1. Amendments at a glance
Section/Schedule Particulars
Finance Act
2 and First Sch. Rate Structure 4
Income-tax Act
9 Expanding the scope of taxation of salary earned by non-residents 5-5.3
10(10AA) Exemption limit of leave salary of non-Government employees revised to salary of ten months 6-6.3
10(15)(iv), Explanation 1 and Explanation 2 Benefit of Tax-Exemption for Interest Payable Extended to Hedging Transaction charges 7-7.3
10(15A) Reintroduction of incentives for the Civil Aviation industry 8-8.4
10(18) Pension of gallantry award winners exempt in certain cases 9-9.2
10(23FA) Rationalisation of tax exemption to Venture Capital Fund/Venture Capital Company 10-10.8
10(23G) Expansion of the scope of eligible infrastructure facilities for the purpose of exemption under section 10(23G) 11-11.5
10(29A) Exemption of Commodity Boards and Authorities from income-tax 12-12.2
10(33), 80L(1), Measures for development of capital market 13-13.11
Chapter XIIE115R 194K(1),196A(1) (consisting sections to115T),
Section/Schedule Particulars
10C Insertion of a new provision providing exemptions to indus­tries set-up in the North-Eastern Region 14-14.8
12A, 12AA, Rationalisation of Provisions Relating to Registration
253 of Trusts 15-15.4
17(2)(iiia), 49 Provisions to tax perquisites in case of stock options
(2B), (2C), (2D) And sweat equity plans 16-16.4
24(2), second Enhancement of deduction of interest allowable on
Proviso borrowed capital in respect of a self-occupied residential house under certain circumstances 17-17.3
35 Weighted deduction for scientific research and development expenditure 18-18.4
35ABB Rationalisation of the provisions relating to allowance for telecommunication licence fees 19-19.3
36(1)(viia) Amendment of provisions relating to deduction for provision for bad and doubtful debts in the case of Banks 20-20.3
36(1)(viii), 80L Removal of requirement of approval by Central Gov-
(1)(x), 194 A(3)(i) ernment under section 36(1)(viii) 21-21.3
36(1)(xi) Deduction of Y2K Expenditure22-22.4
43(1) Computation of actual cost of assets in the case of Non-Residents 23-23.2
43B, Explana- Deduction of interest payable to co-operative banks
tion 4(aa) to be allowed on actual payment basis. 24-24.2
43D Extension of provisions of section 43D to Housing Finance Companies 25-25.3
44AD(6), Amendments to sections 44AD, 44AE and 44AF to pro-
44AE(7), Vide for claiming lower profits 26-26.3
44AF(5)
45(1A) Taxing profits and gains arising from insurance claim received for damage to or destruction of a capital asset as capi­tal gains 27-27.4
2(22)(iv)/(v), 46A Clarification of tax issues arising out of the provision to allow buy-back of shares by the companies 28-28.4
80D Deduction for medical insurance premium on the health of senior citizen raised 29-29.2
80DD(1) Full deductions allowed for any amount of expenditure incurred on the maintenance of handicapped dependent 30-30.2
80DDB Limits under section 80DDB revised 31-31.3
80G(2)(iiihi) Full deductions to donations to the Fund for Technology Development and Application 32-32.3
Section/Schedule Particulars
80G(5B) Deduction for donations made to funds or institutions for charitable purposes 33-33.3
80HHA Modification of the definition of small scale industry 34-34.2
80HHB, 80HHC, Receipts of money in convertible foreign exchange to be
80HHD, 80HHE, considered for deduction when received beyond
80-O, 80-R, the period of six months with the approval of the
80RR and Reserve Bank of India 35-35.3
80RRA, 155(13)
80HHC Amendment of section 80HHC 36-36.2
80HHD Incentive to increase investment in tourism sector 37-37.3
80HHF Incentives for film industry 38-38.7
