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The Ministry of Defence has introduced the Agnipath Scheme, 2022 (the Scheme) for enrolment of Agniveers in Indian Armed Forces. It has come into force on 1st November, 2022. In pursuance of the Government’s decision to implement the Agnipath Scheme, 2022, the Competent Authority has decided to create a non-lapsable dedicated Agniveer Corpus Fund in the interest-bearing section of the Public Account head. The package given to an Agniveer from Agniveer Corpus Fund is called as ‘Seva Nidhi’.

2. In the Scheme, the Agniveer Corpus Fund is defined as a Fund in which consolidated contributions of all the Agniveers and matching contributions of the Government along with interest on these contributions would be held in their respective accounts. The scheme will be administered and the Fund will be maintained under the aegis of Ministry of Defence (MoD) with the following features –

(i) Each Agniveer is to contribute 30% of his monthly customized Agniveer Package to the individual’s Agniveer Corpus Fund. Further the Government will also contribute a matching amount to the ‘Agniveer Corpus Fund’. The Government will also pay to the subscriber interest as approved from time to time on the contributions standing in his account.

(ii) On completion of the engagement period of four years, Agniveers will be paid one time ‘Seva Nidhi’ package, which shall comprise of their contribution including interest thereon and matching contribution from the Government equal to the accumulated amount of their contribution including interest.

3. In order to allow deduction from the computation of total income of Agniveer, any contribution made by him or the Central Government to his Agniveer Corpus Fund account and to exempt from tax any payment received by Agniveer or his nominee, from the Agniveer Corpus Fund, it is proposed to make the following amendments:

(i) It is proposed to insert a new clause (12C) in section 10 of the Act to provide that any payment received from the Agniveer Corpus Fund by a person enrolled under the Agnipath Scheme, 2022, or the nominee of such person shall be exempted from income tax.

(ii) It is further proposed to insert a new section 80CCH to the Act to provide that an assessee, being an individual enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund on or after the 1st day of November, 2022, shall be allowed a deduction of the whole of the amount deposited by him and also the amount contributed by the Central Government to his account in the Agniveer Corpus Fund, from his total income.

(iii) For the purposes of this proposed clause (12C) of section 10 and section 80CCH, it is proposed to define ‘Agnipath scheme’ as a scheme for the enrolment in Indian Armed Forces introduced by the Central Government, and ‘Agniveer Corpus Fund’ as a fund defined in para 2(c) of Agnipath Scheme notified by the Central Government.

(iv) It is also proposed to insert a new sub-clause in clause (1) of section 17 of the Act so as to provide that the contribution made by the Central Government in the previous year, to the Agniveer Corpus Fund account of an individual enrolled in the Agnipath Scheme referred to in section 80CCH shall be considered as salary of that individual. A corresponding deduction of the same has been provided as mentioned above.

(v) Further, it is proposed to provide that in the new tax regime of section 115BAC an individual enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund shall get a deduction of the government contribution to his Seva Nidhi [sub-section (2) of section 80CCH].

4. These amendments will take effect from the 1st day of April, 2023 and will apply in relation to assessment year 2023-24 and subsequent assessment years.

[Clauses 5, 10, 39, 50]

Extract of relevant clause of Finance Bill 2023

Clause 5 of the Bill seeks to amend section 10 of the Income-tax Act relating to incomes not included in total income.

It is proposed to amend the Explanation to clause (4D) of the said section to give reference of the International Financial Services Centres Authority (Fund Management) Regulations, 2022 in the definition of “specified fund”.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years.

Clause 10 of the Bill seeks to amend section 17 of the Income-tax Act relating to “Salary”, “perquisite” and “profits in lieu of salary” defined.

It is proposed to insert a new sub-clause (ix) in clause (1) of the said section so as to provide that the contribution made by the Central Government in the previous year to the Agniveer Corpus Fund account of an individual enrolled in the Agnipath Scheme referred to in section 80CCH shall be considered as salary of that individual.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years.

As per clause (2) of the said section, “perquisite”, inter alia, includes value of rent-free accommodation or value of any accommodation provided to employees by the employer at a concessional rate.

