Taxmann's analysis of the finance bill 2021 (as passed by the lok sabha)

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Analysis of changes made in the Finance Bill, 2021 as passed by the Lok Sabha
Editorial Team
The Lok Sabha has passed the Finance Bill, 2021 on March 23, 2021. The Bill presented
originally in the Lok Sabha on February 1, 2021 has not been passed in its original
shape. More than 100 changes have been made in the Finance Bill, 2021 as passed by
the Lok Sabha [hereinafter referred to as Finance Bill (Lok Sabha)]. New amendments have
been proposed, some proposed amendments have been removed or altered.
The Finance Bill (Lok Sabha) has also introduced various curative amendments. For
instance, section 43(6)(c) has been amended by the Finance Bill (Lok Sabha) to reduce
the WDV of the block of asset if goodwill forms part of that block. Further, section
234F has been amended to withdraw the late-filing fees of Rs. 10,000 as belated return
cannot be filed on or after 1st January from the assessment year 2021-22.
A snippet of all changes made in the Finance Bill, 2021 as passed by the Lok Sabha viz-
a-viz the Finance Bill, 2021 is presented hereunder:
1. Tax on transfer of money or property by a firm/AOP/BOI to its partners or
members [Section 9B, Section 45(4) and Section 48]
[Assessment Year 2021-22]
Where any partner receives any amount or property on account of dissolution or
reconstitution of the firm, the income-tax implications in such cases in the hands of
partner or the firm have always been a controversial matter. Some of them are
discussed below:
(a) Whether the expression “dissolution of the firm or otherwise” includes
reconstitution of the firm?
(b) Whether consideration (in money or in kind) received by a partner from the firm
could be said to be received on account of transfer of his interest in the partnership
firm?
(c) Whether transfer of property (stock-in-trade and capital asset) by a firm to its
partners be treated as transfer for income-tax purposes? If yes, whether income
from such transfer be chargeable to tax in the hands of firm?
(d) What shall be the mechanism to compute income in such cases?
(e) Where a firm does the revaluation of the property or record self-generated asset in
the books of account and credit the corresponding gain to the capital accounts of
the partners, what should be the tax treatment of the amount received by partner
3

in excess of his capital contribution made on account of such revaluation or self-
generated asset?
The Finance Bill (Lok Sabha) has addressed the aforesaid issues by inserting Section
9B, substituting Section 45(4) and inserting Section 48(iii). Before understanding the
amendment, it is imperative to understand that when a partner disassociates from the
partnership firm in lieu of transfer of a property by that firm to him, there will be two
transactions. One, transfer of right by the partner and second, transfer of property by
the firm to the partner. The former transaction is dealt with under Section 45(4) and
the latter in Section 9B.
1.1. Meaning of certain terms
Section 9B defines the meaning of ‘specified entity’ and ‘specified person’ as under.
(a) “Specified entity” means a firm or other Association of Persons (AOP) or Body of
Individuals (BOI) [not being a company or a co-operative society]. For simplicity,
hereinafter the ‘specified entity’ is just referred to as a ‘firm’.
(b) “Specified person” means a person who is a partner of a firm or member of other
AOP or BOI (not being a company or a co-operative society) in any previous year.
For simplicity, hereinafter the ‘specified person’ is just referred to as a ‘partner’.
1.2. Income on receipt of capital asset or stock in trade by a partner from a firm
[Section 9B]
Section 9B provides that where a partner receives during the previous year any capital
asset or stock-in-trade or both from a firm in connection with the dissolution or
reconstitution of such firm, then the firm shall be deemed to have transferred such
capital asset or stock-in-trade or both, as the case may be, to the partner in the year in
which such capital asset or stock in trade or both are received by that partner.
Further, it provides that any profits and gains arising from such deemed transfer of
capital asset or stock in trade or both, as the case may be, by the firm shall be deemed
to be the income of the firm of the previous year in which stock or capital asset were
received by the partner and chargeable to income-tax under the head ‘business or
profession’ or ‘capital gain’ in accordance with the provisions of the Act.
Furthermore, the fair market value of the capital asset or stock on the date of its receipt
by the partner shall be deemed to be the full value of consideration while computing
profit and gains arising from deemed transfer of such stock or capital asset by the firm.
