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A.Y. 2016 – 2017
Bill Jo Ban Gaya Act
Ghatkopar CPE Study Circle
02/07/2016
caprachiparekh@gmail.com

Cl 3:S(2)
• POH in respect of shares of unlisted companies
• Proposed amendment mentioned in Budget
Speech
• Third proviso to section 2(42A) inserted as
amendment
• Reduction in POH from 36 m to 24m

Cl 7: S10(12)/(13)
• Proposed to tax withdrawal from PF in excess of
40%
• FM has rolled back the amendment
• Relief to Salaried Tax Payers

Cl 16: S.35ABA
• Deduction for expenditure incurred for right to use
spectrum
• Non compliance with conditions will lead to
withdrawal of deduction
• Amendment grants power to Tax Officer to rectify
total income of the tax payer
• Period of limitation to be counted from year of non-
compliance

Cl.19: S.35CCC
• Deduction was proposed to be reduced from 150%
to 100% in respect of expenditure incurred on
agricultural extension projects
• Weighted deduction of qualifying expenditure to
continue @150% until A.Y. 2020-2021, as against
the proposed AY 18-19.

New Cl.29A
• Sec 49(5) : deemed COA in respect of transfer of
CA under Income Disclosure Scheme,
• On which tax, surcharge & penalty have been paid,
• Shall be FMV of the asset on the date of
commencement of the Scheme

Cl.41: S.80IAC
• Original amendment provides for 100% deduction
of profits derived by eligible start-up
• Explanation (ii) amended to include LLP’s in the
defintion of eligible start-ups
• Welcome step, as earlier benefit was sought to be
given only to corporates

Cl.43: S.80-IBA
• 100% deduction for profits from housing projects
• Certain words & phrases substituted
• Changes are in the nature of improvements to the
draft of new section , to curtail possible
controversies

Cl.46:S.92CA
• Reference to clause (viii) has been changed to
clause(x) in new sub-section 3A of Sec 92CA
• Change is correction of a referencing error with
regards to reference to TPO, in cases where
exchange of information has been called for u/s
90/90A

New Cl.47A
• Exemption of LTCG u/s 10(38) to cover financial
instruments traded on the IFSC platform, without
levy of STT
• Corresponding benefit u/s 111A was missed
• Second proviso to S. 111A(1) to exempt
transactions on recognised stock exchange located
in any IFSC in foreign currency.

Cl.49: S.115BA
• Core Incidental activities like research on goods
manufactured or their distribution has been
covered as eligible business activity – 25%
• Option to avail 25% tax rate, giving up other tax
incentives – Irrevocable choice

Cl.50: New S.115BBDA
• Section as initially proposed brought certain
interpretational issues
• Additional tax is with reference to the aggregate
dividend income being in excess of INR 1 mil.
Received from multiple payers.

Cl.52: S. 115BBF
• Proposed section – 10% presumptive tax regime
for royalty income from patents developed &
registered in India
• Developed in India – 75% of expenditure incurred
for any invention with a granted patent is incurred
in India.
• Condition of being set up on or after 01.04.2016
removed

Cl.53: S.115JB
• Unit established in an IFSC deriving income solely
in convertible foreign exchange could avail lower
MAT @ 9%
• Condition that such unit be established on or after
01.04.2016 is removed
• Benefit available to units already established
before 01.04.2016.

Cl.60: S. 115TD, 115TE, 115TF
• “exit tax” has been introduced on accreted income
of such trust which was claimed exempt from tax
in earlier years.
• 2 new provisos inserted:
- Assets purchased out of agricultural income not
chargeable to tax,
- Assets purchased prior to availing any exemption shall be
excluded
• Time Limit for payment of taxes on accreted
income - relaxed

Cl.66: S.143
• New S.S. (1D) & proviso thereto inserted.
• Time limit of one year not applicable for
processing tax returns,
• though mandatory to process the tax return
before passing the final assessment order u/s
143(3)

Cl. 81: S.194LBB
• Proviso inserted
• No TDS shall be deducted in cases where income
of the non-resident is not chargeable to tax
• Eg. Where tax treaty benefit has been availed

Cl.86: S.206C
• Instead of being included in Table u/s 206(C), new
sub-section (1F)
• TCS on sale of Motor vehicle only at the time of
receipt of consideration
• Exclusion on account of purchase of motor vehicle
for personal consumption, not provided in Bill
passed by Lok Sabha

Cl.96 S. 270A
• New section relating to penalty for misreporting &
under-reporting of Income
• Includes another instance for under-reporting
income – penalty can be levied on account of
reassessed income being under MAT
• “tax payable” definition also been amended &
classified in 3 categories

Cl.97: N.S. 270AA
• Immunity from penalty u/s 270A and prosecution
u/s 276C
• Immunity from initiation of prosecution
proceedings has been extended for sec. 276CC
• Prosecution in case of failure to furnish Income tax
return

N.Cl. 106A: S. 276C
• Referencing for new penalty scheme has been
made in S.276C, which provides for prosecution in
case of evasion of taxes

Cl.112
• Amendment to tax the employer contribution to
PF in excess of INR 1,50,000
• Rolled Back

Cl. 192
• Income Disclosure Scheme, where taxpayers can
declare their undisclosed income, paying tax
@45%
• References to section 119 & section 138 of the
Income Tax Act included in the scheme.

Rates of Tax – A Glance
• Individuals/ HUF
• Firms / AOP/BOI/ CO-op Societies.,
• Companies

Other Important Aspects
• Equalisation Levy
• Income Declaration Scheme

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