Amendment in Income Tax Act at a Glance: Explanatory notes to the Provisions of the Finance Act, 2013

Amendment in Income Tax Act at a Glance: Explanatory notes to the Provisions of the Finance Act, 2013

 CIRCULAR NO.03/2014

F. No. 142/24/2013-TPL
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Direct Taxes)
*******

Dated, the 24th January, 2013

EXPLANATORY NOTES TO THE PROVISIONS OF THE FINANCE ACT, 2013

CIRCULAR

INCOME-TAX ACT

Finance Act, 2013 ─ Explanatory Notes to the Provisions of the Finance Act, 2013
CIRCULAR NO. 03/2014, DATED 24th JANUARY, 2014

AMENDMENTS AT A GLANCE

Section/Schedule	Particulars/Paragraph number
	Finance Act, 2013
First Schedule	Rate Structure, 3.1 - 3.4
	Income-tax Act, 1961
2	Change in the definition of capital asset, 4.1-4.5
10	Change in the definition of keyman insurance policy, 5.1 – 5.5; exemption to income of investor Protection Fund of depositors, 6.1-6.3 ; pass through status to certain Alternative Investment Funds, 7.1 – 7.4; exemption of income received in India in Indian currency by a foreign company, 8.1 – 8.4; exemption to National Financial Holdings Company Limited, 9.1 – 9.3.
Insertion of new section 32AC	Incentive for acquisition and installation of new plant or machinery by manufacturing company, 10.1-10.4.
36	Clarification for amount to be eligible for deduction as bad debts in case of banks, 11.1 - 11.8.
40	Disallowance of certain fee, charge, etc. in case of State Government Undertakings, 12.1 - 12.3.
Insertion of new section 43CA	Computation of income under the head ―profits and gains of business or profession‖ for transfer of immovable property in certain cases, 13.1 – 13.4.
56	Taxability of immovable property received for inadequate consideration, 14.1 – 14.4.
80C	Raising of limit of percentage of eligible premium for life insurance policies of persons with disability or disease, 15.1 – 15.6.
80CCG	Expanding the scope and deduction and its eligibility under the section, 16.1 - 16.5.
80D	Deduction for contribution to Health Schemes similar to Central Government Health Scheme (CGHS), 17.1 -17.3.
Insertion of new section 80EE	Deduction in respect of interest on loan sanctioned during financial year 2013-14 for acquiring residential house property, 18.1 – 18.4.
80G	One hundred per cent deduction for donation to National Children‘s Fund, 19.1- 19.4.
80GGB & 80GGC	Contribution not to be in cash for deduction under section 80GGB & 80GGC, 20.1 – 20.3.
80-IA	Extension of the sunset date under the section for the power sector, 21.1 – 21.3.
80JJAA	Deduction for additional wages in certain cases, 22.1 – 22.6.
87 and Insertion of new section 87A	Rebate of 2000 for individuals having total income up to Rs. 5 lakh, 23.1 – 23.4.
90 and 90A	Tax Residency Certificate, 24.1-24.5.
Omission of Chapter X-A relating to general Anti- Avoidance Rule and Insertion of new Chapter X- A, omission of section 144BA and insertion of new section 144BA, amendment of sections 144C, 153D, 245N, 245R, 246A, 253 and 295	General Anti Avoidance Rule (GAAR), 25.1-25.5.
115A	Taxation of income by way of Royalty or fees for technical services, 26.1 - 26.4.
115BBD	Lower rate of tax on dividends received from foreign companies, 27.1 – 27.3.
115-O	Removal of the cascading effect of Dividend Distribution Tax (DDT), 28.1 – 28.5.
Insertion of new Chapter XII-DA	Additional income-tax on distributed income by company for buy-back of unlisted shares, 29.1 – 29.4.
115R	Rationalisation of tax on distributed income by the Mutual Funds, 30.1 – 30.5.
Insertion of new Chapter XII-EA	Taxation of securitisation trusts, 31.1 - 31.4.
132B	Application of seized assets, 32.1 – 32.3.
138	Replacement of terms ―Foreign Exchange Regulation Act, 1947‖ and Foreign Exchange Regulation Act, 1973‖ with ―Foreign Exchange Management Act, 1999‖, 33.1 – 33.4.
139	Return of income filed without payment of self-assessment tax to be treated as defective return, 34.1- 34.3.
142	Direction of special audit under sub-section (2A) of the section, 35.1 – 35.3.
153 and 153B	Exclusion of time I computing the period of limitation for completion of assessments and reassessments, 36.1 – 36.6; time limit for completion of assessment or reassessment where reference is made to the transfer pricing officer, 37.1 – 37.6.
167C and 179	Clarification of the phrase ―tax due‖ for the purposes of recovery in certain cases, 38.1 – 38.3.
Insertion of new section 194-IA	Tax Deduction at Source (TDS) on transfer of certain  immovable properties (other than agricultural land), 39.1- 39.6.
Insertion of new section 194LD, amendment of sections 115AD, 195 and 196D	Income by way of interest on certain bonds and Government securities, 40.1 – 40.2.
204	Meaning of person ―responsible for paying‖ under Chapter XVII, 41.1 – 41.4.
206AA	Exemption from requirement of furnishing PAN under section 206AA to certain non-resident bond holder, 42.1 - 42.3.
206C	Removal of exemption from levy of Tax Collection at Source (TCS) to cash sale of any coin or any other article weighing 10 grams or less, 43.1 – 43.2.
252	Appointment of President of the Appellate Tribunal, 44.1 – 44.4.
Substitution of new section for section 271FA	Penalty under section 271FA for non-filing of Annual Information Return, 45.1 – 45.5.
Fourth Schedule	Extension of time for approval, 46.1 – 46.5.
	Wealth-tax Act, 1957
2	Change in the definition of capital asset, ; exemption from wealth tax to agricultural land situated in urban area, 47.1 – 47.3.
Insertions of new sections 14A and 14B and amendment of section 46	Enabling provisions for facilitating electronic filing of annexure-less return of net wealth, 48.1 - 48.4.
	Finance (No.2) Act, 2004
Section 98 of the Finance (No.2) Act, 2004	Rationalisation of securities transaction tax rates, 49.1 – 49.3.
	Chapter VII, Finance Act, 2013
Chapter VII of the Finance Act, 2013 and amendment in sections 36 and 43 of the Income- tax Act, 1961	Commodities Transaction Tax, 50.1 – 50.6.2.