Section 9B also defines the expression “reconstitution of specified entity”. It means
where:
(a) One or more of its partners or members ceases to be partners or members;
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(b) One or more new partners or members are admitted. However, at least one
existing partner or member should continue to be partner or member of the
specified entity after admission of the new partner(s) or member(s); or
(c) All the partners or members continue with change in their respective share or in
share of some of them.
Further, the CBDT is empowered to issue guidelines, with prior approval of the
Central Government, for removing difficulties arising in giving effect to the provisions
of this section. Every such guidelines shall be laid before each house of Parliament and
shall be binding on the Income-tax authorities and assessee.
Section 9B deals with the following three aspects.
1.2-1. Distribution of stock or capital asset by a firm to its partner is deemed as transfer
This provision creates a deeming fiction that the distribution of stock or capital asset
by a firm to its partner is a transfer. This is done to overrule various judicial rulings
which held that the distribution, division or allotment of assets by a partnership firm
upon dissolution or reconstitution is nothing but a mutual adjustment of rights
between the partners.
The Apex Court in the case of Malabar Fisheries Co. v. CIT [1979] 2 Taxman 409 (SC)
has held that a partnership firm, under the Indian Partnership Act, 1932, is not a
distinct legal entity, apart from the partners constituting it. The firm, as such, has no
separate rights of its own in the partnership assets and when one talks of the firm's
property or firm's assets, all that is meant is property or assets in which all partners
have a joint or common interest. If that be the position, it is difficult to accord the
contention that upon dissolution the firm's rights in the partnership assets are
extinguished. The firm, as such, has no separate rights of its own in the partnership
assets but it is the partners who own jointly in common its assets. Therefore, the
consequence of the distribution, division or allotment of assets to the partnership,
which flows upon dissolution after discharge of liabilities, is nothing but a mutual
adjustment of rights between the partners and there is no question of any
extinguishment of the firm's rights in the partnership assets amounting to a transfer
of assets within the meaning of section 2(47).
Now, Section 9B has created a deeming fiction for treating such flow of stock or capital
asset at the time of dissolution or reconstitution as transfer.
1.2-2. How to compute the gains arising from deemed transfer of stock-in-trade?
Sub-section (2) of Section 9B provides that any profit and gains arising from deemed
transfer of stock-in-trade shall be deemed to be income of the partner of the year in
which such stock is received by the partner and, accordingly, it shall be charged to tax
under the head “Profit and gains from business or profession”.
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For such computation, it provides that the fair market value of the stock on the date
of its receipt by the partner shall be deemed to be the full value of consideration while
computing profit and gains arising from deemed transfer of such stock by the firm.
The income arising from the transfer of stock shall be taxable as business income under
Section 28. In simple words, the fair market value of stock transferred to the partner
shall be recorded as sale by the firm as the same shall form part of the business of the
firm.
1.2-3. How to compute the gains arising from deemed transfer of capital asset?
Sub-section (2) of Section 9B provides that any profit and gains arising from deemed
transfer of capital asset shall be deemed to be income of the firm of the year in which
such capital asset is received by the partner. It shall be charged to tax under the head
“Capital Gains”.
Further, it provides that fair market value of capital asset on the date of its receipt by
the partner shall be deemed to be the full value of consideration while computing
capital gain arising from deemed transfer of such capital asset by the firm.
Determination of income taxable under the head ‘Capital gains’ depends upon various
factors such as nature of capital asset, period of holding, cost of acquisition, full value
of consideration, etc. Section 48 prescribes the mode of computation of income taxable
under the head ‘capital gains’. As per said section, the capital gain is computed by
reducing the cost of acquisition, cost of improvement and attributable expense from
the full value of consideration of the capital asset.
Section 48 has also been amended by the Finance Bill (Lok Sabha) to mitigate the
double taxation arising due to introduction of section 9B and substitution of section
45(4). A new clause (iii) is inserted to provide that profit and gains chargeable to tax
under section 45(4) which is attributable to capital asset being transferred by the firm
shall be reduced while computing capital gain in the hands of the firm in respect of
such capital asset. In other words, the amount of capital gain computed under section
45(4) which is attributable to capital asset being transferred by the firm shall be
deducted while computing capital gain in the hands of the firm in respect of such
capital asset.
