANCE
❖ FDI limit in Insurance raised from 49% to 74%.
❖ Development Financial Institution (DFI)

o Professionally managed Development Financial Institution will have statutory backing, and
Rs 27,000 crore capital.
o The proposed DFI may be used to finance both social and economic infrastructure projects
identified under the National Infrastructure Pipeline (NIP)
❖ Bad Bank- A new asset reconstruction and asset management company:
o Announcing its version of the bad bank, the government will set up an Asset Reconstruction
and Management Company for Stressed Assets to take over bad loans.
o A bad bank is a corporate structure which isolates illiquid and high-risk assets held by a bank
or a financial organization, or perhaps a group of banks or financial organizations.
o A new measure for cleaning up of bank books due to high levels of provisioning of stressed
assets. An Asset Reconstruction Company Limited and Asset Management Company would be
set up to consolidate and take over the existing stressed debt and then manage and dispose of
the assets to alternate investment funds and other potential investors for eventual value
realization.
o The Economic Survey which was tabled on Friday also indicated that a fresh asset quality
review (AQR) will be needed once the ongoing forbearances related to Covid-19 come to an end.
❖ Rs 20,000 crore equity infusion has been announced for public sector banks. These
measures are expected to strengthen the state-owned banks and hasten the process of clean-up of their
balance sheet.
POWER SECTOR
❖ The government has allocated close to Rs 3.06 lakh crore in the Budget towards launching a
"revamped", reforms-based, result-linked power distribution sector scheme.
The government is proposing to create a framework to give consumers alternatives to choose from more
than one power distribution company, Finance Minister Sitharaman announced.
The move is aimed at offering competition at operator level and more choice to consumers which will
target better efficiency levels in the distribution sector.
❖ Transport system operator (TSO) for regulating common carrier capacity in gas pipelines to boost
gas-based economy.
o Gas transportation: The government has announced an independent gas transport system
operator for booking and coordination to ensure for unbiased allocation of natural gas
transportation capacity.
o The government aims to address concerns of bias in allocation of gas transportation capacity
by big players who are involved in both the supply and transportation of natural gas.
❖ FM announces hydrogen energy mission for generating hydrogen out of green-powered sources.
❖ The maiden gas pipeline project to be taken up in the union territory of Jammu and Kashmir
❖ Rs 1,000 crore to Solar Energy Corporation and Rs 1,500 to Renewable Energy Development
Agency
EDUCATION
❖ Over 15,000 schools to be qualitatively strengthened under National Education Policy
❖ Allocation Rs. 54,873.66 crore (y-o-y increase of 5.1%) for school education and Rs. 38,350.65 crore (y-
o-y increase of 16.5%) for higher education in Budget Estimate 2021-22.
Allocations for education Budget Estimate (2021-22)

ministry and its major scheme (Rs. In Crores)
School education & Ministry 54,873.66

National Education Mission 31,300.16
Mid-Day Meals in Schools 11,500.00
Department of Higher Education 38,350.65
Digital e-learning 645.61
Indian Institutes of Technology 7,686.02
Indian Institutes of Management 476.00
Source – Expenditure Budget 2021-22
❖ The proposed key educational initiatives include–
o For Institutions, Creation of Formal Umbrella Structures in nine cities by retaining their
internal autonomy - having 4 separate vehicles for standard-setting, accreditation, regulation
and funding.
o Allocation of Rs 3,000 crore in Rashtriya Uchtar Shiksha Abhiyaan (RUSA), a centrally-

sponsored scheme that aims to improve the quality of institutes, promotes self-autonomy and
aims to ensure adequate availability of quality faculty in all higher educational institutions. This
scheme also promotes diversity including inclusion of Schedule Caste/Schedule Tribe,
minorities and women in the higher education system.
o A new allocation of Rs 10 crore has been set aside for a segment called 'Indian Knowledge
Systems'. This segment will look into elements of knowledge from ancient India and its
contributions to modern India and its successes and challenges.
o Over 15,000 schools to be qualitatively strengthened under National Education Policy

2021.
o 100 new Sainik Schools to be set up in partnership with NGOs.
o Government proposes to amend the National Apprenticeship Promotion Scheme to

enhance opportunities for youth.
o Govt to set-up 750 Eklavya model residential schools in tribal area.
o Central University to be set up in Leh.
DISINVESTMENT TARGET
❖ Disinvestment target for FY2022 at Rs 1.75 lakh cr
❖ FM puts disinvestment receipts at Rs 1.75 lakh cr for fiscal year beginning April 1, 2021. Two PSBs and
one general insurance company to be divested, legislations amendments to be introduced in this session
❖ The government has targeted the disinvestment of Rs 1.75 lakh crore for fiscal year beginning April
1, 2021, from the stake sale in public sector companies and financial institutions. This is
lower than the previous fiscal year 2020-21 disinvestment target of Rs 2.1 lakh crore which was
proposed to be raised from CPSE (Central Public sector enterprises).
❖ Out of the said target of Rs. 1.75 lakh crore, the Rs. 1.00 lakh crore would be arranged from sale of
government stake in public sector companies and financial institutions and Rs 75,000 crore would
come as CPSE disinvestment receipts.
❖ Further, the government would allow for the maximum of 4 public sector companies in Strategic
Sectors. The companies owned by the government in other sectors would be eventually privatized or
merged or subsidiarized with other CPSEs or closed
❖ Besides IDBI Bank, the government would privatize two public sector banks and one general insurance
company and is planning to bring the IPO of LIC in the FY22.
❖ The target disinvestments announced by the president would be payable itself in FY 2021-22 which
include the Strategic Sale of IDBI Bank, BPCL, Shipping Corp, Container Corporation,
Neelachal Ispat Nigam Ltd, Pawan Hans, Air India, etc.
❖ The four strategic sectors would include-

o Atomic energy, Space and Defence
o Transport and Telecommunications
o Power, Petroleum, Coal and other minerals
o Banking, Insurance and financial services
❖ Furthermore, the Government would work out on the incentive package of central funds for states to
start the disinvestment of their public sector.
❖ All idle assets and non-core assets which largely consist of surplus land with Government/FIs/PSUs
will no more be part of Aatmanirbhar Bharat. The direct sale or concession of land will be handled
through special purpose vehicle.
❖ The clear indication behind the disinvestment receipt involves the economic growth of CPSE/ FIs
through infusion of private capital, technology and best management practices thereby creating new
job opportunities in the India.
LABOUR AND WORKFORCE
❖ India has a total workforce of over 50 crore including 40 crore unorganized sector which include farm
and rural workers.
❖ Women workers allowed in all categories, including night-shifts with adequate protection.
❖ Compliance burden on employers reduced with single registration and licensing, and online returns
❖ The labour reforms done by the government consist of four broad codes
o wages,
o industrial relation,
o social security and occupational safety
o health & working conditions
❖ One nation, one ration card plan is under implementation in 32 states, 1 union territory
❖ Social Security net for gig workers
o A portal to collect information on gig-workers, building and construction workers,
among others.
o A portal will be set up to collect info on gig & platform workers, building & construction
workers, among others to provide them benefits like health, credit (easy financing),
food and others.
o The gig and platform workers are those who are engaged by various e-commerce
businesses like UBER, OLA, SWIGGY and Zomato. These workers are not paid salaries
and hence deprived of social security benefits like provident fund, group insurance and
pension.
COMPANY LAW
❖ SMALL COMPANIES: Government to increase maximum threshold paid-up capital of small

companies from Rs. 50 lakh to Rs. 2 crore and increase the threshold of maximum turnover from Rs. 2
crore to Rs 20 crore.
More than 2 lakh additional companies to come under the definition of small companies which will
have a lower compliance burden including lower penalties for violations and lower filing requirements.
❖ Allowing One Person Companies (OPC) to grow without any restriction in Share Capital or Turnover.
❖ NRIs will be allowed to set-up OPCs with just presence of 120 days in India in a year from erstwhile 182
days.
❖ Launching MCA21 Version 3.0 – E-Scrutiny, E-Adjudication and Compliance management to be

simplified.
❖ Decriminalization of LLP Act, 2008
❖ Tribunals to be rationalized
PRODUCTION LINKED INCENTIVE SCHEMES
❖ ₹1.97 lakh crore on various PLI schemes over the next 5 years, starting this fiscal for 13 sectors. This
will be an addition to the ₹40,951 crore announced for the PLI for electronic manufacturing schemes.
❖ In order to reduce India's dependence on China, the government in March had announced a scheme
that aims to give companies incentives on incremental sales from products manufactured in domestic
units.
❖ The Union Cabinet approved the production-linked incentive (PLI) scheme for 10 sectors on November
11. These are pharmaceuticals, automobiles and auto components, telecom and networking products,
advanced chemistry cell batteries, textile, food products, solar modules, white goods, and specialty
steel.
❖ The PLI for large scale electronics manufacturing extends an incentive of 4 percent to 6 percent on
incremental sales of goods manufactured in India to eligible companies, for a period of five years
subsequent to the base year (FY2019-20) after they achieve their investment and production value
target for each year.
❖ The government has earmarked the highest amount of incentive for the automobile and its components
sector, amounting to Rs 57,042 crore. The mobile sector had been granted an incentive of around Rs
40,951 crore.
❖ Some other sectors included under PLI are advance cell chemistry battery (Rs 18,100 crore), electronic
and technology products (Rs 5,000 crore), pharmaceutical drugs (Rs 15,000 crore), and telecom and
network products (Rs 12,195 crore).
❖ Textile products (Rs 10,683 crore), food products (Rs 10,900 crore), high efficiency solar PV modules
(Rs 4,500 crore), white goods (Rs 6,238 crore) and specialty steel (Rs 6,322 crore) are also included in
the scheme.
OPERATION GREEN SCHEME
❖ Operation Greens is a project approved by the Ministry of Food Processing Industries with the target
to stabilise the supply of tomato, onion and potato crops (TOP crops) in India, as well as to ensure their
availability around the country, year-round without price volatility.
❖ Scheme extended to a total of 22 crops, fruits and vegetables (TOTAL) (Mango, Banana, Guava, Kiwi,
Lichi, Papaya, Citrus, Pineapple, Pomegranate, Jackfruit; Vegetables: - French beans, Bitter Gourd,
Brinjal, Capsicum, Carrot, Cauliflower, Chillies (Green), Okra, Onion, Potato and Tomato)
OTHER NOTABLE ANNOUNCEMENTS
❖ Rs 1,500 crore allocated for promoting digital mode of payment
❖ Increase in agriculture credit target to Rs 16.5 lakh crore
❖ Rs 3,768 crore for Census
❖ Rs 300 crore to Goa for Liberation anniversary
❖ Yet another power discom rescue scheme @ Rs 3 lakh crore over five years
❖ Proposal to consolidate SEBI Act, Depositories Act, SCRA Act, Government Securities Act
into one.
❖ Focus on strengthening three areas: Preventive, Curative, and Wellbeing
❖ 100% electrification of Broad-Gauge routes to be completed by December, 2023
❖ Broad Gauge Route Kilometers (RKM) electrification to reach 46,000 RKM, i.e. 72% by end of 2021
❖ To ensure faster resolution of cases by:

o Strengthening NCLT framework
o Implementation of e-Courts system
o Introduction of alternate methods of debt resolution and special framework for
MSMEs
❖ Rs. 1,000 crore for the welfare of Tea workers especially women and their children in Assam
and West Bengal through a special scheme
___
CA ROHIT SURANA
+91 98366 63781
CA NIMISH KUMAR
+91 90078 28224
CA SONAM AGRAWAL
+91 98362 65187
CA GAURAV PODDAR
+91 90078 17201
CA SUNAYNA BANTHIA
+91 86973 20094
Highlights of Budget 2021-22
Bold and Growth led
Personal Taxation
Major Areas Budget Proposals
Tax rates - Surcharges, Cesses No Change

For senior citizens(more than 75Years) who only have pension and interest income, exemption of filing of income
tax returns
Deductions
No change in tax rates or standard deduction
For salaried employees
Interest accrued on contributions to PF in excess of Rs 2.5 lacs per annum will now be taxable
For individuals under chapter VIA No Change
Interest on Affordable Housing amounting to Rs.150000 extended till March 2022.

For housing
Dividend taxation 1. Advance tax liability on dividend income shall arrive only after declaration or payment of dividends.
2.Propose to make dividend payments to REIT (estate investment trusts) and Invit's (Infrastructure investment
trusts) exempt from TDS
Capital gains
No Change
LTCG Taxation on Equity / MF
No Change
STT
Non Resident Alteration in double taxation rules and taxation for NRIs, especially who return to India. Relief is also being looked at
for those who face difficulty in getting credit for taxes paid in India
Propose to notify rules to eliminate double taxation for NRIs on foreign retirement funds
Corporate Taxation
Tax rates No Change
No Change
Dividend taxation
Transfer pricing No Change
Other Time limit for reopening assessments to 3 years from present 6 years
FM announces faceless dispute resolution panel for small taxpayers and faceless ITAT
Tax audit limit increased from Rs 5 crore to Rs 10 crore (Digital Transaction more than 95%)
Other Important Announcements
Fiscal deficit for FY 21 and FY 22 In RE 2020-21, fiscal deficit is pegged at 9.5% of the GDP
Fiscal deficit in 2021-22 is pegged at 6.8% of the GDP
We aim to bring fiscal deficit below 5% of the GDP by 2025-26
Digital economy Announced allocation of Rs 1,500 crore for a proposed scheme to provide financial incentives to
promote digital modes of payment.
Auto sector - Scrappage policy, Green taxes New scrappage policy - 20 years in case of personal vehicles and 15 years in case of commercial
vehicles
Agri - Farm laws status Rs 75,100 crore allocated for farmer

FM proposes increase in agriculture credit target to Rs 16.5 lakh crore
Total amount paid to paddy farmers surged to Rs 1.72 lakh crore in 2020-21
Govt says MSP procurement to continue at a steady pace
Banking sector Asset Reconstruction Company and Asset Management Company to help banks tackle bad loans.
Infusion of Rs 20,000 crore for public sector banks.
Other Important Announcements
MSME Small Company definition revised

Rs.50 lac paid up increased to Rs. 2 crore
Rs. 2 crore Turnover increased to Rs. 20 crore
Separate administration structure to promote ease of doing business
Disinvestment/IPO Two PSU banks and one public sector insurance company for disinvestment
Government's FY22 disinvestment revenue target is Rs 1.75 lakh crore
BPCL, Air India, Shipping Corp, Container Corp and other disinvestments will be completed in 2021-22
Government to bring LIC IPO in 2022
Insurance FDI in insurance hiked to 74% from 49%
FM announces a record Rs 1.10 lakh crore outlay for railways, of which Rs 1.7 lakh crore is for capital
expenditure
I propose a sharp increase in capital expenditure at 5.54 lakh crore, from Rs 4.39 lakh crore in 2021
Infrastructure
Others FM announces Rs 35,000 crore for Covid-19 vaccines. The total budget outlay for healthcare is 2.23 lakh
crore. This is an increase of 137% from last year
The total financial impact of all Aatmanirbhar Bharat packages, including measures taken by RBI, was
about Rs 27.1 lakh crore, more than 13% of GDP
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Contents
1. Foreword ............................................................................ 4
2. Key Highlights of Economy Survey 2020-21….................... 6
3. Union Budget 2021-22
a) Key Features of Budget.......................................... 7
b) Sector Wise Proposals............................................ 7
4. Tax Proposals
a) Direct tax .............................................................. 20
b) Indirect tax ........................................................... 69
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Union Budget 2021-22
Foreword
Dear Reader,
Finance Minister Nirmala Sitharaman presented her third but the first paperless Union Budget through her tablet in Parliament. This Budget
assumes great significance as it comes amid the novel corona virus pandemic, which has led to massive economic disruption in India and
around the world. While the country has witnessed strong economic recovery since lockdown restrictions were eased, there’s still a long way
to go. All eyes were on this Budget, with hopes that it will help revitalize the economy. Budget document says that the Indian economy is
expected to rebound strongly in 2021-22 owing to the reform measures undertaken by the government. It further said that the real GDP
growth is projected to contract by 7.7 per cent in 2020-21 as compared to a growth of 4.2 per cent in 2019-20.
This budget rests on six pillars – Health and well-being, Physical and Financial capital and infrastructure, Inclusive development for aspirational
India, Reinvigorating human capital, Innovation and R&D and Minimum government and maximum governance. The finance minister has
announced a total spend of around Rs 2 trillion on healthcare and mega national highway projects in election-bound states of Tamil Nadu,
West Bengal, Assam and Kerala to give an impetus to the Covid-hit economy. The overall capital expenditure for FY 2021-22 is Rs.5.54 lakh
crore. Another major highlight was the increase in the FDI limits in the insurance sector from 49% to 74%. The government plans to divest
two PSUs as well as one insurance company.
In significant changes to the taxation process, Sitharaman announced the scrapping of income tax returns for senior citizens under certain
conditions, new rules for removal of double taxation for NRIs and reduction of period from 6 years to 3 years for reopening of tax assessment
under section 148. Startups will get an extension in their tax holiday for an additional year. Sitharaman also announced that the advance tax
liability on dividend income shall arise after declaration of payment of dividend. At the conclusion of her speech, FM said the government
will borrow about Rs 12 lakh crore in FY22, adding that the expenditure for the next fiscal has been pegged at Rs 34.83 lakh crore. A slump
in government revenues amid the Covid-19 pandemic has led to a sharp rise in deficit and market borrowing. The FM announced that India’s
fiscal deficit is set to jump to 9.5 per cent of GDP as against projected 3.5 per cent in 2020-21. She announced a push to the textile industry
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by 7 new Mega Investment Parks, a hike in custom duty on cotton and raw silk, a new cess on agriculture development, Rs 2.5 per litre on
petrol and Rs 4 per litre on diesel, a central university in Leh, a focus on sea-weed farming with a new facility in Tamil Nadu and a new vehicle
scrapping policy that aims to provide the auto sector a boost among other announcements. Sitharaman also announced that an additional
1 crore families will now benefit under the Centre’s Ujjwala scheme.
Benchmark stock indices Nifty and Sensex gave a thumbs up to government's 'expansionary budget' as FM Sitharaman chose the path of
additional borrowing instead of taxing the super-rich or raising taxes on high-income individuals. By the end of her speech, Sensex was at
47451.62, up by 1165.85 points.
FM Sitharaman said that the Budget preparation was undertaken under circumstances "like never before" and that the Centre is fully prepared
to support and facilitate economic growth. The government’s efforts are to revive the economy, address the gaps in the economy and
building a strong foundation through infrastructure spending, investment in distressed sectors, especially MSMEs and focusing on a growth
formula built around jobs through education, up-skilling and innovation.
Other notable moves include Strengthening the financial sector to build an ecosystem by boosting manufacturing through institutionalization
of debt financing, monetizing assets through divestments and focusing on accelerating foreign investments. The creation of a Board for
Advance Rulings and a Dispute Resolution committee for small taxpayers will pave the way for further tax certainty. All these announcements
will eventually help in achieving India’s vision of becoming a USD 5 trillion economy but this all will surely not be a piece of cake.
1st February, 2021

Knowledge Cell Team - Publication
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Key Highlights of Economic Survey 2020-21
India’s economy could contract 7.7 per cent in the financial year that ends on March 31, pulled down mainly by
the coronavirus pandemic and the weeks-long nationwide lockdown to contain the disease. Expects the Indian
economy to grow by 11 per cent during 2021-22. This is close to the growth forecast of 11.5 per cent made by
the International Monetary Fund (IMF).
1. The gross tax revenue earned by the government during the period April to November 2020 fell by 12.6%
to ₹10.26 lakh crore.
2. Disinvestment which was targeted at ₹2.1 lakh crore has only been ₹15,220 crore (7.2 per cent of the targeted amount) which
according to the survey happened due to the coronavirus pandemic.
3. The fiscal deficit has also gone up and as of January 8, the union government borrowed a total of ₹10.72 lakh crore, 65% more than
what it had borrowed in the corresponding period in the previous financial year.
4. The survey points out that the economy is recovering during the second half of this year. The government consumption is expected
to grow by 17%, after contracting by 3.9% during the first half. On the other hand, private consumption is expected to contract by
0.6% in the second half, after having contracted by 18.9% during the first half.
5. The only sector expected to grow this year according to the survey is the agriculture sector which is expected to grow by 3.4%.
6. The Goods and Services Tax (GST) collections have also increased in the second half of the year as the monthly GST collections in
December 2020 stood at ₹1.15 lakh crore.
7. Bank credit growth as of January 1 stood at 6.7%. Since September 2019, bank credit growth has been in the single digits.
8. Inflation between April and December 2020 stood at 6.6% in comparison to the previous year on account of high food inflation of
9.1%.
9. The survey clearly points out the impact of the coronavirus pandemic on the economy as CEA Subramanian said, “India focused on
saving lives and livelihoods by its willingness to take short-term pain for long-term gain, at the onset of the Covid-19 pandemic.
(sources: livemint)
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Tax Rates
(A) Individual/ HUF:
(I) The Slab for Individual/ HUF, whether Incorporated or not, or every artificial Juridical person:( Less than 60 years)
Slab Rates
Income Tax Rate
Upto Rs. 2,50,000 Nil
Rs.2,50,001 to Rs. 5,00,000 5% (Income<= Rs.5,00,000, Tax liability= Nil)

Rs.5,00,001 to Rs. 7,50,000 10%
Rs.7,50,001 to Rs. 10,00,000 15%
Rs.10,00,001 to Rs. 12,50,000 20%
Rs. 12,50,001 to Rs. 15,00,000 25%
Above Rs.15,00,000 30%
(II) The option shall be exercised for every previous year where the individual or the HUF has no business income, and in other cases the
option once exercised for a previous year shall be valid for that previous year and all subsequent years.
(III) The option shall not be valid for a previous year or previous years, as the case may be, if the Individual or HUF fails to satisfy the
conditions and other provisions of the Act shall apply
(IV) Tax payer opting for reduced rates shall submitted the income tax return —
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(a) (i) Leave travel concession as contained in clause (5) of section 10;
(ii) House rent allowance as contained in clause (13A) of section 10;
(iii) Some of the allowance as contained in clause (14) of section 10;
(iv) Allowances to MPs/MLAs as contained in clause (17) of section 10;
(v) Allowance for income of minor as contained in clause (32) of section 10;
(vi) Exemption for SEZ unit contained in section 10AA;
(vii) Standard deduction, deduction for entertainment allowance and employment/professional tax as contained in section 16;
(viii) Interest under section 24 in respect of self-occupied or vacant property referred to in sub-section (2) of section 23. (Loss under
the head income from house property for rented house shall not be allowed to be set off under any other head and would be
allowed to be carried forward as per extant law);
(ix) Additional deprecation under clause (iia) of sub-section (1) of section 32;
(x) Deductions under section 32AD, 33AB, 33ABA;
(xi) Various deduction for donation for or expenditure on scientific research contained in sub-clause (ii) or sub-clause (iia) or sub-
clause (iii) of sub-section (1) or sub-section (2AA) of section 35;
(xii) Deduction under section 35AD or section 35CCC;
(xiii) Deduction from family pension under clause (iia) of section 57;
(xiv) Any deduction under chapter VIA (like section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG,
80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc). However, deduction under sub-section (2) of section 80CCD (employer
contribution on account of employee in notified pension scheme) and section 80JJAA (for new employment) can be claimed
(b) without set off of any loss, -
(i) carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the
deductions referred to in (a) above; or
(ii) under the head house property with any other head of income;
(c) by claiming the depreciation, if any, under section 32, except clause (iia) of sub-section (1) thereof, determined in such manner as may
be prescribed; and
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(d) without any exemption or deduction for allowances or perquisite, by whatever name called, provided under any other law for the time
being in force.
Note:
➢ A resident individual is entitled for rebate under section 87A if his total income does not exceed Rs. 5,00,000. The amount of
rebate shall be 100% of income-tax or Rs. 12,500, whichever is less.
➢ Tax Payer has been given option to pay tax at reduced rates.
In case of Non-resident person-amount of tax would be increased by a surcharge-
Income Rate(%)
Below two crores Same as Resident tax payer.
Between two to five crores 25%
Exceeding five crores 37%
(V) In case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time
during the previous year:
Slab Rates
Income Tax Rate
Up to Rs. 3,00,000 Nil
Rs. 3,00,001 to Rs. 5,00,000 5%(Income<= Rs.5,00,000, Tax liability= Nil)
Rs. 5,00,001 to Rs. 10,00,000 20%
Above Rs.10,00,000 30%
(VI) In case of every individual, being a resident in India, who is of the age of eighty years or more at any time during the previous year:
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Slab Rates
Income Tax Rate
Up to Rs. 5,00,000 Nil
Rs. 5,00,001 to Rs. 10,00,000 20%
Above Rs.10,00,000 30%
(B) Co-operative Societies:

In case of Co-operative Societies, the rates of income-tax are as given below. The rates will be continued to be same as those specified
for Assessment Year 2019-20.
Slab Rates
Income Tax Rate
Up to Rs. 10,000 10%
Above Rs. 10,000-Rs. 20,000 20%
Above 20,000 30%
(C) Firms:
In the case of firms, the rate will continue to be the same as that specified for Assessment Year 2019-20. The rate of income-tax in case
of firm is @ 30% which will further be increased by "Health and Education Cess on Income Tax" @ 4%.
(D) Local Authorities:

In the case of Local Authorities, the rate will continue to be the same as that specified for Assessment Year 2019-20. The rate of income-
tax in case of local authority is @ 30% which will further be increased by Health and Education Cess on Income Tax" @ 4%.
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The amount of income-tax computed in accordance with all above (B), (C) & (D) provisions shall be increased by a surcharge at the rate of
12% such income-tax in case of all the above assesses having a total income exceeding one Crore rupees.
However, the total amount payable as income-tax and surcharge on total income exceeding Rs. 1 Crore 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 Rs. 1 Crore.
(E) Companies:
Income Tax Slab Rate Surcharge Rate
Tax
Assessee Total Income Rate
Rate
In Case of Domestic Company (where its total turnover or the gross receipt Above 1 Crore but not exceed 10 Crore 7%
25%
in the previous year 2018-19 does not exceed 400 crore rupees) Above 10 Crore 12%
In Case of Domestic Company (where its total turnover or the gross Above 1 Crore but not exceed 10 Crore 7%
30%
receipt in the previous year 2018-19 exceed 400 crore rupees) Above 10 Crore 12%
In case of Company other than a domestic company- Above 1 Crore but not exceed 10 Crore 2%
i) On the total income as consists of, —
(a) royalties received from the Government or an Indian concern in
pursuance of an agreement made by it with the Government or the Indian
concern after the 31st day of March, 1961 but before the 1st day of April,
50%
1976 or Above 10 Crore 5%
(b) Fees for rendering technical services received from Government or an
Indian concern in pursuance of an agreement made by it with the
Government or the Indian concern after the 29th day of February, 1964 but
before the 1st day of April, 1976,
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and where such agreement has, in either case, been approved by the
Central Government.
In case of Company other than a domestic company- Above 1 Crore but not exceed 10 Crore 2%
40%
ii) Other Than Above mentioned in (i) Above 10 Crore 5%
➢ In other cases, (including sections 115-O, 115QA, 115R, 115TA or 115TD) the surcharge shall be levied at the rate of twelve percent.
Optional
Income Tax Slab Rate Surcharge Rate
Assessee Tax Rate Income Rate
All Domestic Company 22% - 10%
New Domestic Manufacturing Company 15% Above 1 Crore but not exceed 10 Crore 7%
Above 10 Crore 12%
Condition for opting reduced rate of 15% (Section 115BAB): -

• were set up and registered on or after 1 October 2019 and commence manufacturing on or before 31 March 2023;
• were not formed by splitting up or reconstructing an existing business (a certain level of relaxation applies in this regard);
• use no machinery or plant previously used for any purpose (a certain level of flexibility applies in this regard);
• are not engaged in any business other than the manufacture or production of goods or research in relation to, or the distribution
of, such goods; and
• do not avail of specified exemptions or incentives.
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Taxpayers have the option of availing of the reduced tax rate. However, once a taxpayer opts to be governed by Section 115BAB of the IT
Act, they cannot subsequently opt out.
A 10% surcharge will be levied. Hence, the effective tax rate for companies which opt to pay tax under Section 115BAB of the IT Act will be
17.16%.
Companies which opt for a reduced rate under Section 115BAB of the IT Act will be exempted from MAT.
Exclude the Goodwill from the Definitions of Block of Assets:
Section 2
Existing Provision:
Block of Assets means a group of assets comprising
A. Tangible Assets- Buildings, Machineries, Plant or Furniture
B. Intangible Assets- Know How, Patent, Copy Right, Trade Mark, Licenses, Franchises and any other business or commercials rights of
similar nature.
Proposed Provision:
It is proposed to amend the said clause so as to exclude goodwill of a business or profession from the purview of “block of asset”.
Implication: Goodwill shall not be considered as an Asset.
WEF: 01-04-2021
Exemption of Income
Section 10 (4D)
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Existing Provision:
Section 10 (4D) Any income as a result of transfer of capital asset referred to in clause (viiab) or section 47, on a recognised stock exchange
located in any International Financial Services Centre and where the consideration for such transaction is paid or payable in convertible
foreign exchange, to the extent such income accrued or arisen to, or is received in respect of units held by a non-resident.
Proposed provision:
After the words “attributable to units held by non-resident, the words “or is attributable to the investment division of offshore banking unit,
as the case may be,” shall be inserted. And the various explanations as per the clause specified.
Implication: Favorable Compliance for Units Operating in IFSC GIFT city and changes for various definitions for Specified fund and Offshore
Banking Unit.
W.E.F.: 1st Day of April 2022
Newly Inserted clause:

(4E) Any income as a result of transfer of non deliverable forward contracts entered into with an offshore banking unit of an International
Financial Services Centre as referred to in sub-section (1A) of section 80LA, which fulfils such conditions as may be prescribed.
(4F) Any income of a non-resident by way of royalty, on account of lease of an aircraft in a previous 22 year, paid by a unit of an International
Financial Services Centre as referred to in sub-section (1A) of section 80LA subject to condition specified.
Income from property held for charitable or religious purpose

Section 11
Existing Provision:
The section provides exemption in respect of income derived from property held under trust wholly for charitable or religious purpose.
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Proposed to section:
Such voluntary contributions should be invested in one or more of the forms or modes specified in 11(5) maintained for such corpus.
New insertion:
(A) application out of the corpus shall not be considered as application for charitable or religious purposes for the purposes of clause (a)
and (b) of sub-section (1), provided when it is invested or deposited back, into one or more of the forms or modes specified in sub-section
(5) maintained specifically for such corpus, from the income of the previous year, such amount shall be allowed as application in the previous
year in which it is deposited Back to corpus and to the extent it is deposited back. (B) Application from loans and borrowings shall not be
considered as application for Charitable or religious purposes for the purposes of clause (a) and (b) of sub-section (1), Provided when such
loan or borrowing is repaid from the income of that previous year, such Repayment shall be allowed as application in the previous year in
which it is repaid and to The extent it is repaid. It is also proposed to insert a new Explanation 5 to the said sub-section so as to provide That
for the computation of income required to be applied or accumulated during the previous Year, no set off or deduction or allowance of any
excess application, of any of the year Proceeding the previous year, shall be allowed. Explanation to sub-section (2) provides that if any trust
or institution accumulates or set Off apart its income then payment or credit out of such accumulation, to exempt entities as Prescribed in
the Explanation, shall not be treated as application. Clause (d) of sub-section (3) Provides that such income, credited or paid to entities
prescribed, shall be deemed to be Income of the trust or institution. Explanation to sub-section (2) provides that if any trust or institution
accumulates or set Off apart its income then payment or credit out of such accumulation, to exempt entities as Prescribed in the Explanation,
shall not be treated as application. Clause (d) of sub-section.
WEF- 01.04.2021
Goodwill not to be considered as depreciable Assets
Section- 32
Existing Provision: Newly Inserted

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Conditions for claim of depreciation on fixed assets:
Deduction on account of depreciation on tangible assets (building, machinery, plant and furniture) and intangible assets (know-how, patents,
copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature) acquired on or after the 1st day of
April, 1998, and are owned, wholly or partly by the assessee and are used wholly and exclusively for the purpose of business and profession
while computing the income under the head ‘Profits and gains of business or profession.
Proposed to the provision:

In clause (ii), after the words, figures and letters, “after the 1st day of April, 1998,” the words “not being goodwill of a business or profession,”
shall be inserted.
Implication:
Goodwill of a business or profession not to be considered depreciable asset and no depreciation to be allowed on the same assets.
W.E.F: 01.04.2021
Other Deductions of various expenses
Section 36
Existing Provision:
Any sum received by the assessee from any of his employees to which the provisions of 2(24)(x) apply, if such sum is credited by the assessee
to the employee‘s account in the relevant fund or funds on or before the due date. Explanation 1.—For the purposes of this clause, ―due
date means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in
the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or
otherwise.
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Proposed Provision:
Explanation 2.––For the removal of doubts, it is hereby clarified that the provisions of section 43B shall not apply and shall be deemed never
to have been applied for the purposes of determining the “due date” under this clause.
Implication:
Deduction shall be allowed irrespective of sum has been credited into employee‘s account in the relevant fund or funds on or before the due
date
Deduction on actual Payment Basis:
Section - 43B
Existing Provision:
Employer’s contribution towards SPF, RPF, Approved Gratuity Fund, Approved Superannuation Fund, New Pension Scheme, Any funds as per
law are allowed in deduction only if depositing those funds on or before the due dates of ROI.
Proposed Provision:
New Explanation Inserted: ––The provisions of this section shall not/ deemed never to be applied for sum received by the assessee from
any of his employees to which the provisions of 2(24)(x) applies.”.
Implication:
Deduction shall be allowed irrespective of sum has been credited into employee‘s account in the relevant fund or funds on or before the due
date
W.E.F: 01-04-2021
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Full Value of Consideration for Transfer of Assets in Certain Cases:
Section 43CA
Existing Provision:
Where the value adopted or assessed or assessable by the authority for the purpose of payment of stamp duty does not exceed one hundred
and 10% of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the
transfer shall, for the purposes of computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration.
Proposed Provision:
(A). 110% shall be substituted by 120%. If following conditions are satisfied:
1. Transfer of residential unit takes place between the 12.11.2020 to 30.06.2021
2. such transfer is by way of first-time allotment of the residential unit to any person and
3. Consideration received or accruing does not exceed Rs. 2 Cr.
(B). after sub-section (4), the following Explanation shall be inserted, namely: ––
Meaning of Residential Unit: Independent housing unit with separate facilities for living, cooking and sanitary requirement distinctly
separated from other residential units within the building, which is directly accessible from an outer door or through an interior door in a
shared hallway and not by walking through the living space of another household.
Implication:
The amendment will provide relaxation by way of increase in the rate of variation allowed while calculating value by the authority for the
purpose of payment of stamp duty.
W.E.F.: 01.04.2021
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Relaxation given in Audit of Books of Accounts
Section - 44AB
Existing Provision:
Every person— (a)If turnover of any business in any previous year does not exceed Rs. 5Cr (Conditionally cash transaction should be less
than 5% of turnover).
Proposed provision:
Limit of Rs. 5 cr. has been increased to Rs 10 cr. (Conditionally cash transaction should be less than 5% of turnover)
Implication:
Assessee with turnover not exceeding Rs. 10 Cr. Shall not be liable to tax audit done.
W.E.F.: 01.04.2021
Ambit of assessee increased under Presumptive basis for professional:
Section - 44ADA
Existing Provision:
Eligibility Resident assessee in India engaged in profession as referred in Sec 44AA
Proposed Provision – Eligibility: Resident assesses in India shall be substituted by assesses being individual, HUF or partnership firm other
than LLP as per LLP Act, 2008.
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Implication:
Ambit of assessee has been increased to cover individual, HUF and Partnership firm other than LLP.
WEF: 01.04.2021
Increase the tax ambit under the head of Income from Capital gain
Section: 45 Section 45 (1B)
Existing Provision: Newly inserted
Proposed Provision:
Any profits or gains arising from investment in unit linked insurance plan (ULIP) receipt of any such amount including the amount allocated
by way of bonus on such policy by such person shall be Chargeable to income-tax under the head "Capital gains" and shall be deemed to
be the income of such person of the previous year in which such amount was received and the income taxable shall be calculated in prescribed
manner. sub-section (4A) proposed that where a specified person (a person who is partner of a firm or member of other association of
persons or body of individuals) receives during the previous year any capital asset at the time of dissolution or reconstitution of the
specified entity, which represents the balance in his capital account in the books of accounts of such specified entity at the time of its
dissolution or reconstitution, then any profits or gains arising from receipt of such capital asset by the specified person shall be chargeable
to income-tax as income of such specified entity under the head "Capital gains" and shall be deemed to be the income of such specified
entity of the previous year in which such capital asset was received by the specified person.
Implication:
Tax burden for assessee involved in such transaction will increase and proper disclosure should be made by the Tax payer.
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WEF:
1st day of July 2021
Section: 47(Viiac)- Newly Inserted
Proposed Provision:
It proposed that any transfer, in a relocation* of a capital asset by the original fund to the resulting fund.
Section: 47(Viiad) - Newly Inserted
Proposed Provision: It states that any transfer by a shareholder or unit holder or interest holder, in a relocation, of a capital asset being a
share or unit or interest held by him in the original fund in consideration for the share or unit or interest in the resultant fund.
Implication: No tax burden to assessee involved in above mentioned respective.
WEF: 1st day of April 2022
Mode of Computation of Capital Gain
Section: 48- Newly Inserted
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Proposed Provision: It proposed that in case of specified entity (a person who is partner of a firm or member of other association of persons
or body of individuals) referred to in sub-section (4A) of section 45, the amount included in the total income of such specified entity which
is attributable to the capital asset being transferred, calculated in the prescribed manner.
Implication: No financial Impact on Tax payer.
Special provision for computation of capital gains in case of depreciable assets

Section: 50 (ii) - The following proviso shall be Inserted namely;
Proposed Provision:
In a case where goodwill of a business or profession forms part of a block of asset for the assessment year beginning on the 1st day of April,
2020 and depreciation thereon has been obtained by the assessee under the Act, the written down value of that block of asset and short
term capital gain, if any, shall be determined and computed in prescribed manner.
Implication: Tax burden for involved assessee in transfer of goodwill will be treated as short term capital gain.
WEF: 1st day of April 2021
Exemption of Long term Capital Gain Tax on Transfer of Residential Property if Net Consideration is invested in the Equity Shares
of a new Start-up SME Company
Section: 54GB
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Existing Provision:
The provisions of section 54GB of the Income Tax Act exempts the capital gain arising from transfer of a long term capital assets being a
'residential property', if the amount is invested in subscription of the equity shares of the eligible company up to 31st March 2021.
Proposed Provision: The period of extension of capital gains arising from for sale of residential property for investment in start-ups has
been extended up to 31st March 2022.
Implication: Tax relief for involved assessee for more one year.
WEF: 1st day of April 2021.
Tax enhancement in transfer of goodwill treated as short term capital gain
Section: 55
Existing Provision:
In relation to a capital asset, being goodwill of a business or profession, or a trade mark or brand name associated with a business or
profession, or a right to manufacture, produce or process any article or thing, or right to carry on any business or profession, or tenancy
rights, or stage carriage permits, or loom hours, the cost of acquisition of such asset by the assessee by purchase from a previous owner,
means the amount of the purchase price of the previous owner.
Proposed Provision: If the above mentioned Capital assets are acquired as per prescribed section 49(1)(i) to (iv) where acquisitions in form
of (by succession, inheritance , under gift or will, any distribution of assets of HUF), than cost of acquisition will be purchase price of previous
owner. Apart from above mentioned way of acquisitions, the purchase price is NIL.
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Provided where capital asset ,being goodwill Provided that where the capital asset, being goodwill of a business or profession, in respect
of which a deduction on account of depreciation under sub-section (1) of section 32 has been obtained by the assessee in any previous year
preceding the previous year relevant to the assessment year commencing on or after the 1st day of April, 2021, that the total amount of
depreciation obtained by the assessee under sub-section (1) of section 32 before the assessment year commencing on the 1st day of April,
2021 shall be reduced from the amount of purchase price.
Implication:
Tax burden for involved assessee in transfer of goodwill will be treated as short term capital gain.
WEF: 1st day of April 2021.
Increase in % in provision relating to Taxability of Gift
Section:56(2)(x)
Existing Provision:
Where any person receives, in any previous year, from any person or persons on or after the 1st day of April, 2017-
(a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value
of such sum;
(b) any immovable property, -
(A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;
(B) for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the
higher of the following amounts, namely: -
(i) the amount of fifty thousand rupees; and
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(ii) the amount equal to ten per cent of the consideration
Proposed Provision:
It proposed that the provisions of sub-item (ii) of item (B) shall have effect as if for the words “ten per cent” the words “twenty per cent.”
had been substituted.
Implication:
Tax relief for involved assessee to extended of more 10% value of Assets.
WEF: 1st day of April, 2022.
Carry Forward and Set Off Of Accumulated Business Losses And Unabsorbed Depreciation
Section 72A
Existing Provision: Newly inserted clause:
Proposed provision:
In section 72A of the Income-tax Act, in sub-section (1),– Clause (c) one or more public sector company or companies with one or more
public sector company or companies; or Clause (d) an erstwhile public sector company with one or more company or companies, if the share
purchase agreement entered into under strategic disinvestment restricted immediate amalgamation of the said public sector company and
the amalgamation is carried out within five year from the end of the previous year in which the restriction on amalgamation in the share
purchase agreement ends,
The following shall be inserted, namely:– ‘Provided that the accumulated loss and the unabsorbed depreciation of the amalgamating
company, in case of an amalgamation referred to in clause (d), which is deemed to be the loss or, as the case may be, the allowance for
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unabsorbed depreciation of the amalgamated company, shall not be more than the accumulated loss and unabsorbed depreciation of the
public sector company as on the date on which the public sector company ceases to be a public sector company as a result of strategic
disinvestment
Implication:
This shall restrict the losses to be carried forward to additional period of time after amalgamation.
Deduction of Interest on Loan for affordable residential house property now for Loans Sanctioned upto 31.03.2022
Section 80 EEA
Existing Provision:
The existing provisions of section 80EEA of the Act provide for a deduction in respect of interest on loan taken from any financial institution
for acquisition of an affordable residential house property. The deduction allowed is up to one lakh fifty thousand rupees and is subject to
certain conditions. One of the conditions is that loan has been sanctioned by the financial institution during the period from 1st April, 2020
to 31st March, 2021.
Proposed Provision:
To extend the benefit of aforesaid provision by further 1 year (i.e. upto 31.03.2022)
Implication:
Affordable Housing sector will continue to get a boost.
W.E.F.1st April 2022
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Extension of period for incorporation of Eligible Startups
Section 80-IAC
Existing Provision:
To initiate the development of start-ups in India and provide a competitive platform, Section 80-IAC states that an eligible start-up shall be
allowed a deduction of an amount equal to 100 per cent of the profits and gains if the start-up is incorporated on or after 1st day of April
2016 but before the 1st day of April 2021.
Proposed Provision:
To extend the benefit of aforesaid provision by further 1 year (i.e. up to 31.03.2022)
Implication:
To carry forward the vision of Atma Nirbahar Bharat and promote Startups in India.
Deduction in respect of Profits and Gains from Affordable Rental Housing Projects
Section 80 IBA
Existing Provision:
This section says there will be total i.e.100% of net profits or gains, will be deducted from the gross total income of the assessee, if they are
derived from a business of developing and building housing projects. However, the assessee has to fulfil certain conditions, specified under
this section, to avail the deduction, which are as follows- It should be an Affordable Housing Project, which is approved by the competent
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authority after the 1st day of June, 2016, but on or before the 31st day of March, 2021 and the project should be completed within a period
of five years from the date of approval by the competent authority. Here both the above mentioned conditions should be fulfilled.
Proposed Provision:
1. Insertion of sub section (1A) to the said section so as to provide for hundred per cent deductions of the profits and gains derived from the
business of developing and building affordable rental housing project.
2. There is amendment in the approval authority now approve till 2022 by the competent authority.
3. It is also proposed to insert a new clause (da) in sub-clause (6) to define the expression “rental housing project”
Implication:
Affordable Housing sector will continue to get a boost in its sluggish growth with the inclusion of rental housing projects.
80LA (Deduction for certain Income of offshore banking units & IFS Centers)
Existing Provision: 100% of income from 5 consecutive years generated by an offshore banking unit or international financial services centre
is eligible for tax deductions. After this period of 5 years, there is a 50% tax deduction available for the following 5 years.
Proposed Provision: 100% of income from any 10 consecutive years from 15 Years generated by an international financial services (IFS)
centre is eligible for tax deductions.
Implications: Tax Relief to IFS to Invest in India.
W.E.F: 1st day of April 2022.

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Relief from taxation in income from retirement benefit account
Section 89 A
Existing Provision: Insertion of New Section
Proposed Provision:
Where a specified person has income accrued in a specified account, such
income shall be taxed in such manner and in such year as may be prescribed.
Explanation.––For the purposes of this section,–– (a) “specified person” means
a person resident in India who opened a specified account in a notified country
while being non-resident in India and resident in that country; (b) “specified
account” means an account maintained in a notified country by the specified
person in respect of his retirement benefits and the income from such account
is not taxable on accrual basis but is taxed by such country at the time of withdrawal or redemption;
(c) “notified country” means a country as may be notified by the Central Government in the Official Gazette for the purposes of this section.
Implication:
Relief from taxation in income from retirement benefit account maintained in a notified country
Inclusion of a unit linked insurance fund
Section 112 A
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Existing Provision:
As per Section 112A, long-term capital gains arising from transfer of an equity share, or a unit of an equity oriented fund or a unit of a
business trust shall be taxed at 10% (without indexation) of such capital gains.
Proposed Provision:
It is proposed to amend the said Explanation to the section so as to include a fund set up under a scheme of an insurance company comprising
unit linked insurance policies to which exemption under clause (10D) of section 10 does not apply on account of the applicability of the
fourth and fifth proviso thereof within the definition of “equity oriented fund”.
Implication:
Section 112A shall also apply to a fund set up under a scheme of an insurance company comprising unit linked insurance policies to which
exemption under clause (10D) of section 10 does not apply.
Re computation of Book Profit by Assessing Officer in Advance Pricing Agreement
Section 115 JB
Existing Provision: Insertion of New Section
Proposed Provision:
In clause (fb), in sub-clause (B), in the long line, in clause (iid), in sub-clause (B) the word dividend is inserted.
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Insertion of sub section 2D after sub section 2C to empower the Board to make rules to provide for the manner of recomputing the book of
profit of the past year for the purposes of payment of tax of the company, if there is any increase in book of profit in the previous year due
to income of a past year included in the book profit on account of an advance pricing agreement or secondary adjustment.
Relating to Apportionment of Income between Spouses & Assessee
Section 139: Explanation 2 In this sub-section, due date means (a)
Existing Provision
Explanation 2: In this sub-section, due date for filing of return means: (a) where the assessee other than an assessee referred to in clause
(aa)] is: (i) a company; or (ii) a person (other than a company) whose accounts are required to be audited under this Actor under any other
law for the time being in force; or (iii) a working partner of a firm whose accounts are required to be audited under this Act or under any
other law for the time being in force, will be 30th day of September of the assessment year;
Proposed Provision
Explanation 2: In this sub-section, due date for filing of return means: (a) where the assessee other than an assessee referred to in clause
(aa)] is: (i) a company; or (ii) a person (other than a company) whose accounts are required to be audited under this Act
or under any other law for the time being in force; or (iii) a working partner of a firm whose accounts are required to be audited under this
Act or under any other law for the time being in force, or (iv) The spouse of such partner if the provisions of section 5A applies to such
spouse will be 30th day of September of the assessment year;
Implication:
Apportionment of income between spouses governed by Portuguese Civil Code are 5A of Income Tax Act 1961 where income is divided
between Husband and Wife then due date for filing return for both will be 30th day of September of the assessment year.
W.E.F: 1st day of April, 2021.

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Due of return in case of Section 92E applicable
Section 139: Explanation 2 In this sub-section, due date means (aa)
Existing Provision
Explanation 2: In this sub-section, due date for filing of return means:
(aa) in the case of an assessee who is required to furnish a report referred to in section 92E, the 30th day of November of the assessment
year.
Proposed Provision
Explanation 2: In this sub-section, due date for filing of return means:
(aa) in the case of an assessee including the partners of the firm being such assessee, who is required to furnish a report referred to in section
92E, the 30th day of November of the assessment year.
Implication:
Due to amendment now partners of the Firm whose is required to furnish report u/s 92E there partners return filing due date also will be
30th day of November of the assessment year.
Due date of Belated Return (3 months prior)

Section 139 (4): Belated Return
Existing Provision
Any person who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous
year at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.
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Proposed Provision
Any person who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous
year at any time within three months prior to the end of the relevant assessment year or before the completion of the assessment,
Implication:
Belated return u/s 139(4) can be filed December of that assessment year or before the completion of the assessment, whichever is earlier.
This amendment will take effect from 1st day of April, 2021.
Due date of Revised Return u/s 139(5)
Section 139 (4): Revised Return
Existing Provision - If any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrong
statement therein, he may furnish a revised return at any time before the end of the relevant assessment year or before the completion of
the assessment, whichever is earlier.
Proposed Provision- If any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrong
statement therein, he may furnish a revised return at any time within three months before the end of the relevant assessment year or
before the completion of the assessment, whichever is earlier.
Implication: Revised return u/s 139(5) can Revise the return within three months before the end of the relevant assessment year or
before the completion of the assessment, whichever is earlier.

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Relating to Defective Return
Section 139 (9): Proviso to explanation is Inserted New Pro Proviso to explanation to Sec 139(9). Provided that the Board may, by
notification in the Official Gazette, specify that any of the conditions specified in clauses (a) to (f) to the Explanation shall not apply to such
class of assessee or shall apply with such modifications, as may be specified in such notification.
Implication:
Through official Gazette Board may specify modify conditions for defective return u/s 139(9) for some class of assessee
Enhance the ambit of Notice to assessee for filing of Return
Section142: Inquiry before assessment
Proviso to Sec 142(1)(i) is Inserted- It is proposed to insert a second proviso in the said clause so as to empower the prescribed income-
tax authority also to serve notice under clause (i) of sub-section (1) of the said section for the purposes of that clause.
Implication: From this amendment not only the Assessing Officer but also the prescribed income-tax authority also to serve notice to
assessee for filing of return.
Discrepancies between Income Tax return and Audit Report
Section143(1)(a)(iv) & (v): Assessment
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Existing Provision
The total income or loss shall be computed after making the following adjustments, namely:
(i) Any arithmetical error in the return;
(ii) An incorrect claim, if such incorrect claim is apparent from any information in the return;
(iii) Disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due
date specified under sub-section (1) of section 139;
(iv) Disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the
return.
(v) Disallowance of deduction claimed under sections 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or section 80-IE, if the return is
furnished beyond the due date specified under sub-section (1) of section 139; or
(vi) Addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total
income in the return.
Proposed Provision-
143(1)(a)(iv) of the said Act, it is proposed to amend the said sub-clause so as to allow for the adjustment on account of increase in income
indicated in the audit report but not taken into account in computing the total income. & 143(1)(a)(v)of the said Act, it is proposed to
amend the said sub-clause so as to provide that any deduction admissible under section 10 AA or under any of the provisions of Chapter
VIA under the heading “C.—Deductions in respect of certain incomes” shall be allowed, if the return of income is furnished on or before the
due date specified under the sub-section (1) of section139 of the said Act.
Implication - This amendment will affect increase in income if reported in Audit report but not shown in income tax return and disallowance
of all deductions allowed.
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Shorter Time limit to Intimation
Section143: Proviso for time limit for issuing intimation
Existing Provision - That no intimation under this section shall be sent after the expiry of
one year and 6 months as the case may be from the end of the financial year in which the
return is furnished.
Proposed Provision - It is also proposed to amend the said section so as to reduce the time
limit specified for sending intimation under sub-section (1) from one year to nine months
and to reduce the time limit for sending notice under sub-section (2) from six months to
three months from the end of the financial year in which the return is furnished.
Implication - Speedy completion of Assessment.
Income escaping assessment
Section147
Substitution of New Section in place of existing

If any income chargeable total, in the case of an assessee, has escaped assessment for any assessment year, the Assessing officer may, subject
to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped
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assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the
depreciation allowance or any other allowance, as the case may be, for such assessment year.
This amendment will take effect from 1st day of April, 2021.
Issue of notice where income has escaped assessment
Section148

->The Assessing Officer shall serve on the assessee a notice along with a copy of order passed under clause (d) of section 148A, requiring
him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of
which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and
verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as
may be, apply accordingly as if such return were a return required to be furnished under section 139.
->But no notice under the said section shall be issued unless there is information with the Assessing Officer which suggests that the income
chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and prior approval of the specified
authority to issue such notice has been obtained by the Assessing Officer.
->The proposed Explanation 1 to the said section provides for the purposes of the said section and section 148A, that information which
suggests that the income chargeable to tax has escaped assessment means any information flagged in the case of the assessee for the
relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time or any final objection
raised by the Comptroller and Auditor General of India to the effect that the assessment in the case of the assessee for the relevant assessment
year has not been made in accordance with the provisions of this Act.
->The proposed Explanation 2provides that where
(i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or
after the 1st day ofApril,2021, in the case of the assessee; or
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(ii) survey is conducted under section 133A in the case of the assessee; or
(iii) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any money, bullion, jewellery
or other valuable article or thing, seized or requisitioned in case of any other person on or after the1st day of April, 2021, belongs to the
assessee; or
(iv) the Assessing officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or
documents, seized or requisitioned
in case of any other person on or after the1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the
assessee, the Assessing officer shall be deemed to have information which suggests that the income chargeable to tax has escaped
assessment in the case of the assessee for the three assessment years immediately preceding the assessment year relevant to the previous
year in which the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted or money,
bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person.
->The proposed Explanation 3 provides that the “specified authority” shall mean the specified authority referred to in section 151
Conducting inquiry and providing opportunity before issue of notice under section 148
Section 148A
Existing Provision - Newly inserted Section
Proposed Provision - the Assessing Officer shall, before issuing any notice under section 148: (a) conduct any enquiry, if required, with the
prior approval of specified authority, with respect to the information which suggests that income chargeable to tax has escaped assessment;
(b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to
show cause within such time, as may be specified in the notice, being not less than seven days but not exceeding thirty days from the date
on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice
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under section 148 should not be issued on thebasis of information which suggests that income chargeable to tax has escaped assessmentin
his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee
furnished, if any, in response to the show cause notice referred to in clause (b); and (d) decide, on the basis of material available on record
including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval
of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or
where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply
as per clause (b) expires.
Implication - Providing opportunity to the Assessee before issue of notice under section 148 and this is in favor of assessee that he can
satisfy the AO of why notice should not be issued to him.
Time limit for notice issued u/s 148
Section 149

No notice under section 148shall be issued for the relevant assessment year –
(a) if three years have elapsed from the end of therelevant assessment year, unless the case falls under clause (b); (b) if three years, but not
more thanten years, have elapsed from the end of the relevant assessment year unless the Assessing Officerhas in his possession books of
accounts or other documents or evidence which reveal that theincome chargeable to tax, represented in the form of asset, which has escaped
assessment amounts to or is likely to amount to fifty lakh rupees or more for that year. Provided that no notice under section 148
shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if such notice could not
have been issued at that time on account of being beyond the time limit prescribed under the provisions of clause (b), as they stood
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immediately before the commencement of the Finance Act, 2021. Further, the provisions of this section shall not apply to cases where a
notice under section 153A or section 153C read with section 153A is required to be issued in relation to a search initiated under section 132
or books of account, other documents or any assets requisitioned under section 132A on or before the 31st day of March, 2021 and for the
purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause
notice under clause (b) of section 148A; or the period during which the proceeding under section 148A is stayed by an order or injunction
of any court shall be excluded and also where immediately after the exclusion of such period, the period of limitation available to the
Assessing Officer for passing an order under clause (d) of section 148A is less than seven days, such remaining period shall be extended to
seven days and the period of limitation in sub-section (1) shall be deemed to be extended accordingly.
Implication - Assessee with income escaping assessment is less than 50 Lacs. than assessment time limit is 3 years and books of accounts
are with Department than 10 Years.
Sanction for issue of notice.
Section151

For the purpose of section 148, specified authority shall be:
(i) Principal Commissioner of Income-tax or Principal Director of Income-tax or Commissioner of Income-tax or Director of Income-tax, if
three years or less than three years have elapsed from the end of the relevant assessment year;
(ii) Principal Chief Commissioner of Income-tax or Principal Director General of Income-tax, or where there is no Principal Chief Commissioner
of Income-tax or Principal Director General of Income-tax, Chief Commissioner of Income-tax or Director General of Income-tax,
if more than three years have elapsed from the end of the relevant assessment year.
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Implication - For Serving Notice to Assessee if more than 3 Years have elapsed than AO must take sanction from the above mentioned
Income Tax Authorities.
Faceless assessment of income escaping assessment
Section 151A
Conducting of enquiries or issuing show-cause notice or passing order under section

148A (before issuance of
notice under section 148) in the scheme to be notified as specified under the said section.
Implication - Faceless assessment of income escaping assessment will be available in the

scheme to be notified by Department of Income Tax and so no need of personally visiting
Department every now and then.
Section 153 Time limit for completion of Assessment, Reassessment and Re-computation.
Existing Provision - No order of assessment shall be made under section 143 or section 144 at any time after the expiry of twenty-one
months from the end of the assessment year in which the income was first assessable
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Proposed Provision - For the assessment year commencing on or after the 1st April, 2021, the time limit for making an assessment order
under sections 143 or 144 shall be reduced from the existing twenty-one months to nine months from the end of the assessment year
in which the income was first assessable.
Implication - Reduction in time limit of Assessment, Reassessment and Re- computation from 21 months to 9months.
Assessment in case of Search or Requisition

Section 153A
Existing Provision - Notwithstanding anything contained in ssection139, section 147, section 148, section 149, section 151 and section 153,
in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned
under section 132A after the 31st day of May, 2003, the Assessing Officer shall:
(a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect
of each assessment year falling within six assessment years 3 [and for the relevant assessment year or years] referred to in clause (b), in the
prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of
this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139;
(b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in
which such search is conducted or requisition is made 4 [and for the relevant assessment year or years
Proposed Provision - The search or requisition shallonly apply where search or requisition is made on or before 31st March, 2021.
Consequently, assessments under section 153A and 153C shall not be made in respect of a search or requisition made on or after 1st April,
2021.
Implication - Limiting the Search or Requisitions from the existing Scenario.
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Assessment of income of any other person

Section 153C
Existing Provision - Newly inserted Proviso to Sec 153C subsection (3)
Proposed Provision - Nothing contained in the said section shall apply in relation to a search initiated under section 132or books of account,
other documents or any assets requisitioned under section 132A on or after1st day of April, 2021.
Exemption of insurance companies or insurers and business trust from TDS (TDS on Dividend)
Section 194:
Existing Provision
TDS on dividend income will be deducted at the rate of 10%: Provided that no such deduction shall be made, if (a) the dividend is paid by
the company by any mode other than cash; and (b) the amount of such dividend distributed or paid or likely to be distributed or paid during
the financial year by the company to the shareholder, does not exceed Rs. 5000/ in respect of any dividends referred to in section 115-O.s
Proposed Provision - The provisions of this section shall not apply to such income credited or paid to certain insurance companies or
insurers and business trust by a special purpose vehicle or payment of dividend to any other person as may be notified.
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Implication - Exemption of insurance companies or insurers and business trust from TDS. This amendment will take effect from 1st day of
April, 2021.
No TDS to deducted on zero coupon bond issued by infrastructure debt fund.

Section 194A
Existing Provision
TDS to be deducted by cooperative society if and only if the gross receipt or turnover exceeds 50 crore during PFY and the amount of interest
is more than 50,000 in case of payee being a senior citizen and forty thousand rupees in any other case.
Proposed Provision: infrastructure debt fund will also be included within the purview of clause (x) of the said Sub-section so as to provide
that tax shall not be deducted on income in relation to a zero coupon bond issued by infrastructure debt fund.
Implication - No TDS to deducted on zero coupon bond issued by infrastructure debt fund.
W.E.F: - 1st day of April, 2021.
Payment of rent by certain individuals or Hindu undivided family
Section 194IB
Existing Provision- Sub-section (1) of the said section provides that any person, being an individual or a Hindu undivided family (other than
those referred to in the second proviso to section 194-I) responsible for paying to a resident any income by way of rent exceeding fifty
thousand rupees for a month or part of a month during the previous year, shall deduct an amount equal to five per cent. of such income as
income-tax thereon. Sub-section (4) of the said section provides that in a case where the tax is required to be deducted as per the provisions
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of section 206AA, such deduction shall not exceed the amount of rent payable for the last month of the previous year or the last month of
the tenancy, as the case may be.
Proposed Provision - Sub-section (4) of the said section provides that in a case where the tax is required to be deducted as per the provisions
of section 206AA and 206AB, such deduction shall not exceed the amount of rent payable for the last month of the previous year or the last
month of the tenancy, as the case may be.
Implications - TDS is also to be deducted as per the provisions of Sec. 206AB.
W.E.F: - 1st day of July, 2021.
Deduction of tax in case of specified senior citizen

Section 194P
Existing Provision - Newly Inserted Section
Proposed Provision - Sub-section (1) of the said section seeks to provide that Notwithstanding anything contained in the provisions of
Chapter XVII-B, in case of a specified senior citizen, the specified bank shall, after giving effect to the deduction allowable under Chapter VI-
A and rebate allowable under section 87A, compute the total income of such specified senior citizen for the relevant assessment year and
deduct income-tax on such total income on the basis of the rates in force. Sub-section (2) of the said section seeks to provide that the
provisions of section 139 shall not apply to a specified senior citizen for the assessment year relevant to the previous year in which the tax
has been deducted under sub-section (1).
Implication - Due to this Insertion of this Section, the Banks will deduct TDS after giving effect to all deductions allowable and rebate
allowable to Senior Citizen and so now Senior Citizen will not require to file return.
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W.E.F: - 1st April, 2021.
Deduction of tax at source on payment of certain sum for purchase of goods.
Section 194Q
Existing Provision - Newly Inserted Section
Proposed Provision - Any person, being a buyer who is responsible for paying any sum to any resident (hereafter in this section referred to
as the seller) for purchase of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year, shall, at the
time of credit of such sum to the account of the seller or at the time of payment thereof by any mode, whichever is earlier, deduct an amount
equal to 0.1% of such sum exceeding fifty lakh rupees as Income Tax.
Implication - Now onwards the on purchase of goods having value exceeding fifty lakh rupees the Buyers shall deduct TDS at a rate of 0.1%.
W.E.F: - 1st July, 2021.
Income of Foreign Institutional Investors from securities.
Section 196D
Existing Provision - Deduction of tax on any income referred to in clause (a) of sub-section (1) of section 115AD, not being income by way
of interest referred to in section 194LD of the Income-tax Act, payable to a Foreign Institutional Investor, being the person responsible for
making the payment, at the rate of 20%
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Proposed Provision - Proviso to the said section is inserted which provides that where an agreement referred to in sub-section (1) of section
90 or sub-section (1) of section 90A applies to the payee and if the payee has furnished a certificate referred to in sub-section (4) of section
90 or sub-section (4) of section 90A, as the case may be, then, income tax thereon shall be deducted at the rate of 20% or at the rate or rates
of income-tax provided in such agreement for such income, whichever is lower.
Implication - If DTAA as specified in Sec 90A is there, then TDS is to be deducted at 20% or rate specified in Double Taxation Avoidance
Agreement whichever is lower.
W.E.F: - 1st April, 2021.
TDS on payments made to non-residents and residents not having a PAN
SEC.206AA
Existing Provision:
Any person entitled to receive any sum or income or amount, on which TDS shall be deducted, shall furnish his PAN to deductor , failing
which TDS shall be deducted at the higher of the following rates, namely:—
a) Rate as applicable for that part of income
b) Rate in force (rate as specified in act)
c) 20%
Proposed Provision (Insertion): Provided further that where the tax is required to be deducted under section 194Q, if for the “words 20%”,
the “words “5%.” had been substituted.
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Implication: Tax Relaxation to NR And Resident not having PAN (if any)
TDS - non-filers of income-tax return.

Section 206AB (Newly inserted)
Proposed Provision: TDS is required to deduct under the provisions of TDS on any sum or income or amount paid, or payable or credited,
by a person to a specified person, TDS shall be deducted at the higher of the following rates, namely:––
(i) at twice the rate specified in the relevant provision of the Act; or
(iii) at the rate of five per cent.
Implication: Recovery of Tax from non-filers.
W.E.F: 1st day of July2021.
TCS (collection of tax) for non-filers of ITR
Section: 206CCA (Newly inserted)
Proposed Provision: TCS is required to deduct under the provisions of TCS on any sum or income or amount paid, or payable or credited,
by a person to a specified person, TCS shall be collected at the higher of the following rates, namely:––
(i) at twice the rate specified in the relevant provision of the Act; or
(iii) at the rate of five per cent.
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Implication: Recovery of tax from Non-filers.
W.E.F: 1st day of July2021.

Constitution of one or more Interim Board
Section: 245AA
Existing Provisions: Newly inserted section
Proposed Provision: To resolve the pending application for proceeding before Assessing Officer in minimum time, the Central Government
has in opinion:
(1) To constitute one or more Interim Boards for Settlement, as may be necessary, for the settlement of pending applications.
(2) Every Interim Board shall consist of three members, each being an officer of the rank of Chief Commissioner, as may be nominated
by the Board.”
(3) If the Members of the Interim Board differ in opinion on any point, the point shall be decided according to the opinion of the
majority.
Implication: The Income-tax Settlement Commission so constituted shall cease to operate on or after the 1st day of February, 2021. The
newly formed Interim Board shall replace function and power of the existing settlement commission. Hence these clauses have been added
in the in this section.
WEF: 1st February, 2021
Income Tax Settlement Commission Cease to operate

Section: 245B
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Existing Provision: Tax Settlement Commission, a quasi-judicial body, was set up under section 245B of Income-tax Act 1961. This
commission comprises persons of integrity and outstanding ability, having special knowledge of and experience in, problems relating to
direct taxes and business accounts.
Proposed Provision: Income-tax Settlement Commission so constituted shall cease to operate on or after the 1st day of February, 2021.
Implication: The Central Government shall constitute one or more Interim Boards for Settlement, as may be necessary, for the settlement of
pending applications. After the Feb-1-2021, Tax Settlement Commission will be cease to act.
WEF: 1st February, 2021.
Power of chairman to transfer cases from one bench to another

Section : 245BC
Existing Provision: On the application of the Assessee or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner
or Commissioner and after notice to them, and after hearing such of them as he may desire to be heard, or on his own motion without such
notice, the Chairman may transfer any case pending before one Bench, for disposal, to another Bench.
Amendment: Provisions of this section shall not apply on or after the 1st day of February, 2021.
Implication: The Interim Board shall decide the method and procedure along with authority to transfer cases from one board to another.
WEF: 1st February, 2021.
Decision to be by majority
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Section: 245BD
Existing Provision: Earlier, If the Members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of
the majority, if there is a majority, but if the Members are equally divided, they shall state the point or points on which they differ, and make
a reference to the Chairman who shall either hear the point or points himself or refer the case for hearing on such point or points by one or
more of the other Members of the Settlement Commission and such point or points shall be decided according to the opinion of the majority
of the Members of the Settlement Commission who have heard the case, including those who first heard it.
Amendment: The provisions of this section shall not apply on or after the 1st day of February, 2021.
Implication: If the Members of the Interim Board differ in opinion on any point, the point shall be decided according to the opinion of the
majority. Hence there is no such effect on the method of decision.
WEF: This amendment will take effect retrospectively from 1st February, 2021.
Application for settlement commission

Section: 245C
Existing Provisions: Earlier, regarding any pending proceeding before any Assessing Officer. An Assessee may, at any stage of a settlement
of case relating to him, make an application in the prescribed form and manner, containing a full disclosure of his income which has not
been disclosed before Assessing Officer.
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Proposed Provision: Since, Income-tax Settlement Commission shall cease to operate on or after the 1st day of February, 2021. No such
application shall be made to the settlement commission for pending cases.
Implication: The application for settlement commission will no longer be filed.

