Thursday, April 22, 2021
Saturday, September 19, 2020
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.
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Thanks & Regards,
Member,ICAI- Committee For DIRECT TAXES 2011-12
Friday, May 7, 2010
IFRS COUNTDOWN-Clarifications from MCAShare
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A meeting of the Core Group constituted by the Ministry of Corporate Affairs for convergence of Indian Accounting Standards with the International financial Reporting Standards (IFRSs) from the year 2011 was held on 11th January, 2010 and on 29th March, 2010 under the chairmanship of Shri R. Bandyopadhyay,Secretary , Ministry of Corporate Affairs. These meetings were attended by the officials from Ministry of Finance, SEBI, RBI, IRDA C&AG, PFRDA, ICAI, Industry Representatives and other experts. On the basis of the deliberations taken place in the meeting on 11th January, 2010, a Press Release (No.2/2010) related to the roadmap for application of the converged Indian Accounting Standards by companies (other than Banking companies, Insurance companies and Non-Banking finance companies) was issued on 22nd January, 2010. Further, on the basis of the deliberations taken place in the meeting on 29th March, 2010, a Press Release (No.3/2010) related to the roadmap for the application of the converged Indian Accounting Standards by the Banking companies, Insurance companies and Non-Banking finance companies was issued on 31st March, 2010. In response to the requests seeking clarifications on the roadmaps issued, a consolidated statement on clarifications is being annexed with this Press Release. Both the Press Releases are available on the Ministry’s website at www.mca.gov.in.
Consolidated Statement on Clarifications on the Roadmaps
Determination of applicability
1.The companies, covered in the phase I, would be required to convert their opening balance sheet as at 1st April 2011 in compliance with the first set of Accounting Standards (i.e. the converged Accounting Standards). Accordingly, companies are not required to provide comparative figures for the year 2010-11 as first set of Accounting Standards (i.e. the converged Accounting Standards).
2 Issue:
Whether companies can voluntarily opt to provide comparative figures for 2010-11 as per the first set of Accounting Standards (i.e. the converged Accounting Standards)?
Clarification:
Companies covered in Phase I will prepare their financial statements for 2011-12 in accordance with the first set of Accounting Standards (i.e. the converged Accounting Standards) but will show previous years’ figures as per the financial statements for 2010-11 i.e. as per non-converged accounting standards.
However, the entity shall have the option to add an additional column to indicate what these figures could have been if the first set of Accounting Standards (i.e. converged accounting standards) had been applied in that previous year.
Companies which make this additional disclosure will, for this purpose, convert their opening balance sheet as at the date on which this previous year commences and, in that case, a further conversion of the opening balance sheet for the year for which the financial statements are prepared will not be necessary.
ISSUE :
Whether companies covered in 2nd / 3rd phase for application of the first set of Accounting Standards (i.e. the converged Accounting Standards) can voluntarily opt to apply the samew.e.f accounting year beginning on 1.4.2011?
Clarification:
Such Companies will have an option for application of the first set of accounting standards (i.e. the converged Accounting Standards) only for the financial year commencing on 1st April, 2011 or thereafter.
As per the roadmap, in phase I, the following categories of companies (other than banking companies, insurance companies and NBFCs) will convert their opening balance sheet as at 1stApril, 2011 in compliance with the first set of Accounting Standards(i.e. the converged Accounting Standards)
a. Companies which are part of NSE – Nifty 50
b. Companies which are part of BSE –Sensex 30
c. Companies whose shares or other securities are listed on stock exchanges outside India
d. Companies, whether listed or not, which have a net worth in excess of Rs.1,000 crores
Issue:
What is the cut-off date on which the aforesaid criteria shall be applied in order to determine the companies falling in each of the aforesaid four categories of companies which will convert their opening balance sheet as at 1st April, 2011 in compliance with the first set of Accounting Standards (i.e. the converged Accounting Standards)?
Clarification:
The date for determination of the criteria is the Balance Sheet as at 31st March 2009 or the first Balance Sheet prepared thereafter when the accounting year ends on another date.
As per the proposed roadmap for Banks andNBFCs, in phase I, the following categories will convert their opening balance sheet as at 1stApril, 2013 in compliance with the notified accounting standards which are converged withIFRS:
i) Banks
All scheduled commercial banks and those urban co-operative banks which have a net worth in excess of Rs. 300 crores will convert their opening balance sheet as at 1stApril, 2013 in compliance with the first set of accounting standards (i.e., converged accounting standards)
ii) NBFCs
a. Companies which are part of NSE – Nifty 50
b. Companies which are part of BSE –Sensex 30
c. Companies, whether listed or not, which have a net worth in excess of Rs.1,000 crores
What is the cut-off date on which the aforesaid criteria shall be applied in order to determine the scheduled commercial banks/ urban co-operative Banks/ NBFCs falling in each of the aforesaid categories which will convert their opening balance sheet as at 1st April, 2013 in compliance with the first set of Accounting Standards (i.e. the converged Accounting Standards)?
