Govt introduces Taxation Law Amendment Bill in Lok Sabha

The outbreak of Novel Corona Virus (COVID-19) pandemic across many countries of the world, including India, has caused immense loss to lives of people and given rise to unprecedented humanitarian and economic crisis in the country. Due to vagaries of pandemic, a national lockdown was imposed which had to be further extended. Due to very rapid spread of pandemic, social distancing had to be ensured immediately to prevent society at large from its disastrous consequences. This necessitated ease of compliance under certain tax and other laws.

1. The Taxation And Other Laws (Relaxation And Amendment Of Certain Provisions) Bill, 2020 as introduced in Lok Sabha on 18.09.2020 seeks to replace the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 and further to amend the Income-tax Act, 1961, the Central Goods and Services Tax Act, 2017, the Finance (No.2) Act, 2019, the Direct Tax Vivad se Vishwas Act, 2020 and the Finance Act, 2020 which are administered by the Department of Revenue through two boards, namely, the Central Board of Direct Taxes and the Central Board of Indirect Taxes. Thus, no additional expenditure is contemplated on the enactment of the Bill.

2.   As Parliament was not in session and in view of the urgency, the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (Ord. 2 of 2020) was promulgated on the 31st day of March, 2020 which, inter alia, relaxed certain provisions of the specified Acts relating to direct taxes, indirect taxes and prohibition of Benami property transactions. Further, certain notifications were also issued under the said Ordinance.

3.   In view of stakeholders’ representations received after enactment of the Finance Act, 2020, and due to need for further rationalisation of some provisions of certain Acts, further amendments are considered necessary to be incorporated in the proposed Bill replacing the Ordinance.

4.   The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020 which seeks to replace the said Ordinance, inter alia, provides for extension of various time limits for completion or compliance of actions under the specified Acts and reduction in interest, waiver of penalty and prosecution for delay in payment of certain taxes or levies during the specified period.

5.   Further, the Bill proposes amendments to the Income-tax Act, 1961 which , inter alia, include providing of tax incentive for Category-III Alternative Investment Funds located in the International Financial Services Centre (IFSC) to encourage relocation of foreign funds to the IFSC, deferment of new procedure of registration and approval of certain entities introduced through the Finance Act, 2020, providing for deduction for donation made to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND) and exemption to its income, incorporation of Faceless Assessment Scheme, 2019 therein, empowering the Central Government to notify schemes for faceless processes under certain provisions by eliminating physical interface to the extent technologically feasible and to provide deduction or collection at source in respect of certain transactions at three-fourth’s rate for the period from 14th May, 2020 to 31st March, 2021.

6.   The Bill also proposes to amend the Direct Tax Vivad se Viswas Act, 2020 to extend the date for payment without additional amount to 31st December, 2020 and to empower the Central Government to notify certain dates relating to filing of declaration and making of payment.

7.   The Finance Act, 2020 is also proposed to be amended to clarify regarding capping of surcharge at 15 per cent. on dividend income of the Foreign Portfolio Investor.

8.   The Bill also proposes to empower the Central Government to remove any difficulty up to a period of two years and provide for repeal and savings of the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020.

9.   The Bill seeks to achieve the aforesaid objectives.

Clause 4 of the Bill seeks to amend certain provisions relating to Income-Tax Act, 1961.

The proposed amendment to clause (4D) of section 10 provides for calculation of income of non-resident in the prescribed manner.

The proposed amendment of the clause (23C) of section 10 empowers the Board to prescribed form and manner for application for approval to funds or trust or institution or any university or other educational institutions or any hospital or other medical institutions.

The proposed insertion of new section 12AB relating to procedure for fresh registration empowers the Board to provide by rules the form and the manner in which the order under the said sub-section shall be passed.

The proposed amendment to section 35 seeks to insert new proviso to sub­section (1) which empowers the Board to provide by rules the form and manner of giving intimation by the research association, university, college or company, to the prescribed authority.

The proposed amendment to sub-section (5) of section 80G empowers the Board to provide by rules the statement, time period, form and manner of verification, particulars and time for delivery of correction statement for rectification of any mistake in the information furnished in the said statement. It further proposes to empower the Board to make rules with regard to the manner, particulars and time for certificate of donation.

The proposed insertion of sub-section (1A) in section 115AD provides for calculation of income that is attributable to units held by non-resident in the prescribed manner.