W.F.H: This amendment will take effect retrospectively from 1st February, 2021.
Procedure on receipt of an application under Section 245D

Section: 245D
Existing Provision: There are procedures and deadlines to make decision on the admission of application from applicant under section
245C.
Proposed provision: In sub-section (2C), after the second proviso, Provided also that where in respect of an application, an order, which
was required to be passed under this sub-section on or before the 31st day of January, 2021, has not been passed on or before the 31st day
of January,2021, such application shall deemed to be valid.
(ii) In sub-section (6B), for the words “amend any order passed by it”, the words “amend any order passed” shall be substituted and shall be
deemed to have been substituted
(iii) after sub-section (8), the following sub-sections shall be inserted and shall be deemed to have been inserted, namely:
(9) On and from the 1st day of February, 2021, the provisions of sub-sections (1), (2), (2B), (2C), (3), (4),(4A), (5), (6) and (6B) shall apply to
pending applications allotted to Interim Board with the following modifications, namely:
(i) for the words “Settlement Commission”, wherever they occur, the words “Interim Board” shall be substituted;
(ii) for the word “Bench”, the words “Interim Board” shall be substituted;
(iii) for the purposes of this section, the date referred to in sub-section (2) of section 245M shall be deemed to be date on which the
application was made under section 245C and received by the Interim Board
(iv) where the time-limit for amending any order or filing of rectification application as per sub-section (6B) expires on or after the 1st day of
February, 2021, in computing the period of limitation, the period commencing from the 1st February, 2021 and ending on the end of the
month in which the Interim Board is constituted shall be excluded and where immediately after exclusion of such period, the remaining
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period available to the Interim Board for amending the order or to the Principal Commissioner or Commissioner or the applicant for filing of
application is less than sixty days, such remaining period shall be extended to sixty days and the period of limitation shall be deemed to have
been extended accordingly.
(10) On and from the 1st day of February, 2021, the provisions of sub-sections (6A) and (7) shall have effect as if for the words “Settlement
Commission”, the words“ Settlement Commission or Interim Board of Settlement” had been substituted.
(11) The Central Government may by notification in the Official Gazette, make a scheme, for the purposes of settlement in respect of pending
applications by the Interim Board, so as to impart greater efficiency, transparency and accountability by—
(a)Eliminating the interface between the Interim Board and the assessee in the course of proceedings to the extent technologically feasible;
(b)Optimizing utilization of the resources through economies of scale and functional specialization;
(c) Introducing a mechanism with dynamic jurisdiction.
(12) The Central Government may, for the purposes of giving effect to the scheme made under sub-section (11), by notification in the Official
Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as
may be specified in the said notification: Provided that no such direction shall be issued after the31st day of March, 2023.
(13) Every notification issued under sub-section (11) and sub-section (12) shall, as soon as may be after the notification is issued, be laid
before each House of Parliament:.
Implication: All the above amendment has been brought into affect in the view of newly formed Interim Board instead of Tax Settlement
Commission. There is change in key words, references which were used in the light of Tax Settlement Commission, now has been undertaken
considering the Interim Board.
Power of Settlement Commission to order provisional attachment to protect revenue

Section: 245DD
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Existing Provision: The settlement commission is empowered to provisionally attach property belonging to the applicant for protecting the
interest of the revenue.
Amendment: New subsection inserted

Subsection (3): The power of the Settlement Commission under this section shall be exercised by the Interim Board and the provisions of this
section shall mutatis mutandis apply to the Interim Board as they apply to the Settlement Commission.
Implication: The Interim board shall replace the settlement commission in exercising the power to protect interest of the revenue.
Powers and procedures of Settlement commission

Section: 245F
Existing provision: Since the Income-tax Settlement Commission so constituted under section 245B shall cease to operate on or after the
1st day of February, 2021.
Proposed provision: On and from the 1st day of February, 2021, the powers and functions of the Settlement Commission under this section
shall be exercised or performed, by the Interim Board and all the provisions of this section shall mutatis mutandis apply to the Interim Board
as they apply to the Settlement Commission.
Implication: All the powers of settlement commission have been entrusted to Interim Board.
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Functions of Interim Board
Section: 245G& 245H:
Insertion to this section: Provided that on or after the 1st day of February, 2021, functions of the Settlement Commission under this section
shall be performed by the Interim Board and the provisions of this section shall mutatis mutandis apply to Interim Board as they apply to the
Settlement Commission.
Implication: The same function of Settlement Commission and provisions of this section will apply to Interim Board also.
Withdrawal of Application
Section: 245M
Insertion of new section:

1 With respect to a pending application, the assessee who had filed such application may, at his option, withdraw such application
within a period of three months from the date of commencement of the Finance Act, 2021 and intimate the Assessing Officer, in
the prescribed manner, about such withdrawal.
2 Provided further that the income-tax authority shall not be entitled to use the material and other information produced by the
assessee before the Settlement Commission or the results of the inquiry held or evidence recorded by the Settlement Commission
in the course of proceedings before it.
Implication: In cases of pending application filed, the assessee can withdraw their application within three month from the date of
commencement of the Finance Act, 2021.
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INDIRECT TAX PROPOSALS
AMENDMENTS IN THE CGST ACT:
Applicability of GST on within Organization certain transaction

Section: 7
Existing Provision: - As per Section 7 (1)
(a) All forms of supply of goods or services or both such as sale, transfer, barter, exchange,
license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business.
(b) Imports of services for a consideration whether or not in the course or furtherance of business.
Proposed provision: - Introduce of new clause (aa) in sub-section (1) of section 7 of the CGST Act is being Inserted, retrospectively with
effect from the 1st July, 2017, So as to ensure levy of tax on activities or transactions involving supply of goods or services by any person,
other than individual, to its member or constituents or vice-versa, for cash, deferred payment or other valuable consideration.
Implication: GST registered person other than individual provide any services to its member or constituents or vice versa for cash, deferred
Payment or other valuable consideration shall be liable to tax. For example: Partnership firm enter in transaction with partner in cash, deferred
consideration or other transaction which can be valued. Such transaction is liable to treat as taxable supply.
WEF: Retrospectively from 1st July 2017.
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GST Input can be claimed only after filing of GSTR-1
Section: 16
Existing Provision:
Section 16(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and, in the manner, specified in
section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to
be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.
(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any
supply of goods or services or both to him unless,––
(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents
as may be prescribed;
(b) He has received the goods or services or both.
(c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government,
either in cash or through utilisation of input tax credit admissible in respect of the said supply; and
(d) He has furnished the return under section 39:
(3) Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under
the provisions of the Income-tax Act, 1961, the input tax credit on the said tax component shall not be allowed.
(4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or
both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which
such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.
Proposed provision: A new clause (aa) to the sub-section (2) of the section 16 of CGST Act is being inserted to provide that input tax credit
on invoice or debit note may be availed only when the details of such invoice or debit note have been furnished by the supplier in the
statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note.
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Implication:- Before introducing this clause Recipient can claim ITC on the basis of invoice or Debit note. However, after introducing this
clause Recipient can claim ITC after the supplier filed GSTR -1 and communicate to Recipient.
W.E.F.: Prospectively it means when notified by Government.
Widrawal the mandate of Audit requirement under GST
Section: 35
Existing Provision: - Section 35(5) Every registered person whose turnover during a financial year exceeds
the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall
submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section
44 and such other documents in such form and manner as may be prescribed.
Proposed Provision: - Sub-section (5) of section 35 of the CGST Act is being omitted so as to remove the mandatory requirement of getting
annual accounts audited and reconciliation statement submitted by specified professional.
Implication: - As per Section 35(5) Any Supplier has turnover exceeds 2 crore is compulsory to get his account audited by a chartered
accountant or a cost accountant. Now as per proposed provision section 35(5) is omitted it means now not require to be audited by Chartered
Accountant and Cost Accountant.
W.E.F.- Prospectively it means when notified by Government.
Audit under GST not required for registered person other than ISD
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Section: 44
Existing Provision:
1) Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person
and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as may be
prescribed on or before the thirty-first day of December following the end of such financial year.
Provided that the Commissioner may, on the recommendations of the Council and for reasons to be recorded in writing, by notification,
extend the time limit for furnishing the annual return for such class of registered persons as may be specified therein:
Provided further that any extension of time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall
be deemed to be notified by the Commissioner.
(2) Every registered person who is required to get his accounts audited in accordance with the provisions of sub-section (5) of section 35 shall
furnish, electronically, the annual return under sub-section (1) along with a copy of the audited annual accounts and a reconciliation
statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement,
and such other particulars as may be prescribed.
Proposed Provision: Section 44 of the CGST Act is being substituted so as to remove the mandatory requirement of furnishing a
reconciliation statement duly audited by specified professional and to provide for filling of the annual return on self-certification basis. It
further provides for the commissioner to exempt a class of taxpayers from the requirement of filing the annual return.
Implication: - Before amendment, Every registered person whose turnover is above 2 crore other than Input Service Distributor, a person
paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person shall be compulsory to audited his
accounts and reconcile as per annual return 9 under 9C by chartered accountant and Cost accountant.
After amendment not require to audit by chartered accountant or cost accountant. It may be self- certification basis.
W.E.F. - Prospectively it means when notified by Government.

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Interest on GST liability only after adjusting input of GST
Section: 50
Existing Provision: Section 50(1) Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made
thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax
or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified by the
Proposed Provision: Section 50 of the CGST Act is being amended, retrospectively, to substitute the proviso to sub-section (1) so as to
charge interest on net cash liability with effect from 1st July, 2017
Implication: Before amendment, if any tax liability require paying but fails by supplier then require to pay interest on tax but after
amendment, The Supplier to pay Interest to on only on net cash liability.
It means after set off Input tax credit if any amount to require to pay then interest to be charge.
W.E.F.: Retrospectively, i.e. from 1st July 2017.
General provisions relating to determination of tax
Section: 75 (12)
Existing provision: N/A ( New Inserted Explanation)

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Proposed Provision: – The expression "self-assessed tax" shall include the tax payable in respect of details of outward supplies furnished
under section 37, but not included in the return furnished under section 39 of CGST.
Implication: Ease in Compliances
Provisional attachment to protect revenue in certain cases

Section 83
Existing Provision: Where during the pendency of any proceedings under section 62, 63,64,67,73& 74, the Commissioner is of the opinion
that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may, by order in writing attach
provisionally any property (including bank account) belonging to the taxable person in such manner as may be prescribed.
Proposed Provision: Where, after the initiation of any proceeding under Chapter XII, XIV & XV, the Commissioner is of the opinion that for
the purpose of protecting the interest of the Government revenue it is necessary so to do, he may, by order in writing, attach provisionally,
any property, including bank account, belonging to the taxable person or any person specified in sub-section (1A) of section 122, in such
Implication: The coverage of proposed section is increased by covering the below mentioned persons who (Covered under 122(1A))
• Supplies any goods/services/both without issue of any invoice or incorrect/false invoice.
• Issues any invoice/bill without supply of goods/services/both.
• Takes/utilises ITC without actual receipt of goods/services/both either fully/partially.
• Takes/distributes ITC in contravention of section 20 or the rules made there under.
Appeals to Appellate Authority

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Section: 107
Existing Provision: NA (Newly Inserted)
Proposed Provision: No appeal shall be filed against an order under Sec 129(3), unless a sum equal to 25% of the penalty has been paid
by the appellant.
Implications: As per the insertion in the above section there is upfront payment of at least 25% of the calculated penalty by Dept. for filing
appeal against order.
Goods in transit cannot be seized u/s 129

Section: 130 and 129
Existing Provision: - As per Section130 (1) Notwithstanding anything contained in this Act, if any person—
(i) supplies or receives any goods in contravention of any of the provisions of this Act or the rules made thereunder with intent to evade
payment of tax; or
(iii) supplies any goods liable to tax under this Act without having applied for registration; or
(iv) contravenes any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or
(v) uses any conveyance as a means of transport for carriage of goods in contravention of the provisions of this Act or the rules made
thereunder unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his
agent, if any, and the person in charge of theconveyance,
then, all such goods or conveyances shall be liable to confiscation and the person shall be liable to penalty under section 122
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Proposed provision: - Section 130 of the CGST Act is being amended to delink the proceedings under that section relating to confiscation
of goods or conveyances and levy of penalty from the proceedings under section 129 relating to detention, seizure and release of goods
and conveyances in transit.
Implication: - Before amendment Section 130 covers penalty of section 129 also but after amendment, The proceeding under section 129
Those confiscation, detention, seizure and release of goods and conveyance in transit not cover in section 130. There is delink with section
129.
W.E.F.: Prospectively it means when notified by Government.
AMENDMENTS IN THE IGST ACT:
Section 16 of IGST Act

Existing Provision:
16. (1) “zero rated supply” means any of the following supplies of goods or services or both, namely:–– (a) export of goods or services or
both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.
(2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed
for making zero-rated supplies, notwithstanding that such supply may be an exempt supply.
(3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:–– (a) he
may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be
prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or (b) he may supply goods or services or both,
subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid
on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules
made thereunder.
Proposed Provision:
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(i) Zero rate the supply of goods or services to a Special Economic Zone developer or a Special Economic Zone unit only when the said supply
is for authorised operations;
(ii) Restrict the zero-rated supply on payment of integrated tax only to a notified class of taxpayers or notified supplies of goods or services;
and
(iii) link the foreign exchange remittance in case of export of goods with refund.
Implication:
It is clarification nature amendment. Before Amendment it is not clarify that refund of IGST in case zero rated Supply to which type of
operation.
Now, only authorised operation in zero rated supply may eligible to refund. However, Foreign exchange will be received on export of goods.
Previously zero rated supply will be on under bond or letter of undertaking or payment of IGST and claim refund in future.
At current Some notified taxpayer compulsory to pay integrated tax then in future claim IGST.
W.E.F: Prospectively i.e. When act notified by the Government.
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Union Budget
2021
Analysis of GST Proposals by
Dr. Avinash Poddar,
Advocate & IP
Proposed Amendments in
CGST Act, 2017
© 2021 - Dr. Avinash Poddar, Advocate & IP Page No. 1 of 14

Sr. Section
Nature Existing Provisions Proposed Amendment Comments
No. No.
1 Section Inserted NA (aa) the activities or As the Hon’ble Supreme Court in the
7(1)(aa) transactions, by a person, other case of Calcutta Club [Civil Appeal No.
than an individual, to its 4184/2009] for erstwhile Service tax
members or constituents or regime held that there cannot be the
vice-versa, for cash, deferred sale of goods or provision of services
payment or other valuable between the unincorporated private
consideration. clubs/associations and its members
owing to the principle of mutuality which
Explanation.––For the treats such clubs/associations and its
purposes of this clause, it is members as the same person. This ratio
hereby clarified that, should be applicable to GST.
contained in any other law for Government proposed a retrospective
the time being in force or amendment by way of insertion of this
any judgment, decree or order sub clause (aa) to ensure the levy of tax
of any Court, tribunal or on the amounts collected from the
authority, the person and its members towards the supply of
members or constituents shall goods/services.
be deemed to be two separate
persons and the supply of
activities or transactions inter
se shall be deemed to take
place from one such person to
another;”
2 Section Inserted NA (aa) the details of the invoice or The government by way of this
16(2)(aa) debit note referred to in clause proposition seems to add a condition for
(a) has been furnished by the determining the eligibility of Input Tax
supplier in the statement of Credit.
outward supplies and such
details have been In a way this proposition gives the
communicated to the recipient statutory backup to the most disputed
of such invoice or debit note in and deliberated upon rule i.e. Rule 36(4)
the manner specified under of CGST Rules.
section 37;
As we all are aware the constitutional
validity and vires of Section 16(2)(c) is
already under challenge at various
court.

Sr. Section
No. No.
We also are in acceptance that it is
impossible to control the act of the
supplier. Now this insertion of sub-
clause (aa) further makes the recipient
dependent on the supplier and his filling
of statement of outward supply u/s. 37.
We also need to see whether the

provision finally gets introduced
prospectively or retrospectively.
Further, as per me, this provision is also

not in sync with the scheme and
therefore is prone to litigation.
3 Section Omitted (5) Every registered person Omitted This provision was in relation to the
35(5) whose turnover during a audit to be conducted by the
financial year exceeds the professionals. There was always a
prescribed limit shall get his dispute and ambiguity in Section 35(5)
accounts audited by a chartered vis-à-vis Section 44(2) and the question
accountant or a cost accountant which required proper attention was
and shall submit a copy of the whether it is audit as contemplated and
audited annual accounts, the defined in Sec. 2(13) of CGST Act or
reconciliation statement under whether it is only reconciliation.
sub-section (2) of section 44
and such other documents in As a professional, I feel very strongly
such form and manner as may from day one that it was far beyond the
be prescribed reconciliation and huge responsibility
was casted on the auditor.
Provided that nothing contained
in this sub-section shall apply to The omission of this particular provision
any department of the Central is certainly leading to loss of
Government or a State opportunity/business for professionals
Government or a local but I feel the government has tried to
authority, whose books of remove the ambiguity and accepted this
account are subject to audit by to be only a reconciliation and therefor
the Comptroller and Auditor- has proposed to delete sub-section 5 of
General of India or an auditor Section 35.
appointed for auditing the
accounts of local authorities It is certainly not a welcome step as per
professionals but in the larger
Sr. Section
No. No.
under any law for the time prospective, I feel this will not impact
being in force. the opportunities/business in any
manner.
4 Section Substituted (1) Every registered person, Every registered person, other This section is completely substituted
44 other than an Input Service than an Input Service and now the responsibility of
Distributor, a person paying tax Distributor, a person paying tax reconciliation has been shifted to the
under section 51 or section 52, under section 51 or section 52, Tax Payer meaning thereby, now as per
a casual taxable person and a a casual taxable person and a this proposition, the tax payer liable for
non-resident taxable person, non-resident taxable person filling annual return may also be
shall furnish an annual return shall furnish an annual return required to include a self-certified
for every financial year which may include a self- reconciliation statement in annual
electronically in such form and certified reconciliation return wherein he will be liable to
manner as may be prescribed statement, reconciling the reconcile the turnover or supplies
on or before the thirty-first day value of supplies declared in the declared in the return furnished for the
of December following the end return furnished for the F.Y. with the audited Financial
of such financial year: financial year, with the audited Statements.
annual financial statement for
Provided that the every financial year As per me, I would once again wish to
Commissioner may, on the electronically, within such time reiterate that the professionals and their
recommendations of the and in such form and in such services will certainly be required for
Council and for reasons to be manner as may be prescribed: preparation of annual return including
recorded in writing, by Provided that the Commissioner reconciliation statement and filling
notification, extend the time may, on the recommendations thereof.
limit for furnishing the annual of the Council, by notification,
return for such class of exempt any class of registered On the lighter note, this proposition is
registered persons as may be persons from filing annual good for professionals because now it is
specified therein: return under this section: the duty and responsibility of tax payer
to reconcile and furnish and not the
Provided further that any Provided further that nothing responsibility of the auditor anymore.
extension of time limit notified contained in this section shall
by the Commissioner of State apply to any department of the
tax or the Commissioner of Central Government or a State
Union territory tax shall be Government or a local
deemed to be notified by the authority, whose books of
Commissioner. account are subject to audit by
the Comptroller and Auditor
(2) Every registered person General of India or an auditor
who is required to get his appointed for auditing the
accounts audited in accordance accounts of local authorities
with the provisions of sub-
Sr. Section
No. No.
section (5) of section 35 shall under any law for the time
furnish, electronically, the being in force.”.
annual return under sub-
section (1) along with a copy of
the audited annual accounts
and a reconciliation statement,
reconciling the value of supplies
declared in the return furnished
for the financial year with the
audited annual financial
statement, and such other
particulars as may be
prescribed.
Explanation.- For the purposes

of this section, it is hereby
declared that the annual return
for the period from the 1st July,
2017 to the 31st March, 2018
shall be furnished on or before
the [31st January, 2020] and
the annual return for the period
from the 1st April, 2018 to the
31st March, 2019 shall be
furnished on or before the
31st March, 2020.
5 50(1) Substituted Provided that the interest on Provided that the interest on This as per me was awaited since long.
proviso tax payable in respect of tax payable in respect of Although the Honourable finance
supplies made during a tax supplies made during a tax minister in one of the GST Council
period and declared in the period and declared in the meeting has confirmed that the interest
return for the said period return for the said period will be on net cash liability and not on
furnished after the due date in furnished after the due date in gross tax liability but since the law was
accordance with the provisions accordance with the provisions not amended the benefit was not being
of section 39, except where of section 39, except where passed on to the taxpayers and the issue
such return is furnished after such return is furnished after was still unsettled and pending before
commencement of any commencement of any the courts.
proceedings under section 73 or proceedings under section 73 or
section 74 in respect of the said section 74 in respect of the said Now after this proposed amendment, I
period, shall be levied on that period, shall be payable on that am sure it will give huge relief to the tax
portion of the tax that is paid by portion of the tax which is paid payers and this certainly is a very
Sr. Section
No. No.
debiting the electronic cash by debiting the electronic cash welcome step and proposition by the
ledger. ledger.”. government.
6 Section Substituted (ii) where the notice under the (ii) where the notice under the This proposed amendment shall be
74 same proceedings is issued to same proceedings is issued to having a wide impact on all those tax
Explanati the main person liable to pay the main person liable to pay payers who are getting their
on – 1(ii) tax and some other persons, tax and some other persons, proceedings concluded by way of paying
and such proceedings against and such proceedings against the tax, interest and penalty (if any) u/s.
the main person have been the main person have been 73 or 74.
concluded under section 73 or concluded under section 73 or
section 74, the proceedings section 74, the proceedings Prior to this proposed amendment, even
against all the persons liable to against all the persons liable to the proceedings of Section 129 and 130
pay penalty under sections pay penalty under sections were getting concluded but now those
122, 125, 129 and 130 are 122 and 125 are deemed to be proceedings will continue and therefor
deemed to be concluded. concluded. the person will be liable to pay
applicable and imposed penalties u/s.
129 or 130.
This means conclusion of proceedings

will lead to conclusion of proceedings
u/s. 73 or 74 and the proceedings u/s.
122 and 125 but not the proceedings
u/s. 129 and 130.
7 Section Inserted NA Explanation.––For the purposes This explanation proposed to be inserted
75(12) of this sub-section, the clarifies that self-assessed tax will not
expression "self-assessed tax" only include the tax payable as per
shall include the tax payable in return u/s. 39 but it will also include the
respect of details of outward outward supplies shown as per the
supplies furnished under statement of outward supplies u/s. 37.
section 37, but not included in
the return furnished under This means the spectrum of the term
section 39. self-assessed tax is widened by this
proposed amendment and the recovery
can be initiated by the officer not only
for tax payable as per Section 39 return
but also for the outward supply liability
shown in the statement filled u/s. 37.
8 Section Substituted Where during the pendency of Where, after the initiation of We all are aware how broad this power
83(1) any proceedings under section any proceeding under Chapter is and how carelessly it is being used by
62 or section 63 or section 64 XII, Chapter XIV or Chapter XV, the officers.
or section 67 or section 73 or the Commissioner is of the
Sr. Section
No. No.
section 74, the Commissioner is opinion that for the purpose of This proposed amendment has impact
of the opinion that for the protecting the interest of the that the gravity and the reach is further
purpose of protecting the Government revenue it is widened meaning thereby this
interest of the Government necessary so to do, he may, by proposition intends to increase the
revenue, it is necessary so to order in writing, attach ambit of provisional attachment by way
do, he may, by order in writing provisionally, any property, of substitution of section by chapters of
attach provisionally any including bank account, the CGST Act.
property, including bank belonging to the taxable person
account, belonging to the or any person specified in sub- For an example now even a proceeding
taxable person in such manner section (1A) of section 122, in u/s. 71 empowers the officer to attach
as may be prescribed. such manner as may be the property/bank accounts because
prescribed. Section 71 falls within Chapter XIV of
the CGST Act.
I would not like to comment further but

one thing is very sure a broad and wide
power is given to the officers and we
being the tax payers and tax compliant
are now have to keep our fingers
crossed and be at the mercy of
government officers unless they use this
power wisely and with correct
application of mind.
9 Section Inserted NA Provided that no appeal shall be This proposition requires the pre-deposit
107(6) filed against an order under for filling appeal before first appellate
sub-section (3) of section 129, authority to be 25% of the penalty
unless a sum equal to twenty- imposed.
five per cent. of the penalty has
been paid by the appellant. As per the Law, the pre-deposit prior to
this amendment was only to the extent
of 10% of Tax Liability in case of dispute
which is now proposed to be 25% of the
penalty amount in case of detention and
seizure of conveyance and goods during
transit.
10 Section Substituted (a) on payment of (a) on payment of penalty The proposed amendment in clause (a)
129(1)(i) the applicable tax and penalty equal to two hundred per and (b) is giving dual effect i.e. of
(a)(b) equal to one hundred per cent. of the tax payable on happiness as well as sadness.
cent of the tax payable on such goods and, in case of
such goods and, in case of exempted goods, on payment
Sr. Section
No. No.
exempted goods, on payment of an amount equal to two per Happiness because the tax term is
of an amount equal to two per cent. of the value of goods or deleted from the provision which means
cent of the value of goods or twenty-five thousand rupees, now getting the conveyance and goods
twenty five thousand rupees, whichever is less, where the released, only penalty is required to be
whichever is less, where the owner of the goods comes paid by the concerned person (Noticee).
owner of the goods comes forward for payment of such
forward for payment of such penalty; Sad because the penalty is increased to
tax and penalty; 200% from 100% which means no relief
(b) on payment of (b) on payment of penalty to the tax payer and we are back to
the applicable tax and equal to fifty per cent. of the square one. The reason why I am saying
penalty equal to the fifty per value of the goods or two so is prior to amendment also I was
cent of the value of the hundred per cent. of the tax liable to pay 200% (Tax + Penalty) and
goods reduced by the tax payable on such goods, now after amendment also, I am liable
amount paid thereon and, in whichever is higher, and in to pay 200% therefor no relief to the
case of exempted goods, on case of exempted goods, on hardship cost to the tax payer.
payment of an amount equal to payment of an amount equal to
five per cent of the value of five per cent. of the value of
goods or twenty five thousand goods or twenty-five thousand
rupees, whichever is less, rupees, whichever is less,
where the owner of the goods where the owner of the goods
does not come forward for does not come forward for
payment of such tax and payment of such penalty;
penalty;
11 Section Omitted (2) The provisions of sub- omitted This proposition has the impact that now
129(2) section (6) of section 67 shall, the conveyance and goods detained by
mutatis mutandis, apply for the officer cannot be released on
detention and seizure of goods execution of bond and bank guarantee
and conveyances. as security meaning thereby the penalty
imposed by the officer will have to be
paid in cash by the tax payer.
12 Section Substituted (3) The proper officer detaining (3) The proper officer detaining This proposition has the impact of
129(3) or seizing goods or or seizing goods or conveyance imposition of penalty, if any, within the
conveyances shall issue a shall issue a notice within seven time frame as provided.
notice specifying the tax and days of such detention or
penalty payable and thereafter, seizure, specifying the penalty
pass an order for payment of payable, and thereafter, pass
tax and penalty under clause an order within a period of
(a) or clause (b) or clause (c). seven days from the date of
service of such notice, for
payment of penalty under
Sr. Section
No. No.
clause (a) or clause (b) of sub-
section (1).
13 Section Substituted (4) No tax, interest or (4) No penalty shall be Tax and Interest are not applicable and
129(4) penalty shall be determined determined under sub-section will not be demanded after this
under sub-section (3) without (3) without giving the person amendment in law. For release of
giving the person concerned an concerned an opportunity of conveyance and goods, only penalty
opportunity of being heard. being heard. shall be imposed.
14 Section Substituted (6) Where the person (6) Where the person Prior to proposed amendment, the
129(6) transporting any goods or the transporting any goods or the provision was if person does not pay tax
owner of the goods fails to pay owner of such goods fails to pay and penalty within 14 days of seizure,
the amount of tax and penalty the amount of penalty under the conveyance and goods detained
as provided in sub-section (1) sub-section (1) within fifteen were liable for confiscation as per
within seven days of such days from the date of receipt of section 130.
detention or seizure, further the copy of the order passed
proceedings shall be initiated in under sub-section (3), the After the proposed amendment, the
accordance with the provisions goods or conveyance so effect will be that the goods or
of section 130: detained or seized shall be conveyance detained or seized shall
liable to be sold or disposed of become liable to be sold or disposed off
Provided that where the otherwise, in such manner and in the manner prescribed in case the
detained or seized goods are within such time as may be payment of imposed penalty is not made
perishable or hazardous in prescribed, to recover the within 15 days from the date of receipt
nature or are likely to penalty payable under sub- of copy of the order imposing such
depreciate in value with section (3): penalty.
passage of time, the said period
of seven days may be reduced Provided that the conveyance I can comment after going through both
by the proper officer. shall be released on payment existing and proposed amendment that
by the transporter of penalty no relief has been provided and the
under sub-section (3) or one impact is same. Earlier, it was
lakh rupees, whichever is less confiscation and now it is sale for the
purpose of recovery of penalty hence it
Provided further that where the is only the change of words in the law
detained or seized goods are impact on tax payer remains same as
perishable or hazardous in per my view.
nature or are likely to
depreciate in value with Further, one relief which is proposed to
passage of time, the said period be provided is with respect to release of
of fifteen days may be reduced conveyance on payment of penalty
by the proper officer. imposed by the officer or Rs. 1 Lac
whichever is less if the same is paid by
the transporter.
Sr. Section
No. No.
15 Section Substituted Notwithstanding anything Where any person— The non-obstante clause is no more
130(1) contained in this Act, if any there which means section 130 is now
person— not having any overriding impact.
16 Section Substituted Provided further that the Provided further that the It has been done in line of Section 129
130(2)(b) aggregate of such fine and aggregate of such fine and
second penalty leviable shall not be less penalty leviable shall not be less
proviso than the amount of penalty than the penalty equal to
leviable under sub-section hundred per cent. of the tax
(1) of section 129: payable on such goods:
17 Section Omitted Where any fine in lieu of Omitted This is a welcome move and shall be
130(3)(c) confiscation of goods or helpful and beneficial for the tax payers.
conveyance is imposed under
sub-section (2), the owner of
such goods or conveyance or
the person referred to in sub-
section (1), shall, in addition,
be liable to any tax, penalty and
charges payable in respect of
such goods or conveyance.
18 Section Substituted (1) The Commissioner may, if The Commissioner or an officer This proposition of amendment intends
151 he considers that it is necessary authorised by him may, by an to grant wider powers to the concerned
so to do, by notification, direct order, direct any person to jurisdictional commissioner to call for
that statistics may be collected furnish any information on any matters
relating to any matter dealt information relating to any concerned with the act.
with by or in connection with matter dealt with in connection
this Act. with this Act, within such time,
in such form, and in such
(2) Upon such notification being manner, as may be specified
issued, the Commissioner, or therein.
any person authorised by him in
this behalf, may call upon the
concerned persons to furnish
such information or returns, in
such form and manner as may
be prescribed, relating to any
matter in respect of which
statistics is to be collected.

Proposed Amendments in
IGST Act, 2017

Sr. Section
No. No.
1 Section Inserted (b) supply of goods or services (b) supply of goods or services This proposed amendment restricts the
16(1)(b) few words or both to a Special Economic or both for authorised enjoyment of benefits of zero rating in
Zone developer or a Special operations to a Special case the supplies are made to SEZ
Economic Zone unit. Economic Zone developer or a developer or SEZ Unit in a way that now
Special Economic Zone unit. post this amendment the benefits will be
available only to the supplies to SEZ
developer or SEZ Unit which are for
authorised operations and not for any
other supplies.
Such authorised operations must be as

per the SEZ Act, Rules and other
relevant notifications.
2 Section16 Substituted (3) A registered person making (3) A registered person making Prior to this proposed amendment, the
(3) zero rated supply shall be zero rated supply shall be exporters were having an option (i) to
eligible to claim refund under eligible to claim refund of export with payment of IGST and claim
either of the following options, unutilised input tax credit on refund thereof; or (ii) to export without
namely:–– supply of goods or services or payment of Tax under LUT and claim
both, without payment of refund thereof.
(a) he may supply goods or integrated tax, under bond or
services or both under bond or Letter of Undertaking, in After this proposed amendment, the
Letter of Undertaking, subject accordance with the provisions scheme is supposed to undergo
to such conditions, safeguards of section 54 of the Central complete change. Now, only notified
and procedure as may be Goods and Services Tax Act or class of taxpayer/notified class of
prescribed, without payment of the rules made thereunder, goods/services are eligible for claiming
integrated tax and claim refund subject to such conditions, refund in case the supplies are made
of unutilised input tax credit; or safeguards and procedure as with payment of tax. Therefore, now
may be prescribed: everyone making supplies with payment
(b) he may supply goods or of IGST may not be eligible for claiming
services or both, subject to Provided that the registered refund unless they are covered in the
such conditions, safeguards and person making zero rated notified class of taxpayer or they are
procedure as may be supply of goods shall, in case of supplying notified class of
prescribed, on payment of non-realisation of sale goods/services.
integrated tax and claim refund proceeds, be liable to deposit
of such tax paid on goods or the refund so received under The above discussion means that now
services or both supplied, in this sub-section along with the most of the taxpayers will have to export
accordance with the provisions applicable interest under without payment of tax and claim refund
of section 54 of the Central section 50 of the Central Goods of the accumulated Input Tax Credit as
and Services Tax Act within per the provisions of Section 54 of the
Sr. Section
No. No.
Goods and Services Tax Actor thirty days after the expiry of CGST Act and Rules made thereunder
the rules made thereunder. the time limit prescribed under subject to conditions and procedures as
the Foreign Exchange may be prescribed.
Management Act, 1999 for
receipt of foreign exchange Further to this, another impact of this
remittances, in such manner as amendment is that the proviso to sub-
may be prescribed. section (3) mandates the collection and
realisation of sales proceeds otherwise
(4) The Government may, on the refund claimed needs to be
the recommendation of the deposited back in the treasury of the
Council, and subject to such government along with the interest u/s.
conditions, safeguards and 50.
procedures, by notification,
specify–– This proposed amendment i.e. the
(i) a class of persons who may proviso is now providing teeth to the
make zero rated supply on toothless provision of Rule 96B and
payment of integrated tax and therefor it could be said that Rule 96B is
claim refund of the tax so paid; now having the statutory backup.
(ii) a class of goods or services
which may be exported on
payment of integrated tax and
the supplier of such goods or
services may claim the refund
of tax so paid.”.

Thank You
Prepared and Edited By :- Dr. Avinash Poddar, Advocate & IP
Team Members :- Shailin Doshi, CMA Pranab Chhatterjee, CA Amit Agrawal, CA Rakesh Khatri, CMA Soniya Gangwani, CA Sweety
Bansal, CA Priyanka Jhawar, CA Kritika Kabra, CA Keshav Garg, CA Anurag Kedia, Keval Devganiya, Saurabh Sarda
Contact us on :- (E) – contact@ashvalegal.com, (O) – 070690 23232-34, (M) – 93270 13570
Surat Offices :- (i) B-102, SNS Interio, Besides CNG Pump Station, Bhatar Char Rasta, Surat – 395007
(ii) 1st & 2nd Floor, The Financial Super Market Tower, Above Bank of Baroda, Ring Rd, Surat – 395002
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Disclaimer :-
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2/2/2021 Budget 2021: Haven-seeking bizmen brought to earth - Times of India
Printed from
Budget 2021: Haven-seeking bizmen brought to earth

TNN | Feb 2, 2021, 05.36 AM IST
NEW DELHI: Businessmen, using tax havens like Dubai to avoid paying
taxes in India, find themselves in hot water. The reason — India’s tax laws
now define the term ‘liable to tax’.
The fallout? Nothing changes for a salaried worker, say, in UAE. He does
not have to pay tax in India on his overseas salary income. But the
provisions block the misuse of Dubai, and some other countries, for
taxavoidance purpose (it could also hit genuine cases).
“This amendment could impact Indian citizens who reside in countries

where there are no tax laws applicable to individuals, and whose taxable
income in India exceeds Rs 15 lakh. Such people would be treated as
‘Resident and Not Ordinarily Resident’ in India,” says Gautam Nayak, tax partner, CNK Associates.
“Their income from foreign businesses controlled from India, or professions set up in India, would be liable to be taxed in India,”
Nayak adds.
“While the direct Indian sourced incomes were already taxable in the hands of such individuals, they now have tax exposure to
incomes earned by them outside India, but from businesses controlled or professions set up in India,” says Rashmin Sanghvi, a
chartered accountant.
He illustrates: “The typical example would be Indian jewellery or diamond firms that have group companies in tax havens like
https://timesofindia.indiatimes.com/business/india-business/haven-seeking-bizmen-brought-to-earth/articleshowprint/80641173.cms 1/2
2/2/2021 Budget 2021: Haven-seeking bizmen brought to earth - Times of India
UAE owned by NRIs, but are actually controlled from India. Incomes earned by the NRIs from such foreign companies can be
taxable in India now.”
As the term ‘liable to tax’ was not defined, taxpayers used to rely on several decisions, including those given by the Authority
for Advance Rulings – several of which related to UAE residents. “Certain rulings held that even ‘potential’ future liability to tax
was enough to cover persons under the clause ‘liable to tax’. This has been negated by putting a precise definition under the
Act,” adds Sanghvi.
At the same time, tax exemption for foreign pension funds has been simplified by providing relief even though they may be
exempt under their domestic (overseas country) tax laws.
The intent to define the term ‘liable to tax’ to ensure tax certainty was tucked away in an annexure to the FM’s speech.
The Finance Bill 2021 states: “The term liable to tax, in relation to a person, means that there is a liability of tax on that person
under the law of any country and will include a case where subsequent to imposition of such tax liability, an exemption has
been provided.” The proposed amendment applies to financial years 2020-21 and the subsequent years.
https://timesofindia.indiatimes.com/business/india-business/haven-seeking-bizmen-brought-to-earth/articleshowprint/80641173.cms 2/2
Quick View Budget 2021
• Direct Tax
• Indirect Tax
NARESH J. PATEL & CO.

804, Mauryansh Elanza,
Shyamal Cross Roads,
Ahmedabad – 380 015
1st February, 2021
www.nareshco.com
Disclaimer: This Presentation has been prepared solely for general information purpose and is not intended to constitute a
recommendation, consulting or advise.
Advance Tax payment for Dividend:

Requirement of Advance income tax is payable Advance income tax is payable on
advance income tax on income including dividend on Dividend income only after
on dividend income estimated basis declaration / receipt of dividend
Tax Audit Limit relaxation:

Turnover Limit: Rs. 5 Crore Rs. 10 Crore

Tax Audit Not required if Cash Receipt
and Payment upto 5%

Reduced Time limit for sending intimation/notice:

Sr. Particular Existing Proposed
No.
1. Time limit for sending intimation u/s 143(1) 12 Month* 9 Month*

*from the end of the financial year in which return
was furnished
For example : Income Tax Return for A.Y. 2022-23 31-Mar-2024 31-Dec-2023
2. Time limit for issue of scrutiny notice u/s 143(2) 6 Months# 3 Months#
# from the end of the year in which return is
furnished
For example : Income Tax Return for A.Y. 2022-23 30-Sep-2023 30-June-2023

Reduced time limit for belated/revised ITRs:

Last date for filing of belated or revised returns of income 12 Months* 9 Months*
*from the end of the financial year or before the completion
of the assessment, whichever is earlier.
For example: Income Tax Return for A.Y. 2022-23 31-Mar-2023 31-Dec-2022
Reduced time limit for Reopening Assessment:

Time limit for 3 years from the end of relevant assessment year
Reopening of 4/6 years from the end
Assessment: of relevant assessment 10 years from the end of relevant assessment year
year Approval of Principal CIT required

Higher TDS/TCS for non-filer of Income Tax Return:

Higher rate for TDS for the non-filers of No such TDS at Higher of:
income-tax return: provision (a) Twice the rate specified in Act or
• Not applicable for TDS u/s 192, 192A, (b) Twice the rate or rates in force or
194B, 194BB, 194LBC or 194N (c) 5%
• Condition: Aggregate of TDS and TCS for
the same deductee is Rs. 50,000 or If PAN is not available than higher of
more in each of two previous years above or 20% as per sec. 206AA.
 Non-filer :
Not filed the returns of income for both of 2 Assessment Years relevant to 2 previous years,
immediately before the previous year in which tax is required to be deducted/collected and
Time limit for filing tax return u/s. 139(1) expired for both these assessment years.
 Not include a non-resident who does not have a permanent establishment in India.
 Effective from 1st July, 2021
TDS on purchase of goods (Section 194Q):

purchase of any goods of the value or No requirement Limit of Rs. 50 Lakhs
aggregate of such TDS @ 0.1 %
Due date of ITR filing of partners of the firm covered under

transfer pricing audit:
Due of Partners of the firm, filing 31- July (or 31- 30-November
transfer pricing report u/s. 92E October if audit)
Applicability of Presumptive taxation for professionals:

Applicability of Presumptive taxation Resident in India Individual, HUF or Partnership
for professionals (Sec. 44ADA) Firm other than LLP
Interest on loan for affordable housing (Section 80EEA):

Deduction Upto Rs. 1,50,000 in Loan sanctioned upto 31st Loan sanctioned upto 31st
respect of Payment of Interest on March, 2021. March, 2022.
Loan taken for Affordable Housing
Tax Holiday for Start up and capital gain exemption:

Eligibility for claiming tax holiday for start 31st March, 2021 31st March, 2022
up: date of incorporation upto
Capital gain exemption for date of 31st March, 2021 31st March, 2022
investment in start up upto

Easy dispute resolution for small tax payers :

• Small tax payer:
• Taxable income up to 50 Lakh and
• Disputed income up to 10 Lakh
• A separate Dispute Resolution Panel (Committee) to be constituted.
Faceless ITAT :
• Faceless Income Tax Appellate Tribunal to be introduced
Exemption to senior citizen from filing IT in specified cases:

• No need to file Income Tax Return subject to following conditions
• Senior Citizen above 75 year of age and having only income from Pension
• Interest Income from the same bank in which receiving Pension Income
• To furnish a declaration to the Bank.
• Bank to compute the income and deduct TDS after giving effect to the deduction allowable
under Chapter VI-A and rebate allowable under section 87A of the Act
Reducing hardhips to NRI:

• Government will notify the rule for reducing hardship of double taxation in case of NRI return to
India having accrued incomes from their foreign retirement accounts. They also face difficulties in
getting credit for Indian taxes in foreign jurisdictions.
Pre-filling of details while filing ITR:

• In order to ease of compliance for taxpayer, details of capital gains from listed securities, dividend
No Deduction if delay in deposit of employee’s contribution

• Late deposit of contribution of employees towards Provident funds, superannuation funds, and
other social security funds will qualify as disallowance of expense to extent of employee

Tax exemption on ULIP proceeds capped:

• For ULIPs taken on or after 1st February, 2021, the maturity proceeds of policies with an annual
premium of more than Rs. 2.5 lakh will be taxable on par with equity linked mutual fund schemes.
• In the event of policyholder’s demise either the sum assured or proceeds of the investments,
whichever is higher, are paid out to the nominee. The amount paid to nominee will continue to be
tax free
Income adjustment based on TAR (Sec 143(1)(a)(iv))

• Amended to allow for the adjustment on account of increase in income indicated in the audit
report but not taken into computation of total income.
Discontinuation of Income tax settlement Commission

• Discontinue on or after 1st February, 2021 and to constitute Interim Board of settlement for
pending cases.

INDIRECT TAX
PROPOSALS


No.
1 ITC Matching The conditions for availing New sub clause added in section 16(2)(aa):
Input Tax Credit does not
require filing GSTR-1 as pre- ITC can be availed only when the details of such invoice or
condition. debit note have been furnished by the supplier in the
statement of outward supplies and such details have been
communicated to the recipient of such invoice or debit
note.
2 GSTR-9C Mandatory Filing of GSTR 9C • Removed the mandatory requirement of GSTR-9C
Reconciliatio Reconciliation Statement for • Filing of the annual return GSTR-9 on self-certification
n Statement turnover above 5 Crore basis
3 Interest Interest on Net Cash Liability • Liability to pay interest shall be computed on the net
basis not confirmed and was cash liability
under dispute. • Effective retrospectively from the 1st July, 2017


No.
4 Seizure and Conclusion of the proceedings Now it has been proposed to consider seizure
confiscation of against the main person as well as and confiscation of goods and conveyances in
goods and some other persons (e.g. transit as a separate proceeding from recovery
conveyances in transporter) if the main person of tax.
transit (e.g. supplier) exercises the option Therefore the other persons (e.g. transporter)
of paying the requisite amount of shall not get the closure of the proceedings even
tax, interest and penalties for if the main person (e.g. supplier) opts to close
concluding the proceedings. the proceedings
5 Self-assessment No such requirement • Liability declared in GSTR 1 but not included

tax and recovery in GSTR 3B will be considered as “self-
assessed tax”.
• Recovery proceedings can be initiated
without following the process of
adjudication.


No.
6 Provisional In limited types of Scope expanded to include any proceeding in the
attachment assessments nature of assessment (Chapter XIII), inspection,
search, seizure and arrest (Chapter XIV) and
demand & recovery (Chapter XV)
7 Pre-deposit for No such requirement Pre-deposit amount for filing the appeal before the
Appeal filing first appellate authority in cases of detention and
seizure of goods and conveyance during transit shall
be 25% of the penalty amount imposed.


No.
8 Penalty on Penalty equal to 100% of the tax Further the quantum of penalty u/s 129 has
Seizure and payable ( in case of exempted been doubled to 200% of the tax payable
confiscation of goods, on payment of an amount where the owner of the goods comes
goods and equal to two per cent. of the value forward for payment of such penalty.
conveyances in of goods or twenty-five thousand
transit rupees, whichever is less) where the
owner of the goods comes forward
for payment of such tax and penalty
9 Power to collect Limited Power to collect statistics Power to call for information
information


No.
10 Refunds on At present Sec. 16(3) provides for Option of making the supply on payment of
account of two routes for claiming the refund integrated tax shall only be granted to a
zero-rated of the accumulated ITC viz. notified class of taxpayers or notified
supplies (a) making the supplies with supplies of goods or services.
payment of IGST and claiming
refund thereof and
(b) making the supplies under LUT
without tax and claiming refund
of the accumulated ITC based
on the formula


No.
11 Clubs/ Supply of goods by any • The activities or transactions, by a
associations unincorporated association or body person, other
of persons to a member thereof for • than an individual, to its members or
cash, deferred payment or other constituents or vice versa, for cash,
valuable consideration. deferred payment or other valuable
consideration
• Retrospective amendment effective from
1st July, 2017
• Exemption (up to
Rs.7,500/month/member) in respect of
housing societies, shall be available


Items Existing Rates Proposed Rates
Textiles:
Nylon chips, fiber, Yarn 7.5% 5%
Chemicals
Caprolactam 7.5% 5%
Naptha 4% 2.5%
Agriculture products
Cotton Nil 10%
Raw silk and silk yarn 10% 15%
Gold 7.5% + 2.5%
Silver 12.5% AIDC*
Renewable energy
Solar Invertors 5% 20%
Solar Lanterns 5% 15%
Steel screws and plastic builder wares 10% 15%
Prawn feed 15% 5%
Relaxations for Companies / LLPs

One Person Company (OPC)
• No Restriction on turnover / paid up capital
• Coversion to any other type at any time
• Reducing residency limit for indian citizen from 182 days to 120 days
• Allowing NRI to incorporate OPC
Definition of small companies widened

Turnover Limit Rs. 2 crore Rs. 20 crore
Paid up capital limit Rs. 50 lakhs Rs. 2 crore
Decriminalisation of LLP will be done

Thank You
Naresh J Patel & Co.
info@nareshco.com
http//www.nareshco.com
Disclaimer: This presentation has been prepared solely for general information purposes and is not intended to constitute a
recommendation, offer or advice. It does not constitute a solicitation to any class of persons to act on the basis of opinions expressed
thereto in this presentation. The information contained herein is subject to change without prior notice. Before making any decision you
should consider whether the information is appropriate in light of your needs and you may wish to consult a professional adviser for further
advice. We do not warrant that the information contained in this presentation is accurate or complete and disclaim any and all liability to
anyone for any loss or damage caused by errors or omissions. We assume no responsibility for the interpretation and/or use of information
contained on this presentation, nor does it offer a warranty of any kind, either expressed or implied.
For information only

Union Budget
2021
Tax and Policy Highlights

Macro-fiscal
Highlights
► Fiscal deficit relative to GDP at 9.5% in ► Government’s gross tax revenues contracted
FY21 and 6.8% in FY22 shows a sharp by (-)5.5% in FY21 RE after having declined by
deviation from the Fiscal Responsibility and (-)3.4% in FY20
Budget Management (FRBM) target of 3%. ► Using a nominal growth of 14.4% and a
The focus will be on sectors with high buoyancy of 1.2, centre’s gross tax revenues 26%
Union Budget 2021

employment and output multipliers like are projected to show a growth of 16.7% in Growth in center’s
construction and health capex in FY22 (BE)
FY22 (BE)
► Capital expenditure is estimated to increase ► Both Personal Income Tax (PIT) and Corporate
from 1.6% of GDP in FY20 to 2.3% of GDP
in FY21 Revised Estimates (RE) and further
Income Tax (CIT) are projected to grow by 14.4%
more than 22% in FY22 BE over FY21 RE. This Nominal GDP
to 2.5% of GDP in FY22 Budget Estimates is largely due to base effects growth rate for FY22
(BE) ► A reinvigorated disinvestment plan has been
► The Fifteenth Finance Commission has planned for FY22 with receipts from
recommended amendment of the FRBM disinvestment budgeted to increase to INR1.75 6.8%
Act, based on recommendations of an high- lakh crores from INR32,000 crores in FY21 Fiscal deficit
powered inter-governmental group target for
► The Finance Commission has permitted a FY22
higher fiscal deficit for the states in 2021-
22 at 4% of GDP for states considered
together. Additionally, a flexibility of 0.5%
of GDP has been allowed subject to certain
conditions. The deficit-GDP ratio is to be
brought down in line with the FRBM
requirement of 3% of GDP by 2023-24
Policy
Highlights
► INR 35,000 crores allocated for COVID-19 ► A revamped reforms-based result-linked power
vaccine distribution sector scheme to be launched with an
► PM Atma Nirbhar Swasth Bharat Yojana to be outlay of INR 3,05,984 crores over 5 years
launched with an outlay of INR 64,180 crores ► To consolidate financial capacity of PSBs,
over 6 years recapitalization of INR 20,000 crores is proposed INR2.23
Union Budget 2021

► A conciliation mechanism to be set for quick ► Asset reconstruction and management companies lakh crore for
resolution of contractual disputes to be set up to handle stressed assets of PSBs healthcare
► Decriminalization of the LLP Act, 2008 in FY22 ► A sum of INR 20,000 crores allocated to set up the
► The FDI in insurance increased to 74% from 49% Debt Financing Institution PM Atma Nirbhar
Swasth Bharat Yojana
► IPO of LIC to be undertaken in FY22 ► An independent Gas Transport System Operator to
PPP in ports
7 projects worth more than INR 2,000 crores be set up
► Vehicle Scrappage
will be offered by the major ports on PPP mode ► Voluntary vehicle scrapping policy, to phase out old Policy
in FY22 and unfit vehicles Decriminalization of
► 7 mega textiles parks to be set up over 3 years ► A Hydrogen Energy Mission for generating hydrogen LLP Act
under the proposed MITRA Scheme from green power sources to be launched in FY22 Privatization of PSB
and Insurance
► A Dispute Resolution Committee is proposed to ► Development proposed of a Fin-Tech hub at the GIFT- companies
be constituted to enable efficient dispute IFSC
resolution ► National Monetization Pipeline of potential
► New tax exemption for the notified Affordable brownfield infrastructure assets to be launched 49% 74%
Rental Housing Projects ► Consolidation of the provisions of 4 key securities FDI in
► Privatization of 2 PSBs and 1 General Insurance acts into a rationalized single Securities Markets insurance
company in FY22 Code
Note: MITRA- Mega Investment Textiles Parks, OPC- One Person Company, PSB- Public Sector Bank, LLP- Limited Liability Partnership, PPP- Public Private Partnership
Corporate Tax
Highlights
► Relief for dividend income : ► Rate of TDS/ TCS shall be double of the
Tax Payment
► Advance tax liability in respect of dividend specified rate or 5% whichever is higher in case
relaxation
income to be computed after declaration or of non-filing of income tax return for last two for dividend
payment of dividend whichever is earlier years and where TDS /TCS is INR 50,000 or income
► Withholding Tax exemption granted to dividends more for last two years
Union Budget 2021

paid to Real Estate Investment Trust (REIT) and
► Salary income, payment to NR, lottery etc. excluded
Investment Trust (InviT) Tax audit
► Tax treaty benefits to be available to Foreign ► Late deposit of employees’ contribution to threshold
Portfolio Investors (FPI) labour welfare founds by the employer shall not from INR 50m
be allowed as deduction to the employer to INR 100m
► Minimum Alternate Tax (MAT) exemption to
foreign companies in respect of dividend income ► Relaxation in conditions (viz. prohibition on
if applicable tax rate is less than MAT rate loans or borrowings, restriction on commercial No deduction
► Rationalization of provisions relation to activities, direct investment in entity owning for late deposit
relating to taxation of the assets or amount infrastructure) for exemption to Sovereign of employee’s
received by partners from the partnership contribution
Wealth Fund & Pension Fund
to PF
firm in excess of their capital contribution ► Tax holiday for affordable housing extended up
► Tax audit exemption limit is increased from to 31 March 2022
INR50 million to INR100 million for persons ► New Tax exemption introduced for affordable
Extension in
who are undertaking 95% of their Tax holiday
rental housing project for migrant workers for affordable
transactions digitally
► Relaxation in conditions for loss carry forward of housing
divested Public Sector Undertaking (PSU) in
amalgamation
Key Highlights - Corporate Tax Highlights
► Transfer of assets by PSU to resulting ► Further, re-opening of assessment up to 10 years LLP not eligible
company to be deemed as tax neutral only if - when there is a serious tax evasion and for presumptive
demerger concealment on income is INR 5m or more in a tax for
year professionals
► TDS of 0.1% levied on purchase of goods
above INR5 million in a year ► Reduction in time limits for general
Union Budget 2021

Quick processing
► where turnover of buyer exceeds INR 100 million
assessment and processing of Income tax of return and
return by three months closure of
► Substitution of Authority for Advance revenue audit
► Faceless dispute resolution committee will be
Rulings (AAR) with Board for Advance
Rulings constituted for small taxpayer having taxable
Faceless dispute
income up to INR5 million and disputed
► where turnover of buyer exceeds INR 100 million resolution for
income up to INR1 million small taxpayers
► Limited Liability Partnership (LLP) not
► Settlement Commission shall be discontinued from
eligible for presumptive tax for professionals 1 February 2021 Provisional
► The term “liable to tax” to be defined to ► A National Faceless Income-tax Appellate attachment of
assets in case of
provide certainty Tribunal Centre to be established to eliminate fake / sham
► Provisional attachment assets if penalty human interface during Income Tax Appellate invoicing
proceedings initiated for fake invoice/sham Tribunal (ITAT) proceedings
transactions of more than INR 20M Faceless appellate
► Personal hearings will be conducted through video proceedings
► Reduction in time limit for re-opening of conferencing Scheme extended
to appellate
assessment reduced from six years to three tribunal
years
Indirect Tax | Customs
Highlights
► Sunset clause provided for all conditional ► Common customs electronic portal is notified
exemptions currently in force. The same for facilitating registration, service of orders, Sunset clause
shall end on 31 March 2023 (unless filing bill of entry. 2 years
withdrawn earlier). ► Countervailing and anti-dumping duty can be conditional
► New conditional exemptions shall be valid for levied retrospectively from the date of initiation exemption
Union Budget 2021

two years from the end of financial year of investigation in anti-circumvention cases.
during which it was enacted. ► More anti-avoidance measures have been
► Bill of entry to be filed before end of the introduced. Anti-
preceding day of arrival of goods. avoidance
► Duty has been reduced – gold and silver, goods measures
► Any goods entered for exportation under of iron and steel, copper scrap and others. introduced
wrongful claim of refund or remission of ► Duty has been increased – leather, textile goods,
duty can be confiscated. compressors, auto-components, tunnel boring
► Penalty to be levied in cases where ITC is machine, parts of mobile phones and others.
claimed basis fraudulent invoice and the
same is utilized for payment of tax on
export.
► Two year time limit (further extendable by
one more year) has been laid down for
completion of enquiry and investigation
culminating into issuance of notice.
Indirect Tax | Goods and Services Tax
Highlights
► Zero-rated benefit for supplies to SEZ shall ► GST audit has been replaced by self-certified
be available only for authorized operations. reconciliation statement.
► Option of paying tax and claiming refund in ► On recommendations of GST Council, NO GST
case of zero-rated supplies will be available Commissioner may waive the requirement of Audit
only in case of notified supplies and class of filing GST annual return for notified class of
Union Budget 2021

taxpayers. taxpayers.
► Mutuality concept has been done away with ► Law has been amended to allow input tax credit
Pre-deposit
through specific provisions to levy tax on only in cases where the supplier filed the return
such transaction – this has been done to and details are communicated to the recipient. 25%
overrule the recent Supreme Court ruling. Appeal against
► Mandatory pre-deposit (25% of penalty) required detention
► Law has been amended to give effect to for filing appeal against detention or seizure
interest liability on net tax payment order.
retrospectively from 1 July 2017.
Other Indirect Taxes
Highlights
► Agriculture Infrastructure and Development ► Central sales tax (CST)
Cess (AIDC) ► Form “C” can be issued where the registered person
► For the purpose of financing the agriculture either resell or uses the goods in the manufacture or Levy of
processing for sale of goods currently covered under
infrastructure and other development new cess
expenditure. CST (like petrol and diesel).
Union Budget 2021

► On import of notified goods.
► Also on manufacture of petrol and high speed
diesel.
People Advisory Services
Highlights
► Exemption for LTC Cash Scheme: Legislative ► Reduction in time limit for filing belated/
amendments introduced to give effect to the revised return by three months. Accordingly,
recently introduced LTC Cash Scheme belated return or revised return can now be filed
► To further incentivize affordable housing, up to three months before the end of the
LTC Cash Scheme
the time limit for loan sanctioned from a relevant assessment year or before the legislated
Union Budget 2021

financial institution, has been extended to completion of the assessment, whichever is
31 March 2022 earlier
► Relaxation for certain category of resident ► Higher rates of TDS under certain provisions on
senior citizens of the age of 75 or more, non filers of tax returns for two consecutive tax Timeline
from filing return of Income tax years. It is not applicable for TDS on salary Due date to file
income revised/ belated
► New Section has been introduced to address return reduced by 3
mismatch in taxation of income from notified ► Interest accruing on employee’s contribution to
months and complete
overseas retirement fund. It is applicable for specified provident funds, on contributions in assessments
individuals who are resident in India and excess of INR 2,50,000 per annum, will be
have opened specified retirement fund taxable
accounts outside India, while being non- ► Focus on concluding the process of the
resident in India and resident in that country implementation of four new labor codes.
► Interest for delay in payment of advance tax Specific mention in the budget speech for social
not to be levied on dividend income (not security benefits to be extended to GIG and
applicable on deemed dividend) for platform workers, reduction in compliance
instalments prior to receipt/ declaration of burden on employers, with single registration
dividend income and online returns
Key highlights - People Advisory Services Highlights
► Taxation of proceeds received on maturity of ► Dispute resolution committee to be set up to
high premium unit linked insurance policies reduce litigations for small and medium
(ULIPs) issued on or after 01 February 2021,
where the aggregate premium exceeds INR
2,50,000 per annum
taxpayers for preventing new disputes and
settling the issue at the initial stage
► Time limit for completion of assessment
3 years
Union Budget 2021

Reduction in time
Assessment proceedings reduced by three months. period to issue
► Time period to issue Notice for reopening of Accordingly, the assessment is proposed to be income escaping
assessment of cases: completed within nine months from the end of assessment
► Income escaping assessment (normal cases): the the assessment year notice
time limit has been reduced to three years from
six years
► In specified cases, can be reopened till 10 years
Transfer Pricing
Highlights
► Rationalization of provisions of Minimum ► Reduction of time limit for completing
Alternate Tax (MAT) assessment
Rationalizing
► Amendment to address certain ambiguities: ► The time limit for completion of assessment MAT provision
► It has been proposed that MAT shall not be proceedings has been proposed to be reduced by
applicable on the past year’s income which is three months. For FY 2020-21 onwards, time limit
Union Budget 2021

included in the current year’s books of account to complete transfer pricing assessments will be
3
on account of an Advance Pricing Agreement 33 months from the end of the financial year.
(APA) or a secondary adjustment. ► Faceless proceedings before the Income Tax
► The Assessing Officer shall, based on an Appellate Tribunal (ITAT) months
application made to him in this behalf by the ► Faceless scheme has been launched for ITAT reduction of
tax payer, recompute the book profit of the proceedings in line with the faceless appeal scheme. completing
past year(s) and tax payable, if any, during the assessment
► Likely to apply to appeals involving transfer pricing
previous year, in the prescribed manner.
grounds as well.
► Re-computation of past years book profits will
► The faceless scheme for ITAT proceedings shall be
be done through rectification proceedings.
effective from 1 April 2021. Faceless ITAT
► This amendment shall be applicable from AY
2021-22 onwards.
International Tax
Highlights
► Rationalization of equalization levy ► Changes to the advance ruling process
provisions ► The existing Authority for Advance Ruling (AAR) will
► Taxation as royalty/ fee for technical services cease to operate with effect from date to be notified
under the income-tax law would have priority by the central government Rationalization of
over equalization levy ► Constitution of one or more Boards for Advance provisions related to
Union Budget 2021

► In order to be regarded as “online sale of goods” Ruling will be notified equalization levy
and “online provision of services” for e-commerce ► Central government will introduce a new scheme to
supply or service, certain activities are now impart great efficiency, transparency and
defined accountability and also to introduce dynamic Constitution
jurisdiction of Board for
► Sale of goods and provision of services will be
Advance
covered regardless of whether the e-commerce ► Advance rulings issued by the Board will be
Ruling
operator owns the goods or provides the service appealable before the high court
► Applicability of Income-tax exemption for ► The cases pending before the Authority for Advance
consideration covered by equalization levy Ruling on the notified date will be transferred to the
aligned with 1 April 2020 along with date of Board
applicability of equalization levy ► Corresponding amendments will be made to the
► The amendments will take effect retrospectively relevant provisions with effect from 1 April 2021
from financial year starting from 1 April 2020 ► Definition for “liable to tax” introduced
► No change in applicability of “significant ► The Income-tax Act, 1961 did not provide any
economic presence” criteria for business specific definition of the term “liable to tax”
connection ► The amendment will define this as a liability of tax on
► Accordingly, as provided for by the Finance Act, that person under the law of any country and will
2020, the provision would be applicable from include a case where subsequent to imposition of
1 April 2021 such tax liability, an exemption has been provided
Transaction Tax
Highlights
► Goodwill of a business or profession will not
be eligible for tax depreciation going forward
Depreciation
► The scope of slump sale transactions on Goodwill
amended to specifically include all types
transfers —primarily intended to cover slump
Union Budget 2021

exchange transactions
Substance
over form for
slum sale
Union Budget
2021
Sector Highlights
Agriculture
Highlights
► Increase in the target for agricultural credit ► Agriculture Infrastructure Fund to be made
Agriculture credit
► Ensure availability of higher credit to farmers available to APMCs target increased
and for animal husbandry, dairy and fisheries ► Augmenting availability of funds with APMCs for
sector their infrastructure facilities 15 16.5
► Enhanced allocation to Rural Infrastructure ► Development of 5 major fishing harbours into Lakh crores Lakh crores
Union Budget 2021

Development Fund hubs of economic activity
► Facilitating availability of additional funds for ► Economic and social boost to fisheries sector Allocation to Rural
agricultural and allied activities Infrastructure
► Set-up of Multipurpose Sea-weed Park in Tamil Development Fund
► Enhanced allocation to Micro Irrigation Nadu
Fund ► Filip to employment and additional income
30,000 40,000
► Mobilization of additional resources for crores crores
► Implementation of a special scheme for the
expanding coverage under micro-irrigation 2020-21 2021-22
welfare of tea workers, especially women and
► ‘Operation Green Scheme’ expanded to
children in Assam and West Bengal Allocation to Micro
include additional 22 perishable products Irrigation Fund
► Boost to diversity, inclusiveness and welfare
► Boost in integrated development of agriculture
value chain and exports
5,000 10,000
► Integration of 1000 more mandis with
crores crores
e-National Agriculture Market 2021-22
2020-21
► Increase in transparency and competitiveness in
agricultural markets
Key Highlights – Agriculture Highlights
Key direct tax and corporate law proposals ► Incentivising set-up of one-person company
► No change in income-tax rates applicable to (‘OPC’) by allowing them to grow without any
individuals and co-operative societies restrictions on paid up capital and turnover,
► Start-ups incorporated on or after 1 April
reducing the residency limit for an Indian
2016 and before 1 April 2022 will be citizen to set up an OPC from 182 days to 120 Extension of sunset
Union Budget 2021

eligible for 100% deduction of profits and days and also allow Non Resident Indians clause for deduction of
profits of start-ups and
gains from business for 3 consecutive years (NRIs) to incorporate OPCs in India capital gains exemption
out of 10 years at the option of the ► Conversion of OPC into any other type of by 1 more year i.e. 1
company to be allowed at any time April 2022
taxpayer provided the turnover of business
does not exceed INR 100 crores
► Capital gains arising on transfer of Incentivization
residential property on or before 31 March of set-up of
OPCs
2022 will be exempt where the following
conditions are satisfied within the specified
timelines
► The net consideration received is
utilized for subscription of equity shares
of eligible start-up
► The start-up utilizes the amount for
purchase of new asset
Key Highlights – Agriculture Highlights
Key indirect tax proposals
► No change in Goods and Service Tax rates
Levy of AIDC
► Imposition of Agriculture Infrastructure and Development Cess (‘AIDC’) has been proposed on on import of
import of certain specified goods including identified fertilizers under HSN 31 effective from 2 specified
February 2021. BCD rates for such products have been reduced. AIDC for such identified products goods
Union Budget 2021

under HSN 31 is 5%
► While computing the customs duty, Social Welfare Surcharge would be computed on value
Changes in
including AIDC
BCD rates for
► Changes in BCD rates for certain Agricultural products and by products wef 2 February 2021: certain
agricultural
Chapter Nature of goods Earlier BCD Rate New BCD Rate products
2207 20 00 Denatured Ethyl Alcohol (ethanol) for use in 2.5% 5%
23 All goods in the nature of residues and waste Nil / 5% / 10% / 15%
from food industries except dog and cat food 15% / 20%/ 30%
and shrimp larvae feed
5002 Raw Silk (not thrown) 10% 15%
5004, 5005, Silk yarn, yarn spun from silk waste (whether 10% 15%
5006 or not put up for retail sale)
5201 Raw Cotton Nil 5% + 5% AIDC
5202 Cotton waste (including yarn waste or Nil 10%
garneted stock)
5402 to 5404, 5405 00 Nylon Fibre and Yarn 7.5% 5%
00, 5406, 5501 to 5510
Automotive
Highlights
► Increase in basic customs duty rate of auto ► Proposed TDS @0.1% on purchase of goods
components falling under chapters 70, 73, exceeding INR 50 lakh during a year
85, 87 and 91 from 10 % to 15% ► Sale of motor vehicles covered under section Increase in BCD rate of
206C(1F) will continue to be governed by TCS certain auto components
► Increase in basic customs duty rate for from 7.5% /10% to 15%
provisions
compressors falling under chapter 84 and
Union Budget 2021