It is further proposed to amend sub-clause (i) and substitute sub-clause (ii) of clause (2) of the said section so as to provide that the method of computation for the value of rent free accommodation provided to the assessee by his employer and the value of any accommodation provided to the assessee by his employer at a concessional rate shall be computed in such manner as may be provided by rules.

It is also proposed to clarify that accommodation shall be deemed to have been provided at a concessional rate if the value of accommodation computed in such manner as may be provided by rules exceeds the rent recoverable from, or payable by, the assessee.

These amendments will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years.

Clause 39 of the Bill seeks to insert a new section 80CCH in the Income-tax Act relating to deductions in respect of contribution to Agnipath Scheme.

It is proposed to insert a new section 80CCH to provide that where an assessee, being an individual enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund on or after 1st November, 2022, has in the previous year, paid or deposited any amount in his account in the said Fund, he shall be allowed a deduction in the computation of his total income, of the whole of the amount so paid or deposited in accordance with the said Scheme; and where the Central Government makes any contribution to the account in the Agniveer Corpus Fund, the assessee shall be allowed a deduction in the computation of his total income of the whole of the amount so contributed. It is further proposed to define the expressions “Agnipath Scheme” and “Agniveer Corpus Fund” for the purposes of the said section.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years.

Deduction & Tax Exemption

Clause 50 of the Bill seeks to amend section 115BAC of the Income-tax Act relating to tax on income of individuals and Hindu undivided family.

The provisions of the said section, inter alia, provides that the income-tax payable in respect of the total income of a person, being an individual or a Hindu undivided family, for any previous year relevant to the assessment year beginning on or after 1st April, 2021, shall, at the option of such person, be computed at the rate of tax given in the Table therein, if the conditions contained in sub-section (2) are satisfied.

It is proposed to amend the marginal heading of the said section so as to provide that the said section applies to tax on income of individuals, Hindu undivided family and others.

It is further proposed to insert a new sub-section (1A) in the said section so as to provide that notwithstanding anything contained in this Act but subject to the provisions of Chapter XII, the income-tax payable in respect of the total income of a person, being an individual or Hindu undivided family or association of persons (other than a cooperative society), or body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2, other than a person who has exercised an option under sub-section (6), for any previous year relevant to the assessment year beginning on or after 1st April, 2024, shall be computed at the rate of tax given in the Table therein.

These amendments will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years.

It is also proposed to amend clause (i) of sub-section (2) of the said section to give reference of sub-section (2) of section 80CCH therein to provide the benefit of concessional tax regime to an individual enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund on or after 1st November, 2022.

This amendment will take effect from 1st April, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and subsequent assessment years.

It is also proposed to amend sub-section (2) of the said section, inter alia, to provide that for the purposes of sub-section (1A), the total income of the person referred to therein shall be computed without any exemption or deduction under the provisions of clause (5) or clause (13A) or prescribed under clause (14) (other than those as may be prescribed for this purpose) or clause (17) or clause (32) of section 10 or section 10AA or clause (ii) or clause (iii) of section 16 or clause (b) of section 24 [in respect of the property referred to in sub­section (2) of section 23] or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or under any of the provisions of Chapter VI-A other than the provisions of sub-section (2) of section 80CCD or sub-section (2) of section 80CCH or section 80JJAA.

It is also proposed to insert a second proviso in sub-section (3) of the said section so as to provide that in a case where,––

(i)the assessee has not exercised the option under sub-section (5) for any previous year relevant to the assessment year beginning on or before the 1st day of April, 2023;

(ii) the income-tax on the total income of the assessee is computed under sub-section (1A); and

(iii) there is a depreciation allowance in respect of a block of assets which has not been given full effect prior to the assessment year beginning on the 1st day of April, 2024,

corresponding adjustment shall be made to the written down value of such block of assets as on 1st April, 2023 in the manner as may be prescribed.

