02 DT Ammendments 2 in 1 PDF

© SATISH MANGAL (9350647377, satishmangal17@gmail.
com) LATEST AMENDMENTS
RECENT
AMENDMENTS
MADE BY
FINANCE ACT, 2019
+
TAXATION LAWS (AMENDMENT) ACT, 2019
Including All Circulars & Notifications related from these Amendments
“PREPARED BY”
CA. SATISH MANGAL

[Ph: 93506-47377] (M.COM. F.C.A., LL.B)
© SATISH MANGAL (9350647377, satishmangal17@gmail.com) INDEX FOR CONTENTS
“INDEX FOR CONTENTS”

S.NO. CHAPTER INDEX PAGE
(i) INCOME TAX RATE STRUCTURE 1
(ii) CONCESSIONAL TAXATION relating to DOMESTIC COMPANIES 4
(iii) IDENTICAL AMENDMENTS as brought in MULTIPLE TOPICS 9
(iv) PROFITS AND GAINS OF BUSINESS OR PROFESSION 12
(v) CAPITAL GAINS and INCOME FROM OTHER SOURCES 15
(vi) MAT, CDT and TAX ON BUY-BACK OF SHARES 19
(vii) ASSESSMENT OF TRUSTS 21
(viii) TAX DEDUCTED AT SOURCE (TDS) 22
(ix) ASSESSMENT PROCEDURE 26
(x) PENALTIES & PROSECUTIONS 30
(xi) ASSESSMENT OF NON-RESIDENTS & FOREIGN COMPANIES 32
(xii) TRANSFER PRICING 33
(xiii) DEDUCTIONS UNDER CHAPTER VI-A 36
(xiv) SETOFF; OR CARRY FORWARD & SETOFF OF LOSSES 40
(xv) INCOME FROM SALARIES and HOUSE PROPERTY 42
(xvi) TAX TREATMENT FOR INVESTMENT FUND & ITS UNIT HOLDERS 43
(xvii) COLLECTION RECOVERY AND REFUND 44
(xviii) MISCELLANEOUS AMENDMENTS 45
No part of this Module May be reproduced or transmitted in any form or by any means (including Photocopying)
without the prior permission of CA SATISH MANGAL
“ALL RIGHTS RESERVED WITH MR. SATISH MANGAL”

© SATISH MANGAL (9350647377, satishmangal17@gmail.com) LATEST AMENDMENTS
“RECENT AMENDMENTS as made by the FINANCE ACT, 2019”

and
“THE TAXATION LAWS (AMENDMENT) ACT, 2019”
“INCOME TAX RATES STRUCTURE”
 Tax rates, Surcharge and Health & Education cess, as applicable for assessment year
2020-21 are summarized in the following table –
Health and
Type of Assessee Tax Rate Surcharge
Education cess
(1) Resident Individuals who is Up to ` 3,00,000/- : Nil
IF,
the age of 60 years or more ` 3,00,001 to 5,00,000/- : 5%
TI > 50 Lacs : NIL
(i.e. Senior Citizen) ` 5,00,001 To 10,00,000/-: 20%
50 Lacs < TI > 1CR. : 10%
Above ` 10,00,000/- : 30%
TI > 1CRORE : 15%
4%
(2) Resident Individuals who is Up to ` 5,00,000/- : Nil
the age of 80 years or more ` 5,00,001 To 10,00,000/-: 20% See on
Above ` 10,00,000/-
(i.e. Super / Very Senior citizen) : 30%
on (Tax + Surcharge)
(3) Other Individuals, HUF, Up to ` 2,50,000/- : Nil Next Page

AOP, BOI ` 2,50,001 To 5,00,000/-: 5%
(Whether resident ` 5,00,001 To 10,00,000/-: 20%
Or
non-resident) Above ` 10,00,000/- : 30%
(4) Artificial Judicial Person --- Same as given in 3rd Point------ 4% on (Tax + Surcharge)
12%
(5) Firms (including LLP) 30% [Only where TI > 1 CRORE] 4% on (Tax + Surcharge)
IF, in case of Domestic Co.,

(6) Companies:- 4%
(i) Domestic company TI > 1CRORE : NIL on
 If its total turnover or Gross 10 CR. < TI > 1CRORE : 7% (Tax + Surcharge)
receipts in the 25%
TI > 10CRORES : 12%
P.Y. 2016-17 > 250 Crores -------------------------------------- ----------------------------
P.Y. 2017-18 > 400 Crores IF, in case of Foreign Co.,
4%
 In otherwise case TI > 1CRORE : NIL
30% on
10 CR. < TI > 1CRORE : 2% (Tax + Surcharge)
(ii) Foreign company 40%
TI > 10CRORES : 5%
(7) Co-operative Societies Up to ` 10,000/- : 10%
12% 4% on (Tax + Surcharge)
` 10,001 To 20,000/- : 20%
Above ` 20,000/- : 30% [Only where TI > 1 CRORE]
(8) Local Authorities 30% 12% 4% on (Tax + Surcharge)

[Only where TI > 1 CRORE]
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(1) Surcharge in case of Individual, HUF, AOP, BOP, or Artificial Judicial person:-
Cases Situations Surcharge
(i) If total income (including STCG u/s 111A and LTCG u/s 112A) doesn’t exceed ` 50lakh Nil
(ii) If total income (including STCG u/s 111A and LTCG u/s 112A) exceeds ` 50 lakh but 10%
doesn’t exceed ` 1 crore
(iii) If total income (including STCG u/s 111A and LTCG u/s 112A) exceeds ` 1 crore but 15%
doesn’t exceed ` 2 crore
(iv) If total income (including STCG u/s 111A and LTCG u/s 112A) exceeds ` 2crore:
 On such STCG u/s 111A and LTCG u/s 112A 15%

 On other income (viz. Total Income – such STCG u/s 111A and LTCG u/s 112A):
Other income doesn’t exceed ` 2 crore: 15%
If
Other income exceeds ` 2 crore but doesn’t exceed 5 crore: 25%
Other income exceeds ` 5 crore: 37%
Note: The aforesaid point (1) shall not apply in case an Individual / HUF / AOP / BOI / AJP , who has any
income u/s 115AD (as applicable in case of Foreign Institutional Investor).
(2) For Individual, HUF, AOP, BOP, or Artificial Judicial person having income u/s 115AD(1)(b)
i.e. STCG and LTCG on transfer of ANY security except units of MF or UTI:-
Cases Situations Surcharge
(i) If total income doesn’t exceed ` 50 lakh Nil

(ii) If total income exceeds ` 50 lakh but doesn’t exceed ` 1crore 10%
(iii) If total income exceeds ` 1 crore but doesn’t exceed ` 2 crore 15%
(iv) If total income [including STCG and LTCG u/s 115AD(1)(b) i.e. STCG and LTCG on
transfer of any security except units of MF/UTI, (whethet or not covered u/s 111A and
112A)] exceeds ` 2crore:
 On such STCG and LTCG i.e. on transfer of any security except units of MF/UTI 15%
(means, not only of section 111A and section 112A but others as well)
 On other income (viz. Total Income – such STCG and LTCG):
Other income doesn’t exceed ` 2 crore: 15%
If Other income exceeds ` 2 crore but doesn’t exceed 5 crore: 25%
Other income exceeds ` 5 crore: 37%
EXPLANATORY REMARKS:
(a) Since section 115AD(1)(b) covers STCG and LTCG on transfer of any security except units of MF/UTI
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(means, not only of section 111A and 112A but others as well), therefore, in addition to STCG u/s 111A
and LTCG u/s 112A, surcharge shall not exceed 15% in case of other STCG and LTCG (as arising from
transfer of any security except units) also.
(b) It may be noted here that where assessee is foreign company which has been notified as Foreign
Institutional Investor, in such a case, rate of surcharge as applicable to foreign company shall apply.
(3) For Domestic company as covered u/s 115BAA or u/s 115BAB (i.e. chargeable to tax @ 22% or
15% respectively, subject to certain conditions): 10% on tax of total income (ir-respective of quantum
of total income).
EFFECT OF CHANGE IN SURCHARGE ON TDS RATES:-
(A) IN CASE OF SALARY:
Where payment is being made to a RESIDENT or a NON-RESIDENT –

Situation Rate of surcharge
50 Lacs < Amount liable for TDS during the financial year > 1 CRORE 10 %
1 CRORE < Amount liable for TDS during the financial year > 2 CRORE 15 %
Amount liable for TDS during the financial year > 5 CRORE 37 %
Note: If employee furnishes his details of STCG u/s 111A or LTCG u/s 112A to his employer, then,
surcharge on such STCG or LTCG shall not exceed 15% in any case.
(B) IN CASE OF ANY OTHER SUM:
Where payment / credit is being made to a NON-RESIDENT Individual/HUF/AOP/BOI/AJP:

Situation Rate of surcharge
50 Lacs < Amount liable for TDS during the financial year > 1 CRORE 10 %
Amount liable for TDS during the financial year > 5 CRORE 37 %
Note: If tax is deductible on STCG as referred to in 111A or LTCG as referred to in 112A, then,
surcharge on such STCG or LTCG shall not exceed 15% in any case.
Amendment of Section 87A: Rebate of income-tax in case of certain individuals:-

 A resident individual can claim a rebate from income-tax under this section.
Prior to amendment After the amendment

 Rebate under this section was available only if his  Rebate under this section will be available if his
total income didn’t exceed ` 3,50,000. total income doesn’t exceed ` 5,00,000.
 The quantum of rebate was limited to ` 2,500.  The quantum of maximum rebate will be ` 12,500.
]\
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“CONSESSIONAL TAXATION relating to CERTAIN DOMESTIC COMPANIES”

Amendment of section 115BA: Tax on income of certain domestic manufacturing companies:-
Eligible Assessee Domestic Company.

Engaged in business of manufacturing or production of any
Essential
article or thing (including research or distribution of its
conditions must
(i) Such company manufactured or produced article, but not engaged in any other
to claim be…
business).
the benefit
(+)
of
Setup & registered on or after 1/3/2016.
lower tax rate
(ii) Total income must be computed without availing the benefit of following sections:
 32(1)(iia) i.e. Additional depreciation.
 32AD i.e. Investment allowance.
 33AB, 33ABA (i.e. Tea development account, Site restoration account).
 35(1)(ii)/(iia)/(iii)/ 35(2AA)/35(2AB) i.e. Scientific research expense/contribution.
 35AD i.e. Investment linked deduction to specified business.
 35CCC, 35CCD i.e. Agriculture extension project or skill development project.
 80-IA to 80RRB (Except 80JJAA) and 10AA i.e. Profit based deductions.
(i) Tax on special income (like, lottery income, LTCG, etc.):

Tax on Total
At special rate as prescribed under Chapter XII (i.e. Section 110 to 115BBG);
income
(ii) Tax on Balance income: 25%.
Optional scheme Option must be exercised on or before due date of first ROI.
Option once exercised – can’t withdraw neither for same nor for any other year.
But, if assessee excercises option u/s 115BAA, then, option under this section may be
withdrawn. As inserted by Taxation Laws (Amendment) Act, 2019
Insertions of section 115BAA & section 115BAB by the Taxation Laws (Amendment) Act, 2019:
Section 115BAA: Tax at the rate of 22% on income of certain domestic companies:-
Eligible Assessee Domestic Company.
(i) Total income must be computed without availing the benefit of following sections:
Essential
conditions  32(1)(iia) i.e. Additional depreciation.
to claim  32AD i.e. Investment allowance.
the benefit  33AB, 33ABA (i.e. Tea development account, Site restoration account).
of  35(1)(ii)/(iia)/(iii)/ 35(2AA)/35(2AB) i.e. Scientific research expense/contribution.
lower tax rate
4

