In view of the recent changes, the following data provides summary of newly Inserted Sections in Direct Taxes by Finance Act, 2021.
Please provide your valuable insights and queries in the comments section.
Insertion of New Sections under Direct Taxes by
Summary of Inserted Sections:
| Section Number | Name of Section |
| Section 89A | Relief from taxation in income from retirement benefit account maintained in notified country |
| Section 148A | Conducting Inquiry, providing opportunity before issuer of notice under Section 148 |
| Section 194P | Deduction of tax in case of specified senior citizen |
| Section 194Q | Deduction of tax at source on payment of certain sum for purchase of goods |
| Section 206AB | Special Provisions for TDS for non-filers of ITR |
| Section 206CCA | Special Provisions for TCS for non-filers of ITR |
| Section 245AA | Interim Boards for Settlement |
| Section 245M | Option to Withdraw Pending Application |
| Section 245-OB | Board for Advance Rulings |
| Section 245W | Appeal |
Detailed Summary:
1) Section 89A : Relief from Taxation in Income from Retirement Benefit Account maintained in notified country.
a) Where a specified person has income accrued in a specified account, such income shall be taxed in such manner and in such year as may be prescribed.
- “Specified Person” means a person resident in India who opened specified account in a notified country while being non-resident in India and resident in that country.
- “Specified Account” means an account maintained in a notified country by the specified person in respect of his retirement benefits and the income from such account is not taxable on accrual basis but is taxed by such country at the time of withdrawal or redemption.
- “Notified Country” means a country as may be notified by CG in the Official Gazette.
2) Section 148A : Conducting Inquiry, providing opportunity before issuer of notice under Section 148.
a) The Assessing Officer shall, before issuing notice under section 148, –
- Conduct an enquiry, with the prior approval of specified authority, for the information which suggests that the income chargeable to tax has escaped assessment;
- Provide an opportunity of being heard.
- Consider the reply of assessee.
- Decide on the basis of material available on record whether it is fit to issue notice under section 148.
b) Provided that the provisions of this section shall not apply in a case where :
- Search is initiated under section 132 or requisition under section 132A in case of Assessee on or after 1/4/2021; or
- AO is satisfied, with prior approval of Commissioner that valuable article or books of accounts seized under section 132 or requisitioned under section 132A, belongs to the Assessee on or after 1/4/2021;
3) Section 194P : Deduction of tax in case of specified senior citizen.
a) In case of a specified senior citizen, the specified bank shall, deduct income-tax on total income on the basis of rates in force.
b) Provisions of Section 139 (Return Filling) shall not apply to specified senior
citizen for AY relevant to PY in which Tax has been deducted.
- “Specified Senior Citizen” means an individual, being a resident in India –
> Who is of the age of 75 yrs or more at any time during PY.
> Who is having income of nature of pension and interest income from that account maintained by such Individual.
> Has furnished a declaration to the specified bank containing such particulars as may be prescribed.
4) Section 194Q : Deduction of tax at source on payment of certain sum for purchase of goods.
a) Any Buyer who is responsible for paying any sum to any resident (Seller) for purchase of any goods of the value or aggregate of such value exceeding 50 Lakh Rupees in any PY, shall deduct TDS @ 0.1% of such sum exceeding 50 Lakh Rupees.
- “Buyer” means a person whose total sales, gross receipts or turnover from business carried on by him exceed 10 Crore rupees during FY immediately preceding the FY in which purchase of goods is carried out.
b) Where any sum referred in sub section (1) is credited to any account, whether called “suspense account” or any other name, in books of accounts of person liable to pay such income , such credit shall be deemed to be credit to the account of payee and provisions of this section shall apply accordingly.
c) The provisions of this section shall not apply to a transaction on which –
- Tax is deductibe under any other provisions; and
- Tax is collectible under section 206C.
5) Section 206AB : Special Provisions for TDS for non-filers of ITR
a) Where TDS is required to be deducted under provisions of chapter XVIIB, other than sections 192, 192A, 194B, 194BB, 194LBC or 194N on any sum paid or payable or credited by any person to a specified person, the tax shall be deducted at higher of following rates :
- At twice the rate; or
- At the rate of 5%
b) If the provisions of section 206AA is applicable to a specified person, in addition to the provisions of this section, the tax shall be deducted at higher of two rated provided in this section and in section 206AA.
c) “Specified Person” means a person who has not filed the returns of income for both of the two assessment years relevant to the two previous years immediately prior to the previous year in which tax is required to be deducted and the aggregate of TDS & TCS in his case is Rs. 50,000 or more in each of two previous years.
6) Section 206CCA : Special Provisions for TCS for non-filers of ITR
a) Where Tax is required to be collected at source on any sum or amount received by a person from a specified person, the tax shall be collected at higher of the following two rates :
- At twice the rate specified; or
- At the rate of 5%.
b) If the provisions section 206CC is applicable to a person, in addition to the provisions of this section, the tax shall be collected at higher of the two rates provided in this section & in section 206CC.
7) Section 245AA : Interim Boards for Settlement
a) Central Govt. shall constitute one or more Interim Boards for Settlement, for the settlement of pending applications.
b) Every Interim Board shall consist of three members, each being an officer of the rank of Chief Commissioner, as may be nominated by the Board.
c) If members of board differ in opinion on any point, the point shall be decided by majority.
8) Section 245M : Option to Withdraw Pending Application
a) Where any application is pending, assessee at his option may withdraw such application within 3 months from 1/2/2021 & inform AO about such withdrawal.
b) Where above option is not exercised, it shall be deemed to have been transferred to Interim Board.
c) Any pending application may be transferred from one Interim Board to another Interim Board.
d) All documents or evidences shall also be transferred to Interim board in relation to such application.
e) Where the application has been withdrawn by assessee, then any proceeding in relation to that application shall stand abated.
9) Section 245OB : Board for Advance Rulings
a) Central Govt. shall constitute one or more boards for advance rulings.
b) The Board shall consist of two members (Officer not below the rank of Chief Commissioner).
10) Section 245W : Appeal
a) Any applicant aggrieved by ruling or order of the board, may appeal to High Court within 60 days from the date of communication of that ruling or order. “Further 30 days may be granted to appellant on sufficient cause.”
b) Central Govt may make any scheme by notification for the purpose of filing appeal to High Court.
c) Central Govt in respect to the above scheme, direct that any of the provisions of this act shall not apply or shall apply with such exceptions, modifications as may be required.
“No such direction shall be issued after 31/3/2023”
Author Bio
According to section 89A of Income tax Act, 1961, the section applies to Tax relief in relation to export turnover. So can you please explain how this section is related to specified employees? And what benefits will a person gets who used to be a US citizen having an active 401(k) account but his residential status is currently ROR?