The matters in respect of which rules may be made are matters of procedure and administrative detail and it is not practicable to provide for them in the Bill itself. The delegatio of legislative power is, therefore, of a normal character.

Text of the The Taxation And Other Laws (Relaxation And Amendment Of Certain Provisions) Bill, 2020 as introduced in Lok Sabha on 18th September 2020 is as follows:-

AS INTRODUCED IN LOK SABHA

Bill No. 116 of 2020

THE TAXATION AND OTHER LAWS (RELAXATION AND
AMENDMENT OF CERTAIN PROVISIONS) BILL, 2020

A

BILL

to provide for relaxation and amendment of provisions of certain Acts and for matters connected therewith or incidental thereto.

BE it enacted by Parliament in the Seventy-first Year of the Republic of India as follows:—

CHAPTER I

PRELIMINARY

1. Short title and commencement.

(1) This Act may be called the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.

(2) Save as otherwise provided, it shall be deemed to have into come into force on the 31st day of March, 2020.

2. Definitions.

(1) In this Act, unless the context otherwise requires,—

(a) “specified Act” means—

(i) the Wealth-tax Act, 1957;(ii) the Income-tax Act, 1961;

(iii) the Prohibition of Benami Property Transactions Act, 1988;

(iv) Chapter VII of the Finance (No. 2) Act, 2004;

(v) Chapter VII of the Finance Act, 2013;

(vi) the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015;

(vii) Chapter VIII of the Finance Act, 2016; or

(viii) the Direct Tax Vivad se Vishwas Act, 2020;

(b) “notification” means the notification published in the Official Gazette.

(2) The words and expressions used herein and not defined, but defined in the specified Act, the Central Excise Act, 1944, the Customs Act, 1962, the Customs Tariff Act,1975 or the Finance Act,1994, as the case may be, shall have the meaning respectively assigned to the min that Act.

CHAPTER II

RELAXATION OF CERTAIN PROVISIONS OF SPECIFIED ACT

3. Relaxation of certain provisions of specified Act.

(1) Where, any time limit has been specified in, or prescribed or notified under, the specified Act which falls during the period from the 20th day of March, 2020 to the 31st day of December, 2020, or such other date after the 31st day of December, 2020, as the Central Government may, by notification, specify in this behalf, for the completion or compliance of such action as—

(a) completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval, or such other action, by whatever name called, by any authority, commission or tribunal, by whatever name called, under the provisions of the specified Act; or

(b) filing of any appeal, reply or application or furnishing of any report, document,return or statement or such other record, by whatever name called, under the provisions of the specified Act; or

(c) in case where the specified Act is the Income-tax Act, 1961,—

(i) making of investment, deposit, payment, acquisition, purchase,construction or such other action, by whatever name called, for the purposes of claiming any deduction, exemption or allowance under the provisions contained in—

(I) sections 54 to 54GB, or under any provisions of Chapter VI-Aunder the heading “B.-Deductions in respect of certain payments” thereof;or

(II) such other provisions of that Act, subject to fulfillment of such conditions, as the Central Government may, by notification, specify; or

(ii) beginning of manufacture or production of articles or things or providing any services referred to in section 10AA of that Act, in a case where the letter of approval, required to be issued in accordance with the provisions of the Special Economic Zones Act, 2005, has been issued on or before the 31st day of March, 2020, and where completion or compliance of such action has not been made withinsuch time, then, the time limit for completion or compliance of such action shall,notwithstanding anything contained in the specified Act, stand extended to the31st day of March, 2021, or such other date after the 31st day of March, 2021, asthe Central Government may, by notification, specify in this behalf:

Provided that the Central Government may specify different dates for completion or compliance of different actions:

Provided further that such action shall not include payment of any amount as is referred to in sub-section (2):

Provided also that where the specified Act is the Income-tax Act, 1961 and the compliance relates to—

(i) furnishing of return under section 139 thereof, for the assessment year commencing on the—

(a) 1st day of April, 2019, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021”, the figures, letters and words “30th day of September, 2020” had been substituted;

(b) 1st day of April, 2020, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021”, the figures, letters and words “30th day of November, 2020” had been substituted;

(ii) delivering of statement of deduction of tax at source under sub-section (2A)of section 200 of that Act or statement of collection of tax at source under sub-section(3A) of section 206C thereof for the month of February or March, 2020, or for the quarter ending on the 31st day of March, 2020, as the case may be, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021”, the figures, letters and words “15th day of July, 2020” had been substituted;