► However, recently introduced provision under section
instruments under chapter 90 from 7.5% to Announcement
206C(1H) for TCS on sale of goods shall not apply in
15% case new TDS provision is applicable
of Voluntary
Vehicle
► Reduction in basic customs duty for ferrous ► Equalisation levy provisions amended and scope Scrappage
and non-ferrous metal products falling under seems to cover a wider set of transactions Policy
chapter 72 & 74 used by domestic
► Introduction of Voluntary Vehicle Scrappage
manufacturers for reducing cost of inputs by
Policy to replace old vehicles likely to boost
2.5% Equalisation
demand for newer and less polluting vehicles levy provisions
► Agriculture Infrastructure and Development ► Announcement of significant allocation for clarified
Cess imposed on petrol and diesel with a construction of highways and roads. New scheme to
consequent reduction in other duties and augment public bus transport service likely to aid
cess to ensure no additional burden on the increase in demand for automobile industry and
Reduction in BCD rate
consumer create job opportunities of certain metals by
► Temporary withdrawal of anti-dumping duty
and countervailing duty on import of metals
2.5%
from certain countries including China,
Germany, Vietnam, Korea and Indonesia
Chemicals
Highlights
► PM AtmaNirbhar Swasth Bharat Yojana ► Continued focus on infrastructure projects such INR350 INR
announced with an outlay of INR642 billion as road, highways, railways, urban billion
over 6 years, for creating new healthcare infrastructure through expansion of metro allocated for
institutions and for detecting and curing new projects and city bus service and affordable COVID-19 vaccine
and emerging diseases and INR350 billion housing
Union Budget 2021

allocated for COVID19 vaccine ► Positive impact on varied speciality chemicals
► Positive impact on intermediaries or raw including construction chemicals
materials used for producing active Capital expenditure
► Hydrogen Energy Mission to be launched for
pharmaceutical ingredients increased to INR5450
generating hydrogen from green power sources billion, with focus on
► Allocation of INR2870 billion under “Jal ► Positive impact for hydrogen producing companies creation of infrastructure
Jeevan Mission (Urban)” to be implemented Voluntary vehicle scrapping policy announced to
► Jal Jeevan Mission to be
over a period of five years – aiming at scrap old and unfit vehicles and encourage fuel implemented
universal water supply in 4,378 urban local efficient and environmental friendly vehicles Scheme of Mega
bodies with 28.6 million household tap Investment Textile Parks
► Positive impact for emission control catalyst, proposed
connections polyurethane and TPU
► Positive impact on PVC, water treatment Hydrogen Energy Mission to
be launched
chemicals, etc.
Scheme to encourage
► A scheme of Mega Investment Textiles Parks environment friendly
(MITRA) is proposed to boost manufacturing vehicles
of technical textiles in India and its exports.
Seven textile parks will be established over POSITIVE IMPACT
three years on chemical
sub-segments
► Positive impact on dye and intermediaries,
colourants and paints, speciality chemicals, etc
Key Highlights – Chemicals Highlights
Key indirect tax proposals
► Following changes made in the Basic Customs Duty (BCD) rates with effect from 2 February 2021 BCD increased to
7.5% for Carbon
Chapter Nature of goods Existing BCD rate Proposed BCD rate Black, Bis-phenol A
28030010 Carbon Black 5% 7.5% and Epichlorohydrin
Union Budget 2021

2710 Naphtha 4% 2.5%
2907 23 00 Bis-phenol A Nil 7.5% BCD reduced on
2910 30 00 Epichlorohydrin 2.5% 7.5% Naphtha from 4% to
2933 71 00 Caprolactam 7.5% 5% 2.5% and on
Caprolactam from
► Agriculture Infrastructure and Development Cess (AIDC) is proposed to be levied on following chemical sector goods 7.5% to 5%
with effect from 2 February 2021
Chapter Nature of goods AIDC Existing BCD rate Proposed BCD rate To earmark resources
for improving
2701 Various types of coal 1.5% 2.5% 1%
agricultural
2702 Lignite, whether or not Agglomerated 1.5% 2.5% 1% infrastructure,
2703 Peat, whether or not agglomerated 1.5% 2.5% 1% Agricultural
31021000 Urea 5% 5% Nil Infrastructure and
31023000 Ammonium nitrate 5% 7.5% 2.5% Development Cess
31 Muriate of potash, for use as manure or for 5% 5% Nil payable on chemical
the production of complex fertilisers sector goods. An
31053000 Diammonium phosphate, for use as manure 5% 5% Nil equivalent reduction
or for the production of complex fertilisers has been made to BCD
Defence
Highlights
► Defence budget allocation of INR 1350.60 ► Tax incentives introduced to promote domestic
bn for capital expenditure and INR 2120.27 aircraft leasing market
bn for revenue expenditure ► Defence Acquisition Program (DAP) 2020 introduced
► Increase in budget allocation for capital “Leasing” as an acquisition category in addition to
“buy” and “make” category
defence expenditure by 18.75% over 2020-
19%
Union Budget 2021

► In Oct 2020, aircraft leasing was notified as an
21 (BE)
eligible financial product to be transacted in Increase in Defence
► Policy for Strategic Disinvestment in Defence International Financial Services Centre (IFSC) capital expenditure,
► To increase investment space for private sector ► Proposal for income-tax exemption on royalty income highest in 15 years
and minimize presence of Central Public Sector received on aircraft lease by non-resident lessors
Enterprises (CPSEs), defence is one of the from eligible IFSC units engaged in Aircraft leasing
identified strategic sector for disinvestment Custom Duty on
► Reduction in custom duty rate for domestic components/
► Policy to result in minimal presence of CPSEs in
manufacturing of aircrafts or its parts by public parts of aircrafts
the defence sector and remaining CPSEs to be
sector units reduced from
privatized or merged or subsidiarized with other
CPSEs or closed ► To reduce the cost of raw materials and inputs, basic 2.5% to 0%
custom duty has been reduced from 2.5% to 0% for
components or parts, including engines, for
manufacture of aircrafts by public sector units of
Ministry of Defence
Tax exemption for
aircraft lease rentals
paid to foreign lessors
Financial Services
Highlights
Policy Proposals ► Increase in FDI limit in the insurance sector from
Increase in FDI limit in
► Allowing Debt financing of Infrastructure 49% to 74% with additional controls and the insurance sector
Investment Trust (InvITs) and Real Estate safeguards
Investment Trusts (REITs) by Foreign ► Recapitalization of INR20,000 crores to
Portfolio Investors (FPIs) consolidate the financial capacity of PSBs
Union Budget 2021

► Consolidation of several securities market ► Set up of an Asset Reconstruction Company and 49% 74%
laws into a rationalized single Securities Asset Management Company to take over,
Markets Code manage and dispose existing stressed debts of
► Development of world class Fin-Tech hub at public sector banks to Alternate Investment
International Financial Services Centre Funds and other potential investors Development of
(IFSC) ► Minimum loan size for debt recovery reduced
world class Fin-Tech
hub at IFSC
► Creation of a permanent institutional from INR50 lakhs to INR20 lakhs for NBFCs with
framework for developing the bond market minimum asset size of INR100 crores
► Introduction of an investor charter as a right ► Privatization of two PSBs and one General
Permanent
of all financial investors towards investor Insurance company institutional
protection ► Divestment of Government’s stake in LIC framework for bond
through the IPO route this year market
Key Highlights – Financial Services Highlights
Tax Proposals ► Tax incentive proposals for IFSC units:
Conditions for tax
► Dividend payment to REITs and InvITs shall ► Relaxation of certain conditions for offshore exemption rationalized
be exempt from withholding tax fund manager located in IFSC in case of foreign SWF
► Conversion of urban co-operative banks into ► Exemption on the following: and PF
banking company to be tax neutral
Union Budget 2021

► Income earned by the investment division
► Withholding tax on dividend income paid to of banking unit in IFSC
FPIs to be restricted to DTAA rates, where ► Transfer of non-deliverable forward Tax incentives for
applicable contracts entered by non-resident with an eligible funds
► Rationalization of conditions of tax offshore banking unit in IFSC located in IFSC
exemption for foreign sovereign wealth ► Royalty income earned by non-resident
funds (SWF) and pension funds (PF) from aircraft leasing to IFSC unit
► Tax neutrality on relocation of funds into
IFSC, subject to certain conditions
Infrastructure
Highlights
► Infrastructure has emerged as a top priority ► National Monetisation Pipeline to be set-up for
to fuel Growth, Development and brownfield infrastructure investment and
Employment generation; its “never like monetizing public infrastructure investments.
before”. Certainly, the voice of stakeholders ► Several measures rolled out in direction of
finds an ear in this Budget. monetisation:
Union Budget 2021

► Interestingly, Infrastructure to garner ► Augmentation of funds to be carried out through Set up of Development
revenues under asset monetization program; revised framework of InVITs/ REITs – NHAI and PGCIL Financial Institution
one of the rationales for no increase in to have sponsored InVIT to attract foreign and
domestic investors
taxes.
► Dedicated Freight Corridor and other infrastructure
► Unprecedented increase in capital assets of Railways
expenditure for FY 2021-22 by 34.5% to Rs ► Continue with Airport privatization
5.5 lakh crore to push growth via ► Oil and gas pipelines, Warehousing assets under CPSE
infrastructure creation. etc.
► Much on expectations – Development ► Setup of SPV to monetize land assets of various PSUs Focus on Asset
Monetisation
Financial Institution (‘DFI’) to be set-up and and CPSEs
professionally managed with budgetary ► Commissioning of Western Dedicated Freight
allocation of INR 20,000 crores for funding Corridor (DFC) and Eastern DFC Indian Railways
infrastructure projects – Lending Portfolio to to be completed by June 2022.
be INR 5 lakh crores in 3 years.
Key Highlights – Infrastructure Highlights
► A new scheme to be launched to support ► Scheme to be launched for Power Distribution
augmentation of public bus transport Companies with an outlay of INR 3.05 lakh
services under innovative PPP model to crores over 5 years for Infrastructure creation
enable private sector players to finance, including pre-paid smart metering and feeder
acquire, operate and maintain over 20,000 separation, upgradation systems, etc.
Union Budget 2021

buses Seven Port Projects
► Framework to be established for providing
in PPP Mode
► Strategic divestments in case of core option to choose power distribution company
infrastructure companies such as Shipping ► 7 projects worth more than INR 2,000 crores to
Corporation of India, Air India, Container be offered by the Major Ports on PPP mode in
Corporation of India amongst others to be FY21-22.
completed by FY 2021-22 ► Scheme to promote flagging of merchant ships
► New technologies i.e., ‘MetroLite’ and in India to be launched by providing subsidy
‘MetroNeo’ to be deployed in metro rail support to Indian shipping companies in global Introduction of
Conciliation
systems to enhance experience, convenience tenders floated by Ministries and CPSEs mechanism for
and safety in Tier-2 cities and peripheral ► Announcement of set-up of a Conciliation
disputes
areas of Tier-1 cities. Mechanism for resolution of contractual
disputes for private players carrying out
contracts for Government and CPSEs.
Key Highlights – Infrastructure Highlights
► Dividend payment to REITs/ InVIT exempted
from withholding tax
► Relaxation in conditions to claim 100% tax
exemptions by Sovereign Wealth Funds /
Pension Funds
Union Budget 2021

Introduction of
► Notified Infrastructure debt funds to be able Tax exemption
to raise funds through issuance of zero and Tax holiday
coupon bonds
► Announcement of Tax exemption for aircraft
lease rentals paid to foreign lessors by unit
of IFSC
Media & Entertainment
Highlights
► Certain aspects of e-commerce equalization ► Effective date of applicability of Significant
levy clarified on a retrospective basis from Economic Presence remains unchanged – to Equalization
1 April 2020. M&E players impacted by the apply from 1 April 2021 onwards levy: Scope
levy should analyze the impact: clarified
► Exemption of income chargeable to equalization
Union Budget 2021

levy to apply from 1 April 2020 onwards, instead
of previously 1 April 2021
Significant
► Income taxable as “royalty” and “fees for Economic
technical services” excluded from the scope of Presence:
the levy, thus removing the previous ambiguity Effective date
around potential double taxation remains
► Scope of “online sale of goods” and “online unchanged
provision of services” to include one or more of
the following activities:
► Acceptance of offer for sale
► Placing of purchase order
► Acceptance of purchase order
► Payment of consideration
► Supply of goods or provision of services
► “Consideration received or receivable” on which

levy is chargeable to include consideration
irrespective of whether the e-commerce operator
owns the goods or provides the services
Oil & Gas
Highlights
100
► Petroleum has been classified as a “Strategic ► Ujjwala scheme extended to cover 10 million
Sector” by the government, where central additional beneficiaries
public sector enterprises would have ► Agricultural infrastructure and development
minimum presence. Balance to be privatized/ cess introduced on certain petroleum products, more districts in
merged/ subsidiarized however, other duties calibrated to ensure no CGD network
Union Budget 2021

► Government continues its focus on building a additional burden on consumer
gas-based economy and moving towards a ► No announcement for inclusion of natural gas
10
regime where the natural gas sector will be and aviation turban fuel into the GST regime
deregulated and gas pricing would be market
million
determined. This is meant to be achieved
through: more beneficiaries
► Adding 100 districts to city gas networks over a of Ujjwala scheme
period of 3 years
► Setting up an Independent Gas Transport System
Operator for booking common carrier capacity on
natural gas pipelines on a non-discriminatory
open access basis
► Monetization of certain gas pipelines owned by
PSUs
► Gas pipeline project to be taken up in Jammu and
Kashmir
Pharma & Life Sciences
Highlights
► The total budget outlay for healthcare is ► Launch of Jal Jeevan Mission (Urban) Increase of
INR2.23 lakh crore vs. INR94,452 crores in announced to aim universal water supply in all 137% in
FY 20-21 resulting in an increase of 137% 4,378 Urban Local Bodies with 2.86 crores budget
household tap connections, as well as liquid outlay on
► Provision of INR35,000 crores for Covid-19 healthcare
vaccine in FY 2021-22 waste management in 500 AMRUT cities, with sector
Union Budget 2021

► Pradhan Mantri AtmaNirbhar Swasth Bharat an outlay of INR2.87 lakh crores over 5 years
Yojana proposed to be launched with outlay ► The Urban Swachh Bharat Mission 2.0 will be
of about INR64,180 crore over 6 years to implemented with a total financial allocation of Provision for
INR35,000
develop capabilities of primary, secondary INR1.42 lakh crore over a period of 5 years crore for
and tertiary care health systems, strengthen from 2021-2026 COVID-19
vaccine
existing national institutions, and create new ► Pneumococcal vaccine a Made in India product
institutions including set up of integrated to be rolled across country
public health labs, critical care hospital ► With a view to ensure transparent and efficient Health cess on Medical
blocks, expansion of Integrated Health regulation of the 56 allied healthcare Devices imported by
Information Portal, etc. International
professions, National Commission for Allied Organization and
► Launch of Mission Poshan 2.0 in order to Healthcare Professionals Bill has been Diplomatic Missions
strengthen nutritional content, delivery, introduced in Parliament
outreach, and outcome by merger of ► The National Nursing and Midwifery Commission 5% Nil
Supplementary Nutrition Programme and Bill will be introduced with the intention of
the Poshan Abhiyan bringing about transparency, efficiency and
► Health cess on medical devices imported by governance reforms in the nursing profession
international organization and diplomatic
missions reduced from 5% to nil
Real Estate
Highlights
► Tax holiday for notified affordable rental ► Time limit for claiming exemption on long term
housing projects introduced. capital gains derived by individual/HUF from Affordable housing
approval of project, loan
► Affordable housing projects approved up to sale of residential property by way of sanction approval and
31 March 2022 (‘erstwhile 31 March 2021’) investment in eligible start-up extended by one investment in start up
to be eligible for tax holiday. year. Eligible start-up to mean company/ LLPs for LTCG exemption
Union Budget 2021

incorporated before 1 April 2022 increased by
1
► Additional interest deduction of INR 1.5
lakhs for acquisition of specified residential ► Foreign Portfolio Investors to be permitted to
house property by individuals for loan provide debt funding to REITs. year
obtained till 31 March 2022 (‘erstwhile 31 ► Establishment of Special Purpose Vehicle to
March 2021’). monetise land owned by Government/ Relaxation of variance in
► Deviation up to 120% (‘erstwhile 110%’) Ministries/ PSE case of residential units
where sales consideration is less than stamp between SDV and SC
increased from
duty value for sale of residential units
subject to specified conditions. 10% 20%
► Exemption from withholding tax on dividend
credited or distributed to REITs. TDS on dividend
credited/
distributed to
REITs Nil
Retail and Consumer Products
Highlights
► Increasein purchasing power of rural ► Mega Investment Textiles Parks (‘MITRA’)
and urban consumers likely because of Scheme to create world class infrastructure
focus on capital expenditure, for global champions in the textile sector
leading to creation of 7 textile parks over 3
infrastructure, affordable housing, years. Increase in capital outlay
resulting in increased
Union Budget 2021

health care etc. purchasing power
► Rationalization of customs duty structure by
► Capital expenditure – INR 5.54 lakh crores eliminating outdated exemptions.
(FY 2021-22 BE) as against INR 4.12 lakh
► Rationalization of duties on raw material
crores (FY 2020-21 BE)
inputs to man made textiles/ gold and silver.
► Health outlay INR 2.23 lakh crores (FY
2021-22 BE) as against INR 0.94 lakh
crores (FY 2020-21 BE) Custom duty
rationalization
► Renewed focus on ‘Make in India’/
Indian manufacturing – sourcing
strategies may be impacted.
► PLI launched to create manufacturing
global champions across 13 sectors with
amount committed nearly INR 1.97 lakh 1.97
Lakh Crores
crore in the next 5 years starting FY for PLI scheme
2021-22
Start-up
Highlights
► In order to boost the start-up ecosystem in ► Indirect tax
India, the eligibility period for incorporating ► Requirement of furnishing GST Audit report in Form
the eligible start-up has been extended by 9C has been removed
one more year (i.e., subject to other ► Requirement of furnishing annual return in Form 9 to
conditions, start-up incorporated on or be replaced with a self-certified reconciliation
Extension of date
Union Budget 2021

before 1 April 2022 can now claim income- statement. Due dates to be notified
of incorporation to
tax holiday). ► Requirement of Input Tax Credit reconciliation with
the invoice statement uploaded by supplier inserted claim tax holiday
► Existing provisions of section 54GB provide in CGST Act
exemption from capital gains (from transfer ► One Person Company (OPC) Promoting
of residential property on or before 31st
► The restriction on paid up share capital and annual digital
March, 2021) utilised for subscription in the turnover on an OPC to convert itself into private
equity shares of an eligible start-up. The company or public has been removed
Finance Bill, 2021, has extended the period ► Also, it is proposed to reduce the residency limit for
of transfer of residential property up to 31
12
an Indian citizen to set up an OPC from 182 days to
March 2022 120 days and has also allowed Non Resident Indians months
(NRIs) to incorporate OPCs in India to act as a
► In order to incentivize tax payers to use member and nominee of OPC
digital mode of transactions, the turnover
threshold for tax audit of accounts has been Threshold for tax audit
increased from INR 5 crores to INR 10
crores, where 95% of receipts and payments
5
crores
10
crores
are executed through digital modes
Technology
Highlights
► To give impetus to digital payments, INR ► Social security benefits extended to gig and
1,500 Crores earmarked to promote digital platform workers. Women will be allowed to Promoting
payments work in night shifts with adequate protection Digital
► Internet services to be utilized for National ► Retrospective amendments introduced with
Language Translation Mission for effect from 1 April 2020 to provide clarification
Union Budget 2021

dissemination of governance-and-policy on the applicability of Equalisation Levy
Boost for
related knowledge ► Consideration which is taxable as royalty and fees for
Fin-tech hub
Government to support development of a technical service not to be included
► in Gift City
world class Fin-tech hub at the GIFT-IFSC by ► Nature of activities that would constitute online sale
of goods or provision of services specifically listed
providing additional tax incentives
► Consideration from e-commerce supply shall include:
► National Digital Educational Architecture
► Value of goods irrespective of whether the
(NDEAR) to be set up to support educational Equalisation
operator owns the goods
planning, governance and administrative Levy
► Value of services irrespective of whether the
activities. This will support education eco- services are provided or facilitated by the operator
system architecture for development of ► Zero-rating benefit in case of supplies made to
digital infrastructure SEZ units and developers to be curtailed only in
Zero-rating
benefit available
► Government to launch data analytics, cases where supplies used for authorized for SEZ’s
artificial intelligence, machine learning operations. authorised
driven MCA21 Version 3.0. to have ► Basic Custom Duty rates on certain IT sector operations only
additional modules for e-scrutiny, e- specific products like inputs related to machines
Adjudication, e-Consultation and Compliance capable of connecting to automatic data
Management processing machines, ink cartridges etc. has
been increased from NIL to 2.5%.
Telecom
Highlights
► To promote value addition in the mobile ► In line with industry demand, benefit of
phone industry, Customs Duty on inputs, concessional duty of customs extended to third
parts or sub-parts for manufacture of party manufacturers
specified parts of mobile phones increased ► The government has approved the policy of
► Custom Duty exemptions on inputs and raw disinvestment of Central Public Sector
Union Budget 2021

material used to manufacture certain Enterprises (CPSEs), which provides a clear Promoting domestic
telecom equipment withdrawn to give thrust roadmap for disinvestment in non-strategic and manufacturing
to domestic manufacturing strategic sectors. In strategic sectors, including
telecommunications, there will be a minimal
presence of CPSEs
Value addition in
the mobile phone
promoted
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Going all out for growth
01 February 2021
Going all out for growth
FY22 budget had a clear and decisive agenda, reviving and driving Rs 64 bn over the next six years; 2) Jal Jeevan Mission (Urban)
economic growth. It belied all fears with no additional significant with an outlay of Rs 2.87 trn over the next 5 years.
direct or indirect tax measures, which came as a positive surprise
▪ Banking and Insurance sector also got a fillip. Key features
and a much-needed relief, which would improve sentiment and
include: 1) Plans of setting up a new asset reconstruction
boost growth. Unlike typical budgets, there were no hidden
company (ARC) and asset management company (AMC) as part
additional taxes, which usually tempers down the initial euphoria.
of a strategy to clean up banks’ balance sheets; 2) Government
Tax collections and divestment targets also seem to be more realistic
will look to privatise two public sector banks, along with IDBI
and achievable. Fiscal prudence, which was the underlying tone in
Bank; 3) Increasing permissible limit of FDI from 49% to 74% in
previous budgets, took a complete backseat with fiscal deficit
Insurance sector.
targets and glide path being relaxed substantially. 10-year bond
yields spiked ~15 bps to 6.06%. While R.E. for FY21 fiscal deficit (at ▪ Fiscal deficit estimate rests on credible assumptions i.e. (i) 15%
9.5%) overshot B.E by ~570bps, FY22 fiscal deficit has been pegged YoY higher revenue receipts, in line with nominal GDP growth
at 6.8%, higher than estimates. Capital expenditure budget is up forecasts, led by ~22% YoY growth in direct tax and GST; (ii)
~34% YoY with higher outlays for healthcare and infrastructure Divestment target at Rs. 1.75 trn (~17% lower than FY21BE), led
sector while revenue expenditure has been kept under check with by LIC IPO, Air India, BPCL and other strategic sales.
lower planned subsidy.
▪ Total expenditure is expected to rise by 1% YoY with 19% jump in
▪ Budget 2021 built further on government's directive of industrials/infra while agri+allied is expected to decline by 5%
infrastructure/manufacturing-led economic revival envisaged YoY due to a sharp increase in FY21RE. Defence expenditure is
under the ‘Atma Nirbhar Bharat’ development model. Salient budgeted to rise by 4.8% YoY; more encouraging is the fact that
features include: 1) Introduction of a bill to set up a financial the share of Capex spending is budgeted to rise to 15.9% of total,
institution providing Rs 20 bn crore to launch the National Asset up ~300bps YoY.
Monetisation Pipeline for funding new infra projects; 2) PLI
▪ The glide path also clearly highlights growth priority, implying
scheme across 13 sectors (announced earlier) with planned
expansionary policy would persist in the medium term as fiscal
expenditure of Rs. 1.97 trn, over 5 years starting FY22; 3) Proposal
deficit is expected to fall below 4.5% only by FY26.
of a mega-investment textile park to be launched along with 7
more textile parks over the next 3 years. ▪ Key winners: Infrastructure, Industrials, Banks, Insurance,
Cigarettes
▪ Improving quality of life (providing health, food, and affordable
housing) remains a key priority for the government. Two new
schemes with significant outlays were announced in the budget Varun Lohchab, Head – Research Punit bahlani
viz.: 1) PM Atma Nirbhar Swasth Bharat Yojna with an outlay of varun.lohchab@hdfcsec.com punit.bahlani@hdfcsec.com
Page | 2
Receipt Budget Reclassified
PARTICULARS (Rs bn) FY20A %YoY FY21 RE %YoY FY 22 BE
Income Tax - Corp 5,569 -19.9% 4,460 22.6% 5,470
Income Tax - Indiv 4,927 -6.8% 4,590 22.2% 5,610
Total Income Tax 10,495 -13.8% 9,050 22.4% 11,080
Customs 1,093 2.5% 1,120 21.4% 1,360 Gross Tax receipts to stay
flattish in FY21 and 22 (9.8,
Excise + Svc Tax, etc. 2,467 46.9% 3,624 -7.3% 3,360
9.9% of GDP)
GST 5,988 -14.0% 5,151 22.3% 6,300
Total Indirect Tax 9,547 3.6% 9,895 11.4% 11,020
Total Tax Collected 20,076 -5.6% 18,945 16.7% 22,110
Less : States' share, etc 6,507 -15.5% 5,500 21.0% 6,656
Net Tax Revenues 13,569 -0.9% 13,445 14.9% 15,454
Interest, dividend, grants 1,989 -43.7% 1,120 3.4% 1,158
Others 1,283 -23.1% 987 28.9% 1,272
Growth in other capital receipts
Non Tax Revenues 3,272 -35.6% 2,107 15.4% 2,430
primarily driven by aggressive
REVENUE RECEIPTS 16,841 -7.7% 15,552 15.0% 17,884 disinvestment (INR 1750bn in
Debt receipts (net) 9,287 100.9% 18,660 -23.1% 14,354 FY22)
Other capital receipts (net) 686 -32.2% 465 304.3% 1,880
CAPITAL RECEIPTS 9,973 91.8% 19,125 -15.1% 16,234
TOTAL RECEIPTS 26,814 29.3% 34,677 -1.6% 34,119
Page | 3
Expenditure Budget Reclassified
PARTICULARS (Rs Bn) FY20A %YoY FY21 RE %YoY FY 22 BE
EXPENDITURE HEAD
Interest 6,121 13.2% 6,929 16.9% 8,097
Defence/external/home affairs 4,558 0.3% 4,569 4.8% 4,788 Rise in education and health
expenditure partly negated by
Infrastructure/energy/industry 3,143 19.9% 3,769 19.1% 4,489 drop in social welfare
Agriculture & allied/rural devpt 2,548 41.9% 3,617 -5.2% 3,429
SUBSIDIES
Fertiliser 811 65.1% 1,339 -40.6% 795
Food 1,087 288.8% 4,226 -42.5% 2,428
Petroleum 385 0.7% 388 -66.5% 130

High transfers to states and
Education/health/welfare 1,975 4.9% 2,072 4.4% 2,163 union territories to persist in
Transfer to states & UTs 1,640 57.5% 2,583 34.1% 3,463 FY22
Pension 1,840 11.1% 2,044 -7.4% 1,893
Others 2,755 7.7% 2,967 6.4% 3,157
TOTAL 26,863 28.4% 34,503 1.0% 34,832
Page | 4
Scheme Outlay 2021
YoY Gwth YoY Gwth
Particulars (Rs Bn) FY20A FY21RE FY22BE
(%) 20-21 (%) 21-22
Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) 487 650 650 33% 0%
Capex Support for Railways 802 1,324 1,078 65% -19%
Mahatma Gandhi National Rural Employment Guarantee Program 717 1,115 730 56% -35%
National Highways Authority of India 317 491 574 55% 17%
Road Works 463 524 602 13% 15%
National Health Mission 352 356 371 1% 4%
Pradhan Mantri Awas Yojna (PMAY) 250 405 275 62% -32%
Pradhan Mantri Gram Sadak Yojna 140 137 150 -2% 9%
AMRUT and Smart Cities Mission 96 99 138 3% 40%
Jal Jeevan Mission (JJM)/ National Rural Drinking Water mission 100 110 500 10% 355%
Pradhan Mantri Krishi Sinchai Yojna 82 80 116 -3% 46%
Swachh Bharat Mission (Gramin) 13 10 23 -20% 130%
Swachh Bharat Mission (Urban) 82 60 100 -27% 67%
Aatmanirbhar Bharat Rojgar Yojana - 10 31 NA 213%
Capital Support to NaBFID - - 200 NA NA
PMMY through NCGTC - 5 10 NA 100%
Provision for Guarantee invoked under PCGS - 5 10 NA 100%
Page | 5
Focus charts
Fiscal Deficit as a % of GDP Revenue Deficit as a % of GDP
9.5 8.0 7.5
10.0
9.0 7.0
8.0 6.8
6.0 5.1
7.0
6.0 5.0
4.5 3.9 4.6
5.0 4.1
3.5 3.5 4.0 3.2 3.3
4.0 3.4 2.9 2.5 2.6
3.0 2.4
3.0 2.1
2.0 2.0
FY 22 BE
FY 14
FY 15
FY 16
FY 17
FY 18
FY 19
FY 21 RE
FY 22 BE
FY 14
FY 15
FY 17
FY 18
FY 19
FY 16
FY 21 RE
FY 20
FY 20
Share of Capex in Budget Expenditure on MOA
17 1,600 100%
15.91
16 1,400 1,315 80%
1,245
15 14.13 14.41 1,200 60%
1,018
14 13.29 12.73 1,000 40%
13 12.28 12.50 800 20%
12.03 11.82
12 600 536 0%
445 443
11 400 272 273 -20%
231
10 200 -40%
FY 22 BE
FY 14
FY 15
FY 17
FY 18
FY 19
FY 16
FY 21 RE
FY 22 BE
FY 14
FY 15
FY 17
FY 18
FY 19
FY 16
FY 21 RE
FY 20
FY 20
Page | 6
Focus charts
Expenditure of Ministry of Rural Development Expenditure on MGNREGA
2,500 80.00% 1,400
1,974 1115
2,000 60.00% 1,200
40.00% 1,000
1,500 1,221 1,315
1,086 1,118 20.00% 800 717 730
951 618
1,000 864 552
677 775 0.00% 600 482
373
500 325 350
-20.00% 400
0 -40.00% 200
FY 22 BE
FY 22 BE
FY 15
FY 16
FY 17
FY 18
FY 14
FY 16
FY 17
FY 18
FY 19
FY 14
FY 19
FY 15
FY 21 RE
FY 21 RE
FY 20
FY 20
Expenditure on Pradhan Mantri Awas Yojna Expenditure on Pradhan Mantri Gram Sadak Yojna
450 200 183

405 179
400 180 169
154 150
350 312 160 145
140 137
300 275 140
254 250
250 210 120
99
200 155 100
150 130 116 80
100 60
FY 22 BE
FY 21 RE
FY 15
FY 16
FY 17
FY 18
FY 14
FY 19
FY 22 BE
FY 21 RE
FY 15
FY 16
FY 17
FY 18
FY 14
FY 19
FY 20
FY 20
Page | 7
Contributing analysts
INDUSTRY ANALYST EMAIL ID PHONE NO.
Head - Research (Consumer, Strategy) Varun Lohchab varun.lohchab@hdfcsec.com +91-22-6171-7334
Aditya Makharia aditya.makharia@hdfcsec.com +91-22-6171-7316
Autos, Logistics, Aviation
Mansi Lall mansi.lall@hdfcsec.com +91-22-6171-7357
Madhukar Ladha madhukar.ladha@hdfcsec.com +91-22-6171-7323
AMCs, Brokerages, Insurance
Sahej Mittal sahej.mittal@hdfcsec.com +91-22-6171-7325
Krishnan ASV venkata.krishnan@hdfcsec.com +91-22-6171-7328
Banks, NBFCs Aakash Dattani aakash.dattani@hdfcsec.com +91-22-6171-7314
Punit Bahlani punit.bahlani@hdfcsec.com +91-22-6171-7354
Rajesh Ravi rajesh.ravi@hdfcsec.com +91-22-6171-7352
Cement & Building Materials
Saurabh Dugar saurabh.dugar@hdfcsec.com +91-22-6171-7353
Parikshit Kandpal parikshit.kandpal@hdfcsec.com +91-22-6171-7317
Construction & Infrastructure, Capital
Rohan Rustagi rohan.rustagi@hdfcsec.com +91-22-6171-7355
Goods, Real Estate
Chintan Parikh chintan.parikh@hdfcsec.com +91-22-6171-7330
Naveen Trivedi naveen.trivedi@hdfcsec.com +91-22-6171-7324
Consumer Durables, FMCG
Aditya Sane aditya.sane@hdfcsec.com +91-22-6171-7336
Apurva Prasad apurva.prasad@hdfcsec.com +91-22-6171-7327
IT Services & Exchanges Amit Chandra amit.chandra@hdfcsec.com +91-22-6171-7345
Vinesh Vala vinesh.vala@hdfcsec.com +91-22-6171-7332
Harshad Katkar harshad.katkar@hdfcsec.com +91-22-6171-7319
Oil & Gas, Chemicals Nilesh Ghuge nilesh.ghuge@hdfcsec.com +91-22-6171-7342
Rutvi Chokshi rutvi.chokshi@hdfcsec.com +91-22-6171-7356
Bansi Desai bansi.desai@hdfcsec.com +91-22-6171-7341
Pharma
Karan Vora karan.vora@hdfcsec.com +91-22-6171-7359
Retail & Fashion, Paints Jay Gandhi jay.gandhi@hdfcsec.com +91-22-6171-7320
Page | 8
Autos
Budget Highlights Impact Recommendations
▪ The budget has given an impetus to infrastructure ▪ This will lead to improved investments ▪ This is positive for CV OEMs,
investments across road, rail and ports. The across the country, which will be beneficial including Tata Motors, Ashok
capital expenditure amount is Rs 5.54 trillion vs. to the CV OEMs Leyland
Rs 4.39 trillion (+26% YoY)
▪ Spending on road will go up to Rs 1.08trillion in ▪ Improvement in road infrastructure will ▪ In the near term, CV OEMs will
FY22E from budgetary provision and total lead to demand for automobiles benefit
spending will be Rs 1.73trillion (+10% YoY) in
FY22E
▪ Scrapping scheme has been announced for cars ▪ While the scheme is positive for auto OEMs, ▪ This is positive for CV OEMs
and CVs. PVs would undergo fitness tests after 20 we will await further details as this is a including Tata Motors, Ashok
years and CVs after 15 years voluntary scrapping policy. We await details Leyland, M&M and Eicher
of any incentives that will be offered for
scrapping vehicles (detailed policy will be
announced in 10-15 days)
▪ To increase the share of bus-based public ▪ This scheme will enable private sector ▪ This is positive for CV OEMs
transport in urban areas, the government will operators to operate over 20,000 buses including Tata Motors, Ashok
launch a scheme of Rs 180bn to support Leyland
augmentation of public bus transport services
▪ Agriculture credit will increase to Rs 16.5 trillion ▪ This will lead to increased farm incomes, ▪ This will be positive for OEMs with
in FY22 (+10% YoY). Further, the quantum of which will drive demand for PVs and 2Ws dominant market share in the rural
procurement under MSP has steadily increased. in the rural markets. The e-NAM markets (Maruti Suzuki and Hero
Also, the e-NAM procurement will be extended to procurement will be extended to 1,000 more Motocorp)
1,000 more mandis. Rs 1.14 trillion of trade value mandis, which will further increase
has been carried out through e-NAMs competitiveness of agriculture produce
▪ Import duty on auto components including ▪ This will promote localisation of auto
ignition wiring sets, safety glass etc. has been components and is a medium term positive
increased to 15% from 7.5% currently for auto component manufacturers
Page | 9
Banks & NBFCs/HFCs
▪ Big fillip for infra spending and capacity- ▪ This has a multiplier effect for lending ▪ Positive growth catalyst for corporate-
building across key sectors in the economy institutions, especially corporate-facing facing lenders such as SBIN, ICICIBC
institutions and AXSB
▪ Proposal to set up a new Asset Reconstruction ▪ Game-changing move aimed at efficient ▪ Positive from a capital efficiency
Company (ARC) and Asset Management cleansing of stressed asset portfolios across perspective for banks that are
Company (AMC) structure to consolidate, the banking sector and unlocking capital currently saddled with large corporate
acquire, monetise and resolve stressed assets towards productive assets (away from idle NPAs - ICICI Bank, Axis Bank and
and unproductive assets) State Bank of India
▪ Proposal to recapitalise PSU banks to the extent ▪ Together with the potential capital that is ▪ Positive for PSU banks such as SBIN,
of INR200bn likely to get unlocked from selling down BOB, PNB, CBK, UNBK and INBK that
stressed assets into the new ARC + AMC have undergone consolidation in
structure, this will sufficiently equip PSU earlier rounds
banks with adequate growth capital
▪ Proposal to set up a Development Financial ▪ Negligible - a better alternative would have ▪ Negative for sovereign-owned NBFCs
Institution (DFI) for infrastructure financing been to re-purpose existing sector-specific such as PFC and REC
sovereign-owned NBFCs with a broader
infra mandate
▪ Deficit-funded budget to pump-prime the ▪ While the Budget has not introduced any ▪ Negative for lenders, especially NBFCs
economy new taxes or cess, the cost of money is with a higher mix of wholesale
likely to go up in the medium term funding
Page | 10
Banks & NBFCs/HFCs…cont’d
▪ Proposal to privatise 2 PSU banks ▪ The liability franchise for many fringe PSU ▪ Positive for large banks, especially
banks relies heavily on sovereign support, private sector banks, which could
without which the deposits may not be benefit from deposit share migration
stable
▪ Reduction in minimum loan size eligible for ▪ Should result in better enforceability of ▪ Positive for NBFCs with higher ticket-
debt recovery under the SARFAESI Act from collateral and greater credit discipline, sized exposure such as Loans Against
INR5mn to INR2mn especially in the case of secured lending Property
▪ Launch of a revamped, reforms-based result- ▪ Distribution companies are currently the ▪ Positive for PFC and other lenders
linked power distribution sector scheme for weakest link in the power sector ecosystem, with a large, stalled, power-sector
infrastructure creation including smart metering largely on account of continuing leakages exposure
in the form of high T&D losses
▪ Financial incentives to promote digital modes of ▪ Higher outlay by the government should ▪ Positive for large acceptance
payments help cross-subsidise the digital payments infrastructure players, especially banks
ecosystem without unduly high merchant (lower burn rate)
discount rates (MDRs)
Page | 11
Cement and Building Materials
▪ Total fund allocation for road projects under ▪ Should boost cement demand ▪ Positive
Ministry Of Road Transport and Highways
increased to Rs INR 1.73 trn, 18/17% increase
over FY21BE/FY20A and Pradhan Mantri Gram
Sadak Yojna increased to Rs INR 150 bn, a 7%
increase over FY20A, but a 23% decline from
FY21BE.
▪ Total fund allocation for Ministry of Rural ▪ Should boost both cement and building ▪ Positive
(including IEBR) increased to Rs INR 374 bn, material demand
27/29% increase over FY21BE/FY20A and
Ministry of Housing and Urban Affairs
(including IEBR, Smart City and AMRUT)
decreased to Rs INR 378 bn, a 27/2% decrease
over FY21BE/FY20A
▪ Total fund allocation for Ministry of Jal Shakti ▪ Should accelerate pipes (metal + plastic) ▪ Positive
increased to Rs INR 500 bn, 4.3x/5.0x the demand
FY21BE/FY20A spend.
▪ Extension of additional deduction of interest, ▪ Should marginally boost both cement and ▪ Positive
amounting to INR 1.5 lakh, for loan taken to building materials demand
purchase an affordable house and tax holiday
extension
Page | 12
Consumer
▪ The Basic Customs Duty (BCD) on alcoholic ▪ The total tax impact on imported alcholic ▪ Neutral for the sector as there is no
beverages (brandy, bourbon, whiskey, scotch, beverages remains unchanged. change in the effective tax rate on
etc) reduced from 150% to 50% and Agri Cess imports.
(AIDC) of 100% has been introduced.
▪ BCD on Crude Palm Oil changed from 27.5% to ▪ The total duty on Crude Palm Oil has gone ▪ This can be a mild negative for the
15% and AIDC of 17.5% has been introduced. up to 32.5% from 27.5%. FMCG sector- specifically personal
▪ The increase in duty will lead to increase care companies like HUL and GCPL.
cost of manufacturing for FMCG
companies.
▪ However, Palm Oil has seen high inflation
in the last few months and, hence, the
overall impact will not be significant.
▪ BCD on compressors of Refrigerators and Air ▪ This has been done to promote local ▪ Mild negative for other RAC players
Conditioners increased from 12.5% to 15%. manufacturing of components and finished like Voltas, Havells, Blue Star, etc due
▪ BCD on LED lights and parts of manufacturing goods. to increased input cost. May require
LED has increased to 10% from 5%. ▪ Combined with PLI, this will drive <1% price hike to pass on.
companies to expand production capacity
in India over the next few years.
▪ Rural development budget increased from Rs ▪ It will further aid the he rural economy, ▪ Increase in investment behind rural
1,200bn to Rs 1,315bn (up ~10%) which has been growing well since last one employment is a positive for
▪ MGNREGA budget increased from Rs 615bn to year. consumption categories (FMCG and
Rs 730bn. ▪ The increase in budget for MGNREGA will Consumer Durables).
▪ Rural housing development budget remained drive increased employment in rural areas,
stable at Rs 195bn. leading to continuing growth in
consumption.
Page | 13
Industrials
▪ The total allocation (including IEBR) to Ministry ▪ Will boost order flows ▪ Positive for most Infra companies
of Road Transport and Highways at Rs 1.7trn,
10.3% growth
▪ For FY22, the total capital and development ▪ Will aid order pipeline ▪ Positive for KEC , L&T, Siemens,
expenditure (including IEBR) of Railways has RVNL, RITES, IRCON, BEML ,
been pegged at Rs 2.14tn a decline of 10.8%, on Titagarh, Texmaco, etc.
higher base
▪ Allocation to Pradhan Mantri Gram Sadak ▪ Help build qualification and competition ▪ Positive for smaller infra players
Yojana has been increased to Rs 150bn vs Rs
137bn YoY.
▪ Infra focused Development Financial Institution, ▪ Long-term lending constraints has limited ▪ Positive for most Infra companies
with initial capital of Rs 200bn. This DFI is infra asset creation in India. This shall aid
expected to lend (long term) Rs 5trn over the next acceleration of infrastructure assets and
3years ordering
▪ Dividend payment to InvITs/REITs exempt from ▪ More procedural and sentimental relief ▪ Positive for InvITs
TDS; Advance tax liability on dividend income
after declaration/payment of dividend;
Deduction of tax on dividend income at lower
treaty rate
▪ Launch of National Monetisation Pipeline; Toll ▪ Will open more funding raise avenues for ▪ Positive for most Infra companies
roads, transmission lines, gas pipelines, railway order awards
infra. assets, etc. would be divested; DFC would
be monetised for O&M
Page | 14
Industrials… cont’d
▪ Central part funding for metro Kochi Ph 2 ▪ Will boost order flows ▪ Positive for ITD, LT, JKIL, KEC,
(11.5km, Rs 19.6bn), Chennai Ph 2 (119km, Rs Siemens, BEML etc
632.5bn), Bengaluru Ph 2A & 2B (58km, Rs
147.9bn), Nagpur Ph 2 (Rs 59.8bn) and Nashik
(Rs 20.9bn);
▪ Suitable amendments to relevant regulation to ▪ This will accelerate asset monetization ▪ Positive for listed InvITs
enable debt financing of InvITs/REITs by FPI. program and free up banks debt
This was envisaged in 2019, RBI guidelines
awaited
▪ MRTS and Metro projects outlay has been ▪ Will add to orders flows ▪ Positive for LT, JKIL, KEC, ITD,
increased to Rs 248.7bn, which is 155% higher Siemens, BEML etc
YoY, on a lower base (Rs 191/97.5bn in
FY20/FY21RE)
▪ Total outlay by Ministry of Power at Rs 615.6bn ▪ Will aid order pipeline ▪ Positive for companies in T&D space
vs Rs 506bn (FY21RE) (Kalpataru Power and KEC
International
▪ Allocation to Ministry of Jal Shakti increased ▪ Will aid order pipeline. ▪ Positive for LT, NCC, PNC,JMC etc
sharply from Rs 110bn (FY21RE) to Rs 500bn
▪ Rs 117.8bn Capex target for IREDA and SECI ▪ Will aid order pipeline. ▪ Positive for power generation
(under IEBR) vs. Rs 100.9bn in FY21RE. companies
▪ Capital outlay on defence services pegged at Rs ▪ Will aid order pipeline ▪ Positive for LT, BEML, BEL, HAL etc.
1.35trn, flat YoY
Page | 15
Industrials… con’d
▪ National highways on more economic corridors ▪ Will aid order inflow ▪ Positive for developers with South
planned: Tamil Nadu (3,500km, Rs 1trn), Kerala exposure like KNR, NCC, Ashoka,
(1,100km, Rs 650bn), West Bengal (675km, Rs DBL etc
250bn)
▪ Reform/result-linked power distribution scheme ▪ Will aid ordering ▪ Positive for Capital Goods EPC like
with an outlay of Rs 3trn over the next 5 years; KEC, LT, KPTL and product
The scheme to provide assistance to DISCOM for companies Siemens, ABB etc
creation of infrastructure
▪ Major ports to be offered on PPP mode ▪ Positive for port developers ▪ Adani, Gujarat Pipavav
▪ Zero Coupon bond issuance allowed for any ▪ Positive for raising long term funds as ▪ Positive for all infra companies as this
infrastructure capital company or infrastructure payment is due only on maturity will accelerate awarding
capital fund or public sector company or
scheduled bank
▪ Jal Jeevan Mission with aim to provide on tap ▪ Will aid ordering ▪ All Industrials companies
water supply and liquid waste-water
management system to 28.6mn urban household;
Total capital outlay of Rs 2.9trn over the next 5
years
▪ 100% tax exemption was granted to Sovereign
▪ Positive for monetisation ▪ Positive for all HAM/BOT asset
Wealth Funds earlier. Still some SWFs were
owners viz. PNC, Ashoka, LT, KNR,
facing issues and in meeting conditions. The FY22
DBL, HG etc
budget relaxes some of these conditions relating
to prohibition on private funding, restriction on
commercial activities, and direct investment in
infrastructure
Page | 16
IT Services
▪ Government to realign existing scheme of ▪ This will enhance the employability of the ▪ Mild positive for TCS, Infosys, Wipro
National Apprenticeship Training Scheme engineering graduates and support the
(NATS) for providing post-education offshore supply-side metrics for IT
apprenticeship, training of graduates and companies.
diploma holders in Engineering and has
allocated Rs 30bn towards it.
▪ Outlay of Rs 1.5bn for FY22 (Rs 1bn in FY21 RE) ▪ The program facilitates set-up of IT/ITeS ▪ Mild positive for TCS
towards promotion of IT/ITeS industries under facilities beyond major cities and supports
NEBPS & IBPS schemes; this is part of the access to talent supply and fungibility.
Digital India Program outlay of Rs 67.7bn for
FY22 (Rs 29.8bn in FY21 RE).
Exchanges
▪ Gold exchange will be set up with SEBI as the ▪ The setting up of a dedicated gold exchange ▪ MCX is in the advanced stages of
regulator. The WDRA will be strengthened to will boost physical delivery volume, setting up a gold spot exchange, which
set up a commodity market ecosystem and will increase hedging activity and will lead to is a positive for the exchange
provide warehouse facilities like with vaults and local price discovery for gold.
logistics.
Page | 17
Logistics
▪ Budgetary spending on railways has increased ▪ Higher rail Capex will be beneficial for ▪ Positive for rail operators - CONCOR
from Rs 678bn in FY20 to Rs 1.08trillion in FY21. CTOs and Gateway Rail
Including IEBR, the total railway Capex
spending in FY21 stands at Rs 2.4trillion (+62%
YoY) from Rs 1.48trillion in FY20. The
expenditure for FY22E will remain elevated at
Rs 2.14trillion.
▪ The government has referred to it National Rail ▪ Government remain committed to ▪ Positive for CTOs such as CONCOR
Plan (pls see link to our note: Indian Railways - enhancing railway capacity and Gateway Rail
getting aggressive) in shaping the development
plans of IR. To lower the logistics cost of the
country, focus is on completing the WDFC and
EDFC by Jun-22.
▪ 100% electrification of broad gauge railway ▪ Government is committed to increase the
tracks will be completed by Dec-23. Railways speed of railway transport which will bring
will achieve 72% electrification (46,000 RKM) by down logistics cost as a percentage of GDP
end of 2021 (up from 41,548 RKM on 1st Oct
2020).
Page | 18
Non-leveraged financials
▪ Exemption u/s 10 (10D) disallowed for proceeds ▪ Disincentivise ULIP sales for ticket sizes > ▪ Negative for Life insurance as ULIP
from ULIPs invested in policies purchased on or INR 250K. sales will get negatively impacted.
after 1/2/2021, in case aggregate ticket sizes (p.a.) ▪ Expect higher sales of regular premium vs. ▪ We expect IPRU to be most impacted
are higher than INR 250K. Such ULIP proceeds single pay. amongst the listed insurers as avg.
will now be taxable as capital gains. Applicable ticket size for ULIP is INR 183K in
▪ Insurance companies may look at reducing
tax rate is 10%. FY20 with ULIPs contributing 48.2% in
expense ratios.
to 9MFY21 APE.
▪ Level playing field achieved for
investments in mutual funds and higher ▪ Avg. ticket sizes of HDFC Life/MFSL
than INR 250K ticket sized ULIPs. Thus, at INR NA/134K will be the next in
incrementally benefits asset managers. line. ULIP contribution in total APE for
HDFC Life/MFSL is 19.5/31.5%
(9M/1HFY21).
▪ Despite ULIPs contributing 62.0% to
total APE (9MFY21), we expect a
limited impact on SBILIFE as average
ticket size for the co is < INR 100K and
target customer segment is materially
different.
▪ Positive for Asset Managers-
HDFCAMC, MOFS, NAM, and
UTIAM.
▪ LIC to IPO in FY22E. ▪ Increase in supply of life insurance paper. ▪ Continue to prefer pvt. life insurers.
Page | 19
Non-leveraged financials… cont’d
▪ FDI limit in Insurance increased from 49% to ▪ Foreign investors will be allowed to ▪ Allows for easier foreign investment in
74% purchase a majority stake in insurance the sector.
companies and in some cases direct control ▪ May also allow easier exit for banks
will also be allowed. /NBFCs to meet RBI circular limiting
holding in insurance to 30/50%
▪ Privatisation/disinvestment of a PSU general ▪ Details awaited. ▪ Prefer private general insurers such as
insurer. ICICIGI.
Page | 20
Oil and Gas
▪ FY22BE total subsidy provision is INR 140.73bn ▪ We believe that subsidy provision is ▪ Neutral for OMCs and upstream
for LPG, and nil for Kerosene. adequate. companies.
▪ If oil prices go up, government will
make additional provision for subsidy.
▪ Customs duty on naphtha reduced from 4% to ▪ Marginally negative for oil refineries
2.5%.
▪ An Agriculture Infrastructure and Development ▪ The Basic Excise Duty (BED) and Special ▪ Neutral for the sector
Cess (AIDC) of INR 2.5/ltr has been imposed on Additional Excise Duty (SAED) rates have
petrol and INR 4/ltr on diesel. been reduced on them so that overall
consumer does not bear any additional
burden.
▪ 100 more districts to be added in the next 3 years ▪ More GAs will be available for CGD ▪ Positive for CGD entities and GAIL,
to the City Gas Distribution network. entities. Gas transmission volumes will GSPL and PLNG.
increase. ▪ This should support gas demand
growth.
▪ Oil and Gas Pipelines of GAIL, IOCL and HPCL • Neutral for the sector
will be covered under the asset monetisation
programme.
▪ Independent Gas Transport System Operator • Neutral for the sector
will be set up for facilitation and coordination of
booking of common carrier capacity in all-
natural gas pipelines.
Page | 21
Pharma & Healthcare
▪ Budgeted healthcare spend increased by ~11% ▪ Government’s spend on healthcare is 1.8% ▪ Neutral for the sector
YoY to INR 746bn, ~2.1% of total budgeted of GDP which is significantly lower than
expenditure in FY22BE. Allocation towards D/o the global average of ~4.4%
Health & Family Welfare (INR 713bn), D/o
Health Research (INR 27bn) and D/o
Pharmaceuticals (INR 4.7bn)
▪ Introduction– PM Atma Nirbhar Swasth Bharat ▪ Facilitates setting up of ▪ Positive for hospitals
Yojana with an outlay of INR 642bn over 6 hospitals/institutions especially in tier II/III
years to develop capacities of primary, towns, which lack adequate bed capacity
secondary, and tertiary healthcare systems and
create/strengthen existing institutions in
addition to the National Health Mission
▪ Provision of INR 350bn for COVID-19 vaccines ▪ To boost the earnings/ cash flows of COVID ▪ Positive for Cadila, Dr. Reddy’s,
with a commitment to provide more if required vaccine manufacturers/ distributors Aurobindo
▪ Rolling out of ‘Made-in-India’ Pneumococcal ▪ Decent opportunity for indigenous vaccine ▪ Positive for Aurobindo, GSK, Pfizer
vaccine (PCV) across the country which is manufacturers like Serum Institute (entered
presently only in 5 states in Dec 20 at ~USD 3/10 for public/private
market) and Aurobindo (currently
undergoing phase 3 trial).
▪ MNCs GSK and Pfizer vaccines’ market
size is ~INR 4.5bn (as per AIOCD).
Awareness could lead to market expansion
Page | 22
Real Estate
▪ Tax holiday on profits earned by developers of ▪ Positive for affordable housing players as ▪ Positive for Kolte Patil, Prestige,
affordable housing projects has been extended by this will promote more affordable housing Sobha, Brigade etc.
one year. All affordable housing projects projects
approved before 31st Mar 2022 will stand to
benefit. This step is taken to promote affordable
housing development
▪ In order to provide relief to taxpayers, advance- ▪ More of timing difference and reduces ▪ Neutral
tax liability on dividend income shall arise only hassles of claiming TDS
after the declaration/payment of dividend. The
dividend paid to Real Estate Infrastructure Trusts
or Infrastructure Investment Trusts (REIT/InvIT)
shall be exempt from TDS.
▪ It is also proposed to clarify that deduction of tax ▪ Positive from flows perspective and FPI
on incomes including dividend income of ▪ Will aid REITs raise fund
Foreign Portfolio Investors may be made at treaty
rate. It is also proposed to exempt dividend
payment from levy of Minimum Alternate Tax
(MAT) for foreign company if the applicable tax
rate is less than the rate of MAT.
▪ Additional Rs 0.15mn interest deduction (over ▪ Positive for affordable housing players as ▪ Positive for Kolte Patil, Prestige,
and above Rs 0.2mn currently) under new section this will promote more affordable housing Sobha, Brigade etc.
80EEA was allowed for Loans taken from 1 st projects
Apr2019 to 31st Mar 2020 during FY20 budget.
This has been extended by one more year up to
31st Mar 2022.
Page | 23
Real Estate… cont’d
▪ In order to incentivise home buyers and real ▪ Circle rate and agreement value differential ▪ Neutral
estate developers, it is proposed to increase safe was increased earlier in Nov-20 from 10% to
harbour limit from 10% to 20% for the specified 20% so no change in budget
primary sale of residential units.
▪ Allocation to PMAY Rural and Urban has been ▪ Impact in urban areas is neutral; affordable ▪ No impact
reduced from Rs 405bn to Rs 275bn during FY22E stock was getting developed by private
developers
▪ Debt Financing of InVITs and REITs by Foreign ▪ Positive from flow perspective ▪ Will aid REITs raise fund
Portfolio Investors will be enabled by making
suitable amendments in the relevant legislations.
This was announced in 2019 also but didn’t
move. If RBI notifies guidelines, it will further
ease access of finance to InVITS and REITs, thus
augmenting funds for infrastructure and real
estate sectors
▪ To promote supply of Affordable Rental Housing
▪ Neutral ▪ We don’t expect our coverage
for migrant workers, the Union Budget has
universe to participate in rental
allowed tax exemption for notified Affordable
housing projects
Rental Housing Projects.
Page | 24
Retail & Fashion
▪ Custom duty on gold and silver reduced from ▪ The duty cut are likely to reduce gold prices ▪ Positive for Titan and Thangamayil.
12.5% from 7.5% and thereby spur fresh gold/jewellery
purchases . This is a welcome change for an
▪ Custom duty on gold dore bares have been
industry, which has seen 2 years of back-to-
slashed from 11.85% to 6.9% and and that of
back volume declines, courtesy spiralling
silver dore has been reduced from 11% to 6.1%
gold prices (30% YoY).
▪ Note: Both categories will attract Agriculture
▪ The duty cut is likely to dissuade
Infrastructure and development cess rate of
smuggling of gold and also makes
2.5%
organised jewellery retail more competitive
vs its unorganised counterparts
Page | 25
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Page | 26
Union Budget 2021
Economic indicators
GDP to contract by Current account

7.7 percent in FY20-21 recorded a
surplus of
GDP growth for
FY22 is projected at
3.1 percent
of GDP in H1 FY21
11 percent* due to modest
imports
The RBI cut repo rate by May record a

surplus of
115 basis points to
4 percent after March 2020 2 percent
for FY21 altogether
Continues with
an accommodative
monetary policy stance
Net FDI inflow jumps to

US$27.5 billion for April-October 2020
14.8 percent higher than April-October 2019
Fiscal deficit in FY21 is projected CPI averaged at

to increase to 9.5 percent 6.6 percent
of GDP from April to December
To target 6.8 percent
2020, driven primarily
by food
in FY22 and below
inflation and
4.5 percent supply
by 2025-2026 disruptions
INR averaged at 74.63

Exports
contracted by
from April to December
2020 as against 15.7 percent
70.38 to US$ 200.8 billion
from April to from April to December 2020
December in 2019
*Growth is measured on a year-over-year basis on real values.
© 2021 Deloitte Touche Tohmatsu India LLP

Union Budget 2021
Top 10 policy
announcements
Government-owned Public sector

development banks proposed
finance institution to be
for infrastructure recapitalised up
debt financing to to INR 20,000
be set up crores (~US$2.67
billion)
A new asset reconstruction
company and an asset
management company
will take over existing
stressed debt
A new entity to be introduced to purchase debt

securities; infrastructure debt funds to be
allowed to raise capital through zero coupon
bonds; infrastructure trusts to be enabled to
borrow from foreign portfolio investors (FPIs)
A single securities markets Privatisation of two public

code to be introduced by sector banks and a general
consolidating four existing insurance company
acts covering capital announced; ongoing
market, depositories, disinvestments of
securities four public
contracts, and sector
government enterprises
securities to be
regulations completed
in FY22
Pipeline for monetisation of public assets

such as roads, railways, oil and gas
infrastructure, power transmission
infrastructure, warehouses, sports
stadiums, etc., to be put in place
Foreign direct investment limit Higher Education

in the insurance sector Commission to be
proposed to be hiked established through a
from 49 percent to legislation for
74 percent standard-setting,
accreditation,
regulation,
Regulated gold
and
exchanges to be set
funding
up countrywide

Union Budget 2021
Top 10 tax highlights
No changes to corporate or Equalisation

personal income-tax rates levy expanded
by clarifying a)
scope of online
International Financial Services sale of goods/
Centre (IFSC): Eligibility conditions provision of
for India based fund manager services and b)
regime relaxed; income-tax consideration
exemption expanded for offshore on which the
banking units; royalty levy
income from aircraft applies
leasing to IFSC units
exempted
Tax holiday extended to startups incorporated

up to 31 March 2022; capital gains exemption
on investment in startups extended to
31 March 2022
Tax holiday on affordable New tax deduction at

housing projects extended source (TDS) at 0.1%
to those approved by 31 introduced for
March 2022; scope of the tax payments by specified
holiday expanded persons for purchase
to cover affordable of goods from
rental housing a resident
projects seller
Income-tax assessment timelines and the re-

assessment window to be reduced to nine
months and halved to three years, respectively
Faceless Income-tax A new Agriculture Infrastructure

Appellate Tribunal and Development Cess (AIDC) on
(ITAT) appeals import of 25 notified products
scheme with from 2 February 2021 and as
dynamic jurisdiction excise duty on petrol and diesel
to be introduced; once notified; consequential
Authority for reduction in basic
Advance Rulings customs duty also
replaced by Board announced
for Advance Rulings;
Settlement
Commission
discontinued – Customs duty structure to be
pending rationalised by eliminating
applications to be outdated exemptions and phasing
heard by interim out of all conditional exemptions
boards by 31 March immediately
after two years of
introduction

R. C. Jain & Associates LLP
BUDGET COMMITTEE MEMBERS
DIRECT TAX
1. CA R.C Jain 5. CA Nilam Jain
2. CA Gopal Agarwal 6. CA Sheetal Mankani
3. CA Basant Agaewal 7. CA Roma Hingorani
4. CA Meera Joisher 8. CA Dimpi Gala
5. CA Manoj Pokharana
In Association with
1. Misba Shah 5. Juhi Mansukhani
2. Sonam Hotchandani 6. Ritik Karotra
3. Bhavesh Bang 7. Janvi Unadket
4. Chanchal Moorpani 8. Priya Suthar
INDIRECT TAX
1. CA Shraddha Vora 2. CA Priyanka Shah
In Association with
1. Deepak Bamane 5. Tushar Zore
2. Soham Tahsilkar 6. Jay Gudka
3. Radhika Yadav 7. Shreya Joshi
4. Sagar Mohite
1
INDEX
Sr. No. Particulars Page No.
HIGHLIGHTS OF UNION BUDGET 2021 4-6
DIRECT TAX
A Tax Rates 7-8
B Salary 9-10
C Profit & Gains of Business or Profession 11-14
D Capital Gain 15-16
E Special Cases 17-19
F Tax Deducted at Source and Tax Collected at Source 20-24
G Minimum Alternate Tax 25-26
H Losses & Relief Etc. 27-28
I Filing of Returns, Assessments, Appeals, Penalties 29-36
J Exemption Under Section 10 and Deduction under Chapter VI-A 37-39
K International Taxation 40-41
L International Financial Service Center 42-45
M Others (IDS) 46-47
INDIRECT TAX
A Goods and Service Tax 48-61
2
B Customs 62-69
C Excise 70
REAL ESTATE
A Relief towards Real Estate Sector and Home Buyers 71-72
3
HIGHLIGHTS
 DIRECT TAX
 No change in the Income Tax Rates for any of the categories including no change in
Surcharge or Cess position.
 Citizens of age 75 years and above who have only Pension and Interest income – Need not
file Income Tax Returns.
 Dividend Tax- Dividend will be exempt from TDS in specified cases.
 Advance tax liability on dividend income will arise only after declaration or payment of
dividend. For Foreign Investors – lower treaty rate benefit will be given.
 LTC related exemption benefit as a result of Pandemic restrictions, subject to conditions.
 Higher rate of TDS/TCS in case of dedicatees/collectees not filing Income Tax Return.
 Vivad Se Viswas Scheme Last Date of filing extended to 28th February, 2021.
 Relief to Trusts – Charitable trusts running Hospitals and Educational Institutions enjoying
relief from income tax has been increased from Rs.1 crore to Rs.5 crore of Aggregate Annual
Receipts.
 Tax holiday for Start-Ups extended to 31st March, 2022. Capital Gains exemption on
investment in startups also extended to 31s March, 2022.
 Tax Audit Limit to be increased to Rs.10 crores from Rs.5 crores for those having less than
5% cash transactions.
 Pre-Filling of Returns – Details of certain types of Capital Gains, Dividend Income and
Interest income will be pre-filled in the returns.
4
 Clarity thrown on Employee Contribution of PF & ESIC iterating that the same are to be
disallowed in case not paid within due dates of the respective Acts.
 No depreciation on Goodwill as an asset of the Business.
 TDS on purchase of goods by a person having T/o in PY more than 10CR and transaction
value per vendor being more than 50Lakhs (Exclusions available for transactions subject to
other TDS or TCS provisions).
 Re-opening of Assessment to reduce to 3 years from 6 years. Only where evidence of

concealment of Income of Rs. 50 lakhs or more – re-opening can be made upto 10 years &
only with approval of Pr. CCIT.
 Reducing Litigation for small tax payers – Constitution of Faceless Dispute Resolution Panel
for people with Total Income upto Rs.50 lakh and disputed income of Rs.10 lakh.
 Income Tax Appellate Tribunal to become Faceless – Only electronic communication will be
done.
 Relaxation to NRIs – Rules to remove hardship of Double Taxation rebate availment as a

result of difference in accounting years.
 REAL ESTATE
 Affordable Housing – Additional Interest deduction (Sec 80EEA) of Rs.1.5 lakhs to be

extended for loans taken till 31st March, 2022.
 Affordable Housing Projects – Tax Holiday extended till 31st March, 2022.
 Benefit of Tax Holiday available to Affordable housing construction extended to eligible

affordable projects built with the intention of rental to specified income groups/migrants.
5
 MCA, COMPANIES ACT, LLP ACT
 Easing Compliance requirements of Small Companies – Threshold increased to Share Capital

upto Rs.2 crore and Turnover upto Rs.20 crore will be Small Companies.
 Allow One Person Companies (OPC) to grow without any restriction in Share Capital or
Turnover. NRIs will be allowed to set-up OPCs. Presence in India of 120 days in a year
enough to start an OPC.
 Launching MCA Version 3.0 – E-Scrutiny, E-Adjudication and Compliance management to

be simplified.
 INDIRECT TAX
 The mandatory requirement of GST audit in form GSTR-9C would be discontinued. The
Annual return would content reconciliation statement format.
 Interest on Late Payment of GST would be payable on Net Cash liability.
 In addition to 4 conditions for availing ITC, new condition is inserted that ITC can be availed
only if the same is reported by supplier in GSTR-1 (I.e. it should appear in GSTR-2A of
Purchasing party).
 If the proceeds relating to SEZ Unit aren’t realized within the prescribed period, the exporter
shall be liable to pay Tax along with Interest.
 When an appeal is filed relating to confiscation of goods, pre-deposit amount would include
25% of penalty involved.
 Supply would now include levy of tax on activities or transactions involving supply of goods
or services by any person, other than an individual, to its members or constituents or vice-
versa, for cash, deferred payment or other valuable consideration.
6
DIRECT TAXES
A. Tax Rates
 Rates of Income tax
 There is no change in the tax rates from last year in case of all type of assesses.
 Tax rates under section 115BAA, 115BAB, 115BAC and 115BAD are same.
 On Total Income, Surcharge will be levied at normal applicable rates except in case of
Dividend, 111A and 112A income it will be restricted to 15%.
 Marginal relief is provided in cases of surcharge.
 Advance Tax
 Section 234C(1) provides Relaxation in the levy of Interest if the short fall in Advance
Tax payment is due to underestimation or failure to estimate provided the assessee has
paid full tax in subsequent advance tax instalments :
 Capital Gains; or
 Winnings from lotteries, Crossword puzzles, races(including horse race), card games
and any activity in nature of gambling, betting etc.; or
 Income under the head “Profits and Gains of Business or Profession” in cases where
income accrues or arises under the said head for the first time; or
 Income of the nature referred to in sub-section (1) of section 115BBDA (i.e.

