Existing Position
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Position as amended by the Lok Sabha
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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:
(a)
Any transaction carried out electronically on screen-based system through a
member registered for trading in commodity derivatives under the FCRA;
(b)
Transaction is supported by a time stamped note issued by such member;
(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.
(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.
(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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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.
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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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:
(a)
A reference to TPO is made before, on or after July 1, 2012; or
(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:
(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;
(2)
Tax at concessional rate shall be deducted if payment is made to a FII or a
qualified foreign investor;
(3)
Tax to be deducted at 5%;
(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:
(1)
If the sale consideration of bullion (excluding any coin/article weighing 10
grams or less) exceeds Rs. 2,00,000; or
(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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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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No wealth-tax on agriculture
land
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The urban land
is not chargeable to wealth-tax if it is a land:
(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
(2)
occupied by any building which has been constructed with the approval of the
appropriate authority; or
(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
(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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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.
As per the
amended provision, following lands will not be chargeable to wealth-tax:
(1)
Land classified as agricultural land in the records of the Government and
used for agricultural purposes; or
(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
(3)
Land occupied by any building which has been constructed with the approval of
the appropriate authority; or
(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
(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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