The computation of capital gain under section 9B read with section 48(iii) shall be as
follows:
Particular Amount
Full value of consideration received or accrued (FMV of capital asset)
Less:
(a) Expenditure incurred wholly and exclusively in connection with
transfer;
(b) Cost of Acquisition/Indexed cost of acquisition;
(c) Cost of improvement/Indexed cost of improvement; or
xxx
(xxx)
(xxx)
(xxx)
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(d) The amount chargeable to tax as income of firm under Section 45(4)
which is attributable to capital asset being transferred by the firm
(e) Exemption under Sections 54 to 54GB to the extent of net result of
above calculation
(xxx)
(xxx)
Income taxable under the head capital gains xxx
The rate at which such capital gain shall be charged to tax will be depend on the nature
of capital asset transferred and period for which such asset is held by the specified
entity.
1.3. Tax on receipt of money or capital asset by partner in connection with
reconstitution of firm [Section 45(4)]
The Finance Bill (Lok Sabha) has substituted sub-section (4) as proposed to be
substituted by the Finance Bill, 2021. This provision provides that where a partner
receives during the previous year any capital asset or money or both from a firm in
connection with the reconstitution, then any profit and gains arising from such receipt
of money by specified person shall be deemed to be the income of the specified entity
under the head “Capital Gains” of the previous year in which such capital asset or
money or both were received by the specified person. Further, it also prescribes the
formula to compute the profit and gains arising to the partner from such receipt of
money or capital asset from the firm.
The profit and gains shall be computed in accordance with the following formula:
A = B + C - D
A = Income chargeable to income-tax under this provision as income of the firm under
the head ‘Capital gains’;
B = Value of money received by partner on the date of such receipt;
C = Fair market value of the capital asset received by the partner on the date of such
receipt; and
D = Balance in the capital account (represented in any manner) of the partner in the
books of account of the firm at the time of reconstitution.
Where the value of A is negative, it shall be deemed to be nil.
While computing the balance in the capital account of partner in the books of account
of firm, increase in capital account due to the following shall not be taken into account:
(a) Revaluation of any asset;
(b) Self-generated goodwill (goodwill acquired without incurring any cost for
purchase or which has been generated during the course of business or profession);
(c) Other self-generated assets.
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Explanation 2 to Section 45(4) clarifies that when a capital asset is received by the
partner from a firm in connection with the reconstitution, the provisions of the said
section shall operate in addition to the provisions of section 9B. Thus, the taxation
under both the provisions shall be worked out independently.
1.3-1. Analysis of section 45(4)
Section 45(4) provides for the computation of capital gain which arises to a partner on
extinguishment or relinquishment of his right in the firm in connection with
reconstitution of the firm. Though the income arises to partner but it is deemed as
income of the firm. Thus, the firm would be assessed under section 9B for its own
income and under section 45(4) for income arising to partner thereof.
1.3-2. Section 45(4) v. Section 9B
Section 9B provides for taxability arising at the time of dissolution or reconstitution,
whereas section 45(4) deals with the taxability at the time of reconstitution only.
Where any asset or money is transferred to partner or member at the time of
dissolution, same amounts to extinguishment or relinquishment of rights. Term
“transfer” as defined under section 2(47) covers extinguishment or relinquishment of
rights within its ambit. However, since such rights are not extinguished or
relinquished in favour of another person in case of dissolution, no one derives any
benefit from the same. Thus, section 45(4) does not apply at the time of dissolution.
1.4. Mode of computation of capital gain [Section 48]
Section 9B deals with the taxability of the income arising to the firm on transfer of
capital asset to a partner in connection with dissolution or reconstitution. Section 45(4)
deals with the income which arises to the partner on receipt of a capital asset in
connection with the reconstitution. However, tax in respect of such receipt is charged
in the hands of firm only. Thus, in case of reconstitution double taxability will arise
once under section 45(1) read with section 9B and second under section 45(4). To
remove the impact of such double taxation, Section 48 is amended. This section
provides for reduction of cost of acquisition, improvement and expenditure incurred
in connection with transfer from full value of consideration of capital asset while
computing income chargeable under the head ‘Capital gains’.