Dividend Income except deemed dividend u/s 2(22)(e) of the act).
7
 Relaxation for certain category of senior citizen from filing
return of income-tax
 For Resident senior citizens who are of the age of 75 year or above, a new section is
inserted to provide a relaxation from filing the return of income, if the following
conditions are satisfied:
 Having ONLY pension Income and can also have interest income from same bank in
which he is receiving his pension income
 This will be a specified bank notified by government
 Declaration from such specified bank needs to be submitted.
The specified bank will than compute and deduct the tax as per applicable rates.
8
B. SALARY
 Exemption for Leave Travel Concession (LTC)

 In view of the situation arising out of outbreak of COVID pandemic, it is proposed to
provide tax exemption to cash allowance in lieu of LTC, received by or due to an
employee from his employer or former employer for himself and his family, in
connection with his proceeding on leave to any place in India.
 Following conditions are to be fulfilled:

 The employee exercises an option for the deemed LTC fare in lieu of the applicable
LTC in the Block year 2018-21;
 specified expenditure means expenditure incurred by an individual or a member of his

family during the specified period on goods or services which are liable to tax at an
aggregate rate of twelve per cent or above under various GST laws and goods are
purchased or services procured from GST registered vendors/service providers;
 Specified period means the period commencing from 12th day of October, 2020 and
ending on 31st day of March, 2021;
 The amount of exemption shall not exceed 36,000 rupees per person or one-third of
specified expenditure, whichever is less;
 The payment to GST registered vendor/service provider is made by an account payee

cheque drawn on a bank or account payee bank draft, or use of electronic clearing
system through a bank account or through such other electronic mode as prescribed
under Rule 6ABBA and tax invoice is obtained from such vendor/service provider;
9
 If the amount received by, or due to an individual as per the terms of his employment,
from his employer in relation to himself and his family, for the LTC is more than
what is allowable to such person under the above discussed provisions, the exemption
under the proposed amendment would be available only to the extent of exemption
admissible under above listed provisions.
This amendment will take effect from 1st April, 2021 and will, apply in relation to
the assessment year 2021-2022 only.
10
C. PROFIT AND GAINS OF BUSINESS OR PROFESSION
 Tax neutral conversion of urban co-operative bank into banking

company
Sr. Section Existing Provision Proposed Provision
No.
1 44DB (a) Where the co-operative bank (a) It is proposed to expand
undergoes a business re- the scope of business re-
organization and gets organization by including
converted into another co- conversion of a co-
operative bank, the section operative bank into a
provides for deduction under banking company.
sections 32, 35D, 35DD and Accordingly, the
35DDA on a proportionate deductions under the
basis considering the number aforementioned sections
of days before and after the will continue to be
date of business re- provided on a
organization. proportionate basis.
(b) Also, transfer of Capital (b) The transfer of Capital
assets and shares by the assets and shares by the
predecessor cooperative bank co-operative bank to the
to the successor co-operative converted banking
bank is not regarded as a company shall not be
transfer. treated as transfer.
Amendment will accordingly,

apply in relation to the AY
2021-22 and subsequent
assessment years.
11
 Payment by employer of employee contribution to a fund on or
before due date.
 Rationalisation of the provision
 Section 43B specifies the list of deductions that are admissible if the payment is made on
or before the due date of filing returns u/s 139(1). Employers Contribution is covered in
clause (b) of section 43B. However, Employees contribution referred u/s 36(1) (va) is not
covered here.
 It has been clarified in the explanation inserted restricting the applicability to employer’s
contribution only and the employer’s contribution towards welfare funds such as ESI and
PF is clearly distinguished from the employee’s contribution towards welfare funds to
avoid mis-utilisation of employee’s contributions by making late deposits.
These amendments will take effect from the AY 2021-22 and subsequent assessment years.
 Rationalisation of the provision of presumptive taxation for professionals

under sec 44ADA
Sr. No. Section Existing Provision Proposed Provision

1 44ADA The provision is applicable to an The provision clearly excludes
assesse being individual, HUF or a LLP from its applicability.
Partnership firm and whose total
gross receipts do not exceed 50 Lakh
rupees in a previous year.
This amendment will take effect from AY 2021-22 and onwards.
12
 Sec 44AB - Rationalisation of provisions relating to tax audit in certain

cases

No.
1 44AB Section specifies that a person who The said limit of Rs. 5 crores has
is carrying on business, is required been increased to Rs. 10 crores
to get his accounts audited if his
total sales, turnover or gross receipts
in business exceed or exceeds Rs. 5
crore in cases where:
 Aggregate of all receipts in

cash during the PY does not
exceed 5% of total receipts
 Aggregate of all cash

payments including
expenditures in cash during
the PY does not exceed 5%
of total payments
This will be applicable from AY 2021-22 onwards.
13
 Depreciation on Goodwill:
 Existing sections such as sec 2(11), sec 32, sec 48, sec49,sec 50 and sec 43 does not
contain clear stand in relation to whether there should be depreciation on goodwill or not.
 Therefore there are amendments as follows:

Sec 32(1)(ii): It is provided that Goodwill of business or profession shall not be
considered as an asset for this said clause and hence it is not eligible for depreciation.
Explanation 3 to sec 32(1): this explains the meaning of term asset, it has been
amended to include the explanation that goodwill is not considered as asset for this
sub-section.
Sec 50: This section relating to special provision for computation of capital gains in
case of depreciable assets, the proviso to the section is added to explain that
depreciable assets does not include goodwill.
14
D. CAPITAL GAIN
 Rationalization of the provision of slump sale:

 On the basis of substance over form, transfer of asset in exchange of another asset it can be
construed that the monetary value of the transferring asset is ascertained and an asset in
exchange of that monetary value is discharged in the form of consideration.
 In this situation it would be a case of transfer by way of sale and would thus be covered
within existing provisions of section 50C of the Act.
 This amendment will take effect from the 1st April, 2022 and shall accordingly apply to the
 Rationalization of provision of transfer of capital asset to

partner on dissolution or Reconstitution.
 It has been noticed that there is uncertainty regarding applicability of provisions of
aforesaid sub-section 45(4) of the Act to a situation where assets are revalued or self-
generated assets are recorded in the books of accounts and payment is made to partner or
member which is in excess of his capital contribution.
 New proposed section sub-section (4A) of section 45 of the Act substitutes sub-section
(4) of section 45 of the Act. This section applies in a case where a specified person
receives during the previous year any money or other asset at the time of dissolution or
reconstitution of the specified entity. profits or gains arising from the receipt of such
money or other asset by the specified person shall be chargeable to income-tax as income
of the specified entity under the head "Capital gains" and shall be deemed to be the
income of such specified entity of the previous year in which the money or other asset
was received by the specified person. For the purposes of section 48 of the Act,
15
 Fair Value of consideration = Value of money received (in case of monetary
transaction) or Fair Market value(in case of non-monetary transaction).
 Cost of Acquisition = the balance in the capital account (excluding amount related to
revaluation of any asset and self -generated goodwill/asset) at the time of its
dissolution or reconstitution.
 Sec 55 r.w.s. 49 - Cost of acquisition/improvement in case of

intangible assets:
Sr. No. Section Existing provision Proposed provision

1 55 to be The cost of acquisition in the Now for the mentioned cases the
read with cases mentioned in sec 49(i) to cost will be as to previous owner or
49 sec 49(iv) were taken to be as to ultimate previous owner and nil
cost to previous owner and in in any other cases, as the case may
all other cases as Nil. be.
16
E. SPECIAL CASES
 Sovereign Wealth Fund (SWF) and Pension Fund (PF) {Section

10(23FE)}
 Section10(23FE) of Act provides exemption to SWF and PF from the income in the
nature of dividend, interest or long-term capital gains arising from an investment made by
it in India.
Sr. Existing Provision Proposed Provision

No.
1 Assesse may invest in Alternate Assesse may invest in Alternate Investment

Investment Fund (AIF) having 100% Fund (AIF) having 50% investment in
investment in eligible infrastructure eligible infrastructure company and
company Infrastructure Investment Trust.*
2 SWF/PFs are not allowed to invest SWF/PFs are allowed to invest through
through holding company holding company, being a Domestic
company, set up and registered after 1st
April 2021, having minimum of 75%
investments in infrastructure companies.*
3 SWF/PFs are not allowed to invest in SWF/PFs are allowed to invest in NBFC-
NBFC- IDF/IFC (non-banking finance IDF/IFC if such NBFC have minimum
company-infrastructure debt 90% lending to one or more infrastructure
fund/Infrastructure finance company) entities.*
4 SWF/PFs are not allowed to undertake SWF/PFs shall not participate in day to day
any commercial activity operation of investee however it can
appoint director and executive director for
monitoring the investment.
17
5 A pension fund which is not liable to tax Pension fund is liable to tax but exemption
in foreign country in which it is registered from taxation for all its income has been
would be eligible. provided by the foreign country under
whose laws it is created or established shall
also be eligible
* Exemption shall be calculated proportionately in case investment is less than 100%.
 The Central Government may prescribe the method of calculation of 50% or 75% or 90%
referred above
 Sec 2(29A) - Definition of the term - Liable to tax:
 Earlier there was no definition in Income Tax Act, 1961 relating to the term “Liable to
tax”, now clause (29A) has been inserted to section 2 of the Act, explaining the term
“Liable to tax’ as follows:
 A person is said to be called as liable to tax if there is a liability of tax on that person
under the law of any country including cases where after imposition of tax, an exemption
has been provided.
 Issuance of zero coupon bond by infrastructure debt fund

No.
1 2(48) As per the section the term “zero In order to enable infrastructure
coupon bond” means a bond- debt fund to issue zero coupon
(a) Issued by any infrastructure bond the term “zero coupon
capital company or bond” shall mean-
infrastructure capital fund (a) Issued by any
or public sector company or infrastructure capital
18
scheduled bank. company or
(b) In respect of which no infrastructure capital
payment and benefit is fund or infrastructure
received or receivable debt fund or public
before maturity or sector company or
redemption from scheduled bank on.
infrastructure capital (b) In respect of which no
company or infrastructure payment and benefit is
capital fund or public sector received or receivable
company or scheduled bank before maturity or
and redemption from
(c) Which are notified by the infrastructure Capital
Central Government in the Company or
Official Gazette. infrastructure capital
fund or infrastructure
debt fund or Public
Sector Company or
scheduled bank.
(c) Which are notified by the
Central Government in
the Official Gazette?
Amendment will accordingly,

apply in relation to the AY
2022-23 and subsequent
assessment years.
Consequential amendment is proposed in Sec 194A of the Act w.e.f. 1st April 2021.
19
F. TAX DEDUCTED AT SOURCE AND TAX COLLECTED AT
SOURCE
 Rates for deduction of income-tax at source during the financial year

(FY) 2021-22 from certain incomes other than “Salaries”
 The rates for deduction of income-tax at source during the FY 2021-22 under the
provisions of section 193, 194A, 194B, 194BB, 194D, 194LBA, 194LBB, 194LBC and
195 will remain the same for the purposes of deduction of income-tax at source during
the FY 2020-21. The amount of tax so deducted shall be increased by a surcharge if
income or aggregate income in case of a Non-Resident and Foreign Companies exceeds
the amount as previously specified for FY 2020-21.
The TDS concession given during COVID pandemic will no longer be applicable
after 31st March 2021.
 Rates for deduction of Income-tax at Source from “Salaries” or in Special

Cases
 For the rates for deduction of income-tax at source from Salaries or any e-commerce
platform/digital platform facilitating purchase/sale of any goods or services or
booking of any rooms or shows or tickets during the FY 2021-22, there is no change in
the tax rates from last year.
 Tax Deduction at Source (TDS) on purchase of goods

 It is proposed to provide for TDS by person responsible for paying any sum to any
resident for purchase of goods. The rate of TDS is kept very low at 0.1%. However,
where the tax is required to be deducted and Permanent Account Number (PAN) is not
provided, the TDS shall be at the rate of 5%.
 It is proposed that the tax is only required to be deducted by that buyer whose gross
receipts or turnover from the business carried on by him exceed ten crore rupees during
20
the financial year immediately preceding the financial year in which the purchase of
goods is carried out.
 Tax is required to be deducted by such person, if the purchase of goods by him from the
seller is of the value or aggregate of such value exceeding fifty lakh rupees in the
previous year.
 It is proposed to provide that the provisions of this section shall not apply to:
 A transaction on which tax is deductible under any provision of the Act
 A transaction, on which tax is collectible under the provisions of section 206C(TCS)
other than transaction to which section 206C (1H) applies
 The above means that if on a transaction TCS is required to be collected under

section 206C(1H) (TCS on purchase of goods) as well as TDS is to be deducted
under this section, then on that transaction only TDS under this section shall be
carried out. In all other cases, TCS is to be collected.
 TDS / TCS on non-filer at higher rates

 TDS on non-filer at higher rates
 It is proposed to insert a new section 206AB in the Act providing for higher rate for
TDS for the non-filers of income-tax return. This section shall not apply where the
tax is required to be deducted under sections 192, 192A, 194B, 194BB, 194LBC or
194N of the Act.
 The proposed TDS rate in this section is higher of the followings rates:-
 Twice the rate specified in the relevant provision of the Act; or
 Twice the rate or rates in force; or
 The rate of 5%
21
 If the provision of section 206AA of the Act (Non-furnishing of PAN in TDS return) is
applicable to a specified person, in addition to the provision of this section, the tax shall
be deducted at higher of the two rates (206AA and 206AB) of the Act.
 TCS on non-filer at higher rates

 Similarly it is proposed to insert a section 206CCA in the Act for providing for higher
rate of TCS for non-filers of income-tax return.
 The proposed TCS rate in this section is higher of the following rates:-
 Twice the rate specified in the relevant provision of the Act; or
 The rate of 5%
 If the provision of section 206CC (Non-furnishing of PAN in TCS Return) of the Act is
applicable to a specified person, in addition to the provision of this section, the tax shall
be collected at higher of the two rates (206CC and 206CCA) of the Act.
 Other Common Points

 Herein, A Specified Person is a person who has not filed the returns of income for two
consecutive previous years to the previous year in which tax is required to be deducted or
collected and the time limit for filing of tax return for these two previous years has
expired. Specified person shall not include a non-resident who does not have a permanent
establishment in India.
 Another condition that applies to both 206AB and 206CCA is that the aggregate of tax
deducted at source and tax collected at source in the case of this specified person is
rupees fifty thousand or more in each of these two previous years.
22
 Exemption of deduction of tax at source on payment of Dividend to

business trust in whose hand dividend is exempt
Section Existing Provision Proposed Provision

194 Section 194 of the Act provides for It is proposed to provide that the
deduction of tax at source (TDS) on provisions of this section shall also
payment of dividends to a resident @ not apply to such income credited
10%. or paid to a business trust by a
special purpose vehicle or payment
This section also provides that the of dividend to any other person as
provisions of this section shall not apply may be notified.
to such income credited or paid to certain
insurance companies or insurers.
 Rationalisation of the provision concerning withholding on payment

made to Foreign Institutional Investors (FIIs)
 Section 196D of the Act provides for deduction of tax on income of FII from securities
under section 115AD (1) (a) at the rate of 20%.
 The Act allows benefit of agreement under section 90 or section 90A in determining the
rate of tax at which the tax is to be deducted at source. However it is not considered at the
time of tax deduction on payments to FIIs.
 Therefore, it is proposed to insert a proviso to section 196D (1) of the Act to provide that
in case of a payee to whom an agreement referred to in section 90 (1) or 90A (1) applies
23
and such payee has furnished the Tax Residency Certificate then the tax shall be deducted
at the rate of 20% or rate of income-tax provided in such agreement for such income,
whichever is lower.
24
G. MINIMUM ALTERNATE TAX (MAT-SECTION 115JB)
 Rationalisation of provisions of mat

No.
1 115JB In Explanation 1, clause (fb)
While computing book profits in The said Explanation is being
case of a Foreign Company, the amended by providing similar
capital gains arising on transfer of treatment to dividend income and
securities, interest, royalty and Fees expense thereof.
for technical services were added
back if the tax payable on them were
at a lesser rate than MAT.
Sub section 2 (D) did not exist. It is proposed to include new sub
section 2(D) - In case of company
assesse where due to Advanced
Pricing Agreement entered into
by him or secondary adjustment
u/s 92CE in respect of past years,
there is an increase in the book
profits of the previous year, the
Assessing Officer shall on
application made to him:
(a) Re-compute the book
profit of the past years and
tax payable, if any.
(b) Also such order can be
rectified within a period
of four years from the end
25
of the financial year in
which the said application
is received by the
Assessing Officer as per
sec 154(7) which deals
with rectification of order.
This amendment will take effect from AY 2021-22 and subsequent assessment years.
26
H. LOSSES AND RELIEFS ETC.
 Facilitating strategic disinvestment of public sector company

Sr. Section Existing Provisions Proposed amendment
No.
1 72A(1) where there has been amalgamation of The said clause is proposed to be
Clause one or more public sector company or amended by removing the
(c) companies engaged in the business companies engaged in the business
of operation of aircraft with one or of operation of aircraft.
more public sector company or
companies engaged in similar
business then accumulated loss and
the unabsorbed depreciation of the
amalgamating company shall be
deemed to be the loss or, as the case
may be, the allowance for unabsorbed
depreciation of the amalgamated
company for the previous year in
which the amalgamation was effected.
Clause No such clause It is proposed to insert a new
(d) clause (d) to provide that in case of
amalgamation of an erstwhile
public sector company with one or
more company or companies, if the
share purchase agreement
entered into under strategic
disinvestment restricted
immediate amalgamation of the
27
said public sector company and the
amalgamation is carried out within
five years from the end of the
previous year in which the
restriction on amalgamation in
the share purchase agreement
ends, the accumulated loss and the
unabsorbed depreciation of the
amalgamating company shall be
deemed to be the loss or,
allowance for unabsorbed
depreciation of the amalgamated
company for the previous year in
which the amalgamation was
effected, and other provisions of
the said Act relating to set off and
carry forward of loss, and the
allowance for depreciation shall
apply accordingly.
relation to the AY 2021-2022 and subsequent assessment years.
A proviso to the said sub-section is inserted to provide that the accumulated loss and the
unabsorbed depreciation of the amalgamating company, shall not be more than the
accumulated loss and unabsorbed depreciation of the public sector company as on the date on
which the public sector company ceases to be a public sector company as a result of
strategic disinvestment.
28
I. FILING OF RETURNS, ASSESSMENTS, APPEALS,

PENALTIES AND PROSECUTION
 Due Date of Filing Income Tax Returns under section 139

Original Return
 Section 139 of the act contains provision relating to Filing of Income Tax Returns and
their respective Due Dates.
 Explanation 2 of the section provides that the due date for filing of original Return of
income for the partner of a firm whose accounts are required to be audited under the said
Act or under any other law for the time being in force shall be 31st October of the
assessment year.
 Section 5A of the Act provides for taxation of spouses governed by Portuguese Civil
Code. On account of this provision any income earned by a partner of a firm whose
accounts are required to be audited shall be apportioned between the spouses and
included in their total income, if the section 5A applies to them.
 The Portuguese Civil Code in India is applicable only to the state of Goa and the
Union territories of Dadra & Nagar Haveli and Daman & Dui. As per the Portuguese
Civil Code, whatever income is earned by the husband and the wife from all sources
(except Salary Income from employment) shall be apportioned equally between
both the spouses. The income so apportioned shall be added to the total income of
each spouse separately and each spouse should disclose only his/her share of income
in the Income Tax Return.
 Since the total income of a partner can be determined after the books of accounts of such
firm have been finalized, the due dates of partners are already aligned with the due date
29
of the firm (i.e. 31st October). However, this relaxation is not there for spouse of such
partner to whom section 5A of the Act applies. Therefore, it is proposed that the due
date for the filing of original return of income be extended to 31st October of the
assessment year in case of spouse of a partner of a firm whose accounts are required to
be audited under this Act or under any other law for the time being in force, if the
provisions of section 5A applies to them.
 Further, in the case of a firm which is required to furnish report from an accountant as per
section 92E of the Act, the due date for filing of original return of income in case of such
partner is the 30th November of the assessment year.
 Belated Return and Revised Return

Section Existing Provision Proposed Impact
Provision
139(4) – Belated Belated Return/Revised Belated Time limit is
Return or Revised Return can be filed Return/Revised reduced from 12
Return 139(5) before the end of Return can be filed months to 9
relevant assessment 3 months before the months from the
year or before end of relevant end of
completion of assessment year or Respective
assessment, whichever before completion financial year
is earlier. of assessment,
30
 Discontinuance of Income-tax Settlement Commission

 It is proposed to discontinue Income-tax Settlement Commission (ITSC) and to constitute
Interim Board of settlement for pending cases. The various amendments proposed are as
under:
 This scheme shall discontinue on or after 1st February 2021.
 All the applications which are already filed for which no order is passed on or before
31st January, 2021 shall be treated as pending applications.
 In respect of an application, an order which was required to be passed by the Income

Tax Settlement Commission u/s 245(2C) on or before 31st January 2021 to declare an
application invalid but such order was not passed on or before 31st January 2021, such
application shall be valid and treated as pending application.
 Interim Board shall be formed consisting of three members, each being an officer of the
rank of Chief Commissioner, as may be nominated by Board for settlement. All the
powers vested with ITSC shall mutatis mutandi vest with Interim Board for the
purposes of disposal of pending applications
 With respect to pending application, the assessee who had filed such application may,
at his option to withdraw the application within three months from the commencement
of the Finance Act 2021.
 Further, the Income Tax authority shall not be entitled to use the material and other
information given by assessee before the Income Tax Settlement Commission in the
course of any proceeding before it.
The above amendments will take effect from 1St February 2021
Section 245C-This section relates to where the assesse has not been disclosed the
31
full and true income.
 Reduction of time limit for completing assessment

 Section 153 of the Act contains provisions in respect of time-limit for completion of
assessment, reassessment and re-computation.
 This section provides the time limit for passing an assessment order u/s 143(Intimation)
or 144 of the Act shall be 21 months from the end of assessment year in which the
income was first assessable.
 The time limit for completing assessment reduced earlier and proposed further is as
follows-
Assessment Years Time Period

18-19 18 months
19-20 12 months
21-22 and subsequent years 9 months
 Provision for Faceless Proceedings before the Income-tax

Appellate Tribunal (ITAT) in a jurisdiction less manner
 In order to ensure that the reforms initiated by the Department to reduce human interface
from the system reaches the next level, it is imperative that a faceless scheme be launched
for ITAT proceedings on the same line as faceless appeal scheme. This will not only
reduce cost of compliance for taxpayers, increase transparency in disposal of appeals but
will also help in achieving even work distribution in different benches resulting in best
utilization of resources.
 Therefore, it is proposed to insert new sub-sections in the section 255 of the Act so as to
provide that the Central Government may notify a scheme for the purposes of disposal of
appeal by the ITAT so as to impart greater efficiency, transparency and accountability
by-
32
 Eliminating the interface between the ITAT and parties to the appeal in the course of
proceedings to the extent technologically feasible.
 Optimizing utilization of the resources through economies of scale and functional

specialization.
 Allowing prescribed authority to issue notice under clause (i)

of sub-section (1) of section 142
 Section 142 provides for conduct of inquiry before assessment. This section empowers to
the Assessing Officer to issue notice to an assessee who has not submitted a return of
income, asking for submission of return. However, this power can be currently invoked
by the Assessing Officer.
 It is proposed to amend the provision of the Section 142 to empower the prescribed
income-tax authority to enable centralized issuances of notices, besides the Assessing
Officer to issue notice under this clause.
 Constitution of Dispute Resolution Committee for small and

medium taxpayers
 The Central Government has consciously adopted a policy to make the processes under
the Act, which require interface with the taxpayer, fully faceless. Vivad se Vishwas
scheme was launched last year to settle pending disputes.
 The new scheme is proposed to be incorporated in a new section 245MA and has the
following features-
 The Central Government shall constitute one or more Dispute Resolution Committee
(DRC).
33
 Only those disputes where the returned income is fifty lakh rupee or less (if there is a
return) and the aggregate amount of variation proposed in specified order is ten lakh
rupees or less shall be eligible to be considered by the DRC.
 If the specified order is based on a search initiated under section 132 or requisition
made under section 132A or a survey initiated under 133A or information received
under an agreement referred to in section 90 or section 90A, of the Act, such
specified order shall not be eligible for being considered by the DRC.
 Assessee would not be eligible for benefit of this provision if there is detention,
prosecution or conviction under various laws as specified in the proposed section.
 Constitution of the Board for Advance Ruling
 With a view to avoiding dispute in respect of assessment of tax liability and to

provide tax certainty, a scheme of Advance Rulings was incorporated in the Act vide
the Finance Act, 1993 by inserting a new Chapter XIX-B. Under these provisions the
Authority for Advance Rulings (AAR) pronounces rulings on the applications of the
non-resident/residents and such rulings are binding both on the applicants and the
Tax department.
 Hence, it is proposed to constitute a Board of Advance Ruling and to make the

following amendments in the existing provisions of AAR: -
 Section 245N is proposed to be amended to incorporate the definitions of the

Board of Advance Rulings.
 Section 245-O is proposed to be amended to provide that the Authority
constituted under the said section shall cease to operate on or after the notified
date.
 Section 245-OB shall be inserted to provide for the constitution of the Board of
Advance Rulings.
34
 Section 245P is proposed to be amended to provide that on or from the notified
date, the provisions of the said section shall have effect as if for the words
“Authority”, the words “Board for Advance Rulings” had been substituted.
 Section 245U is proposed to be amended to provide that on or from the notified

date, the powers of the Authority under the said section shall be exercised by the
Board for Advance Rulings.
 Income escaping assessment and search assessments
 Under the Act, the provisions related to income escaping assessment provide that if
the Assessing Officer has reason to believe that any income chargeable to tax has
escaped assessment for any assessment year, he may assess or reassess or recomputed
the total income for such year under section 147 of the Act by issuing a notice under
 The Bill proposes a completely new procedure of assessment of such cases. It is

expected that the new system would result in less litigation and would provide ease of
doing business to taxpayers as there is a reduction in time limit by which a notice for
assessment or reassessment or re-computation can be issued. The salient features of
new procedure are as under: -
 The provisions of section 153A and section 153C, of the Act are proposed to be
made applicable to only search initiated under section 132 of the Act or books of
accounts, other documents or any assets requisitioned under section 132A of the
Act, on or before 31st March 2021.
 Section 147 proposes to allow the Assessing Officer to assess or reassess or re-
compute any income escaping assessment for any assessment year.
 Further, a final objection raised by the Comptroller and Auditor General of India
to the effect that the assessment in the case of the assessee for the relevant
assessment year has not been in accordance with the provisions of the Act shall
35
also be considered as information which suggests that the income chargeable to
tax has escaped assessment.
 New Section 148A of the Act proposes that before issuance of notice the
Assessing Officer shall conduct enquiries, if required, and provide an opportunity
of being heard to the assessee. After considering his reply, the Assessing Office
shall decide, by passing an order, whether it is a fit case for issue of notice under
section 148 and serve a copy of such order along with such notice on the assessee.
However, this procedure of enquiry, providing opportunity and passing order,
before issuing notice under section 148 of the Act, shall not be applicable in
search or requisition cases.
 The time limitation for issuance of notice under section 148 of the Act is proposed
to be provided in section 149 of the Act and is as below:
 In normal cases, no notice shall be issued if three years have elapsed
from the end of the relevant assessment year. Notice beyond the period of
three years from the end of the relevant assessment year can be taken only
in a few specific cases.
 In specific cases where the Assessing Officer has in his possession evidence
which reveal that the income escaping assessment, represented in the form of
asset, amounts to or is likely to amount to fifty lakh rupees or more, notice
can be issued beyond the period of three year but not beyond the period of
ten years from the end of the relevant assessment year.
36
J.EXEMPTION UNDER SECTION 10 AND DEDUCTIONS

UNDER CHAPTER VI-A
 Taxability of Interest on various funds where income is exempt:

 Existing Provisions:
 Sec 10 (11): In case of Statutory provident Fund the amount including any interest
received on the termination of services is not taxable in the hands of employees.
 Sec 10(12):
In case of:-
Recognized Provident Fund: Employers contribution up to 12% of employees salary
and interest upto 9.5% earned on the fund is exempt from tax and any excess would be
taxed in the hands of employees. The lump sum amount received on service termination
(subject to completion of 5 years of service, which is relaxed in some cases) is exempt
from tax.
Public provident Fund: Interest earned and lump sum amount received from the fund
on termination of service would be exempted from tax.
 Unrecognized Provident Fund:

 Employers Contribution and interest earned: Not taxable in hands of Employee
On termination: Employees contribution is exempt, but interest earned thereon is taxed
as Income from other sources and employers contribution and interest thereon is taxable
under the head salary. However, employees can claim tax relief under Section 89 of the
Income Tax Act on such income.
 Proposed Changes:
In respect of the above exemptions, the Finance bill 2021 provides that the exemption on
any interest income accrued during the previous year is to the extent of amount or
aggregate of amount of contribution up to Rs 250000 in a previous year in that fund on or
after 1st April 2021.
37
 Deductions under Chapter VI-A

 Section 80-IBA
 Under existing provisions of Sec. 80-IBA, 100% of profits and gains derived from the
business of developing and building affordable housing projects, if the project is
approved by the competent authority during the period from 01.06.2016 to 31.03.2020.
The Finance Bill 2021 proposes to extend the period of approval of project by one year
i.e. up-to 31.03.2022.
 The same outer limit will be also provided for the proposed Affordable Rental Housing
Project to help migrant labourer’s and to promote affordable rental under Section 80-IBA
of the Act to such rental housing project which is notified by the Central Government in
the official gazette and fulfills such conditions as specified in the said notification.
This amendment will take effect from Assessment Year 2022-23.
 Section 80-EEA
 The conditions u/s 80EEA which prescribes a deduction in respect of interest up to
one lakh fifty thousand rupees on loan taken for certain house property are as follows:
 The loan has been sanctioned by the financial institution during the period beginning
on the 1st day of April, 2020 and ending on the 31st day of March, 2021 now this
period has been extended to 31st day of March 2022 i.e. loan sanctioned in financial
year 2021-2022 is also eligible for deduction u/s. 80EEA.
 The stamp duty value of house property does not exceed Forty Five Lakh rupees.
 Assesse does not own any residential house property on the date of sanction of loan
38
 Section 80-IAC
 The existing Provision of Section 80IAC provides for 100% deductions for 3
Consecutive Assessment Years out of 10 at the option of assesse for new eligible startup.
This eligible startup had to be incorporated on or after 01.04.2016 but before 01.04.2021
has now been extended to be incorporated before 01.04.2022
 The existing provision of Section 54GB provides for exemption from Capital Gain for
transfer of Long term Capital Asset provided net consideration is utilized for subscription
for equity shares of eligible set up. It was further provided that benefit is available only
when residential property is transferred on or before 31st March 2021 which has now
been extended that residential property can be transferred on or before 31st March 2022.
39
K. INTERNATIONAL TAXATION
 Rationalisation of the provision of withholding on payment made to fiis
(foreign institutional investors)

No.
1 196D The provision provides for It has been proposed to amend the
deduction of TDS at the time of section by including the
payment or credit in respect of following proviso-
interest on securities other than If the agreement referred
interest u/s 194LD payable to a to in sub section (1) of 90 or 90A
Foreign Institutional Investor at the applies to the assessee and
rate of 20%. alongside he furnishes a tax
residency certificate, then the
TDS applicable will be lower of
20% or the rate provided in the
agreement.
This amendment will take effect from AY 2021-22 and onwards.
 Sec 89A - Addressing mismatch in taxation of income from notified

overseas retirement fund
 Earlier, if a person who was non-resident in India opened an account for retirement
benefits in any notified foreign country, and if in future he became resident in India then
the income from such account was:
 Taxed in India on accrual basis.
 On the other hand that income was taxed in that notified foreign country on receipt
basis.
40
 In order to remove this hardship of double taxation, Section 89A inserted which says that
the income from such account in notified country will not be taxed on accrual basis in
India and will be taxed by that notified country at the time of withdrawal or redemption
in that notified foreign country. This will be applicable from AY 2022-23 onwards.
41
L. INTERNATIONAL FINANCIAL SERVICE CENTER

 Tax incentives for units located in International Financial
Services Centre (IFSC)
 Government has establishment a world class financial services centre. Units located in
IFSC enjoy some concession. In order to make location in IFSC more attractive, it is
proposed to provide the following additional incentives:
 Section 9A shall be amended and the Central Government may, by notification in the
Official Gazette, specify that any one or more of the conditions in clauses(a) to (m) of
sub-section (3) or clauses (a) to (d) of sub-section (4) of Section 9A shall not apply
(or apply with modification) to an eligible investment fund or its eligible fund
manager (Certain activities not to constitute business connection in India), if the
fund manager is located in an IFSC and has commenced operations on or before the
 Clause (4D) of section 10 shall be amended to provide an exemption in case of any

income accrued or arisen to, or received to the investment division of offshore
banking unit to the extent attributable to it and computed in the prescribed manner.
 The term ”specified fund” shall be amended to include ―the investment division of
offshore banking unit which has been granted a category III AIF registration and
fulfils other conditions to be prescribed including the condition of maintaining
separate books for its investment division. The “investment division of offshore
banking unit” is proposed to be defined as an “investment division of a banking unit
of a non-resident” located in an International Financial Services Centre and which has
 A new clause (4E) shall be inserted in section 10, so as to exempt any income
accrued or arisen to, or received by a non-resident as a result of transfer of non-
deliverable forward contracts entered into with an offshore banking unit of
42
International Financial Services Centre which commenced operations on or before the
31st day of Mach, 2024 and fulfils prescribed conditions.
 A new clause (4F) shall be inserted in section 10, so as to exempt any income of a
non-resident by way of royalty on account of lease of an aircraft in a previous year
paid by a unit of an International Financial Services Centre, if the unit is eligible for
deduction under section 80LA (tax deduction to an offshore banking unit of
International Financial Services Centre) for that previous year and has commenced
operation on or before the 31st day of the March, 2024.
 A new clause (23FF) shall be inserted in section 10, so as to exempt any income of
the nature of capital gains, arising or received by a non-resident, which is on account
of transfer of share of a company resident in India by the resultant fund and such
shares were transferred from the original fund to the resultant fund in relocation, if
capital gains on such shares were not chargeable to tax had that relocation not taken
place.
 “Original Fund” is proposed to be defined as a fund established or incorporated or

registered outside India, which collects funds from its members for investing it for
their benefit and fulfils the following conditions, namely: —
 The fund is not a person resident in India
 The fund is a resident of a country or specified territory with which an agreement
referred to in sub-section (1) of section 90 or sub-section (1) of section 90A has
been entered into; or is established in a country or a specified territory notified by
the Central Government;
 The fund and its activities are subject to applicable investor protection regulations
in the country or specified territory of establishment/incorporation or residency;
and
 Fulfill such other conditions as prescribed;
43
 “Relocation” is to be defined as transfer of assets of the original fund to a resultant fund
on or before the 31st day of March, 2023, where consideration is in the form of share or
unit or interest in the resulting fund to the share/unit/interest holder of the original fund in
the same proportion in which the share or unit or interest in such original fund.
 “Resultant fund” is proposed to be defined as a fund established or incorporated in India

in the form of a trust/company/LLP, which-
 Has been granted a certificate of registration as a Category I or Category II or
Category III Alternative Investment Fund, and is regulated under the SEBI
 Is located in any IFSC as referred to in sub-section (1A) of section 80LA.
 Section 47 shall be amended to insert new clauses so as to provide that any transfer, in
relocation, of a capital asset by the original fund to the resultant fund shall not be
considered as transfer for capital gain tax purpose. Another clause shall pe inserted to
provide that any transfer by a share/unit/interest holder, in a relocation, of a capital asset
being a share/unit/interest held by him in the original fund in consideration for the
share/unit/interest in the resultant fund shall not be treated as transfer for the purpose of
capital gain.
 Consequential amendments shall be proposed in section 49, 56 and 79 on account of such

relocation.
 It is also proposed to amend the section 80LA of the Act to:

 Provide that deduction under said section is also available to a unit of IFSC if it is
registered under the IFSC Authority Act, 2019 removing the earlier requirement
of obtaining permission under any other relevant law.
 Provide that the income arising from transfer of an asset, being an aircraft/ aircraft
engine which was leased by a unit referred to in clause (c) of sub-section (2) of
80LA to a domestic company engaged in the business of operation of aircraft
44
before such transfer shall also be eligible for 100% deduction subject to condition
that the unit has commenced operation on or before 31st March 2024.
 Section 115AD shall be amended to make the provision of this section applicable to
investment division of an offshore banking unit in the same manner as it applies to
specified fund. However, the provisions shall apply to the extent of income that is
attributable to the investment division of such banking unit as a Category-III portfolio
investor under the SEBI(Foreign Portfolio investors) Regulations, 2019 calculated in the
prescribed manner.
 The term ―”investment division of offshore banking unit” is to have the meaning as
defined in Para (iii) above.
 These amendments will take effect from 1st April, 2022 and will apply to the AY 2022-
23 and subsequent AYs.
45
M. OTHER
 Income Declaration Scheme (IDS)

 The Income Declaration Scheme, 2016 (the Scheme) contained in Chapter-IX of the
Finance Act, 2016 provided an opportunity to the persons who had not disclosed any
income in the past to come clean and make payment of tax, surcharge and penalty as per
the provisions of the Scheme. The Scheme commenced on 01.06.2016.
Sr. Section Existing Provision Proposed Impact

No. Provision
1. 187 Section 187 of the Finance Act,
2016 inter alia, provides that the
tax, surcharge and penalty
payable under the Scheme shall NA NA
be paid on or before the specified
date and if the declarant failed to
pay such amount, the declaration
filed by the declarant shall be
deemed invalid.
2. 191 Section 191 of the Finance Act, It is now proposed Tax will be
2016, inter alia, provides that that, excess amount refundable
any amount of tax, surcharge and of tax; surcharge or whereas Interest
penalty paid in pursuance of a penalty paid in will not be paid
Declaration made under the pursuance of a on Refund
Scheme shall not be refundable. declaration made Amount.
A proviso was inserted in section under the Scheme This amendment
191 of the Finance Act, 2016 shall be refundable will take effect
46
empowering the Board to specify to the specified retrospectively
a class of persons to whom such class of persons from 1st June,
tax paid in excess shall be without payment of 2016.
refundable. any interest.
47
INDIRECT TAXES
A. GOODS AND SERVICES TAX
The amendment shall take place through notification issued on later date:
Sr. Section Existing Provision Proposed Provision Impact

No.
1. New provision i.e. Sub (aa) The activities or The concept of
Sec 7 of
section ”aa” shall be transactions, by a person, mutuality in
CGST Act
inserted other than an individual, to Income Tax
Scope of
its members or constituents Act is no
supply
(for eg. AOP, BOP, club and longer
society) or vice versa for the applicable to
consideration in any mode GST Act
because of this
amendment,
now
transactions
between
members and
constituents
shall be
covered under
the scope of
supply and
taxable.
2. New provision i.e. Sub (aa) the details of outward The ITC shall
Sec 16 of
section ”aa” shall be supply furnished by the be eligible as
CGST Act
inserted supplier in their GSTR-1, per the
48
shall be shown in GSTR-2A Invoices or
Eligibility and
of recipient, and the same debit note
conditions for
shall be eligible for claiming shown in
taking input
ITC. GSTR-2A,
tax credit
dealer won’t
be allowed to
claim
additional
credit.
3. (5) Every registered person Provision is omitted. The mandatory

Sec 35 (5) of
whose turnover during the requirement of
CGST Act
Financial Year exceed the GST audit by
Accounts &
prescribed limit (5 crore) the specified
other Records
shall get his accounts audited professional
and the same shall be has been
submitted along with the removed as per
reconciliation statement in this
their Annual return amendment.
4. Every registered person Every registered person GST annual

Sec 44 of
whose eligible for filing whose eligible for filing return along
CGST Act
annual return shall get his annual return shall furnish with self-
Annual
accounts audited as per the the detail along with the self- assessed
Return
provision of section 35(5). certified reconciliation reconciliation
statement and audited annual statement is to
financial statement for every be submitted
financial year. electronically
for every
The said section shall not
apply to any department of financial year.
the Central Government,

State Government, Local
49
Authority whose books are
audited by CAG
(Comptroller and Auditor
General of India)
5. Every person who fails to Every person who fails to Interest will be
Sec 50 of
pay the tax or any part pay the tax or any part levied on NET
CGST Act
thereof to the Government, thereof to the Government, LIABILITY
Interest on
shall be liable to pay interest shall be liable to pay interest i.e. tax liability
delay
@18% @18% on amount paid after adjusting
payment of
through electronic cash the available
Tax
ledger (i.e. after adjusting ITC/ amount
amount with ITC). paid through
electronic cash
A registered person whose ledger subject
liable to pay tax in to the said tax
accordance with the Section has been paid
73 or Section 74 before
(Determination of tax not issuance of
paid, short paid, erroneously any notice of
refunded or input tax credit assessment as
wrongly availed or per section 73
fraudulently utilized), shall & 74.
pay the portion of tax via
electronic cash ledger.
6. As per the Explanation 1 As per the Explanation 1 The dealer will

Sec 74 of
clause (ii) of sec 74, Every clause (ii) of sec 74, Every only penalize
CGST Act
person against whom the person against whom the as per the sec
Determination
proceedings are going on, proceedings are going on, 122 (Certain
of tax not
shall be liable for penalty as shall be liable for penalty as offences like
paid, short
per the sec 122, 125, 129 & per the sec 122 & 125 claiming
50
paid, 130 wrong ITC
erroneously etc) & 125
refunded or (General
input tax Penalty).
credit Penalty
wrongly pertaining to
availed or Sec 129 and
fraudulently 130 dealing
utilized with
confiscation
and detention
of goods is
dealt
separately.
7. Explanation shall be inserted For the purpose of sub Previously

Sec 75 (12) of
for the section 75(12) section 12, the expression only unpaid
CGST Act
“self-assessed tax” shall self-assessed
General
include the tax payable in tax as per
provisions
respect of details of outward GSTR 3B and
relating to
supplies furnished under interest thereof
determination
section 37 (GSTR-1), but not could be
of tax
included in the return recovered by
furnished under section the officer.
39(GSTR-3B) Henceforth the
tax liability as
per GSTR 3B
or the
difference
between GSTR
1 and GSTR
51
3B (in case
amount
mentioned in
GSTR 1 is
higher) shall
be recovered
by the officer.
8. Where during the pendency

Sec 83 (1) of The coverage
of any proceedings under (1) Where, after the initiation
CGST Act of provisional
section 62 or section 63 or of any proceeding under
attachment is
Provisional
section 64 or section 67 or Chapter XII, Chapter XIV or
broaden and
attachment to
section 73 or section 74, the Chapter XV, the
the officer
protect
Commissioner is of the Commissioner is of the
shall now
revenue in
opinion that for the purpose opinion that for the purpose
attach bank
certain cases
of protecting the interest of of protecting the interest of
and take other
the Government revenue, it the Government revenue it is
necessary
is necessary so to do, he necessary so to do, he may,
action even in
may, by order in writing by order in writing, attach
the cases f
attach provisionally any provisionally, any property,
Self-
property, including bank including bank account,
assessment,
account, belonging to the belonging to the taxable
Provisional
taxable person in such person or any person
assessment,
manner as may be specified in sub-section (1A)
Scrutiny of
prescribed. of section 122, in such returns,
Inspection of
goods in
movement,
Power to
arrest, Power
to summon
52
persons to give
evidence and
produce
documents,
Access to
business
premises for
the purpose
protecting
government
revenue.
New proviso inserted No appeal shall be filed Appeal in case
9 Proviso to Sec
against an order u/s 129 (3), of detention of
107(6) of
unless a sum equal to 25% of goods shall be
CGST Act
the penalty has been paid by admitted only
Appeals to
the appellant. when 25%
Appellate
penalty is
Authority
paid.
10 Goods and conveyance after Goods and conveyance after Penalty

Clause (a) of
seizure shall be released on seizure shall be released on increased from
Section 129
payment of the applicable tax payment of penalty equal to 100% to 200%
(1) of CGST
and penalty equal to 100% 200% of the tax payable on of the tax
Act
of the tax payable on such such goods and, in case of payable on
Detention,
goods and, in case of exempted goods, on payment such goods.
seizure and
exempted goods, on payment of an amount equal to 200%
release of
of an amount equal to 2% of of the value of goods or
goods and
the value of goods or Rs. Rs.25000/- , Whichever is
conveyances
25000/- whichever is less, less, where the owner of
in transit
where the owner of the goods comes forward for
goods comes forward for payment of such penalty.
53
payment of such tax and
penalty;.
Goods and conveyance after Goods and conveyance after
11 Clause (b)of
seizure shall be released on seizure shall be released on
Section 129
payment of the applicable tax payment of penalty equal to
(1) of CGST
and penalty equal to the 50% 50% of the value of goods or
Act
of the value of the goods 200% of the tax payable on
Detention,
reduced by the tax amount such goods whichever is
seizure and
paid thereon and, in case of higher, and in case of
release of
exempted goods, on payment exempted goods, on payment
goods and
of an amount equal to 5% of of an amount equal to 5% of
conveyances
the value of goods or Rs. value of goods or Rs.25000/-,
in transit
25000, whichever is less, whichever is less, where the
where the owner of the owner of the goods does not
goods does not come forward come forward for payment of
for payment of such tax and such penalty.
penalty
The goods so seized shall be Sub Section omitted.
12 Sec 129 (2) of
released, on a
CGST Act
Provisional basis, upon
Detention,
execution of a bond and
seizure and
furnishing of a security, in
release of
such manner and of such
goods and
quantum, respectively, as
conveyances
may be prescribed or on
in transit
payment of applicable tax,
interest and penalty payable,
as the case may be.
The proper officer detaining The proper officer detaining

13 Sec 129 (3) of
or seizing goods or or seizing goods or
54
CGST Act conveyances shall issue a conveyances shall issue a
notice specifying the tax and notice within 7 days of such
Detention,
penalty payable and detention, specifying the tax
seizure and
thereafter, pass an order for and penalty payable and
release of
payment of tax and penalty. thereafter, pass an order
goods and
within a period of 7 days
conveyances
from the date of service of
in transit
such notice, for payment of
penalty.
No tax, interest or penalty No Penalty shall be Opportunity of
14 Sec 129 (4) of
shall be determined under determined under Sec 129 (3) being heard
CGST Act
Sec 129 (3) without giving without giving the person an will be given
Detention,
the person an opportunity of opportunity of being heard. only for
seizure and
being heard. Penalty.
release of
goods and
conveyances
in transit
Where the person Where the person Increase in
15 Sec 129 (6) of
transporting any goods or the transporting any goods or the days for
CGST Act
owner of the goods fails to owner of such goods fails to payment of
Detention,
pay the amount of tax and pay the amount of penalty as penalty from
seizure and
penalty within 14 days of provided within 15 days from 14 to 15 days.
release of
such detention or seizure, the date of receipt of the With
goods and
further proceedings shall be copy of the order passed additional of
conveyances
initiated in accordance with under Sec. 129(3), the goods penalty up-to
in transit
the provisions of section 130. or conveyance shall be liable Rs. 1 Lac for
Provided that where the to sold or disposed of delay.
detained or seized goods are otherwise,
perishable in nature, the said Provided that the conveyance
55
period of 14 days may be shall be released on payment
reduced by the proper by the transporter of penalty
officer. which is amount equal to
goods or Rs.1 Lac,
whichever is Less;
Provided that where the
detained or seized goods are
perishable in nature, the said
period of 15 days may be
reduced by the proper officer.
Notwithstanding anything The word “where any Henceforth this
16 Sec 130 (1) of
contained in this Act, if any person” is inserted- section will
CGST Act
person- not overrule
Confiscation
other
of goods or
provisions of
conveyances
the Act.
and levy of
penalty
Amount of penalty shall be The amount of Penalty shall Specified
17 Section 130
as specified under sub- be equal to 100% of the tax Penalty.
(2) of the
section (1) of section 129 payable on such goods.
CGST Act
Confiscation
of goods or
conveyances
and levy of
penalty
Where any fine in lieu of The sub section is omitted.
18 Section 130
confiscation of goods or
(3) of the
conveyance is imposed, the
CGST Act
owner of such goods or
56
conveyance or the person,
Confiscation
shall, in addition, be liable to
of goods or
any tax, penalty and charges
conveyances
in respect of such goods or
and levy of
conveyance.
penalty
The Commissioner may, if The commissioner or an The power to
19 Section 151 of
he considers that it is officer authorized by him call for
the CGST Act
necessary so to do, by may, by an order, direct any information is
Power to
notification, direct that person to furnish information now also
collect
statistics may be collected relating to any matter dealt given to the
statistics
relating to any matter dealt with in connection with this officer and not
with by or in connection with Act, within such time, in only
this Act. such form, & in such manner, Commissioner
Upon Notification being as may be specified therein.
issued, the commissioner or
any person may call upon
such person to furnish details
required.
No information obtained The
20 Sec 152(1) of No information of any
under section 150 & 151 information
CGST Act individual return or part
shall be published or used for shall be
thereof obtained under
Bar on
any proceedings of this act published or
sec150 & sec151 be
disclosure of
without giving an used only after
published or used for any
information
opportunity of being heard to opportunity of
proceedings of this act
the concerned person. being heard
without written consent of
irrespective of
the concerned person.
receiving a
written consent
and that
information is
57
not restricted
to individual
return
anymore.
21 Sec152(2) of No person who is not Shall be omitted

CGST Act engaged in
collection/compilation/comp
Bar on
uterization shall be permitted
disclosure of
to see or have access to any
information
information obtained under
section 151.
22 Sec 168(2) of The Commissioner specified The Commissioner specified The

CGST Act in clause (91) of section 2, in clause (91) of section 2, Commissioner
sub-section (3) of section 5, sub-section (3) of section 5, has been given
Power to issue
clause (b) of sub-section (9) clause (b) of sub-section (9) power to issue
instructions
of section 25, sub-sections of section 25, sub-sections instructions for
or directions
(3) and (4) of section 35, (3) and (4) of section 35, sub- self-reconciled
sub-section (1) of section 37, section (1) of section 37, sub- statement of
sub-section (2) of section 38, section (2) of section 38, sub- annual return
sub-section (6) of section 39, section (6) of section 39, [ and the power
[sub-section (1) of section section 44, sub-sections (4) of directing
44, sub-sections (4) and (5) and (5) of section 52]117, officer to
of section 52]117, [sub- [sub-section (1) of section collect
section (1) of section 143, 143, except the second statistics is
except the second proviso proviso thereof]118,clause (l) removed, this
thereof]118, sub-section (1) of sub-section (3) of section is to bring in
of section 151, clause (l) of 158 and section 167 shall line with
sub-section (3) of section mean a Commissioner or above
158 and section 167 shall Joint Secretary posted in the amendments.
58
mean a Commissioner or Board and such
Joint Secretary posted in the Commissioner or Joint
Board and such Secretary shall exercise the
Commissioner or Joint powers specified in the said
Secretary shall exercise the sections with the approval of
powers specified in the said the Board.
sections with the approval of
the Board.
The following shall

be Shall be deemed to be The said has
23 Sec (7) of
treated as supply of goods, omitted with effect from been removed
CGST Act
namely:
read with 1.07.2017. from schedule
Schedule II and inserted in
Supply of goods by any
para 7 Scope of
unincorporated association or Supply as per
body of persons to a member Sr. 1 above.
Supply of thereof for cash, deferred
goods payment or other valuable
consideration.
Zero rated supply means,

24 Sec 16(1)(b) of Zero rated supply means : Previously all
Supply of goods or service or
IGST Act Supply of goods or services the supply to
both to SEZ developer or a
Zero rated or both for authorized SEZ was
SEZ unit.
supply operations to SEZ developer regarded as
Zero Rated
or a SEZ unit.
Supply,
henceforth it
shall only
cover those
operation
which are used
59
in main course
of business of
SEZ.
Clarification is
awaited.
Registered person making Registered person making
25 Sec 16(3) of The New
zero rated supplies can claim zero rated supplies can claim
CGST Act proviso
refund under following refund under following
inserted for in
options options
case of non-
(a) Supply of goods with realization of
(a) Supply of goods with LUT without payment of sales proceeds
LUT without payment of IGST subject to of Zero rated
IGST subject to conditions supply then the
conditions Refund
(b) Supply of goods with
(b) Supply of goods with amount needs
payment of IGST and
payment of IGST and to deposit to
claim refund of such tax
claim refund of such tax government
paid subject to
paid subject to along with
conditions.
conditions. applicable
Provided in case of non- interest thirty
realization of sales days.
proceeds refund received

should be deposited
along with interest under
sec 50 of CGST Act
within 30days of time
prescribed in FEMA Act
1999.
60
(4) The Government may, on
26 Sec 16(3) of The power is
the recommendation of the
CGST Act given to
Council, and subject to such
Government to
conditions, safeguards and
withdraw LUT
procedures, by notification,
benefits for a
specify––
class of
persons or
(i) a class of persons who
goods or
may make zero rated supply
services.
on payment of integrated tax
and claim refund of the tax
so paid;
(ii) a class of goods or
services which may be
exported on payment of
integrated tax and the
supplier of such goods or
Services may claim the
refund of tax so paid.”
61
B. CUSTOMS
Amendments in the Customs Act, 1962:

No.
1. Sub section (3) of The importer shall present the The importer shall present the
Section 46: bill of entry before the end of the bill of entry before the end of the
Filing of Bill of Entry next day following the day day (including holidays)
in case of (excluding holidays) on which preceding the day on which the
importation the goods arrives at a customs goods arrives at a customs
station to be cleared for home station to be cleared for home
consumption or warehousing: consumption or warehousing:
Provided that the Board may, in
such cases as it may deem fit,
prescribe different time limits for
presenting the bill of entry,
which shall not be later than the
end of the day of such arrival:
 Insertion of New Section:
 Section 28BB
Any inquiry or investigation under this Act shall be completed by issuing such notice,
within a period of two years from the date of initiation of audit, search, seizure or
summons, as the case may be:
Provided that the Principal Commissioner of Customs or the Commissioner of

Customs may, on sufficient cause being shown and for reasons to be recorded in
writing, Extend the said period to a further period of one year.
 Section 114AC
62
Penalty for attempt to export goods improperly:

Where any person has obtained any invoice by fraud, collusion, willful misstatement
or suppression of facts to utilize input tax credit on the basis of such invoice for
discharging any duty or tax on goods that are entered for exportation under claim of
refund of such duty or tax, such person shall be liable for penalty not exceeding five
times the refund claimed.
Explanation –– For the purposes of this section, the expression “Input Tax Credit”
shall have the same meaning as assigned to it in clause (63) of section 2 of the Central
Goods and Services Tax Act, 2017.
 Section 154C
Notifying of Common Portal:
The Board may notify a common portal, to be called the “Common Customs
Electronic Portal”, for facilitating registration, filing of bills of entry, shipping bills,
other documents and forms prescribed under this Act or under any other law for the
time being in force or the rules or regulations made thereunder, payment of duty and
for such other purposes, as the Board may, by notification, specify.
 Amendments in the Customs Tariff Act, 1975.
 Insertion of New Section:
 Section 9 (1B)
Where the Central Government, on inquiry, is of the opinion that “absorption of

countervailing duty”* imposed under sub-section (1) has taken place whereby the
countervailing duty so imposed is rendered ineffective, it may modify such duty to
counter the effect of such absorption, from such date, not earlier than the date of
initiation of the inquiry, as the Central Government may, by Notification in the
63
Official Gazette, specify.
*“absorption of countervailing duty” is said to have taken place, if there is a
decrease in the export price of an article without any commensurate change in the
resale price in India.
 The amendment shall take place with immediate effect:
 Imposition of agriculture, infrastructure and development cess on

import of certain items
 In the case of goods specified in the First Schedule of Customs Tariff Act being
goods imported into India, there shall be levied and collected for the purposes of
the Union, a duty of customs, to be called the Agriculture, Infrastructure and
Development Cess, at the rates specified in the said Schedule, for the purposes
of financing the agriculture infrastructure and other development
expenditure.
 The Agriculture, Infrastructure and Development Cess chargeable on the goods

specified in the First Schedule shall be in addition to any other duties of customs
chargeable on such goods under the Customs Act or any other law for the time
being in force.
 All the provisions, rules and regulations of the Customs Act including those
relating to refunds and exemptions from duties, offences and imposition of
penalty, shall apply in relation to the levy and collection of the Agriculture,
Infrastructure and Development Cess.
64
 Below are some items on which Customs duty rate is proposed to be

changed from 02nd February, 2021
Sr. Heading, sub- Commodity Existing Amended
No heading tariff Rate rate
item
A. Tariff rate changes for Basic Customs Duty
1 3925 Plastic items: 10% 15%
Builder’s ware of Plastics
2 7104 Gems and Jewellery Sector: 10% 15%
Cut and Polished Synthetic stones, including
Cut and Polished Cubic Zirconia
3 8414 30 00 Electrical and Electronics Sector: 12.5% 15%
Compressors of a kind used in refrigerating
equipment
4 8414 80 11 Compressors of a kind used in air-conditioning 12.5% 15%
equipment
5 8504 90 90 Printed Circuit Board Assembly [PCBA] of 10% 15%
charger or adapter (All goods under this tariff
item, other than above, will continue to attract
the existing effective rate of BCD at 10%)
6 7007 Parts of Automobiles: 10% 15%
Safety glass, consisting of toughened
(tempered) or laminated glass. (All goods
under this heading, other than those used with
motor vehicles, will continue to attract the
existing effective rate of BCD at 10%)
7 8512 90 00 Parts of Electrical lighting and signaling 10% 15%
vehicles
B. Tariff rate changes (without any change in the effective rates of Basic Customs Duty)
65
1 8501 10 to 8501 Electric Motors 10% 15%
53
2 8537 Boards, panels, consoles, etc. for electric 10% 15%
control or distribution of electricity
3 9031 80 00 Other instruments, appliances and machines 7.5% 15%
4 9032 89 Electronic automatic regulators and other 10% 15%
 Other proposals involving changes in basic customs duty rates in respective

notifications
Sr. Heading, sub- Commodity Existing Rate Amended rate

No heading tariff item
1 2710 Fuels, Chemicals and Plastics : 4% 2.5%
Naphtha
2 2907 23 00 Bis-phenol A Nil 7.5%
3 2910 30 00 Epichlorohydrin 2.5% 7.5%
4 2933 71 00 Caprolactam 7.5% 5%
5 3907 40 00 Polycarbonates 5% 7.5%
6 3908 Nylon chips 7.5% 5%
7 3920 99 99 Other plates, sheets, films, etc. 10% 15%
of other plastics
8 5002 Textiles : 10% 15%
Raw Silk (not thrown)
9 5004, 5005, 5006 Silk yarn, yarn spun from silk 10% 15%
waste (whether or not put up
for retail sale)
10 5201 Raw Cotton Nil 5% + 5%
AIDC*
11 5202 Cotton waste (including yarn Nil 10%
waste or garneted stock)
66
12 5402, 5403, 5404, Nylon Fibre and Yarn 7.5% 5%
5405 00 00, 5406,
5501 to 5510
13 3908 Metals : 10% 15%
Iron and steel scrap, including
stainless steel scrap [up to
31.03.2022]
14 7206 and 7207 Primary/Semi-finished 10% 7.5%
products of non-alloy steel
15 7208, 7209, 7210, Flat products of non-alloy and 10% / 7.5%
7211, 7212, 7225 alloy steel 12.5%
(except 7225 11 00)
and 7226 (except
7226 11 00)
16 7213, 7214, 7215, Long product of non-alloy, 10% 7.5%
7216, 7217, 7221, stainless and alloy steel
7222, 7223, 7227 and
7228
17 7225 Raw materials for use in 2.5% Nil
manufacture of CRGO steel
[up to 31.03.2023]
18 7404 Copper Scrap 5% 2.5%
19 7318 Screw, bolts, nuts, etc. of iron 10% 15%
and steel
20 8544 (other than 8544 IT, Electronics and Renewable: 7.5% 10%
70 and 8544 30 00) Specified insulated wires and
cables
21 Any Chapter Inputs or parts for manufacture Nil 2.5%
of Printed Circuit Board
Assembly (PCBA) of cellular
mobile phone (w.e.f. 1.4.2021)
22 Any Chapter Inputs or parts for manufacture Nil 2.5%
67
of camera module of cellular
mobile phone (w.e.f. 1.4.2021)
23 Any Chapter Parts or components of PCBA Nil 2.5%
of Lithium-ion battery or
battery pack (w.e.f. 1.4.2021)
24 Any Chapter Inputs or raw materials of Nil 2.5%
following goods: - (i) Other
machines capable of
connecting to an automatic data
processing machine or to a
network (8443 32 90) (ii) Ink
cartridges, with print head
assembly (8443 99 51) (iii)Ink
cartridges, without print head
assembly (8443 99 52) (iv)Ink
spray nozzle (8443 99 53)
(w.e.f. 1.4.2021)
25 Any Chapter Inputs and parts of LED lights 5% 10%
or fixtures including LED
Lamps
26 Any Chapter Inputs for use in the 5% 10%
manufacture of LED driver or
MCPCB (Metal Core Printed
Circuit Board) for LED lights
or fixtures including LED
Lamps
For rate changes of basic custom duty of other than above items, kindly refer the Finance Bill,
2021.
68
 Social welfare surcharge (sws) in case of import
 SWS, on imported goods effective rate of 3% are including gold and silver.
 Below are some items on which SWS is being exempted
Sr. HSN Code Description

No
1 2515 11 Crude or roughly trimmed
2 2515 12 Merely cut, by sawing or otherwise, into blocks or slabs of a
rectangular
 SWS are being exempted on the value of AIDC imposed on gold and silver.
Accordingly, these items would attract SWS, at normal rate, only on value plus basic
customs duty.
69
EXCISE
The amendment shall take place with immediate effect:
 Imposition of agriculture, infrastructure and development cess on

import of certain items
 In the case of goods specified in the Seventh Schedule of Central Excise Act, 1944 being
goods manufactured or produced in India, there shall be levied and collected for the
purposes of the Union, a duty of customs, to be called the Agriculture, Infrastructure
and Development Cess, at the rates specified in the said Schedule, for the purposes of
financing the agriculture infrastructure and other development expenditure.
 The Agriculture, Infrastructure and Development Cess chargeable on the goods specified
in the Seventh Schedule shall be in addition to any other duties of excise chargeable on
such goods under the Central Excise Act or any other law for the time being in force.
 All the provisions, rules and regulations of the Central Excise Act including those
relating to refunds and exemptions from duties, offences and imposition of penalty, shall
apply in relation to the levy and collection of the Agriculture, Infrastructure and
Development Cess.
70
REAL ESTATE
Relief towards real estate sectors and homebuyers
 Affordable Housing Scheme
 For Developers
 Under existing provisions of Sec. 80-IBA, 100% of profits and gains derived from the
business of developing and building affordable housing projects, if the project is
approved by the competent authority during the period from 01.06.2016 to 31.03.2020.
The Finance Bill 2021 proposes to extend the period of approval of project by one year
i.e. upto 31.03.2022.
 The same outer limit will be also provided for the proposed Affordable Rental Housing
Project to help migrant laborers and to promote affordable rental under Section 80-IBA
of the Act to such rental housing project which is notified by the Central Government in
the official gazette and fulfills such conditions as as specified in the said notification.
This amendment will take effect from Assessment Year 2022-23.
 For Homebuyers
 The conditions u/s 80EEA which prescribes a deduction in respect of interest up to one
lakh fifty thousand rupees on loan taken for certain house property are as follows:
 The loan has been sanctioned by the financial institution during the period beginning on
the 1st day of April, 2020 and ending on the 31st day of March, 2021 now this period has
been extended to 31st day of March 2022 i.e. loan sanctioned in financial year 2021-2022
is also eligible for deduction u/s. 80EEA.
 The stamp duty value of house property does not exceed Forty Five Lakh rupees.
 Assessee does not own any residential house property on the date of sanction of loan.
71
 Increase in safe harbor limit from 10% to 20% of the sale

consideration vis-à-vis stamp duty value for home buyers and real
estate developers selling such residential units:
 At the time of calculating Business income (sec 43CA), Income from other sources sec
56 (2) (x) and capital gains sec 50C (1) arising out of transactions in immovable property,
sale consideration or stamp duty value whichever is higher is adopted. If the stamp duty
valuation is higher than the consideration received, the difference is taxed both in the
hands of buyer as well as seller. A safe harbor limit has been provided where a variation
to the extent of 10% between stamp duty value and sale consideration was granted i.e if
the variation between Stamp Duty Value & Sale Consideration is equal to or more than
10% then the actual sale consideration will be treated as Fair Value of consideration and
not the Stamp Duty Value.
 These safe harbor limit has been extended to 20% subject to the conditions below:
 The transfer of residential unit takes place during the period from 12th November,
2020 to 30th June, 2021
 The transfer is by way of first time allotment of the residential unit to any person
 The consideration received or accruing as a result of such transfer does not exceed
two crore rupee.
These amendments will take effect from 1st April 2021 and subsequent assessment years.
72
UNION
BUDGET 2021
Reset | Refocus | Restart
Tax & Regulatory | Audit & Assurance | Transaction Advisory |

Estate & Succession Planning
FOREWORD
MAKING A POWER POINT – BY SPEAKING LESS AND DOING The Government has chosen to focus on targeted and high impact
capital expenditures which shall improve long term prospect of the
MORE country. Part of this funding will be received through a divestment
The Post Covid world will bring in a lot of changes and one of the program that should hopefully be finally put into action.
first that we got to see was the Finance Minister, Smt. Nirmala
Sitharaman providing a budget that was unlike any of her previous The budget focused on Six Pillars for setting a base for building a
budgets. This shows a remarkably steep learning curve for her and stronger economy : health and well-being, physical and financial
also indicates that she has been extremely receptive to feedback. capital and infrastructure, inclusive development for aspirational
India, reinvigorating human capital, innovation and R&D, minimum
Right from the specifics of the policies announced, to the speech, to government - maximum governance.
the way it was delivered, all point to a shift in overall thought
process of the Minister and perhaps also of the Government. After Before this, the FM had provided budgets to support the economy
having delivered the longest Budget Speech ever in 2020, the while the economy was battling its own internal cyclical slowdown –
Finance Minister avoided eloquent poetry and kept a strict timeline despite her best efforts, the outcome of those budgets didn’t work
on her budget speech. She gave up the ‘bahi khata’ draped in red at achieving all that she wished for. Oddly, with a global pandemic
cloth for a digital tablet to read the speech from and went into induced contraction of the GDP, the FM seems to have hit the right
numerous details and numbers on how the policies’ have impacted notes and balanced the budget with the right expenditures,
the populace. investments and providing structural changes to bring ease of doing
business and reducing taxpayer compliance load.
Following her thought process from her maiden budget, where she
greatly increased the marginal rates of taxes on individuals to help As FM mentioned in her opening remarks, we certainly hope that
bridge the revenue shortfall, it was widely anticipated that she this is truly the ‘dawn of a new era’.
would levy a ‘Covid-cess’ in order to cover for the expenditure of the
government in its fight against the Novel Corona Virus. However, she
has provided tremendous policy stability by not changing any direct
taxes and not further burdening the taxpayers.
The Indirect taxes have seen some changes, at the level of tax rates
levied and also at the administrative ease to be provided. CA Dinesh D. Ghalla CA Haresh K. Chheda
GBCA & Associates LLP, Chartered Accountants 2 Privileged Use Only

TABLE OF CONTENTS
Eco nomic O ver view 4
Key H ig h lig ht s 6
D irec t Tax Pro p o sa ls 9
C
Inodrp o rate
ire c t TaxLaw
ProM
poatte
sa lsrs 44
In d irec t Tax Pro p o sa ls 47
G lo ssa r y 55
All the amendments mentioned below are proposed in the Finance Bill, 2021 and will take effect from AY 2022-23 unless otherwise specifically stated,
subject to passing by both the houses of the Parliament and assent by the President.
This document summarizes the Union Budget 2021-22 and the recent policy changes. It has been prepared for the privileged use of our clients. We
recommend you to seek professional advice before taking action on specific issues.
© GBCA & Associates LLP, Chartered Accountants

Increased Target for Credit to Farmers | Enhanced
Allocation to Micro Irrigation Fund and RIDF |
Development of 5 Major Fishing harbors | E-National
Agriculture Market
ECONOMIC OVERVIEW
ECONOMIC OVERVIEW
V FOR VACCINE, VICTORY AND A V-SHAPED RECOVERY
As the Indian Economic Downturn continues to recuperate from the of 9.1% due to COVID-19 induced constraints on the supply side. The
shock of the Global Pandemic, the Economic Survey 2021 pointed prime component was the food inflation. The balancing act for
out that the measures taken by the Government were clearly 2021-22 shall shift to tuning policies for a ‘Growth vs Inflation’
focused on “minimizing losses in a worst-case scenario”. environment after the ‘Lives vs Livelihoods’ debate of 2020-21.
With one eye on short term responses and one eye on long term The harsh dent in Services Purchasing Managers’ Index (PMI) was
requirements of the Indian Economy, 2020 presented the most caused by the national lockdown where this index fell to an all-time
daunting challenge economically. low of 5.4 but recovered substantially to a level of 52.3 as the
The direction of the efforts put in by the Government for the “V- mobility restrictions were lifted. The PMI Manufacturing was also hit
Shaped Recovery” were dual pronged. On one hand were the severely due to the lockdown but it improved as the economic
structural reforms for the supply side and on the other were unlock commenced. Weak domestic demand has resulted in an
carefully calibrated fiscal and monetary support for the demand estimated Current Account Surplus of 3.% of GDP in the first half of
side. This also includes the various policies and initiatives like 2020-21.
Atmanirbhar 2.0 and 3.0. While this cushioned the FPI outflows in the last quarter of 2019-20
Diligent policies by way of debt moratoria and liquidity support, Rupee had depreciated to its lowest level of 76.86 for 1 USD in Q1
India has emphatically begun to shed the restraints in term of all its of FY 2020-21 which subsequently appreciated owing to the heavy
resources, be it physical, capital or man-power. The ‘Post-COVID-19’ inflows of FPI of around USD 9.8 billion in domestic equity market.
period is hopefully round the corner with the world’s largest
Vaccination drive underway.
After a massive contraction of GDP by 7.7% in 2020-21. The Real
GDP is expected to grow an estimated 11% in 2021-22. To put it in
context, our real GDP would be 2.4% greater in 2021-22 compared
to 2019-20.
The headline Consumer Price Index (CPI) inflation had risen to a high

Increase in FDI limit in the insurance sector (74%) |
Development of world class Fin-Tech hub at IFSC |
Boosting the start-up Ecosystem | Continuous focus on
Affordable Housing
KEY HIGHLIGHTS
KEY HIGHLIGHTS
relevant assessment year or before completion of assessment,
DIRECT TAX PROPOSALS
 No changes in the Income Tax Rates  Goodwill of a business or profession will not be considered as a
 The turnover threshold for tax audit has been enhanced from INR 5 depreciable asset.
Crores to INR 10 Crores if the total cash receipts and payments do  Deemed Capital Gains Tax applicable on Firm / AOP / BOI on receipt
not exceed 5%. of asset / money by its partner / member on dissolution /
 Time limit for approval of affordable housing project, eligible for reconstitution at
deduction u/s 80IBA, has been extended to 31.03.2022.  FMV of such asset
 Time limit for sanction of affordable housing loan to claim  Money received
additional deduction up to INR 1.5 Lakhs for interest paid on such
in excess of capital balance excluding revaluation, if any.
loans extended till 31.03.2022.
 Details of Capital Gains from listed securities, Dividend Income and
 Notional tax on value of property as per stamp duty laws
Interest income will be pre-filled in the Income Tax Returns.
chargeable under the head business income and income from other
 Due date for filing of return of income for a partner of the firm
sources will not be triggered if the difference is not more than 20%
which is subject to Transfer Pricing Audit will be 30th November of
(earlier 10%) of sale consideration for transfer by way of first time
the relevant AY.
allotment of residential unit.
 Threshold for relief to approved Charitable trusts operating
 Advance Tax liability on dividend income shall arise only after
Hospitals and Educational Institutions is increased from INR 1 Crore
declaration or payment of dividend.
to INR 5 Crores.
 Late deposit of employee’s contribution to specified funds by
 TDS will not be required in case of dividend income earned by a
employer shall not be allowed as deduction to the employer.
Business Trust (REIT, InvIT etc.).
 Time limit for re-opening of Assessment proposed to be reduced
 Lower treaty rate shall be applied for deducting tax on payments
from 6 years to 3 years. Only where evidence of concealment of
made to FII if they furnish Tax Residency Certificate.
Income is of INR 50 Lakhs or more, re-opening of assessment can
be made upto 10 years, with the approval of Principal Chief  Resident Senior Citizens aged 75 years and above, earning only
Commissioner of Income Tax. pension and interest income from the same specified bank need
not file Income Tax Return. The paying bank would compute and
 Time limit for filing belated or revised return is reduced and the
deduct necessary tax on their total income.
same has to be now filed 3 months prior to the last day of the

KEY HIGHLIGHTS
 Income Tax Appellate Tribunal will become Faceless. Any hearing, if GST PROPOSALS
required, will be through video conferencing.
 With effect from a date to be notified, the mandatory requirement
 Proposal to set up a Faceless Dispute Resolution Committee for of audit of accounts and reconciliation statement by Chartered
assessees having Total Income upto INR 50 Lakhs and disputed Accountant / Cost Accountant is proposed to be removed.
income upto INR 10 Lakhs.  In case of zero rated supply of goods, it is proposed, with effect
from a date to be notified, that the registered person be liable to
COMPANY LAW PROPOSALS deposit the refund received along with interest if the sale proceeds
are not realised within the time limit specified under FEMA, 1999.
 The threshold limit of Small Companies is now changed as follows:
 The option to make zero rated supply on payment of tax and
o Paid Up Share capital limit has been increased from INR 50
claiming refund is proposed to be restricted to a notified class of
Lakhs to INR 2 Crores and
persons or goods or services with effect from a date to be notified.
o Turnover limit has been increased from INR 2 Crores to
INR 20 Crores.
 Provisions relating to One Person Companies MISCELLANEOUS PROPOSALS
o The One Person Companies are allowed to grow without  It is proposed to increase the permissible FDI in insurance
any restrictions on turnover and paid up share capital and companies from 49% to 74% provided :
allowing their conversion at any time. o majority of directors and key management persons are
o The residency limit for an Indian citizen to set up an OPC resident Indians and atleast 50% of directors are
shall be 120 days instead of 182 days independent directors and
o NRIs shall also be allowed to incorporate a One Person o specified % of profits is retained as general reserve
Company In India.
 To ensure faster resolution NCLT and e-courts system shall be
strengthened and implemented.
 The decriminalization of offences under LLP Act, 2008 shall be
taken up.