(iii) delivering of statement of deduction of tax at source under sub-section (3)of section 200 of that Act or statement of collection of tax at source under proviso to sub-section (3) of section 206C thereof for the month of February or March, 2020, or for the quarter ending on the 31st day of March, 2020, as the case may be, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021”, the figures, letters and words “31st day of July, 2020” had been substituted;

(iv) furnishing of certificate under section 203 of that Act in respect of deduction or payment of tax under section 192 thereof for the financial year commencing on the 1st day of April, 2019, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021″, the figures, letters and words”15th day of August, 2020” had been substituted;

(v) sections 54 to 54GB of that Act, referred to in item (I) of sub-clause (i) of clause (c), or sub-clause (ii) of the said clause, the provision of this sub-section shall have the effect as if—

(a) for the figures, letters and words “31st day of December, 2020”, the figures, letters and words “29th day of September, 2020” had been substituted for the time limit for the completion or compliance; and

(b) for the figures, letters and words “31st day of March, 2021”, the figures,letters and words “30th day of September, 2020” had been substituted for making such completion or compliance;

(vi) any provisions of Chapter VI-A under the heading “B.- Deductions in respect of certain payments” of that Act, referred to in item (I) of sub-clause (i) of clause (c),the provision of this sub-section shall have the effect as if—

(a) for the figures, letters and words “31st day of December, 2020”, the figures, letters and words “30th day of July, 2020” had been substituted for the time limit for the completion or compliance; and

(b) for the figures, letters and words “31st day of March, 2021”, the figures,letters and words “31st day of July, 2020” had been substituted for making such completion or compliance;

(vii) furnishing of report of audit under any provision thereof for the assessment year commencing on the 1st day of April, 2020, the provision of this sub-section shall have the effect as if for the figures, letters and words “31st day of March, 2021”, the figures, letters and words “31st day of October, 2020” had been substituted:

Provided also that the extension of the date as referred to in sub-clause (b) of clause(i)of the third proviso shall not apply to Explanation 1 to section 234A of the Income-tax Act,1961 in cases where the amount of tax on the total income as reduced by the amount asspecified in clauses (i) to (vi) of sub-section (1) of the said section exceeds one lakh rupees:

Provided also that for the purposes of the fourth proviso, in case of an individual resident in India referred to in sub-section (2) of section 207 of the Income-tax Act, 1961, the tax paid by him under section 140A of that Act within the due date (before extension) provided in that Act, shall be deemed to be the advance tax:

Provided also that where the specified Act is the Direct Tax Vivad Se Vishwas Act,2020, the provision of this sub-section shall have the effect as if—

(a) for the figures, letters and words “31st day of December, 2020”, the figures,letters and words “30th day of December, 2020” had been substituted for the time limit for the completion or compliance of the action; and

(b) for the figures, letters and words “31st day of March, 2021”, the figures,letters and words “31st day of December, 2020” had been substituted for making such completion or compliance.

(2) Where any due date has been specified in, or prescribed or notified under, the specified Act for payment of any amount towards tax or levy, by whatever name called, which falls during the period from the 20th day of March, 2020 to the 29th day of June, 2020 or such other date after the 29th day of June, 2020 as the Central Government may, by notification, specify in this behalf, and if such amount has not been paid within such date, but has been paid on or before the 30th day of June, 2020, or such other date after the 30th day of June,2020 as the Central Government may, by notification, specify in this behalf, then,notwithstanding anything contained in the specified Act,—

(a) the rate of interest payable, if any, in respect of such amount for the period of delay shall not exceed three-fourth per cent. for every month or part thereof;

(b) no penalty shall be levied and no prosecution shall be sanctioned in respect of such amount for the period of delay.Explanation.—For the purposes of this sub-section, “the period of delay” means the period between the due date and the date on which the amount has been paid.

Download Full Text of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020

Also Read-

LOK SABHA
——
CORRIGENDUM
to
THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN
PROVISIONS) BILL, 2020
[To be/As introduced in Lok Sabha]

1. Page 1, line 7,-

for “have into come”

read “have come”.

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insert ‘(a) “notification” means the notification published in the Official Gazette’.

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for (a) “specified Act”

read (b) “specified Act”.

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for “fulfillment of”

read “fulfilment of”.

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for “Explanation below”

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NEW DELHI;

14 September, 2020
Bhadrapada 23, 1942 (Saka)