1. Introduction
2. Changes made by the Act
3. Rate structure
4. Amendment in the definition of Capital Asset
5. Keyman insurance policy
6. Exemption to income of Investor Protection Fund of depositories
7. Pass through Status to certain Alternative Investment Funds
8. Exemption of income received in India in Indian currency by a foreign company
9. Exemption to National Financial Holdings Company Limited
10. Incentive for acquisition and installation of new plant or machinery by manufacturing company
11. Clarification for amount to be eligible for deduction as bad debts in case of banks
12. Disallowance of certain fee, charge, etc. in the case of State Government Undertakings
13. Computation of income under the head “Profits and gains of business or profession” for transfer of immovable property in certain cases
14. Taxability of immovable property received for inadequate consideration
15. Raising the limit of percentage of eligible premium for life insurance policies of persons with disability or disease
16. Expanding the scope of deduction and its eligibility under section 80CCG
17. Deduction for contribution to Health Schemes similar to CGHS
Deduction in respect of interest on loan sanctioned during financial year 2013-14 for acquiring residential house property
19. One hundred percent deduction for donation to National Children’s Fund
20. Contribution not to be in cash for deduction under section 80GGB & section 80GGC
21. Extension of the sunset date under section 80IA for the power sector
22. Deduction for additional wages in certain cases
23. Rebate of Rs. 2000 for individuals having total income up to Rs. 5 lakh
24. Tax Residency Certificate
25. GENERAL ANTI-AVOIDANCE RULE (GAAR)
26. Taxation of Income by way of Royalty or Fees for Technical Services
27. Lower rate of tax on dividends received from foreign companies
28. Removal of the cascading effect of Dividend Distribution Tax (DDT)
29. Additional Income-tax on distributed income by company for buy-back of unlisted shares
30. Rationalisation of tax on distributed income by the Mutual Funds
31. Taxation of Securitisation Trusts
32. Application of seized assets under section 132B
33. Replacement of terms “Foreign Exchange Regulation Act, 1947” and “Foreign Exchange Regulation Act, 1973” with “Foreign Exchange Management Act, 1999”
34. Return of Income filed without payment of self- assessment tax to be treated as defective return
35. Direction for special audit under sub-section (2A) of section 142
36. Exclusion of time in computing the period of limitation for completion of assessments and reassessments
37. Time limit for completion of assessment or reassessment where reference is made to Transfer Pricing Officer.
38. Clarification of the phrase “tax due” for the purposes of recovery in certain cases
39. Tax Deduction at Source (TDS) on transfer of certain immovable properties (other than agricultural land)
40. Income by way of interest on certain bonds and Government securities
41. Meaning of “person responsible for paying” under Chapter XVII
42. Exemption from requirement of furnishing PAN under section 206AA to certain non-resident bond holder.
43. Removal of exemption from levy of Tax Collection at Source (TCS) to cash sale of any coin or any other article weighing 10 grams or
less
43. Removal of exemption from levy of Tax Collection at Source (TCS) to cash sale of any coin or any other article weighing 10 grams or less
44. Appointment of President of the Appellate Tribunal
45. Penalty under section 271FA for non-filing of Annual Information Return
46. Extension of time for approval in Part A of the Fourth Schedule to the Income-tax Act, 1961
47. Exemption from wealth tax to agricultural land situated in urban area.
48. Enabling provisions for facilitating electronic filing of annexure-less return of net wealth
49. Securities Transaction Tax (STT)
50. Commodities Transaction Tax

-sd-
[Ashis Mohanty]
Under Secretary to the Government of India
Dated 24.01.2024
[F. No. 142/24/2013-TPL]

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