100 new Sainik Schools to be set up | Budgeted outlay
of INR 1.97 Lakh Crores for PLI scheme | Proposed
expansion of Metro Rail network | Launching PDSS with
an outlay of INR 3,05,984 Crores over 5 years

Rate Charts 10
TDS Provisions 23
P e r s o n a l Ta x a t i o n 25
Business Provisions 28
Capital Gains 32
Assessment P ro v i s i o n s 35
C h a r i t a b l e Tr u s t 39
Other Provisions 41
RATE CHARTS – INDIVIDUALS / HUF / AOP / BOI (NO CHANGE)
An individual/ HUF shall have an option to opt for either of the two tax regimes described below:
I. Tax Rates in Old Regime
Tax Rates for Individuals, HUF, AOP and BOI
Senior Very Senior
Individual,
Citizen Citizen ( 80
Status  HUF, AOP Notes
(60 years & years &
and BOI
Above) above)
Net Taxable Income (INR)  Surcharge @ 10.0% if income exceeds INR
50 Lakhs but not exceeding INR 1 Crore.
Upto – 2,50,000 NIL NIL NIL
 Surcharge @ 15.0% if income exceeds INR 1
2,50,001 – 3,00,000 5.00% NIL NIL
Crore but not exceeding INR 2 Crores.
3,00,001 – 5,00,000 5.00% 5.00% NIL
5,00,001 –10,00,000 20.00% 20.00% 20.00% Crores but not exceeding INR 5 Crores.
Crores.
 Health and Education Cess @ 4.0% of Tax +
Above 10,00,000 30.00% 30.00% 30.00% Surcharge.
 Maximum rebate of INR 12,500 available to
resident individuals with total income up to
INR 5,00,000.
 In case of short term capital gains u/s 111A, long term capital gains u/s 112A and dividend, the rate of surcharge shall be
restricted to 15.0%, even if total income exceeds INR 2 Crores.
 AOP/BOI shall continue to be taxed under above existing regime only.

II. Tax Rates u/s 115 BAC in New Regime
Tax Rates for Individuals, HUF
`
Status  Individual, HUF Notes
Net Taxable Income (INR)  Surcharge @ 10.0% if income exceeds INR 50 Lakhs but not
Up to 2,50,000 NIL exceeding INR 1 Crore.
2,50,001 – 5,00,000 5.00%  Surcharge @ 15.0% if income exceeds INR 1 Crore but not
5,00,001 – 7,50,000 10.00% exceeding INR 2 Crores.
7,50,001 – 10,00,000 15.00%  Surcharge @ 25.0% if income exceeds INR 2 Crores but not
exceeding INR 5 Crores.
10,00,001 – 12,50,000 20.00%
12,50,001 – 15,00,000 25.00%  Surcharge @ 37.0% if income exceeds INR 5 Crores.
 Health and Education Cess @ 4.0% of Tax + Surcharge.
 Maximum rebate of INR 12,500 available to resident
Above 15,00,00 30.00% individuals with total income up to INR 5,00,000.
 Refer Note 1
Note 1:
restricted to 15.0%, even if total income exceeds INR 2 Crores. The option u/s 115BAC can be opted every year in case of
Individual/HUF not having business income. In other case, once such option is exercised it can be withdrawn only once in
subsequent year unless such Individual/HUF ceases to have Business Income.
 AMT will not be applicable if one opts for Section 115BAC.
 In order to opt for new regime, individual/ HUF shall have to opt for the same and file the return of income within the due
date prescribed u/s 139(1).

 The individual/HUF will not be able to set-off any loss place of duty
carried forward or depreciation attributable to  Standard deduction (INR 50,000), deduction for
exemptions/deductions mentioned in Note 2 below. entertainment allowance and profession tax u/s 16
[Though set-off of loss of earlier years on account of against salary income
unabsorbed depreciation is not allowed, corresponding
adjustment in WDV of such block of assets is allowed].  Allowances to MPs/MLAs u/s 10(17)
 Allowance for income of minor u/s 10(32)
Note 2:  Exemption for SEZ units u/s 10AA
In case one opts to pay tax under the new tax regime, the  Interest on loan taken for self-occupied or vacant
following exemptions and deductions cannot be claimed: property u/s 24
 Leave travel concession u/s 10(5)- applicable for persons
 Additional depreciation u/s 32(1)(iia)
in employment
 Donations or expenditure on scientific research u/s
 House rent allowance u/s 10(13A) - applicable for
35(1)(ii), 35(1)(iia), 35(1)(iii), 35(2AA)
persons in employment
 Deductions u/s 32AD, 33AB, 33ABA, 35AD, 35CCC
 Allowances u/s 10(14) - applicable for persons in
applicable to business income
employment other than:
 Family pension u/s 57(iia)
o Transport allowance to divyang employee
commuting between residence and office  Any deduction under Chapter VIA like life insurance
premium, PPF, ELSS, repayment of housing loan,
o Conveyance allowance to meet expenses during
mediclaim, donations, deductions in respect of profits
conveyance on duty
o Any allowance to meet cost of travel on tour or
transfer
o Daily allowance on account of absence from normal

RATE CHARTS – FIRMS / LLPS / DOMESTIC COMPANIES (NO CHANGE)
Tax Rates for Firms (including LLPs)
Basic
Particulars Surcharge Cess Total Notes
Tax
Income upto INR 1 Crore 30.00% - 4.00% 31.20% Health and Education Cess @ 4.0% of Tax +
Income exceeding INR 1 Crore 30.00% 12.00% 4.00% 34.94% Surcharge
Tax Rates for Domestic Companies

Company
Particulars opting for Sec Company opting for Sec 115BAB Other Company
115BAA
Business of the Company Any Business Manufacturing/Production Any Business
Set up and registered on or after 1 October, 2019
(manufacturing / production to commence by 31
No specific
Eligibility Criteria No specific requirement
requirement March, 2023) (Also refer note 6)
It is now proposed to include companies engaged in
generation of electricity.
Basic Tax Rate 22% 15% 25%1/30% (refer note 1)
Surcharge 10% 10% 0%/7%/12% (refer note 2)
Cess 4% 4% 4%
Effective Tax Rate 25.168% 17.16% 26% to 34.94%
Basic Rate =15% of Book profits.
Minimum Alternate Tax Not applicable Not applicable
Plus applicable surcharge and cess
Other Conditions Prescribed exemptions /deductions are not allowed (refer Note 7) N.A.
* Section 115BA which applies to certain domestic manufacturing company is redundant, hence not analyzed herein

RATE CHARTS – DOMESTIC COMPANIES (NO CHANGE)
Notes: or using old plant & machinery more than 20% of total plant and
1. Basic rate of Tax is 25% if turnover in FY 2019-20 is not more than machinery or using building used previously as hotel or convention
INR 400 Crores.
centre are not eligible for opting for u/s 115BAB.
2. Surcharge Rates for Other Company
7. Prescribed exemptions/deductions includes:
Applicable
Total Income o Section 10AA : Units in Special Economic Zone
Surcharge
o Section 32(1)(iia) : Additional depreciation allowance
Upto INR 1 Crore 0% o Section 32AD : Deduction for investment in new plant and
INR 1 Crore < Total Income < machinery in notified backward States.
7%
INR 10 Crores o Section 33AB : Tea/ coffee/ rubber development allowance
More than INR 10 Crores 12% o Section 33ABA : Site restoration fund.
o Section 35(1)(ii), (iia), (iii) and 35(2AA), (2AB) : certain scientific
research expenditure.
3. The option of Section 115BAA can be exercised in any year but before
o Section 35AD : Deduction in respect of expenditure on
the due date specified u/s 139(1) for filing return of income for that
specified business (e.g Cold Storage, cross country gas line etc)
year.
o Section 35CCC : Expenditure on agricultural extension project.
4. The option of section 115BAB needs to be exercised before the due
o Section 35CCD : Expenditure on skill development project.
date specified u/s 139(1) for filing 1st Return of Income of the
o All the deductions under Chapter VIA except section 80JJAA
Company. (deduction in respect of new employees) and section 80M
5. The option u/s 115BAB, once exercised, cannot be withdrawn (receipt of dividend).
subsequently. However, if the company fails to satisfy the conditions 8. Set-off of any loss carried forward from earlier years to the
of Section 115BAB it can opt for Section 115BAA. However, in the year extent that such loss is attributable to any of the deduction
of violation it may be doubtful to opt for such option, since the option mentioned above. Though set off of loss on account of
u/s 115BAA is to be exercised on/before the due date specified u/s
139(1) for filing return of income for respective year.
adjustment in WDV of such block of assets shall be allowed.
6. Companies formed by restructuring or splitting up of existing business

RATE CHARTS – FOREIGN COMPANIES (NO CHANGE)
Tax Rates for Foreign Companies
Particulars Tax Surcharge Cess Total Notes:
Income upto INR 1 Crore 40.00% - 4.00% 41.60%
Health and Education Cess @
Income exceeding INR 1 Crore but not 4.0% of Tax + Surcharge
40.00% 2.00% 4.00% 42.43%
exceeding than INR 10 Crores
Income exceeding INR 10 Crores 40.00% 5.00% 4.00% 43.68%

RATE CHARTS – CO-OPERATIVE SOCIETY (NO CHANGE)
Tax Rates for Co-Operative Societies
Particulars Tax Surcharge Cess Total Notes
Income upto INR 10,000 10.00% - 4.00% 10.40%  Health and Education Cess
@ 4.0% of Tax + Surcharge
Income exceeding INR 10,000 but not
20.00% - 4.00% 20.80%  Co-operative societies can
exceeding INR 20,000
opt for concessional rate
Income exceeding INR 20,000 30.00% - 4.00% 31.20%
of tax u/s 115BAD. (Refer
Income exceeding INR 1 Crore 30.00% 12.00% 4.00% 34.944% Note Below)
Concessional rate of tax for Co-operative society  Section 35AD: Deduction in respect of expenditure on
specified business (e.g. Cold Storage, cross country gas line
u/s 115BAD
etc)
 In line with provisions related to domestic companies, co-
 Section 35CCC: Expenditure on agricultural extension project.
operative society, resident in India, shall have the option to
 All the deductions under Chapter VIA except section 80JJAA
pay tax at effective rate of @ 25.17% (inclusive of surcharge
(deduction in respect of new employees) and section 80LA
and cess), subject to fulfilment of following conditions:
(income from IFSC Unit).
o No deduction to be claimed in respect of:
o Set-off of any loss carried forward from an earlier year to
 Section 10AA : Units in Special Economic Zone
the extent that such loss is attributable to any of the
 Section 32(1)(iia) : Additional depreciation allowance
deduction mentioned above shall not be allowed. Though
 Section 32AD : Deduction for investment in new plant and set off of loss on account of unabsorbed depreciation is not
machinery in notified backward States. allowed, corresponding adjustment in WDV of such block of
 Section 33AB : Tea/ coffee/ rubber development allowance assets shall be allowed.
 Section 33ABA : Site restoration fund.  AMT will not be applicable if one opts for Section 115BAD.
 Section 35(1)(ii), (iia), (iii) and 35(2AA): certain scientific  Rest of the provisions are in line with the condition
research expenditure. applicable to companies as per section 115BAA.

RATE CHARTS – TAX DEDUCTED AT SOURCE (TDS)
Rates of Tax Deduction at Source
Payee
Company,
Threshold Partnership Firm /
Individual, HUF,
Section Nature of Payments made to Resident Limits (INR) LLP / Co–op Notes
AOP & BOI
Society / Local
Authority
Rates Rates Rates
192 Salary N.A. N.A. Refer Note 15 N.A.
Payment of accumulated balance due to an
192A 50,000 N.A. 10.0% 1
employee by RPF
193 Interest on Securities 2,500 10.0% 10.0% 2
5,000 (only for
194 Dividends 10.0% 10.0% N.A.
Individuals)
194–A Other Interest 5,000 10.0% 10.0% 3&4
194–B Winning from Lotteries 10,000 30.0% 30.0% N.A.
194-BB Winnings from Horse races 10,000 30.0% 30.0% N.A.
Single
Transaction =
194–C Payment to Contractors / Sub–Contractors 30,000 2.0% 1.0% / 2.0% 3&5
Aggregate=
1,00,000
194–D Insurance Commission 15,000 5.0% 5.0% N.A.
Payment in respect of Life Insurance
194–DA 1,00,000 5.0% 5.0% 6
Policy(other than amount in section 10(10D)

Payee
Company,
Individual, HUF,
AOP & BOI
Society / Local
Authority
Rates Rates Rates
Income arising to a Non–Citizen, Non–Resident
194–E NIL N.A 20.0% N.A.
Entertainer or Sportsmen
194-EE Payment in respect of deposits under NSS 2,500 10.0% 10.0% N.A
194-G Commission etc. on the sale of lottery tickets 15,000 5.0% 5.0% N.A.
194–H Commission/Brokerage 15,000 5.0% 5.0% 3
194–I Rent of machinery, plant or equipment 2,40,000 2.0% 2.0% 3
194–I Rent of land, building, or Furniture 2,40,000 10.0% 10.0% 3

Payment on transfer of certain immovable
194–IA 50,00,000 1.0% 1.0% N.A.
property other than agricultural land
Payment of Rent by Individuals/HUF (other than No TAN
194-IB 50,000 p.m. N.A. 5.0%
covered by Section 44AB) required
Payment under Specified Agreement for Joint
194- IC NIL N.A. 10.0% N.A.
Development
194–J Professional Fees 30,000 10.0% / 2.0% 10.0% / 2.0% 3,7 & 8

Payee
Company,
Individual, HUF,
AOP & BOI
Society / Local
Authority
Rates Rates Rates
Payment to resident for income in respect of
194-K units of Mutual fund or Administrator of 5,000 10.0% 10.0% 9
Specified Undertaking or Specified Company
Compensation or Consideration for Compulsory
194–LA Acquisition of Immovable Property(other than 2,50,000 1.0% 1.0% 10
agricultural land)
194-LBA Incomes form units of Business Trust. NIL 5.0% / 10.0% 5.0% / 10.0% 11
Interest Income paid to Non–Residents by
194–LC NIL 5.0% / 4.0% 5.0% / 4.0% 12
Specified Companies or Business Trust
Interest income paid to Non-Residents by
194-LD NIL 5.0% 5.0% 13
certain Bonds and Government Securities.
Payment for contract /professional services by
No TAN
194-M individual/ HUF. (other than those covered under 50,00,000 5.0% 5.0%
Required
194C and 194J).
Cash Withdrawn from bank, co-operative bank
194-N 1,00,00,000 2% 2% 14
and post office.
Payment made by E-commerce operator to E-

194-O NIL 1% 1% N.A.
commerce Participant.

Payee
Company,
Individual, HUF,
AOP & BOI
Society / Local
Authority
Rates Rates Rates
194P TDS by specified bank to specified senior citizen N.A. N.A. Refer Note 15 N.A.
Refer
Separate
N.A. section on
194Q Purchase of goods 50,00,000 0.1%
TDS on
Purchase
of Goods

Notes: 6. Applicable only where amount is not exempt u/s 10(10D).
Form 15G/15H can be given wherever applicable.
1. TDS provisions u/s 192A applies when withdrawal of
accumulated balance in RPF is to be included in the total 7. a. Rate of TDS is 2% instead of 10% if the payee is
income. engaged only in the business of operation of call centre.
2. Threshold limit for interest paid on debentures is INR b. TDS on Remuneration to Director which is not in the
5,000. Threshold limit for interest on 7.75% GOI Savings nature of Salary to be deducted @ 10%.
(Taxable) Bonds, 2018 is INR 10,000. 8. TDS under section 194J for payment of fees for technical
3. The provisions of following TDS / TCS Sections, which were services (except professional services) is to be deducted @
linked to applicability of Tax Audit provisions, shall now 2% & for professional services is to be deducted @ 10%.
apply if the Gross Receipts / Turnover is INR 1 Crore or 9. Units of Mutual Fund have been specified under section
more for Business and INR 50 Lakhs or more for 10(23D) of Income Tax Act, 1961. “Administrator”,
Profession: “specified company” and “specified undertaking” are
 Section 194A, 194C, 194H, 194I, 194J and specified u/s 2 of the Unit Trust of India (Transfer of
Undertaking and Repeal) Act, 2002.
 Section 206C
10. No tax will be deducted if payment is made in respect of any
Thus, irrespective of applicability of Tax Audit provisions,
award or agreement which has been exempted from levy of
TDS / TCS provisions, as mentioned above, shall apply.
income-tax u/s 96 of the Right to Fair Compensation and
4. The threshold limit for TDS on interest income for Senior
Transparency in Land Acquisition, Rehabilitation and
Citizens is INR 50,000 and in any other cases 40,000.
Resettlement Act, 2013.
5. TDS is to be deducted @ 2.0% if the payee is an AOP or
11. Interest payment from a SPV and Distribution of dividend by a
BOI. No TDS is applicable on payment to Contractor during
Business Trust, to Resident unit holders shall be liable for TDS @
the course of plying, hiring or leasing of goods carriages,
10%. Whereas, in case of Non-Resident payee, TDS on dividend
where such contractor owns 10 or less goods carriages
shall be @ 10% & that on interest payment shall be @ 5%.
during the FY and furnishes amend definition of “work” to
include purchase of raw material from associate of the
customer. The word Associate shall have the same
relations as stated u/s 40A(2)(b).

Notes: 17. In case of non-filers having aggregate TDS / TCS of INR
12. The period of concessional rate of TDS of 5 % has been extended 50,000 or more and who have not filed their ITR in both of
till 1st July 2023 from existing 1st July 2020. The rate of TDS has the 2 years immediately preceding the financial year (and
been reduced to 4% in case of interest payable to a Non- time limit for filing the original return has expired), then
Resident on borrowings in foreign currency from a source the rate of TDS shall be higher of the following
outside India, by way of issue of any long term bond or Rupee  Twice the rates specified or
Denominated Bonds on or after 1st April, 2020 but before 1st  Rates in force or
July, 2023 and which is listed only on a recognised stock  5%
exchange located in any IFSC.
In case the payee does not furnish PAN and TDS rate
13. In case of FPI and QFI, the lower TDS rate of 5% has been for not furnishing PAN are higher than the above
extended to 1st July, 2023. The said concessional TDS rate mentioned rates, then such higher rate shall be
shall also be applied to FII and QFI in respect of applicable.
investment made in Municipal Bonds.
These provisions will not be applicable for the
14. The threshold limit of INR 1 Crore is for aggregate cash following payments:
withdrawn from an account during the FY.  Salary
15. At the rates applicable to particular slab of income including  Accumulated Balance due to employee
applicable Surcharge and Health & Education Cess.  Winnings from lottery, crossword puzzle or horse
race
16. In case payee does not furnish PAN then TDS shall be deducted
at higher of the following rates  Income paid in respect of investment in
securitization trust
 Rates specified in relevant provisions of the Act or
 TDS by banks on cash withdrawals
 Rates in force or
(Effective from 01.07.2021)
 20%
In case of payment by E-Commerce Operator to E-
Commerce Participant, 5% TDS shall apply instead of 20%.

TDS PROVISIONS
 Presently, tax is collectible (TCS) by seller from buyer on goods exceeding INR 50 Lakhs by a specified seller.
 It is now proposed to further provide for TDS on goods purchased from any resident, being seller, in following case:
Rate of TDS Rate of TDS

Nature of payment made to Person Responsible to
(PAN is (PAN is Not Exceptions
resident deduct tax
Provided) Provided)
Person being buyer whose  Tax is deductible under any
total sales, gross receipts other provision of the Act
Purchase of goods (value or or turnover from the
aggregate of value of goods business carried on by him  Transaction on which tax is
0.1% 5% collectible under the provisions
purchased > INR 50 Lakhs during > INR 10 Crores during the
the FY) FY immediately preceding of the Act other than sale of
the FY in which goods were goods.
purchased
Note:
 Notified category of persons will be exempt from deducting tax on above mentioned transaction.
 This provision will take effect from 1st July 2021.
 If on a transaction, TCS is required u/s 206C(1H) as well as TDS under this amended section, then only TDS under this section
will apply.
Relaxation for withholding on payments to FII

 Currently, income of FII from securities is subject to TDS at a specific rate of 20% without providing the benefit of DTAA at the
time of tax deduction.
 In order to provide relaxation, it is proposed that tax shall be deducted at 20% or rate of tax as per DTAA for such income,
whichever is lower, if the payee furnishes Tax Residency Certificate.

TDS PROVISIONS
TDS/TCS on non filers at higher rates o Income paid in respect of investment in
 In order to enforce compliance of return filing by Resident
Indians and Non resident having PE in India, it is proposed o TDS by banks on cash withdrawals
to provide for higher rates of TDS and TCS for non-filers of  For implementation of this amendment, the IT department
income tax return. should come up with some functionality to enable the
 Such higher rates will be applicable to persons: payer to verify the status if return filing of payee and his
total TDS/ TCS.
o who have not filed ITRs in both of the 2 years
immediately preceding the FY of payment/collection  This amendment will be effective from 01.07.2021.
and the time limit for filing original returns has
expired, and Exemption from TDS on payment of Dividend to
o whose aggregate of TDS / TCS is INR 50,000 or more Business trust
in each of the 2 years immediately preceding the FY
 Presently, section 194 of the Act provides for TDS on
of payment/collection.
payment of dividend to Residents.
 The rate of TDS/TCS shall be higher of the following:
 Since dividend income of Business Trust (REIT or InvITs)
o Twice the rates specified/in force
from SPV (Indian company where the Business Trust holds
o 5% controlling interest) is exempt, it is proposed that TDS
 In case the payee/collectee does not furnish PAN and the requirement shall not apply to such dividend payments.
TDS/TCS rates for not furnishing PAN are higher than the Certain notified persons will also be entitled for such
above mentioned rates, then such higher rates shall be relaxation.
applicable.  The proposed amendment will be effective from AY 2021-
 These provisions will not be applicable for the following 22 i.e. FY 2020-21.
payments:
o Salary
o Accumulated Balance due to employee
o Winnings from lottery /crossword puzzle /horse race

PERSONAL TAXATION
Relaxation for certain category of senior citizen now proposed that interest for deferment of advance tax
shall not be applicable on the amount of shortfall in tax
from filing Income-Tax Return
where such shortfall is on account of under-estimation or
 It is proposed to provide relaxation to Resident Senior
failure to estimate dividend income, if tax due on dividend
Citizens from filing the return of income who fulfil the
income has been paid in the subsequent advance tax
following conditions:
instalments.
o They are aged 75 years or more during the FY,
 The proposed amendment will be effective from AY 2021-
o They only have pension income and interest 22 i.e. FY 2020-21.
income from the same Specified bank in which
pension income is received and
o A prescribed declaration is furnished to the specified
Deduction in respect of interest on affordable
bank. housing loan
 After furnishing the declaration, the specified bank would  Presently, an Individual can claim deduction in respect of
compute the income of such senior citizen after giving interest up to INR 1,50,000 on loan taken for his first
effect of deductions & rebate and deduct income tax on the residential house property from financial institution if such
basis of rates in force. loan is sanctioned between 01.04.2019 to 31.03.2021 and
Stamp duty value of such house property does not exceed
INR 45 Lakhs.
Relaxation from Interest on Deferment of  To promote purchase of affordable housing, it is proposed
Advance Tax on Dividend Income to further extend the period of sanctioning of the said loan
 Presently, every assessee is liable to pay a simple interest upto 31.03.2022.
at the rate of 1% per month for a period of three months
on the amount of shortfall in advance tax calculated having
regards to the due dates for payment of advance tax
instalments.
 Considering the intrinsic nature of dividend income, it is

PERSONAL TAXATION
Relief from taxation of income from notified  In view of the situation arising out of outbreak of COVID
pandemic, it is now proposed to provide tax exemption in
overseas retirement benefit account
respect of cash allowance in lieu of one LTC in the block of
 Currently, there is mismatch in the year of taxability of
2018-21. Further, for this purpose rules shall be prescribed
withdrawal from overseas retirement account opened by
and shall, inter alia, be on following lines, viz:
residents when they were non-resident since withdrawal
o Employee or a member of his family during the
from such account may be taxed in foreign country on
period from 12.10.2020 to 31.03.2021 actually
receipt basis but on accrual basis in India.
spends the allowance received on goods or
 It is therefore proposed to provide that income of specified
services which are liable to tax at an aggregate rate
person from specified account shall be taxed in the manner
of twelve per cent or above under various GST laws
and in the year as prescribed by the Central Government.
and goods are purchased or services procured from
 The term specified person means Indian resident who has GST registered vendors/service providers (specified
opened a specified account in a notified country while expenditure)
being a non resident in India and resident in that country.
o The payment to GST registered vendors/service
 Specified account means an account maintained in respect providers is made through proper banking channels
of retirement benefits and whose income is taxable at the and tax invoice is obtained from such vendor/
time of withdrawal or redemption instead of accrual basis service provider
outside India.
o The amount of exemption shall not exceed thirty-
six thousand rupees per person or one-third of
Exemption for Leave Travel Concession Cash specified expenditure, whichever is less
Scheme  The proposed amendment will be applicable in AY 2021-22
only i.e. FY 2020-21.
 Presently, exemption is available in respect of the value of
leave travel concession or assistance received by or due to
an employee from his employer or former employer for
himself and his family, in connection with his proceeding on
leave to any place in India.

PERSONAL TAXATION
Taxability of Interest on excess contributions to
Recognised Provident Fund.
 Presently, exemption is provided for the amounts received
from any statutory PF and also for the accumulated balance
due and becoming payable to an employee participating in
a RPF to the extent provided under the Income Tax Rules.
 On account of this provision, there were instances where
employees contributing huge amounts were able to claim
exemption on the entire amount of Interest
accrued/received from such RPF and thus in the absence of
any threshold limit, this provision benefited only those who
are able to contribute huge amounts to the fund.
 Thus, it is now proposed to provide that the exemption
shall not be available on the interest income accrued,
during the FY and on subsequent years thereafter, on such
contributions made in excess of INR 2,50,000 on or after
01.04.2021. Interest on earlier contributions will continue
to enjoy the Tax exemptions.

BUSINESS PROVISIONS
Goodwill to be considered as non depreciable Relief from tax audit provisions in certain cases
asset  Currently, every person carrying on business is required to
 Goodwill of a business or profession was considered as a get his accounts audited, if his total sales, turnover or gross
depreciable asset in various judicial pronouncements receipts, in business exceeds INR 1 Crore in any FY
including Supreme Court’s decision in case of Smiff  The said limit is INR 5 Crores in cases where,-
Securities Limited (348 ITR 302) o aggregate of all cash receipts during the FY does not
 It is now proposed to provide that goodwill of a business or exceed 5% of total receipts; and
profession shall not be considered as part of block of assets o aggregate of all cash payments during the FY does not
and accordingly no depreciation will be allowed as a exceed 5% of total payments.
deduction under the head Income from Business and  To promote the digital economy, it is proposed to further
Profession. increase the above limit of INR 5 Crores to INR 10 Crores.
 If goodwill is purchased for a price by the assessee, the  The proposed amendment will be effective from AY 2021-
same will be considered cost of acquisition in the event of 22 i.e. FY 2020-21.
transfer in future. If the assessee has already claimed
depreciation on goodwill, the cost shall be reduced to the
extent of depreciation claimed.
 The above amendment is proposed to be made applicable
from A.Y 2021-22 i.e. FY 2020-21.
 Consequential amendment is also proposed in respect of
the written down value of the block of asset which includes
goodwill of a business or profession and short term capital
gain, if any, on cessation of such block of asset shall be
determined in prescribed manner.
 This amendment will have far reaching impact on Mergers
and Acquisition transactions.

BUSINESS PROVISIONS
Rationalisation of provision of presumptive deduction will be lost forever.
taxation for Specified Profession  The proposed amendment will be effective from AY 2021-
22 i.e. FY 2020-21.
 Presently, an Indian Resident, being a professional assessee
can opt for offering presumptive income if the gross
receipts from such profession is upto INR 50 Lakhs. Incentives for affordable housing
 The said benefit of presumptive taxation is now sought to  Currently, an assessee engaged in the business of
be restricted to resident Individuals, HUFs or partnership developing and building affordable housing projects is
firms other than LLP. eligible to claim deduction of 100% of profits. The benefit
 The proposed amendment will be effective from AY 2021- is available in respect of the projects approved upto
22 i.e. FY 2020-21. 31.03.2021.
 It is proposed to extend the benefit by additional one year
i.e. for projects to be approved on or before 31.03.2022.
Payments of employee’s contribution to a fund
 Also to help migrant labourers and to promote affordable
on or before due date rental, it is proposed to extend the above tax deduction to
 Currently, based on various judicial decisions, deduction of such rental housing projects which are notified by the
employee’s contribution to provident fund or Central Government and which fulfil the specified
superannuation fund or fund set up under ESI Act or any conditions.
other employee welfare fund is allowable, if such payment
is made by employer on or before due date for filing of its
return of income.
 The same has been a litigative issue. It is proposed that,
deduction of employee’s contribution to the said fund shall
be allowable only if the employer makes the payments of
such employee contributions in the respective funds on or
before the due date prescribed under the relevant Act /
rule / notification. In case of default, the claim for the

BUSINESS PROVISIONS
Rationalisation of safe harbour limits u/s 43CA, Further, it is proposed to provide similar consequential
relief to buyers of these residential units by Increasing
and Section 56
the safe harbor limit from 10% to 20% u/s 56 (2)(x) of
 Presently u/s 43CA, for computation of business income
the Act.
from transfer of Immovable property being land or building
or both, Stamp duty value [SDV] of the property is
considered as Deemed Sale price, if such SDV exceeds 110%
of the sale consideration.
 Similarly u/s 56(2)(x), if a person receives any immovable
property and Stamp duty value of such property exceeds
10% of the purchase consideration then such excess is
taxable under the head Income from other sources.
 In order to reduce the hardships caused in respect of
genuine transactions, it is proposed to increase the safe
harbour threshold from existing limit of 10% to 20% of sale
consideration u/s 43CA for real estate developers selling
residential units, if the following conditions are fulfilled:
o The transfer of residential unit takes place during
the period from 12 th November, 2020 to 30 th June,
2021
o The transfer is by way of first time allotment of the
residential unit to any person and
o The consideration as a result of such transfer does
not exceed INR 2 Crores.

BUSINESS PROVISIONS
Extension of time limit for set-up of eligible start- Rationalization of provisions of Minimum
up Alternate Tax (MAT)
 Presently a deduction of 100% of the profits and gains  In case of foreign company, it is proposed that Dividend
derived from eligible business by an eligible start-up is income accruing or arising shall be reduced from the book
available for any 3 consecutive assessment years out of 10 profits and expenditure in relation to dividend income shall
years, if the turnover from the business is upto INR 100 be added to the book profits for MAT computation where
Crores and if the eligible start up is incorporated on or such dividend income is taxable at lower then MAT rate due
after 01.04.2016 but before 01.04.2021. to DTAA.
 In order to extend the benefit to eligible start-up, it is  APA and secondary adjustment - In cases where past year’s
proposed to extend the benefit to startup incorporated income is included in books of account during the FY on
upto 01.04.2022. account of an APA or a secondary adjustment under
transfer pricing provisions, the AO shall, on an application
made to him in this behalf by the assessee, re-compute the
Extension of time limit for availing exemption for
book profit of the past year(s) and tax payable, if any, in
investment in eligible start-up the prescribed manner. Further, for the rectification of
 Presently, the benefit of exemption from capital gain for mistake, the period of 4 years shall be reckoned from the
transfer of residential property can be claimed if the end of the FY in which the application from the assesse is
consideration is invested in an eligible start-up on or before received by AO.
31.03.2021. This date is now proposed to be extended upto  The proposed amendment will be effective from AY 2021-
31.03.2022. 22 i.e. FY 2020-21.
22 i.e. FY 2020-21.

CAPITAL GAINS
End of controversy of Slump Sale vs. Slump
Exchange
 Section 50B of the Act provides for computation of capital
gains in case of slump sale. Slump sale means the transfer
of undertaking/s as a result of sale for lump sum
consideration without value being assigned to individual
assets and liabilities .
 Since the current provision only covers transfer of
undertaking by way of sale, there was a controversy in case
of transfer of undertaking by any other mode of transfer
e.g. transfer of undertaking in exchange of shares. This also
lead to instances where slump sale transaction being
carried out as slump exchange transaction to avoid tax
incidence.
 To end this controversy, it is proposed to amend the scope
of the slump sale provision so that all transfer by any
means including but not limited to sale, exchange,
relinquishment, extinguishment of rights will be within its
scope.
22 i.e. FY 2020-21.

CAPITAL GAINS
Taxation on distribution of asset/money on dissolution or reconstitution of firm/AOP/BOI
 At present, section 45(4) provides for tax on transfer of capital asset by way of distribution to partner/member by a
firm/AOP/BOI on its dissolution or otherwise. For computation of such capital gains, fair market value of the capital asset is
considered as full value of consideration.
 At present, for taxation of capital gains there has to be transfer of a capital asset. Hence the cases where there is no transfer
of capital asset but there is revaluation of such asset by crediting capital account of partners and then payment is made to
partner/member of such excess capital balance then such transactions are not covered under section 45.
 To tax the abovementioned situations, it is proposed to amend section 45(4) and also insert section 45(4A) to provide for
following:
No Taxable event Capital gains computation Taxability

1 Section 45(4) : Receipt of Fair market value of such capital asset as on the date of such Taxable as capital
Capital asset by receipt gains in the hands
Partner/Member on Less : Cost of such capital asset in the hands of the firm/AOP/BOI of firm/AOP/BOI in
dissolution/reconstitution of the year of such
the firm/AOP/BOI receipt by its
2 Section 45(4A): Receipt of Value of money and Fair market value of Other asset as the date partner/member
Money/Other asset by of such receipt
Partner/Member on Less : Balance in capital account of such partner/member at the
dissolution/reconstitution of time of dissolution/reconstitution excluding increase on account
the firm/AOP/BOI of revaluation of any asset or self-generated goodwill or any
other self-generated asset*
*Self generated goodwill/asset means goodwill/asset which has been acquired without incurring any purchase cost or which has
been generated during the course of business/profession.

CAPITAL GAINS
 In order to avoid double taxation, it proposed that at the time of future sale of capital asset which was revalued and for
which income was brought to tax under Sr. no. 2 above, the amount so taxed shall be deducted from future sale
consideration.
 Important aspects of this amendment are as under:
o This amendment provides for taxation based on receipt of money/other asset by partner/member and transfer of
capital asset is not mandatory. Also since the definition of income u/s 2(24)(vi) includes any capital gains u/s 45, the
said receipt will qualify as “income” without there being any transfer.
o As per the amendment, trigger of capital gains in case of transfer of capital asset by the firm to partner u/s 45(4) or
receipt of money/other asset u/s 45(4A) is only on dissolution or reconstitution. Interestingly, receipt of capital asset
by the firm to partner without there being any dissolution or reconstitution is not covered under the amended
section 45(4) and hence may be out of tax incidence.
o The chargeability of tax u/s 45(4A) is on profits/gains on receipt of money/other asset by the partner. In general
parlance there can not be profits/gains on receipt, it is always on accrual/credit and not on receipt.
 The proposed amendment will be effective from AY 2021-22 i.e. FY 2020-21.

ASSESSMENT PROVISIONS
New procedure for Income escaping assessment o Till 3 years from the end of relevant AY, in any
other case.
 Presently there is no provision of giving opportunity of
 Upto 31.03.2021, proceedings for reopening of assessment,
being heard to the assessee before reopening of
in case where income has escaped assessment and
assessments. One of the requirement for reopening of
proceedings for search and requisition cases, are carried
assessment is that the AO must have reasons to believe
out separately.
that income has escaped assessment.
 It is proposed to conduct the above proceedings in a same
 It is proposed that under the new procedure of
and like manner under a new procedure.
reassessment proceedings (other than search proceedings),
 Currently re-assessment proceedings can be initiated by
the AO should follow the steps as under;
the AO as under:
o Conduct an enquiry, if required, with the prior
o Till 6 years from the end of the relevant AY if
approval of higher authority with respect to the
income of INR 1 Lakh or more has escaped
information which suggests that income has
assessment
escaped assessment
o Provide an opportunity of being heard to the
income escaping assessment pertains to asset
assessee to explain why assessment should not be
located outside India.
conducted on basis of information which suggests
o Till 4 years from the end of relevant AY in any that income has escaped assessment.
other case
o Decide on the basis of material available on record
 It is proposed that the re-assessment proceedings or search including reply of the assessee (if any), whether or
proceedings can be initiated by the AO as under – not it is a fit case to conduct reassessment
o Till 10 years from the end of relevant AY, if AO has proceedings by passing an order.
in his possession evidence which reveals that the  The proposed amendments could reduce the discretion
income escaping assessment for the concerned currently available to assessing officers for reopening
year, amounts to INR 50 Lakhs or more and is assessments since it appears that it will now be system
represented in the form of an asset. driven.

Provision for Faceless Proceedings before the  In case where the assessee exercises option to withdraw
the application, then the AO in charge shall dispose the
ITAT
case in accordance with normal provisions of the Act as if
 Presently, ITAT hearing takes place through personal
no application had been made u/s 245C of the Act.
hearing. Assessment Proceedings and CIT(A) proceedings
 The Central Government shall issue directions for the
are already in an electronic mode without any requirement
purposes of settlement of pending application by the
of personal attendance. It is now proposed to increase the
Interim Board upto 31.03.2023.
scope and coverage of e-proceedings with objective of
eliminating physical attendance of tax payers/ Authorised
Representative. Time to file belated return/ revised return
 Hence, it is proposed to notify an e-ITAT scheme for Appeal
reduced
proceedings before ITAT, in order to impart greater
 Presently belated and revised returns of income could be
filed before the end of the AY or before the completion of
the assessment whichever is earlier.
Discontinuance of Income Tax Settlement  It is now proposed that the belated and revised returns can
Commission be filed three months before the end of the assessment
 The Income tax Settlement commission shall cease to exist year or before the completion of the assessment whichever
from 01.02.2021 and an “Interim Board” shall be is earlier.
constituted in its place for settlement of pending cases and  The proposed amendment will be effective from AY 2021-
no fresh application for settlement shall be made there 22 i.e. FY 2020-21.
afterwards u/s 245C of the Act.
 In respect of pending applications, assessee has the option
to withdraw the same u/s 245M of the Act on or before
30.06.2021 and if not done so, then the pending
application shall be deemed to be transferred to the
Interim Board.

Amendment in provisions of processing of Rationalisation of Time Limit for Completion of
returned income u/s 143(1) and issue of notice of Assessments
scrutiny assessment u/s 143(2)  The current time limit for the completion of assessment
 Time limit to issue notice for scrutiny proceedings is proceedings is within 12 months from the end of the AY.
proposed to be reduced from 6 months to 3 months, from  It is now proposed to reduce the time limit for completion
the end of FY in which return has been filed. of assessment including reassessment proceedings to 9
 Time limit for sending intimation for processing the return months from the end of AY.
of income u/s 143(1) is also proposed to be reduced from  The proposed amendment will be effective from AY 2021-
12 months to 9 months, from the end of FY in which return 22 i.e. FY 2020-21.
has been filed.
 Currently, disallowance of expenditure indicated in tax
Illustration of various timelines (assuming FY 20-21)
audit report and not included in computation of income
was only allowed to be added while computing total No Timeline of Existing Proposed
income u/s 143(1). It is proposed to provide for increase in Earlier of Earlier of
income indicated in tax audit report but not taken into Belated / Revised 31.03.2022 or 31.12.2021 or
1
Return Completion of Completion of
account in computation of income while processing
Assessment Assessment
returned income u/s 143(1).
 It is proposed to disallow certain income based deductions Processing of ITR u/s
2 31.03.2023 31.12.2022
under section 10AA and section 80H to 80TT (Chapter VI –A 143(1)
under heading ‘C’) if the return of income is filed after due
Selection of Scrutiny
date and the same was not disallowed in the return of 3 30.09.2022 30.06.2022
Assessment u/s 143(2)
income.
Completion of
4 31.03.2023 31.12.2022

Constitution of Dispute Resolution Committee Allowing prescribed authority to issue notice for
 In order to provide for early resolution of small and filing return of income
medium tax payers’ disputes, it is proposed to introduce  Currently, only jurisdictional AO is authorized to
one or more Dispute Resolution Committees (“DRC”). issue/serve notice to a person who has not filed return of
 Disputes where returned income for the year is upto INR 50 income asking for submission of return.
Lakhs AND the aggregate amount of variation proposed in  In line with conscious policy of making all the processes
assessment is upto INR 10 Lakhs shall be eligible to be faceless and elimination of inter face between the tax
considered by the DRC. payer and the department and in order to enable
 Orders based on search initiated or requisition made u/s Centralized issuance of notices etc. in an automated
132A or survey initiated u/s 133A or information received manner, it is proposed to amend the provisions of section
under an agreement referred to Section 90 or Section 90A 142(1)(i) of the Act to empower the prescribed Income Tax
of the Act shall not be eligible for being considered by the Authority besides the assessing officer to issue notice to
DRC. the assessee.
 Further, the assessee shall not be eligible for approaching
the committee if there is detention, prosecution or
Provisional attachment in fake invoice cases
conviction under various laws.
 Presently, section 281B provides for provisional attachment
 Further the DRC is empowered to reduce or waive any
by AO of any property of the assesse in order to protect the
penalty imposable or grant immunity from prosecution for
interest of revenue in the cases of assessment or
any offence under the said Act while resolving the dispute.
reassessment. It is now proposed to also include such
 The Central Government shall not issue any directions after
power of provisional attachment to enable to impose
31.03.2023 for the DRC to resolve the pending disputes
penalty u/s 271AAD where the amount or aggregate of
amount of penalty likely to be imposed exceeds INR 2
Crores. Section 271AAD provides for a levy of penalty on a
person or a person who causes such a person to make a
false entry or omit an entry from his book of accounts.

CHARITABLE TRUST
Rationalization of Provision of Charitable  To streamline the accumulation of income and eliminate
the double counting, following amendments are proposed:
Trusts and Institutions
o Voluntary contributions (made with a specific
 Exemption to funds, institutions, trusts etc. carrying out direction that it shall form part of the corpus) shall
religious or charitable activities is provided u/s. 10(23C) of be invested or deposited in one or more of the forms
the Act and sections 11 and 12 of the Act. or modes specified u/s 11(5) maintained specifically
 Section 12A of the Act, inter alia, provides for procedure to for such corpus.
make application for the registration of the trust or o Application out of the corpus shall not be
institution to claim exemption under sections 11 and 12. considered as application for charitable or religious
 Voluntary Corpus Donations received by trusts, institutions, purposes [for the purposes of section 11(1)(a) and
funds made with a specific direction that they shall form (b)], provided when it is invested or deposited back,
part of the corpus are exempt and shall not be included in into one or more of the forms or modes specified in
the total income of the trust or institution. section 11(5) maintained specifically for such
 Under the existing provisions, these entities are not corpus, from the income of the previous year, such
allowed to accumulate more than 15% of their income or amount shall be allowed as application in the
accumulate for specific purpose up to 5 years, other than previous year in which it is deposited back to corpus
corpus donations referred above. and to the extent it is deposited back.
 Unintended double deductions took place by way of: o Application from loans and borrowings shall not be
o Claiming of exemption of corpus donations and considered as application for charitable or religious
o Application of corpus donations against the purposes. The repayment when made out of income
mandatory 85% application of non-corpus income of the previous year shall be allowed as application
 Entities made applications towards charitable objects out in that previous year.
of borrowed funds, the repayment of which was also o No set-off or deduction or allowance of any excess
claimed as application. This resulted in paper losses and application of any preceding year shall be allowed
short application (less than 85%). while computing income required to be applied or
accumulated during the previous year.

CHARITABLE TRUST
Raising of Prescribed Limit for Exemption
 Presently, section 10(23C) of the Act provides for
exemption in respect of income received by any person on
behalf of different funds or institutions as specified in
different sub-clauses therein as under;
o Exemption of income received on behalf of any
approved non-profit making university or
educational institution.
approved non-profit making hospital or other
institution established for philanthropic purposes.
 One of the existing conditions for availing such exemption
is that the gross annual receipt of such university, hospital
or institution should not exceed INR 1 Crore.
 It is proposed to increase this limit of annual receipt to INR
5 Crores. In case a person has receipts from both,
universities, hospitals or other such institutions, then the
aggregate annual receipts should not exceed INR 5 Crores.

OTHERS
Definition of the term-Liable to Tax aggregate premium payable for any FY during the
term of any of the policies exceeds INR 2.5 Lakhs.
 Presently the Act does not define the term ‘Liable to Tax’
although the same is widely used in various provisions like  It is to be noted that any sum received under above cases
determination of residential status, application of DTAA. shall be exempt in case of death of insured.
 It is now proposed to define the term ‘Liable to Tax’ in Note:
relation to a person, to mean a case where there is a o Equity ULIP which is taxable shall be included in the
liability of tax in respect of that person under the law of definition of Equity oriented fund and any capital
any country. It will also include a case where subsequent to gains arising on such asset shall be taxable under the
imposition of such tax liability, an exemption is provided. provisions of capital gains.
 The proposed amendment will be effective from AY 2021- o The proposed amendment will be applicable for new
22 i.e. FY 2020-21. ULIP policies issued on or after 01.02.2021
Taxation of proceeds of high premium ULIP

 Currently, certain proceeds under ULIP are exempt if the
premium payable does not exceed 10% of the actual capital
sum assured.
 However, it is proposed to make the following proceeds
received under ULIP taxable:
o Any sum received under an insurance policy issued
on or after 01.02.2021 in respect of which the
premium payable for any FY during the term of the
policy exceeds INR 2.5 Lakhs.
o Any sum received under any insurance policies
issued on or after 01.02.2021 in respect of which the

OTHERS
Rationalisation of provisions of Equalisation Levy o Acceptance of purchase order
 Equalisation Levy is levied at 2% of the consideration o Payment of consideration
received or receivable by an e-commerce operator from o Supply of goods or provision of services, partly or
ecommerce supply of goods or services: wholly
o to a person resident in India; or  The proposed amendment will be effective retrospectively
o to a non-resident in the specified circumstances; or from AY 2021-22 i.e. FY 2020-21.
o to a person who buys such goods or services or both,
using internet protocol address located in India. Issuance of zero coupon bond by infrastructure
o It is proposed to clarify that consideration for specified debt fund
services such as online advertising, etc and for e-commerce
 Presently Section 2(48) of the Act provides for definition of zero
supply or services shall not include consideration taxable
coupon bond, as a bond issued by any infrastructure capital
under the Act as royalty or fees for technical services in
company or infrastructure capital fund or public sector company
India read with DTAA.
or scheduled bank and in respect of which no payment and
 It is proposed to provide that consideration for e- benefit is received or receivable before maturity or redemption. It
commerce supply of goods or services shall include: is now proposed to include notified “infrastructure debt fund” to
o consideration for sale of goods irrespective of its list.
whether the e-commerce operator owns the goods
o consideration for provision of services irrespective
of whether service is provided/facilitated by the e-
commerce operator.
 Further, it is also proposed to include one or more
activities for the purpose of e-commerce supply or service:
o Acceptance of offer for sale
o Placing the purchase order

OTHERS
Tax Incentives for units located in IFSC of royalty on account of lease of aircraft paid by unit of
IFSC eligible for specified deduction and commences
 Presently, fund management activity of eligible investment
business operations on/before 31.03.2024.
fund carried out through eligible fund manager located in
India and acting on behalf of such fund shall by itself not  It is proposed that tax holiday shall be extended to income
constitute business connection in India. Such Eligible funds from transfer from aircraft/aircraft engine leased by IFSC
shall also not be considered resident of India merely unit to domestic company engaged in operation of aircraft
because the fund manager is located India. before such transfer subject to certain conditions.
 Certain conditions have been prescribed for the fund to be  To encourage existing offshore funds to relocate to IFSC it is
eligible to avail above benefits. It is proposed to relax some proposed to exclude following transfers from the ambit of
condition/s for such investment fund or its eligible fund capital gains:
manager if such fund manager is located in IFSC and o Transfer of capital assets on such relocation by
commences operations on/before 31.03.2024. Original fund (i.e. existing offshore fund) to
 Presently income from transfer of specified capital assets Resultant fund (i.e. new AIF located in IFSC).
(e.g. derivatives, rupee denominated bonds of an Indian o Transfer by shareholder/unitholder/interest holder
Company, Bond or GDR etc.) received by/accrued to Cat III of shares/units/interest held in Original fund in
AIF located in IFSC of which all the units are held by non- consideration for share/unit/interest in the
residents (other than unit held by a sponsor or manager), is Resultant fund.
exempt subject to certain conditions. It is proposed to o It is also proposed to exempt capital gains of non-
extend the said benefit to the investment division of OBU residents on account of transfer of shares of
located in IFSC and which commences operations on/before company resident in India received on relocation by
31.03.2024. It is also proposed to provide concessional tax the Resultant fund provided capital gains on such
rate u/s 115AD to Investment division of OBU as a FPI. shares were not chargeable to tax if that relocation
 It is proposed exempt income of a non-resident from had not taken place.
transfer of non-deliverable forward contracts entered into  It is proposed to provide tax holiday to units in IFSC if they
with OBU of IFSC subject to certain conditions. are registered under IFSC Authority Act, 2019 removing the
 It is proposed to exempt income of a non-resident by way earlier permission requirements

Increase in threshold limits of a Small Company |
Removal of limits for conversion of an OPC |
Rationalization of Tribunals and E-Court systems for
strengthening NCLT framework | Launch of MCA
Version 3.0
CORPORATE LAW
Small Company and
One Person Company 45
Other provisions and
Decriminalization of
Offences (LLP) 46
Corporate Law
SMALL COMPANY AND ONE PERSON COMPANY
Relaxation for Small Companies [2(85)] Amendments in pursuant to One person
 The definition of Small Company is proposed to be revised. Companies.
The new threshold limits are as follows,  Presently, One person Company is required to compulsorily
o Paid up Share Capital of which does not exceed INR convert itself into a Private Limited Company or Public
2 Crores (earlier INR 50 Lakhs), and Limited Company if,
o Turnover limit of which does not exceed INR 20 o Paid up Share Capital of such company exceeds INR
Crores (INR 2 Crores) 50 Lakhs or
 The above change shall benefit Companies with respect to o Turnover exceeds INR 2 Crores
relaxation in compliance requirements, such as However, the aforesaid limit has been proposed to be
o Exemption from, removed. The One Person Companies are allowed to grow
 Preparation of Cash Flow Statement without any restrictions and are allowed to convert itself into
 Providing Companies Auditors Report Order 2016. a private limited or public limited Company at any time.
 Appointment of Key Managerial Personnel, • The Residency limit on the Indian citizen to incorporate a
Secretarial Auditor and Whole Time Company One Person Company is reduced from 182 days to 120 days.
Secretary • At present, only a natural person who is an Indian Citizen
o Certification of Annual Return by a Company Secretary in and Resident in India shall be eligible to incorporate as a
Practice is not applicable. One Person Company. However, now it has been proposed
o Limited Disclosures in Directors Report that a Non-Resident Indian is also allowed to set up and
incorporate a One Person Company in India .
o Holding at least 1 meeting of the Board of Directors in
each half of a calendar year and the gap between the two
meetings is not less than ninety days.

Corporate Law
OTHER PROVISIONS AND DECRIMINALIZATION OF OFFENCES (LLP)
Rationalization of Tribunals and E-courts systems. offences under Limited Liability Partnership Act 2008 and
has placed suggestions and recommendations from
 To ensure faster resolution of cases, NCLT framework will
stakeholders.
be strengthened, e-Courts system shall be implemented
and alternate methods of debt resolution and special
framework for MSMEs shall be introduced. The Committee has also below recommendations for the ease
of doing business on Limited Liability Partnership as follows:-
 Reduction in the additional fee charged for delayed
Launch of MCA Version 3.0 filings,
 The Budget proposes to launch Data Analytics, Artificial  To allow Limited Liability Partnerships to issue Non-
Intelligence, Machine Learning, driven with MCA21 Convertible Debentures to entities regulated by
Version 3.0. This MCA version 3.0 will have additional Securities and Exchange Board of India or Reserve
modules for E-scrutiny, E-Adjudication, E-Consultation Bank of India,
and Compliance Management.  Classification of certain Limited Liability Partnerships
as "Small Limited Liability Partnership" for regulatory
Decriminalization of Offences under LLP Act purposes and also certain urgently needed structural
 In order to provide greater ease of doing business in India changes for alignment with the provisions of
Companies Act, 2013
to law abiding Limited Liability Partnerships, a need is
being felt to review the penal provisions of the Act so as
to decriminalize compoundable offences involving minor,
procedural or technical violations of the Act, or offences
which can be objectively identified as where no fraud or
mala fide intent is present nor is there any harm to public
interest. In order to achieve the aforesaid objective, the
Committee was formed, which submitted its report
suggesting decriminalization of certain compoundable

19% Increase in Defence capital expenditure | INR 350
billion allocated for COVID-19 vaccine | Voluntary
Vehicle Scrappage Policy | Increase of 137% in budget
outlay on healthcare sector

G o o d s & S e r v i c e Ta x 48
Customs 51
GOODS AND SERVICE TAX
Scope of Supply  Additionally, the details of such invoices or debit notes
shall be required to be communicated to the recipient.
 To put an end to controversy arising out of the decision of
Hon’ble Supreme Court in the case of Calcutta Club on
mutuality, the scope of supply is proposed to be Changes is Annual Return and GST Audit
retrospectively amended to ensure levy on supply of goods  An option to furnish self-certified reconciliation statement,
or services by any person other than individual to its’ reconciling the GST returns with audited financial
members or constituents and vice versa. statements is proposed.
 Further, an explanation in the said section is inserted to  Currently, the due date for furnishing Annual Return is 31 st
negate any judgement or decree or order of any court and December following the end of financial year. It is now
deem person and its members/constituents as two proposed to be prescribed at a later date.
separate persons and transactions/ activities between
 The provisions for mandatory requirement of furnishing a
them to be supply of goods or services. reconciliation statement duly audited by Chartered
 Consequently, entry 7 of Schedule II to the CGST Act is Accountant / Cost Accountant along with the audited
being omitted retrospectively financial statements of the registered person whose
turnover exceeds INR 2 Crores are proposed to be omitted
Restriction on Input Tax Credit
 Currently, the availability of input tax credit is restricted to
105% of the invoices or debit notes furnished by the
supplier.
 It is now proposed to restrict the availability of Input Tax
Credit to the invoices or debit notes furnished by the
supplier in the GST return of outward supplies. The
relaxation of 5% , then, shall not be available.

Retrospective effect to interest on Net Tax
Particulars Cess Total
Liability
 Vide Finance (No.2) Act, 2019, the interest on delayed
Where owner of goods comes
payment of tax was levied on that portion of the tax that is forward for payment 100% of tax 200% of tax
paid by debiting the electronic cash ledger (i.e., tax liability
- Taxable goods
net of input tax credit). The said provision was made
effective from a date to be notified which was then notified Where owner of goods does not 50% of value of
come forward for payment 50% of
on 1 st September, 2020. goods or 200%
value of
 Amidst confusion regarding clarificatory nature of the said - Taxable goods of tax, whichever
goods
provision, the CBIC vide press release had clarified that the is higher
said provision is effective in retrospect with effect from
01st July, 2017.  The conveyance shall be released on payment of penalty or
INR1,00,000, whichever is less.
 To provide legal sanction, it is now proposed that the said
provision be effective retrospectively from 01st July, 2017.  Penalty in respect of confiscation of goods or conveyances
is proposed to be revised to 100% of tax payable. Currently
the same is linked to penalty in respect of detention and
Demands, Recovery, Seizure and Confiscation seizure.
 Amendment is proposed to make seizure and confiscation
of goods and conveyances in transit a separate proceeding
Recovery of Tax as per GSTR-1
 The meaning of the term “self assessed tax” for the
 It is proposed that no appeal shall be filed against an order
determination of tax and interest is proposed to be
of detention or seizure, unless a sum equal to 25% of
amended. Self-assessed tax shall include the tax payable in
respect of details of outward supplies furnished under
 Penalty for contravention of provisions of CGST Act in case
section 37 (i.e. GSTR-1) but not included in return
of transportation or storage of goods in transit are
furnished under section 39 (i.e. GSTR-3B)
proposed to be revised in the following manner.

