CONTENTS
DIVISION ONE
Commentary on Finance (No. 2) Act, 2024
CAPITAL GAINS
1.1 Overview of changes in provisions relating to capital gains 1.3
1.2 Background 1.4
1.3 Change in the period of holding for the classification of capital assets into long-term and short-term [Section 2(42A)] 1.9
1.4 No indexation benefit to be allowed [Second proviso to Section 48] 1.13
1.5 Tax rate on long-term capital gains taxable under Section 112 has been reduced 1.17
1.6 The exemption limit and tax rate on long-term capital gains taxable under Section 112A have been increased 1.20
1.7 The tax rate on short-term capital gains taxable under Section 111A has been increased 1.23
1.8 Amendments in Sections 115AB, 115AC, 115ACA, 115AD and 115E 1.29
1.9 Changes in withholding tax rates [Sections 196B and 196C] 1.30
1.10 Taxation of unlisted bonds and debentures [Section 50AA] 1.32
1.11 Change in the definition of the expression “specified mutual funds” [Section 50AA] 1.43
1.12 Gifts by entities other than individuals/HUFs to be regarded as ‘transfers’ for capital gains purposes [Section 47(iii)] 1.48
1.13 Cost of acquisition of unlisted equity shares offered for sale under IPO [Section 55]
2
TAXATION OF BUYBACK OF SHARES
2.1 Overview of amendments made by Finance (No. 2) Act, 2024 1.68
2.2 Introduction 1.68
2.3 Scope of deemed dividend expanded by the Finance (No. 2) Act, 2024 [Section 2(22)(f)] 1.71
2.4 Computation of capital loss from the shares bought back [Section 46A] 1.79
2.5 Tax deduction under Section 194 on dividend income 1.83
3
TAXATION OF CHARITABLE AND RELIGIOUS TRUSTS
3.1 Overview of changes in provisions relating to Charitable & Religious Trusts 1.85
3.2 Shifting of approval-based exemption under Section 10(23C) to the registration-based exemption under Section 12A 1.86
3.3 Power to condone delays in filing registration applications under Section 12A by trusts or institutions 1.94
3.4 Inclusion of reference of clause (23EA), clause (23ED) and clause (46B) of section 10 in Section 11(7) 1.99
3.5 Timelines for disposing of applications under Section 12AB 1.102
3.6 Merger of trust approved under Section 10(23C) with trust registered under Section 12AB and vice versa 1.103
3.7 Opening of the window for Section 80G approval 1.106
3.8 Change in time limits for disposing of the application for approval under Section 80G 1.106
3.9 Deduction for donations to the National Sports Development Fund 1.107
INCOME AND TAX COMPUTATION
4.1 Overview of amendments made by Finance (No. 2) Act, 2024 1.109
4.2 Increase in the standard deduction from salary income for employees taxable under the new tax regime [Section 16(ia)]
4.3 Changes in the new tax regime [Section 115BAC]
5
BUSINESS INCOME
5.1 Overview of changes in provisions relating to the profits and gains from business or profession
5.2 Any income from letting out of a residential house to be taxable under the head “Income from house property” [Explanation 3 to section 28]
5.3 Deduction in respect of employer’s contribution towards a pension scheme under Section 80CCD [Section 36(1)(iva)]
5.4 Presumptive taxation scheme for the business of operation of cruise ships by non-residents [Section 44BBC]
5.5 Consequential amendment to Section 44B
5.6 Exemption under Section 10(15B)
5.7 The limit of allowable partners’ remuneration has been increased [Section 40(b)]
5.8 Disallowance of settlement amounts paid to settle contravention of an offence [Explanation 3 to Section 37(1)]
5.9 Reference of Public Companies removed as they are already covered under NBFCs [Section 43D] 1.160
5.10 Proceedings before TPO for determination of Arm’s Length Price in respect of specified domestic transactions [Section 92CA]
5.11 Exemption to finance companies located in IFSCs from the Thin Capitalisation provisions [Section 94B]
DEDUCTIONS AND EXEMPTIONS
6.1 Overview of amendments made by Finance (No. 2) Act, 2024 1.163
6.2 Deduction in respect of contribution towards the pension scheme [Section 80CCD] 1.163
6.3 Definition of specified fund expanded to include retail funds and exchange-traded funds for exemption u/s 10(4D)
6.4 Exemption to be allowed to the foreign company for the lease rental received from cruise ships operating in India [Section 10(15B)]
6.5 Exemption under Section 10(23EE) for Core Settlement Guarantee Funds set up by Recognized Clearing Corporations in IFSC