80-IA, 80-IB Incentives to promote Economic Growth and
Industria­lization 39-39.1
Enterprises setting up infrastructure projects may avail tax holiday benefits in any ten consecutive years out of fifteen initial years 39.2-39.2.3
Tax benefits for generation of power or generation and distribution of power to be extended to any undertaking laying new transmission and distribution lines for transmission activities 39.3-39.3.3
Tax holiday benefits to cold chains 39.4-39.4.3
Concession for Infrastructure Facility and Industrial Parks may be availed by persons operating and maintaining it 39.5-39.5.3
Tax holiday for industries in North-East 39.6-39.6.1
Liberalisation of tax holiday to approved housing projects 39.7-39.7.3
80JJA Tax holiday for processing of bio-degradable waste 40-40.2
112 Reduction of tax rate on long-term capital gains in regard to securities 41-41.4
115ACA Concessional rate of tax for income arising to certain resident employees from certain Global Depository Receipts 42-42.5
139(1) Exclusion of two-wheelers from the purview of the ýÿmotor vehicleýÿ for the purpose of filing return under first proviso to section 139(1) 43-43.3
139(6) Amendment of section 139(6) to provide for particulars of bank account and credit card in prescribed form of return 44.44.4
140A Self-assessment tax to be paid while filing returns for the block period in search cases 45-45.2
Section/Schedule Particulars
143 Simplification of procedure of processing of return under sub-section (1) of section 143 and doing away with prima facie adjustment 46-46.3
180, 180A Sunset provisions to sections 180 and 180A relating to assessment of income from royalties and copyright fees and con­sideration for know-how 47-47.4
194L, 197(1), 198 Tax deduction at source on payment of compensation
to 200 and 202 relating to compulsory acquisition of a capital asset
to 205 48-48.4
197A No deduction of tax from interest on securities in certain cases 49-49.3
201, 234A Rationalisation of interest chargeable from the
and 234B assessees 50-50.3
206C Filing of TCS returns on computer media 51-51.4
206CC Certificate for collection of tax at a lower rate 52-52.4
250(6A) and Time-limit for disposal of appeals by the Commissioner
254 (Appeals) and the Appellate Tribunal and empower­ing the latter to award costs 53-53.3
249, 253, 254 Rationalisation of provisions relating to reduction of
and 260A litigation and other allied issues 54-54.2
2(30), 3, 10(6) Omission of transitory provisions and certain modifi-
(viia), 10(23C) cations 55
33ABA, 36(1) (iia), 40A(7), 115AD(1)(a), 194A(3), 194B, 194BB, 194H and Tenth Schedule
2(1B), 2(19AA), Business Re-organization Extensive amendments in relation
2(19AAA), 2(22)(v), to amalgamation, demerger and slump sale 56-56.5
2(41A), 2(42A),
2(42C), 32, 33AC, 35A(7), 35AB(3), 35ABB, 35DD, 35E(7A), 41(1), 42(2), 43(1), 43(6),
47, 49, 50B, 72, 72A, 79, 80-IA, 80-IB, and 115AC(5)
2(14)(vi), 10(15)(vi) Gold Deposit Scheme 57-57.2, 57.4
Section/Schedule Particulars
Wealth-tax Act
2(ea) Gold Deposit Scheme 57.3-57.4
16, 35 Simplification of procedure of processing of return under sub-section (1) of section 16 and doing away with prima facie adjustment 58-58.2
24, 27 and 27A Rationalisation of provisions relating to reduc­tion of litigation and other allied issues 59-59.1
23A and 24 Time-limit for disposal of appeals by the Commis­sioner (Appeals) and the Appellate Tribunal and empowering the latter to award costs 60-60.3
Expenditure-tax Act
22 Time-limit for disposal of appeals by the Commissioner (Appeals) and the Appellate Tribunal 61-61.3
Finance (No. 2) Act, 1998
76 Amendment to Finance (No. 2) Act, 1998 62-62.2