An additional deduction is allowed under Section 48(iii) in respect of the capital gains
charged to tax under section 45(4) which is attributable to capital asset being
transferred by the firm. In other words, a portion of the capital gains so taxed under
Section 45(4) shall be reduced from the full value of consideration of the capital asset
being transferred by the firm. Such portion shall be attributable to only that capital
12

asset which is being transferred by the firm. This method of attribution shall be
prescribed by the CBDT.
2. Goodwill forming part of existing block of assets to be reduced from WDV
[Applicable from Assessment Year 2021-22]
2.1. Background
Depreciation is an allowance under the Income-tax Act which is computed as per the
written-down value (WDV) method on basis of the relevant block of assets. In other
words, for the computation of the depreciation, it is essential to identify the relevant
block of asset and its written-down value.
‘Block of assets’ is a group of assets falling within a class of assets for which the same
rate of depreciation is prescribed. For example, all intangible assets are eligible for a
25% rate of depreciation.
Written-down value of a ‘block of asset’, as per Section 43(6)(c), means the aggregate
of WDVs of all the assets falling within that block of assets at the beginning of the
previous year and:
(a) increased by the actual cost of any asset falling within that block acquired during
the previous year;
(b) reduced by the money payable in respect of any asset (falling within that block)
which is sold or discarded or demolished or destroyed during that previous year.
Particulars Amount
Opening WDV of block of assets
Add: Actual cost of any asset acquired during the previous year under that block
Less: Money payable in respect of any asset, sold, destroyed discarded, or
demolished during the previous year together with the scrap value, if any
xxx
xxx
(xxx)
Closing WDV of block of assets xxx
2.2. Amendment Proposed by the Finance Bill, 2021
The Finance Bill, 2021 proposes to prohibit the depreciation on the goodwill. The
following amendments have been proposed to various provisions of the Act:
2.2-1. Amendment to Section 2(11)
It has been proposed that ‘block of asset’ as defined under section 2(11) shall not
include the ‘goodwill of a business or profession’.
2.2-2. Amendment to Section 32(1)
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Clause (ii) to section 32(1) has been proposed to be amended to provide that ‘goodwill
of a business or profession’ shall not be eligible for depreciation. Further, an
amendment has been proposed to Explanation 3 to Section 32(1) which defines the
expression ‘asset’. It has been proposed that ‘goodwill of a business or profession’
shall not be treated as an ‘intangible asset’ for Section 32(1).
2.2-3. Amendment to Section 50
A new proviso has been proposed to be inserted to Section 50(2) that the CBDT may
prescribe a manner to determine the WDV of the block of asset and short-term capital
gain if goodwill is forming part of the block of asset and depreciation has been claimed
on it.
2.2-4. Amendment to Section 55
Section 55 provides the meaning of various terms including ‘cost of acquisition’ for
computation of capital gains. The Finance Bill also proposes amendment to Section 55.
2.3. Ambiguity in the Bill
The Finance Bill, 2021 sought to amend above-referred four sections of the Income-tax
Act but, it does not propose any amendment to section 43 which defines the WDV of
the block of assets.
Thus, the questions arose what would happen to the amount of goodwill which
formed part of an existing block of assets. Once an asset forms part of the ‘block of
assets’, it loses its identity and deprecation is allowed on the whole block of asset. So,
if an assessee has a block of intangible assets and in any previous year he has acquired
the goodwill, which formed part of such block of assets, then how the depreciation
shall be allowed on such block of assets.
2.4. Clarity in the Finance Bill (Lok Sabha)
The Finance Bill, 2021 as passed by the Lok Sabha, makes the necessary amendments
to Section 43(6)(c) to provide that WDV of block of assets shall be reduced by the actual
cost of goodwill falling within such block of assets. However, the actual cost of
goodwill shall be first decreased by the:
(a) Amount of depreciation actually allowed to the assessee for such goodwill before
the Assessment Year 1988-89, and
(b) Amount of depreciation that would have been allowable to the assessee from the
Assessment Year 1988-89 as if the goodwill was the only asset in the relevant block
of assets.
It should be noted that while computing the WDV for the assessment year 2021-22, if
the depreciation was claimed on the goodwill forming part of the block of assets in
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the immediately preceding previous year, the amount of reduction calculated above
shall not exceed the WDV of the block of assets.