6.6 Definition of Venture Capital Fund expanded to include funds located in IFSC
6.7 Removal of equalisation levy on e-commerce supply [Section 163 of FA 2016]
7 RETURNS & ASSESSMENT
7.1 Overview of amendments made by Finance (No. 2) Act, 2024 1.177
7.2 History of assessment in search and requisition cases
7.3
and requisition cases
7.4 Change in the reassessment procedure [Sections 148, 148A, 149, 151, 152 and 153]
7.5 The liability due under the Black Money Act can be recovered from the seized or requisitioned assets [Section 132B] 1.239
7.6 Assessment for the block period shall not be referred to the DRP [Section 144C] 1.239
7.7 The assessment order passed by the AO for the block period is appealable before the CIT(A) [Section 246A]
7.8 CIT(A) has been empowered to set aside the Section 144 assessment and direct for making a fresh assessment [Section 251]
7.9 An appeal can be filed with the ITAT against the penalty and interest levied in the block assessment [Section 253]
7.10 Consequent to the substitution of block assessment provisions, changes are made to prosecution provision [Section 276CCC]
7.11 Transfer of pending applications from AAR to Board for Advance Rulings (BAR) and its order of withdrawal when order has not been passed under Section 245R(2) [Sections 245Q & 245R]
7.12 Return filed in pursuance of CBDT’s order u/s 119(2)(b) shall be treated as return filed u/s 139
TDS/TCS
8.1 Overview of changes in provisions relating to TDS/TCS 1.245
8.2 Allowing credit of all TDS & TCS in computing TDS from salary income [Section 192]
8.3 No TDS on interest on Floating Rate Savings (Taxable) Bonds (FRSB) 2020 up to Rs. 10,000 and power to notify any Govt. security for no deduction of tax [Section 193]
8.4 Sum referred to Section 194J(1) shall not be considered as “work” for Section 194C [Section 194C]
8.5 Rationalisation of Tax Deducted at Source (TDS) rates 1.251
8.6 The sum paid by multiple transferees to multiple transferors be aggregated for computing the threshold limit [Section 194-IA]
8.7 Lower TDS/TCS certificate can be obtained for TDS under Section 194Q and TCS under section 206C(1H) [Section 197 and Section 206C(9)]
8.8 Taxes withheld outside India to be considered as income received [Section 198]
8.9 Claiming credit for TCS of any other person [Section 206C(4)] 1.255
8.10 Introduction of time limit for filing TDS/TCS correction statement [Section 200 and Section 206C] 1.256
8.11 Board to make scheme for processing of other statements filed by non-deductor [Section 200A]
8.12 Time limit specified for issuing orders of assessee-in-default [Section 201 and Section 206C(7A)]
8.13 Rate of interest for late payment of TCS increased [Section 206C(7)] 1.260
8.14 Govt. to notify transactions or persons to whom TCS provisions will either not apply or will apply at a lower rate [Section 206C(12)]
8.15 TDS on payment of salary, remuneration, interest, bonus or commission by partnership firm to partners [Section 194T]
8.16 TCS on sale of notified Luxury goods of value exceeding Rs. 10 lakhs [Section 206C(1F)]
9
PENALTIES AND PROSECUTION
9.1 Overview of amendments made by Finance (No. 2) Act, 2024
9.2 Penalty for furnishing inaccurate or incorrect information in SFT [Section 271FAA]
9.3 Penalty for failure to submit the annual statement by a non-resident having a liaison office in India under Section 285 [Section 271GC]
9.4 Penalty under Section 271FAA or 271GC not to be imposed if reasonable cause for failure is proved [Section 273B] 1.274
9.5 Period of limitation for imposing penalties [Section 275] 1.276
9.6 Time-limit to claim immunity from the penalty for non-furnishing of TDS/TCS statements is reduced [Section 271H]
9.7 Offence of non-payment of TDS is decriminalized if it is paid before the due date to file the TDS Statement [Section 276B]
10
MISCELLANEOUS
10.1 Overview of amendments made by Finance (No. 2) Act, 2024 1.279
10.2 ‘Angel Tax’ is abolished [Section 56(2)(viib)]
10.3 Discontinuation of the provisions allowing quoting of Aadhaar Enrolment ID in place of Aadhaar number [Section 139AA]
10.4 Tax Clearance Certificate for liabilities under Benami Act required for person domiciled in India and leaving India [Section 230(1A)] 1.283
10.5 Interest on refund not to be paid for the period up to which the refund is withheld [Section 244A] 1.286
10.6 Removal of the precondition that withholding of refunds will adversely affect the revenue [Section 245]