Zero Rated supplies end of the day preceding the day (including holidays) of
arrival of goods. A new proviso is proposed, to enable the
 Currently, all supplies to SEZ developer or SEZ unit are
Board to notify the time period for presenting bill of entry
considered as zero rated supplies. It is now proposed that
in certain cases as it may deem fit.
supplies to SEZ developer or SEZ unit only for authorized
operations shall be treated as zero rated supplies.  A new section is proposed to prescribe penalty in specific
case where any person has obtained any invoice by fraud,
 It may be noted that, currently, the refund on supplies to
collusion, willful misstatement or suppression of facts to
SEZ is permissible only in case of authorized operations.
utilize Input Tax Credit on the basis of such invoice for
 The option to make zero rated supply on payment of tax
discharging any duty or tax on goods that are entered for
and claim refund is proposed to be restricted to a notified
exportation under claim of refund of any duty or tax.
class of persons or goods or services
 In case of zero rated supply of goods, it is proposed that
The above provisions relating to Customs shall come into
the registered person be liable to deposit the refund
effect from the date of enactment of the Finance Bill.
received along with interest if the sale proceeds are not
realised within the time limit specified under FEMA,1999
(nine months)
 A definite period of two year, extendable by one year is
proposed to be prescribed for completion of any
proceedings under the Customs Act, 1962 which would
culminate in issuance of a notice
 It is proposed that conditional exemption shall have validity
of two years unless specifically provided otherwise, or
varied or rescinded earlier (the notification would end on
31′ March falling immediately after two years of issue of
exemption)
 It is proposed to mandate filing of bill of entry before the

CUSTOMS
exemption)
end of the day preceding the day (including holidays) of
 A new section is proposed to prescribe penalty in specific


CUSTOMS
PROPOSALS INVOLVING INCREASE IN BCD,CVD,SAD AND EXPORT DUTY RATES
Sr. No. Particulars From To
Chemical
1 Carbon Black BCD-5.0% 7.5%
Plastic Items
2 Builder’s ware of plastics BCD-10.0% 15%
Gems and Jewellery sector
3 Cut and Polished Synthetic stones, including Cut and Polised Cubic Zirconia BCD-10.0% 15%
Electrical and Electronics Sector
BCD-12.5
4 Compressor of kind used in refrigerating equipment 15%
%
5 Compressor of kind used in air-conditioning equipment BCD-12.5% 15%
Printed Circuit Board Assembly of charger or adapter
6 (All goods under this tariff item, other above, will continue to attract the existing effective BCD-10% 15%
rate of BCD at 10%)
"Safety glass, consisting of toughened (tempered)or laminated glass.(All goods
7 under this heading, other than those used with motor vehicles, will continue to BCD-10% 15%
attract the existing effective rate of BCD at 10%)"
Parts of Electrical lighting and signalling “èquipment, windscreen
8 wipers, defrosters anddemisters, of a kind used for cycles or motor“ vehicles BCD-10% 15%

CUSTOMS
"Ignition wiring sets and other wiring sets of a kindused in vehicles, aircraft or
9 BCD-10% 15%`
ships"
"Instrument Panel Clocks and Clocks of a similartype for vehicles, Aircraft,
10 BCD-10% 15%
Spacecraft or Vessels"
11 Denatured Ethyl Alcohol (ethanol) manufacture of excisable goods BCD-2.5% 5%
BCD-Nil
5%
12 "All goods except dog and cat food and shrimp larvaefeed" 15%
10%
15%
Minerals
BCD-Nil
13 Natural borates and concentrates thereof 2.5%
5%
14 Naphtha BCD-4% 2.5%
15 Bis-phenol A BCD-Nil 7.5%
16 Epichlorohydrin BCD-2.5% 7.5%
17 Caprolactam BCD-7.5% 5%
18 Polycarbonates BCD-5% 7.5%

CUSTOMS
19 Nylon chips BCD-7.5% 5%
20 Other plates, sheets, films, etc. of other plastics BCD-10% 15%
Lether
"Wet blue chrome tanned leather, crust leather, finished leather of all kinds,
21 BCD-Nil 10%
including splits and sides of the aforesaid"
Textiles
22 Raw Silk (not thrown) BCD-10% 15%
23 "Silk yarn, yarn spun from silk waste (whether or notput up for retail sale)" BCD-10% 15%
24 Raw Cotton BCD-Nil "5% +5% AIDC"
25 "Cotton waste (including yarn waste or garneted stock)" BCD-Nil 10%
26 Nylon Fibre and Yarn BCD-7.5% 5%

"7.5%+2.5%
27 Silver BCD-12.5%
AIDC"
"6.1%
28 Silver Dore BCD-11%
+2.5%AIDC”
"7.5%+2.5%
29 Gold BCD-12.5%
AIDC"
"6.9%+2.5%
30 Gold Dore BCD-11.85%
AIDC"

INR 1,500 Crores earmarked to promote digital
payments | Adding 100 districts to city gas networks
over a period of 3 years | Set up of Development
Financial Institution with budget allocation of INR
20,000 Crs. for funding infra projects
GLOSSARY
Glossary
KNOW THE TERMS
Abbreviations Full Forms Abbreviations Full Forms
Agriculture Infrastructure and FDI Foreign Direct Investment
AIDC
Development Cess
Foreign Exchange and
AIF Alternate Investment Funds FEMA
Management Act, 1999
AMT Alternate Minimum Tax
FII Foreign Institutional Investor
AO Assessing Officer
AOP Association of Persons FMV Fair Market Value
APA Advanced Pricing Agreement FPI Foreign Portfolio Investors
AY Assessment Year
FY Financial Year
GDP Gross Domestic Product
BOI Body Of Individuals
GDR Global Depositary Receipts
GOI Government of India
CGST Central Goods and Services Tax
Corporate Social Responsibility HUF Hindu Undivided Family
CSR
CVD Countervailing duty Income Computation and
ICDS
Disclosure Standards
DRC Dispute Resolution Committee International Financial Services

IFSC
Centre
Double Tax Avoidance Agreement with INR Indian Rupees
DTAA foreign countries or specified
territories or specified associations InvITs Infrastructure Investment Trust

Glossary
KNOW THE TERMS
ITAT Income-Tax Appellate Tribunal RIDF Rural Infrastructre Development Fund
LTC Leave Travel Concession RPF Recognised Provident Fund
LTCG Long-Term Capital Gains SAD Special Additional Duty
MAP Mutual Agreement Procedure SDV Stamp Duty Value
MAT Minimum Alternate Tax Securities and Exchange Board of

SEBI
India
MRP Maximum Retail Price
SFT Statement of Financial Transactions
NBFC Non-Banking Financial Company
SHEC Secondary and higher education cess
NPS National Pension Scheme
SME Small and Medium Enterprise
SPV Special Purpose Vehicle
STCG Short-Term Capital Gains
PE Permanent Establishment
TAN Tax Deduction Account Number
PF Provident Fund
TCS Tax Collection at Source
Production AtamNirbhar Bharat - Linked
PLI TDS Tax Deducted at Source
Incentive Scheme
QFI Qualified Foreign Investor u/s Under Section
Research and Development ULIP Unit Linked Insurance Plan

R&D
USD US Dollars
WDV Written Down Value
REIT Real Estate Investment Trust

‘ न चोर हार्यं न च राज हार्यं न भात्रू
भाज्यं न च भारकारर
व्यर्यं कृते वर्धत एव ननत्यं
नवद्यार्नं सवधर्नप्रर्ानम ’
Knowledge is the Wealth that:

The Thief cannot Steal,
The King cannot Acquire,
The Brothers cannot Share,
Does not Weigh on You,
Grows Forever as you share ,
Truly, Knowledge is the Greatest Wealth.
Benefice Business House, 3rd Level, T: +91 22 3321 3737

126, Mathuradas Mills Compound, www.gbcaindia.com
N. M. Joshi Marg, Lower Parel (W),
Mumbai – 400013, India.
UNION
BUDGET 2021
Reset | Refocus | Restart
Tax & Regulatory | Audit & Assurance | Transaction Advisory |

Estate & Succession Planning
FOREWORD
MAKING A POWER POINT – BY SPEAKING LESS AND DOING The Government has chosen to focus on targeted and high impact
capital expenditures which shall improve long term prospect of the
MORE country. Part of this funding will be received through a divestment
The Post Covid world will bring in a lot of changes and one of the program that should hopefully be finally put into action.
first that we got to see was the Finance Minister, Smt. Nirmala
Sitharaman providing a budget that was unlike any of her previous The budget focused on Six Pillars for setting a base for building a
budgets. This shows a remarkably steep learning curve for her and stronger economy : health and well-being, physical and financial
also indicates that she has been extremely receptive to feedback. capital and infrastructure, inclusive development for aspirational
India, reinvigorating human capital, innovation and R&D, minimum
Right from the specifics of the policies announced, to the speech, to government - maximum governance.
the way it was delivered, all point to a shift in overall thought
process of the Minister and perhaps also of the Government. After Before this, the FM had provided budgets to support the economy
having delivered the longest Budget Speech ever in 2020, the while the economy was battling its own internal cyclical slowdown –
Finance Minister avoided eloquent poetry and kept a strict timeline despite her best efforts, the outcome of those budgets didn’t work
on her budget speech. She gave up the ‘bahi khata’ draped in red at achieving all that she wished for. Oddly, with a global pandemic
cloth for a digital tablet to read the speech from and went into induced contraction of the GDP, the FM seems to have hit the right
numerous details and numbers on how the policies’ have impacted notes and balanced the budget with the right expenditures,
the populace. investments and providing structural changes to bring ease of doing
business and reducing taxpayer compliance load.
Following her thought process from her maiden budget, where she
greatly increased the marginal rates of taxes on individuals to help As FM mentioned in her opening remarks, we certainly hope that
bridge the revenue shortfall, it was widely anticipated that she this is truly the ‘dawn of a new era’.
would levy a ‘Covid-cess’ in order to cover for the expenditure of the
government in its fight against the Novel Corona Virus. However, she
has provided tremendous policy stability by not changing any direct
taxes and not further burdening the taxpayers.
The Indirect taxes have seen some changes, at the level of tax rates
levied and also at the administrative ease to be provided. CA Dinesh D. Ghalla CA Haresh K. Chheda

TABLE OF CONTENTS
Eco nomic O ver view 4
Key H ig h lig ht s 6
D irec t Tax Pro p o sa ls 9
C
Inodrp o rate
ire c t TaxLaw
ProM
poatte
sa lsrs 44
In d irec t Tax Pro p o sa ls 47
G lo ssa r y 55
All the amendments mentioned below are proposed in the Finance Bill, 2021 and will take effect from AY 2022-23 unless otherwise specifically stated,
subject to passing by both the houses of the Parliament and assent by the President.
This document summarizes the Union Budget 2021-22 and the recent policy changes. It has been prepared for the privileged use of our clients. We
recommend you to seek professional advice before taking action on specific issues.
© GBCA & Associates LLP, Chartered Accountants

Increased Target for Credit to Farmers | Enhanced
Allocation to Micro Irrigation Fund and RIDF |
Development of 5 Major Fishing harbors | E-National
Agriculture Market
ECONOMIC OVERVIEW
ECONOMIC OVERVIEW
V FOR VACCINE, VICTORY AND A V-SHAPED RECOVERY
As the Indian Economic Downturn continues to recuperate from the of 9.1% due to COVID-19 induced constraints on the supply side. The
shock of the Global Pandemic, the Economic Survey 2021 pointed prime component was the food inflation. The balancing act for
out that the measures taken by the Government were clearly 2021-22 shall shift to tuning policies for a ‘Growth vs Inflation’
focused on “minimizing losses in a worst-case scenario”. environment after the ‘Lives vs Livelihoods’ debate of 2020-21.
With one eye on short term responses and one eye on long term The harsh dent in Services Purchasing Managers’ Index (PMI) was
requirements of the Indian Economy, 2020 presented the most caused by the national lockdown where this index fell to an all-time
daunting challenge economically. low of 5.4 but recovered substantially to a level of 52.3 as the
The direction of the efforts put in by the Government for the “V- mobility restrictions were lifted. The PMI Manufacturing was also hit
Shaped Recovery” were dual pronged. On one hand were the severely due to the lockdown but it improved as the economic
structural reforms for the supply side and on the other were unlock commenced. Weak domestic demand has resulted in an
carefully calibrated fiscal and monetary support for the demand estimated Current Account Surplus of 3.% of GDP in the first half of
side. This also includes the various policies and initiatives like 2020-21.
Atmanirbhar 2.0 and 3.0. While this cushioned the FPI outflows in the last quarter of 2019-20
Diligent policies by way of debt moratoria and liquidity support, Rupee had depreciated to its lowest level of 76.86 for 1 USD in Q1
India has emphatically begun to shed the restraints in term of all its of FY 2020-21 which subsequently appreciated owing to the heavy
resources, be it physical, capital or man-power. The ‘Post-COVID-19’ inflows of FPI of around USD 9.8 billion in domestic equity market.
period is hopefully round the corner with the world’s largest
Vaccination drive underway.
After a massive contraction of GDP by 7.7% in 2020-21. The Real
GDP is expected to grow an estimated 11% in 2021-22. To put it in
context, our real GDP would be 2.4% greater in 2021-22 compared
to 2019-20.
The headline Consumer Price Index (CPI) inflation had risen to a high

Increase in FDI limit in the insurance sector (74%) |
Development of world class Fin-Tech hub at IFSC |
Boosting the start-up Ecosystem | Continuous focus on
Affordable Housing
KEY HIGHLIGHTS
KEY HIGHLIGHTS
relevant assessment year or before completion of assessment,
 No changes in the Income Tax Rates  Goodwill of a business or profession will not be considered as a
 The turnover threshold for tax audit has been enhanced from INR 5 depreciable asset.
Crores to INR 10 Crores if the total cash receipts and payments do  Deemed Capital Gains Tax applicable on Firm / AOP / BOI on receipt
not exceed 5%. of asset / money by its partner / member on dissolution /
 Time limit for approval of affordable housing project, eligible for reconstitution at
deduction u/s 80IBA, has been extended to 31.03.2022.  FMV of such asset
 Time limit for sanction of affordable housing loan to claim  Money received
additional deduction up to INR 1.5 Lakhs for interest paid on such
in excess of capital balance excluding revaluation, if any.
loans extended till 31.03.2022.
 Details of Capital Gains from listed securities, Dividend Income and
 Notional tax on value of property as per stamp duty laws
Interest income will be pre-filled in the Income Tax Returns.
chargeable under the head business income and income from other
 Due date for filing of return of income for a partner of the firm
sources will not be triggered if the difference is not more than 20%
which is subject to Transfer Pricing Audit will be 30th November of
(earlier 10%) of sale consideration for transfer by way of first time
the relevant AY.
allotment of residential unit.
 Threshold for relief to approved Charitable trusts operating
 Advance Tax liability on dividend income shall arise only after
Hospitals and Educational Institutions is increased from INR 1 Crore
declaration or payment of dividend.
to INR 5 Crores.
 Late deposit of employee’s contribution to specified funds by
 TDS will not be required in case of dividend income earned by a
employer shall not be allowed as deduction to the employer.
Business Trust (REIT, InvIT etc.).
 Time limit for re-opening of Assessment proposed to be reduced
 Lower treaty rate shall be applied for deducting tax on payments
from 6 years to 3 years. Only where evidence of concealment of
made to FII if they furnish Tax Residency Certificate.
Income is of INR 50 Lakhs or more, re-opening of assessment can
be made upto 10 years, with the approval of Principal Chief  Resident Senior Citizens aged 75 years and above, earning only
Commissioner of Income Tax. pension and interest income from the same specified bank need
not file Income Tax Return. The paying bank would compute and
 Time limit for filing belated or revised return is reduced and the
deduct necessary tax on their total income.
same has to be now filed 3 months prior to the last day of the

KEY HIGHLIGHTS
 Income Tax Appellate Tribunal will become Faceless. Any hearing, if GST PROPOSALS
required, will be through video conferencing.
 With effect from a date to be notified, the mandatory requirement
 Proposal to set up a Faceless Dispute Resolution Committee for of audit of accounts and reconciliation statement by Chartered
assessees having Total Income upto INR 50 Lakhs and disputed Accountant / Cost Accountant is proposed to be removed.
income upto INR 10 Lakhs.  In case of zero rated supply of goods, it is proposed, with effect
from a date to be notified, that the registered person be liable to
COMPANY LAW PROPOSALS deposit the refund received along with interest if the sale proceeds
are not realised within the time limit specified under FEMA, 1999.
 The threshold limit of Small Companies is now changed as follows:
 The option to make zero rated supply on payment of tax and
o Paid Up Share capital limit has been increased from INR 50
claiming refund is proposed to be restricted to a notified class of
Lakhs to INR 2 Crores and
persons or goods or services with effect from a date to be notified.
o Turnover limit has been increased from INR 2 Crores to
INR 20 Crores.
 Provisions relating to One Person Companies MISCELLANEOUS PROPOSALS
o The One Person Companies are allowed to grow without  It is proposed to increase the permissible FDI in insurance
any restrictions on turnover and paid up share capital and companies from 49% to 74% provided :
allowing their conversion at any time. o majority of directors and key management persons are
o The residency limit for an Indian citizen to set up an OPC resident Indians and atleast 50% of directors are
shall be 120 days instead of 182 days independent directors and
o NRIs shall also be allowed to incorporate a One Person o specified % of profits is retained as general reserve
Company In India.
 To ensure faster resolution NCLT and e-courts system shall be
strengthened and implemented.
 The decriminalization of offences under LLP Act, 2008 shall be
taken up.

100 new Sainik Schools to be set up | Budgeted outlay
of INR 1.97 Lakh Crores for PLI scheme | Proposed
expansion of Metro Rail network | Launching PDSS with
an outlay of INR 3,05,984 Crores over 5 years

Rate Charts 10
TDS Provisions 23
P e r s o n a l Ta x a t i o n 25
Business Provisions 28
Capital Gains 32
Assessment P ro v i s i o n s 35
C h a r i t a b l e Tr u s t 39
Other Provisions 41
An individual/ HUF shall have an option to opt for either of the two tax regimes described below:
I. Tax Rates in Old Regime
Tax Rates for Individuals, HUF, AOP and BOI
Senior Very Senior
Individual,
Citizen Citizen ( 80
Status  HUF, AOP Notes
(60 years & years &
and BOI
Above) above)
Net Taxable Income (INR)  Surcharge @ 10.0% if income exceeds INR
50 Lakhs but not exceeding INR 1 Crore.
Upto – 2,50,000 NIL NIL NIL
2,50,001 – 3,00,000 5.00% NIL NIL
Crore but not exceeding INR 2 Crores.
3,00,001 – 5,00,000 5.00% 5.00% NIL
5,00,001 –10,00,000 20.00% 20.00% 20.00% Crores but not exceeding INR 5 Crores.
Crores.
 Health and Education Cess @ 4.0% of Tax +
Above 10,00,000 30.00% 30.00% 30.00% Surcharge.
 Maximum rebate of INR 12,500 available to
resident individuals with total income up to
INR 5,00,000.
restricted to 15.0%, even if total income exceeds INR 2 Crores.
 AOP/BOI shall continue to be taxed under above existing regime only.

II. Tax Rates u/s 115 BAC in New Regime
Tax Rates for Individuals, HUF
`
Status  Individual, HUF Notes
Net Taxable Income (INR)  Surcharge @ 10.0% if income exceeds INR 50 Lakhs but not
Up to 2,50,000 NIL exceeding INR 1 Crore.
2,50,001 – 5,00,000 5.00%  Surcharge @ 15.0% if income exceeds INR 1 Crore but not
5,00,001 – 7,50,000 10.00% exceeding INR 2 Crores.
7,50,001 – 10,00,000 15.00%  Surcharge @ 25.0% if income exceeds INR 2 Crores but not
exceeding INR 5 Crores.
10,00,001 – 12,50,000 20.00%
12,50,001 – 15,00,000 25.00%  Surcharge @ 37.0% if income exceeds INR 5 Crores.
 Health and Education Cess @ 4.0% of Tax + Surcharge.
 Maximum rebate of INR 12,500 available to resident
Above 15,00,00 30.00% individuals with total income up to INR 5,00,000.
 Refer Note 1
Note 1:
restricted to 15.0%, even if total income exceeds INR 2 Crores. The option u/s 115BAC can be opted every year in case of
Individual/HUF not having business income. In other case, once such option is exercised it can be withdrawn only once in
subsequent year unless such Individual/HUF ceases to have Business Income.
 AMT will not be applicable if one opts for Section 115BAC.
 In order to opt for new regime, individual/ HUF shall have to opt for the same and file the return of income within the due
date prescribed u/s 139(1).

 The individual/HUF will not be able to set-off any loss place of duty
carried forward or depreciation attributable to  Standard deduction (INR 50,000), deduction for
exemptions/deductions mentioned in Note 2 below. entertainment allowance and profession tax u/s 16
[Though set-off of loss of earlier years on account of against salary income
adjustment in WDV of such block of assets is allowed].  Allowances to MPs/MLAs u/s 10(17)
 Allowance for income of minor u/s 10(32)
Note 2:  Exemption for SEZ units u/s 10AA
In case one opts to pay tax under the new tax regime, the  Interest on loan taken for self-occupied or vacant
following exemptions and deductions cannot be claimed: property u/s 24
 Leave travel concession u/s 10(5)- applicable for persons
 Additional depreciation u/s 32(1)(iia)
in employment
 Donations or expenditure on scientific research u/s
 House rent allowance u/s 10(13A) - applicable for
35(1)(ii), 35(1)(iia), 35(1)(iii), 35(2AA)
persons in employment
 Deductions u/s 32AD, 33AB, 33ABA, 35AD, 35CCC
 Allowances u/s 10(14) - applicable for persons in
applicable to business income
employment other than:
 Family pension u/s 57(iia)
o Transport allowance to divyang employee
commuting between residence and office  Any deduction under Chapter VIA like life insurance
premium, PPF, ELSS, repayment of housing loan,
o Conveyance allowance to meet expenses during
mediclaim, donations, deductions in respect of profits
conveyance on duty
o Any allowance to meet cost of travel on tour or
transfer
o Daily allowance on account of absence from normal

RATE CHARTS – FIRMS / LLPS / DOMESTIC COMPANIES (NO CHANGE)
Tax Rates for Firms (including LLPs)
Basic
Particulars Surcharge Cess Total Notes
Tax
Income upto INR 1 Crore 30.00% - 4.00% 31.20% Health and Education Cess @ 4.0% of Tax +
Income exceeding INR 1 Crore 30.00% 12.00% 4.00% 34.94% Surcharge
Tax Rates for Domestic Companies

Company
Particulars opting for Sec Company opting for Sec 115BAB Other Company
115BAA
Business of the Company Any Business Manufacturing/Production Any Business
Set up and registered on or after 1 October, 2019
(manufacturing / production to commence by 31
No specific
Eligibility Criteria No specific requirement
requirement March, 2023) (Also refer note 6)
It is now proposed to include companies engaged in
generation of electricity.
Basic Tax Rate 22% 15% 25%1/30% (refer note 1)
Surcharge 10% 10% 0%/7%/12% (refer note 2)
Cess 4% 4% 4%
Effective Tax Rate 25.168% 17.16% 26% to 34.94%
Basic Rate =15% of Book profits.
Minimum Alternate Tax Not applicable Not applicable
Plus applicable surcharge and cess
Other Conditions Prescribed exemptions /deductions are not allowed (refer Note 7) N.A.
* Section 115BA which applies to certain domestic manufacturing company is redundant, hence not analyzed herein

RATE CHARTS – DOMESTIC COMPANIES (NO CHANGE)
Notes: or using old plant & machinery more than 20% of total plant and
1. Basic rate of Tax is 25% if turnover in FY 2019-20 is not more than machinery or using building used previously as hotel or convention
INR 400 Crores.
centre are not eligible for opting for u/s 115BAB.
2. Surcharge Rates for Other Company
7. Prescribed exemptions/deductions includes:
Applicable
Total Income o Section 10AA : Units in Special Economic Zone
Surcharge
o Section 32(1)(iia) : Additional depreciation allowance
Upto INR 1 Crore 0% o Section 32AD : Deduction for investment in new plant and
INR 1 Crore < Total Income < machinery in notified backward States.
7%
INR 10 Crores o Section 33AB : Tea/ coffee/ rubber development allowance
More than INR 10 Crores 12% o Section 33ABA : Site restoration fund.
o Section 35(1)(ii), (iia), (iii) and 35(2AA), (2AB) : certain scientific
research expenditure.
3. The option of Section 115BAA can be exercised in any year but before
o Section 35AD : Deduction in respect of expenditure on
the due date specified u/s 139(1) for filing return of income for that
specified business (e.g Cold Storage, cross country gas line etc)
year.
o Section 35CCC : Expenditure on agricultural extension project.
4. The option of section 115BAB needs to be exercised before the due
o Section 35CCD : Expenditure on skill development project.
date specified u/s 139(1) for filing 1st Return of Income of the
o All the deductions under Chapter VIA except section 80JJAA
Company. (deduction in respect of new employees) and section 80M
5. The option u/s 115BAB, once exercised, cannot be withdrawn (receipt of dividend).
subsequently. However, if the company fails to satisfy the conditions 8. Set-off of any loss carried forward from earlier years to the
of Section 115BAB it can opt for Section 115BAA. However, in the year extent that such loss is attributable to any of the deduction
of violation it may be doubtful to opt for such option, since the option mentioned above. Though set off of loss on account of
u/s 115BAA is to be exercised on/before the due date specified u/s
139(1) for filing return of income for respective year.
adjustment in WDV of such block of assets shall be allowed.
6. Companies formed by restructuring or splitting up of existing business

RATE CHARTS – FOREIGN COMPANIES (NO CHANGE)
Tax Rates for Foreign Companies
Particulars Tax Surcharge Cess Total Notes:
Income upto INR 1 Crore 40.00% - 4.00% 41.60%
Health and Education Cess @
Income exceeding INR 1 Crore but not 4.0% of Tax + Surcharge
40.00% 2.00% 4.00% 42.43%
exceeding than INR 10 Crores
Income exceeding INR 10 Crores 40.00% 5.00% 4.00% 43.68%

RATE CHARTS – CO-OPERATIVE SOCIETY (NO CHANGE)
Tax Rates for Co-Operative Societies
Particulars Tax Surcharge Cess Total Notes
Income upto INR 10,000 10.00% - 4.00% 10.40%  Health and Education Cess
@ 4.0% of Tax + Surcharge
Income exceeding INR 10,000 but not
20.00% - 4.00% 20.80%  Co-operative societies can
exceeding INR 20,000
opt for concessional rate
Income exceeding INR 20,000 30.00% - 4.00% 31.20%
of tax u/s 115BAD. (Refer
Income exceeding INR 1 Crore 30.00% 12.00% 4.00% 34.944% Note Below)
Concessional rate of tax for Co-operative society  Section 35AD: Deduction in respect of expenditure on
specified business (e.g. Cold Storage, cross country gas line
u/s 115BAD
etc)
 In line with provisions related to domestic companies, co-
 Section 35CCC: Expenditure on agricultural extension project.
operative society, resident in India, shall have the option to
 All the deductions under Chapter VIA except section 80JJAA
pay tax at effective rate of @ 25.17% (inclusive of surcharge
(deduction in respect of new employees) and section 80LA
and cess), subject to fulfilment of following conditions:
(income from IFSC Unit).
o No deduction to be claimed in respect of:
o Set-off of any loss carried forward from an earlier year to
 Section 10AA : Units in Special Economic Zone
the extent that such loss is attributable to any of the
 Section 32(1)(iia) : Additional depreciation allowance
deduction mentioned above shall not be allowed. Though
 Section 32AD : Deduction for investment in new plant and set off of loss on account of unabsorbed depreciation is not
machinery in notified backward States. allowed, corresponding adjustment in WDV of such block of
 Section 33AB : Tea/ coffee/ rubber development allowance assets shall be allowed.
 Section 33ABA : Site restoration fund.  AMT will not be applicable if one opts for Section 115BAD.
 Section 35(1)(ii), (iia), (iii) and 35(2AA): certain scientific  Rest of the provisions are in line with the condition
research expenditure. applicable to companies as per section 115BAA.

Payee
Company,
Individual, HUF,
AOP & BOI
Society / Local
Authority
Rates Rates Rates
192 Salary N.A. N.A. Refer Note 15 N.A.
Payment of accumulated balance due to an
192A 50,000 N.A. 10.0% 1
employee by RPF
193 Interest on Securities 2,500 10.0% 10.0% 2
5,000 (only for
194 Dividends 10.0% 10.0% N.A.
Individuals)
194–A Other Interest 5,000 10.0% 10.0% 3&4
194–B Winning from Lotteries 10,000 30.0% 30.0% N.A.
194-BB Winnings from Horse races 10,000 30.0% 30.0% N.A.
Single
Transaction =
194–C Payment to Contractors / Sub–Contractors 30,000 2.0% 1.0% / 2.0% 3&5
Aggregate=
1,00,000
194–D Insurance Commission 15,000 5.0% 5.0% N.A.
Payment in respect of Life Insurance
194–DA 1,00,000 5.0% 5.0% 6
Policy(other than amount in section 10(10D)

Payee
Company,
Individual, HUF,
AOP & BOI
Society / Local
Authority
Rates Rates Rates
Income arising to a Non–Citizen, Non–Resident
194–E NIL N.A 20.0% N.A.
Entertainer or Sportsmen
194-EE Payment in respect of deposits under NSS 2,500 10.0% 10.0% N.A
194-G Commission etc. on the sale of lottery tickets 15,000 5.0% 5.0% N.A.
194–H Commission/Brokerage 15,000 5.0% 5.0% 3
194–I Rent of machinery, plant or equipment 2,40,000 2.0% 2.0% 3
194–I Rent of land, building, or Furniture 2,40,000 10.0% 10.0% 3

Payment on transfer of certain immovable
194–IA 50,00,000 1.0% 1.0% N.A.
property other than agricultural land
Payment of Rent by Individuals/HUF (other than No TAN
194-IB 50,000 p.m. N.A. 5.0%
covered by Section 44AB) required
Payment under Specified Agreement for Joint
194- IC NIL N.A. 10.0% N.A.
Development
194–J Professional Fees 30,000 10.0% / 2.0% 10.0% / 2.0% 3,7 & 8

Payee
Company,
Individual, HUF,
AOP & BOI
Society / Local
Authority
Rates Rates Rates
Payment to resident for income in respect of
194-K units of Mutual fund or Administrator of 5,000 10.0% 10.0% 9
Specified Undertaking or Specified Company
Compensation or Consideration for Compulsory
194–LA Acquisition of Immovable Property(other than 2,50,000 1.0% 1.0% 10
agricultural land)
194-LBA Incomes form units of Business Trust. NIL 5.0% / 10.0% 5.0% / 10.0% 11
Interest Income paid to Non–Residents by
194–LC NIL 5.0% / 4.0% 5.0% / 4.0% 12
Specified Companies or Business Trust
Interest income paid to Non-Residents by
194-LD NIL 5.0% 5.0% 13
certain Bonds and Government Securities.
Payment for contract /professional services by
No TAN
194-M individual/ HUF. (other than those covered under 50,00,000 5.0% 5.0%
Required
194C and 194J).
Cash Withdrawn from bank, co-operative bank
194-N 1,00,00,000 2% 2% 14
and post office.
Payment made by E-commerce operator to E-

194-O NIL 1% 1% N.A.
commerce Participant.

Payee
Company,
Individual, HUF,
AOP & BOI
Society / Local
Authority
Rates Rates Rates
194P TDS by specified bank to specified senior citizen N.A. N.A. Refer Note 15 N.A.
Refer
Separate
N.A. section on
194Q Purchase of goods 50,00,000 0.1%
TDS on
Purchase
of Goods

Notes: 6. Applicable only where amount is not exempt u/s 10(10D).
Form 15G/15H can be given wherever applicable.
1. TDS provisions u/s 192A applies when withdrawal of
accumulated balance in RPF is to be included in the total 7. a. Rate of TDS is 2% instead of 10% if the payee is
income. engaged only in the business of operation of call centre.
2. Threshold limit for interest paid on debentures is INR b. TDS on Remuneration to Director which is not in the
5,000. Threshold limit for interest on 7.75% GOI Savings nature of Salary to be deducted @ 10%.
(Taxable) Bonds, 2018 is INR 10,000. 8. TDS under section 194J for payment of fees for technical
3. The provisions of following TDS / TCS Sections, which were services (except professional services) is to be deducted @
linked to applicability of Tax Audit provisions, shall now 2% & for professional services is to be deducted @ 10%.
apply if the Gross Receipts / Turnover is INR 1 Crore or 9. Units of Mutual Fund have been specified under section
more for Business and INR 50 Lakhs or more for 10(23D) of Income Tax Act, 1961. “Administrator”,
Profession: “specified company” and “specified undertaking” are
 Section 194A, 194C, 194H, 194I, 194J and specified u/s 2 of the Unit Trust of India (Transfer of
Undertaking and Repeal) Act, 2002.
 Section 206C
10. No tax will be deducted if payment is made in respect of any
Thus, irrespective of applicability of Tax Audit provisions,
award or agreement which has been exempted from levy of
TDS / TCS provisions, as mentioned above, shall apply.
income-tax u/s 96 of the Right to Fair Compensation and
4. The threshold limit for TDS on interest income for Senior
Transparency in Land Acquisition, Rehabilitation and
Citizens is INR 50,000 and in any other cases 40,000.
Resettlement Act, 2013.
5. TDS is to be deducted @ 2.0% if the payee is an AOP or
11. Interest payment from a SPV and Distribution of dividend by a
BOI. No TDS is applicable on payment to Contractor during
Business Trust, to Resident unit holders shall be liable for TDS @
the course of plying, hiring or leasing of goods carriages,
10%. Whereas, in case of Non-Resident payee, TDS on dividend
where such contractor owns 10 or less goods carriages
shall be @ 10% & that on interest payment shall be @ 5%.
during the FY and furnishes amend definition of “work” to
include purchase of raw material from associate of the
customer. The word Associate shall have the same
relations as stated u/s 40A(2)(b).

Notes: 17. In case of non-filers having aggregate TDS / TCS of INR
12. The period of concessional rate of TDS of 5 % has been extended 50,000 or more and who have not filed their ITR in both of
till 1st July 2023 from existing 1st July 2020. The rate of TDS has the 2 years immediately preceding the financial year (and
been reduced to 4% in case of interest payable to a Non- time limit for filing the original return has expired), then
Resident on borrowings in foreign currency from a source the rate of TDS shall be higher of the following
outside India, by way of issue of any long term bond or Rupee  Twice the rates specified or
Denominated Bonds on or after 1st April, 2020 but before 1st  Rates in force or
July, 2023 and which is listed only on a recognised stock  5%
exchange located in any IFSC.
In case the payee does not furnish PAN and TDS rate
13. In case of FPI and QFI, the lower TDS rate of 5% has been for not furnishing PAN are higher than the above
extended to 1st July, 2023. The said concessional TDS rate mentioned rates, then such higher rate shall be
shall also be applied to FII and QFI in respect of applicable.
investment made in Municipal Bonds.
These provisions will not be applicable for the
14. The threshold limit of INR 1 Crore is for aggregate cash following payments:
withdrawn from an account during the FY.  Salary
15. At the rates applicable to particular slab of income including  Accumulated Balance due to employee
applicable Surcharge and Health & Education Cess.  Winnings from lottery, crossword puzzle or horse
race
16. In case payee does not furnish PAN then TDS shall be deducted
at higher of the following rates  Income paid in respect of investment in
 Rates specified in relevant provisions of the Act or
 TDS by banks on cash withdrawals
 Rates in force or
(Effective from 01.07.2021)
 20%
In case of payment by E-Commerce Operator to E-
Commerce Participant, 5% TDS shall apply instead of 20%.

TDS PROVISIONS
 Presently, tax is collectible (TCS) by seller from buyer on goods exceeding INR 50 Lakhs by a specified seller.
 It is now proposed to further provide for TDS on goods purchased from any resident, being seller, in following case:
Rate of TDS Rate of TDS

Nature of payment made to Person Responsible to
(PAN is (PAN is Not Exceptions
resident deduct tax
Provided) Provided)
Person being buyer whose  Tax is deductible under any
total sales, gross receipts other provision of the Act
Purchase of goods (value or or turnover from the
aggregate of value of goods business carried on by him  Transaction on which tax is
0.1% 5% collectible under the provisions
purchased > INR 50 Lakhs during > INR 10 Crores during the
the FY) FY immediately preceding of the Act other than sale of
the FY in which goods were goods.
purchased
Note:
 Notified category of persons will be exempt from deducting tax on above mentioned transaction.
 This provision will take effect from 1st July 2021.
 If on a transaction, TCS is required u/s 206C(1H) as well as TDS under this amended section, then only TDS under this section
will apply.
Relaxation for withholding on payments to FII

 Currently, income of FII from securities is subject to TDS at a specific rate of 20% without providing the benefit of DTAA at the
time of tax deduction.
 In order to provide relaxation, it is proposed that tax shall be deducted at 20% or rate of tax as per DTAA for such income,
whichever is lower, if the payee furnishes Tax Residency Certificate.

TDS PROVISIONS
TDS/TCS on non filers at higher rates o Income paid in respect of investment in
 In order to enforce compliance of return filing by Resident
Indians and Non resident having PE in India, it is proposed o TDS by banks on cash withdrawals
to provide for higher rates of TDS and TCS for non-filers of  For implementation of this amendment, the IT department
income tax return. should come up with some functionality to enable the
 Such higher rates will be applicable to persons: payer to verify the status if return filing of payee and his
total TDS/ TCS.
o who have not filed ITRs in both of the 2 years
immediately preceding the FY of payment/collection  This amendment will be effective from 01.07.2021.
and the time limit for filing original returns has
expired, and Exemption from TDS on payment of Dividend to
o whose aggregate of TDS / TCS is INR 50,000 or more Business trust
in each of the 2 years immediately preceding the FY
 Presently, section 194 of the Act provides for TDS on
of payment/collection.
payment of dividend to Residents.
 The rate of TDS/TCS shall be higher of the following:
 Since dividend income of Business Trust (REIT or InvITs)
o Twice the rates specified/in force
from SPV (Indian company where the Business Trust holds
o 5% controlling interest) is exempt, it is proposed that TDS
 In case the payee/collectee does not furnish PAN and the requirement shall not apply to such dividend payments.
TDS/TCS rates for not furnishing PAN are higher than the Certain notified persons will also be entitled for such
above mentioned rates, then such higher rates shall be relaxation.
applicable.  The proposed amendment will be effective from AY 2021-
 These provisions will not be applicable for the following 22 i.e. FY 2020-21.
payments:
o Salary
o Accumulated Balance due to employee
o Winnings from lottery /crossword puzzle /horse race

PERSONAL TAXATION
Relaxation for certain category of senior citizen now proposed that interest for deferment of advance tax
shall not be applicable on the amount of shortfall in tax
from filing Income-Tax Return
where such shortfall is on account of under-estimation or
 It is proposed to provide relaxation to Resident Senior
failure to estimate dividend income, if tax due on dividend
Citizens from filing the return of income who fulfil the
income has been paid in the subsequent advance tax
following conditions:
instalments.
o They are aged 75 years or more during the FY,
o They only have pension income and interest 22 i.e. FY 2020-21.
income from the same Specified bank in which
pension income is received and
o A prescribed declaration is furnished to the specified
Deduction in respect of interest on affordable
bank. housing loan
 After furnishing the declaration, the specified bank would  Presently, an Individual can claim deduction in respect of
compute the income of such senior citizen after giving interest up to INR 1,50,000 on loan taken for his first
effect of deductions & rebate and deduct income tax on the residential house property from financial institution if such
basis of rates in force. loan is sanctioned between 01.04.2019 to 31.03.2021 and
Stamp duty value of such house property does not exceed
INR 45 Lakhs.
Relaxation from Interest on Deferment of  To promote purchase of affordable housing, it is proposed
Advance Tax on Dividend Income to further extend the period of sanctioning of the said loan
 Presently, every assessee is liable to pay a simple interest upto 31.03.2022.
at the rate of 1% per month for a period of three months
on the amount of shortfall in advance tax calculated having
regards to the due dates for payment of advance tax
instalments.
 Considering the intrinsic nature of dividend income, it is

PERSONAL TAXATION
Relief from taxation of income from notified  In view of the situation arising out of outbreak of COVID
pandemic, it is now proposed to provide tax exemption in
overseas retirement benefit account
respect of cash allowance in lieu of one LTC in the block of
 Currently, there is mismatch in the year of taxability of
2018-21. Further, for this purpose rules shall be prescribed
withdrawal from overseas retirement account opened by
and shall, inter alia, be on following lines, viz:
residents when they were non-resident since withdrawal
o Employee or a member of his family during the
from such account may be taxed in foreign country on
period from 12.10.2020 to 31.03.2021 actually
receipt basis but on accrual basis in India.
spends the allowance received on goods or
 It is therefore proposed to provide that income of specified
services which are liable to tax at an aggregate rate
person from specified account shall be taxed in the manner
of twelve per cent or above under various GST laws
and in the year as prescribed by the Central Government.
and goods are purchased or services procured from
 The term specified person means Indian resident who has GST registered vendors/service providers (specified
opened a specified account in a notified country while expenditure)
being a non resident in India and resident in that country.
o The payment to GST registered vendors/service
 Specified account means an account maintained in respect providers is made through proper banking channels
of retirement benefits and whose income is taxable at the and tax invoice is obtained from such vendor/
time of withdrawal or redemption instead of accrual basis service provider
outside India.
o The amount of exemption shall not exceed thirty-
six thousand rupees per person or one-third of
Exemption for Leave Travel Concession Cash specified expenditure, whichever is less
Scheme  The proposed amendment will be applicable in AY 2021-22
only i.e. FY 2020-21.
 Presently, exemption is available in respect of the value of
leave travel concession or assistance received by or due to
an employee from his employer or former employer for
himself and his family, in connection with his proceeding on
leave to any place in India.

PERSONAL TAXATION
Taxability of Interest on excess contributions to
Recognised Provident Fund.
 Presently, exemption is provided for the amounts received
from any statutory PF and also for the accumulated balance
due and becoming payable to an employee participating in
a RPF to the extent provided under the Income Tax Rules.
 On account of this provision, there were instances where
employees contributing huge amounts were able to claim
exemption on the entire amount of Interest
accrued/received from such RPF and thus in the absence of
any threshold limit, this provision benefited only those who
are able to contribute huge amounts to the fund.
 Thus, it is now proposed to provide that the exemption
shall not be available on the interest income accrued,
during the FY and on subsequent years thereafter, on such
contributions made in excess of INR 2,50,000 on or after
01.04.2021. Interest on earlier contributions will continue
to enjoy the Tax exemptions.

BUSINESS PROVISIONS
Goodwill to be considered as non depreciable Relief from tax audit provisions in certain cases
asset  Currently, every person carrying on business is required to
 Goodwill of a business or profession was considered as a get his accounts audited, if his total sales, turnover or gross
depreciable asset in various judicial pronouncements receipts, in business exceeds INR 1 Crore in any FY
including Supreme Court’s decision in case of Smiff  The said limit is INR 5 Crores in cases where,-
Securities Limited (348 ITR 302) o aggregate of all cash receipts during the FY does not
 It is now proposed to provide that goodwill of a business or exceed 5% of total receipts; and
profession shall not be considered as part of block of assets o aggregate of all cash payments during the FY does not
and accordingly no depreciation will be allowed as a exceed 5% of total payments.
deduction under the head Income from Business and  To promote the digital economy, it is proposed to further
Profession. increase the above limit of INR 5 Crores to INR 10 Crores.
 If goodwill is purchased for a price by the assessee, the  The proposed amendment will be effective from AY 2021-
same will be considered cost of acquisition in the event of 22 i.e. FY 2020-21.
transfer in future. If the assessee has already claimed
depreciation on goodwill, the cost shall be reduced to the
extent of depreciation claimed.
 The above amendment is proposed to be made applicable
from A.Y 2021-22 i.e. FY 2020-21.
 Consequential amendment is also proposed in respect of
the written down value of the block of asset which includes
goodwill of a business or profession and short term capital
gain, if any, on cessation of such block of asset shall be
determined in prescribed manner.
 This amendment will have far reaching impact on Mergers
and Acquisition transactions.

BUSINESS PROVISIONS
Rationalisation of provision of presumptive deduction will be lost forever.
taxation for Specified Profession  The proposed amendment will be effective from AY 2021-
22 i.e. FY 2020-21.
 Presently, an Indian Resident, being a professional assessee
can opt for offering presumptive income if the gross
receipts from such profession is upto INR 50 Lakhs. Incentives for affordable housing
 The said benefit of presumptive taxation is now sought to  Currently, an assessee engaged in the business of
be restricted to resident Individuals, HUFs or partnership developing and building affordable housing projects is
firms other than LLP. eligible to claim deduction of 100% of profits. The benefit
 The proposed amendment will be effective from AY 2021- is available in respect of the projects approved upto
22 i.e. FY 2020-21. 31.03.2021.
 It is proposed to extend the benefit by additional one year
i.e. for projects to be approved on or before 31.03.2022.
Payments of employee’s contribution to a fund
 Also to help migrant labourers and to promote affordable
on or before due date rental, it is proposed to extend the above tax deduction to
 Currently, based on various judicial decisions, deduction of such rental housing projects which are notified by the
employee’s contribution to provident fund or Central Government and which fulfil the specified
superannuation fund or fund set up under ESI Act or any conditions.
other employee welfare fund is allowable, if such payment
is made by employer on or before due date for filing of its
return of income.
 The same has been a litigative issue. It is proposed that,
deduction of employee’s contribution to the said fund shall
be allowable only if the employer makes the payments of
such employee contributions in the respective funds on or
before the due date prescribed under the relevant Act /
rule / notification. In case of default, the claim for the

BUSINESS PROVISIONS
Rationalisation of safe harbour limits u/s 43CA, Further, it is proposed to provide similar consequential
relief to buyers of these residential units by Increasing
and Section 56
the safe harbor limit from 10% to 20% u/s 56 (2)(x) of
 Presently u/s 43CA, for computation of business income
the Act.
from transfer of Immovable property being land or building
or both, Stamp duty value [SDV] of the property is
considered as Deemed Sale price, if such SDV exceeds 110%
of the sale consideration.
 Similarly u/s 56(2)(x), if a person receives any immovable
property and Stamp duty value of such property exceeds
10% of the purchase consideration then such excess is
taxable under the head Income from other sources.
 In order to reduce the hardships caused in respect of
genuine transactions, it is proposed to increase the safe
harbour threshold from existing limit of 10% to 20% of sale
consideration u/s 43CA for real estate developers selling
residential units, if the following conditions are fulfilled:
o The transfer of residential unit takes place during
the period from 12 th November, 2020 to 30 th June,
2021
o The transfer is by way of first time allotment of the
residential unit to any person and
o The consideration as a result of such transfer does
not exceed INR 2 Crores.

BUSINESS PROVISIONS
Extension of time limit for set-up of eligible start- Rationalization of provisions of Minimum
up Alternate Tax (MAT)
 Presently a deduction of 100% of the profits and gains  In case of foreign company, it is proposed that Dividend
derived from eligible business by an eligible start-up is income accruing or arising shall be reduced from the book
available for any 3 consecutive assessment years out of 10 profits and expenditure in relation to dividend income shall
years, if the turnover from the business is upto INR 100 be added to the book profits for MAT computation where
Crores and if the eligible start up is incorporated on or such dividend income is taxable at lower then MAT rate due
after 01.04.2016 but before 01.04.2021. to DTAA.
 In order to extend the benefit to eligible start-up, it is  APA and secondary adjustment - In cases where past year’s
proposed to extend the benefit to startup incorporated income is included in books of account during the FY on
upto 01.04.2022. account of an APA or a secondary adjustment under
transfer pricing provisions, the AO shall, on an application
made to him in this behalf by the assessee, re-compute the
Extension of time limit for availing exemption for
book profit of the past year(s) and tax payable, if any, in
investment in eligible start-up the prescribed manner. Further, for the rectification of
 Presently, the benefit of exemption from capital gain for mistake, the period of 4 years shall be reckoned from the
transfer of residential property can be claimed if the end of the FY in which the application from the assesse is
consideration is invested in an eligible start-up on or before received by AO.
31.03.2021. This date is now proposed to be extended upto  The proposed amendment will be effective from AY 2021-
31.03.2022. 22 i.e. FY 2020-21.
22 i.e. FY 2020-21.

CAPITAL GAINS
End of controversy of Slump Sale vs. Slump
Exchange
 Section 50B of the Act provides for computation of capital
gains in case of slump sale. Slump sale means the transfer
of undertaking/s as a result of sale for lump sum
consideration without value being assigned to individual
assets and liabilities .
 Since the current provision only covers transfer of
undertaking by way of sale, there was a controversy in case
of transfer of undertaking by any other mode of transfer
e.g. transfer of undertaking in exchange of shares. This also
lead to instances where slump sale transaction being
carried out as slump exchange transaction to avoid tax
incidence.
 To end this controversy, it is proposed to amend the scope
of the slump sale provision so that all transfer by any
means including but not limited to sale, exchange,
relinquishment, extinguishment of rights will be within its
scope.
22 i.e. FY 2020-21.

CAPITAL GAINS
Taxation on distribution of asset/money on dissolution or reconstitution of firm/AOP/BOI
 At present, section 45(4) provides for tax on transfer of capital asset by way of distribution to partner/member by a
firm/AOP/BOI on its dissolution or otherwise. For computation of such capital gains, fair market value of the capital asset is
considered as full value of consideration.
 At present, for taxation of capital gains there has to be transfer of a capital asset. Hence the cases where there is no transfer
of capital asset but there is revaluation of such asset by crediting capital account of partners and then payment is made to
partner/member of such excess capital balance then such transactions are not covered under section 45.
 To tax the abovementioned situations, it is proposed to amend section 45(4) and also insert section 45(4A) to provide for
following:
No Taxable event Capital gains computation Taxability

1 Section 45(4) : Receipt of Fair market value of such capital asset as on the date of such Taxable as capital
Capital asset by receipt gains in the hands
Partner/Member on Less : Cost of such capital asset in the hands of the firm/AOP/BOI of firm/AOP/BOI in
dissolution/reconstitution of the year of such
the firm/AOP/BOI receipt by its
2 Section 45(4A): Receipt of Value of money and Fair market value of Other asset as the date partner/member
Money/Other asset by of such receipt
Partner/Member on Less : Balance in capital account of such partner/member at the
dissolution/reconstitution of time of dissolution/reconstitution excluding increase on account
the firm/AOP/BOI of revaluation of any asset or self-generated goodwill or any
other self-generated asset*
*Self generated goodwill/asset means goodwill/asset which has been acquired without incurring any purchase cost or which has
been generated during the course of business/profession.

CAPITAL GAINS
 In order to avoid double taxation, it proposed that at the time of future sale of capital asset which was revalued and for
which income was brought to tax under Sr. no. 2 above, the amount so taxed shall be deducted from future sale
consideration.
 Important aspects of this amendment are as under:
o This amendment provides for taxation based on receipt of money/other asset by partner/member and transfer of
capital asset is not mandatory. Also since the definition of income u/s 2(24)(vi) includes any capital gains u/s 45, the
said receipt will qualify as “income” without there being any transfer.
o As per the amendment, trigger of capital gains in case of transfer of capital asset by the firm to partner u/s 45(4) or
receipt of money/other asset u/s 45(4A) is only on dissolution or reconstitution. Interestingly, receipt of capital asset
by the firm to partner without there being any dissolution or reconstitution is not covered under the amended
section 45(4) and hence may be out of tax incidence.
o The chargeability of tax u/s 45(4A) is on profits/gains on receipt of money/other asset by the partner. In general
parlance there can not be profits/gains on receipt, it is always on accrual/credit and not on receipt.
 The proposed amendment will be effective from AY 2021-22 i.e. FY 2020-21.

New procedure for Income escaping assessment o Till 3 years from the end of relevant AY, in any
other case.
 Presently there is no provision of giving opportunity of
 Upto 31.03.2021, proceedings for reopening of assessment,
being heard to the assessee before reopening of
in case where income has escaped assessment and
assessments. One of the requirement for reopening of
proceedings for search and requisition cases, are carried
assessment is that the AO must have reasons to believe
out separately.
that income has escaped assessment.
 It is proposed to conduct the above proceedings in a same
 It is proposed that under the new procedure of
and like manner under a new procedure.
reassessment proceedings (other than search proceedings),
 Currently re-assessment proceedings can be initiated by
the AO should follow the steps as under;
the AO as under:
o Conduct an enquiry, if required, with the prior
approval of higher authority with respect to the
income of INR 1 Lakh or more has escaped
information which suggests that income has
assessment
escaped assessment
o Provide an opportunity of being heard to the
income escaping assessment pertains to asset
assessee to explain why assessment should not be
located outside India.
conducted on basis of information which suggests
o Till 4 years from the end of relevant AY in any that income has escaped assessment.
other case
o Decide on the basis of material available on record
 It is proposed that the re-assessment proceedings or search including reply of the assessee (if any), whether or
proceedings can be initiated by the AO as under – not it is a fit case to conduct reassessment
o Till 10 years from the end of relevant AY, if AO has proceedings by passing an order.
in his possession evidence which reveals that the  The proposed amendments could reduce the discretion
income escaping assessment for the concerned currently available to assessing officers for reopening
year, amounts to INR 50 Lakhs or more and is assessments since it appears that it will now be system
represented in the form of an asset. driven.

Provision for Faceless Proceedings before the  In case where the assessee exercises option to withdraw
the application, then the AO in charge shall dispose the
ITAT
case in accordance with normal provisions of the Act as if
 Presently, ITAT hearing takes place through personal
no application had been made u/s 245C of the Act.
hearing. Assessment Proceedings and CIT(A) proceedings
 The Central Government shall issue directions for the
are already in an electronic mode without any requirement
purposes of settlement of pending application by the
of personal attendance. It is now proposed to increase the
Interim Board upto 31.03.2023.
scope and coverage of e-proceedings with objective of
eliminating physical attendance of tax payers/ Authorised
Representative. Time to file belated return/ revised return
 Hence, it is proposed to notify an e-ITAT scheme for Appeal
reduced
proceedings before ITAT, in order to impart greater
 Presently belated and revised returns of income could be
filed before the end of the AY or before the completion of
the assessment whichever is earlier.
Discontinuance of Income Tax Settlement  It is now proposed that the belated and revised returns can
Commission be filed three months before the end of the assessment
 The Income tax Settlement commission shall cease to exist year or before the completion of the assessment whichever
from 01.02.2021 and an “Interim Board” shall be is earlier.
constituted in its place for settlement of pending cases and  The proposed amendment will be effective from AY 2021-
no fresh application for settlement shall be made there 22 i.e. FY 2020-21.
afterwards u/s 245C of the Act.
 In respect of pending applications, assessee has the option
to withdraw the same u/s 245M of the Act on or before
30.06.2021 and if not done so, then the pending
application shall be deemed to be transferred to the
Interim Board.

Amendment in provisions of processing of Rationalisation of Time Limit for Completion of
returned income u/s 143(1) and issue of notice of Assessments
scrutiny assessment u/s 143(2)  The current time limit for the completion of assessment
 Time limit to issue notice for scrutiny proceedings is proceedings is within 12 months from the end of the AY.
proposed to be reduced from 6 months to 3 months, from  It is now proposed to reduce the time limit for completion
the end of FY in which return has been filed. of assessment including reassessment proceedings to 9
 Time limit for sending intimation for processing the return months from the end of AY.
of income u/s 143(1) is also proposed to be reduced from  The proposed amendment will be effective from AY 2021-
12 months to 9 months, from the end of FY in which return 22 i.e. FY 2020-21.
has been filed.
 Currently, disallowance of expenditure indicated in tax
Illustration of various timelines (assuming FY 20-21)
audit report and not included in computation of income
was only allowed to be added while computing total No Timeline of Existing Proposed
income u/s 143(1). It is proposed to provide for increase in Earlier of Earlier of
income indicated in tax audit report but not taken into Belated / Revised 31.03.2022 or 31.12.2021 or
1
Return Completion of Completion of
account in computation of income while processing
Assessment Assessment
returned income u/s 143(1).
 It is proposed to disallow certain income based deductions Processing of ITR u/s
2 31.03.2023 31.12.2022
under section 10AA and section 80H to 80TT (Chapter VI –A 143(1)
under heading ‘C’) if the return of income is filed after due
Selection of Scrutiny
date and the same was not disallowed in the return of 3 30.09.2022 30.06.2022
income.
Completion of
4 31.03.2023 31.12.2022

Constitution of Dispute Resolution Committee Allowing prescribed authority to issue notice for
 In order to provide for early resolution of small and filing return of income
medium tax payers’ disputes, it is proposed to introduce  Currently, only jurisdictional AO is authorized to
one or more Dispute Resolution Committees (“DRC”). issue/serve notice to a person who has not filed return of
 Disputes where returned income for the year is upto INR 50 income asking for submission of return.
Lakhs AND the aggregate amount of variation proposed in  In line with conscious policy of making all the processes
assessment is upto INR 10 Lakhs shall be eligible to be faceless and elimination of inter face between the tax
considered by the DRC. payer and the department and in order to enable
 Orders based on search initiated or requisition made u/s Centralized issuance of notices etc. in an automated
132A or survey initiated u/s 133A or information received manner, it is proposed to amend the provisions of section
under an agreement referred to Section 90 or Section 90A 142(1)(i) of the Act to empower the prescribed Income Tax
of the Act shall not be eligible for being considered by the Authority besides the assessing officer to issue notice to
DRC. the assessee.
 Further, the assessee shall not be eligible for approaching
the committee if there is detention, prosecution or
Provisional attachment in fake invoice cases
conviction under various laws.
 Presently, section 281B provides for provisional attachment
 Further the DRC is empowered to reduce or waive any
by AO of any property of the assesse in order to protect the
penalty imposable or grant immunity from prosecution for
interest of revenue in the cases of assessment or
any offence under the said Act while resolving the dispute.
reassessment. It is now proposed to also include such
 The Central Government shall not issue any directions after
power of provisional attachment to enable to impose
31.03.2023 for the DRC to resolve the pending disputes
penalty u/s 271AAD where the amount or aggregate of
amount of penalty likely to be imposed exceeds INR 2
Crores. Section 271AAD provides for a levy of penalty on a
person or a person who causes such a person to make a
false entry or omit an entry from his book of accounts.

CHARITABLE TRUST
Rationalization of Provision of Charitable  To streamline the accumulation of income and eliminate
the double counting, following amendments are proposed:
Trusts and Institutions
o Voluntary contributions (made with a specific
 Exemption to funds, institutions, trusts etc. carrying out direction that it shall form part of the corpus) shall
religious or charitable activities is provided u/s. 10(23C) of be invested or deposited in one or more of the forms
the Act and sections 11 and 12 of the Act. or modes specified u/s 11(5) maintained specifically
 Section 12A of the Act, inter alia, provides for procedure to for such corpus.
make application for the registration of the trust or o Application out of the corpus shall not be
institution to claim exemption under sections 11 and 12. considered as application for charitable or religious
 Voluntary Corpus Donations received by trusts, institutions, purposes [for the purposes of section 11(1)(a) and
funds made with a specific direction that they shall form (b)], provided when it is invested or deposited back,
part of the corpus are exempt and shall not be included in into one or more of the forms or modes specified in
the total income of the trust or institution. section 11(5) maintained specifically for such
 Under the existing provisions, these entities are not corpus, from the income of the previous year, such
allowed to accumulate more than 15% of their income or amount shall be allowed as application in the
accumulate for specific purpose up to 5 years, other than previous year in which it is deposited back to corpus
corpus donations referred above. and to the extent it is deposited back.
 Unintended double deductions took place by way of: o Application from loans and borrowings shall not be
o Claiming of exemption of corpus donations and considered as application for charitable or religious
o Application of corpus donations against the purposes. The repayment when made out of income
mandatory 85% application of non-corpus income of the previous year shall be allowed as application
 Entities made applications towards charitable objects out in that previous year.
of borrowed funds, the repayment of which was also o No set-off or deduction or allowance of any excess
claimed as application. This resulted in paper losses and application of any preceding year shall be allowed
short application (less than 85%). while computing income required to be applied or
accumulated during the previous year.

CHARITABLE TRUST
Raising of Prescribed Limit for Exemption
 Presently, section 10(23C) of the Act provides for
exemption in respect of income received by any person on
behalf of different funds or institutions as specified in
different sub-clauses therein as under;
approved non-profit making university or
educational institution.
approved non-profit making hospital or other
institution established for philanthropic purposes.
 One of the existing conditions for availing such exemption
is that the gross annual receipt of such university, hospital
or institution should not exceed INR 1 Crore.
 It is proposed to increase this limit of annual receipt to INR
5 Crores. In case a person has receipts from both,
universities, hospitals or other such institutions, then the
aggregate annual receipts should not exceed INR 5 Crores.

OTHERS
Definition of the term-Liable to Tax aggregate premium payable for any FY during the
term of any of the policies exceeds INR 2.5 Lakhs.
 Presently the Act does not define the term ‘Liable to Tax’
although the same is widely used in various provisions like  It is to be noted that any sum received under above cases
determination of residential status, application of DTAA. shall be exempt in case of death of insured.
 It is now proposed to define the term ‘Liable to Tax’ in Note:
relation to a person, to mean a case where there is a o Equity ULIP which is taxable shall be included in the
liability of tax in respect of that person under the law of definition of Equity oriented fund and any capital
any country. It will also include a case where subsequent to gains arising on such asset shall be taxable under the
imposition of such tax liability, an exemption is provided. provisions of capital gains.
 The proposed amendment will be effective from AY 2021- o The proposed amendment will be applicable for new
22 i.e. FY 2020-21. ULIP policies issued on or after 01.02.2021
Taxation of proceeds of high premium ULIP

 Currently, certain proceeds under ULIP are exempt if the
premium payable does not exceed 10% of the actual capital
sum assured.
 However, it is proposed to make the following proceeds
received under ULIP taxable:
o Any sum received under an insurance policy issued
on or after 01.02.2021 in respect of which the
premium payable for any FY during the term of the
policy exceeds INR 2.5 Lakhs.
o Any sum received under any insurance policies
issued on or after 01.02.2021 in respect of which the

OTHERS
Rationalisation of provisions of Equalisation Levy o Acceptance of purchase order
 Equalisation Levy is levied at 2% of the consideration o Payment of consideration
received or receivable by an e-commerce operator from o Supply of goods or provision of services, partly or
ecommerce supply of goods or services: wholly
o to a person resident in India; or  The proposed amendment will be effective retrospectively
o to a non-resident in the specified circumstances; or from AY 2021-22 i.e. FY 2020-21.
o to a person who buys such goods or services or both,
using internet protocol address located in India. Issuance of zero coupon bond by infrastructure
o It is proposed to clarify that consideration for specified debt fund
services such as online advertising, etc and for e-commerce
 Presently Section 2(48) of the Act provides for definition of zero
supply or services shall not include consideration taxable
coupon bond, as a bond issued by any infrastructure capital
under the Act as royalty or fees for technical services in
company or infrastructure capital fund or public sector company
India read with DTAA.
or scheduled bank and in respect of which no payment and
 It is proposed to provide that consideration for e- benefit is received or receivable before maturity or redemption. It
commerce supply of goods or services shall include: is now proposed to include notified “infrastructure debt fund” to
o consideration for sale of goods irrespective of its list.
whether the e-commerce operator owns the goods
o consideration for provision of services irrespective
of whether service is provided/facilitated by the e-
commerce operator.
 Further, it is also proposed to include one or more
activities for the purpose of e-commerce supply or service:
o Acceptance of offer for sale
o Placing the purchase order

OTHERS
Tax Incentives for units located in IFSC of royalty on account of lease of aircraft paid by unit of
IFSC eligible for specified deduction and commences
 Presently, fund management activity of eligible investment
business operations on/before 31.03.2024.
fund carried out through eligible fund manager located in
India and acting on behalf of such fund shall by itself not  It is proposed that tax holiday shall be extended to income
constitute business connection in India. Such Eligible funds from transfer from aircraft/aircraft engine leased by IFSC
shall also not be considered resident of India merely unit to domestic company engaged in operation of aircraft
because the fund manager is located India. before such transfer subject to certain conditions.
 Certain conditions have been prescribed for the fund to be  To encourage existing offshore funds to relocate to IFSC it is
eligible to avail above benefits. It is proposed to relax some proposed to exclude following transfers from the ambit of
condition/s for such investment fund or its eligible fund capital gains:
manager if such fund manager is located in IFSC and o Transfer of capital assets on such relocation by
commences operations on/before 31.03.2024. Original fund (i.e. existing offshore fund) to
 Presently income from transfer of specified capital assets Resultant fund (i.e. new AIF located in IFSC).
(e.g. derivatives, rupee denominated bonds of an Indian o Transfer by shareholder/unitholder/interest holder
Company, Bond or GDR etc.) received by/accrued to Cat III of shares/units/interest held in Original fund in
AIF located in IFSC of which all the units are held by non- consideration for share/unit/interest in the
residents (other than unit held by a sponsor or manager), is Resultant fund.
exempt subject to certain conditions. It is proposed to o It is also proposed to exempt capital gains of non-
extend the said benefit to the investment division of OBU residents on account of transfer of shares of
located in IFSC and which commences operations on/before company resident in India received on relocation by
31.03.2024. It is also proposed to provide concessional tax the Resultant fund provided capital gains on such
rate u/s 115AD to Investment division of OBU as a FPI. shares were not chargeable to tax if that relocation
 It is proposed exempt income of a non-resident from had not taken place.
transfer of non-deliverable forward contracts entered into  It is proposed to provide tax holiday to units in IFSC if they
with OBU of IFSC subject to certain conditions. are registered under IFSC Authority Act, 2019 removing the
 It is proposed to exempt income of a non-resident by way earlier permission requirements

Increase in threshold limits of a Small Company |
Removal of limits for conversion of an OPC |
Rationalization of Tribunals and E-Court systems for
strengthening NCLT framework | Launch of MCA
Version 3.0
CORPORATE LAW
Small Company and
One Person Company 45
Other provisions and
Decriminalization of
Offences (LLP) 46
Corporate Law
SMALL COMPANY AND ONE PERSON COMPANY
Relaxation for Small Companies [2(85)] Amendments in pursuant to One person
 The definition of Small Company is proposed to be revised. Companies.
The new threshold limits are as follows,  Presently, One person Company is required to compulsorily
o Paid up Share Capital of which does not exceed INR convert itself into a Private Limited Company or Public
2 Crores (earlier INR 50 Lakhs), and Limited Company if,
o Turnover limit of which does not exceed INR 20 o Paid up Share Capital of such company exceeds INR
Crores (INR 2 Crores) 50 Lakhs or
 The above change shall benefit Companies with respect to o Turnover exceeds INR 2 Crores
relaxation in compliance requirements, such as However, the aforesaid limit has been proposed to be
o Exemption from, removed. The One Person Companies are allowed to grow
 Preparation of Cash Flow Statement without any restrictions and are allowed to convert itself into
 Providing Companies Auditors Report Order 2016. a private limited or public limited Company at any time.
 Appointment of Key Managerial Personnel, • The Residency limit on the Indian citizen to incorporate a
Secretarial Auditor and Whole Time Company One Person Company is reduced from 182 days to 120 days.
Secretary • At present, only a natural person who is an Indian Citizen
o Certification of Annual Return by a Company Secretary in and Resident in India shall be eligible to incorporate as a
Practice is not applicable. One Person Company. However, now it has been proposed
o Limited Disclosures in Directors Report that a Non-Resident Indian is also allowed to set up and
incorporate a One Person Company in India .
o Holding at least 1 meeting of the Board of Directors in
each half of a calendar year and the gap between the two
meetings is not less than ninety days.

Corporate Law
OTHER PROVISIONS AND DECRIMINALIZATION OF OFFENCES (LLP)
Rationalization of Tribunals and E-courts systems. offences under Limited Liability Partnership Act 2008 and
has placed suggestions and recommendations from
 To ensure faster resolution of cases, NCLT framework will
stakeholders.
be strengthened, e-Courts system shall be implemented
and alternate methods of debt resolution and special
framework for MSMEs shall be introduced. The Committee has also below recommendations for the ease
of doing business on Limited Liability Partnership as follows:-
 Reduction in the additional fee charged for delayed
Launch of MCA Version 3.0 filings,
 The Budget proposes to launch Data Analytics, Artificial  To allow Limited Liability Partnerships to issue Non-
Intelligence, Machine Learning, driven with MCA21 Convertible Debentures to entities regulated by
Version 3.0. This MCA version 3.0 will have additional Securities and Exchange Board of India or Reserve
modules for E-scrutiny, E-Adjudication, E-Consultation Bank of India,
and Compliance Management.  Classification of certain Limited Liability Partnerships
as "Small Limited Liability Partnership" for regulatory
Decriminalization of Offences under LLP Act purposes and also certain urgently needed structural
 In order to provide greater ease of doing business in India changes for alignment with the provisions of
Companies Act, 2013
to law abiding Limited Liability Partnerships, a need is
being felt to review the penal provisions of the Act so as
to decriminalize compoundable offences involving minor,
procedural or technical violations of the Act, or offences
which can be objectively identified as where no fraud or
mala fide intent is present nor is there any harm to public
interest. In order to achieve the aforesaid objective, the
Committee was formed, which submitted its report
suggesting decriminalization of certain compoundable

19% Increase in Defence capital expenditure | INR 350
billion allocated for COVID-19 vaccine | Voluntary
Vehicle Scrappage Policy | Increase of 137% in budget
outlay on healthcare sector

G o o d s & S e r v i c e Ta x 48
Customs 51
Scope of Supply  Additionally, the details of such invoices or debit notes
shall be required to be communicated to the recipient.
 To put an end to controversy arising out of the decision of
Hon’ble Supreme Court in the case of Calcutta Club on
mutuality, the scope of supply is proposed to be Changes is Annual Return and GST Audit
retrospectively amended to ensure levy on supply of goods  An option to furnish self-certified reconciliation statement,
or services by any person other than individual to its’ reconciling the GST returns with audited financial
members or constituents and vice versa. statements is proposed.
 Further, an explanation in the said section is inserted to  Currently, the due date for furnishing Annual Return is 31 st
negate any judgement or decree or order of any court and December following the end of financial year. It is now
deem person and its members/constituents as two proposed to be prescribed at a later date.
separate persons and transactions/ activities between
 The provisions for mandatory requirement of furnishing a
them to be supply of goods or services. reconciliation statement duly audited by Chartered
 Consequently, entry 7 of Schedule II to the CGST Act is Accountant / Cost Accountant along with the audited
being omitted retrospectively financial statements of the registered person whose
turnover exceeds INR 2 Crores are proposed to be omitted
Restriction on Input Tax Credit
 Currently, the availability of input tax credit is restricted to
105% of the invoices or debit notes furnished by the
supplier.
 It is now proposed to restrict the availability of Input Tax
Credit to the invoices or debit notes furnished by the
supplier in the GST return of outward supplies. The
relaxation of 5% , then, shall not be available.