It is also proposed to substitute sub-section (4) of the said section so as to provide that in case of a person, having a Unit in the International Financial Services Centre, as referred to in sub-section (1A) of section 80LA,––

(i) who has exercised option under sub-section (5) for any previous year relevant to the assessment year beginning on or after 1st April, 2021 but before 1st April, 2024;

(ii) whose total income is computed under sub-section (1A),

the conditions contained in sub-section (2) shall be modified to the extent that the deduction under section 80LA shall be available to such Unit subject to fulfilment of the conditions contained in the said section.

It is also proposed to insert a proviso in sub-section (5) of the said section so as to provide that the provisions of the sub-section shall not apply for any previous year relevant to the assessment year beginning on or after 1st April, 2024, that is, a person, being an individual or Hindu Undivided Family, shall not exercise the option for concessional rate of taxation under sub-section (1) for any previous year relevant to the assessment year beginning on or after 1st April, 2024.

It is also proposed to insert sub-section (6) in the said section so as to provide that nothing contained in sub- section (1A) shall apply to a person where an option is exercised by such person, in the manner as may be prescribed, for any assessment year, and where such option is exercised––

(i) on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for such assessment year, in case of a person having income from business or profession, and such option once exercised shall apply to subsequent assessment years; or

(ii) along with the return of income to be furnished under sub-section (1) of section 139 for such assessment year, in case of a person not having income referred to in clause (i).

However, the option under clause (i) of the said sub-section (6), once exercised for any previous year can be withdrawn only once for a previous year other than the year in which it was exercised and thereafter, the person shall never be eligible to exercise the option under that sub-section, except where such person ceases to have any income from business or profession in which case, option under clause (ii) of that sub-section shall be available.

These amendments will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years.

Extract of Relevant Amendment Proposed by Finance Bill, 2023

5. Amendment of section 10.

In section 10 of the Income-tax Act,––

(a) in clause (4D), in the Explanation, in clause (c), in sub-clause (i), in item (I), after the words and figures “Securities and Exchange Board of India Act, 1992, or”, the words, brackets and figures “regulated under the International Financial Services Centres Authority (Fund Management) Regulations, 2022, made under the” shall be inserted;

(b) for clause (4E), the following shall be substituted with effect from the 1st day of April, 2024,––

“(4E) any income accrued or arisen to, or received by a non-resident as a result of––

(i) transfer of non-deliverable forward contracts or offshore derivative instruments or over-the-counter derivatives; or

(ii) distribution of income on offshore derivative instruments, entered into with an offshore banking unit of an International Financial Services Centre referred to in sub­section (1A) of section 80LA, which fulfils such conditions as may be prescribed:

Provided that the amount of distributed income referred to in sub-clause (ii) shall include only so much of the amount which is chargeable to tax in the hands of the offshore banking unit under section 115AD.”;

(c) in clause (10D),––

(i) in the second proviso, the words, brackets, figures and letter “or the Explanation to sub-section (2A) of section 88, as the case may be” shall be omitted;

(ii) for the sixth proviso, the following provisos shall be substituted with effect from the 1st day of April, 2024, namely:––

“Provided also that nothing contained in this clause shall apply with respect to any life insurance policy other than a unit linked insurance policy, issued on or after the 1st day of April, 2023, if the amount of premium payable for any of the previous years during the term of such policy exceeds five lakh rupees:

Provided also that if the premium is payable by a person for more than one life insurance policy other than unit linked insurance policy, issued on or after the 1st day of April, 2023, the provisions of this clause shall apply only with respect to those life insurance policies other than unit linked insurance policies, where the aggregate amount of premium does not exceed the amount referred to in the sixth proviso in any of the previous years during the term of any of those policies:

Provided also that the provisions of the fourth, fifth, sixth and seventh provisos shall not apply to any sum received on the death of a person:”;

(d) after clause (12B), the following shall be inserted, namely:––

‘(12C) any payment from the Agniveer Corpus Fund to a person enrolled under the Agnipath Scheme, or to his nominee.