 80-IA to 80RRB (Except section 80JJAA and section 80LA) and 10AA i.e. Profit
based deductions.
(ii) Total income of the company shall be calculated
- without setoff of any brought forward loss or depreciation from any earlier year; and
- without setoff of loss or unabsorbed depreciation deemed of assessee company u/s
72A
- if such loss is attributable to any deduction under the aforesaid sections and
- such loss will not be carried forward.
 In case of violation of aforesaid conditions in any previous year, the option exercised
under this section shall become invalid in respect of the assessment year relevant to that
previous year and subsequent assessment years and other provisions of the Act shall
apply, as if the option had not been exercised for the assessment year relevant to that
previous year and subsequent assessment years.
(iii) In a case where there is a depreciation allowance in respect of a block of asset which has
not been given full effect to (i.e. balance ½ additional depreciation due to put to use
less than 180 days) prior to the assessment year 2020-21, corresponding adjustment
shall be made to the written down value of such block of assets as on the 1st April, 2019
in the prescribed manner, if option for section 115BBA is exercised for a previous year
2019-20 relevant to the assessment year 2020-21.
Note: Since there is no time line within which option under this section can be exercised, a
domestic company having brought forward losses and depreciation on account of
deductions listed under this section may, if it so desires, postpone exercise the option
under this section to a later assessment year, after set off of the losses and depreciation
so accumulated.
Computation On special incomes (like, Lottery income, LTCG, On
of STCG u/s 111A etc.) as covered under Chapter XII other
Tax liability (i.e. Section 110 to 115BBG) income
on
Tax At special rate as given under these section 22%
total income
Surcharge @ 10% on tax computed on total income
Health & education cess @ 4% on aggregate of tax & surcharge on total income
Optional scheme To avail the benefit of lower tax rate, option must be exercised in the prescribed manner on
or before the due date of ROI for any previous year relevant to assessment year 2020-21 (or
any subsequent year).
 Option once exercised under this section– can’t withdraw neither for same nor for
any other year.
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MAT not MAT provision (i.e. section 115JB) shall not apply on a company which has exercised its
applicable option us 115BAA.
MAT Credit not MAT Credit provision (i.e. section 115JAA) shall not apply on a company which has
available exercised its option us 115BAA. Meaning there by, benefit of brought forward MAT Credit
u/s 115JAA shall NOT be given.
Section 115BAB: Tax @ 15% on income of certain new domestic manufacturing companies:-
Eligible Assessee Domestic Manufacturing Company.
(a)
Essential Engaged in business of manufacturing or production of
conditions must any article or thing (including research or distribution of
(i) Such Company
to claim be… its manufactured or produced article, but not engaged in
the benefit any other business).
of (+)
lower tax rate Setup and registered on or after 1/10/2019 and
(b)
commenced manufacturing on or before 31/3/2023.
Note: Business of manufacture or production of any article or thing does not
include business of –
(1) Development of computer software in any form or in any media
(2) Mining
(3) Conversion of marble blocks or similar items into slabs
(4) Bottling of gas into cylinder
(5) Printing of books or production of cinematograph films
(6) Any other business as may be notified by the Central Govt. in this behalf.
(ii) Total income must be computed without availing benefit of following sections:
 32(1)(iia) i.e. Additional depreciation.
 32AD i.e. Investment allowance.
 33AB, 33ABA (i.e. Tea development account, Site restoration account).
 35(1)(ii)/(iia)/(iii)/35(2AA)/35(2AB)i.e. Scientific research expense/contribution.
 80-IA to 80RRB (Except 80JJAA) and 10AA i.e. Profit based deductions.
(iii) (a) It is not formed by splitting up, or the reconstruction of a business in existence.
EXCEPTION:
- If, due to circumstances as specified in section 45(1A) [Refer to Capital Gains]
like, earthquake, flood, accidental fire, etc.,
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- assessee had to close its business by reason of extensive damage of assets, but,
- within 3 years from the end of year of discontinuance,
- formed an eligible business, in such a case benefit of this section will be available.
(b) New plant and machinery must be used by the assessee company.
EXCEPTIONS:
(i) Any plant and machinery which was used outside India by any person other
than the assessee, provided such plant & machinery:
 is imported into India;
 is not used in India and depreciation has not been claimed in respect
theirof before the date of installation by assessee.
(ii) If total value of previously used plant & machinery does not exceed 20% of the
total value of plant & machinery used in the business, then, it shall be deemed
that the above condition has been complied with.
(iv) The company does not use any building previously used as a hotel or as a
convention centre.
 If any difficulty arises regarding fulfilment of the conditions specified in (i)(a), (iii)(b),
and (iv) above, the Board may, with the approval of the Central Government, issue
guidelines for the purpose of removing the difficulty and to promote manufacturing or
production of article or thing using new plant and machinery.
(v) Total income of the company is calculated without setoff of any loss or
unabsorbed depreciation deemed of assessee company u/s 72A (pursuant to
amalgamation, etc.), if such loss is attributable to any deduction under the aforesaid
sections and such loss will not be carried forward.
 In case of violation of aforesaid conditions in any previous year, the option exercised
under this section shall become invalid in respect of the assessment year relevant to that
previous year and subsequent assessment years and other provisions of the Act shall
apply, as if the option had not been exercised for the assessment year relevant to that
previous year and subsequent assessment years.
 Where the option exercised under section 115BAB has been rendered invalid due
to violation of conditions specified in (i)(a), (iii)(b), and (iv) above, such person may
exercise option under section 115BAA. [Part of section 115BAA]
 Option once exercised – can’t withdraw neither for same nor for any other year.
Computation On income, which On special On any other income
of has been derived incomes (like,
On short term On any other
Tax liability from or is Lottery income,
capital gain income
on incidental to the LTCG, etc.) as
derived from (e.g. income
7
total income business of covered under transfer of a from house

manufacturing or Chapter XII capital asset on property,
production of an (i.e. Section 110 which no capital gain)
article or thing to 115BBG) depreciation is [See Note
allowable below]
Tax 15% At special rate 22% 22%
as given under
these section
Surcharge @ 10% on tax computed on total income
HEC @ 4% on aggregate of tax & surcharge computed on total income
Note: In computing such other income, no deduction or allowance in respect of any
expenditure or allowance shall be allowed.
Optional scheme Option must be exercised in the prescribed manner on or before due date of first ROI.
Option once exercised – can’t withdraw neither for same nor for any other year.
 In case of amalgamation, the option exercised u/s 115BAB shall remain valid in the
case of the amalgamated company only and if the essential conditions as given under
this section are continued to be satisfied by such company.
MAT not MAT provision (i.e. section 115JB) shall not apply on a company which has exercised its
applicable option us 115BAB.
Additionally, since assessee will be new company and option would have been exercised at
the time of first ROI, hence, there is no possibility of having brought forward MAT credit.
Power of AO Due to close connection or for any other reason, if transaction with any person, produces
to compute profit more than the ordinary expected profit, then, AO shall consider reasonable profit for
reasonable profit the purpose of this section.
in Provided that in case the aforesaid arrangement involves a specified domestic
certain cases transaction referred to in section 92BA, the amount of profits from such transaction
Section 115BAB(6) shall be determined having regard to arm's length price as defined in section 92F.
 The amount, being profits in excess of the amount of the profits determined by the
Assessing Officer, shall be deemed to be the income of the person.
 Income tax on the income so deemed shall be subject to tax @ 34.32% (i.e., Tax @
30% + Surcharge @ 10% + HEC @ 4%).
Amendment of Section 92BA: Meaning of specified domestic transaction:-
Existing Legal Position:

Specified domestic transaction means:-
8
(1) Any inter-unit transfer of goods or services [means, transfer of goods / services by the assessee from
his eligible business (i.e. eligible for deduction u/s 80IA to 80RRB or section 10AA), to a normal
business or vice-versa and consideration for such transfer does not match with fair market value of such
goods / services].
(2) Any transaction between assessee (who is carrying on eligible business i.e. eligible for deduction u/s
80IA to 80RRB or section 10AA) and other person (carrying normal business), which produces
profit more than ordinary profit to the assessee.
Provided that aggregate of aforesaid transactions during the previous year must exceed ` 20 crores.
After the amendment:

 Following transaction has also been added in the aforesaid list of specified domestic transactions:
(3) Any transaction between assessee (who exercised option u/s 115BAB) and other person carrying
normal business, which produces profit more than ordinary profit to the assessee.
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“IDENTICAL AMENDMENTS as brought in MULTIPLE SECTIONS / TOPICS”
Amendment of Section 13A: Exemption to Political Parties:-

 To claim exemption under this section, one of the existing conditions is that such political party receives
donation of `2,000 or more only by way of an account payee cheque/draft or by use of electronic
clearing system through a bank account or through electoral bond.
Object and corresponding amendment:
 In order to encourage other electronic modes of payment, this section has been amended so as to include
such other electronic mode as may be prescribed, in addition to the already existing permissible modes of
payment in the from of an account payee cheque / bank draft or by use of electronic clearing system through
a bank account or through electoral bond.
SIMILAR AMENDMENT IN OTHER SECTIONS:
 There are certain other sections also which prohibit cash transactions and allow/encourage payment or
receipt only through account payee cheque/draft or by use of electronic clearing system.
 To promote other electronic modes of payment, identical modifications have been made in the scheme of
these section so as to include such other electronic modes as may be prescribed, in addition to the already
existing permissible modes of payment in the from of an account payee cheque / bank draft or by use of
electronic clearing system through a bank account. Such other sections are as follows:
(1) Section 44AD: Special provisions for computing profit of business on presumptive basis:-
 To qualify for digital turnover (on which deemed business profit would be computed @ 6%, instead 8%),
9
payment can be received in addition to through account payee cheque / draft or by use of ECS through a
bank account, through such other electronic mode as may be prescribed also.
(2) Section 35AD: Deduction in respect of capital expenditure on specified business:-

To claim deduction under this section any expenditure in respect of which:
Payment or Must be made through A/C Payee

In (+) To (+) If exceeds
aggregate (+) (+) cheque/draft or by use of ECS through
a a
of `10,000/- a bank A/C or through such other
day Person
payments electronic mode as may be prescribed.
(3) Section 40A(3): Disallowance out of cash expenditure:-

in To a person
incurs Any respect
Payment
or
(+) > 10,000/-
If assessee In a day
Expenditure of
Aggregate ` 35,000/-
which (+) In case of
payments
Otherwise than by payment to
made
A/C Payee cheque Transport
or draft or ECS or through such other electronic mode as may be prescribed** Operator.
In such a case, NO DEDUCTION WILL BE ALLOWED IN RESPECT OF SUCH AMOUNT OF EXPENDITURE.

**This will also apply in case of section 40A(3A) and section 40A(4).
(4) Section 43(1): Determination of Actual Cost:-
If assessee acquires an asset in respect of which…….
Payment or Must be made through A/C Payee

In To If exceeds
aggregate (+) (+) (+) (+) cheque/draft or by use of ECS through
a a
of
day `10,000/- a bank A/C or through such other
Person
payments electronic mode as may be prescribed.
Then only such expenditure shall be considered for the purposes of determination of actual cost.
(5) Section 43CA and Section 50C: Adoption of SDV as deemed sales consideration:-
Land or building or both

held as… (+) If Stamp duty value > 105% of sales consideration
Capital asset OR Stock in trade (as shown by assessee)
Transfer ()
Then, capital gain/ business income shall be computed by taking such stamp duty value as sales consideration.
10
 Generally, stamp duty value is taken on the date of registration of the immovable property.
But,
− Where the date of the agreement and the date of registration are not the same,
− the stamp duty value on the date of agreement may be taken,
− only in a case where consideration, or a part thereof, has been received by way of an account payee cheque
or account payee bank draft or by use of electronic clearing system through a bank account or through such
other electronic mode as may be prescribed, on or before the date of the agreement for transfer.
(6) Section 56(2)(ix): Adoption of stamp duty value as deemed purchase price:-
Capital asset being land or building or both (+) If Stamp duty value > 105% of purchase price
(as shown by assessee)
Receives ()
Then, stamp duty value less purchase price shall be treated as income under the head income from other sources.
 Generally, stamp duty value is taken on the date of registration of the immovable property.
But,
− Where the date of the agreement and the date of registration are not the same,
− the stamp duty value on the date of agreement may be taken,
− only in a case where consideration, or a part thereof, has been paid by way of an account payee cheque or
account payee bank draft or by use of electronic clearing system through a bank account or through such
other electronic mode as may be prescribed, on or before the date of the agreement for transfer.
(7) Section 80JJAA: Deduction in respect of employment of new workmen:-
 In case of an existing business, to claim deduction u/s 80JJAA in respect of additional employee cost
Emoluments must be paid by way of an account payee cheque/bank draft or by use of electronic clearing
system through a bank account or through such other electronic mode as may be prescribed.
(8) Section 269SS, Section 269ST and Section 269T: Mode of accepting or taking deposits:-
Broadly speaking,
 If any person accepts or takes any loan or deposit or amount in relation to transfer of an immovable property
(individually/in aggregate) from any person which exceeds ` 20,000, then, such loan / deposit / such amount
must be taken through account payee cheque/ account payee demand draft / ECS / such other electronic
mode as may be prescribed. Section 269SS
 If repayable sum of any loan/deposit/ advance money in relation to transfer of an im-movable property
(along with interest) from any person is ` 20,000 or more, then, repayment of any sum out of such
loan/deposit/such advance must be through account payee cheque or account payee demand draft /ECS or
such other electronic mode as may be prescribed. Section 269T
 If aggregate amount of receipts-
(a) from a person in a day; or
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(b) in respect of a single transaction; or

(c) in respect of transactions relating to one event or occasion from a person,
is two lakh rupees or more, then, such sum must be received by an account payee cheque or an account payee
bank draft or use of electronic clearing system through a bank account or through such other electronic
mode as may be prescribed. Section 269ST
Amendment of Section 140A, 143, 234A, 234B and 234C: Credit of relief provided u/s 89:-
 Section 89 provides tax relief when salary (or family pension) is paid in arrears or in advance.
At present,
- Section 140A (which deals with self assessment),
- Section 143 (which deals processing of return of income),
- Section 234A (which deals interest for delay in filing of return of income),
- Section 234B and 234C (which deals interest for default in payment of advance tax),
contain provisions pertaining to tax computation after allowing credit for prepaid taxes and certain
admissible reliefs, credits, etc.
 However, the relief under section 89 is not specifically mentioned in these sections.
Amended version:
With a view to avoiding genuine hardship in the case of a person who is eligible for relief u/s 89, the
provisions of section 140A, 143, 234A, 234B and 234C have been amended to provide that computation of tax
liability shall be made under these sections after allowing relief under section 89.
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"PROFITS AND GAINS OF BUSINESS OR PROFESSION"
Change in Depreciation Rates:- Notification No. 69/2019, dated 20th September, 2019
1 2 3 4
S. Item Normal New depreciation rate as
No. depreciation rate applicable in case of acquisition
(Applicable in between 23rd August, 2019 to
case except falls 31st March, 2020 and put to use
in column no. 4) on or before 31st March, 2020
(i) Motor cars [Except covered in point (ii) below] 15% 30%
(ii) Motor cars, Motor buses, Motor lorries, Motor 30% 45%
taxies, Motor vans used in the business of
running them on hire
12
Amendment of Section 201 and Section 40(a)(i): Consequence of failure to deduct / pay tax:-
(A) Amendment of section 201:-
Section 201(1): If any person liable for TDS….
Fails to deduct such TDS OR After deduction fails to deposit such TDS
As required under the Act.
Then, he will be treated as assessee in default.
EXCEPTION
 Resident Payee has furnished his return of income u/s 139.