Retrospective effect to interest on Net Tax
Particulars Cess Total
Liability
 Vide Finance (No.2) Act, 2019, the interest on delayed
Where owner of goods comes
payment of tax was levied on that portion of the tax that is forward for payment 100% of tax 200% of tax
paid by debiting the electronic cash ledger (i.e., tax liability
- Taxable goods
net of input tax credit). The said provision was made
effective from a date to be notified which was then notified Where owner of goods does not 50% of value of
come forward for payment 50% of
on 1 st September, 2020. goods or 200%
value of
 Amidst confusion regarding clarificatory nature of the said - Taxable goods of tax, whichever
goods
provision, the CBIC vide press release had clarified that the is higher
said provision is effective in retrospect with effect from
01st July, 2017.  The conveyance shall be released on payment of penalty or
INR1,00,000, whichever is less.
 To provide legal sanction, it is now proposed that the said
provision be effective retrospectively from 01st July, 2017.  Penalty in respect of confiscation of goods or conveyances
is proposed to be revised to 100% of tax payable. Currently
the same is linked to penalty in respect of detention and
Demands, Recovery, Seizure and Confiscation seizure.
 Amendment is proposed to make seizure and confiscation
of goods and conveyances in transit a separate proceeding
Recovery of Tax as per GSTR-1
 The meaning of the term “self assessed tax” for the
 It is proposed that no appeal shall be filed against an order
determination of tax and interest is proposed to be
of detention or seizure, unless a sum equal to 25% of
amended. Self-assessed tax shall include the tax payable in
respect of details of outward supplies furnished under
 Penalty for contravention of provisions of CGST Act in case
section 37 (i.e. GSTR-1) but not included in return
of transportation or storage of goods in transit are
furnished under section 39 (i.e. GSTR-3B)
proposed to be revised in the following manner.

Zero Rated supplies end of the day preceding the day (including holidays) of
 Currently, all supplies to SEZ developer or SEZ unit are
considered as zero rated supplies. It is now proposed that
supplies to SEZ developer or SEZ unit only for authorized
operations shall be treated as zero rated supplies.  A new section is proposed to prescribe penalty in specific
 It may be noted that, currently, the refund on supplies to
SEZ is permissible only in case of authorized operations.
 The option to make zero rated supply on payment of tax
and claim refund is proposed to be restricted to a notified
class of persons or goods or services
 In case of zero rated supply of goods, it is proposed that
the registered person be liable to deposit the refund
received along with interest if the sale proceeds are not
realised within the time limit specified under FEMA,1999
(nine months)
exemption)

CUSTOMS
exemption)
end of the day preceding the day (including holidays) of
 A new section is proposed to prescribe penalty in specific


CUSTOMS
Chemical
1 Carbon Black BCD-5.0% 7.5%
Plastic Items
2 Builder’s ware of plastics BCD-10.0% 15%
Gems and Jewellery sector
3 Cut and Polished Synthetic stones, including Cut and Polised Cubic Zirconia BCD-10.0% 15%
Electrical and Electronics Sector
BCD-12.5
4 Compressor of kind used in refrigerating equipment 15%
%
5 Compressor of kind used in air-conditioning equipment BCD-12.5% 15%
Printed Circuit Board Assembly of charger or adapter
6 (All goods under this tariff item, other above, will continue to attract the existing effective BCD-10% 15%
rate of BCD at 10%)
"Safety glass, consisting of toughened (tempered)or laminated glass.(All goods
7 under this heading, other than those used with motor vehicles, will continue to BCD-10% 15%
attract the existing effective rate of BCD at 10%)"
Parts of Electrical lighting and signalling “èquipment, windscreen
8 wipers, defrosters anddemisters, of a kind used for cycles or motor“ vehicles BCD-10% 15%

CUSTOMS
"Ignition wiring sets and other wiring sets of a kindused in vehicles, aircraft or
9 BCD-10% 15%`
ships"
"Instrument Panel Clocks and Clocks of a similartype for vehicles, Aircraft,
10 BCD-10% 15%
Spacecraft or Vessels"
11 Denatured Ethyl Alcohol (ethanol) manufacture of excisable goods BCD-2.5% 5%
BCD-Nil
5%
12 "All goods except dog and cat food and shrimp larvaefeed" 15%
10%
15%
Minerals
BCD-Nil
13 Natural borates and concentrates thereof 2.5%
5%
14 Naphtha BCD-4% 2.5%
15 Bis-phenol A BCD-Nil 7.5%
16 Epichlorohydrin BCD-2.5% 7.5%
17 Caprolactam BCD-7.5% 5%
18 Polycarbonates BCD-5% 7.5%

CUSTOMS
19 Nylon chips BCD-7.5% 5%
20 Other plates, sheets, films, etc. of other plastics BCD-10% 15%
Lether
"Wet blue chrome tanned leather, crust leather, finished leather of all kinds,
21 BCD-Nil 10%
including splits and sides of the aforesaid"
Textiles
22 Raw Silk (not thrown) BCD-10% 15%
23 "Silk yarn, yarn spun from silk waste (whether or notput up for retail sale)" BCD-10% 15%
24 Raw Cotton BCD-Nil "5% +5% AIDC"
25 "Cotton waste (including yarn waste or garneted stock)" BCD-Nil 10%
26 Nylon Fibre and Yarn BCD-7.5% 5%

"7.5%+2.5%
27 Silver BCD-12.5%
AIDC"
"6.1%
28 Silver Dore BCD-11%
+2.5%AIDC”
"7.5%+2.5%
29 Gold BCD-12.5%
AIDC"
"6.9%+2.5%
30 Gold Dore BCD-11.85%
AIDC"

INR 1,500 Crores earmarked to promote digital
payments | Adding 100 districts to city gas networks
over a period of 3 years | Set up of Development
Financial Institution with budget allocation of INR
20,000 Crs. for funding infra projects
GLOSSARY
Glossary
KNOW THE TERMS
Agriculture Infrastructure and FDI Foreign Direct Investment
AIDC
Development Cess
Foreign Exchange and
AIF Alternate Investment Funds FEMA
Management Act, 1999
AMT Alternate Minimum Tax
FII Foreign Institutional Investor
AO Assessing Officer
AOP Association of Persons FMV Fair Market Value
APA Advanced Pricing Agreement FPI Foreign Portfolio Investors
AY Assessment Year
FY Financial Year
GDP Gross Domestic Product
BOI Body Of Individuals
GDR Global Depositary Receipts
GOI Government of India
CGST Central Goods and Services Tax
Corporate Social Responsibility HUF Hindu Undivided Family
CSR
CVD Countervailing duty Income Computation and
ICDS
Disclosure Standards
DRC Dispute Resolution Committee International Financial Services

IFSC
Centre
Double Tax Avoidance Agreement with INR Indian Rupees
DTAA foreign countries or specified
territories or specified associations InvITs Infrastructure Investment Trust

Glossary
KNOW THE TERMS
ITAT Income-Tax Appellate Tribunal RIDF Rural Infrastructre Development Fund
LTC Leave Travel Concession RPF Recognised Provident Fund
LTCG Long-Term Capital Gains SAD Special Additional Duty
MAP Mutual Agreement Procedure SDV Stamp Duty Value
MAT Minimum Alternate Tax Securities and Exchange Board of

SEBI
India
MRP Maximum Retail Price
SFT Statement of Financial Transactions
NBFC Non-Banking Financial Company
SHEC Secondary and higher education cess
NPS National Pension Scheme
SME Small and Medium Enterprise
STCG Short-Term Capital Gains
PE Permanent Establishment
TAN Tax Deduction Account Number
PF Provident Fund
TCS Tax Collection at Source
Production AtamNirbhar Bharat - Linked
PLI TDS Tax Deducted at Source
Incentive Scheme
QFI Qualified Foreign Investor u/s Under Section
Research and Development ULIP Unit Linked Insurance Plan

R&D
USD US Dollars
WDV Written Down Value
REIT Real Estate Investment Trust

‘ न चोर हार्यं न च राज हार्यं न भात्रू
भाज्यं न च भारकारर
व्यर्यं कृते वर्धत एव ननत्यं
नवद्यार्नं सवधर्नप्रर्ानम ’
Knowledge is the Wealth that:

The Thief cannot Steal,
The King cannot Acquire,
The Brothers cannot Share,
Does not Weigh on You,
Grows Forever as you share ,
Truly, Knowledge is the Greatest Wealth.
Benefice Business House, 3rd Level, T: +91 22 3321 3737

126, Mathuradas Mills Compound, www.gbcaindia.com
N. M. Joshi Marg, Lower Parel (W),
Mumbai – 400013, India.
Moving forward with resilience

PwC Union Budget 2021- 22 Mov ing f orward with resilience
Contents
Foreword Economic performance
Budget highlights Glossary

PwC Union Budget 2021- 22 Mov ing f orward with resilience
Section 01
Foreword
Foreword
• Against the backdrop of an unprecedented global pandemic and an economic shutdown, the Finance Minister shouldered the
daunting task of reviving an already drudging economy. For our country to become a truly AtmaNirbhar Bharat and the fastest
growing economy we need an unwavering commitment from the Government and its people alike amidst a rapidly changing socio-
economic and political environment
• The Finance Minister while presenting a wholistic budget built upon six pillars (i) Health and Wellbeing (ii) Physical and Financial
Capital, and Infrastructure (iii) Inclusive Development for Aspirational India (iv) Reinvigorating Human Capital (v) Innovation, and
Research and Development (vi) Minimum Government and Maximum Governance. With an ambitious intent on developing a
robust infrastructure, the Finance Minister has sowed the seeds of boosting investor confidence, good governance and facilitating
ease of doing business
Bhavin Shah • With an undercurrent of economic revival, the Budget proposals for the financial services sector are centered on infrastructure
Partner and Deals development and attracting foreign investments. With the objective of making India self-reliant, the Government continues to work
Tax Leader towards rationalising IFSC tax regime. Proposed exemptions for relocation to IFSC and incentives to aircraft leasing entities in
IFSC gives India a fighting chance when compared to established offshore fund jurisdictions
• Continuing with the theme to provide much needed impetus to infrastructure development, the Budget proposals provide
relaxations to the conditions for tax exemptions to SWF and PF as well as extension of tax holiday for affordable housing projects.
Once can expect to see traction in the real estate sector with the increase in the Safe Harbor limit and incentives to home buyers
• Relaxation of investment limits in Insurance sector could see an influx of foreign investments in insurance space. Confirming
availability of treaty benefits for withholding tax on payments to FPI will surely help in demonstrating this Government’s intention of
ease of doing business
• Widening the definition of slump sale to bring all transfers under its preview and restricting the availability of depreciation on
goodwill could prove to be a double blow to transaction space in India impacting valuations. The Government’s unwavering ques t to
overhaul the country’s income-tax litigation mechanism by deployment of advanced technology continues to gain traction in this
Budget. With an aim of consolidating multiple regulations, the introduction of a new Securities Markets Code would prove to be a
welcome step in facilitating ease of doing business
• In summary, the policy proposals, regulatory announcements and tax amendments impacting financial services sector space would
support the Government’s plan for robust infrastructure development and fast-track India’s trajectory as the world’s fastest growing
Union Budget 2021-22 economy and reaching the goal of the 5 trillion economy
PwC Union Budget 2021- 22 Mov ing f orward with resilience 4
Section 02
Economic
performance
Global economy Headwinds
• Global growth estimated to decline by 3.5% in 2020 but expected to rise by • Rising input cost and oil prices likely to result in inflation, which could make
5.5% in 2021 India Inc. uncompetitive
• Advanced economies likely to grow by 4.3% in 2021 on the back of early • Rising yields coupled with rising NPAs could impact borrowings costs and
roll out of vaccines create liquidity constraints
• Emerging economies are expected to grow by 6.3% in 2021 on the back of • Taper tantrums upon reversal of global monetary policy
a contracted base
Indian economy Figure 1: GDP growth rates
• India’s GDP growth for FY21 is estimated to decline by 7.7%, hit by the
global pandemic and the lockdown 11.5%
• Private consumption estimated to contract by 9.5% in FY21 based on
5.5% 6.3%
income loss, mobility restrictions, and supply constraints 4.3% 3.6% 4.2%
2.8%
• Government consumption estimated to rise by 5.8% due to increased 1.6%
expenditure as part of pandemic relief packages.

• Investment estimated to decline by 14.5% due to economic uncertainty and -2.4%
-3.5%
delay in implementation of capital projects -4.9%
-8.0%
Outlook World output Advanced Economies EMDEs India
2019 2020 (Estimate) 2021 (Projection)

• Consumption indicators, including FMCG, auto sales and GST collection
indicate a faster demand recovery in Q3
• Continued momentum post-pandemic in health, pharma, telecom and Source: World Economic Outlook, Jan 2021, IMF (Note- Data for India is
technology (e-commerce, fintech, ed-tech, etc.) owing to significant shift in presented on a fiscal year basis, remaining are on calendar year basis)
consumption patterns
• The pandemic has led to preference for digital services and adoption of
digitalisation in many companies
• GDP is estimated to grow at 11% in FY22 owing to robust growth in
consumption and investment and lower base effect
Figure 2 – Annual growth of GDP & demand components at constant prices Figure 3: Growth rate for sectoral gross value added
15% 10% 10%

8.0% 8.3%
7.2% 7.2%
6.8% 6.5% 8% 6.3%
10% 5.3%
4.0% 6% 5% 4.3%
2.6% 3.4%
5% 4%
5.4%
1.0%
7.6%
9.9%
6.3%
5.8%
5.5%
7.9%
2% 0%
0%
-9.5%
-14.5%
0%
-2.40%
-5%
-2% -5%
-10% -4%
-6% -10% -8.8%

-9.4%
-15%
-8%
-7.7% -12.6%
-20% -10% -15%
FY16 FY17 FY18 FY19 FY20 (RE) FY21 (AE) Agriculture Manufacturing Construction Services
Private Consumption Investment Govt. Consumption GDP FY19 FY20 (RE) FY21 (AE)
Source: Data until FY20 is taken from the first revised estimates of GDP Source: Data until FY20 is taken from the first revised estimates of GDP
(dated 29 Jan 2021); Growth rates for FY21 are taken from the first advanced (dated 29 Jan 2021); Growth rates for FY21 are taken from the first advanced
estimates of GDP (dated 7 Jan 2021) estimates of GDP (dated 7 Jan 2021)

Capital markets
• During April-December 2020, 33 companies (PY 49) raised money through

public issue
• Capital raised through public issues increased to INR 310.87bn during April-
December 2020, an increase of 183.9% over the corresponding period of
the previous financial year
• Net FPI inflows during April-December 2020 stood at INR 2.1 trillion
• FDI of US$30bn raised during the first six months of 2020-21
Banking sector
• Credit growth (YoY) of banks declined to 5.1% in October 2020 from 14.8%
in February 2019, and subsequently, accelerated to 6.7% in January 2021
• Resolution of stressed assets had to take a backseat because of the
suspension of the initiation of fresh insolvency proceedings for defaults
arising on or after 25 March 2020 until 25 March 2021
• Credit growth (YoY) of NBFCs was close to 3% in June 2020, which
subsequently contracted in September 2020 to (-) 6.6% (YoY)
Asset management:
• Net inflow of INR 2.76 trillion (PY INR 1.82 trillion) in mutual funds industry
during April-December 2020 as compared to April-December 2019
• Net AUM of all mutual funds increased by 16.9% to INR 31.02 trillion at the
end of 31 December 2020

Section 03
Budget
highlights
Private equity / AIFs
Key policy announcements
• Pooled investment vehicles (includes mutual funds, AIFs, collective investment schemes, REITs and InvITs) to be eligible to borrow and issue debt securities in
accordance with the applicable SEBI Regulations
• Units or instruments issued by pooled investment vehicle proposed to be included in the definition of ‘securities’ under SCRA
Key direct tax proposals
• TDS at 0.1% (on amounts exceeding INR 5m) applicable on purchase of goods (likely to include shares and securities) from residents, if the sales, gross receipts
or turnover from the business carried on by the purchaser exceeds INR 100m in the preceding FY
− The above amendment is with effect from 1 July 2021
• Dividend income earned by foreign companies not subject to MAT (if applicable)
• Capital gains tax introduced for partnership firms/ LLPs/ AOPs on dissolution/ re-constitution, where distributions are made to partners/ members in excess of their
capital balance owing to the revaluation of assets or recording of self-generated assets
• No depreciation to be allowed on goodwill
− Amount paid for acquiring goodwill to be allowed as deduction on sale
• Slump exchange covered within the meaning of slump sale
• Definition of ‘liable to tax’ introduced – includes a case where an exemption has been provided subsequent to the imposition of tax liability – relevant to determine
eligibility to certain tax treaties
Experts speak
• Similar to the TCS provisions, TDS is likely to apply on the purchase of shares and securities from residents – will result in additional compliance requirements for
the buyer. Clarification awaited on whether TDS should apply for transactions traded through recognised stock exchanges.
• Not
Unionconsidering
Budget 2021-22 goodwill as a depreciable asset has overturned the Supreme Court’s ruling in the case of Smifs Securities Limited
IFSC
• FinTech hub to be set up in GIFT-IFSC
Tax regime for relocation of offshore fund to IFSC

• Relocation of Offshore Fund to a Resultant Fund in IFSC to be tax neutral for Offshore Fund, Resultant Fund and its shareholders/ unitholders
• NR investors of the Resultant Fund exempt on gains from future sale, if the Offshore Fund was otherwise exempt on such gains before relocation
• Cost of acquisition and period of holding of previous owner available to the Resultant Fund
• Change in shareholding of Indian company - No impact on carry forward of losses
Non-deliverable forward contracts executed by IBUs
• Income of non-resident on transfer of non-deliverable forward contracts entered into with an OBU of IFSC to be exempt from tax, provided such OBU
commences operations before 31 March 2024
Tax holiday benefits
• Tax holiday benefits to IFSC units to include units permitted or registered under IFSC Authority Act, 2019
Safe harbour regime for IFSC
• Notification to be issued to relax/ modify conditions for safe harbour regime for an eligible fund and IFSC fund manager comm encing operations before
31 March 2024

IBUs
• Tax regime for investment division of an OBU located in IFSC, where the OBU commences operations before 31 March 2024 to be as follows:
Nature of income Proposed income-tax rate

Capital gains on equity shares 10%++ for LTCG, 15%++ / 30%++ for STCG
Capital gains on debt/ derivatives Exempt
Dividends and interest income (except for interest under section 194LD) 10%++
Business income from a securitisation trust Exempt
Aircraft leasing
• Capital gains on the transfer of aircraft or aircraft engine leased by an IFSC unit to a domestic company eligible for 100% deduction, if the unit has commenced
operations before 31 March 2024
• Income by way of royalty on account of lease rentals paid to foreign entities exempt from tax if the unit has commenced operations before 31 March 2024
Experts speak
The promising tax proposals pertaining to the IFSC will further push the Government’s agenda of ‘AatmaNirbhar Bharat’. This move can be a true game changer for
the Indian fund management industry and global aircraft leasing entities

Real estate and
infrastructure
InvIT and REITs DFI

• Legislative amendment proposed for debt financing by FPI in InvIT and REIT • DFI to be set up for long-term debt financing in the infrastructure sector with an
initial capital of INR 200bn
Asset monetisation • Lending portfolio targeted to be INR 5,000bn by three years
• National Monetisation Pipeline for brownfield infrastructure assets to be
launched Urban infrastructure
• DFC assets to be monetised by Railways for operations and maintenance • Deployment of PPP model in public bus transport services
• Airports to be monetised for operations and management • Expansion of metro rail network through ‘MetroLite’ and ‘MetroNeo’ for Tier-2
• Several core infrastructure assets to be monetised including toll roads, and peripheral areas of Tier-1 cities
transmission assets, pipeline assets, sports stadium, etc., which are owned by
the Government/ PSUs Power
• Framework to give consumers the choice of more than one DISCOMS to
Roads and highways improve performance
• 8,500 kms of road projects to be awarded by March 2022 • Result-linked power distribution scheme to be launched to provide assistance to
• Economic corridors being planned in Tamil Nadu, Kerala, Assam and West DISCOMS for infrastructure creation
Bengal
Ports
Railways • Seven projects worth INR 20bn to be offered by major ports on PPP model in
• Western and Eastern DFC to be commissioned by June 2022, resulting in FY 2021-22
reduced logistics cost

SWF/ PF • Payment to creditors or depositors for borrowings taken for purposes other than
• SWF/ PF exemption on certain incomes earned from specified Indian investment in India to not contravene the conditions on private inurement and
infrastructure businesses modified/ extended to include investment in assets going to Government on dissolution for SWFs - similar changes should
– AIFs having minimum 50% investments in notified infrastructure be brought about for PFs through amendment in the Rules
• Condition on ‘not liable to tax’ relaxed to include where PFs liable to tax but
businesses or in InvITs;
specifically exempted from tax on income in their home country
– Indian holding companies set up on/ after 1 April 2021 having minimum
75% investments in notified infrastructure businesses; and
InvIT and REIT
– NBFC – IDF/ IFC with at least 90% lending to companies/ entities in
• No TDS on dividend paid by SPVs to InvIT/ REIT with effect from 1 April 2020,
notified infrastructure businesses in line with the exemption provision
• Mechanism to be prescribed for proportionate exemption on income from
investments made in AIF/ India Hold Co/ NBFCs holding less than 100%
Infrastructure debt fund
investment in notified infrastructure businesses
• Definition of zero coupon bonds to include such bonds issued by the
Infrastructure Debt Fund
Changes in eligibility norms for SWFs/ PFs
• No TDS on income paid on such bonds
• Direct or indirect leverage for the purpose of making such investment in
India not permitted
Safe harbour provisions for transactions of residential units
• Condition relating to commercial activity removed for SWFs – similar
changes should be brought about for PFs through amendment in Rules • Safe harbour limit of 10% is proposed to be increased to 20% in case of
• SWFs/ PFs not permitted to participate in the day-to-day operations of the primary sale of residential units - difference between the stamp duty value
investee entity. Monitoring mechanism including right to appoint directors/ and consideration received
executive directors to be allowed ⎼ Consideration received or accruing does not exceed INR 20m
⎼ Sale is between 12 November 2020 to 30 June 2021
• Similar benefit proposed to be extended on deemed income in the hands
of buyer
Reinvestment of capital gains on residential property - investment in

start-up
• Deduction for reinvestment of capital gains in equity shares of an eligible
start-up proposed to be extended until 31 March 2022
Tax holiday on affordable housing projects

• Tax holiday is proposed to be extended to real estate developers engaged
in the business of developing and building notified rental housing projects
• Period for obtaining project approval for affordable housing and notified
rental housing is proposed to be extended to 31 March 2022
Interest on loans for purchasing affordable house

• Timelines for enhanced interest deduction (INR 0.15m) for loans sanctioned
by financial institutions towards purchase of first affordable house extended
by one year to 31 March 2022

Experts speak
• The changes brought about in the eligibility conditions and relaxation of

investment conditions should provide much needed clarity and boost
investments from SWFs/ PFs. However, some further relaxations around
investments in holding company set up prior to 1 April 2021 or investments
by an AIF in such holding companies could have provided an impetus to
such investments
• The industry was expecting measures to boost demand. Largely, the status
quo has been maintained in the real estate sector. The proposal to
rationalise safe harbour provisions will help alleviate some of the burden on
developers (for clearing unsold inventory) and aspiring home buyers.
Streamlining of TDS provisions on dividend paid to REIT/ InvITs would help
in reducing potential cash traps
• With the Government’s focus on the infrastructure sector coupled with the
asset monetisation plan, the infrastructure sector is likely to see significant
transaction activity over the next few years. Additionally, several measures
are proposed for project financing, including the introduction of an
infrastructure debt fund, which are likely to boost the infrastructure sector

Start-up and VCs
Incentivising the incorporation of one person companies

• No restriction on paid-up capital and turnover
• NRIs allowed to incorporate one person companies in India
• Permitted to convert into any other type of company at any time
• Limit of residency for shareholders reduced to 120 days (currently 182 days)
• Tax holiday extended for startups incorporated up to 31 March 2022 (currently, 31 March 2021)
• Capital gains exemption on transfer of residential property invested in eligible startups extended to 31 March 2022 (currently, 31 March 2021)
Experts speak
• Continued support to the start-up ecosystem by extending sunset clause for various benefits and minimising compliance burden for small and medium enterprises

Banking, capital markets,
NBFC, ARC, FPI
• A rationalised Securities Markets Code to be introduced to consolidate the SEBI Act, 1992, Depositories Act, 1996, SCRA and Government Securities Act, 2007
• PSBs to be recapitalised up to INR 200bn to strengthen their financial capacity
• Depositors to be able to access funds up to the deposit insurance cover where the bank is temporarily unable to fulfil its obligations
• Disinvestment/ privatisation of IDBI and two other PSBs
• SEBI to be notified as a regulator of gold exchanges
• Warehousing Development and Regulatory Authority to be strengthened to set up a commodity market eco-system
• Introduction of an investor charter as a right of all financial investors across all financial products
• Separate framework proposed for setting up an ARC and AMC to take over/ manage stressed debts and offer them to potential investors, including AIFs
• Debt recovery under SARFAESI Act for NBFCs extended to secured loans exceeding INR 2m (currently INR 5m)
• Banks and financial institutions can invoke SARFAESI to recover debts borrowed by pooled investment vehicles
• For NBFCs, a body to participate in corporate bond market and boost liquidity in the secondary market proposed
TDS by specified banks on income of a specified senior citizen

• Specified senior citizen earning only pension and interest income not required to file tax return where tax has been deducted at source
• Such taxes to be withheld by specified banks (to be notified) considering the final tax liability on total income (after deductions and rebate)
Transition of a primary co-operative bank into a banking company
• Transition of a co-operative bank to a banking company to be tax neutral in the hands of the co-operative bank and its shareholders
TDS on income paid to FPI (with effect from 1 April 2021)
• TDS on dividends, interest, etc., earned by an FPI at the applicable treaty rates or 20%, whichever is lower
• Tax rate under the treaty to apply subject to furnishing a TRC
Experts speak
• Creating an institutional framework to support the corporate bond market

would provide more confidence to institutional and retail investors, thereby,
increasing liquidity
• Operational tax compliance requirements for banks continue to grow
• Setting up a new ARC-AMC could overhaul the framework for stressed assets
resolution
• TDS on income earned by FPIs at tax treaty rates remove cash trap leakages
that arose due to the change in market practice after the PILCOM ruling

Insurance
• FDI limit in insurance companies to be increased to 74% (from 49%). Foreign ownership and control allowed with safeguards
− Majority of directors and key management persons to be resident Indian; at least 50% of directors to be independent
− Specified percentage of profits to be retained as general reserve
• Government to list LIC and divest stake in one general insurance company in 2021-22; legislative amendments to be introduced
• No exemption available for ULIPs issued on or after 1 February 2021 where premiums payable for any year during the policy term exceeds INR 0.25m (limit to be
tested across ULIPs held by the same policyholder)
• Exemption to continue for ULIPs on death of policyholder
• Amounts received from above ULIPs taxable as 'Capital Gains’ in year of receipt. Method of calculating such gains to be prescribed
• Definition of 'equity-oriented fund’ to include above ULIPs. Consequently, capital gains on such ULIPs taxable at (i) 10%++ for LTCG; and (ii) 15%++ for STCG
Experts speak
• Increase in FDI limit should boost foreign investment in the insurance sector
• Direct tax amendments seek to eliminate the tax arbitrage between ULIPs (being predominantly held as investment, as opposed to an insurance product) and
equity oriented mutual funds. The proposal may materially reduce the attractiveness of ULIPs as an investment product

Other direct tax
proposals
Key Policy Announcements
Litigation
Assessment proceedings – Reduced timelines (with effective from AY 2021-22)
Particulars Proposed amendment

Issue of intimation 9 months from end of the FY in which the return is furnished (reduced from 12 months)
Issue of notice initiating assessment 3 months from the end of the FY in which the return is furnished (reduced from 6 months)
Completion of assessment 9 months from the end of the AY (reduced from 12 months)
Overhaul of reassessment proceedings Others

• Time limit to issue notice reduced to three years (from four or six years) • ITAT proceedings to be faceless
− Ten year time limit if the AO is in possession of evidence that reveals income
• Constitution of DRC for small and medium taxpayers:
escaping assessment >= INR 5m
− Eligible cases: (a) Income returned is <=INR 5m; and (b) Proposed variation
• Prior to issuing the notice, the AO to conduct an enquiry and provide the
taxpayer with the opportunity of being heard (for other than search cases) is <=INR 1m
• Reassessment to be initiated based on information available with the AO − DRC permitted to reduce or waive penalty, grant immunity from prosecution
− which is flagged as per the risk management strategy formulated by the • Board of Advance Ruling (Board) to replace AAR
CBDT;
− Board to consist of two members (not below the rank of CCIT);
− any final objection raised by the C&AG of India regarding assessment
− Ruling neither binding on the taxpayer nor on the tax department;
• For search/ survey/ requisition cases, the AO deemed to have information
appealable before the High Court
suggesting that income has escaped assessment
• Income-tax Settlement Commission abolished with effect from 1 February 2021
• Due date for filing of belated return and revised return shall be three months
prior to the end of the assessment year
Rationalisation of the provisions of equalisation levy (with effect from 1 Enhanced TDS/ TCS rates for non-filing of tax return (with effect from 1 July
April 2020) 2021)
• Scope of equalisation levy expanded to include acceptance of offer for sale, • Higher rate of TDS (5%, two times of the specified TDS rate or two times the
placing/ acceptance of purchase order, payment of consideration, supply of rate in force; whichever is higher) to apply in certain cases where the recipient
goods/ provision of services partly or wholly has not filed income-tax return in the last two previous years and TDS or TCS in
• Equalisation levy to be charged on consideration for sale of goods/ services, his case exceeds INR 0.05m in each year
irrespective of whether the e-commerce operator owns such goods/ provides • Similar provisions proposed in relation to TCS
such services
• Equalisation levy to not apply if consideration taxable as ‘royalty’ or ‘fees for
Other amendments
technical services’ • Delay in deposit of employees contribution towards EPF/ ESI/ Superannuation
• Transactions subjected to equalisation levy not taxable fund within the prescribed due date taxable in the hands of employer.
• The threshold for the trigger of tax audit to increase to INR 100m from existing
Restructuring of PSC INR 50m for entities having 95% or more digital transactions
• Reconstruction and splitting up of a PSC deemed to be demerger provided the • Advance tax on dividend on receipt basis. No relaxation on deemed dividend
resulting company is a PSC on appointed date and fulfils conditions to be
prescribed
• Brought forward losses and depreciation of a PSC to be carried forward on
amalgamation with another PSC - for an erstwhile PSC, carry forward allowed if
certain conditions are fulfilled
Individual taxation related amendments

• Accrued interest on employee’s contributions on or after 1 April 2021 to EPF
exceeding INR 0.25m per annum taxable
• Tax exemption for specified expenditure incurred (during the period 12 October
2020 to 31 March 2021) in lieu of leave travel concession – now enacted
Experts speak
• The Government’s quest to overhaul the litigation mechanism by deploying

advanced technology continues to gain traction. By capitalising on the
information collected, analysed and disseminated by the tax department,
the entire reassessment proceedings have been reimagined. The ten year
time limit for reopening will require the taxpayers to tread cautiously
• With the last fact-finding authority, the ITAT, also being covered under the
faceless regime, the manner of presentation of facts and drafting of written
submissions at the assessment and appellate levels continue to gain
importance

Section 04
Glossary
Abbreviation Particulars Abbreviation Particulars
AAR Authority of Advance Ruling ESI Employee State Insurance
Act Income-tax Act, 1961 FDI Foreign Direct Investment
AIFs Alternative Investment Funds FMV Fair Market Value
AMCs Asset Management Companies FPI Financial Portfolio Investor
AO Assessing Officer FY Financial Year
AOP Association of Persions GDP Gross Domestic Product
ARC(s) Asset Reconstruction Company GDR Global Depository Receipts
AY Assessment Year GIFT IFSC Gujarat International Finance Tec City IFSC
C&AG Comptroller and Auditor General of India IBU IFSC Banking Unit
CBDT Central Board of Direct Taxes IDBI Industrial Development Bank of India
CCIT Chief Commissioner of Income-tax IDF Infrastructure Debt Fund
CG Central Government IFC Infrastructure Finance Company
DFC Dedicated Freight Corridor IFSC International Finance Service Centre
DFI Development Financial institution INR Indian Rupee
DISCOM Distribution Companies InvIT(s) Infrastructure Investment Trust(s)
DRC Dispute Resolution Committee ITAT Income-tax Appellate Tribunal
Double taxation avoidance agreement entered into by LIC Life Insurance Corporation of India
DTAA
Government of India LLP Limited Liability Partnership
EPF Employees' Provident Fund LTCG Long-term Capital Gains

Abbreviation Particulars Abbreviation Particulars
MAT Minimum Alternate Tax SWF(s) Sovereign Wealth Fund(s)
MSME(s) Medium, Small and Micro Enterprises TCS Tax Collected at Source
NBFC(s) Non-Banking Financial Company TDS Tax deducted at Source
NR Non-Resident TRC Tax Residency Certificate
NRI Non - Resident India ULIP Unit Linked Insurance Policy
OBU Offshore Bankng Unit VC Venture Capital
PF(s) Pension Fund(s) ++ Plus applicable surcharge and cess
PGCIL Power Grid Corporation of India Limited
PPP Public Private Partnership
PSB Public Sector Banks
PSC Public Sector Company
PSU Public Sector Undertaking
REIT(s) Real Estate Investment Trust(s)
SARFAESI Securitisation and Reconstruction of Financial Assets
and Enforcement of Securities Interest Act, 2002
SCRA Securities Contracts (Regulation) Act, 1956
SEBI Securities Exchange Board of India
STCG Short-term Capital Gains

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TULSIANS’ 1
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TULSIANS’ 2
TABLE OF CONTENTS
S.NO. PARTICULARS PAGE NO.

1 Preface/Forward 3
2 Economic Survey 4-11
3 Key Policy Announcements 12-13
4 Fiscal Position 14-15
5 Tax Highlights 16-17
6 Direct Tax Proposals 18-40
7 Indirect Tax Proposals 41-50
TULSIANS’ 3
PREFACE:
“Faith is the bird that feels the light and sings when the dawn is still dark''.
As indicated earlier by the Finance Minister Ms. Nirmala Sitaraman this Budget would be “Like Never
Before”. It is indeed a never like before budget as India witnessed paperless budget for the very first
time. Everyone had been expecting that this Budget would serve as a VACCINE for the revival and
continuous growth of the Indian Economy.
In order to achieve the Economic growth target of 11% and to make India 5 trillion economy, FM
presented the first budget of this new decade with a vision for ATMA NIRBHAR BHARAT through the
six pillars:
▪ Health and Wellbeing
▪ Physical & Financial Capital and Infrastructure
▪ Inclusive Development for Aspirational India
▪ Reinvigorating Human Capital
▪ Innovation and R&D
▪ Minimum Government and Maximum Governance
It was very well expected that the budget allocation on Healthcare Sector, Insurance, Cleanliness, rural
development, digital India, MSME, Agriculture etc. are going to be high as it was reflected in the
Economic Survey. With the slogan JAN BHI OR JAHAN BHI, there were many expectations of Industry
and people with this budget.
During COVID 19, many announcements were made by the Government to save the lives of the people
and to revive the economy. In its effort Government has succeeded to a great extent. This Budget shows
a Silver line and bring hope of recovery for the Indian Economy. These announcements and decisions
would enable India to be the land of Promise and Hope.
Due to the COVID 19 Pandemic the government expenditure has been increased substantially whereas
there has been a sharp decline in the overall revenue. In such a scenario there was a big challenge
before the FM to increase the government revenue on one hand and to increase the general purchasing
power on other. FM has taken up the challenge and has not levied any new tax or cess.
There are many amendments announced in Direct and Indirect Taxations which would bring
transparency in the system. Through these Budget Proposals FM tried to achieve its ATAMNIRBHAR
BHARAT mission which would rest on above mentioned pillars.
Further policy announcements such as setting up of Asset Restructuring Bank, Development Financial
Institution, and increase in capital expenditure by the government will definitely give a boost to the
economy and pave the way for higher incomes in hands of individual.
This booklet is a small effort done by our team to put before you the tax proposals made by FM in this
budget in a simplified manner for your better understanding.
Date: 1st February 2021, Ahmedabad
TULSIANS’ 4
OVERVIEW OF THE ECONOMIC SURVEY 2020-2021
Key Highlights:
It estimated the real GDP growth would be at 11% and nominal GDP to grow by 15.4% in the year
FY 2021-22, which is a V-SHAPED recovery after the pandemic.
India’s GDP is estimated to contract by 7.7 per cent in FY2020-21, which is composed of a sharp
15.7 per cent decline in first half and a 0.1 per cent fall in the second half.
Global economic output in 2020 is likely to see sharpest contraction in a century which is expected
fall by 4.4%.
Government consumption would propel the recovery in second half of FY2020-21, which is
estimated to grow at 17% YoY.
It is expected that India will have Current Account Surplus of 2% of GDP in FY21, a historic high
after 17 years.
Exports expected to decline by 5.8% and imports by 11.3% in the second half of FY21.
India’s forex reserves touched all-time high of US$ 586.1 billion as on January 08, 2021.
Fiscal Stimulus has facilitated the resilient recovery of the economy from impact of COVID-19. Total
Stimulus of Rs. 29.87 Lakh crore was provided by Government of India and RBI jointly, which
amounts to 15% of the GDP.
Total expenditure of the Central Government recorded a growth of 11 per cent during April-
December 2020 (Flash estimates), and capital expenditure growing by 24.1% and revenue
expenditure by 9.2% YoY.
Market Capitalization to GDP ratio crossed 100% for the first time since 2010.
Atamnirbhar Bharat Mission has put the economy on steady path to recovery in coming years.
GST Collection crossed 1 lakh crore for last 3 months, showing the signs of recovery of Economy.
Four-pillar strategy of Containment, Fiscal, Financial, and Long-term structural reforms has
enabled to boost consumption and investment during unlock phase.
India has adopted a calibrated approach for recovery of the economy as against the front-loaded
large stimulus packages as adopted by many countries.
Fiscal Deficit target is most likely to overshoot the budgeted target for the current fiscal year.
TULSIANS’ 5
Key Indicators:
Data categories Unit 2017-18 2018-19 2019-20 2020-21
GDP and Related Indicators
GDP at current market prices ` Lakh Crores 171.0 189.7 203.4A 194.8B
GDP at constant market prices ` Lakh Crores 131.8 139.8 145.7 A 134.4B
Growth Rate % 7.0 6.1 4.2 A -7.7B
GVA at current market prices ` Lakh Crores 155.1 171.1 183.4A 175.8B
GVA at constant market prices ` Lakh Crores 120.7 128 133.0A 123.4B
Growth Rate % 6.6 6.0 3.9 A -7.2 B
Gross Savings % of GDP 32.4 32.2 Na Na
Gross Capital Formation % of GDP 34.2 32.2 Na Na
Per Capita Net National Income (at ` 1,15,293 1,26,521 1,34,226 A 1,26,968 B
current prices)
Production
Food grains Million tons 285.0 285.2 296.7C 144.5C
Index of Industrial Production % 4.4 3.8 -0.8 -15.5D
(growth)
Electricity Generation (growth) % 5.4 5.2 1.0 -4.6D
Prices
WPI Inflation (average) % 3.0 4.3 1.7 -0.1E
CPI (Combined) Inflation(average) % 3.6 3.4 4.8 6.6E
External Sector
Merchandise Export Growth (US$) % change 10.0 8.8 -5.1 -15.7E
Merchandise Import Growth (US$) % change 21.1 10.4 -7.7 -29.1E
Current Account Balance)/GDP % -1.8 -2.1 -0.9 3.1F
Foreign Exchange Reserves US$ Billion 424.4 411.9 475.6 586.1K
Average Exchange Rate `/US$ 64.45 69.92 70.90 74.64J
Money and Credit
Broad Money (M3) (annual) % change 7.8 10.2 10.1 12.4G
Scheduled Commercial Bank % change 10 13.3 6.1 6.1G
Credit (growth)
Fiscal Indicators (Centre)
Gross Fiscal Deficit % of GDP 3.5 3.4 4.6H 3.5I
Revenue Deficit % of GDP 2.6 2.4 3.3H 2.7I
Primary Deficit % of GDP 0.4 0.4 1.6H 0.4I
Notes:
Na: Not Available F: April-September 2020
A: Provisional Estimates G: As on December 18, 2020
B: First Advance Estimates H: Provisional Actuals
C: 4th AE for 2019-20 & 1st AE for 2019-20 I: Budget Estimates
D: April-November 2020 J: End of December 2020
E: April-December 2020 K: As on 8 January 2021
Trends in GST Collections:

Rs. Lakh Crores
Year April May June July August September October November December
2019-20 1.14 1.0 1.0 1.02 0.98 0.92 0.95 1.02 1.03
2020-21 0.32 0.62 0.91 0.87 0.86 0.95 1.05 1.05 1.15
TULSIANS’ 6
Growth Rate of Fiscal Indicators in 2020-21 (upto November 2020) in %:
Gross Tax Corporation Personal Revenue

Year Excise Duty
Revenue Tax Income Tax Receipts
Apr-Nov 2019 0.8 -0.9 7.0 -3.8 13
Apr-Nov 2020 -12.6 -35.7 -12.3 47.7 -17.3
Revenue Capital
Year Total Expenditure Fiscal Deficit
Expenditure Expenditure
Apr-Nov 2019 12.8 13.0 11.7 12.7
Apr-Nov 2020 4.7 3.7 12.8 33.1
FUTURE OUTLOOK – ECONOMIC SURVEY

► The Government policies will be more focused on the lives instead of livelihoods.
► Real GDP Growth for the year 2021-22 is estimated at 11 percent, which is the highest ever since
Independence and Normal GDP at 15.4 percent with Prospects of robust consumption and
investment, which is in line with the IMF estimates for India. According to IMF, India will be the
fastest growing economy in the next two years.
► The Indian economy will be driven by boost to manufacturing sector through the Productivity
Linked Incentive Schemes, infrastructural investments and supply-side push from reforms and
easing of regulations etc.
TULSIANS’ 7
► Public sector enterprises will play an important role in strategic areas and the Government may
open up all the sectors to the private sector.
► Production Linked Incentive Scheme will promote the manufacturing sector (MSME Sector), which
will lead to overall economic growth and create huge employment opportunities.
► Various initiatives including Production Linked Incentive (PLI) Scheme, Remission of Duties and
Taxes on Exported Products (RoDTEP), improvement in logistics infrastructure and digital
initiatives undertaken by Government and RBI will pave the way for the substantial export in India.
► India is having the potential to be the pharmacy of the World.
ECONOMIC OUTLOOK AND POLICY CHALLENGES:

India has learned a lesson from pandemic COVID 19 which has taught how to balance between lives
and livelihoods and to whom one should give the weightage. India has adopted the policy of “JAAN HAI
TO JAHAN HAI”. The vision and foresight of the Government to battle this pandemic initiate a V-shaped
recovery of economic growth in India after experiencing a sharp contraction of 23.9 percent in first
quarter 2020-21.
COVID – 19- ONCE IN A CENTURY CRISIS:
► During this COVID-19 pandemic, learning from Spanish flue experience and India’s willingness to
take short term pain with early lockdown helped to saving lives and livelihoods. However,
lockdown has adversely impacted the “livelihoods of the public as the economic activities brought
to standstill for almost two months. This resulted into long term gain with V-shaped recovery of
the economic growth i.e., from 23.9 per cent contraction in GDP in Q1 to 7.5 per cent decline in Q2
and seen the recovery across all key economic indicators.
► During this pandemic, the Government ensured that funds for essential activities to support the
poor through The Pradhan Mantri Garib Kalyan Yojana (PMGKY) for ensuring food security, direct
benefit transfers to widows, pensioners and women, additional funds for MGNREGS and to the
business sector (especially the MSMEs) through debt moratoria and liquidity support for
businesses.
► The average balances in Pradhan Mantri Jan-Dhan Yojana (PMJDY) accounts increased during the
April-June quarter, which indicate that the precautionary savings by the accountholders. However,
as the economy revived, the balances has come down which indicate increasing in expenditures on
consumption.
THE INDIAN ECONOMY – A MACRO VIEW:
► The COVID 19 pandemic has predominated the year 2020-21 given various socio-economic
challenges in India and the world. The economic growth rate in all the countries is negative and
Global economic output is estimated to be fall by 4.4 percent. India chose to lockdown early and
faced the short-term pain for long term gains both in the lives saved and in the pace of the economic
recovery, which helped India to manage to avoid the second wave of COVID 19. Due to initial
TULSIANS’ 8
measures taken by the India, India’s GDP is estimated to grow by (-) 7.7 per cent in FY2021,
composed of a sharp 15.7 per cent decline in H1 and a modest (-) 0.1 per cent falls in the second
half.
► Against manufacturing and construction sector, Agriculture sector has shown silver lining hope of
recovery in the initial period of COVID 19. Subsequently in the second half a V-shaped recovery is
seen by the recovery in GDP growth by way increase in power demand, E-way bills, GST collection,
steel consumption, study credit growth in MSME sector, etc. The weaker demand in India and led
to lower import than export, which result into higher foreign reserves.
STRUCTURAL REFORMS:
Major structural reforms provided unparalleled opportunity to grow and contributed to job creation in
the primary and secondary sectors.
► MSME Sector: With the change in the definition of MSMEs, MSME sector has grown and expanded
resulting into increase in productivity without losing several government incentives including
interest subvention, collateral-free loans, market support, export promotion, preferential
procurement in the public sector and enabling of IT ecosystems.
► Labour law Reforms: Government has reduced the Central Labour Laws from 41 to 4 and made
various changes such as one registration, de-criminalization of several offences, minimum wages
etc. in labour laws. This will benefit MSMEs to increase employment, enhance labour productivity,
wages, provide social security, protection, safe working environment and effective dispute
resolution mechanism to workers.
► Reform in Agriculture Sector: A freedom is given to the farmers to sell anywhere where he gets
the best price, which makes ‘One India one market’ for agri-products. This will create innumerable
opportunities for farmers to move up the value chain in food processing from farm to fork, create
jobs and increase incomes.
► Reform in Mining Sector: With an objective to increase participation of the private sector in
mineral exploration, various initiatives under Atmanirbhar Bharat Abhiyan have been taken such
as introduction of a seamless composite exploration-cum-mining-cum production regime, 500
mining blocks to be offered through an open and transparent auction process, joint auction of
bauxite and coal mineral blocks, removal of distinction between captive and non-captive mines,
Mineral index for different mineral and rationalization of stamp duty. These reforms will increase
production of minerals in the country. These reforms will also reduce dependence on imported coal
and create a strong, self-reliant domestic energy sector, attract private investments, generate jobs
and stimulate the economic growth in the medium-term.
► Manufacturing Sector: Production-Linked Incentive (PLI) Schemes have been implemented in ten
champion sector such as Advance Cell Chemistry Battery, Electronic/Technology Products,
Automobiles & Auto Components, Pharmaceuticals Drugs, Telecom & Networking Products, Textile
Products, Food Products, High Efficiency Solar PV Modules, White Goods (ACs & LED), Specialty
Steel to increase the production and employment. It also will make Indian manufacturers globally
TULSIANS’ 9
competitive, attract investment in the areas of core competency and cutting-edge technology;
ensure efficiencies; create economies of scale; enhance exports and make India an integral part of
the global supply chain.
IMPACT OF GROWTH ON DEBT SUSTAINABILITY FOR INDIA:

► During COVID -19, the public expenditures have increased which resulted into increase in public
debt. The economic survey has tried to find out the answer to the vital question for the Indian
Economy i.e. “Does growth lead to debt sustainability? Or does fiscal austerity foster growth?”.
Since the interest rate in India is lower than the growth rate, growth leads to debt sustainability in
India.
INDIA’S FUNDAMENTAL AND ITS’ SOVEREIGN CREDIT RATING:
► In-spite Indian is the fifth largest economy in the World, India’s sovereign credit rating (SCR) been
rated at BBB-/Baa3, which is at the lowest stage of the investment grade. This clearly indicates that
looking to the economic size and its’ ability to repay debt the rating should be AAA. Therefore, the
survey has tried to answer another vital question i.e. “Do the fundamentals that supposedly drive
SCR rationalize this historical anomaly?”
► Several fundamental parameters based on which SCR are GDP growth rate, inflation, general
government debt (as per cent of GDP), cyclically adjusted primary balance (as per cent of potential
GDP), current account balance (as per cent of GDP), political stability, rule of law, control of
corruption, investor protection, ease of doing business, short-term external debt (as per cent of
reserves), reserve adequacy ratio and sovereign default history. India has positive performance on
various fundamentals parameters but the same are ignored since last two decades. Therefore,
survey suggests that the fundamentals are not driving the SCR for India. Since SCR does not reflect
India’s fundamentals, it has no major adverse impact on select indicators such as Sensex return,
foreign exchange rate and yield on government securities.
RELATIONSHIP BETWEEN INEQUALITY AND GROWTH:
► Economic Survey has emphasized that both economic growth and inequality have similar
relationship with social economic indicators. In India economic growth has improved various
socio-economic indicators including health, education, life expectancy, infant mortality, birth and
death rates, fertility rates, crime, drug usage and mental health. Findings suggest that the economic
growth has a far greater impact to reduce poverty than inequality in India. Therefore, being a
developing economy, India must continue to focus on economic growth to reduce the poverty
instead of reducing inequality.
IMPORTANCE OF LIVE THROUGH HEALTHCARE:
► The Importance of Healthcare sector and its inter-linkages with other key sector of the economy is
observed during the COVID-19 pandemic. To avoid economic and social crises due to future
pandemics, the health infrastructure must be improved and provided in remote areas. It also
emphasized that the public expenditure on healthcare sector should have been increased. This will
not only improve the health of the public but also help to improve the domestic economic growth
directly through labour productivity.
TULSIANS’ 10
► Through the Pradhan Mantri Jan Arogya Yojana (PM-JAY), India has experienced greater
penetration of health insurance, experienced a reduction in infant and child mortality rates,
realized improved access and utilization of family planning services, and greater awareness about
HIV/AIDS. PM-JAY helps to reduce the cost of care of high frequency care like Dialysis.
REGULATION IN INDIA:
► The economic survey suggests that India is over regulated economy, which results into ineffective
regulations with good compliance. Various Reforms in tax administration led to a process of
transparency and accountability, which increased the tax compliance. This indicates that the
regulations should be simplified, and supervision should have been increased.
REGULATORY FORBEARANCE - BANKING SECTOR:
► In past the India has relaxed the policy of restructuring of loans taken by various person through
banks where restructuring assets are no longer required to be classified as Non-Performing Assets
(NPA) and banks are not require making any provision for the same. Such a relaxation is continued
in India for much longer period in-spite of the same should have been discontinued when GDP,
exports, IIP and credit growth had all recovered significantly, this has resulted in unintended and
detrimental consequences for banks, firms, and the economy. The banks had exploited this
relaxation window to restructure loans even for unviable entities, thereby window dressing their
books, which result into banks misallocated credit, thereby damaging the quality of investment in
the economy. This present banking crisis brought down investment rates and thereby impacted
economic growth in India.
ROLE OF PRIVATE SECTOR IN INNOVATION:
► India is ranked 48th innovating country according to the Global Innovation Index India ranks first
in Central and South Asia, and third amongst lower middle income group economies. To achieve
the target of third largest economy in term of GDP India must significantly increase its investment
in R &D. The private sector contribution in R&D should have to be increased significantly which has
yet not contributed to this sector in-spite of various tax incentives given to R&D.
ACCESS TO BARE NECESSITIES:
► To improve the social economic growth rate, the access to “the bare necessities” such as housing,
water, sanitation, electricity, and clean cooking fuel are the most important factor. A Bare
Necessities Index (BNI) was constructed which summarizes 26 indicators on five dimensions viz.,
water, sanitation, housing, micro-environment, and other facilities. The BNI index has improved in
the post few years all over India.
TULSIANS’ 11
KEY POLICY ANNOUNCEMENTS
Budget of 2021-22 can rightly be called as the AtamNirbhar Bharat (ANB) Budget where in sharp
increase in Capital Expenditures has been provided to give a boost to overall economy. The key policy
announcements are divided into 6 Pillars to make India truly be the land of Promise and Hope.
1. Health and Well Being:
• Total Budgeted Allocation: 2,23,846 crores vs Rs. 94,452 crores in 2020-21

• Steps are being taken for Preventive, Curative and Wellbeing of people
• New Centrally Sponsored Scheme PM AatmaNirbhar Swasth Bharat Yojana with outlay of Rs.
64,180 crores in 6 years, this would be in addition to the National Health Mission
• Various Institutes, Hospitals, integrated public health labs, Regional Research Platform to be set up.
• Rs 35,000 crores allocated for COVID-19 Vaccine.
• Made-in-India Pnuemococcal vaccine to be rolled across the country which would reduce 50,000
Child deaths annually.
• Mission Poshan 2.0 to be launched which would strengthen nutritional content, Merge the
Supplementary Nutrition Programme
• Launch of Jal Jeevan Mission (Urban) with an aim to provide 2.86 crore household tap connections,
Universal water supply in all 4,378 Urban Local Bodies and Liquid waste management in 500
AMRUT cities. Allocation for Jal Jeevan Mission is Rs. 2.87 Lakh crores over 5 years.
• Urban Swachh Bharat Mission 2.0 to be launched to focus on wastewater treatment, Source
segregation of garbage, Reduction in single-use plastic, Reduction in air pollution, Bioremediation
of all legacy dump sites.
• Voluntary Scrapping policy has been introduced to phase out old and unfit vehicles. After 20 years
in case of personal vehicles and 15 years for commercial vehicles
2. Physical and Financial Capital and Infrastructure:
• 7 Mega Investment Textiles Parks (MITRA) to be established over 3 years to make textile industry
become globally competitive, attract large investments and boost employment generation &
exports.
• Rs. 1.97 Lakh crores allocated for Production Linked Incentive Schemes in 13 Champion Sectors
• Development Financial Institution (DFI), to be setup with a capital of Rs. 20,000 crores, which is
proposed to have a lending portfolio over 5 Lakh crores in 3 years.
• Various assets like Dedicated Freight Corridor, AAI Airports, Railway Infrastructure, Oil & Gas
Pipeline to be monetized.
• Capital Expenditure Budget has been increased sharply by 34.5% to Rs. 5.54 lakh crore as against
4.12 Lakh crore
• New Scheme for public bus transport service
• National Rail Plan for India (2030) to create a ‘future ready’ Railway system by 2030.
• 100% electrification of Broad-Gauge routes to be completed by December 2023.
• Consumers to have alternatives to choose the Distribution Company for enhancing
competitiveness.
TULSIANS’ 12
• 7 projects to be offered in PPP-mode in FY21-22 for operation of major ports.
• A single Securities Markets Code to be evolved to combine various securities related laws.
• SEBI to be notified as Regulator for Gold Exchange
• FDI permissible limit increased from 49% to 74% in insurance sector.
• Asset Reconstruction Company Limited and Asset Management Company to be set up to transfer
the bad loans for banks.
• Easing Compliance requirement of Small companies and One person companies.
• New Policy for Strategic disinvestment has been approved and all strategic areas except 4 key areas.
• Two Public Banks and One Insurance company to be privatized.
3. Inclusive Development for Aspirational India:
• Agricultural credit target enhanced to Rs. 16.5 lakh crore in FY22

• Multipurpose Seaweed Park in Tamil Nadu to promote seaweed cultivation.
• One Nation One Ration Card scheme for beneficiaries to claim rations anywhere in the country.
• Understand Up India Scheme, Margin money requirement reduced to 15%
4. Reinvigorating Human Capital:
• 100 new Sainik Schools to be set up in partnership with NGOs/private schools/states.

• Central University to come up in Leh for accessibility of higher education in Ladakh.
• 750 Eklavya model residential schools in tribal areas
• PSLV-CS51 to be launched by New Space India Limited (NSIL)

• As part of the Gaganyaan mission activities, 4 Indian astronauts being trained on Generic Space
Flight
• Rs. 1,500 crores for proposed scheme to promote digital modes of payment.

• Rs. 1,000 crores for the welfare of Tea workers especially women and their children in Assam and
West Bengal
• Rs. 3,768 crores allocated for first digital census in the history of India.
• Rs. 300 crore grants to the Government of Goa for the diamond jubilee celebrations of the state’s
liberation from Portuguese
TULSIANS’ 13
FISCAL POSITION
The fiscal deficit in is estimated to be 6.8% of GDP whereas the revised estimated for 2020-21 is pegged
at 9.5% of GDP which have been funded through Government borrowings, multilateral borrowings,
Small Saving Funds and short-term borrowings. Gross Borrowing would be Rs. 12 Lakh crores in next
years. Fiscal Deficit target has been set to below 4.5% of GDP by 2025-2026.
TULSIANS’ 14
TULSIANS’ 15
TAX HIGHLIGHTS
Direct Taxes
► Tax Audit Limit under Section 44AB threshold limit of Turnover increased from ₹5 Crores to
₹10 Crores if Cash Receipt and Payment upto 5% of total receipts and total payment
respectively.
► Introduction of new sections for higher TDS/TCS for non-filer of Income Tax Return (Section
206AB and Section 206CCA): (Effective from 1st July 2021)
► Introduction of TDS on purchase of goods (Section 194Q): On Purchase of any goods of the value
or aggregate of such value over Rs. 50 Lakhs, TDS to be deducted at rate of 0.1 % of amount of
goods purchased.
► Due date of ITR filing of partners of the firm covered under transfer pricing audit has been
changed to 30-November of AY.
► Applicability of Presumptive Taxation for Professionals (Sec. 44ADA): This provision has been
made applicable to Individual, HUF and Partnership Firm other than LLP.
► Incentive for Interest on loan for affordable housing (Section 80EEA) extended till the period
for sanction of loan upto 31st March 2022.
► Deduction u/s 54GB shall be allowed upto 31st March 2022 (earlier it was 31st March 2021),
when the amount is invested in eligible startup incorporated on/after 1stApril, 2016 to 1st
April 2022(earlier it was 1st April 2021).
► Constitution of Dispute Resolution Committee for Small and Medium Taxpayers (Section
245MA).
► Introduction of Faceless Proceedings before ITAT
► Discontinuance of Income Tax Settlement Commission (ITSC)
► Exemption to senior citizen aged 75 or more from filing IT in specified cases.
► In order to ease compliance for taxpayer, details of capital gains from listed securities, dividend
► Delay in deposit of contribution of employees towards Provident funds, superannuation funds,

and other social security funds will qualify as disallowance of expense to extent of employee
► Time limit for sending intimation u/s 143(1) has been reduced to 9 Months from the end of the
financial year in which return was furnished.
TULSIANS’ 16
► Time limit for issue of scrutiny notice u/s 143(2) has been reduced to 3 Months from the end of
the year in which return was furnished.
► Last date for filing of belated or revised returns of income has been reduced to 9 Months from
the end of the financial year or before the completion of the assessment, whichever is earlier.
► For normal case of Reassessment, cases can be reopened upto 3 years from the end of relevant
assessment year and in case of Income Escaping Assessment, Cases can be reopened upto 10
years from the end of relevant assessment year, if there is an evidence of concealment above Rs
50 Lacs in a year and Approval of Principal CIT is required.
► Advance income tax is payable on Dividend income only after declaration/receipt of dividend.
Indirect Taxes
► A new condition for claiming input tax credit under GST has been inserted in Section 16 of CGST
Act.
► Form GSTR9C, the mandatory requirement of getting annual accounts audited under GST and
reconciliation statement by Chartered Accountants or Cost Accountants has been done away
with.
► Retrospective amendment from 1 July 2017, to charge interest on Net Cash Liability only.
► Changes in section 129 of CGST to act, increase penalties in case of Detention, Seizure and
Release of Goods and Conveyances in Transit.
► It has been proposed to be clarified that the Liability declared in GSTR 1 but not included in
GSTR 3B will be considered as “self-assessed tax” and hence recovery proceedings can be
initiated without following the process of adjudication.
► Agriculture Infrastructure and Development Cess (AIDC) has been proposed on import of
specified goods.
► Basic Customs Duty (BCD), Antidumping Duties (ADD) has been reduced or revoked for certain
Iron & Steel Products.
► BCD has been increased in many items to give a competitive edge to Indian Manufacturers.
TULSIANS’ 17
Applicability:
The proposals of The Finance Bill, 2021 will be applicable for the Assessment Year 2022-23 unless
and otherwise stated.
Tax rates across all assessees:
The proposals of The Finance Bill, 2021 will be applicable for the Assessment Year 2022-23 unless
and otherwise stated.
Income Tax Rate & Slab for Individuals, HUF, AOP/BOI/Any other Artificial Juridical Person:
There are 2 options for Individual, HUF for tax rates and assesse is free to choose any option out of
two. But once he is opted for the option 2 it has to continue for the lifetime with option 2. The tax
rates under both options are as under:
Income (In Rs.) Income Tax Rate
0-2.5 2.5 - 3-5 5-7.5 7.5- 10- 12.5- More
Lakhs 3 Lakhs Lakhs 10 12.5 15 than 15
Person Lakhs Lakhs Lakhs Lakhs Lakhs
Option 1
Resident Individuals <60
years and All Non-Resident
Individuals, HUF, AOP/ BOI/ Nil 5% 5% 20% 20% 30% 30% 30%
Any other Artificial Juridical
Person
Resident & RBNOR
Individuals (age of 60 years to
Nil Nil 5% 20% 20% 30% 30% 30%
80 years at any time during
PY)
Resident & RBNOR
Individuals (age more than80 Nil Nil Nil 20% 20% 30% 30% 30%
years at any time during PY)
Option 2
All Individuals and HUF Nil 5% 5% 10% 15% 20% 25% 30%
Rate of surcharge is applicable as under:

Total income Surcharge Rate
Upto Rs 50 Lakhs NIL
From Rs 50 Lakhs to Rs 1 Crore 10% of Income Tax
Above Rs 1 Crore to Rs 2 Crore 15% of Income Tax
Above Rs 2Crore to Rs 5Crore 25% of Income Tax
Above Rs 5 Crore 37% of Income Tax
Notes:
a. Enhanced Surcharge rate (25% or 37%) is not applicable in case of specified incomes i.e., short-
term capital gain u/s 111A, long-term capital gain u/s 112A & short-term or long-term capital gain
u/s 115AD(1)(b).
TULSIANS’ 18
b. Health & Education cess: 4% of Income tax plus surcharge
c. A resident or Resident but not Ordinarily Resident individual is entitled to rebate of Rs. 12500/-
under section 87A if his total income does not exceed Rs. 5,00,000 in both options.
d. Certain income tax exemptions and deductions like section 80C, 80D, HRA etc will not be available
under the option 2 tax regime.
e. Option 2 is not available for AOP/BOI/Any other Artificial Juridical Person.
Income Tax Rate for Partnership Firm:
Assessee Taxable Income Tax Rate Surcharge Health & Edu. Cess
Upto 1 Crore 30% - 4%
Firms (Including LLP)
More than 1 Crore 30% 12% 4%
Income Tax Rate and Slab for Local Authority:
Upto 1 Crore 30% - 4%
Local Authority
More than 1 Crore 30% 12% 4%
Income Tax Rate and Slab for Co-operative Society:

The Co-operative Society will have an option to choose an income tax slab amongst.
OPTION 1 OPTION 2
Old Income Tax Slab
New Tax Regime
Taxable Income Tax Rate
Upto Rs 10,000 10% Resident Co-operative Society will have an option to choose a
Rs 10,001 - Rs 20,000 20% reduced rate of tax @ 22% under section 115BAD and shall not
Above Rs 20,000 30% be allowed to avail certain specified exemptions/deductions.
Note:
i. The rate of surcharge would be 12% above Rs 1 crore,
ii. Health & Education Cess will be levied @4% of Income tax plus surcharge.
Income Tax Rates for Domestic Company:
Health & Effective Tax

Domestic Companies Taxable Income Tax Rate Surcharge
Edu. Cess rate
Upto 1 Crore 25% - 4% 26.00%
Turnover upto 400 crores From 1 crore to 10
25% 7% 4% 27.82%
in the previous year 2019-20 crores
More than 10 Crore 25% 12% 4% 29.12%
Upto 1 Crore 30% - 4% 31.20%
Turnover more than 400
From 1 crore to 10
crore in the previous year 30% 7% 4% 33.38%
crores
2019-20
More than 10 Crore 30% 12% 4% 34.94%
TULSIANS’ 19
Notes:
i. The domestic companies can alternatively choose to pay tax under the following reduced rates
subject to certain conditions:
a) Section 115BAA (domestic companies) - tax would be levied @22% + 4% Cess + 10%
Surcharge.
b) Section 115BAB (manufacturing companies)- tax would be levied @15% + 4% Cess +

10% Surcharge.
A Manufacturing generating company can now opt for Section 115BAB as proposed by the Budget
2020. Certain exemptions and deductions + provisions of MAT (Minimum Alternate Tax) will not be
applicable in case of these reduced rates.
Income Tax Rates for Foreign Company:
Upto 1 Crore -
Foreign
From 1 crore to 10 crores 40%* 2% 4%
Company
More than 10 Crore 5%
*50% in case of Royalty received from govt/Indian concern or technical fees as per agreement approved by the Central
Government.
PERSONAL TAXATION:
Non-Filling of IT Return by Senior Citizens:
► Section 139 provides for filing of return of income by every individual person, if his total income or
the total income of any other person in respect of which he is assessable under the Act during the
previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or
before the due date, furnish a return of his income.
► In order to provide relief to senior citizens whose age is 75 years or above, it is proposed to insert
a new section 194A so that they will be exempted from filing the return of income. Such relief will
be only available if the following conditions are satisfied: -
a. The senior citizen is resident in India and of the age of 75 or more during the previous year.
b. He has pension income and in addition to such pension income he may have interest income
from the same bank in which he is receiving his pension income and no other income.
c. This bank is a specified bank which are notified by the Government and
d. He shall be required to furnish a declaration in such form and verified in such manner, as may
be prescribed.
e. On receipt of the declaration, the specified bank would be required to compute the income of
such senior citizen after giving effect to the deduction allowable under Chapter VI-A and rebate
allowable under section 87A and deduct income tax on the basis of rates in force.
Exemption on LTC Allowance Benefit:
► Section 10(5) of the Income Tax has exempted the LTC allowance received by the employees to the
extent it was prescribed in the section. Due to COVID 19 pandemic, it is very difficult for the person
for going on travelling and therefore, the individual employee is not in a position to spend the LTC
TULSIANS’ 20
allowance to be received from the employer, which resultant into the payment of tax on such
amount which he is going to receive towards the LTC. There is a situation where the employees
may not have adopted to take the LTC during the last year, which fall under the block period of
2018-2022. To avoid such a situation and to reduce the tax burden on the employees the
government has extended the benefit of LTC allowance benefit and an additional scheme is
introduced by amending the existing provisions of the section 10(5) of the Act.
► The silent features of the new option which will be provided in Rules are as under:
a. The deemed LTC exemption option will be only applicable only for the Block year 2018-21.
Therefore, this option is only available for the AY 2021-22 only.
b. “Specified Expenditure” means expenditure incurred by an individual or his/her family
member during the 12th of October 2020 and 31st March 2021 (Both days including) on goods
or services procured from GST registered vendors/service providers which are liable for GST
at an aggregate rate of 12 cent or above and the payment for the same should be made through
banking channel or electronic clearing systems or through such other electronic mode
provided a tax invoice is obtained.
c. The exemption will be available to the minimum of
i. The Actual LTC allowance received.
ii. One third of the Specified Expenditure incurred.
iii. Rs. 36000/- per person.
Extension of date of sanction of loan for affordable residential house property:
► In the last Budget a new Section 80EEA was introduced and provided a deduction in respect of
interest on loan taken for a residential house property from any financial institution up to one lakh
fifty-thousand rupees subject to the condition that the loan has been sanctioned during the period
beginning on 1st April 2019 and ending on 31st March 2021 subject to further:
a. the stamp duty value of residential house property does not exceed forty-five lakh rupees and
b. the assesse does not own any residential house property on the date of sanction of loan.
► This deduction is over and above the deduction of Rs 2 lakh for interest payments available under
Section 24. Therefore, individual can claim a total deduction of Rs 3.5 lakhs for interest on home
loan.
► Since the present time limit of the loan taken limit is only upto 31st March 2021, it is proposed to
amend the provision of section 80EEA to extend the time limit of loan taken from 31st March 2021
to 31st March 2022.
Taxation of proceeds of ULIP:
► Section 10 (10D) provides for the exemption for the sum received under a life insurance policy,
including the sum allocated by way of bonus on such policy in respect of which the premium
payable for any of the years during the terms of the policy does not exceed ten percent of the actual
capital sum assured.
► Under the existing provisions of the Act, there is no cap on the amount of annual premium being
paid by any person during the term of the policy. Instances have come to the notice where high net
worth individuals are claiming exemption under this clause by investing in ULIP with huge
TULSIANS’ 21
premium. Allowing such exemption in policy/policies with huge premium defeats the legislative
intent of this clause. The intention was to provide benefit to small and genuine cases of life
insurance.
► It is proposed to provide for the followings:

a. Insert Explanation 3 to define ULIP as a life insurance policy which has components of both
investment and insurance and is linked to a unit as defined in clause (ee) of regulation (3) of
the Insurance Regulatory and Development Authority of India (Unit Linked Insurance
Products) Regulations, 2019 dated the 8th day of July 2019.
b. Insert fourth proviso to provide that the exemption under this clause shall not apply with
respect to any ULIP issued on or after the 1st of February 2021, if the amount of premium
payable for any of the previous year during the term of the policy exceeds two lakh and fifty
thousand rupees.
c. Insert fifth proviso to provide that, if premium is payable by a person for more than one ULIPs,
issued on or after the 1st of February 2021, exemption under this clause shall be available only
with respect to such policies aggregate premium whereof does not exceed the amount of two
lakh fifty thousand rupees, for any of the previous years during the term of any of the policy.
d. Insert sixth proviso providing that the provisions of fourth and fifth provisos shall not apply to
any sum received on the death of a person.
e. Provide that a ULIP [to which exemption section 10 (10D) does not apply on account of the
applicability of the fourth and fifth proviso] is a capital asset under section 2 (14) of the Act.
f. This amendment will take effect from AY 2021-22
Addressing mismatch in taxation of income from notified overseas retirement fund:
► At present there is mismatch in the year of taxability of withdrawal from retirement funds by
residents who had opened such fund when they were NRI i.e., it may be taxed on receipt basis in
such foreign countries while on accrual basis in India.
► To remove this difficulty a new section 89A is proposed to be inserted so that the income of a
specified person from specified account shall be taxed in the manner and in the year as prescribed
by the Central Government.
► For these purposes:

a. “Specified Person” is a person resident in India who opened a specified account in a notified
country while being non-resident in India and resident in that country.
b. “Specified Account” ‖ is an account maintained in a notified country which is maintained for
retirement benefits and the income from such account is not taxable on accrual basis and is
taxed by such country at the time of withdrawal or redemption.
c. “Notified Country‖ is a country notified by the Central Government.
► This amendment will take effect from AY 2022-23

Taxability of Interest on PF where income is exempt:
► Section 10 (11) provides for exemption with respect to any payment from a provident fund to
which the Provident Funds Act, 1925 applies or from any other provident fund set up by the Central
TULSIANS’ 22
Government and notified and Section 10(12) provides for exemption with respect to the
accumulated balance due and becoming payable to an employee participating in a recognised
provident fund, to the extent provided in rule 8 of Part A of the Fourth Schedule. Since some
employees are contributing huge amounts to PF and entire interest accrued/received on such
contributions is exempt. Therefore, it is proposed to insert proviso to these sections so that the
provisions of these section shall not apply to the interest income accrued in the account of the
person to the extent it relates to the amount or the aggregate of amounts of contribution made by
the person exceeding Rs. 250000/- in a previous year on or after 1st April 2021, computed in such
BUSINESS INCOME:
Payment of Employee Contribution to a Fund on or before due date:
► Late payment or nonpayment of employee contribution to PF, ESI or any other welfare fund will
not be allowed as deduction under section 43B. Therefore, to bring more clarity the following
proposals are proposed:
a. to clarify that the provision of section 43B does not apply and deemed to never have been
applied for the purposes of determining the due date‖ under section 36 (1) (va); and
b. to clarify that the provisions of the section 43B do not apply and deemed to never have been
applied to a sum received by the assessee from any of his employees to which provisions of
section 2(24(x) applies.
► These amendments will take effect from AY 2021-22.