Explanation.—For the purposes of this clause “Agniveer Corpus Fund” and “Agnipath Scheme” shall have the meanings respectively assigned to them in section 80CCH;’;

(e) in clause (22B), after the third proviso, the following proviso shall be inserted with effect from the 1st day of April, 2024, namely:––

“Provided also that nothing contained in this clause shall apply to any income of the news agency of the previous year relevant to the assessment year beginning on or after the 1st day of April, 2024;”;

(f) clause (23BBF) shall be omitted;

(g) in clause (23C),––

(I) with effect from the 1st day of October, 2023,––

(i) in the first proviso, for clause (iv), the following clause shall be substituted, namely:––

“(iv) in any other case, where activities of the fund or trust or institution or university or other educational institution or hospital or other medical institution have––

(A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said approval is sought;

(B) commenced and no income or part thereof of the said fund or trust or institution or university or other educational institution or hospital or other medical institution has been excluded from the total income on account of applicability of sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) or section 11 or section 12 for any previous year ending on or before the date of such application, at any time after the commencement of such activities,”;

(ii) in the second proviso,––

(a) in clause (ii),––

(A) in the opening portion, after the word, brackets and figures “clause (iii)”, the words, brackets, letter and figures “or sub-clause (B) of clause (iv)” shall be inserted;

(B) in sub-clause (b), for item (B), the following item shall be substituted, namely:–

“(B) if he is not so satisfied, pass an order in writing,––

(I) in a case referred to in clause (ii) or clause (iii) of the first proviso, rejecting such application and also cancelling its approval;

(II) in a case referred to in sub-clause (B) of clause (iv) of the first proviso, rejecting such application, after affording it a reasonable opportunity of being heard;”;

(b) for clause (iii), the following clause shall be substituted, namely:––

“(iii) where the application is made under sub-clause (A) of clause (iv) of the said proviso or the application made under clause (iv) of the said proviso, as it stood immediately before its amendment by the Finance Act, 2023, pass an order in writing granting approval to it provisionally for a period of three years from the assessment year from which the approval is sought, and send a copy of such order to the fund or trust or institution or university or other educational institution or hospital or other medical institution:”;

(II) in the third proviso,––

(i) in Explanation 2,––

(a) in clause (i),––

(A) in the proviso, the word “and” shall be omitted;

(B) after the proviso, the following provisos shall be inserted, namely:––

“Provided further that the provisions of the first proviso shall apply only if there was no violation of the conditions specified in the twelfth, thirteenth and twenty-first provisos, and those specified in Explanation 2 and Explanation 3, of this clause, at the time the application was made from the corpus:

Provided also that the amount invested or deposited back shall not be treated as application for charitable or religious purposes under the first proviso unless such investment or deposit is made within a period of five years from the end of the previous year in which such application was made from the corpus:

Provided also that nothing contained in the first proviso shall apply where the application from the corpus is made on or before the 31st day of March, 2021;”;

(b) in clause (ii), after the proviso, the following provisos shall be inserted, namely:––

“Provided further that the provisions of the first proviso shall apply only if there was no violation of the conditions specified in the twelfth, thirteenth and twenty-first provisos, and those specified in Explanation 2 and Explanation 3, of this clause at the time the application was made from loan or borrowing:

Provided also that the amount repaid shall not be treated as application for charitable or religious purposes under the first proviso unless such repayment is made within a period of five years from the end of the previous year in which such application was made from loan or borrowing:

Provided also that nothing contained in the first proviso shall apply where the application from any loan or borrowing is made on or before the 31st day of March, 2021; and”;

(c) after clause (ii), the following clause shall be inserted with effect from the 1st day of April, 2024, namely:–

“(iii) any amount credited or paid out of the income of any fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), other than the amount referred to in the twelfth proviso, to any other fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), or trust or institution registered under section 12AB, as the case may be, shall be treated as application for charitable or religious purposes only to the extent of eighty-five per cent. of such amount credited or paid.”;

(ii) in Explanation 3, in clause (c), for the words “furnished on or before”, the words “furnished at least two months prior to” shall be substituted;

(III) in the fifteenth proviso, in Explanation 2,––

(A) in clause (d), for the words “attained finality.”, the words “attained finality; or” shall be substituted;

(B) after clause (d), the following clause shall be inserted, namely:––

“(e) the application referred to in the first proviso of this clause is not complete or it contains false or incorrect information.”;