The date for determination of the criteria is the Balance Sheet as at 31st March 2011 or the first Balance Sheet prepared thereafter when the accounting year ends on another date.
Applicability for entities that are subsidiaries, joint ventures or associates of companies covered under the convergence roadmap
There might be a situation where the parent company is covered in any one of the three phases for specified class of companies for applying the first set of Accounting Standards (i.e. converged Accounting Standards), while the other group companies (subsidiaries, joint ventures or associates) are not covered under such phasing plan.
In such a scenario, whether it would be permissible for the companies, which are not individually covered under the phasing plan for application of the first set of Accounting Standards (i.e. converged Accounting Standards), to voluntarily opt for application of the first set of Accounting standards(i.e. converged Accounting Standards, even for their standalone financial statements?
May also clarify the position in a situation where the phasing plan for application of the first set of Accounting Standards (i.e. the converged Accounting Standards) gets attracted to one of the entity in the group while the parent company is not covered.
The criteria is to be considered for each company's standalone accounts. The companies covered in a particular phase having subsidiaries, joint ventures or associates not covered in those phase/phases will prepare their consolidated financial statements according to the first set of Accounting standards (i.e. the converged Accounting Standards)
When one or more companies in a group fall in a phase other than the phase applicable to the parent company, they will continue to prepare standalone accounts according to the phase applicable to them but the parent may need to make amendments to these accounts for the purposes of consolidation as per converged accounting standards. Such subsidiaries, joint ventures or associate companies may have the option for early adoption of converged accounting standards.
Discontinuing use of the first set of Accounting Standards(i.e. the converged Accounting Standards)
6.
Once a company gets covered in the specified class of companies in any one of the phases, as identified in the roadmap issued by the Ministry and converts its opening Balance Sheet as per the specified date in accordance with the first set of Accounting Standards(i.e. the converged Accounting Standards), whether it would have to continue to follow the same set of accounting standards in the future as well even if it no longer satisfies the specified criteria? Will it be possible for such a company to revert to existing Indian accounting standards?
Once a company starts following the first set of Accounting standards (i.e. the converged Accounting Standards) on the basis of the eligibility criteria, it will be required to follow such Accounting standards for all the subsequent financial statements even if any of the eligibility criteria does not subsequently apply to it.
Calculation of net worth
Issue:
What are the rules for calculation of qualifying net worth to be recommended to the companies in order to determine their applicability for applying the first set of Accounting Standards (i.e. converged accounting standards)?
Clarification:
For the purpose of calculation of qualifying net worth of companies, the following rules will apply:
a. The net worth will be calculated as per the audited balance sheet of the company as at 31st March 2009 or the first balance sheet for accounting periods which end after that date.
b. The net worth will be calculated as the Share Capital plus Reserves less Revaluation Reserve, Miscellaneous Expenditure and Debit Balance of the Profit and Loss Account.
c. For companies which are not in existence on 31st March 2009, the net worth will be calculated on the basis of the first balance sheet ending after that date.
The calculation of net worth is for the purpose of the criteria only since "net worth" is a part of the criteria.
Issue:.
What are the rules for calculation of qualifying net worth to be recommended to the scheduled commercial Banks/ urban co-operative Banks/NBFCs in order to determine their applicability for applying the first set of Accounting Standards (i.e. the converged Accounting Standards)?
Clarification;
For the purpose of calculation of qualifying net worth of scheduled commercial Banks/ urban co-operative Banks/ NBFCs, the following rules will apply:
a. The net worth will be calculated as per the audited balance sheet of the scheduled commercial Banks/ urban co-operative Bank/NBFC as at 31st March 2011 or the first balance sheet for accounting periods which ends after that date.
b. The net worth will be calculated as the Share Capital plus Reserves less Revaluation Reserve, Miscellaneous Expenditure and Debit Balance of the Profit and Loss Account.
c. For scheduled commercial Banks/ urban co-operative Banks/NBFCswhich are not in existence on 31st March 2011, the net worth will be calculated on the basis of the first balance sheet ending after that date.
The calculation of net worth is for the purpose of the criteria only since "net worth" is a part of the criteria.
Removal of options
9.
In case the notified converged accounting standard is not fully consistent with the IAS/IFRS (i.e., despite intention to converge, some deviations remain), as issued by the IASB, it is presumed that Indian companies will continue to follow the first set of Accounting Standards (i.e. converged accounting standards) as notified by the Government of India and not adopt IFRS in toto.
Companies will follow the first set of Accounting Standards (i.e. the converged Accounting Standards) and not the IFRS.