Tax is deductible
AND  Resident Payee has disclosed such income in his return.
on the aforesaid
sum but it is not  Resident Payee has paid tax due on his returned income.
deducted  Payer furnishes a certificate to this effect from the C.A.
Section 201(1A):
Fails to deduct such TDS
liable for
Any person OR
TDS as required under the Act.
Fails to deposit such TDS
Shall be liable to pay the following interest:

From date of deductible TO actual date of deduction of such TDS: Interest @ 1% P.M. or part of month
From actual date of deduction TO Actual date of deposit of such TDS: Interest @1.5% per month…..
Exception
If tax is deductible on the sum paid to a resident payee on the (+) Payer is not deemed as
sum credited to the account of a resident payee but not deducted assessee in default u/s 201(1)
He will be liable to pay Interest @ 1% for date of deductible TO the date of filing of ROI by resident payee.
(B) Amendment of section 40(a)(i):-
Section 40(a)(i) Section 40(a)(ia) Section 40(a)(iii)

- Any chargeable sum (except salary) - Any chargeable sum Salary payable:
- which is payable to - which is payable to - outside India; or
- a Foreign company or other NR - a Resident - to a non-resident
On which tax is deductible under chapter of TDS On which tax at source has not
13
But, been deducted or paid thereon with

(a) such tax has not been deducted or in the time prescribed under the
(b) after deduction, has not been paid on or before the due chapter of TDS
date specified in section 139(1).
100% Disallowance of such sum 30% Disallowance 100% Disallowance of such sum
Proviso: -
- If such tax has been deducted in any subsequent year, or If deduction or payment is delayed
- has been deducted during the previous year but has been paid after by one day then such sum shall
the due date specified in section 139(1), never be allowed
- Then such sum shall be allowed in the previous year in which such
tax has been deposited.
A relief has been given u/s 40(a)(i) and u/s 40(a)(ia) on fulfillment of following conditions:
Tax is deductible on the aforesaid sum The Payer is not deemed to be an

AND
but it is not deducted assessee-in-default u/s 201(1).
Then,
- for the purpose of this section, it shall be deemed that
- the payer has deducted and paid the tax on such amount
- on the date of the furnishing of return of income by such resident recipient (i.e. Payee).
Note: Prior to amendment, this relief was available in case of section 40(a)(ia) only, but, after the
amendment, it has been extended to section 40(a)(i) also.
Amendment of Section 43B: Certain deduction to be only on actual payment:-

Under the existing provisions, this section allows certain deductions (like, tax, duty, bonus, commission, etc.)
on actual payment basis.
After the amendment, scope of this section has been extended to cover the interest payable on loan or
borrowing from:
- Deposit taking NBFC; or
- Systemically important non-deposit taking NBFC;
If it is actually paid either during the relevant previous year If the payment is made after the due date for ROI
or on or before the due date for furnishing of ROI then
then Deduction can be claimed only in the year of
Deduction shall be allowed for the year from actual payment not for the year from which
which such expense relates (i.e. incurred). such expense relates (i.e. incurred).
Explanation: Where a deduction in respect of interest on loan/borrowing from NBFC is allowed as deduction in
any earlier year (i.e., prior to the assessment year 2020-21) on accrual basis, such interest is not again
deductible on payment basis in the year in which the payment is made.
14
Definitions:
 Systemically important non-deposit taking NBFC means a non-banking financial company (NBFC) which is
not accepting or holding public deposits and is having total assets of not less than ` 500 crore as per the last
audited balance sheet and is registered with RBI under the provisions of the Reserve Bank of India Act.
 Deposit taking NBFC means a non-banking financial company which is accepting or holding public deposits
and is registered with RBI under the provisions of the Reserve Bank of India Act.
Amendment of Section 43D: Tax of intt. income on doubtful debts of schedule bank, PFI, etc:-
 Interest income in relation to prescribed categories of bad or doubtful debts (broadly, NPA) received by
certain institutions (like, schedule bank or co-operative bank or public financial institution or housing finance
company, etc.), shall be chargeable to tax in the previous year in which it is credited to its profit and loss
account or in the year in which it is actually received, whichever is earlier. This section gives a relief to
the aforesaid assessee by specifically providing for taxability of interest on non-performing assets (NPA) on
receipt basis.
Object and corresponding amendment:-
 At present, benefit of this section is not available to interest on NPAs of non-banking financial
companies (NBFCs). RBI governs the functioning of banks and NBFCs in India. According to RBI
guidelines, NBFCs are only required to recognize income from NPAs, only when such income is actually
received by NBFCs. However, the Supreme Court in the case of Southern Technologies Ltd. v/s CIT held
that RBI guidelines would not have an overriding effect on income-tax provisions. Hence, currently, interest
on NPAs of NBFC is taxable on accrual basis.
 To extend the benefit of receipt basis taxation of interest on prescribed categories of bad or doubtful debts
to NBFCs, this section has been amended so as to insert reference of a “deposit-taking NBFC” or a
“systemically important non-deposit taking NBFC”.
 For meaning of deposit-taking NBFC” and “systemically important non-deposit taking NBFC” – Refer to section 43B.
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“CAPITAL GAINS” & “INCOME FROM OTHER SOURCES”
Amendment of Section 47(viiab) and Insertion of Section 10(4D): Exemption to specified fund:-
(A) Amendment of section 47(viia):-
Under the existing provisions:
Transfer of
 Bonds or Global Depository Receipts referred to in section 115AC; or
 Rupee denominated bond of an Indian company; or
 Derivative
15
- made by a non-resident
- on a recognised stock exchange located in any International Financial Services Centre and
- where the consideration for such transaction is paid or payable in foreign currency.
shall not be treated as transfer for the purpose of capital gain.
 The aforesaid exemption has also been provided on transfer on such other security as may be notified
by the Central Government.
(B) Insertion of section 10(4D): Exemption of certain income received by a specified fund:-
Exemption under this section is available provided the following conditions are satisfied-
(1) Income is accrued or arises to, or received by a specified fund.
For this purpose, “specified fund” means a fund which satisfies the following conditions-
- It is a fund established or incorporated in India in the form of a trust or a company or a limited
liability partnership or a body corporate.
- It has a certificate of registration as a Category III Alternative Investment Fund and is regulated
under SEBI (Alternative Investment Fund) Regulations, 2012.
- It is located in any International Financial Services Centre.
- All units of fund are held by non-residents (other than held by a sponsor /manager).
(2) Income arises as a result of transfer of capital asset referred to in section 47(viiab).
(3) Income arises as a result of transfer of capital asset on a recognized foreign exchange located in any
International Financial Service Centre.
(4) Consideration for transfer is paid or payable in convertible foreign exchange.
If the above conditions are satisfied, exemption will be available under this section to the extent such income
accrued or arises or received in respect of units held by non-resident.
Amendment of Section 50CA and Section 56(2)(x): Adoption of FMV as deemed consideration:-
Existing Legal Position of section 50CA:
Capital asset being share of a company (+) Sales consideration < Fair Market Value
other than Quoted share (shown by assessee) (as per prescribed method)
Transfer ()
Then, Capital Gain shall be computed by taking such fair market value as sales consideration.
Reason and corresponding amendment in section 50CA:-

(1) Adoption of FMV as per prescribed manner may result into genuine hardships in certain cases like where the
consideration for transfer of shares is approved by certain authorities and the person transferring the share
has no control over such determination.
(2) Section 56(2)(x) is not applicable to certain specified transactions (like, if transfer is between relative etc.).
However, no such exemption is available under section 50CA.
16
In order to provide relief in aforesaid cases, following amendment has been made:
 The provisions of this section shall not apply to any consideration received or accruing as a result of
transfer by such class of persons and subject to such conditions as may be prescribed.
Meaning there by, the Board has been empowered to prescribe transaction undertaken by certain class of
persons to whom the provisions of this section shall not apply.
 Similarly, in view of avoiding genuine hardship, similar amendment has been made in section 56(2)(x)
by which the Board has been empowered to prescribe transaction undertaken by certain class of
recipient to whom the provisions of section 56(2)(x) shall not apply.
Rule 11UAC: Prescribed class of persons to whom the provisions of section 56(2)(x) shall not apply:-
 The provisions of this section shall not apply to any immovable property, being land or building or
both, received by a resident of an unauthorised colony in the National Capital Territory of Delhi,
where the Central Government by notification in the Official Gazette, regularized the transactions of
such immovable property based on the latest Power of Attorney, Agreement to Sale, Will, possession
letter and other documents including documents evidencing payment of consideration for conferring or
recognizing right of ownership or transfer or mortgage in regard to such immovable property in favour of
such resident (i.e. person having physical possession of property on the basis of a registered sale deed or
latest set of Power of Attorney, Will, etc.).
Amendment of Section 54: Exemption on purchase / construction of residential house:-

 If an individual or a Hindu undivided family, transfers residential house property which is long-term, then,
capital gain arising therefrom will be exempt subject to purchase or construct one residential house
property in India with in time-limit as specified under this section.
 Exemption under this section is available for investment in construction or purchase of one residential house
property only.
 To get exemption under this section, assessee can purchase or construct two residential house properties
(with in the specified time-limit for construction/ purchase as is existing from earlier, which is unchanged).
 The aforesaid option of investment in two residential house properties will be available only where the
amount of capital gain does not exceed ` 2crore.
 The aforesaid option can be exercised only once in a lifetime.
In other words, if an assessee exercises the aforesaid option of investment in two residential house properties
for the previous year 2019-20, he shall not be subsequently entitled to exercise the same option for the
previous year 2020-21 or any subsequent year. However, in future he can continue to claim this exemption by
investing in purchase / construction of one residential house property.
17
Amendment of Section 54GB: Capital gain on transfer of residential house property:-

An individual or HUF is eligible to claim exemption on transfer of a long-term residential property subject to
fulfillment of various conditions like,
(a) The transfer should take place on or before 31st March, 2019.
(b) Net sale consideration must be utilized for subscription in equity shares in an "eligible company" (i.e. eligible
startup), and after such subscription, assessee should have more than 50% share capital (or voting right) of
that eligible company.
(c) Eligible company should utilize such consideration for the purchase of a new asset (i.e. new plant &
machinery) which should not be transferred by the eligible company within 5 years from the date of
acquisition.
(a) The sun set date of transfer of residential property has been extended from 31st March, 2019 to 31st March,
2021.
(b) The condition of minimum shareholding of 50% of share capital or voting right has been reduced to 25%.
(c) The condition restricting transfer of computer or computer software has been relaxed from the current 5
years to 3 years.
 COST INFLATION INDEX for Financial Year 2019-20 is 289.
Amendment of Section 56(2)(viib): Share premium in excess of FMV to be treated as income:-

Issue of Shares (At premium)
Closely held Company Resident Person
“Consideration”
Less
“Fair Market value”
Section Taxable
56(2)(viib) u/h
I/O/S
Exceptions
Issue of shares by venture capital undertaking to Issue of shares to class or classes of person
venture capital company or venture capital fund as notified by the Central Government.
Under the amended version:

AMENDMENT NO. 1:
 This section shall not apply in case of issue of shares by venture capital undertaking to specified fund
also.
18
 Specified fund means, Category I or Category II Alternative Investment Fund as regulated under SEBI
Regulations.
AMENDMENT NO. 2:
With a view to ensure compliance with the condition specified in the notification of the Central Government, this
section has been amended to provide that in case of failure to comply with aforesaid conditions, the
consideration received for issue of shares (which exceeds the FMV of such shares), shall be deemed to be the
income of the company chargeable to tax for the previous year in which the failure to comply with any of the
aforesaid condition has taken place. Further, it shall be deemed that the company has under-reported the said
income in consequence of the misreporting referred to in section 270A(8)/(9) for the said previous year.
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“ASSESSMENT OF COMPANIES”
Amendment of Section 115JB: "MINIMUM ALTERNATIVE TAX":-