(IV) in the nineteenth proviso, in the Explanation, with effect from the 1st day of April, 2024,––

(a) after the words, brackets and figures “notified under clause (46)”, the word, brackets, figures and letter “or (46A)” shall be inserted;

(b) for the words, brackets and figures “under clause (46)”, the words, brackets, figures and letter “under clause (46) or clause (46A)” shall be substituted;

(V) in the twentieth proviso, for the words “within the time allowed under that section”, the words, brackets and figures “within the time allowed under sub-section (1) or sub-section (4) of that section” shall be substituted;

(h) clause (23EB) shall be omitted;

(i) clause (26A) shall be omitted;

(j) clause (41) shall be omitted;

(k) in clause (46), for the words “, or a class thereof” at both the places where they occur, the words, figures and letter “other than those covered under clause (46A), or a class thereof” shall be substituted with effect from the 1st day of April, 2024;

(l) after clause (46), the following clause shall be inserted with effect from the 1st day of April, 2024, namely:––

“(46A) any income arising to a body or authority or Board or Trust or Commission, not being a company, which —

(a) has been established or constituted by or under a Central Act or State Act with one or more of the following purposes, namely:––

(i) dealing with and satisfying the need for housing accommodation;

(ii)planning, development or improvement of cities, towns and villages;

(iii) regulating, or regulating and developing, any activity for the benefit of the general public; or

(iv) regulating any matter, for the benefit of the general public, arising out of the object for which it has been created; and

(b) is notified by the Central Government in the Official Gazette for the purposes of this clause;”;

(m) clause (49) shall be omitted.

10. Amendment of section 17.

In section 17 of the Income-tax Act,––

(i) in clause (1), after sub-clause (viii), the following sub-clause shall be inserted, namely:––

“(ix) the contribution made by the Central Government in the previous year, to the Agniveer Corpus Fund account of an individual enrolled in the Agnipath Scheme referred to in section 80CCH;”;

(ii) in clause (2), with effect from the 1st day of April, 2024,––

(a) in sub-clause (i), after the word “employer”, the words “computed in such manner as may be prescribed” shall be inserted;

(b) for sub-clause (ii) and Explanations 1 to 4 thereto, the following shall be substituted, namely:––

“(ii) the value of any accommodation provided to the assessee by his employer at a concessional rate.

Explanation.—For the purposes of this sub-clause, it is clarified that accommodation shall be deemed to have been provided at a concessional rate, if the value of accommodation computed in such manner as may be prescribed, exceeds the rent recoverable from, or payable by, the assessee;”.

39. Insertion of new section 80CCH.

After section 80CCG of the Income-tax Act, the following section shall be inserted, namely:–

‘80CCH. (1) Where an assessee, being an individual enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund on or after the 1st day of November, 2022, has in the previous year paid or deposited any amount in his account in the said Fund, he shall be allowed a deduction in the computation of his total income, of the whole of the amount so paid or deposited.

(2) Where the Central Government makes any contribution to the account of an assessee in the Agniveer Corpus Fund referred to in sub-section (1), the assessee shall be allowed a deduction in the computation of his total income of the whole of the amount so contributed.

Explanation.—For the purposes of this section,–

(a) “Agnipath Scheme” means the scheme for enrolment in Indian Armed Forces introduced vide letter No.1(23)2022/D(Pay/Services), dated the 29th December, 2022 of the Government of India in the Ministry of Defence;

(b) “Agniveer Corpus Fund” means a fund in which consolidated contributions of all the Agniveers and matching contributions of the Central Government along with interest on both these contributions are held.’.