10.7 Due date of submission of statement by a non-resident having liaison office to be prescribed under Income-tax Rules [Section 285] 1.290
DIVISION TWO
- TDS from Salary [Section 192 r/w rules 26A, 26B & 26C]
- TDS on ESOPs [Sections 191(2) and 192(1C)]
- TDS on withdrawal from EPF Scheme [Section 192A] 2.30 - TDS from Interest on Securities [Section 193] 2.31
- TDS from Dividends [Section 194 r/w rule 27]
- TDS from Interest other than Interest on Securities [Section 194A] 2.36
- TDS on Winnings from lottery or crossword puzzle, etc. [Section 194B] 2.42
- TDS on Winnings from Online Games [Section 194BA]
- TDS on Winnings from Horse Races [Section 194BB]
- TDS from Payment to Contractors [Section 194C]
- TDS from Insurance Commission [Section 194D] 2.52
- TDS from Payment in respect of Life Insurance Policy [Section 194DA] 2.53
- TDS from Payment to Non-Resident Sports Person [Section 194E] 2.56
- TDS from Payment under National Savings Scheme [Section 194EE] 2.56
- TDS from Payment for Repurchase of Units by Mutual Fund or UTI [Section 194F] 2.57
- TDS from Commission on sale of Lottery Tickets [Section 194G] 2.57
- TDS from Commission and Brokerage [Section 194H] 2.58
- TDS from Rent [Section 194-I] 2.62
- TDS from sum paid to buy an Immovable Property [Section 194-IA] 2.67
- TDS on rent by certain individual or HUF [Section 194-IB] 2.68
- TDS from payment under Joint Development Agreement [Section 194-IC]
- TDS from Royalty and Fees for Technical or Professional Services [Section 194J] 2.69
- TDS from Income in Respect of Units Payable to Resident [Section 194K] 2.74
- TDS in case of compulsory acquisition of Immovable Property [Section 194LA] 2.75
- TDS from Interest on Infrastructure Debt Fund [Section 194LB] 2.76
- TDS from Income Distributed by Business Trust [Section 194LBA] 2.77 - TDS from Income in Respect of Units of Investment Fund [Section 194LBB] 2.78
- TDS from Income in respect of Investment in Securitization Trust [Section 194LBC] 2.78
- TDS from Interest paid on Foreign Borrowings [Section 194LC] 2.79
- TDS from Interest on rupee denominated Bonds and Govt. Securities [Section 194LD] 2.81
- TDS from payment to Contractors or Professionals by certain individuals or HUFs [Section 194M]
- TDS on Cash withdrawals [Section 194N]
- TDS from Payment by e-commerce operator [Section 194-O]
- TDS from Pension and Interest income of senior citizen [Section 194P r/w rule 26D]
- TDS on purchase of goods [Section 194Q] 2.96
- TDS on benefit or perquisite arising from business or profession [Section 194R] 2.100
- TDS on payment for the transfer of Virtual Digital Assets (VDAs) [Section 194S] 2.108
- TDS on payment of salary, remuneration, interest, bonus or commission by partnership firm to partners [Section 194T]
- TDS from other sum paid to a Non-Resident [Section 195] 2.115
- TDS from income in respect of units payable to Non-Resident [Section 196A] 2.127
- TDS from income from units [Section 196B] 2.128
- TDS from Income arising from Bonds or GDRs [Section 196C] 2.129 - TDS from income payable to FPIs and specified funds [Section 196D] 2.129 - Certificate for lower deduction of tax [Section 197]
- Non-deduction of tax [Section 197A]
- Credit for TDS [Section 199 read with rule 37BA (TDS Credit)]
TDS Certificate [Section 203 read with Rule 31]
- Requirement to furnish PAN (For TDS)[Section 206AA read with Rule 37BC and Rule 114AAB]
- Deduction of tax at higher rates in case of non-filers of return [Section 206AB]
- Tax Deduction and collection account number (TAN) [Section 203A] 2.157
206A]
[Rule
- TCS Certificate [Rule 37D]
- Consequences of failure to collect or pay TCS [Section 206C]
- Certificate to collect TCS at lower Rate [Section 206C read with Rules 37G & 37H]
- Requirement to furnish PAN [Section 206CC] 2.186
- Collection of tax at higher rates in case of non-filers of return [Section 206CCA]
- Directions by Joint Commissioner [Section 144A]
- Reference to Authorities to invoke GAAR [Section 144BA]
- Notice of Demand [Section 156/156A]
Document identification number
DIVISION THREE
Circulars, Clarifications & Notifications [1961 - June 2024]
Circulars, Clarifications and Notifications [1961 - June 2024] 3.3
DIVISION FOUR
Landmark Rulings of Supreme Court/High Courts [1922 - June 2024]
Landmark Rulings of Supreme Court/High Courts [1922 - June 2024] 4.3
