Explanatory Notes to the provisions of the Finance Act, 2017-CBDT Circular No. 02/2018

Explanatory Notes to the provisions of the Finance Act, 2017. CBDT has issued Circular No. 02/2018 dated 15th Februry, 2018 explaining the various amendments and provisions of the Act which generally applies for the Assessment Year  2018-19 (Financial Year 2017-18)

AMENDMENTS AT A GLANCE

Explanatory Notes to the provisions of the Finance Act, 2017

Section/Schedule Particulars / Paragraph number
First Schedule Rate Structure
Chapter III Income-Tax Act, 1961
2

Consolidation of plans within a scheme of mutual fund, ; Tax neutral conversion of preference shares to equity shares, ; Widening scope of Income from other sources,

9 Clarity relating to indirect transfer provisions
9A Modification in conditions of special taxation regime for off shore funds under section 9A,
10

Correct reference to FEMA instead of FERA, ; Tax exemption to partial withdrawal from National  Pension System (NPS), ; Exemption of income of Chief Minister’s Relief Fund or the Lieutenant Governor’s Relief Fund; Tax incentive for the development of capital of Andhra Pradesh,  Exemption of long term capital gains tax under section 10(38) of the Income-tax Act,  Exemption of income of Foreign Company from sale of leftover stock of crude oil from strategic reserves at the expiry of agreement or arrangement, Restriction on exemption in case of corpus donation by exempt entities to other exempt entities.

10AA

Rationalisation of provisions of Section 10AA

11

Restriction on exemption in case of corpus donation by exempt entities to other exempt entities

12A Clarity of procedure in respect of change or modifications of object and filing of return of income in case of entities exempt under sections 11 and 12
12AA

Clarity of procedure in respect of change or modifications of object and filing of return of income in case of entities exempt under sections 11 and 12

13A Transparency in electoral funding
23

No notional income for house property held as stock-in-trade,

35AD

Disallowance  of  depreciation  under  section  32  and  capital expenditure under section 35AD on cash payment

36

Increase in deduction limit in respect of provision for bad and doubtful debts

40A Measures to discourage cash transactions,  Scope of section 92BA of the Income-tax Act relating to Specified Domestic Transactions,
43

Disallowance  of  depreciation  under  section  32  and  capital expenditure under section 35AD on cash payment

43B Extension of scope of section 43D to Co-operative Banks
43D Extension of scope of section 43D to Co-operative Banks
44AA

Increasing  the  threshold  limit  for  maintenance  of  books  of accounts in case of Individuals and Hindu undivided family

44AB

Exclusion  of  certain  specified  person  from  requirement  of audit of accounts under section 44AB

44AD

Measures  for  promoting  digital  payments  in  case  of  small unorganized businesses

45 Special provisions for computation of capital gains in case of joint development agreement
47

Tax neutral conversion of preference shares to equity shares, Extension of capital gain exemption to  Rupee Denominated Bonds,

48

Extension of capital gain exemption to Rupee Denominated Bonds,  Shifting base year from 1981 to 2001 for computation of capital gains

49

Consolidation of plans within a scheme of mutual fund,  Tax incentive for the development of capital of Andhra Pradesh,  Special provisions for computation of capital gains in case of joint development agreement,  Tax neutral conversion of preference shares to equity shares, Cost of Acquisition of capital assets of entities in case of levy of tax on accreted income under section 115TD, Cost of acquisition in Tax neutral demerger of a foreign company, Widening scope of Income from other sources

50CA

Fair Market Value to be full value of consideration in certain cases

54EC

Expanding the scope of long term bonds under 54EC

55 Shifting base year from 1981 to 2001 for computation of capital gains
56 Widening scope of Income from other sources,
58 Disallowance  for  non-deduction  of  tax  from  payment  to resident
71

Restriction on set-off of loss from house property

79  

Carry forward and set off of loss in case of certain companies

80CCD Rationalisation  of  deduction  under  section  80CCD  for  self- employed individual
80CCG Rationalization of deduction under section 80CCG
80G Restricting cash donations
80-IAC Extending the period for claiming deduction by start-ups,
80-IBA Rationalisation  of  Provisions  of  Section  80-IBA  to  promote Affordable Housing
87A Rationalization of rebate allowable under Section 87A
90

Clarification with regard to interpretation of ‘terms’ used in an agreement entered into under section 90 and 90A,

