Lok Sabha passed Finance Bill 2016-Section-wise Amendments Made

Lok Sabha passed Finance Bill 2016-Section-wise Changes made

On 5th May, 2016, the Lok Sabha passed the Finance Bill 2016 with some important amendments to the Bill. The major section wise amendments are as under.

Section 2(42A)  (wef 01/04/2017)
Gains from transfer of unlisted shares shall be short term capital gain if such shares was held by the assessee for a period not more than 24 months.

Section 10
The controversial proposal to tax withdrawals from PF/NPS have been withdwarn

Section 35ABA
Expenditure for obtaining right to use spectrum for telecommunication services.
It has been provided that in case of failure to comply with the conditions of the deduction claimed, the AO shall re compute the total income under section 154 and the period of limitation u/s 154(7) shall apply from the year of failure to comply. Also, the apart from amount paid, the amount payable has also been considered for deduction.

Section 35CCC
Deduction reduced from 1.5 times to 100%

Section 49-Cost with reference to certain mode of acquisition
Amendment regarding cost of acquisition of  asset declared under the Income Declaration Scheme 2016 shall be deemed to be the fair market value for the purpose of the scheme.

Section 80IAC-Special provision in respect of specified business
Limited Liability Partnership(LLP) included in the definition of eligible start-up.

Section 80-IBA. Deductions in respect of profits and gains from housing projects
the project to be approved by the competent authority even after 31st day of March, 2019, the requirement of prescribed guidelines withdrawn.
Where the approval in respect of a housing project is obtained more than once, the project shall be deemed to have been approved on the date on which the building plan of the project was first approved by the competent authority.
Arial distance to be used for municipal limit criterion of 25 KM.

Section 111A Tax on STCG in certain cases
Condition of STT not to apply to transactions undertaken in stock exchanges located in any International Financeial Service Center and consideration is paid in foreign exchange.

Section 115BA-Tax on income of certain domestic companies
Exclusivity of qualified business/reserach has been envisaged.
Option to be exercised before the due date for the first return u/s 139(1)

Section 115BBDA-Tax on certain dividends received from domestic companies
10% tax payble if dividend income in aggregate exceeeds Rs. 10 lakhs

Section 115BBF-Tax on income from patent
Option to be exercised before the due date for return u/s 139(1).
Five years limit for declaring income as per option exercised once.

Section 115TD-Tax on accreted income
Accreted income attributable to specified assets/liabilities excluded.

Section 143(1D) Assessment
Processing of return cases covered by notice u/s 143(2) shall not be necessary within expiry of one year However return shall be processed before order u/s 143(3)

Section 194LBB-TDS on income in respect of Units of Investment Funds
No tax to be deducted for payments made to a non resident/foreign company for income not chargeable to tax.

Section 206C-Tax Collection at Source
Collection of proposed 1% TCS on motor vehicles for value exceeding ten lakhs rupees shall be at the time of receipt of the sale consideration.

Section 270A – Penalty for under-reporting and misreporting of income
It has been clarified that the penalty shall be directed during the couse of any proceedings under the Act and not otherwise.

Deemed total income reassessed u/s 115JB or 115JC if greater than deemed total income assessed or reassessed immediately before such reassessment shall be considered as “under-reporting of income”

Tax calculation methodology and formula prescribed for calculating tax payable on under-reported income. 

Section 276C – Wilful attempt to evade tax etc. (wef 01/04/2017)
under-reporting of income has been added for penalty under this section also.

Finance Bill 2016 Clause wise Amendments Click Here >>