Example, XYZ Limited is running a manufacturing business. On 10-4-2018, it acquired
the following intangible assets in an M&A transaction:
(a) Goodwill worth Rs. 100 crores;
(b) Trademarks worth Rs. 50 crores; and
(c) Licenses and franchise agreement worth Rs. 50 crores.
Compute the WDV of the block of intangible assets of XYZ Ltd. as on March 31, 2021
in the following two situations:
Situation 1 - In April 2019, XYZ Ltd. sold the trademarks in Rs. 40 crores.
Situation 2 - In April 2019, XYZ Ltd. sold the trademarks in Rs. 80 crores.
Computation of WDV as on 31-3-2021 (In Crores)
Particulars Situation
1
Situation
2
Previous Year 2018-19
Intangible assets acquired on April 10, 2018
- Goodwill 100.00 100.00
- Trademarks 50.00 50.00
- Licenses & franchisees 50.00 50.00
Block of intangible assets [A] 200.00 200.00
Less: Depreciation [B = A * 25%] (50.00) (50.00)
WDV as on 31-03-2019 [C = A-B] 150.00 150.00
Opening WDV [C] 150.00 150.00
Less: Intangible assets sold during year [D] (40.00) (80.00)
Less: Depreciation [E = (C - D) * 25%] (27.50) (17.50)
WDV as on 31-03-2020 [F = C – D – E] 82.50 52.50
Opening WDV [F] 82.50 52.50
Adjustment on account of goodwill
Less: Actual cost of goodwill included in block of assets as reduced
by the previous years’ depreciation [G]
(56.25) (52.50)
see note
Cost of Goodwill 100
Less: Dep. allowed on goodwill:
18

- Previous Year 2018-19 [100 * 25%] (25.00)
- Previous Year 2019-20 [(100-25) * 25%] (18.75)
56.25
Less: Depreciation [H = (F - G) * 25%] (6.56) 0.00
WDV of block of intangible assets as on 31-03-2021 19.69 0.00
Note: If the goodwill forms part of block of assets on which deprecation is claimed in
previous year 2019-20 then the ‘amount of reduction’ on account of such goodwill
shall not exceed the WDV assuming that the goodwill is the only asset in that block.
As in the situation 2, the ‘amount of reduction’ is calculated at Rs. 56.25 which exceeds
the WDV of Rs. 52.50, the reduction of WDV on account of goodwill shall be restricted
to Rs. 52.50.
3. FMV of capital assets transferred under slump sale to be calculated in
prescribed manner
3.1. Introduction
The term ‘slump sale’ has been defined under section 2(42C) to mean the transfer of
one or more undertakings as a result of sale for lump sum consideration without value
being assigned to individual assets and liabilities in such cases. Section 50B of the
Income-tax Act provides for computation of capital gains in case of slump sale.
As slump sale is defined to mean sale of undertaking for a lump sum consideration,
some courts have taken a view that transfer by way of exchange, relinquishment etc.
shall not be considered as slump sale. To provide clarity on this issue, Section 2(42C)
is proposed to be amended by the Finance Bill, 2021 to provide that all types of
‘transfer’ as defined under section 2(47) shall be included within the scope of slump
sale. However, the Finance Bill, 2021 has not proposed any amendments to section
50B.
Section 50B(2) provides that where an undertaking or division is acquired, the net
worth of such undertaking or division is deemed as the cost of acquisition. Further,
the benefit of indexation shall not be available even if the undertaking transferred
under the slump sale is deemed as long-term capital asset. The mechanism for the
computation of net worth has been provided in the Explanation 2 to Section 50B. It
provides that for computing net worth, depreciable assets are taken at written down
value and non-depreciable asset at book value. However, capital asset which are fully
allowed as deduction under Section 35AD are taken at nil value.
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3.2. Amendment by the Finance Bill (Lok Sabha)
The existing Section 50B does not contain any provision for the computation of the full
value of consideration in relation to the transfer of the undertaking under a slump
sale. The Finance Bill (Lok Sabha) has amended Section 50B(2) to provide that the fair
market value (FMV) of the capital assets (being an undertaking or division transferred
by way of slump sale) as on the date of transfer shall be calculated in the prescribed
manner. Such FMV shall be deemed to be full value of the consideration received or
accruing as a result of transfer of such capital asset.