50. Amendment of section 115BAC.

In section 115BAC of the Income-tax Act,–

(A) with effect from the 1st day of April, 2024,–

(a) in the marginal heading, for the words “and Hindu undivided family”, the words “, Hindu undivided family and others” shall be substituted;

(b) in sub-section (1), for the figures, letters and words “1st day of April, 2021”, the figures, letters and words “1st day of April, 2021 but before the 1st day of April, 2024” shall be substituted;

(c) after sub-section (1), the following sub-section shall be inserted, namely:–

“(1A) Notwithstanding anything contained in this Act but subject to the provisions of this Chapter, the income-tax payable in respect of the total income of a person, being an individual or Hindu undivided family or association of persons (other than a co-operative society), or body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2, other than a person who has exercised an option under sub-section (6), for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2024, shall be computed at the rate of tax given in the following Table, namely:—

TABLE

Sl. No. Total income Rate of tax
(1) (2) (3)
1. Upto Rs.3,00,000 Nil
2. From Rs.3,00,001 to Rs.6,00,000 5 per cent.
3. From Rs.6,00,001 to Rs.9,00,000 10 per cent.
4. From Rs.9,00,001 to Rs.12,00,000 15 per cent.
5. From Rs.12,00,001 to Rs.15,00,000 20 per cent.
6. Above Rs.15,00,000 30 per cent.”;

(B) with effect from the 1st day of April, 2023, in sub-section (2), in clause (i), after the words, figures and letters “section 80CCD or”, the words, brackets, figures and letters “sub-section (2) of section 80CCH or” shall be inserted;

(C) with effect from the 1st day of April, 2024,–

(a) in sub-section (2), for the opening portion and clause (i) thereof, the following shall be substituted, namely:–

“(2) For the purposes of sub-section (1A), the total income of the person referred to therein, shall be computed—

(i) without any exemption or deduction under the provisions of clause (5) or clause (13A) or prescribed under clause (14) (other than those as may be prescribed for this purpose) or clause (17) or clause (32), of section 10 or section 10AA or clause (ii) or clause (iii) of section 16 or clause (b) of section 24 [in respect of the property referred to in sub-section (2) of section 23] or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or under any of the provisions of Chapter VI-A other than the provisions of sub-section (2) of section 80CCD or sub-section (2) of section 80CCH or section 80JJAA;”;

(b) in sub-section (3), after the proviso, the following proviso shall be inserted, namely:–

“Provided further that in a case where,–

(i) the assessee has not exercised the option under sub-section (5) for any previous year relevant to the assessment year beginning on or before the 1st day of April, 2023;

(ii) the income-tax on the total income of the assessee is computed under sub-section (1A); and

(iii) there is a depreciation allowance in respect of a block of assets which has not been given full effect prior to the assessment year beginning on the 1st day of April, 2024,

corresponding adjustment shall be made to the written down value of such block of assets as on the 1st day of April, 2023 in the manner as may be prescribed.”;

(c) for sub-section (4), the following sub-section shall be substituted, namely:–

‘(4) In case of a person, having a Unit in the International Financial Services Centre, as referred to in sub-section (1A) of section 80LA,–

(i) who has exercised option under sub-section (5) for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2021 but before the 1st day of April, 2024;

(ii) whose total income is computed under sub­section (1A),

the conditions contained in sub-section (2) shall be modified to the extent that the deduction under section 80LA shall be available to such Unit subject to fulfilment of the conditions contained in the said section.

Explanation.—For the purposes of this sub-section, the term “Unit” shall have the meaning assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005’; 28 of 2005.

(d) in sub-section (5), after the proviso, the following proviso shall be inserted, namely:–

“Provided further that the provisions of this sub­section shall not apply for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2024.”;

(e) after sub-section (5), the following sub-section shall be inserted, namely:–

“(6) Nothing contained in sub- section (1A) shall apply to a person where an option is exercised by such person, in the manner as may be prescribed, for any assessment year, and such option is exercised,–

(i) on or before the due date specified under sub­section (1) of section 139 for furnishing the return of income for such assessment year, in case of a person having income from business or profession, and such option once exercised shall apply to subsequent assessment years; or

(ii) along with the return of income to be furnished under sub-section (1) of section 139 for such assessment year, in case of a person not having income referred to in clause (i):

Provided that the option under clause (i), once exercised for any previous year can be withdrawn only once for a previous year other than the year in which it was exercised and thereafter, the person shall never be eligible to exercise the option under this sub­section, except where such person ceases to have any income from business or profession in which case, option under clause (ii) shall be available.”.

*****

Source : Finance Bill 2023 / Union Budget 2023

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