AMENDMENTS as brought by the Taxation Laws (Amendment) Act, 2019:
 Rate of minimum alternate tax has been reduced from 18.5% to 15%.
 MAT Provisions shall not be applicable in case of domestic company as covered u/s 115BAA or u/s
115BAB (i.e. chargeable to tax @ 22% or 15% respectively, subject to conditions specified therein).
EXPLANATORY REMARK:
 In case of an assessee being Unit located in an International Financial Service Centre where 9% MAT Rate
is applicable, is remain unchanged.
AMENDMENT as brought by the Finance Act, 2019:

 In computing Book profit (for the purpose of MAT), lower of brought forward loss (other than depreciation)
or unabsorbed depreciation, as per books of account, is deductible.
 But, in case of a company whose application for corporate insolvency process under the Insolvency and
Bankruptcy Code, 2016 has been admitted by the Adjucating Authority (i.e. NCLT), aggregate amount of
brought forward loss (other than depreciation) or unabsorbed depreciation, shall be allowed as
deduction in computing book profit.
 Following case will also qualify for deduction of aggregate amount of brought forward loss (other than
depreciation) or unabsorbed depreciation:
In case of a company, and its subsidiary and the subsidiary of such subsidiary, where, the National
Company Law Tribunal, on an application moved by the Central Government u/s 241 of the Companies Act,
2013 has suspended the Board of Directors of such company and has appointed new directors who are
nominated by the Central Government, u/s 242 of the said Act.
19
Amendment of Section 115-O(8): Exemption on Dividend distribution by a unit located in IFSC:-

Located in IFSC No CDT on dividend distributed (out of current
(+) income) on or after 1/4/17.
Company Established on or after 1/4/16
(+) If any part their of is received by a company, then,
Derives income solely in that shall also not be liable for CDT on dividend
convertible foreign exchange distribution out of such receipt.
Observation and corresponding amendment:

 This aforesaid exemption was not available in respect of distribution out of income accumulated.
 But, to facilitate of dividend by companies operating in IFSC, the above provisions have been amended to
provide that any dividend paid out of accumulated income derived from operations in IFSC, after 1st
April, 2107 shall also not be liable for tax on distributed profits.
Amendment of Section 115QA and 10(34A):Tax treatment relating to buy-back of shares:-
Existing Legal Position with effect of amendment:

(A) Section 115QA:-
 Domestic company shall be liable to pay additional income tax @ 20% on any amount of distributed
income paid by the company on buy-back of unlisted shares. Deletion by F.A., 2019 (w.e.f. 5th July, 2019)
 Rate of additional income tax: 20% (+) 12% Surcharge (+) 4% Health & Education cess = 23.296%.
Amendment made by Taxation Laws (Amendment) Act, 2019:
 In order to provide relief to listed companies, which have made a public announcement of the
buy-back of shares before 5th July, 2019 but actual buy-back takes place on or after 5th July,
2019, this section has been amended.
 After the amendment, provisions of this section will not be applicable if the following conditions
are satisfied-
(a) It is buy-back of shares of listed company, and
(b) Public announcement pertaining to buy-back has been made before 5th July, 2019 in
accordance with the provisions of the SEBI (Buy-back of Securities) Regulations, 2018.
(B) Section 10(34A):-
− Any income arising to an assessee, being a shareholder,
− on account of buy-back of unlisted shares, Deletion made by F.A., 2019
− shall be exempt.
Amendment of Section 115R: Tax on Income distributed by a specified company/mutual fund:-

If any income is distributed by the specified company or a mutual fund to its unit holders, then, such
specified company / mutual fund becomes liable to pay additional income-tax on section such distributed income.
20
Amended version:
Exemption on income distribution by a mutual fund located in IFSC:
In order to incentivise relocation of mutual fund in International Financial Service Centre (IFSC), this
section has been amended to provide that no tax under this section shall be chargeable provided the following
conditions are satisfied–
(1) Income is distributed by “specified mutual fund”.
“Specified mutual fund” for this purpose is:
- It is a mutual fund specified under section 10(23D).
- It is located in any IFSC.
- All the units are held by non-residents.
(2) Such income in distributed out of its income derived from transactions made on a recognized stock
exchange located in any IFSC and where the consideration for such transaction is paid or payable in
convertible foreign exchange.
(3) Such income is distributed on or after 1st September, 2019.
Exams oriented approach for aforesaid exemption from distribution tax to MF located in IFSC:-
Distributes income out of income derived from
MF as specified u/s 10(23D)
transaction
Specified i.e.
mutual Located in IFSC made on RSE (+) Consideration of which
fund located in any IFSC is paid / payable in
All units of which are held by convertible foreign exchange
non-resident. (+)
Such distribution must be made on or after 1/09/2019.
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“ASSESSMENT OF CHARITABLE/ RELIGIOUS TRUST AND INSTITUTION”
Amendment of Section 12AA and Section 10(23C)(iv)/(v)/(vi)/(via): Registration requirement-

(A) Amendment of section 12AA:-
On receipt of an application for registration, PCIT/CIT, to ensure about objects of the trust & genuineness of
its activities, shall call for necessary documents and informations and hold inquiries.
Then if CIT/PCIT is…
Satisfied () Not satisfied

He shall grant registration. He shall reject such registration application (with opportunity of being heard to trust)
Power to cancel already granted registration (Subject to opportunity of being heard to trust):
21
If activities of the trust…. OR If case is covered u/s

13(1)(a) To 13(1)(d).
are not genuine OR Not carried out as per object of the trust.
Reason and corresponding amendment:

In case of violation of provisions of the Right to Education Act, the Prohibition of Capitation Fees Act,
Foreign Contribution Regulation Act, or any other Act, by a charitable trust could not be a ground to take away
the aforesaid registration of the entity as held by the Courts in various cases like, Global Academy of
Emergency Medicine v/s CIT(Delhi), CIT v/s Maria Social Service (Kar.), Bharati Vidyapeeth v/s ITO (Pune).
To supersede the aforesaid rulings, this section 12AA has been amended on the following lines:
(1) At the time of granting the registration to a trust or institution, the CIT / PCIT shall satisfy himself about
the compliance of the trust or institution to requirements of any other law which is material for the
purpose of achieving its objects.
(2) Where a trust or an institution has been granted registration under section 12AA and, subsequently, it is
noticed that the trust or institution has violated requirement of any other law which was material for the
purpose of achieving its objects and the order holding such violation has occurred, has not been disputed
(or has attained finality), CIT / PCIT may, by an order in writing, cancel the registration of such thrust
or institution after affording a reasonable opportunity of being heard.
 Similar amendments have been made in section 10(23C)(iv)/(v)/(vi)/(via), at the time of granting of
approval and in relation to withdrawl of such approval in case of violation of requirements of any
other law which was material for the purpose of achieving its objects, and the order holding such
violation has occurred, has not been disputed (or has attained finality).
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“TAX DEDUCTION AT SOURCE”
Amendment of Section 194A: TDS on Interest other than “Interest on securities”:-

 Tax deduction at source is not required under this section if interest (other than interest on securities)
paid or payable to a resident doesn’t exceeds the following limit:
When recipient is
If Payer is Senior citizen Any other person
 Banking company 50,000 10,000
 A co-operative society engaged in carrying on the banking business 50,000 10,000
 Post office on any deposit under notified scheme 50,000 10,000
 Any other person 5,000 5,000
22

 The aforesaid limit of 10,000 has been increased to ` 40,000 with effect from 1st April, 2019.
 Now, if recipient of interest is a person (other than a senior citizen), tax will be deducted by bank/ co-
operative bank/ post office only if aggregate interest payable during the financial year exceeds ` 40,000.
 There is no change in the threshold limit if recipient is a senior citizen. Similarly, there is no change in the
threshold limited of ` 5,000.
Amendment of Section 194DA: TDS on Payment in respect of life insurance policy:-

 Tax @ 1% is need to be deducted on payment of any sum (i.e. gross amount) under a life insurance policy,
which is not exempt under section 10(10D).
Reason and corresponding amendment:
 Several concerns have been expressed that deducting tax on gross amount creates difficulties to an assessee
who otherwise has to pay tax on net income (i.e. after deducting the amount of insurance premium paid by
him from the total sum received).
 From the point of view of tax administration as well, it is preferable to deduct tax on net income so that the
income as per TDS return of the deductor can be matched automatically with the return of income filed by
the assessee. The person who is paying a sum to a resident under a life insurance policy is aware of the
amount of insurance premium paid by the assessee.
 Hence, this section is amended to provide for tax deduction at source at the rate of 5% on income
component of the sum paid by the person.
Amendment of Section 194-I: TDS on rent:-

 Presently, tax is deductible only if rent paid / payable during the financial year exceeds ` 1,80,000.
 But, after the amendment, this limit has been increased to ` 2,40,000 with effect from 1st April, 2019.
Amendment of Section 194-IA: TDS on transfer of certain immovable properties:-

Background:
This section relates to payment on transfer of certain immovable property (other than agricultural land)
and provides for levy of TDS @ 1% on the amount of consideration paid or credited for transfer of such property.
Observation and corresponding insertion:
 Prior to amendment, the term “consideration for transfer of any immovable property” was not defined.
 It has been seen that in the case of purchase of immovable property, there are other types of payments made
besides the sales consideration and the buyer is contractually bound to make such payments to the builder /
seller, either under the same agreement or under a different agreement. Some of these payments are those
for rights to amenities like club membership fee, car parking fee, electricity and water facility fees,
maintenance fee, advance fee, etc.
23
 Accordingly, this section has been amended to provide that, the term “consideration for any immovable
property” shall include all charges of the nature of club membership fee, car parking fee, electricity
and water facility fees, maintenance fee, advance fee or any other charges of similar nature, which are
incidental to transfer of the immovable property.
Insertion of Section 194-M: TDS on payment of certain sums by certain individuals or HUF:-
- An individual or a HUF (who is not required to deduct tax u/s 194C, section 194H or section 194J)
- responsible for paying any sum to any resident
 for carrying out any work (including supply of labour for carrying out any work) in pursuance of a
contract,
 by way of commission (not being insurance commission referred to in section 194D) or brokerage or
 by way of fees for professional services during the financial year,
- shall,
- deduct tax thereon @ 5%.
 Such tax shall be deducted at the time of credit of such sum to the account of the payee or the payment
thereof (by whatever mode), whichever is earlier.
 No deduction shall be made in a case where such sum or aggregate of such sum to the payee does not
exceed ` 50,00,000 /- in a financial year.
 The provisions of section 203A (relating to obtaining tax deduction & collection account number) shall not
apply to a person required to deduct tax in accordance with the provisions of this section.
Explanation: For the purposes of this section, "Commission or brokerage", "professional services" and "work"
shall have the same meaning as assigned to it in section 194H, section 194J and section 194C, respectively.
Corresponding amendment in section 197 (i.e. Certificate from AO for nil / lower rate of TDS):-
 Recipient can apply for certificate of nil or lower rate of TDS to the Assessing Officer.
Insertion of Section 194-N: TDS on payment of certain amounts in cash:-