 

2. Rate & Structure

Rates of income-tax in respect of income liable to tax for the assessment year 1999-2000

4.1 In respect of incomes of all categories of taxpayers (corpo­rate as well as non-corporate) liable to tax for the assessment year 1999-2000, the rates of income-tax have been specified in Part I of the First Schedule to the Act and are the same as those laid down in Part III of the First Schedule to the Finance (No. 2) Act, 1998.

4.2 Rates for deduction of income-tax at source during the finan­cial year 1999-2000 from income other than Salaries

4.2-1 The rates for deduction of income-tax at source during the financial year 1999-2000 from income other than Salaries, have been specified in Part II of the First Schedule to the Act. These rates apply to income by way of interest on securities, interest other than interest on securities, insurance commission, win­nings from lotteries or crossword puzzles, winnings from horse races and income of non-residents (including non-resident Indi­ans).

4.2-2 The tax so computed for deduction at source in the case of all assessees (except non-residents and foreign companies) will be enhanced by a surcharge calculated at the rate of 10% of such tax. In the case of individuals, Hindu undivided families, asso­ciation of persons and body of individuals, the surcharge will be payable only by persons having total income above Rs. 60,000.

Rates for deduction of income-tax at source from Salaries, computation of advance tax and charging of income-tax in spe­cial cases during the financial year 1999-2000

4.3 The rates for deduction of income-tax at source from Sal­aries during the financial year 1999-2000 and also the computa­tion of advance tax payable during that year in the case of various categories of taxpayers, have been specified in Part III of the First Schedule to the Act. These rates are also applicable for charging income-tax during the financial year 1999-2000 on current incomes in cases where accelerated assessments have to be made, e.g., provisional assessment of shipping profits arising in India to non-residents, assessment of persons leaving India for good during that financial year or assessment of persons who are likely to transfer property to avoid tax, etc. The salient fea­tures of the rates specified in the said Part III are indicated in the following paragraphs :

4.3-1 Individuals, Hindu undivided families, etc. – Paragraph A of Part III of the First Schedule specifies the rates of income-tax in the case of individuals, Hindu undivided families, associ­ation of persons, etc. There is no change in the rate structure. However, the tax payable would be enhanced by a surcharge for the purposes of the Union at the rate of 10 per cent of the tax payable (after allowing rebate under Chapter VIII-A of the Income-tax Act). No surcharge would be payable by non-residents and persons having income of Rs. 60,000 or less. Marginal relief would also be provided to ensure that the additional amount of income-tax payable, including surcharge, on the excess of income over Rs. 60,000 is limited to the amount by which the income exceeds Rs. 60,000.

The Table below gives the income slabs and the rates of income-tax (a) as specified in Paragraph A of Part I of the First Sched­ule to the Act; i.e., the existing slabs and rates and (b) as specified in Paragraph A of Part III of the First Schedule to the Act, i.e., the new slabs and rates.

(a) Existing (b) New
Income slab Rates as specified in Paragraph A of Part I of the First Schedule to the Act Income slab Rates as specified in Paragraph A of Part III of First Schedule to the Act
Upto Rs. 50,000 Nil Upto Rs. 50,000 Nil
Rs. 50,001 to Rs. 60,000 10% Rs. 50,001 to Rs. 60,000 10%
Rs. 60,001 to Rs. 1,50,000 20% Rs. 60,001 to Rs. 1,50,000 20%*
Above Rs. 1,50,000 30% Above Rs. 1,50,000 30%*

*Persons (other than non-residents) in this slab would be required to pay ten per cent surcharge on the total tax payable after rebate under Chapter VIII-A.

4.3-2 Effect of levy of surcharge – The effect of levy of sur­charge in the case of individuals, HUFýÿs etc. at different income levels would be as under :

Total income Existing tax New tax Additional Percentage
(Rs.) liability liability liability increase
(Rs.) (Rs.) (Rs.) (Rs.)
50,000 Nil Nil Nil Nil
55,000 500 500 Nil Nil
60,000 1,000 1,000 Nil Nil
60,100 1,020 1,100** 80 7.8
60,120 1,024 1,120** 96 9.37
60,130 1,026 1,129 103 10
60,150 1,030 1,133 103 10
60,200 1,040 1,144 104 10
60,500 1,100 1,210 110 10
61,000 1,200 1,320 120 10
65,000 2,000 2,200 200 10
70,000 3,000 3,300 300 10
75,000 4,000 4,400 400 10
1,00,000 9,000 9,900 900 10
1,50,000 19,000 20,900 1,900 10
1,75,000 26,500 29,150 2,650 10
2,00,000 34,000 37,400 3,400 10
2,50,000 49,000 53,900 4,900 10
3,00,000 64,000 70,400 6,400 10
4,00,000 94,000 1,03,400 9,400 10
5,00,000 1,24,000 1,36,400 12,400 10

**Marginal relief would be provided to ensure that the addition­al amount of income-tax payable, including surcharge, on the excess of income over Rs. 60,000 is limited to the amount by which the income is more than Rs. 60,000.

4.3-3 Co-operative societies – In the case of co-operative socie­ties, the rates of income-tax have been specified in paragraph B of Part III of the First Schedule to the Act. These rates are the same as those specified in the corresponding Paragraph of Part I of the First Schedule to the Act. However, the tax payable would be enhanced by a surcharge for the purposes of the Union at the rate of ten per cent of the tax payable.

4.3-4 Firms – In the case of firms, the rate of income-tax has been specified in paragraph C of Part III of the First Schedule to the Act. This rate is 35% which is the same as that specified in the corresponding paragraph of Part I of the First Schedule to the Act. However, the tax payable by resident firms would be enhanced by a surcharge for the purposes of the Union at the rate of ten per cent of the tax payable.

4.3-5 Local authorities – In the case of local authorities, the rate of income-tax has been specified in paragraph D of Part III of the First Schedule to the Act. This rate is 30% which is the same as that specified in the corresponding Paragraph of Part I of the First Schedule to the Act. However, the tax payable would be enhanced by a surcharge for the purpose of the Union at the rate of ten per cent of the tax payable.