No Depreciation on Goodwill:
► Goodwill of a business or a profession has not been specifically provided as an asset either in the
definition 2 (11) or in section 32. The question whether goodwill of a business is an asset or
depreciation on it is allowable or not is answered in affirmative by the Hon’ble Supreme Court in
the case Smiff Securities Limited [(2012)348 ITR 302 (SC)]. Thus, as held by Hon‘ble Supreme
Court, Goodwill of a business or profession is a depreciable asset under section 32 of the Act.
► But there are various sections of the Income Tax Act which calculate the value of the Assets for the
purpose of the calculation of depreciation, which creates lot of confusion and calculation part along
with the justification of the same. Thus, while Hon‘ble Supreme Court has held that the Goodwill of
a business or profession is a depreciable asset, the actual calculation of depreciation on goodwill is
required to be carried out in accordance with various other provisions of the Act.
► Therefore, there are no clear way to calculate the value of goodwill However, in some cases (like
that of acquisition of goodwill by purchase) there could be valid claim of depreciation on goodwill
in accordance with the decision of Hon‘ble Supreme Court holding goodwill of a business or
profession as a depreciable asset.
► Since, Goodwill, in general is not a depreciable asset, which normally appreciate. Therefore, there
may not be a justification of depreciation on goodwill. Now it is proposed that:
TULSIANS’ 23
i. goodwill of a business or profession will not be considered as a depreciable asset and there
would not be any depreciation on goodwill of a business or profession in any situation.
ii. In a case where goodwill is purchased by an assessee, the purchase price of the goodwill will
continue to be considered as cost of acquisition for the purpose of computation of capital
gains under section 48 of the Act subject to the condition that in case depreciation was
obtained by the assessee in relation to such goodwill prior to the assessment year 2021-22,
then the depreciation so obtained by the assesse shall be reduced from the amount of the
purchase price of the goodwill.
► Therefore, to give effect to the above decision, it has been proposed to,
i. amend section 2 (11) to provide that block of asset shall not include goodwill of a business or
profession.
ii. amend section 32 (1)(ii) of the Act to provide that goodwill of a business or profession shall
not be considered as an asset for the purpose of the said clause and therefore not eligible for
depreciation.
iii. amend section 50 of the Act to provide that in a case where goodwill of a business or
profession formed part of a block of asset for the assessment year beginning on the 1st of
April 2020 and depreciation has been obtained by the assessee under the Act, the written
down value of that block of asset and short-term capital gain, if any, shall be determined in
the manner as may be prescribed.
iv. amend section 55 (2)(a) to provide that in relation to a capital asset, being goodwill of a
business or profession, or a trademark or brand name associated with a business or
profession, or a right to manufacture, produce or process any article or thing, or right to carry
on any business or profession, or tenancy rights, or stage carriage permits, or loom hours,
a. in the case of acquisition of such asset by the assessee by purchase from a previous owner,
means the amount of the purchase price; and
b. in the case falling under sub-clause (i) to (iv) of sub-section (1) of section 49 and where such
asset was acquired by the previous owner (as defined in that section) by purchase, means the
amount of the purchase price for such previous owner; and
c. in any other case, shall be taken to be nil.
v. provide that in case of goodwill of business or profession acquired by the assessee by way of
purchase from a previous owner and any deduction on account of depreciation under section
32 has been obtained by the assessee in any previous year preceding the previous year
relevant to the assessment year commencing on or after the 1st April, 2021, then the cost of
acquisition will be the purchase price as reduced by the depreciation so obtained by the
assessee before the previous year relevant to assessment year commencing on 1st April,
2021.
Incentive to Affordable Housing Projects:
► Section 80IBA provides for the 100% exemptions, subject to certain various conditions, if the Gross
Total Income of the assesse includes the profit and gains derived from business of developing and
building housing projects. The said exemption is only available if the project is approved by the
TULSIANS’ 24
competent authority before 31st March 2021. The act has proposed to be amended and the benefit
of such exemptions is going to be available if the project is approved on or before 31st March 2022.
► To help migrant laborers and affordable rental, a new concept of “Business of Developing and
Building Rental Housing Project”, which will be notified by the Central Government on or before
31st March 2022 and fulfills such conditions as may be specified and is introduced through
insertion of new sub section (1A) to Section 80IBA and the benefit of 100% exemption is also
allowed to such income.
Tax incentives for units located in International Financial Services Centre (IFSC) and to
Investment Division of Offshore Banking Units:
► Government has established a world class financial service center at GIFT City, Gandhinagar,
Gujarat, and given some tax incentives/concessions to units located in IFSE. To make such location
more attractive to bring investment at such location following additional incentives are also
proposed:
a. Various condition as specified under sub section 3 and 4 of section 9A shall not be
applicable or (apply with modification) to an eligible fund or its eligible fund manager
provided such conditions shall be notified by the Central Government provided the fund
manager is located in an IFSC and has commenced operations on or before 31st March
2024.
b. According to Section 10(4D), at present capital gain income arising from transfer of GDRs,
Rupee Denominated Bonds or Derivatives by Category-III Alternate Investment Funds
(AIFs), the units in AIF are held by Non-Resident as referred in Section 47 (viiab) shall be
exempted subject to specified conditions. Now it is proposed to extend such exemption in
case of any income accrued or arisen to or received to the investment division of offshore
banking unit to the extent attributable to it and computed in the prescribed manner.
c. The definition of Specified Fund under the section 10(4D) is also proposed to amend so
that it will under the purview the investment division of offshore banking unit (IDOBU),
which has been granted a category III AIF registration, which is an IDOBU of a non-resident
located in an IFSC) and fulfills other conditions as may be prescribed. This exemption is
only provided if separate books for the same are maintained by IDOBU and commenced
operation on or before 31st March 2024.
d. To exempt any income accrued or arisen to or received by a non-resident as a result of

transfer of non-deliverable forward contracts entered into with an offshore banking unit
of IFSC, which has commenced operation on or before the 31st of March 2024, a new
section 10(4E) is proposed to be inserted.
e. Further to exempt the royalty income of a non-resident on account of lease of an aircraft

paid by a unit of IFSC, provided such unit is eligible for the deduction under section 80LA
and has commenced operation on or before 31st March 2024, a new section 10(4F) was
proposed to be inserted.
TULSIANS’ 25
f. Section 10 (23FF) is proposed to be inserted so as to exempt the capital gain arising or
received by a non-resident by way of transfer of shares of a company resident in India by
the resultant fund and such shares were transferred from the original fund to the resultant
fund in relocation provided such capital gains were not chargeable to tax had that
relocation not taken place.
g. To give effect to the above exemption it is also proposed to insert new clauses (viiac) and
(viiad) to section 47 so that any transfer, in relocation, of a capital asset by the original
fund to the resultant fund shall not be considered as transfer for capital gain tax purpose
and any transfer by a shareholder or unit holder or interest holder, in a relocation, of a
capital asset being a share or unit or interest held by him in the original fund in
consideration for the share or unit or interest in the resultant fund shall not be treated as
transfer for the purpose of capital gains. The definition of Original Fund and Relocation and
resultant funds are inserted in Explanation to clause (viiac) and clause (viiad) of section
47, which is as under:
(a) Original Fund is a fund established or incorporated or registered outside India, which
collects funds from its members for investing it for their benefit and fulfils the
following conditions, namely: —
• the fund is not a person resident in India.
• the fund is a resident or is established or incorporated or registered in a country
or a specified territory with which an agreement referred to in section 90(1) and
90A (1) has been entered into or notified by the Central Government in this behalf.
• the fund and its activities are subject to applicable investor protection regulations
in the country or specified territory where it is established or incorporated or is a
resident; and
• fulfills such other conditions as prescribed.
(b) Relocation is defined as transfer of assets of the original fund to a resultant fund on or
before 31st March 2023, where consideration for such transfer is discharged in the
form of share or unit or interest in the resulting fund to the shareholder or unit holder
or interest holder of the original fund in the same proportion in which the share or
unit or interest was held by such shareholder or unit holder or interest holder in such
original fund.
(c) Resultant fund is defined as a fund established or incorporated in India in the form of
a trust or a company or a limited liability partnership, which-
• has been granted a certificate of registration as a Category I or Category II or
Category III (AIF), and is regulated under the SEBI (AIF) Regulations, 2012, made
under the SEBI Act, 1992; and
• is located in any IFSC as referred to in section 80LA (1A).
h. To give effect of the above changes consequential amendments are also proposed in
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section 49, 56 and 79 to make the income chargeable to tax in some specified
circumstances.
i. Earlier the deduction under section 80LA is available to a unit of IFSC provided it obtains
the permission under any other relevant law. Now it is proposed to amend section 80LA
so that deduction under is available to a unit of IFSC provided it is registered under the
IFSC Authority Act, 2019 and the copy of permission means the copy of registration
obtained under such Act.
j. Further new subsection 2(d) in section 80LA was inserted so that the income arising from
transfer of an asset, being an aircraft or aircraft engine, which was leased by a unit of a IFSC
as referred in 2 (c) to a domestic company engaged in the business of operation of aircraft
before such transfer shall also be eligible for 100% deduction provided such unit has
commenced operation on or before 31st March 2024.
k. Section 115AD is proposed to amend so that the provisions of this section will be
applicable to IDOBU as it applies to the extent of income that is attributable to the IDBOU
as a Category-III portfolio investor under the SEBI (FPI) Regulations, 2019 made under the
SEBI Act, 1992, calculated in the prescribed manner to specified fund.
Extension of date of incorporation for eligible start up for exemption and for investment in
eligible start-up.
► Section 80IC provides for a 100 per cent deduction of the income derived from the eligible business
by the eligible start-up for three consecutive assessment years out of ten years subject to certain
conditions provided the startup is incorporated before 1st April 2021.
► Section 54GB provide for exemption of capital gain which arises from the transfer of a long-term
capital asset i.e., a residential house or a residential plot of land, provided the eligible assesse the
net consideration will be invested in the equity shares of an eligible start-up before the due date of
furnishing of return of income and such start-up is required to utilise the said investment for
purchase of new asset within one year from the date of investment by the assessee. This exemption
is only available if the residential property is transferred on or before 31st March 2021.
► In order to boost the investment in Start-up the time limit under both the sections is further
increased by one year i.e., upto 31st March 2022.
Issuance of zero-coupon bonds by infrastructure debt fund (IDF):
► Section 2 (48) provides the definition of zero-coupon bond, now it is proposed to amend the same
so that to include the zero-coupon bond issued by infrastructure debt fund, which are notified by
the Central Government under 10(47). The provision of section 194A is also amended so that no
TDS can be deducted on such bonds.
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Conversion of Urban Cooperative Bank into Banking Company:
► At present deduction under section 44DB are available to Urban Cooperative Bank (UCB) in case
business is reorganized and provide that the deductions under sections 32, 35D, 35DD and section
35DDA will be available in proportion to no. of days before and after the reorganization between
the predecessor co-operative bank and the successor cooperative bank. Further Section 47
provides that there is no transfer of a capital assets in such reorganization as well as transfer of
shares by the shareholders in the predecessor co-operative bank.
► Vide Circular No. DCBR.CO.LS.PCB. Cir.No.5/07.01.000/2018-19 dated September 27, 2018. RBI
has permitted voluntary transition of UCB into a banking company by way of transfer of Assets and
Liabilities.
► Therefore, it is proposed to expand the benefit of section 44DB and 47 of business reorganization
so that it will include conversion of a UCB to a banking company.
Strategic Disinvestment of Public Sector Company:
► Section 2 (19AA) defines Demerger, to facilitate strategic disinvestment of the Public Sector
Companies (PSC) it is proposed to amend that definition and therefore, a new Explanation 6 is
introduced so that it the reconstruction or splitting up of a public sector company into separate
companies shall be deemed to be a demerger, if.
▪ Such reconstruction or splitting up has been made to transfer any asset of the demerged
company to the resultant company; and
▪ the resultant company is a PSC on the appointed date indicated in the scheme approved by
the Government or any other body authorised under the provisions of the Companies Act,
2013 or any other Act governing such PSC in this behalf; and
▪ Fulfills such other conditions as may be notified by the Central Government in the Official
Gazette.
► Section 72A provided for provisions for the carry forward and set off of accumulated loss and
unabsorbed depreciation allowance in amalgamation or demerger, etc. To facilitate the strategic
disinvestment of PSC it is proposed to relax these provisions for PSC. Accordingly, it is proposed to
substitute clause (c) to provide that the provision of subsection (1) of section 72A shall also apply
in case of amalgamation of one or more PSC or companies with one or more PSC or companies.
Means thereby that in such cases carry forward and set off of accumulated loss and unabsorbed
depreciation allowance will be available in such cases. It is also proposed that such carry forward
shall not be more than the accumulated loss and unabsorbed depreciation of the PSC as on the date
on which the PSC ceases to be a PSC as a result of strategic disinvestment.
► It is also proposed to insert clause (d) to provide that the provision of sub-section (1) of section
72A shall also apply in case of amalgamation of an erstwhile PSC with one or more company or
companies, if:
▪ the share purchase agreement entered into under strategic disinvestment restricted
immediate amalgamation of the said PSC; and
▪ the amalgamation is carried out within five year from the end of the previous year in which
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the restriction on amalgamation in the share purchase agreement ends.
► Following definitions are also proposed to be inserted by way of Explanation:

▪ “Control” shall have the same meaning as assigned to in clause (27) of Section 2 of the
▪ “Erstwhile PSC” means a company which was a PSC in earlier previous years and ceases to
be a PSC way of strategic disinvestment by the Government.
▪ “Strategic Disinvestment” shall mean Sale of Shareholding by the Central Government or
any State Government in a PSC which results in reduction of its shareholding to below 51%,
along with transfer of control to the buyer.
Increase in safe harbour limit of 10% for home buyers and real estate developers:
► At present Section 43CA provides that if the sale consideration of land or building or both, is less
than the stamp duty valuation for the purpose of payment of stamp duty by any State Government
Authority (i.e. ―stamp valuation authority), such value shall be considered as the deemed to be
considered as the full sale consideration for the purpose of computing profits and gains from
transfer of such assets provided such value for the purpose of payment of stamp duty does not
exceed 110 percent of the sales consideration received .
► Section 56 (2)(x) provides that where any person receives any immovable property for a
consideration, which is less than the stamp duty value of the property exceeds ten per cent of the
consideration or fifty thousand rupees, whichever is higher, the stamp duty value of such property
as exceeds such consideration shall be deemed to be an income under income from other sources‖.
► It is now proposed to enhance the safe harbor threshold limit from existing 10% to 20% under
section 43CA and Section 56 (2)(x), if the following conditions are satisfied:
a. The transfer of residential unit takes place during the period from 12November, 2020 to 30th
June 2021.
b. The transfer is by way of first-time allotment of the residential unit to any person.
c. The consideration received or accruing as a result of such transfer does not exceed two crore
rupees.
Rationalization of provisions related to Sovereign Wealth Fund (SWF) and Pension Fund (PF)
► Section 10 (23FE) provides for the exemption from dividend income, interest or long-term capital
gains arising from an investment made by it in India to SWF or PF which fulfills certain conditions
prescribed therein and notified by the Central Government. These conditions are now proposed to
amend to remove the difficulties in meeting some of the conditions:
1) Allowing Alternate Investment Fund (AIF) to invest up to 50% in non-eligible investments.

Presently SWF/PFs may invest in a Category-I or Category-II AIF, having 100% investment in
eligible infrastructure company. It is proposed to:
a. relax the condition of 100% to 50%.
TULSIANS’ 29
b. allow the investment by Category-I or Category-II AIF in an Infrastructure Investment Trust
(InvIT).
c. Exemption shall be calculated proportionately, in case if aggregate investment of AIF in
infrastructure company or companies or in InvIT is less than 100%.
2) SWF/PFs are now proposed to invest through holding company, subject to the following
conditions:
a. Holding company should be a domestic company.
b. It should be set up and registered on or after 1st April 2021.
c. It should have minimum 75% investments in one or more infrastructure companies.
d. Exemption shall be calculated proportionately, in case if aggregate investment of holding
company in infrastructure company or companies is less than 100%
3) SWF/PFs are now proposed to invest in NBFC-IFC/IDF (non-banking finance company-

infrastructure debt fund/Infrastructure finance company) subject to the following
conditions:
a. NBFC-IDF/IFC should have minimum 90% lending to one or more infrastructure entities.
b. Exemption shall be calculated proportionately, in case if aggregate lending of NBFC-IDF
or NBFC-IFC in infrastructure company or companies is less than 100%.
4) It is proposed to provide that there should not be any loan or borrowing to SWF/PFs for the
purpose of making investment in India. It is also proposed to provide that the condition
regarding no benefit to private person and assets going to government on dissolution would
not apply to any payment made to creditor or depositor for loan taken or borrowing other
than for the purpose of making investment in India.
5) The condition of not undertake any commercial activity is proposed to be removed and
replaced with a condition that SWF/PFs shall not participate in day-to-day operation of
investee. Provided, appointing director and executive director for monitoring the investment
is allowed. The term "investee" is proposed to define to mean a business trust or a company
or an enterprise or an entity or a category I or II AIF or an Infrastructure Investment Trust or
a domestic company or an Infrastructure Finance Company or an Infrastructure Debt Fund,
in which the SWF or PF, as the case may be, has made the investment, directly or indirectly.
6) Presently, some PFs are liable to tax in their country though given exemption subsequently.
It is proposed to amend this sub-clause to provide that if pension fund is liable to tax but
exemption from taxation for all its income has been provided by the foreign country under
whose laws it is created or established, then such pension fund shall also be eligible.
7) It is also proposed to provide that the Central Government may prescribe the method of
calculation of 50% or 75% or 90%referred above.
MINIMUM ALTERNATE TAX:
► As per Section 115JB MAT is applicable in case tax on the total income of a company computed
under Income Tax Act is less than 15 per cent of book profit. Book profit is computed by making
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certain adjustments to the profit disclosed in the profit and loss account by the company under the
► At present there is no adjustment in boom profit on account of additional income of past year(s)
included in books of account of current year on account of secondary adjustment under section
92CE or on account of an Advance Pricing Agreement (APA) entered with the taxpayer under
section 92CC.
► It is proposed that in cases where past year income is included in books of account during the
previous year on account of an APA or a secondary adjustment, the Assessing Officer shall, on an
application made to him in this behalf by the assessee, re-compute the book profit of the past
year(s) and tax payable, if any, during the previous year, in the prescribed manner. Further, the
provision of section 154 of the Act shall apply so far as possible and the period of four years
specified in section 154 (7) shall be reckoned from the end of the financial year in which the said
► At present dividend income is taxable in the hand of shareholders and therefore, dividend received
by a foreign company is required to be excluded for the purposes of calculation of book profit in
case the tax payable on such dividend income is less than MAT liability on account of concessional
tax rate provided in the Double Taxation Avoidance Agreement (DTAA).
► It is proposed to reduce and added back dividend income and the expense claimed in respect
thereof in calculating book profit for the purposes of section 115JB in case of foreign companies
where such income is taxed at lower than MAT rate due to DTAA.
► This amendment will take effect from AY 2021-22.
TRANSFER OF CAPITAL ASSETS TO PARTNERS:

► Section 45 (4) provides that the profits or gains arising from the transfer of a capital asset by way
of distribution of capital assets on the dissolution of a firm or other association of persons or body
of individuals (not being a company or a co-operative society or otherwise, shall be chargeable to
tax as the income of such firm or other association of persons or body of individuals of the previous
year in which the said transfer takes place.
► It is proposed to substitute the existing provision of Section 45(4) and also inserted a new section
145(4A).
► According to new section 45(4), where a specified person who receives during the previous year
any capital asset at the time of dissolution or reconstitution of the specified entity, the profit and
gains arising from the receipt of such capital asset by the specified person shall be chargeable to
income-tax as income of the specified entity under the head―capital gains‖ and shall be deemed to
be the income of such specified entity of the previous year in which the capital asset was received
by the specified person. The capital asset represents the balance in the capital account of such
specified person in the books of the specified entity at the time of its dissolution or reconstitution.
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For the purposes of section 48 of the Act, the fair market value of the capital asset on the date of
such receipt shall be deemed to be the full value of the consideration received or accruing as a result
of the transfer of the capital asset.
► Section 45(4A) applies in a case where a specified person receives during the previous year any
money or other asset, which is in excess of the balance in the capital account of such specified
person in the books of accounts of the specified entity at the time of its dissolution or reconstitution,
the profits or gains arising from the receipt of such money or other asset by the specified person
shall be chargeable to income-tax as income of the specified entity under the head "Capital gains"
and shall be deemed to be the income of such specified entity of the previous year in which the
money or other asset was received by the specified person. For the purposes of section 48, value of
the money or the fair market value of other asset on the date of such receipt shall be deemed to be
the full value of the consideration received or accruing as a result of the transfer of the capital asset;
and the balance in the capital account of the specified person in the books of accounts of the
specified entity at the time of its dissolution or reconstitution shall be deemed to be the cost of
acquisition.
► The balance in the capital account of the specified person in the books of account of the specified
entity is to be calculated without taking into account increase in the capital account of the specified
person due to revaluation of any asset or due to self-generated goodwill or any other self-generated
asset.
► “Specified person” is a person who is partner of a firm or member of other association of persons
or body of individuals (not being a company or a cooperative society), in any previous year.
► “Specified entity” is a firm or other association of persons or body of individuals (not being a
company or a cooperative society); and
► “Self-generated goodwill and self- generated assets” are defined as goodwill or asset, as the case
may be, which has been acquired without incurring any cost for purchase or which has been
generated during the course of the business or profession.
► Section 48 is also amended to provide that in case of specified entity, the amount included in the
total income of such specified entity under section 45(A) which is attributable to the capital asset
being transferred, shall be reduced from the full value of the consideration to compute income
charged under the head - capital gains.

TDS/TCS PROVISIONS:
TDS on Dividend (Section 194):
► Section 194 provides for deduction of TDS on payment of dividends to a resident. The section
provides that no TDS will be deducted if dividend credited or paid to certain insurance companies
or insurers. Now it is also proposed that no TDS shall be deducted if dividend is credited or paid to
a business trust by a special purpose vehicle or payment of dividend to any other person as may be
notified.
TULSIANS’ 32
► This amendment will take effect retrospectively from AY 2020-21.
TDS on payment made to Foreign Institutional Investors (Section 196D):
► Section 196D provides that TDS on income from securities as referred in Section 115AD(1)(a)
(other than interest referred in section 194LD) of FII is to be deducted at the rate of 20 per cent
without considering the benefit of agreement under section 90 or section 90A. Whereas the
definition of the expression ―rate in force, in section 2 (37A), allows benefit of agreement under
section 90 or section 90A in determining the rate of tax at which TDS is to be deducted. Hon‘ble
Supreme Court in the case of PILCOM vs. CIT West Bengal (Civil Appeal No. 5749 of 2012) has
upheld the said principle i.e., the benefit of DTAA is to be given.
► Accordingly, it is proposed to insert a proviso to section 196D (1) to provide that in case of a payee
to whom DTAA applies and such payee has furnished the tax residency certificate, then the tax shall
be deducted at the rate of twenty per cent or rate or rates of income-tax provided in such agreement
for such income, whichever is lower.

TDS on Purchase of Goods (Section 194Q):
► A new section 194Q is proposed which provides for TDS @ 0.1% to be deducted by buyer whose
total sales, gross receipts or turnover from the business carried on by him exceed ten crore rupees
during the financial year immediately preceding the financial year in which the purchase of goods
is carried out for paying any sum to any resident for purchase of goods provided the purchase of
goods from the seller is of the value or aggregate of such value exceeding fifty lakh rupees in the
previous year. It is also proposed to provide that the provisions of this section shall not apply to, -
a. a transaction on which tax is deductible under any provision of the Act; and
b. a transaction, on which tax is collectible under the provisions of section 206C other than
transaction to which sub-section (1H) of section 206C applies.
► It is also proposed to amend the section 206AA (1) and insert second proviso to further provide
that where the tax is required to be deducted under section 194Q and PAN is not provided, the TDS
shall be at the rate of five per cent.
► These amendments will take effect from 1st July 2021.

TDS/TCS at Higher rates in case of Non-Filer:
► Section 206AA and Section 206CC provides for higher rate of TDS/TCS for non-furnishing of PAN.
To ensure filing of return of income by those persons who have suffered a reasonable amount of
TDS/TCS, a new section 206AB and 206CCA are proposed to be inserted so that TDS/TCS can be
deducted at the higher rate from the non-filers of income-tax return.
► Section 206AB would apply on any sum or income or amount paid, or payable or credited, by a
person (herein referred to as deductee) to a specified person but shall not apply where the tax is
required to be deducted under sections 192, 192A, 194B, 194BB, 194LBC or 194N. TDS rate at
which TDS should be deducted is higher of the followings rates: -
TULSIANS’ 33
a. twice the rate specified in the relevant provision of the Act; or
b. twice the rate or rates in force; or
c. the rate of five per cent
► It is also specified that if the provision of section 206AA is applicable to a specified person, in
addition to the provision of this section, the tax shall be deducted at higher of the two rates provided
in this section and in section 206AA.
► Section 206CCA would apply on any sum or amount received by a person (herein referred to as
collectee) from a specified person. TCS rate at which TCS should be collected is higher of the
followings rates: -
a. twice the rate specified in the relevant provision of the Act; or
b. the rate of five percent
► It is also specified that If the provision of section 206CC is applicable to a specified person, in
addition to the provision of this section, the tax shall be collected at higher of the two rates provided
in this section and in section 206CC.
► “The specified person” is a person who has not filed the ITR for the last two assessment years which
are immediately before the previous year in which tax is required to be deducted or collected, as
the case may be and the time limit for filing tax return under section 139(1 has expired for both
these assessment years. Provided further that aggregate of TDS and TCS in his case is Rs. 50000/-
or more in each of these two assessment years. Moreover, Specified person shall not include a non-
resident who does not have a permanent establishment in India.
► Consequential amendment is proposed in section 194-IB (4) i.e., deduction of TDS in case of
payment of rent by individual and HUF.
► This amendment will take effect from 1st July 2021.
TAX AUDIT (Section 44AB):

► Under section 44AB, every person carrying on business or profession is required to get his accounts
audited, if his total sales, turnover or gross receipts, in business or profession exceed or exceeds
one crore rupees or fifty lakhs rupees respectively in any previous year. In order to reduce
compliance burden on SME, the threshold limit for a person carrying on business was increased
from one crore rupees to five crore rupees in the previous Budget were, -
a. aggregate of all receipts in cash during the previous year does not exceed five per cent of such
receipt; and
b. aggregate of all payments in cash during the previous year does not exceed five per cent of such
payment.
► Now further to incentivize non-cash transactions and further reduce compliance burden of SME it
is proposed to increase the threshold from five crore rupees to ten crore rupees.
TULSIANS’ 34
PRESUMPTIVE TAXATION FOR PROFESSIONAL (Section 44ADA):
► There was some ambiguity about the applicability of Section 44ADA, which relates to computing
profits and gains of profession on presumptive basis. Now It is proposed to provide that the
provision of this section shall apply to an assessee, being an individual, HUF or partnership firm
and not to a Limited Liability Partnership (LLP).

ADVANCE TAX PROVISIONS:
► Every person has to pay the Advance tax as per Section 208 and interest under section 234C will
be payable if there is a shortfall in the tax payment calculated provided no interest shall be charged
if the shortfall in tax is due to the following income:
a. the amount of capital gains; or
b. income from winning of lotteries, crossword puzzles etc (Section 2(24)(ix); or
c. income under the head "Profits and gains of business or profession" in cases where the
income accrues or arises under the said head for the first time; or
d. income from dividend under section 115BBDA (1).
► Now it is proposed to exclude dividend income except deemed dividend under section 2(22) from
the calculation of Advance Tax purpose, which is to be considered on receipt basis.

EXEMPTION TO EDUCATION INSTITUTIONS (Section 10(23)):
► Section 10 (23C) (iiiad) and section 10(23) ((iiiae) provides for the exemption for income received
by any person on behalf of university or educational institution or hospital or institution provided
that the annual receipts of such university or educational institution do not exceed Rs 1 crore as
per Rule 2BC of the Income-tax Rule.It is now proposed to increase the said limit to Rs 5 crore.
FILLING OF RETURNS (SECTION 139):
► Section 139 contains provisions in respect of the filing of return of income for different persons or
class of persons and the due dates for filing of original, belated and revised returns of income for
different classes of assessee.
► According to Section 5A income earned by a partner of a firm whose accounts are required to be
audited shall be apportioned between the spouses and included in their total income if spouses
governed by Portuguese Civil Code. In ordinary case the due date for filing of original return of
income of partner where the firm books of accounts are required to be audited is 31st October of
the assessment year instead of 31st July. However, this relaxation is not provided for spouse of such
partner to whom section 5A of the Act applies. Therefore, it is proposed that in those cases the due
date for the filing of original return of income be extended to 31st October. Further, in the case of a
firm which is required to furnish transfer pricing audit report for international transaction or
specified domestic transaction, as per section 92E, the due date for filing of original return of
TULSIANS’ 35
income is the 30th of November. Since the total income of such partner can be determined after the
books of accounts of such firm have been finalised, it is proposed that the due date of such partner
be extended to 30th November.
► Section 139 (4) and (5) contain provisions relating to filing of belated and revised returns of income
respectively. Presently the belated or revised returns could be filed before the end of the AY or
before the completion of the assessment whichever is earlier. Now It is proposed that the last date
for filing of belated or revised returns of income, as the case may be, be reduced by three months
before the end of the relevant AY or before the completion of the assessment, whichever is earlier.
► Section 139(9) provides that in case a return of income is found to be defective, the AO will intimate
the defect to the assessee and give him a period of 15 days or more to rectify the said defect and if
the defect is not rectified within the said period, the return shall be treated as an invalid return and
the assessee will be considered to have never filed a return of income. The Explanation to the
subsection lists the conditions in which a certain return of income shall be considered to be
defective. Therefore, it is proposed that a proviso be inserted to the said Explanation empowering
the Board to specify, vide notification that any of the above conditions shall not apply for a class of
assessee or shall apply with such modifications, as maybe specified in such notification.
► These amendments will take effect from the assessment year 2021-22.
ASSESSMENT PROCEDURE:
► Section 143(1)(a) provides the time of processing of return of income made under section 139, or
in response to a notice under 142(1), the total income or loss shall be computed after making the
adjustments specified in clauses (i) to (vi) therein.
► It is proposed to amend the following provisions of section 143 (1):

a. To allow for the adjustment on account of increase in income indicated in the audit report but
not taken into account in computing the total income.
b. To give consequential effect to amendment carried out in section 80 AC vide Finance Act, 2018
c. To reduce the time limit for sending intimation from one year to nine months from the end of
the financial year in which the return was furnished.
► It is also proposed to reduce the time limit for issue of notice under section 143(2) from six months
to three months from the end of the financial year in which the return is furnished.

Reduction of Time Limit for completing Assessment:
► It has been proposed that the time limit for completion of assessment proceedings may be reduced
by three months bring down the time for completing of assessment from 12 months to 9 months
from the end of the assessment year in which the income was first assessable, for the assessment
year 2021-22 and subsequent assessment years.
TULSIANS’ 36
New Assessment procedure:
► A completely new procedure of assessment is proposed. The salient features of new procedure are
as under: -
a. The provisions of section 153A and section 153C, of the Act are proposed to be made
applicable to only search initiated under section 132 of the Act or books of accounts, other
documents or any assets requisitioned under section 132A of the Act, on or before 31st
March 2021.
b. Assessments or reassessments or in re-computation in cases where search is initiated

under section 132 or requisition is made under 132A, after 31st March 2021, shall be under
the new procedure.
c. Section 147 proposes to allow the Assessing Officer to assess or reassess or re-compute
any income escaping assessment for any assessment year.
d. Before such assessment or reassessment or re-computation, a notice is required to be

issued under section 148 of the Act, which can be issued only when there is information
with the Assessing officer which suggests that the income chargeable to tax has escaped
assessment. Prior approval of specified authority is also required to be obtained before
issuance of such notice by the Assessing Officer.
e. It is proposed to provide that any information which has been flagged in the case of the
assessee in accordance with the risk management strategy formulated by the Board shall
be considered as information which suggests that the income chargeable to tax has escaped
assessment. The flagging would largely be done by the computer-based system.
f. Further, a final objection raised by the Comptroller and Auditor General of India to the
effect that the assessment in the case of the assessee for the relevant assessment year has
not been in accordance with the provisions of the Act shall also be considered as
information which suggests that the income chargeable to tax has escaped assessment.
g. Further, in search, survey or requisition cases initiated or made or conducted, on or after

1st April 2021, it shall be deemed that the Assessing officer has information which suggests
that the income chargeable to tax has escaped assessment in the case of the assessee for
the three assessment years immediately preceding the assessment year relevant to the
previous year in which the search is initiated, or requisition is made, or any material is
seized or requisitioned, or survey is conducted.
h. New Section 148A of the Act proposes that before issuance of notice the Assessing Officer
shall conduct enquiries, if required, and provide an opportunity of being heard to the
assessee. After considering his reply, the Assessing Office shall decide, by passing an order,
whether it is a fit case for issue of notice under section 148 and serve a copy of such order
along with such notice on the assessee. The Assessing Officer shall before conduct any such
TULSIANS’ 37
enquiries or providing opportunity to the assessee or passing such order obtain the
approval of specified authority. However, this procedure of enquiry, providing opportunity
and passing order, before issuing notice under section 148 of the Act, shall not be
applicable in search or requisition cases.
i. The time limitation for issuance of notice under section 148 of the Act is proposed to be
provided in section 149 of the Act and is as below:
a. in normal cases, no notice shall be issued if three years have elapsed from the end of the
relevant assessment year. Notice beyond the period of three years from the end of the
relevant assessment year can be taken only in a few specific cases.
b. in specific cases where the Assessing Officer has in his possession evidence which reveal
that the income escaping assessment, represented in the form of asset, amounts to or is
likely to amount to fifty lakh rupees or more, notice can be issued beyond the period of
three year but not beyond the period of ten years from the end of the relevant assessment
year.
j. Another restriction has been provided that the notice under section 148 of the Act cannot
be issued at any time in a case for the relevant assessment year beginning on or before 1st
day of April 2021, if such notice could not have been issued at that time on account of being
beyond the time limit prescribed under the provisions of clause (b), as they stood
immediately before the proposed amendment.
k. Since the assessment or reassessment or re-computation in search or requisition cases

(where such search or requisition is initiated or made on or before 31st March 2021) are
to be carried out as per the provision of section 153A, 153B, 153Cand 153D of the Act, the
aforesaid time limitation shall not apply to such cases.
l. It is also proposed that for the purposes of computing the period of limitation for issue of
section 148 notice, the time or extended time allowed to the assessee in providing
opportunity of being heard or period during which such proceedings before issuance of
notice under section 148 are stayed by an order or injunction of any court, shall be
excluded. If after excluding such period, time available to the Assessing Officer for passing
order, about fitness of a case for issue of 148 notice, is less than seven days, the remaining
m. The specified authority for approving enquiries, providing opportunity, passing order
under section 148A of the Act and for issuance of notice under section 148 of the Act are
proposed to be —
a. Principal Commissioner or Principal Director or Commissioner or Director, if three years
or less than three years have elapsed from the end of the relevant assessment year.
b. Principal Chief Commissioner or Principal Director General or where there is no Principal
Chief Commissioner or Principal Director General, Chief Commissioner or Director
General, if more than three years have elapsed from the end of the relevant assessment
year.
TULSIANS’ 38
n. Once assessment or reassessment or re-computation has started the Assessing officer is
proposed to be empowered (as at present) to assess or reassess the income in respect of
any issue which has escaped assessment, and which comes to his notice subsequently in
the course of the proceeding under this procedure notwithstanding that the procedure
prescribed in section 148A was not followed before issuing such notice for such income.

DISPUTE RESOLUTION COMMITTEE:
► A new scheme for preventing new disputes and settling the issue at the initial stage is introduced
under section 245MA the salient features of the scheme are as follows:
a. The Central Government shall constitute one or more Dispute Resolution Committee
(DRC).
b. This committee shall resolve disputes of such persons or class of person which shall be
specified by the Board.
c. The assessee would have an option to opt for or not opt for the dispute resolution through
the DRC.
d. Only those disputes where the returned income is fifty lakh rupee or less (if there is a
return) and the aggregate amount of variation proposed in specified order is ten lakh
rupees or less shall be eligible to be considered by the DRC.
e. If the specified order is based on a search initiated under section 132 or requisition made
under section 132A or a survey initiated under 133A or information received under an
agreement referred to in section 90 or section 90A, of the Act, such specified order shall
not be eligible for being considered by the DRC.
f. Assessee would not be eligible for benefit of this provision if there is detention, prosecution
or conviction under various laws as specified in the proposed section.
g. Board will prescribe some other conditions in due course which would also need to be
satisfied for being eligible under this provision.
h. The DRC, subject to such conditions as may be prescribed, shall have the powers to reduce
or waive any penalty imposable under this Act or grant immunity from prosecution for any
offence under this Act in case of a person whose dispute is resolved under this provision.
TULSIANS’ 39
FACELESS PROCEEDINGS IN ITAT:
► A New Section 255 is proposed to introduce so as to provide that the Central Government may
notify a scheme for the purposes of disposal of appeal by the ITAT so as to impart greater efficiency,
transparency and accountability by, —
a. Eliminating the interface between the ITAT and parties to the appeal in the course of
proceedings to the extent technologically feasible.
b. Optimising, utilisation of the resources through economies of scale and functional

specialisation.
c. Introducing an appellate system with dynamic jurisdiction.
DISCONTINUATION OF INCOME TAX SETTLEMENT COMMISSION:

► It is proposed to discontinue Income-tax Settlement Commission (ITSC) WITH IMMEDIATE EFFECT
i.e., 1st February 2021 and to constitute Interim Board of settlement for pending cases.
CHARITABLE TRUSTS:
► To ensure that there is no double counting while calculating application or accumulation in the
assessment of Charitable Trusts, it has been proposed that-
a. Voluntary contributions made with a specific direction that it shall form part of the corpus
shall be invested or deposited in one or more of the forms or modes specified section 11
(5) maintained specifically for such corpus.
b. Application out of corpus shall not be considered as application for charitable or religious
purposes for the purposes of third proviso of clause (23C) and clauses (a) and (b) of section
11. However, when it is invested or deposited back, into one or more of the forms or modes
specified in sub-section (5) of section 11 maintained specifically for such corpus from the
income of the previous year, such amount shall be allowed as application in the previous
year in which it is deposited back to corpus to the extent of such deposit or investment.
c. Application from loans and borrowings shall not be considered as application for
charitable or religious purposes for the purposes of third proviso of clause (23C) and
clauses (a) and (b) of section 11. However, when loan or borrowing is repaid from the
income of the previous year, such repayment shall be allowed as application in the
previous year in which it is repaid to the extent of such repayment.
d. Clarify in both clause (23C) of section 10 and section 11 that for the computation of income
required to be applied or accumulated during the previous year, no set off or deduction or
allowance of any excess application, of any of the year preceding the previous year, shall
be allowed.
TULSIANS’ 40
With respect to Indirect Tax several changes in rate of Basic Customs duty are being made in-order to
promote AtamNirbhar Bharat which has twin objective of promoting domestic manufacturing and
helping domestic industries to get into global value chain and export better. Now the thrust has been
shifted to raw materials and export of value-added products. Overhaul of Customs Duty Exemptions is
also being proposed. Although changes in GST have been brought in from time to time on the basis of
the recommendation of GST council, this year a number of amendments have been proposed to GST
Acts in this Budget.
Goods and Service Tax:

► Section 7 of CGST Act is proposed to be amended to insert a new clause (aa) in sub-section (1), to
ensure levy of GST to levy GST on activities or transactions involving the supply of goods or services
by any person, other than an individual, to its members or constituents or vice-versa, for cash,
deferred payment or other valuable consideration.
This amendment is being carried in relation to a Hon’ble Supreme Court Judgment, wherein it was
held that “there cannot be the sale of goods or provision of services between the unincorporated
private clubs/associations and its members owing to the principle of mutuality which treats such
clubs/associations and its members as the same person”.
Paragraph 7 of Schedule II which provided that Supply of goods by any unincorporated association,
or body of person to a member thereof for cash, deferred payment or other valuable consideration
shall be treated as goods. This paragraph is now being OMMITTED since the same is being proposed
to be incorporated is definition of supply in section 7.
Both these amendments are retrospective effective from 1 July 2017.
► Section 16 which provides the conditions for claiming Input Tax Credit, apart from the 4 existing
an additional condition has been inserted to provide that ITC can be availed only if the invoices/
debit notes are furnished by the supplier in his GSTR-1 and such details have been communicated
to the recipient. With change in section 16, recipient of goods and services would be able to take
credit of taxes paid on purchase only if the same is reflected in GSTR2A.
► Section 35 (5) which provided for mandatory requirement of getting annual accounts audited and
reconciliation statement submitted by specified professional in form GSTR9C is proposed to be
OMMITED.
► Section 44 dealing with annual return in form GSTR9 is also being substituted to give powers to the
Commissioner to exempt certain class of taxpayers from filing this statement on the
recommendations of the GST Council.
The form GSTR9 may include a self-certified reconciliation statement, reconciling the value of
supplies declared in the return furnished for the financial year, with the audited annual financial
statement for every financial year.
TULSIANS’ 41
Further the requirement of filing form GSTR9C in section 44 is also proposed to be done away with
in consequent to proposed amendment in section 35.
► Section 50 providing for interest on delay of filing returns and payment of tax is being substituted
so as to charge interest only on net cash liability with effect from the 1st of July 2017. There was an
internal circular issued to the department officials earlier on this regard but now the same is
proposed to be incorporated in the Act. Since this is a Retrospective amendment effective from
1July 2017, it will give relief to many taxpayers.
► Section 74 of the CGST Act is being amended so as make seizure and confiscation of goods and
conveyances in transit a separate proceeding from recovery of tax. The proceedings involving
seizure and confiscation of goods and conveyances in transit would now be treated as a separate
proceeding from the recovery proceedings under Section 73 and 74 of the CGST Act, 2017
► Clarity has been brought in on “Self -assessed tax”, as per the explanation proposed to be inserted
to section 75 (12) “self-assessed tax” shall include the tax payable in respect of outward supplies,
the details of which have been furnished under section 37, but not included in the return furnished
under section 39.
► Section 83 of the CGST Act is being amended so as to provide that provisional attachment shall
remain valid for the entire period starting from the initiation of any proceeding under Chapter XII,
Chapter XIV or Chapter XV till the expiry of a period of one year from the date of order made
thereunder.
► Proviso to Section 107(6) is being added to provide that the appeal against the order of adjudicating
authority in relation to seizure and confiscation of goods and conveyances in transit (provided by
Section 129) can be made only if 25% of penalty is paid by the appellant.
► Amendments proposed in Section 129 relating to Detention, Seizure and Release of Goods and
Conveyances in Transit and Section 130 Confiscation of Goods or Conveyances and Levy of Penalty.
These both sections have been delinked.
Where the goods have been detained or seized under Section 129, such goods would be released
on making of following payments:
Proposed Provision Existing Provision
In case the owner come forward for payment of In case the owner come forward for payment of
penalty penalty
► On payment of penalty equal to 200% of tax ► On payment of penalty equal to 100% of tax
payable on such goods payable on such goods
► In case of exempted goods, amount equal to ► In case of exempted goods, amount equal to
2% of value of goods or INR 25,000/- 2% of value of goods or INR 25,000/-
whichever is less whichever is less
In case the owner does not come forward for In case the owner does not come forward for
payment of penalty payment of penalty
TULSIANS’ 42
► On payment of penalty equal to 50% of ► On payment applicable tax and penalty
value of goods or 200% of tax payable on equal to 50% of value of goods reduced by
goods, whichever is higher. tax paid thereon
► In case of exempted goods, amount equal to ► In case of exempted goods, amount equal to
5% of value of goods or INR 25,000/- 5% of value of goods or INR 25,000/-
whichever is less whichever is less
Provision related to provisional release of goods and conveyance detained under section 129 has
been deleted.
Time limits for issuing notice and passing order under Section 129 have been introduced. As per
amended Section 129(3), the officer would need to issue a notice within 7 days of detention or
seizure and pass the order within 7 days of serving of notice.
Section 129(6) has been amended to provide as below:
Proposed Provision Existing Provision
In case the person fails to pay the penalty, Where the person fails to pay the tax, interest
within 15 days, so demanded vide an order and penalty within 14 days of detention or
issued under Section 129(3), the goods or seizure, the proceedings would initiate to
conveyance so detained or seized shall be liable confiscate the goods in accordance with
to be sold or disposed of otherwise, in such Section 130 of the CGST Act, 2017
manner and time as may be prescribed.
However, the conveyance may be released on
payment of penalty as per the order or INR
1,00,000, whichever is less by the transporter
Minimum amount of fine in lieu of confiscation being proposed at not less than penalty equal to
100% of tax payable on such goods.
► Section 151 is being substituted to empower the jurisdictional commissioner to call for information
from any person relating to any matter dealt with in connection with the Act.
► Section 152 of the CGST Act is being amended so as to provide that no information obtained under
sections 150 and 151 shall be used for the purposes of any proceedings under the Act without
► Section 16 of the IGST Act is being proposed to be amended to provide.

Supply to SEZ shall be treated as zero rated supply only when supplied for authorised operations.
The option to make zero rated supply with payment of tax shall be available only for notified class
of taxpayers and goods and services.
In case of exports of goods, if foreign remittance ins not received with specified time limits in FEMA,
refund granted would need to be deposited with the Government with interest as per section 50.
TULSIANS’ 43
Customs:
► All the conditional exemption exemptions unless otherwise specified or varied or rescinded, given
under Customs Act shall come to an end on 31st March falling immediately two years after the date
of such grant or variation.
► All existing conditional exemptions in force as on the date on which the Finance Bill 2021 receives
the assent of the President unless having a prescribed end date, shall come to an end on 31st March
2023 (if not specifically extended/ rescinded earlier) on review. (Section 25)
► A new section 28BB is being introduced prescribing a two-year time limit, further extendable by
one year by the Commissioner, for completion of any proceedings under this act which would
culminate in issuance of a notice under section 28 of the Customs Act, 1962.
► Mandatory filling of bill of entry before end of the day preceding the day (including holiday) of
arrival of goods. However, the Board can notify the time period for presenting bill of entry in certain
cases as it may deem fit. (Section 46(3))
► Confiscation of any goods entered for exportation under claim of remission or refund of any duty
or tax or levy, so as to make a wrongful claim in contravention of the provisions of the Customs Act,
1962 or any other law for the time being in force. (Section 113 (ja))
► Penalty in specific case where any person has obtained any invoice by fraud, collusion, willful
misstatement or suppression of facts to utilize Input Tax Credit on the basis of such invoice for
discharging any duty or tax on goods that are entered for exportation under claim of refund of any
duty or tax. (Section 114AC).
► Section 153 is being amended so as to insert a new clause (ca) under sub section (1) thereof so as
to enable service of order, summons, notice, etc. by making it available on the common portal.
► Notification of a common portal for facilitating registration, filing of bills of entry, shipping bills,
any other document or form prescribed under this act or under any other law for the time being in
force or the rules and regulations made thereunder, payment of duty and for carrying out such
other functions and for such purposes as may be specified.
► Anti-Dumping duty is being temporarily revoked for the period commencing from 2.2.2021 till
30.09.2021, on imports of the following –
▪ Straight Length Bars and Rods of alloy-steel, originating in or exported from People’s Republic
of China, imposed vide notification No. 54/2018-Cus (ADD) dated 18.10.2018.
▪ High Speed Steel of Non-Cobalt Grade, originating in or exported from Brazil, People’s Republic
of China and Germany, imposed vide notification No. 38/2019-Cus (ADD) dated 25.09.2019.
TULSIANS’ 44
▪ Flat rolled product of steel, plated or coated with alloy of Aluminum or Zinc, originating in or
exported from People’s Republic of China, Vietnam and Korea RP, imposed vide notification
No. 16/2020-Cus (ADD) dated 23.06.2020.
► Countervailing duty is being temporarily revoked for the period commencing from 2.2.2021 till
30.09.2021, on imports of Certain Hot Rolled and Cold Rolled Stainless Steel Flat Products,
originating in or exported from People’s Republic of China, imposed vide notification No. 1/2017-
Cus (CVD) dated 07.09.2017.
► Provisional Countervailing duty is being revoked on imports of Flat Products of Stainless Steel,
originating in or exported from Indonesia, imposed vide notification No. 2/2020- Customs (CVD)
dated 9.10.2020.
► Anti-dumping duty on Cold-Rolled Flat Products of Stainless Steel of width 600 mm to 1250 mm
and above 1250 mm of non bonafide usage originating in or exported from People’s Republic of
China, Korea RP, European Union, South Africa, Taiwan, Thailand and United States of America has
been discontinued upon expiry of the anti-dumping duty hitherto leviable vide notifications no.
61/2015-Customs (ADD) dated 11th December 2015 and 52/2017 -Customs (ADD) dated 24th
October 2017.
► New cess “AGRICULTURE INFRASTRUCTURE AND DEVELOPMENT CESS (AIDC)” is being

imposed on imports of certain items at specified rate. Simultaneously, BCD is being reduced on
items being brought under new cess. However, it would be levied only on specified goods as
detailed below. All other items are exempted from this cess.
Heading, sub-
Commodity BCD AIDC
heading tariff item
0808 10 00 Apples 15% / 35%* 35%
1511 10 00 Crude Palm Oil 15% 17.5%
1507 10 00 Crude Soya-bean oil 15% 20%
1512 11 10 Crude Sunflower seed oil 15% 20%
0713 10 Peas (Pisum sativum) 10% 40%
0713 20 10 Kabuli Chana 10% 30%
0713 20 20 Bengal Gram (desi chana) 10% 50%
0713 20 90 Chickpeas (garbanzos) 10% 50%
0713 40 00 Lentils (Mosur) 10% / 30%* 20%
2204 All goods (Wine) 50% 100%
2205 Vermouth and other wine of fresh grapes, flavored 50% 100%
2206 Other fermented beverages for example, Cider, Perry, 50% 100%
Mead, sake, mixture of fermented beverages or
fermented beverages and nonalcoholic beverages
2208 All goods (Brandy, Bourbon whiskey, Scotch etc.) 50% 100%
2701 Various types of coal 1% 1.5%
2702 Lignite, whether or not agglomerated 1% 1.5%
2703 Peat, whether or not agglomerated 1% 1.5%
3102 10 00 Urea Nil 5%
3102 30 00 Ammonium nitrate 2.5% 5%
31 Muriate of potash, for use as manure or for the Nil 5%
production of complex fertilizers
TULSIANS’ 45
Heading, sub-
Commodity BCD AIDC
heading tariff item
3105 30 00 Diammonium phosphate, for use as manure or for the Nil 5%
production of complex fertilizers
5201 Cotton (not carded or combed) 5% 5%
7106 Silver (including imports by eligible passengers) 7.5% 2.5%
7106 Silver Dore 6.1% 2.5%
7108 Gold (including imports by eligible passengers) 7.5% 2.5%
7108 Gold Dore 6.9% 2.5%
► Changes in Duty rates for have been prescribed for the following items:
Rate of Duty
Tariff Item Product AIDC Movement
From To
2803 0010 Carbon Black 5% 7.5% Increase
3925 Builder’s ware of Plastic 10% 15% Increase
7104 Cut and Polished Synthetic stones, 10% 15% Increase
including Cut and Polished Cubic
Zirconia
8414 30 00 Compressors of a kind used in 12.50% 15% Increase
8414 80 11 refrigerating, air-conditioning
Equipment.
8504 90 90 Printed Circuit Board Assembly [PCBA] 10% 15% Increase
of charger or adapter (All goods under
this tariff item, other than above, will
continue to attract the existing effective
rate of BCD at 10%)
7007 Safety glass, consisting of toughened 10% 15% Increase
(tempered) or laminated glass. (All
goods under this heading, other than
those used with motor vehicles, will
continue to attract the existing effective
rate of BCD at 10%)
8512 90 00 Parts of Electrical lighting and signaling 10% 15% Increase
equipment, windscreen wipers,
defrosters and demisters, of a kind used
for cycles or motor vehicles
8544 30 00 Ignition wiring sets and other wiring 10% 15% Increase
sets of a kind.
used in vehicles, aircraft or ships
9104 00 00 Instrument Panel Clocks and Clocks of a 10% 15% Increase
similar
type for vehicles, Aircraft, Spacecraft or
Vessels
8414 40 Air compressors mounted on a wheeled 7.5% 15% Increase
chassis for Towing
8414 80 (except Gas Compressors (other than of a kind 7.5% 15% Increase
8414 80 11) used in air-conditioning equipment),
free-piston generators for gas turbine,
turbo charger and other compressors
8501 10 Electric Motors 10% 15% Increase
to
8501 53
8536 41 00 Relays 10% 15% Increase
and
TULSIANS’ 46
Rate of Duty
From To
8536 49 00
8537 Boards, panels, consoles, etc. for electric 10% 15% Increase
control or distribution of electricity
9031 80 00 Other instruments, appliances and 7.5% 15% Increase
machines
9032 89 Electronic automatic regulators and 10% 15% Increase
other
2207 20 00 Denatured Ethyl Alcohol (ethanol) for 2.5% 5% Increase
use in
23 All goods except dog and cat food and Nil/5/ 10 / 15% Increase/
shrimp larvae feed 15 /20/30 REDUCTION
2528 Natural borates and concentrates Nil/5% 2.5% REDUCTION
thereof
2710 Naphtha 4% 2.5% REDUCTION
2907 23 00 Bis-phenol A NiL 7.5% Increase
2910 30 00 Epichlorohydrin 2.5% 7.5% Increase
2933 71 00 Caprolactam 7.5% 5% REDUCTION
3907 40 00 Polycarbonates 4% 2.5% Increase
3908 Nylon chips 4% 2.5% Increase
3920 99 99 Other plates, sheets, films, etc. of other 4% 2.5% Increase
plastics
41 Wet blue chrome tanned leather, crust Nil 10% Increase
leather,
finished leather of all kinds, including
splits and sides of the aforesaid
5002 Raw Silk (not thrown) 10% 15% Increase
5004, 5005, 5006 Silk yarn, yarn spun from silk waste 10% 15% Increase
(whether or not put up for retail sale)
5201 Raw Cotton Nil 5% 5% Increase
5202 Cotton waste (including yarn waste or Nil 10% Increase
garneted
stock)
5402, 5403, Nylon Fibre and Yarn 7.5% 5% REDUCTION
5404, 5405
00 00, 5406,
5501 to 5510
7106 Silver 12.5% 7.5% 2.5% REDUCTION
7106 Silver Dore 11% 6.1% 2.5% REDUCTION
7108 Gold 12.5% 7.5% 2.5% REDUCTION
7108 Gold Dore 11.85% 6.9% 2.5% REDUCTION
7107 00 00, Base metals or precious metals clad with 12.5% 10% REDUCTION
7109 00 00, precious metals
7111 00 00
7110 Other precious metals like Platinum, 12.5% 10% REDUCTION
Palladium, etc
7112 Waste and scrap of precious metals or 12.5% 10% REDUCTION
metals clad with precious metals
7112 Spent catalyst or ash containing precious 11.85% 9.17 REDUCTION
metals %
7113 Gold or Silver Findings 20% 10% REDUCTION
7118 Coin 12.5% 10% REDUCTION
TULSIANS’ 47
Rate of Duty
From To
7204 Iron and steel scrap, including stainless 2.5% Nil REDUCTION
steel scrap [up to 31.03.2022]
7206 & 7207 Primary/Semi-finished products of non- 10% 7.5% REDUCTION
alloy steel
7208, 7209, 7210, Flat products of non-alloy and alloy steel 10% /12.5% 7.5% REDUCTION
7211, 7212, 7225
(except
72251100) and
7226 (except
7226 11 00)
7213,7214, 7215, Long product of non-alloy, stainless and 10% 7.5% REDUCTION
7216,7217,7221, alloy steel
7222,7223,7227
and 7228
7225 Raw materials for use in manufacture of 2.5% Nil REDUCTION
CRGO steel [up to 31.03.2023]
7404 Copper Scrap 5% 2.5% REDUCTION
7318 Screw, bolts, nuts, etc. of iron and steel 10% 15% Increase
8430 Tunnel boring machines Nil 7.5% Increase
8431 Parts and components for manufacture Nil 2.5% Increase
of tunnel boring machines with actual-
user condition
8544 (other than Specified insulated wires and cables 7.5% 10% Increase
8544 70 and 8544
30 00)
39, 74 and 85 Former, bases, bobbins, brackets; CP Nil Appli Increase
wires; P.B.T.; Phenol resin moulding cable
powder; Lamination/ El silicon steel Rate
strips for use in manufacture of
transformers (entry at S.No. 198 of
25/1999- Customs)
Any Chapter Inputs or parts for manufacture of Nil 2.5% Increase
Printed Circuit Board Assembly (PCBA)
of cellular mobile phone (w.e.f. 1.4.2021)
camera module of cellular mobile phone
(w.e.f. 1.4.2021)
connectors of cellular mobile phone
(w.e.f. 1.4.2021)
Any Chapter Inputs or raw material for manufacture Nil 2.5% Increase
of specified parts like back cover, side
keys etc. of cellular mobile phone (w.e.f.
1.4.2021)
Any Chapter Inputs or raw material (other than PCBA Nil 10% Increase
and moulded plastics) for manufacture
of charger or adapter of cellular mobile
phones
8504 90 90 or Moulded plastics for manufacture of 10% 15% Increase
3926 90 99 charger or adapter
Any Chapter Inputs or parts of Printed Circuit Board Nil 10% Increase
Assembly of charger or adapter of
cellular mobile phones
TULSIANS’ 48
Rate of Duty
From To
Any Chapter Inputs or parts of Moulded Plastic of Nil 10% Increase
charger or adapter of cellular mobile
phones
Any Chapter Inputs or raw materials (other than Nil 2.5% Increase
Lithium-ion cell and PCBA) of Lithium-
ion battery or battery pack (w.e.f.
1.4.2021)
Any Chapter Parts or components of PCBA of Lithium- Nil 2.5% Increase
ion battery or battery pack (w.e.f.
1.4.2021)
Any Chapter Inputs or raw materials of following Nil 2.5% Increase
goods: -
(i) Other machines capable of connecting
to an automatic data processing machine
or to a network (8443 32 90)
(ii) Ink cartridges, with print head
assembly (8443 99 51)
(iii)Ink cartridges, without print head
assembly (8443 99 52)
(iv) Ink spray nozzle (8443 99 53)
(w.e.f. 1.4.2021)
Any Chapter Inputs and parts of LED lights or fixtures 5% 10% Increase
including LED Lamps
Any Chapter Inputs for use in the manufacture of LED 5% 10% Increase
driver or MCPCB (Metal Core Printed
Circuit Board) for LED lights or fixtures
including LED Lamps
9405 50 40 Solar lanterns or solar lamps 5% 15% Increase
8504 40 Solar Inverters 5% 20% Increase
9503 Parts of Electronic Toys for manufacture 5% 15% Increase
of electronic toys
Any Chapter Components or parts, including engines, 2.5% 0% REDUCTION
for manufacture of aircrafts or parts of
such aircrafts, by Public Sector Units
under Ministry of Defence subject to
condition specified.
9018-9022 Medical Devices imported by Health Cess HC REDUCTION
International Organization and @ 5% @
Diplomatic Missions Nil
9801 High Speed Rail Projects being brought Applicable 5%
under project imports Rate
87149100, All goods other than Bicycle parts and 10% 15% Increase
871492, 871493, components
87149400,
871495, 871499
87149600,
Excise:
► New tariff items have been inserted in Chapter 24, in 4th Schedule of Central Excise Act 1944, which
shall be effective from 1 January 2022. NCCD at 25% is also prescribed on the above-mentioned
items effective from 1 January 2022.
TULSIANS’ 49
Tariff Item Description of Goods Unit Rate of Duty
2404 11 00 Products intended for inhalation without combustion, Kg 81%
containing tobacco or reconstituted tobacco
2404 19 00 Products intended for inhalation without combustion, Kg 81%
Other
► Amendments in Chapter 27 of fourth schedule of Central Excise Act,1944 has been amended
retrospectively from 1 January 2020 to specify a correct IS “17076” for M15 fuel which is subjected
to a duty of 14% and Rs. 15 per Litre.
► Automotive diesel fuel, containing Biodiesel, conforming to standard IS 1460 and Diesel fuel blend
(B6 to B20) conforming to standard IS 16531 has also been subjected to a duty of 14% and Rs. 15
per Litre.
► Agriculture Infrastructure and Development Cess (AIDC) as an additional duty of excise has been
proposed on Petrol at 2.5 per litre and High-speed diesel at Rs.4 per litre.
Consequent to imposition of AIDC, the Basic Excise Duty (BED) and Special Additional Excise Duty
(SAED) on Petrol and High-speed diesel is being reduced so that consumer does not have to bear
any additional burden on account of imposition of AIDC. The revised duty structure on petrol and
HSD shall be as follows.
Description of Goods BED (Rs/Ltr) SAED (Rs/Ltr) AIDC (Rs/Ltr)
Petrol (Unbranded) 1.4 11 2.5
Petrol (Branded) 2.6 11 2.5
High Speed Diesel (Unbranded) 1.8 8 4
High Speed Diesel (Branded) 4.2 8 4
TULSIANS’ 50

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THE UNION BUDGET 2021

An Analysis of Important Direct Tax Proposals

JAIN SHRIMAL & CO.

2 Budget 2021 Jain Shrimal & Co.

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Section No. Particulars Existing Time Limits Revised Time Limits

Issuance of notice of assessment 6 Months from end of FY in 3 Months from end of FY in

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Section No. Particulars Existing Limit Revised Limits

10(23C) Exemption for the income received by any 1 Crore 5 Crore

44AB Tax Audit ( whose aggregate of all the 5 Crore 10 Crore

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�� 206AB: Apply on any sum or

*The specified person is a person

�� 206CCA: Apply on any sum or

*The specified person is a

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Sec 194Q - Not applicable:

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Applicable from:- AY 2021-22

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● Consideration received or receivable from e-commerce supply or services shall include :

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Section 9: Income deemed to accrue or arise in India

Section 17: ‘Salary’, ‘perquisite’ and ‘profits in lieu of salary’ defined.

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Section 55: Meaning of “adjusted”, “cost of improvement” and “cost of acquisition”.

Section 57: Deductions

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Section 115-O: DDT

Section 12AB: Trust registration

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Presented to you by JSCO Budget Team

❖ CA Narendra Shrimal ❖ CA Vartika Vijay

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exemption from filing ITR - Paying banks will deduct TDS.

Commissioner of Income Tax.

requirement of getting accounts and reconciliation statements audited under GST .

transactions are digital.

pre-filled in the ITR form.

on leather import withdrawn.

from the stamp duty if the following conditions are fulfilled -

now be available even for loan taken till 31.3.2022.

profits) extended till 31.3.2022.

from Rs.1 crore to Rs.5 crore(Turnover/Gross Receipts).

23. Agri Infra Development Cess levied on certain products.

BUSINESS  Permanent disallowance in case of late deposit of employee’s

[NEW • Others - within 3 years

OF  Correspondingly, Sec 44 of the CGST Act is being substituted so

Doshi R C & Co.

Compliance burden on small charitable trusts running educational institutions and

IIP Inflation (%)

Stimulus by Govt and RBI combined 15%

GOVERNMENT REFORMS ENERGY

AGRICULTURE AND ALLIED SECTORS

Non-Corporate Assessee Where Sec. 5A is applicable to Spouse