- Every person, being,—
 a bank;
 a co-operative bank; or
 a post office,
- who is responsible for paying any sum or aggregate of sums,
- in cash,
- in excess of one crore rupees during the previous year,
- to any person (herein referred to as the recipient)
- from one or more accounts maintained by the recipient with it
- shall,
- at the time of payment of such sum,
- deduct income-tax @ 2% of sum exceeding one crore rupees.
24
 Provided that No TDS under this section shall be deducted to any payment made to:
(i) Government, banking company, co-operative bank or a post office.
(ii) Any business correspondent of a banking company or co-operative bank in accordance with the guideline
issued in this regard by RBI.
(iii) Any white label ATM operator of a banking company / co-operative bank in accordance with the
authorisation issued by RBI under the Payment and Settlement Systems Act, 2007.
(iv) Such other person or class of persons, which the Central Government may, by notification in the Official
Gazette, specify in consultation with the Reserve Bank of India.
Notification no. 68/2019 dated 18th September, 2019:
The Central Government after consultation with the Reserve Bank of India, hereby specifies-
- Cash Replenishment Agencies (CRA’s) and franchise agents of White Label Automated Teller
Machine Operators (WLATMO’s)
- maintaining a separate bank account from which withdrawal is made
- only for the purposes of replenishing cash in the Automated Teller Machines (ATM’s) operated by such
WLATMO’s and
- the WLATMO have furnished a certificate every month to the bank certifying that the bank account of
the CRA’s and the franchise agents of the WLATMO’s have been examined and the amounts being
withdrawn from their bank accounts has been reconciled with the amount of cash deposited in the
ATM’s of the WLATMO’s.
Notification no. 80/2019 dated 15th October, 2019:
(a) the authorised dealer and its franchise agent and sub-agent; and
(b) Full-Fledged Money Changer (FFMC) licensed by the RBI and its franchise agent;
maintaining a separate bank account from which withdrawal is made only for the purposes of,-
(i) purchase of foreign currency from foreign tourists or non-residents visiting India or from resident
Indians on their return to India, in cash as per the directions or guidelines issued by the RBI; or
(ii) disbursement of inward remittances to the recipient beneficiaries in India in cash under Money
Transfer Service Scheme (MTSS) of the Reserve Bank of India, and
aforesaid specified person furnished a certificate every month to the bank withdrawal is only for the
purposes specified above and the directions or guidelines issued by the RBI have been adhered to.
Notification no. 70/2019 dated 20th September, 2019:
The commission agent or trader, operating under Agriculture Produce Market Committee (APMC), and
registered under any Law relating to Agriculture Produce Market of the concerned State, and who has
certified to the banking company or co-operative society or post office that the withdrawal of cash from the
account in excess of rupees one crore during the previous year is for the purpose of making payments to
the farmers on account of purchase of agriculture produce.
25
© SATISH MANGAL (9350647377, satishmangal17@gmail.com) Exam Oriented Approach for Section 194M & 194N (TDS)
Section TDS Responsible Payee Timing of Rate of TDS Limit for Non- Other Relevant Provisions
on - Payer (Deductor) (Deductee) Deduction Deduction
194M Payment to  Section 203A shall not apply to deductor of this section.
Credit Not
(As contractor or An individual Resident 5%  Recipient can apply for certificate of nil or lower rate of
applicable or exceeding
w.e.f.
Sub- or TDS to the AO. [Corresponding amendment of section 197]
contractor payment, ` 50,00,000
1st **Comment:
HUF** (whichever during a
september for who is not An individual / HUF is required to deduct tax at source in
2019) is Financial
carrying out required to respect of the following under this section-
ANY WORK Earlier) Year to the
deduct tax - Payment / credit to a resident contractor or resident
Or payee
u/s professional, when such payment is for personal use.
Commission [*Deeming
194C, - Payment / credit to a resident contractor or resident
Or Fiction
Brokerage 194H, professional or to a resident by way of commission (not being
NOT
Or or insurance commission) or brokerage [where payer is an
available]
Fees for 194J individual / HUF who carries on business or profession and
professional books of account are not subject to tax audit under section
services 44BA(a)/(b) in the immediately preceding financial year].
194N Cash Bank Any Person At the time 2% Not  Tax deducted under this section shall not be deemed to be
(As withdrawal or of payment exceeding income received for computing income of recipient.
applicable (in excess of Co-operative in cash ` 1 crore  No TDS under this section shall be deducted to any
w.e.f.
1st ` 1 crore) bank during a payment made to:
september from one or or Financial (i) Govt., banking company, co-operative bank, post office.
2019) more Year to the
Post office (ii) Any business correspondent of a banking company or co-
accounts payee operative bank as per guideline issued in this regard by RBI.
maintained (From one (iii) Any white label ATM operator of a banking company / co-
with bank / or more operative bank as per the authorization issued by RBI under
Co-operative accounts as the Payment and Settlement Systems Act, 2007.
bank / Post maintained (iv) Such other person or class of persons notified by the Central
office with Payer) Government in consultation with RBI.
25A
Press Release, dated 30-08-2019 (Clarification on cash withdrawal before september 1, 2019)
 The Central Board of Direct Taxes (CBDT) has clarified that any cash withdrawal prior to 1st September,
2019 will not be subjected to the TDS under section 194N. However, since the threshold of ` 1 crore is
with respect to the previous year, calculation of amount of cash withdrawal for triggering deduction under
section 194N shall be counted from 1st April, 2019.
Corresponding amendment in section 198 (i.e. Deemed income of payee):-
 Tax deducted u/s 194N shall not be deemed to be income received for computing income of recipient.
Amendment of Section 206A: Quarterly return in respect of payment of interest without TDS:-
 Any banking company or
 co-operative society or
 public company (i.e. Housing Finance company)
− responsible for paying to a resident any income not exceeding `10,000 `40,000/-, where the payer is a
banking company or a co-operative society, and `5,000/- in any other case
− by way of interest (other than interest on securities),
− shall prepare quarterly statements in such form, containing such particulars, verified in such manner and
within such time, as may be prescribed, and deliver to the prescribed income-tax authority or its authorised
person such statements as aforesaid, on a computer readable media. AS AMENDED BY F. A., 2019
 Banking company/Co-operative society/Housing Finance company may also furnish a correction statement
(i.e. revised return) for rectification of any mistake in quarterly return in such form and verified in such
manner as may be specified by the authority. AS INSERTED BY F. A., 2019
Exams oriented approach for the aforesaid provisions of section 206A:-

10,000
Banking company or Co-operative society Interest (except on securities) > 40,000 Resident
Housing finance company Interest (except on securities) > 5,000
Shall furnish quarterly statement in prescribed form and manner on computer readable media to the
authorised person (NSDL) with in the prescribed time.
 After the amendment, a revised / correction statement (for rectification of any mistake in already filed such
quaterly statement) may also be furnished in prescribed form and manner.
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“ASSESSMENT PROCEDURE”
Amendment of Section 139(1): Filing of Return of Income:-

26
AMENDMENT NO. 1:
 Under the existing provisions, a person claiming exemption u/s 54 to 54GB (i.e. from capital gains tax
on investment in specified assets like house, bonds, etc.), is not required to furnish a return of income, if
after claim of such exemptions, his total income doesn’t exceed the basic exemption limit.
 In order to make furnishing of return compulsory for such persons, sixth proviso to section 139(1) has
been amended to provide that-
- a person who is claiming exemption u/s 54, 54B, 54D, 54EC, 54F, 54G, 54GA and 54GB
- shall necessarily be required to furnish a return,
- if before claim of such exemption, his total income is more than the basic exemption limit.
Explanatory Remark: In case of exemption u/s 54EE, furnishing of return will not be required even if
without claim of such exemption 54EE is more than the exemption limit as the aforesaid amendment
does not cover the case of section 54EE.
AMENDMENT NO. 2:
 In order to ensure that persons who enter into certain high value transactions do furnish their return
of income, a new proviso i.e. seventh proviso has been inserted in section 139(1) which provides that:
- Any person other than a company or a firm
- who is not required to furnish a return under this sub-section and
- who at any time during the previous year,
(i) has deposited an amount or aggregate of the amounts exceeding `1crore in one or more current
accounts maintained with a banking company or a co-operative bank; or
(ii) has incurred expenditure of an amount or aggregate of the amounts exceeding `2lakh for himself or
any other person for travel to a foreign country; or
(iii) has incurred expenditure of an amount or aggregate of the amounts exceeding `1 lakh towards
consumption of electricity; or
(iv) fulfils such other conditions as may be prescribed,
- shall, furnish a return of his income
- on or before the due date, in the prescribed form and verified in the prescribed manner and setting forth
such other particulars as may be prescribed.
Exams oriented approach for the aforesaid proviso of section 139(1):-
Any person except company or firm shall necessarily be required to furnish a return of his income,
if amount / aggregate amount, during the previous year, of…
Current account deposits in Expense on his or Electricity met out any

one or more account with a OR any other person OR expense OR
other criteria
bank (including co-operative foreign travel exceeds as may be
bank) exceeds `1 crore exceeds ` 2 lakh ` 1 lakh prescribed.
27
Amendment of Section 139A: Permanent Account Number:-

AMENDMENT NO. 1:
 At present, any person is required to apply for Permanent Account Number (PAN) in certain cases only
[like, if total income exceeds basic exemption limit, or if it is required to furnish return u/s 139(4A), etc.].
 It has been observed in many cases that persons entering into high value transactions (such as purchase of
foreign currency or huge withdrawal from the banks), do not possess a PAN.
 In order to keep an audit trail of such transactions, for widening and deepening of the tax base, new insertion
has been in this section so as to provide that every person, who intends to enter into certain prescribed
transitions and has not been allotted a PAN, shall also apply for allotment of a PAN.
AMENDMENT NO. 2:
To ensure ease of compliance, inter-changeability of PAN with the Aadhaar number has been brought
under this section on the following lines:
 Every person who is required to furnish or intimate or quote his PAN under the Act, and who has not been
allotted a PAN but possesses the Aadhaar number, may furnish or intimate or quote his Aadhaar
number in lieu of PAN, and such person shall be allotted a PAN in the prescribed manner.
 Every person who has been allotted a PAN, and who has linked his Aadhaar number under section 139AA,
may furnish or intimate or quote his Aadhaar number in lieu of a PAN.
AMENDMENT NO. 3:
To ensure quoting of PAN or Aadhaar number for entering into prescribed transactions and
authentication thereof in the prescribed manner, following insertions have been made:
 Every person entering into the prescribed transaction shall quote his permanent account number or
Aadhaar number, as the case may be, in the documents pertaining to such transactions and also
authenticate such permanent account number or Aadhaar number, in such manner as may be
prescribed.
 Every person receiving any document relating to the prescribed transaction, shall ensure that permanent
account number or Aadhaar number, as the case may be, has been duly quoted in such document and
also ensure that such permanent account number or Aadhaar number is so authenticated.
Consequential amendment in section 272B (i.e. Penalty in case of violation of PAN provisions
as given u/s 139A):-
 Failure to comply with the provisions of section 139A (i.e. PAN)
 Failure to quote or intimate (or false/wrongly quote or intimate) PAN or
` 10,000/-
Aadhaar as required u/s 139A.
for
New insertions (viz. Impact of amendment u/s 139A): each such default
28
 Failure to quote or authenticate his PAN or Aadhaar in any document

relating to prescribed transaction u/s 139A.
 If person receiving the document relating to prescribed transaction fails
to ensure that PAN/Aadhaar has been duly quoted in document relating
to prescribed transaction or it has been duly authenticated.
Amendment of Section 139AA: Quoting of Aadhaar number:-

OBLIGATIONS:
(1) Every person who is eligible to obtain Aadhaar number, in every application for PAN or ROI, as filed on or
after 1/7/2017, shall quote Aadhaar number (if not allotted, then, Enrollment ID of Aadhaar application
form shall be quoted).
(2) If PAN has been allotted before 1/7/2017 (i.e. before obtaining Aadhaar number), then, such person shall
intimate his Aadhaar number to the prescribed authority upto a notified date.
In otherwise case, his PAN will deemed to be invalid and the other provisions of this Act shall apply, as if the
person had not applied for allotment of permanent account number.
But, if such person do not have Aadhaar number and do not wish to obtain such number for the time being,
his PAN will not be deemed to be invalid. [As decided by the Supreme Court]
Amended version:
 In order to protect validity of transactions previously carried out through such PAN, the scheme of this
section has been modified to provide that if a person fails to intimate the Aadhaar number, the PAN allotted to
him shall be made inoperative after such notified date in such manner as may be prescribed.
Effect of Change (AS MADE BY FINANCE ACT, 2017) in time-limit for completion of assessment / re-
assessment [Relevant for P.Y. 2019-20 (A.Y. 2020-21)]:
Section 153(2):Time limit for completion of assessment or reassessment u/s 147:-
If notice u/s 148 has been served before 1st April 2019 If notice u/s 148 is served on or after 1st April 2019
9 Months 12 Months
From the end of the financial year in which notice u/s 148 was served.
Section 153(3): Time limit for completion of fresh assessment in pursuance of an order u/s
254, 263, 264 setting aside / cancelling an assessment:-
If such order is passed by CIT (or in case of order of ITAT, received by CIT)-
Before 1st April 2019 On or after 1st April 2019
9 Months 12 Months
from the end of the financial year in which such order is passed by CIT (or order of ITAT, is received by CIT)
29
Section 153B: Time limit for completion of assessment or reassessment in case of person
searched / requisitioned as referred to in section 153A and in case of such
other person as referred to in section 153C:-
If date of execution of last authorisation for search / requisition u/s 132/132A (i.e. date of panchnama) is:
Before 1st April 2019 On or after 1st April 2019
18 Months 12 Months
From the end of the financial year in which such last authorisation for search / requisition was executed.
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“PENALTIES & PROSECUTIONS”
Amendment of Section 270A: Penalty for under reporting and misreporting of income:-
This section relates to penalty for under-reporting and misreporting of income. Existing provisions provide
for various situations for the purposes of levy of penalty under this section. Some out of which are as follows:
S. MANNER OF COMPUTATION
CASES OF UNDER-REPORTED INCOME QUANTUM OF UNDER-
No. OF TAX ON UNDER-
REPORTED INCOME
REPORTED INCOME
(1) If Return has been furnished and income has Tax on [Under-reported Income +
Income assessed
been assessed for the first time (i.e. assessment Income determined u/s 143(1)]
(-)
made for first time) (-)
Income determined u/s
AND Tax on Income determined u/s
143(1)
Income assessed > Income determined u/s 143(1) 143(1)
(2) If No return has been furnished and (a) In case of assessee (a) Tax on under reported
assessment made for first time other than individual income as if it were the total
AND or HUF: income.
Income assessed > Basic Exemption Limit Amount of income assessed
(b) In case of Individual (b) Tax on (under-reported
or HUF: income+ BEL) as if it were
Amount of Income assessed total income of assessee
(-)
Basic exemption Limit
(3) Where income is not assessed for first time i.e. Reassessed Income Tax on [Under-reported Income +
case of re-assessment (-) Earlier assessed Income]
AND Earlier assessed Income (-)
Reassessed Income > Earlier assessed Income Tax on Earlier assessed Income.
 Serial No. (4), (5) and (6) cover the cases where section 115JB (MAT Provisions) or 115JC (AMT Provisions) applies.
30
 Serial No. (7) and (8) cover the cases of loss which under assessment / re-assessment is reduced or converted in income.