4.3-6 Companies – In the case of companies, the rates of income-tax have been specified in paragraph E of Part III of the First Schedule to the Act. These rates are the same as those specified in the corresponding paragraph of Part I of the First Schedule to the Act. There is no change in the existing rates of 35% for domestic companies and 48% for foreign companies. However, in the case of domestic companies, the tax payable would be enhanced by a surcharge at the rate of ten per cent of the tax payable.

[Section 2 and First Schedule]

 

3. Amendments to Income-tax Act

Income-tax

Rate Structure

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Rates of income-tax in respect of income liable to tax for the assessment year 1999-2000

4.1 In respect of incomes of all categories of taxpayers (corpo­rate as well as non-corporate) liable to tax for the assessment year 1999-2000, the rates of income-tax have been specified in Part I of the First Schedule to the Act and are the same as those laid down in Part III of the First Schedule to the Finance (No. 2) Act, 1998.

4.2 Rates for deduction of income-tax at source during the finan­cial year 1999-2000 from income other than ýÿSalariesýÿ

4.2-1 The rates for deduction of income-tax at source during the financial year 1999-2000 from income other than ýÿSalariesýÿ, have been specified in Part II of the First Schedule to the Act. These rates apply to income by way of interest on securities, interest other than ýÿinterest on securitiesýÿ, insurance commission, win­nings from lotteries or crossword puzzles, winnings from horse races and income of non-residents (including non-resident Indi­ans).

4.2-2 The tax so computed for deduction at source in the case of all assessees (except non-residents and foreign companies) will be enhanced by a surcharge calculated at the rate of 10% of such tax. In the case of individuals, Hindu undivided families, asso­ciation of persons and body of individuals, the surcharge will be payable only by persons having total income above Rs. 60,000.

Rates for deduction of income-tax at source from ýÿSalariesýÿ, computation of ýÿadvance taxýÿ and charging of income-tax in spe­cial cases during the financial year 1999-2000

4.3 The rates for deduction of income-tax at source from ýÿSal­ariesýÿ during the financial year 1999-2000 and also the computa­tion of ýÿadvance taxýÿ payable during that year in the case of various categories of taxpayers, have been specified in Part III of the First Schedule to the Act. These rates are also applicable for charging income-tax during the financial year 1999-2000 on current incomes in cases where accelerated assessments have to be made, e.g., provisional assessment of shipping profits arising in India to non-residents, assessment of persons leaving India for good during that financial year or assessment of persons who are likely to transfer property to avoid tax, etc. The salient fea­tures of the rates specified in the said Part III are indicated in the following paragraphs :

4.3-1 Individuals, Hindu undivided families, etc. – Paragraph A of Part III of the First Schedule specifies the rates of income-tax in the case of individuals, Hindu undivided families, associ­ation of persons, etc. There is no change in the rate structure. However, the tax payable would be enhanced by a surcharge for the purposes of the Union at the rate of 10 per cent of the tax payable (after allowing rebate under Chapter VIII-A of the Income-tax Act). No surcharge would be payable by non-residents and persons having income of Rs. 60,000 or less. Marginal relief would also be provided to ensure that the additional amount of income-tax payable, including surcharge, on the excess of income over Rs. 60,000 is limited to the amount by which the income exceeds Rs. 60,000.

The Table below gives the income slabs and the rates of income-tax (a) as specified in Paragraph A of Part I of the First Sched­ule to the Act; i.e., the existing slabs and rates and (b) as specified in Paragraph A of Part III of the First Schedule to the Act, i.e., the new slabs and rates.

(a) Existing (b) New
Income slab Rates as specified in Paragraph A of Part I of the First Schedule to the Act Income slab Rates as specified in Paragraph A of Part III of First Schedule to the Act
Upto Rs. 50,000 Nil Upto Rs. 50,000 Nil
Rs. 50,001 to Rs. 60,000 10% Rs. 50,001 to Rs. 60,000 10%
Rs. 60,001 to Rs. 1,50,000 20% Rs. 60,001 to Rs. 1,50,000 20%*
Above Rs. 1,50,000 30% Above Rs. 1,50,000 30%*

*Persons (other than non-residents) in this slab would be required to pay ten per cent surcharge on the total tax payable after rebate under Chapter VIII-A.