92BA

Scope  of  section  92BA  of  the  Income-tax  Act  relating  to Specified Domestic Transactions,

92CE Secondary adjustments in certain cases
94B

Limitation of Interest deduction in certain cases,

115BBDA Rationalization of taxation of income by way of dividend
115BBG Income from transfer of carbon credits
115JAA

Rationalisation of Provisions relating to tax credit for Minimum Alternate Tax and Alternate Minimum Tax

115JB

Rationalisation  of  provisions  of  section  115JB  in  line  with Indian Accounting Standards (Ind-AS)

115JD Rationalisation of Provisions relating to tax credit for Minimum Alternate Tax and Alternate Minimum Tax
119

Empowering Board to issue directions in respect of penalty for failure to deduct or collect tax at source

132

Reason to believe to conduct a search, etc. not to be disclosed, Power of provisional attachment and to make reference to Valuation Officer to authorised officer

132A

Reason to believe to conduct a search, etc. not to be disclosed,

133

Rationalisation of the provisions in respect of power to call for information

133A Extension of the power to survey
133C Legislative framework to enable centralised issuance of notice and processing of information under section 133C
139

Mandatory furnishing of return by certain exempt entities, Rationalisation of time limits for completion of assessment, reassessment and re-computation and  reducing the time for filing revised return,

139AA Quoting of Aadhaar number
140A Fee for delayed filing of return
143 Processing of return within the prescribed time and enable withholding of refund in certain cases,  Fee for delayed filing of return
153

Rationalisation of time limits for completion of assessment, reassessment and re-computation and reducing the time for filing revised return

153A

Rationalisation of the provisions in respect of time limits for completion of search assessment,  Rationalisation of provisions of the Income Declaration Scheme, 2016 and consequential amendment to section 153A and 153C, 

153B

Rationalisation of the provisions in respect of time limits for completion of search assessment,

153C Rationalisation of provisions of the Income Declaration Scheme, 2016 and consequential amendment to section 153A and 153C, 
155

Enabling claim of credit for foreign tax paid in cases of dispute,

194-IB

Deduction of tax at source in the case of certain Individuals and Hindu undivided family

194-IC Special provisions for computation of capital gains in case of joint development agreement
194J Simplification of the provisions of tax deduction at source in case Fees for professional or technical services under section 194J, 
194LA

Non-deduction of tax in case of exempt compensation under RFCTLAAR Act, 2013

194LC Extension of eligible period of concessional tax rate on interest in case of External Commercial Borrowing and Extension of benefit to Rupee Denominated Bonds
194LD Extension  of  eligible  period  of  concessional  tax  rate  under section 194LD
197A Enabling of Filing of Form 15G/15H for commission payments specified under section 194D
204 Definition   of   ‘person   responsible   for   paying’   in   case   of payments covered under sub-section (6) of section 195,
206C Exemption from tax collection at source under section 206C in case of certain specified goods, services and buyers, Restriction on cash transactions
206CC Strengthening of PAN quoting mechanism in the TCS regime,
211 Rationalisation  of  section  211  and  section  234C  relating  to advance tax
234C Rationalisation  of  section  211  and  section  234C  relating  to advance tax,
234F Fee for delayed filing of return
241A Processing of return within the prescribed  time and enable withholding of refund in certain cases
244A Interest on refund due to deductor
245A Rationalisation of time limits for completion of assessment, reassessment and re-computation and reducing the time for filing revised return
245N Amendments  to  the  structure  of  Authority  for  Advance Rulings
245-O Amendments to the structure of Authority for Advance Rulings
245Q Amendments to the structure of Authority for Advance Rulings
253 Amendment of Section 253
269ST Restriction on cash transactions
271DA Restriction on cash transactions
271F Fee for delayed filing of return
271J Penalty on professionals for furnishing incorrect information in statutory report or certificate
273B Penalty on professionals for furnishing incorrect information in statutory report or certificate
CHAPTER VI Miscellaneous
Part XIII Amendment to the Finance Act, 2016
50 Clarification regarding the applicability of section 112
197

Rationalisation of provisions of the Income Declaration Scheme, 2016 and consequential amendment to section 153A and 153C, 

Download CBDT Circular Explanatory Notes to the provisions of the Finance Act, 2017 Click Here >>

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