 It was noticed that a case where return is furnished for the first time u/s 148 was not covered by the
section and accordingly this section is amended to include such circumstance and quantification in respect
thereof under Serial No. (2).
Amended version of aforesaid Serial No. (2):

S. MANNER OF COMPUTATION
CASES OF UNDER-REPORTED INCOME QUANTUM OF UNDER-
No. OF TAX ON UNDER-
REPORTED INCOME
REPORTED INCOME
(2) If No return has been furnished or return (a) In case of assessee other (a) Tax on under reported
has been furnished for the first time u/s 148 than individual or HUF: income as if it were the
and assessment made for first time Amount of income assessed total income.
AND (b) In case of Individual or
Income assessed > Basic Exemption Limit HUF: (b) Tax on (under-reported
Amount of Income assessed income+ BEL) as if it were
[Underlined words have been added by F.A. 2019] (-) total income of assessee
Basic exemption Limit
Amendment of Section 276CC: Prosecution for failure to furnish return in certain cases:-
Rigorous Imprisonment and Fine
Nature of Offence Minimum Maximum
Willful failure to file return in time u/s 139(1), or in

response to notice u/s 142(1) / u/s 148 /u/s 153A
Case I: If tax tried to be evaded exceeds ` 25 Lacs 6 months (with fine) 7 years (with fine)
Case II: In any other case 3 months (with fine) 2 years (with fine)
Note: No prosecution if –
(a) The return is filed before the expiry of the assessment year; or
(b) Tax payable by such person, not being a company, on regular assessment as reduced by TDS and advance
tax does not exceed ` 3,000/-.
 The said provision did not provide for taking into account tax collected at source and self-assessment
tax for the purpose of determining the tax liability.
(i) The aforesaid limit of ` 3,000/- has been increased to ` 10,000/-.
(ii) While checking the limit of ` 10,000/-, in addition to TDS and advance tax, TCS and self assessment tax
paid before the expiry of relevant assessment year will also be reduced.
31
“TAXATION OF FOREIGN COMPANIES & NON-RESIDENTS IN INDIA”
Amendment of Section 115A(1)(a): Tax on interest in case of foreign company or other NR:-
 Interest income of a foreign company or other non-residents in certain cases like interest income from
Government or Indian concern on money borrowed in foreign currency by such Government or Indian
concern, or interest received from infrastructure debt fund, or on foreign currency bond/ rupee denominated
bond, etc. us taxable @ 20% or 5%, as the case may be.
But, this section prohibits any deduction under Chapter VI-A (i.e. section 80C to 80U) against such income.
 Under Chapter VI-A, inter alia, section 80LA provides for deduction in respect of income of Unit of IFSC.
 In order to ensure that units located in IFSC claim full deduction under section 80LA, this section has
been amended to provide that the aforesaid prohibition of Chapter VI-A shall not apply to a unit of an
International Financial Service Centre for claiming deduction under section 80LA.
Amendment of section 10(15): Interest exemption to NR on money lent to unit located in IFSC:-
 With a view to facilitate external borrowing by the units located in International Financial Services Centre, a
new insertion has been made by this Finance Act, 2019 in section 10(15), but this exemption will be
available provided the following conditions are satisfied:
(1) Assessee (i.e., Recipient of interest) is a non-resident.
(2) Interest is payable by a unit located in an International Financial Service Centre.
(3) Interest pertains to money borrowed by it on or after 1st September, 2019.
 If all aforesaid conditions are satisfied, interest income will be exempt under section 10(15).
Insertion of Section 10(4C): Exemption of interest income of rupee denominated bonds:-

Interest income will be exempt but subject to the fulfillment of following conditions:
(1) Such interest is payable to a non-resident or a foreign company.
(2) It is payable by an Indian company or a business trust.
(3) It is payable in respect of money borrowed from a source outside India by way of issue of rupee
denominated bonds [as referred to in section 194LC].
(4) The aforesaid bonds are issued during 17th September, 2018 to 31st March , 2019.
Amendment of Section 195(2) & 195(7): TDS on payment to non-residents:-

 Where the responsible payer considers that the whole of such sum would not be income chargeable in the
case of recipient, he may make an application to the AO to determine the appropriate chargeable proportion
32
of such sum, and upon such determination, tax shall be deducted only on that proportion of the sum which is
so chargeable. Section 195(2)
 The Board may specify a class of persons or cases in which person responsible for paying any sum, whether
or not chargeable under the provisions of this Act, shall make an application to the AO to determine the
appropriate chargeable proportion, and upon such determination, tax shall be deducted on that proportion of
the sum which is so chargeable. Section 195(7)
Purpose and corresponding amendment:
 At present, the process of obtaining above certificate / order is manual.
 In order to use technology to streamline the process which will not only reduce the time for processing
of such applications, but shall also help tax administration in monitoring such payments, the scheme of
this section has been amended to allow for prescribing the form and manner of applicable to the Assessing
Officer and also for the manner of determination of appropriate portion of sum chargeable to tax by the
Assessing Officer.
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“TRANSFER PRICING”
Amendment of Section 92CD: Effect to Advance Pricing Agreement:-

Existing Legal Position with effect of amendment and reason their of:-
(1) If return for any previous year to which APA applies has already been furnished before the date of
such APA, assessee shall furnish a modified return within 3 months from the end of the month in which
such APA was entered, and such return shall be deemed to be a return u/s 139.
(2) If on the date of filing of modified return assessment or re-assessment for such year is pending:
AO shall consider such APA and modified return in completing such assessment / reassessment.
 Time limit as otherwise available for completion of such proceedings shall be extended by one year.
(3) If without awaiting for modified return (i.e. before the expiry of time limit of modified return), assessment
or re-assessment for any year to which APA applies has already been completed.
In such a case, to give effect of APA, AO shall proceed to assess or re-assess income for such year shall
pass an order modifying the total income of the relevant assessment year (determined in such assessment
or reassessment) having regard to and in accordance with the APA. As amended by F. A., 2019
REASON FOR AMENDMENT:

Due to the use of words “assess or reassess”, a possible view is that assessing officer may start
fresh assessment or reassessment in respect of completed assessment or reassessment of the assessee
who has modified his return of income in accordance with the APA entered into by him, while the intention
of the legislature is that Assessing Officer should merely modify the total income consequent to modification
of return of income in pursuance of APA.
Such proceedings must be completed within one year from the end of the year of filing of modified return.
33
Amendment of Section 92CE: Secondary adjustment in certain international transactions:-

Existing Legal Position with effect of amendment:-
Meaning:
“Primary adjustment” to a transfer price means:
- the determination of transfer price
- in accordance with the arm's length principle
- resulting in an increase in the total income or reduction in the loss
- of the assessee.
“Secondary adjustment” means:
- an adjustment in the books of account of the assessee and its associated enterprise
- to reflect that the actual allocation of profits between the assessee and its associated enterprise
- are consistent with the transfer price
- determined as a result of primary adjustment,
- thereby removing the imbalance between cash account and actual profit of the assessee.
“Excess money” means:
- the difference between
- the arm's length price determined in primary adjustment
- and
- the price at which the international transaction has actually been undertaken.
Applicability of Secondary Adjustment: As amended** by F. A., 2019 w.r.e.f. A.Y. 2018-19
 Assessee shall make the secondary adjustment in the following cases:

(1) Where a primary adjustment to transfer price has been made suo-motu by the assessee in his return of
income;
(2) Where a primary adjustment to transfer price made by the AO has been accepted by the assessee;
(3) Where a primary adjustment to transfer price is determined by an advance pricing agreement entered
into by the assessee under section 92CC (on or after 1st April, 2017**);
(4) Where a primary adjustment to transfer price is made as per the safe harbour rules framed u/s 92CB;
or
(5) Where a primary adjustment to transfer price is arising as a result of resolution of an assessment by way
of the mutual agreement procedure under DTAA entered into u/s 90 or 90A.
** However, no refund of the taxes already paid till date under the pre-amended section would be allowed.
Non-applicability of Secondary Adjustment:
 No secondary adjustment is required to be made in the following cases:
(i) the amount of primary adjustment made does not exceed one crore rupees; or
(ii) the primary adjustment is made in respect of A.Y. 2016-17 or any earlier assessment year.
Quantum of Secondary Adjustment:
- Where, as a result of primary adjustment to the transfer price,
34
- there is an increase in the total income or reduction in the loss of the assessee,
- the excess money or part theirof, as the case may be, which is available with its associated enterprise,
- if not repatriated to India within the time as may be prescribed,
- shall be deemed to be an advance made by the assessee to such associated enterprise and
- the interest on such advance,
- shall be computed in such manner as may be prescribed.
Explanation:
 The excess money or part thereof may be repatriated from any of the associated enterprises of the
assessee which is not resident in India. AS INSERTED** BY F. A., 2019 w.r.e.f. A.Y. 2018-19
Amended Rule 10CB: Computation of interest income pursuant to secondary adjustments:-
Excess money or part Interest on the non-

their of must be repatriated excess money
Case
repatriated to India or part thereof within the
with in 90 days from: specified time limit, is
chargeable from:
(i) Where a primary adjustment to transfer price the due date of filing the due date of filing of
has been made suo-motu by the assessee in of ROI u/s 139(1) ROI u/s 139(1)
his return of income
(ii) Where a primary adjustment to transfer price the date of the order of the date of the order of
made by the Assessing Officer / Appellate Assessing Officer Assessing Officer
Authority has been accepted by the assessee
(iii) Where a primary adjustment to transfer price is
determined by an advance pricing
agreement entered into by assessee u/s 92CC
 If the APA has been entered into upto the the date of filing of the due date of filing of
due date of ROI for the relevant P.Y. ROI u/s 139(1) ROI u/s 139(1)
 If the APA has been entered into after the the end of the month the end of the month in
due date of filing of return for the relevant in which the APA has which the APA has been
P.Y. been entered into entered into
(iv) Where assessee has exercised option as per the due date of filing the due date of filing of
the safe harbour rules u/s 92CB of ROI u/s 139(1) ROI u/s 139(1)
(v) Where a primary adjustment to transfer price is the date of giving the date of giving effect by
determined by a resolution arrived at under effect by the A.O. the A.O. under Rule 44H
mutual agreement procedure under DTAA under Rule 44H to to such resolution
entered into u/s 90 or 90A. such resolution
35
 In case of failure to repatriate the excess money with in the above time-limit, interest would be computed
as follows:
Case Rate
(i) Where the international transaction At the one year marginal cost of fund lending rate of SBI as on
is denominated in Indian rupee 1st April of the relevant previous year + 3.25%.
(ii) Where the international transaction At six month London Inter-bank Offered Rate (LIBOR)as on
is denominated in foreign currency 30th September of the relevant previous year + 3.0%.
INSERTION MADE BY FINANCE ACT, 2019:

Scheme relating to one-time payment named as additional income-tax on excess money [sub-sections (2A) to (2D)]:
 Where the excess money or part thereof has not been repatriated in prescribed time, the assessee may at his
option pay additional income-tax at the rate of 18% (+12% surcharge + 4% HEC) on such excess money
(or part thereof).
 If the assessee pays the additional income-tax, he will not be required to make secondary adjustment or
compute interest from the date of payment of such tax. It is needless to say here that he is required to make
secondary adjustment pertaining to interest till the date of payment of additional tax.
 The tax so paid shall be the final payment of tax and no credit shall be allowed in respect of such tax.
 The deduction in respect of the amount on which such tax has been paid, shall not be allowed under any
other provision.
Amendment of Section 92D: Maintenance and keeping of prescribed information & document:-

 Every person
(i) who has entered into an international transaction or specified domestic transaction; or
(ii) being a constituent entity of an international group, referred to in section 286,
shall keep and maintain such information and document in respect thereof, as may be prescribed.
 The requirement of information and document to be kept and maintained by a constituent entity of an
international group shall be applicable even when there is no international transaction undertaken by
such constituent entity.
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“DEDUCTIONS TO BE MADE IN COMPUTING THE TOTAL INCOME”
Amendment of Section 80C: Deduction in respect of LIP, contributions to PPF, etc.:-
List of Eligible investments or contributions as given under this section has been extended to include the
following-
36
 Contribution by an employee of the Central Government to a specified account of the pension scheme
referred to in section 80CCD (i.e. Tier II NPS A/C)
- for a fixed period of not less than three years; and
- which is as per notified scheme of the Central Government
will also qualify for deduction under this section.
Amendment of Section 80CCD: Deduction for contribution to pension scheme of CG (NPS):-

 Amount deductible in respect of contribution by the Central Government or any other employer to
notified pension scheme (NPS) can not exceed 10% of salary of concerned employee.
Reason and corresponding amendment:-
 The Union Cabinet in its meeting on 6th December, 2018 has approved enhancement of the mandatory
contribution by the Central Government for its employees covered under NPS Tier-I from 10% to 14%
(minimum contribution by employees to remain 10%).
 To avoid any adverse tax treatment in the hands of Central Government employee, this limit of 10% has
been extended to 14% in the case of Central Government employees.
 There is not amendment in relation to non-Government employees.
Insertion of Section 80EEA: Deduction in respect of intt. on loan taken for residential house:-
Relevant conditions for claiming deduction under this section:-

(1) The assessee is an individual (may be resident or non-resident.).
(2) He is not eligible to claim any deduction u/s 80EE (This condition is of clarificatory in nature because
to claim deduction u/s 80EE, loan must be sanctioned between 1st April, 2016 to 31st March, 2017).
(3) He has taken a loan for acquisition of residential property.
(4) Loan is taken from a bank or a housing finance company.
(5) Loan has been sanctioned during April 1, 2019 and March 31, 2020.
(6) The stamp duty value of the residential house property does not exceed ` 45 lakh.
“Stamp duty value” means value adopted (or assessed or assessable) by any authority of the Central
Govt. or a State Govt. for the purpose of payment of stamp duty in respect of an immovable property.
(7) The assessee does not own any residential house property on the date of sanction of loan.
Amount of Deduction:-
` 1,50,000/- OR Interest payable on the above loan,
(whichever is lower )
 Deduction will be available for the assessment year 2020-21 and subsequent years.
 If deduction is claimed under section 80EEA, no deduction will be allowed in respect of such interest
or part theirof under any other provision of the Act for the same or any other assessment year.
37
Exams oriented approach for the aforesaid provisions of section 80EEA:-
Eligible assessee Individual, not eligible to claim deduction u/s 80EE.
For acquiring residential house.