4.3-2 Effect of levy of surcharge – The effect of levy of sur­charge in the case of individuals, HUFýÿs etc. at different income levels would be as under :

Total income Existing tax New tax Additional Percentage
(Rs.) liability liability liability increase
(Rs.) (Rs.) (Rs.) (Rs.)
50,000 Nil Nil Nil Nil
55,000 500 500 Nil Nil
60,000 1,000 1,000 Nil Nil
60,100 1,020 1,100** 80 7.8
60,120 1,024 1,120** 96 9.37
60,130 1,026 1,129 103 10
60,150 1,030 1,133 103 10
60,200 1,040 1,144 104 10
60,500 1,100 1,210 110 10
61,000 1,200 1,320 120 10
65,000 2,000 2,200 200 10
70,000 3,000 3,300 300 10
75,000 4,000 4,400 400 10
1,00,000 9,000 9,900 900 10
1,50,000 19,000 20,900 1,900 10
1,75,000 26,500 29,150 2,650 10
2,00,000 34,000 37,400 3,400 10
2,50,000 49,000 53,900 4,900 10
3,00,000 64,000 70,400 6,400 10
4,00,000 94,000 1,03,400 9,400 10
5,00,000 1,24,000 1,36,400 12,400 10

**Marginal relief would be provided to ensure that the addition­al amount of income-tax payable, including surcharge, on the excess of income over Rs. 60,000 is limited to the amount by which the income is more than Rs. 60,000.

4.3-3 Co-operative societies – In the case of co-operative socie­ties, the rates of income-tax have been specified in paragraph B of Part III of the First Schedule to the Act. These rates are the same as those specified in the corresponding Paragraph of Part I of the First Schedule to the Act. However, the tax payable would be enhanced by a surcharge for the purposes of the Union at the rate of ten per cent of the tax payable.

4.3-4 Firms – In the case of firms, the rate of income-tax has been specified in paragraph C of Part III of the First Schedule to the Act. This rate is 35% which is the same as that specified in the corresponding paragraph of Part I of the First Schedule to the Act. However, the tax payable by resident firms would be enhanced by a surcharge for the purposes of the Union at the rate of ten per cent of the tax payable.

4.3-5 Local authorities – In the case of local authorities, the rate of income-tax has been specified in paragraph D of Part III of the First Schedule to the Act. This rate is 30% which is the same as that specified in the corresponding Paragraph of Part I of the First Schedule to the Act. However, the tax payable would be enhanced by a surcharge for the purpose of the Union at the rate of ten per cent of the tax payable.

4.3-6 Companies – In the case of companies, the rates of income-tax have been specified in paragraph E of Part III of the First Schedule to the Act. These rates are the same as those specified in the corresponding paragraph of Part I of the First Schedule to the Act. There is no change in the existing rates of 35% for domestic companies and 48% for foreign companies. However, in the case of domestic companies, the tax payable would be enhanced by a surcharge at the rate of ten per cent of the tax payable.

[Section 2 and First Schedule]

 

4. Amendments to Wealth-tax Act

57.4 These amendments will take effect from 1st April, 2000 and will accordingly, apply in relation to assessment year 2000-2001 and subsequent years.

[Sections 3, 6 and 91]

Finance Act, 1999

Wealth-tax

Simplification of procedure of processing of return under sub-section (1) of section 16 and doing away with prima facie adjustment

58.1 As in the case of the Income-tax Act, the Act has amended section 16 of the Wealth-tax Act to modify the present provisions contained in section 16(1)/16(1A)/16(1B) to do away with the provisions relating to prima facie adjustments, additional tax and issue of intimations in all cases. Filing of return by itself would complete the process of assessment limiting its scope to raise demand and issue refund on the basis of return filed. With the exception of issuing intimations where any sum is payable by assessee or refund is due to him, the acknowledgement shall be deemed to be an intimation. The Act has also amended sub-section (1) of section 35 of the Wealth-tax Act to provide for rectifica­tion of intimation or deemed intimation referred to in sub-sec­tion (1) of section 16.

58.2 This amendment takes effect from 1st June, 1999.

5. Amendments to Expenditure-tax Act

[Sections 93 and 94]

Finance Act, 1999

Expenditure-tax

Time-limit for disposal of appeals by the Commissioner (Appeals) and the Appellate Tribunal

61.1 As in the case of Income-tax Act, the Act has amended sec­tion 22 of the Expenditure-tax Act to provide that the Commis­sioner (Appeals), where it is possible, may hear and decide every appeal within a period of one year from the end of the financial year in which the appeal is filed.

61.2 In view of the applicability of the provisions of section 254 of the Income-tax Act to the Expenditure-tax Act in terms of section 24 of that Act, the newly introduced time-limit for disposal of appeals by the Appellate Tribunal would apply also for appeals under the Expenditure-tax Act. Similarly, the Appel­late Tribunal has been empowered to award costs at its discretion under the Expenditure-tax Act.

61.3 This amendment takes effect from the 1st June, 1999.

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Category : Income Tax (25147)
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