Existing Position
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Position as amended by the Lok Sabha
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Finaly after a few debate in parliament house Finance Bill 2013 passed by parliament yesterday with slight amendments. Here is the list of amendments summarized in comparison with previous act.Lets have a look at it !!!
Scope of Sec. 10(48) widened to include other prescribed income
also and not just income arising from sale of crude oil
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The Finance Act 2012
inserted a new clause (48) in Section 10 to provide for exemption in respect
of any income received in India in Indian currency by a foreign company on
account of sale of crude oil in any period in India, if a few conditions are
satisfied.
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The Finance Bill, 2013
as passed by the Lok Sabha (herein after referred to as 'the Finance Bill,
2013') enlarges the scope of Section 10(48). With effect from the assessment
year 2014-15, the exemption will also be available in respect of income arising
on account of sale of any other goods or rendering of services as notified by
the Central Government.
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Trading in commodity derivatives no more a speculative
transaction
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Proviso to Section
43(5) provides a list of transactions which shall not be deemed to be
'speculative' transactions.
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A new clause (e) is
inserted in proviso to Section 43(5) wef assessment year 2014-15 to provide
that trading in commodity derivatives carried out in a recognised association
shall not be treated as 'speculative' transaction. For this purpose, an
eligible transaction means:
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(a) Any
transaction carried out electronically on screen-based system through a
member registered for trading in commodity derivatives under the FCRA;
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(b)
Transaction is supported by a time stamped note issued by such member;
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(c) The
contract note should indicate unique client identity number, unique trade
number and PAN.
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TRC – Can be a conclusive evidence but has to be supported by
prescribed documents
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(1) The Finance
Act, 2012 imposed a mandatory condition to furnish Tax Residency Certificate
('TRC') for availing of benefits under the DTAAs. The TRC helps in
establishing the country of residence of a non-resident taxpayer.
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Considering these
apprehensions of the taxpayers, the provision proposed by the Finance Bill,
2013 that TRC was a necessary but not a sufficient condition for claiming
benefit under DTAA has been removed.
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(2) However, the
Finance Bill, 2013 had amended section 90 to provide that submission of TRC
was a necessary but not a sufficient condition for claiming benefits under
DTAA. This amendment was proposed to be introduced retrospectively wef AY
2013-14.
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As per the amended
version, apart from the submission of a TRC (which is a necessary condition),
the assessee shall also provide such other documents and information as may
be prescribed for claiming benefits under the DTAAs.
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(3) This
proposed amendments raised apprehensions among the taxpayers that it would
give powers to the tax collectors to disregard the TRC and view the
transaction independently.
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Time-limit for completion of an assessment when reference is made
to the TPO
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Sections 153 and
153B, inter-alia, provide the time-limit for completion of an
assessment and re-assessment. These time-limits get extended if a reference
is made under Section 92CA to the TPO. These time-limits were extended by
Finance Act, 2012 by 3 months wef July 1, 2012.
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The Finance Bill, 2013
provides that the revised time-limit will be applicable regardless of the
fact whether:
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(a) A
reference to TPO is made before, on or after July 1, 2012; or
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(b) The
order of TPO is passed before, on or after July 1, 2012.
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TAN not required to deduct tax from payment made for purchasing
an immovable property
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A new section 194-IA
is inserted by the Finance Bill, 2013 to provide that transferee is liable to
deduct tax at source at 1% from payment being made to a resident-transferor
in respect of purchase of an immovable property.
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The Finance Bill, 2013
approved of the provisions of Section 194-IA. However, it provided an
exemption to the transferee from obtaining a TAN, which is otherwise a
mandatory requirement for deduction of tax at source.
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Concessional withholding rates on certain rupee denominated
long-term infrastructure bonds is withdrawn
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The Finance Bill, 2013
proposed to introduce a provision wherein even Indian Rupee loan given by
non-resident through the route of Long-term Infrastructure Bonds would also
enjoy the concessional rate of tax deduction at source.
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This amendment has
been withdrawn in the Finance Bill, 2013. However, a new provision is
inserted in Section 194LD which provides as under:
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(1) Tax under
this section shall be deducted in respect of interest on a rupee denominated
bond of an India company or Government security which is payable after May
31, 2013 but before June 1, 2015;
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(2) Tax at
concessional rate shall be deducted if payment is made to a FII or a
qualified foreign investor;
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(3) Tax to be
deducted at 5%;
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(4) If tax is
deducted under Sec. 194LD, provisions of Sections 195 and 196D will not be
applicable.
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Non-resident referred to in Section 194LC will not be penalised
for not having a PAN
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By virtue of Section
206AA, if PAN of the recipient is not available, tax is deductible either at
the normal rate or at the rate of 20%, whichever is higher.
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Under the amended
provisions of Section 206AA, in respect of payment of interest on long-term
infrastructure bonds to a non-resident (as referred to in Section 194LC), tax
will be deducted at the normal rate of 5%, even if the non-resident-recipient
does not have PAN.
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Even gold coins weighing less than 10 gms will be subject to TCS
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Sale of
bullion/jewellery is subject to TCS provisions in following cases:
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With effect from June
1, 2013, consideration of any coin or any other article weighing 10 grams or
less shall not be excluded while calculating the monetary limit of Rs.
2,00,000.
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(1) If the sale
consideration of bullion (excluding any coin/article weighing 10 grams or
less) exceeds Rs. 2,00,000; or
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(2) If the sale
consideration of jewellery exceeds Rs. 5,00,000 and out of sale consideration
any amount is received in cash.
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No wealth-tax on agriculture land
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The urban land is not
chargeable to wealth-tax if it is a land:
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Land classified as
agricultural land in the records of the Government and used for agricultural
purposes, will not be treated as an 'asset' under Section 2(ea) with
retrospective effect from the AY 1993-94. Consequently, such land will not be
chargeable to wealth-tax, even if such land is situated in an urban area.
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(1) On which
construction of a building is not permissible under any law for the time
being in force in the area in which such land is situated; or
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As per the amended
provision, following lands will not be chargeable to wealth-tax:
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(2) occupied by
any building which has been constructed with the approval of the appropriate
authority; or
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(1) Land classified as
agricultural land in the records of the Government and used for agricultural
purposes; or
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(3) being an
unused land held by the assessee for industrial purposes for a period of two
years from the date of its acquisition by him; or
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(2) Land on which
construction of a building is not permissible under any law for the time
being in force in the area in which such land is situated; or
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(4) held by the
assessee as stock-in-trade for a period of 10 years from the date of its
acquisition by him.
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(3) Land occupied by
any building which has been constructed with the approval of the appropriate
authority; or
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(4) An unused land
held by the assessee for industrial purposes for a period of two years from
the date of its acquisition by him; or
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(5) Land held by the
assessee as stock-in-trade for a period of 10 years from the date of its
acquisition by him.
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It is the worth watching blog for all the common peoples to make them aware about valuable content regarding Indian Taxation in an easier manner. I, CA Animesh Singi used my in depth analysis regarding tax to bring out a sweet fruit from the pot of hard work of my study to help you all. It is said that knowledge is the thing which you earn more when you spread more. Hope my efforts will be worth watching for you. Keep Enjoying! Email: animeshsingi@gmail.com
Tuesday, 30 April 2013
Amendments made in Finance Bill 2013 (Passed in Parliament)
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