Eligible amount Taken
From bank / housing finance company.
Interest on LOAN
During the previous year 2019-20.
Sanctioned
Not owner of any residential house on this
date (i.e. date of sanction of loan).
 Stamp duty value of house should not exceed ` 45Lacs.
Maximum amount of deduction: ` 1,50,000/-.
 No double deduction in respect of same amount of interest.

Note: Suppose, if interest amount is ` 2,25,000/-, then, ` 1,50,000/- may be claimed u/s 80EEA, and balance
amount viz. ` 75,000/- can be claimed u/s 24 (i.e. under the head income from house property).
Insertion of Section 80EEB: Deduction for intt. on loan taken for purchase of electric vehicle:-
Relevant conditions for claiming deduction under this section:-

(1) The assessee is an individual.
(2) He has taken a loan for the purpose of purchase of an electric vehicle.
(3) Loan is taken from financial institution (i.e., a bank or any deposit taking NBFC or a systemically
important non-deposit taking NBFC).
(4) Loan has been sanctioned during April 1, 2019 and March 31, 2023.
(5) Assessee should not own any other electric vehicle on the date of sanction of loan.
Amount of Deduction:-
` 1,50,000/- OR Interest payable on the above loan, (whichever is lower)
 Deduction will be available for the assessment year 2020-21 and subsequent years.
 If deduction is claimed under section 80EEB, no deduction will be allowed in respect of such interest
or part theirof under any other provision of the Act for the same or any other assessment year.
For this purpose “electric vehicle” means-
- a vehicle which is powered “exclusively” by an electric motor whose traction energy is supplied
exclusively by traction battery installed in the vehicle, and
- it has such electric regenerative braking system, which during braking provides for the conversion of
vehicle kinetic energy into electrical energy.
Explanatory Remark:
As the word “exclusive” is used, interest on loan taken for purchase of a “hybrid car” (which derives
some of its power from conventional engine) is not eligible for deduction.
38
Exams oriented approach for the aforesaid provisions of section 80EEB:-
Eligible assessee Individual.
For purchase of an electric vehicle.

Eligible amount Taken
From a Bank or NBFC.
Interest on LOAN
During the period 1/4/2019 to 31/3/2023.
Sanctioned
Not owner of any electric vehicle on this
date (i.e. date of sanction of loan).
Maximum amount of deduction: ` 1,50,000/-.
 No double deduction in respect of same amount of interest.

Amendment of Section 80IBA: Deductions in respect of profits from housing projects:-
Under the existing provisions, Deduction of 100% of profit derived from the business of developing and
building housing projects is allowed on fulfillment of certain conditions including conditions relating to
minimum plot size, limitation on size of residential unit, and restriction on utilization of floor area ratio,
which are as follows:
Condition If housing project is located in If housing project is located at any
Delhi, Mumbai, Chennai, Kolkata other place
Minimum plot size (on which 1000 sq. meters 2000 sq. meters
such housing project is only
situated) should be….
Carpet area of each residential 30 sq. meters 60 sq. meters
unit should not exceed…..
The project utilize…. At least 90% of floor area ratio At least 80% of floor area ratio
Such Project must be approved After 1/6/2016 but before 1/4/2020 (ir-respective of its location)
Under the amended version, if housing project is approved on or after 1st september, 2019, then-
Condition If housing project is located in If housing project is located at any

Delhi NCR (limited to Delhi, other place
Noida, Greater Noida,
Ghaziabad, Gurugram,
Faridabad), Mumbai, Chennai,
Kolkata, Hyderabad, Bengaluru
Minimum plot size (on which 1000 sq. meters 2000 sq. meters
such housing project is only
situated) should be….
39
Carpet area of each residential 60 sq. meters 90 sq. meters

unit should not exceed…..
The project utilize…. At least 90% of floor area ratio At least 80% of floor area ratio
Time limit for approval of such  The time-limit for approval has been extended by one year.
Project (as amended by the  After this amendment, deduction under this section will be available
Taxation Laws (Amendment) Act, if the project is approval by the competent authority after 1st June,
2019 2016 but on or before 31st March, 2020.
Amendment of Section 80LA: Deduction for certain incomes of off-shore banking units:-
(i) Schedule bank Branch Permission has been obtained

(+)
Eligible Assessee
(ii) Foreign bank having in SEZ in respect theirof from RBI.
(iii) Unit of an International Financial Service Centre (IFSC).
Eligible incomes (1) Any income from offshore banking unit (i.e. earned at branch level) from
banking business with –
(i) Undertaking which is located in special economic zone, or
(ii) Undertaking which develops, operate & maintain, or develop, operate and
maintain a special economic zone.
(2) Income of unit of IFSC.
Quantum of deduction (i) For first 5 years from the year in which permission for such branch has been
obtained: 100% of such income
(ii) For next 5 years: 50% of such income.
In case of a unit of International Financial Services Centre, deduction has been
increased to 100% for any 10 consecutive years out of 15 years beginning with the
year in which the aforesaid permission is obtained. AS INSERTED BY F. A., 2019
Other Conditions ROI (+) Copy of permission from RBI & Certificate of C.A. (in Form 10CCF).
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“SET OFF, CARRY FORWARD & SET OFF OF LOSSES”
Amendment of Section 79: Carry forward and set off of losses in case of certain companies:-
AMENDMENT NO. 1:
40
Section 79(a) Section 79(b)

Applicability Any closely held company Closely held company being an eligible startup as referred
except an eligible startup to in section 80IAC.
Condition - At least 51% voting (1) All the shareholders of the last day of the year in which
for power loss was incurred
claiming the - as on the last day of - shall continue to hold those shares
benefit of loss year in which loss was - on the last day of the previous year
incurred, and - in which company wants to setoff such loss.
- as on the last day of the It may be noted here that, in between, due to fresh issue by
year in which company company, what proportion such shareholders have remained
wants to setoff such in total voting power of company is completely ir-relevant.
loss (2) Such loss must relate from 7 years from the year of
- must be held by same incorporation.
persons.
 To further facilitate ease of doing business in the case of an eligible start-up, the scheme of this section
has been modified so as to provide that brought forward loss of a closely held eligible start-up shall be
carried forward and set off against the income of current previous year on satisfaction of either of the
two conditions stipulate currently under clause (a) or clause (b) as given above.
Resultant Legal Position:

Applicability Any closely held company
Condition - At least 51% voting power
for - as on the last day of year in which loss was incurred, and
claiming the - as on the last day of the year in which company wants to setoff such loss
benefit of loss - must be held by same persons.
But, in case of a closely held company being an eligible startup as referred to in section
80IAC, even if the aforesaid condition of 51% is not satisfied, still benefit shall be allowed on
the fulfillment of the following conditions:
(1) All the shareholders of the last day of the year in which loss was incurred
- shall continue to hold those shares
- on the last day of the previous year
- in which company wants to setoff such loss.
It may be noted here that, in between, due to fresh issue by company, what proportion
such shareholders have remained in total voting power of company is completely ir-
relevant.
(2) Such loss must relate from 7 years from the year of incorporation.
41
AMENDMENT NO. 2:
 A new exception has been added in list of exceptional cases of this section, which provides that the
provisions of this section shall not apply to those companies, and their subsidiary and the subsidiary of such
subsidiary, where
- the National Company Law Tribunal (NCLT) on a petition moved by the Central Government u/s 241
of the Companies Act has suspended the Board of Directors of such company and has appointed
new directors, who are nominated by the Central Government, u/s 242 of the Companies Act; and
- a change in shareholding of such company and its subsidiaries and the subsidiary of such
subsidiary, has taken place in a previous year pursuant to a resolution plan approved by NCLT,
after affording a reasonable opportunity of being heard to the jurisdictional Principal CIT /CIT.
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“INCOME FROM SALARIES”
Amendment of Section 16(ia): Standard deduction:-

 This section 16(ia) provides standard deduction is salaried employees.
 Under the existing provisions, standard deduction is ` 40,000 or salary income, whichever is lower.
 After the amendment, the quantum of standard deduction has been increased to ` 50,000.
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“INCOME FROM HOUSE PROPERTY”
Amendment of Section 23(2) & 24: Annual value in case of more than one self-occupied house:
 If an assessee has occupied one house property for his own residential purposes or could not be occupied
throughout the previous year because of his employment, business or profession, situated at some other
place, it is not chargeable to income-tax. Annual value of such property is taken as nil and interest on
capital which was borrowed for purchase or construction of such property is deductible up to ` 2,00,000.
 If an assessee has occupied more than one house property for his residential purposes, only one
property (as selected by the assessee) is treated as self-occupied property (annual value of such property is
taken as nil, interest liability is deductible up to ` 2,00,000).
In such a case, income from other self-occupied property / properties will be calculated as if such property /
properties are “deemed to be let out”.
 The aforesaid provision has been amended to exempt notional income pertaining to two self-occupied
residential house properties.
42
 Meaning there by, if more than one house property is used for residential purpose, upto two self
occupied house (as selected by the assessee), annual value (of both houses) will be taken as Nil but
aggregate interest on capital borrowed for the purpose of purchase / construction of these properties, will
be deductible up to ` 2,00,000, and other remaining property will be deemed as let out.
Amendment of Section 23(5): Annual value in case of house property held as stock-in-trade:-
 If any property (i.e. any building or land appurtenant thereto) held as stock-in-trade and couldn’t be let out
during the whole or any part of the previous year, then, annual value of such property shall be taken to be nil.
 However, this concession is available only for the period up to 1 year from the end of the financial year in
which the certificate of completion of construction of the property is obtained from the competent authority.
 The aforesaid period of 1 year has been extended to 2 years.
 Consequently, annual value in the aforesaid case, shall be taken to be nil for 2 years from the end of the
financial year in which the certificate of completion of construction of the property is obtained from the
competent authority.
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TAX ON INCOME IN THE HANDS OF INVESTMENT FUNDS AND ITS UNITHOLDERS
Amendment of Section 115UB: Tax treatment relating to Investment Fund & its Unit holders:-
 This section provides for pass through of income earned by the Category I and II Alternative Investment
Fund (AIF), except for business income which is taxed at AIF level.
 Pass through of losses are not provided under the existing regime and are retained at AIF level to be
carried forwards and set off in accordance with Chapter VI (i.e. Setoff Chapter).
 Provisions regulating adjustment of losses have been amended.
Amended version of this section is as follows:
If in any previous year, the net result of computation of total income of the investment fund [without
exemption u/s 10(23FBA) i.e. relating to business income] is a loss under any head of income and such loss
cannot be or is not wholly set-off against income under any other head of income of the said previous year,
then,—
(i) If in case of business loss (not any other loss) at the fund level (either current loss or the loss which
remained to be set off), the loss shall not be allowed to be passed through to the investors (i.e. shall not
be allocated to the unit holders) but would be carried over at fund level to be set off against income
of the next year in accordance with the provisions of Chapter VI (i.e. Chapter of setoff, or carry
forward and setoff of losses).
43
(ii) In case of loss (other than business loss), benefit by way of its pass through shall not be given to such
unit holder, who has not held the unit of such investment fund for a period of at least 12 months.
(iii) the loss (other than business loss) accumulated at the level of investment fund as on March 31, 2019,
shall be deemed to be the loss of a unit holder who held the unit on 31st March, 2019 (irrespective
of period of holding of such unit) in respect of the investments made by him in the investment fund and
allowed to be carried forward by him for the remaining period calculated from the year in which the
loss had occurred for the first time taking that year as the first year and it shall be set-off by him in
accordance with the provision of Chapter VI,
the loss so deemed in the hands of unit holders shall not be available to the investment fund for the
purposes of Chapter VI.
Exam-oriented Approach for Tax Implications of Investment Fund & its Unit holders :-
Nature & Proportion of income (i.e. receipt)
in the hands of unit holder will be same as
for Investment Fund.
Distribution
Investment Unit holder
Fund
Total
In case of.. Income
Business Loss Any other Loss

