1.
Addressing
mismatch in taxation of income from notified overseas retirement fund [Section
89A]
Proposed section 89A seeks to provide relief from double
taxation due to mismatch of taxation on income from withdrawal of retirement
benefit account maintained by a specified person in a notified country on
account of the amount being taxable in
the notified State on receipt basis while being taxable in India on
accrual basis (hereinafter referred to as
“Specified Account”). The details of the application of the provision are
to be prescribed by the Central Government.
This amendment
is proposed to take effect from 1st April, 2022 and will
accordingly apply to assessment year 2022-23 and subsequent assessment years.
2.
Rationalisation
of the provision concerning withholding on payment made to Foreign
Institutional Investors (FIIs) [Section 196D]
It is proposed to insert a proviso to 196D(1) to provide
that in case of a payee to whom an agreement referred to in 90(1) or 90A(1)
applies and such payee has furnished the tax residency certificate referred to
in section 90(4) or section 90A(4) of the Act, then the tax shall be deducted
at the rate of 20% or rate or rates of income- tax provided in such agreement
for such income, whichever is lower.
This amendment is proposed to
take effect from 1st April, 2021
3.
Constitution of
the Board for Advance Ruling
The Authority for Advance Rulings (AAR) is proposed to
be substituted by the Board for Advance Ruling. The Board to consist of two
members, each being officer not below the rank of Chief Commissioner of Income
Tax, which will ensure continued functioning. This and other proposed changes
are stated to impart greater efficiency, transparency and accountability.
These amendments are proposed to take effect from 1st
April, 2021.
4.
Proposed
Rationalization of provisions of Equalization
Levy
Proviso is proposed to be inserted in Section 163 (Extent, commencement and application) to clarify that consideration received or receivable for specified
services and for e-commerce supply or services shall not include consideration
taxable as royalty or fees for technical services in India under the Income-tax
Act read with the agreement notified by the Central Government under section 90
or section 90A of the Income-tax Act.
·
Explanation in Section 164(cb) (Definitions) (Certain Activities to constitute
e- commerce supply or service) is proposed to be inserted to
define activities, such as acceptance of offer for sale, placing/acceptance of
the purchase order, payment of consideration and supply of goods or provision
of services , partly or wholly, taking place online to be considered as “online
sale of goods” and “online provision of services”.
·
Section
165A (Charge of Equalization Levy)(Meaning of Consideration received or
receivable inserted) is proposed to be amended by inserting sub-section (3) to
provide that consideration received or receivable from ecommerce supply or
services shall include:
(i)
consideration
for sale of goods irrespective of whether the e-commerce operator owns the
goods;
(ii)
consideration
for provision of services irrespective of whether service is provided or
facilitated by the e-commerce operator
These amendments are proposed
to take effect retrospectively from 1st April, 2020.
5.
Section 10(50) is proposed to be
amended to give effect to the above mentioned amendments.
These
amendments are proposed to take effect from Assessment year 2021-22 and
subsequent assessment years.
6.
Proposed
insertion of definition of “Liable to tax” (Section 10(29A))
It has been proposed to define Liable to tax in relation
to a person, means that there is a liability of tax on such person under any
law for the time being in force in any country, and shall include a case where
subsequent to imposition of tax liability, an exemption has been provided.
These
amendments are proposed to take effect from Assessment year 2021-22 and
subsequent assessment years.
7.
Proposed
insertion of new section 206AB
TDS/TCS on non-filer at higher rates not applicable to
non-resident who does not have permanent establishment in India.
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