Benefit to unit holders only, Business Income Other Income
Benefit to
Not to Investment fund
Investment
fund only,
Not to For Loss For Loss Taxable for Exempt
Exempt for Unit holder
unit holders. incurred accumulated Invt. Fund for
Invt. Fund
after upto Unit
31/3/2019 31/3/2019 Tax rate holder Taxable
10(23FBA) ()
Period of holding of If Invt. Fund is In case any
such units by assessee 10(23FBB)
Co. or Firm other Invt. At
unit holder must be at fund Normal
least 12 months. Rate
Rate as
depending
applicable MMR
Benefit will be allowed to unit holder upon
to company i.e. 42.744%
who held units on 31/3/2019 Type of
or firm () ()
(irrespective of Period of holding of
such units) for the remaining period as “Sec. 115UB” Income Assessee
per the provisions of Chapter VI.
-------------------------------------------------------------------------------------------------------------------------------------------
“COLLECTION RECOVERY AND REFUND”
Amendment of Section 228A: Tax recovery in pursuance of agreement with foreign countries:-
Existing Legal Position with amendment:
44
- Where an agreement is entered into by the Central Government with the Government of any foreign country
- for recovery of Income tax under the Indian Income tax Act and the corresponding law in force in that
foreign country and
- there are any arrears of tax due against any assessee who is in default and
- who has property in such a foreign country, or who is resident of that foreign country
- the Tax Recovery Officer may forward to the Board a certificate specifying the amount of arrear due from
the assessee.
 Similarly the Govt. of foreign country may send to the Central Board of Direct Taxes a certificate for the
recovery of any tax due to such foreign country from any person having property in India or who is resident
in India. Bold underlined words have been newly added
 These amendments are relevant where details of property of such person are not available.
Amendment of Section 239: Claim for refund:-

 Every claim for refund shall be made in the prescribed Form No. 30 and within one year from the last day of
the relevant assessment year by furnishing return u/s 139.
-------------------------------------------------------------------------------------------------------------------------------------------
“MISCELLANEOUS AMENDMENTS”
Insertion of Section 269SU: Acceptance of payment through prescribed electronic modes:-

In order to achieve the mission of the Government to move towards a less cash economy to reduce
generation and circulation of black money and to promote digital economy, this new section has been
inserted which provides that-
- Every person,
- carrying on business,
- shall, provide facility for accepting payment through the prescribed electronic modes
- in addition to the facility for other electronic modes of payment, if any, being provided by such person,
- if his total sales, turnover or gross receipt in business
- exceed `50 crore during the immediately preceding previous year.
Consequential Insertion of Section 269SU (i.e. Penalty in case of violation of section 269SU):-
Section Nature of default Penalty leviable
271DB Fails to provide facility for accepting payment through ` 5,000/- for every day during which
the prescribed electronic modes u/s 269SU such failure continues.
Amendment of Section 285BA & 271FAA: Statement of financial transaction / reportable A/C:-
 This section relates from furnishing of statement of financial transaction or Reportable account (SFTRA) by
person specified therein. Scheme of this section has been amended on the following lines:
45
(1) In addition to specified persons (who are already required to furnish statement under this section), the
Board may prescribe any person for furnishing a statement under this section.
(2) Under the existing provisions, for reporting of any transaction, value or aggregate value of prescribed
transaction should not be less than ` 50,000.
But, after the amendment, this threshold of `50,000 has been removed for furnishing of information,
with a view to ensure pre-filling of information relating to small amount of transactions as well.
(3) Presently, if a defect in the statement is not rectified with in the time allowed by the prescribed I.T. authority,
the statement shall be treated as invalid.
But, after the amendment, if the defect in the statement is not rectified with in the allowed time, the
provisions of the Act shall apply as if such person had furnished inaccurate information in the statement.
Consequent to the above amendment, the penalty provisions of section 271FAA for incorrect furnishing of
information in the statement will apply.
Amendment of Section 286: Furnishing of report in respect of international group:-

 This section relates to specified reporting regime in respect of an international group.
 It provides that every parent entity or the alternate reporting entity (ARE), resident in India, shall, for every
reporting accounting year, in respect of the international group of which it is a constituent, furnish a report,
to the prescribed authority within a period of 12 months from the end of the said reporting accounting year,
in the prescribed form.
 For this purpose, “accounting year” means a previous year in a case where the parent entity or alternate
reporting entity (ARE) is resident in India.
 In case of an alternate reporting entity (ARE) resident in India whose ultimate parent entity is not resident in
India, the accounting year shall not mean the previous year but an annual accounting period, will respect
to which the parent entity of the international group prepares its financial statements under any law for
the time being in force or the applicable accounting standards of the country of which such entity is
resident.
Amendment of Section 2(19AA): Meaning of Demerger:-

Prior to amendment, for tax-neutral demergers, one of the existing conditions was that the resulting company
should record the property and liabilities of the undertaking at the value appearing in the books of the
demerged company.
Reason and corresponding amendment:-
 Since, Indian Accounting Standards (Ind-AS) compliant companies are required to record the property and
the liabilities of the undertaking at a value different from the book value of the demerged company.
 Therefore, in order to accommodate such companies, following amendment has been made-
46
 The aforesaid condition shall not be applicable in a case where the property and liabilities of the
undertaking received by it, are recorded at value different from the value appearing in the books of account
of the demerged company immediately before the demerger in compliance of the Indian Accounting
Standards specified in Annexure to the Companies (Indian Accounting Standards) Rules, 2015.
Insertion of section 9(1)(viii): Deemed accrual of gift of money to a non- resident / foreign co.:-
Observation and corresponding insertion:
A non-resident is taxable in India in respect of income that accrues or arises in India or is received in
India or is deemed to accrue or arise in India or is deemed to be received in India. A gift of money is chargeable
to tax in the hands of recipient subject to certain exceptions provided in section 56(2)(x).
In a few cases, gift received by a non-resident or foreign company from a resident person, is not
taxable in India [even if it is not covered by exceptions specified in section 56(2)(x)]. There is no deeming
provision under section 9 for this purpose.
To plug in this loophole, a new clause (viii) has been inserted in section 9(1) which will be applicable if
the following conditions are satisfied-
(1) Payer is resident in India (i.e. money is received from a person resident in India).
(2) Recipient is non-resident / foreign company (i.e. money is received by non-resident / foreign company).
(3) A sum of money is received by non-resident / foreign company on or after 5th July, 2019.
(4) Income arises outside India and the transaction is not covered by any of the exceptions specified by
section 56(2)(x).
If these conditions are satisfied, money received by a non- resident / foreign company, shall be deemed to
accrue or arise in India
Amendment of Section 9A: Certain activities not to constitute business connection in India:-
Background:
 In order to facilitate location of fund managers of offshore funds in India, this section provides a specific
tax regime for this purpose with the objective that income of the fund from the investment outside India
would not be taxable in India solely on the basis that the Fund management activity in respect of such
investments have been undertaken through a fund manager located in India.
 In the case of an “eligible investment fund”, the fund management activity carried out through an “eligible
fund manager” acting on behalf of such fund, shall not constitute business connection in India of the said
fund. Further, an eligible investment fund” shall not be said to be resident in India merely because the
“eligible fund manager” undertaking fund management activities on its behalf, is located India.
 These benefits are available subject to certain conditions as provided in this section which are related
to residence of fund, corpus, size, investor broad basing, investment diversification and payment of
remuneration to fund manager at arm’s length.
Existing Legal Position and corresponding amendments:-
(1) Section 9A(3) provides that the monthly average of the corpus of the fund, shall not be less than ` 100 crore.
47
Where the fund has been established or incorporated in the previous year, the corpus of fund shall not less
than ` 100 crore at the end of such previous year.
 This condition has been amended to provide that where the fund has been established or incorporated in
the previous year, the fund shall be required to fulfil the condition of maintaining the corpus of `100
crore within a period of 6 months from the last day of the month of its establishment or incorporation, or
at the end of such previous year, whichever is later.
(2) Section 9A(3) also provides that the remuneration paid by the fund to an eligible fund manager in respect of
fund management activity undertaken by him on its behalf is not less than the arm’s length price of the said
activity.
 This condition have been amended to provide that the remuneration paid by the fund to an eligible fund
manager in respect of fund management activity undertaken by him on its behalf is not less than the
amount calculated in such manner as may be prescribed (instead of the arm’s length price of the said
activity).
Amendment of section 10(12A): Exemption on withdrawal from NPS on closure of his account:
This section provides that any payment from the National Pension System Trust (NPST) to an employee on
closure of account or his opting out of the pension scheme referred to in section 80CCD, to the extent is does not
exceed 40% of the total amount payable to him at the time of closure or at the time of his opting out of the
scheme, shall be exempt from tax.
 With a view to enable the pensioner to have more disposable funds, the aforesaid exemption has been
increased from 40% to 60%.
 After this amendment, 60% of the total amount payable to the person at the time of closure or at the time
of his opting out of NPS, shall be exempt from tax under this section.
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ALL THE BEST

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© SATISH MANGAL (9350647377, satishmangal17@gmail.

com) LATEST AMENDMENTS

CA. SATISH MANGAL

“INDEX FOR CONTENTS”

(i) INCOME TAX RATE STRUCTURE 1

(ii) CONCESSIONAL TAXATION relating to DOMESTIC COMPANIES 4

(iii) IDENTICAL AMENDMENTS as brought in MULTIPLE TOPICS 9

(iv) PROFITS AND GAINS OF BUSINESS OR PROFESSION 12

(v) CAPITAL GAINS and INCOME FROM OTHER SOURCES 15

(vi) MAT, CDT and TAX ON BUY-BACK OF SHARES 19

(vii) ASSESSMENT OF TRUSTS 21

(viii) TAX DEDUCTED AT SOURCE (TDS) 22

(ix) ASSESSMENT PROCEDURE 26

(x) PENALTIES & PROSECUTIONS 30

(xi) ASSESSMENT OF NON-RESIDENTS & FOREIGN COMPANIES 32

(xii) TRANSFER PRICING 33

(xiii) DEDUCTIONS UNDER CHAPTER VI-A 36

(xiv) SETOFF; OR CARRY FORWARD & SETOFF OF LOSSES 40

(xv) INCOME FROM SALARIES and HOUSE PROPERTY 42

(xvii) COLLECTION RECOVERY AND REFUND 44

(xviii) MISCELLANEOUS AMENDMENTS 45

“ALL RIGHTS RESERVED WITH MR. SATISH MANGAL”

“RECENT AMENDMENTS as made by the FINANCE ACT, 2019”

“INCOME TAX RATES STRUCTURE”

(3) Other Individuals, HUF, Up to ` 2,50,000/- : Nil Next Page

IF, in case of Domestic Co.,

(8) Local Authorities 30% 12% 4% on (Tax + Surcharge)

 On such STCG u/s 111A and LTCG u/s 112A 15%

(i) If total income doesn’t exceed ` 50 lakh Nil

EFFECT OF CHANGE IN SURCHARGE ON TDS RATES:-

(A) IN CASE OF SALARY:

Where payment is being made to a RESIDENT or a NON-RESIDENT –

Where payment / credit is being made to a NON-RESIDENT Individual/HUF/AOP/BOI/AJP:

Amendment of Section 87A: Rebate of income-tax in case of certain individuals:-

Prior to amendment After the amendment

“CONSESSIONAL TAXATION relating to CERTAIN DOMESTIC COMPANIES”

Eligible Assessee Domestic Company.

(i) Tax on special income (like, lottery income, LTCG, etc.):

 35CCC, 35CCD i.e. Agriculture extension project or skill development project.

total income business of covered under transfer of a from house

Amendment of Section 92BA: Meaning of specified domestic transaction:-

Existing Legal Position:

After the amendment:

“IDENTICAL AMENDMENTS as brought in MULTIPLE SECTIONS / TOPICS”

Amendment of Section 13A: Exemption to Political Parties:-

(2) Section 35AD: Deduction in respect of capital expenditure on specified business:-

Payment or Must be made through A/C Payee

(3) Section 40A(3): Disallowance out of cash expenditure:-

In such a case, NO DEDUCTION WILL BE ALLOWED IN RESPECT OF SUCH AMOUNT OF EXPENDITURE.

If assessee acquires an asset in respect of which…….

Payment or Must be made through A/C Payee

Land or building or both

(7) Section 80JJAA: Deduction in respect of employment of new workmen:-

(b) in respect of a single transaction; or

 Resident Payee has furnished his return of income u/s 139.

Shall be liable to pay the following interest:

Section 40(a)(i) Section 40(a)(ia) Section 40(a)(iii)

- a Foreign company or other NR - a Resident - to a non-resident

But, been deducted or paid thereon with

Tax is deductible on the aforesaid sum The Payer is not deemed to be an

Amendment of Section 43B: Certain deduction to be only on actual payment:-

Existing Legal Position of section 50CA:

Reason and corresponding amendment in section 50CA:-