Further, a new clause in Explanation 2 has been inserted to provide that the value of
capital asset being goodwill, which has not been acquired by the assessee by purchase
from previous owner, shall be taken as nil while computing net worth.
3.3. Impact of the Amendment
As per the amendments by the Finance Bill (Lok Sabha), FMV of the undertaking or
division transferred during slump sale shall be deemed to be the full value of the
consideration as a result of such transfer. This deeming fiction may give rise to
following two situations:
(a) Actual amount received by transferor (seller) from transferee (buyer) is higher
than such FMV; or
(b) Actual amount received by seller from buyer is lower than such FMV.
3.3-1. Tax implications in hands of seller
Irrespective of the amount of the actual consideration, Section 50B(2)(ii) provides that
the FMV of the capital asset (being a unit or undertaking) shall be taken as full value
of consideration for the computation of the capital gain under Section 50B. However,
such full value of consideration shall be calculated in the prescribed manner. More
clarity on this aspect will be provided when the Rules are prescribed in this regard.
Where the actual consideration is less than the FMV determined in the prescribed
manner, it would result in higher capital gain tax liability in hands of seller due to this
deeming fiction.
3.3-2. Tax implications in hands of buyer
As per Accounting Standard 14 - Accounting for Amalgamations, any excess of the
sale consideration over the value of the net assets of seller acquired by buyer should
be recognized in the buyer’s financial statements as goodwill. If the amount of the
consideration is lower than the value of the net assets acquired, the difference should
be recognized as Capital Reserve.
Thus, if the buyer has paid lower than FMV of undertaking transferred in slump sale,
the difference between the actual consideration and FMV shall be treated as capital
reserve. Such capital reserve should be treated as capital receipt not chargeable to tax.
22

Compliance List for April 2020 to March 2021
GST MANUAL
WITH GST LAW GUIDE & DIGEST
OF LANDMARK RULINGS
(SET OF 2 VOLUMES)
Author : Taxmann
Edition : 15th Edition
ISBN No : 9789390585106
Rs. 3100 | USD 100
Date of Publication : February 2021
Weight (Kgs) : 3.03
No. of papers : 2846
ORDER NOW
Description
Taxmann’s GST Manual contains Compilation of Amended, Updated &
Annotated GST Acts, Rules, Circulars & Notifications. What sets it apart is
the presentation of the GST Act, along-with Relevant Rules, Forms, Circulars,
Notifications, Dates of Enforcements and Allied Laws referred to in the Section.
In other words, Annotation under each section shows:
 Relevant Rules & Forms
 Relevant Circulars & Notifications
 Date of enforcement of provisions
 Allied Laws referred to in the Section
 Along with the above, the readers get a specially curated comprehensive
Guide to GST Laws & Section-wise digest of Landmark Rulings under the
GST Law
The Present Publication is the 15th Edition, authored by Taxmann’s Editorial
Board, is amended up to 1st February 2021, with the following noteworthy
features:
 Taxmann’s series of Bestseller Books on GST Laws
 Follows the six-sigma approach, to achieve the benchmark of ‘zero error’
 Compliance List for April 2020 to January 2021
 Section – Rules and Forms Referencer
 List of Forms
23

It may not be taxed under Section 56(2)(x) either as the unit or undertaking covered
under Section 50B cannot be regarded as a property as defined in Section 56(2)(x).
However, if the buyer has paid consideration in excess of FMV, then such excess
consideration shall be recognised as goodwill in books of account of buyer. The
Finance Bill, 2021 has sought to prohibit the depreciation on the goodwill. However,
the goodwill would be treated as capital assets and capital gain shall arise on its
subsequent transfer.
4. Tax on Interest earned on PF contribution exceeding Rs. 2.50 Lakhs or Rs. 5
Lakhs
As per the existing provision, interest on the contribution made by the employees to
the statutory provident fund, recognised provident fund and the public provident
fund is exempt from tax.
The Finance Bill, 2021 has proposed that no exemption shall be available for the
interest income accrued during the previous year in the recognised and statutory
provident fund to the extent it relates to the contribution made by the employees over
Rs. 2,50,000 in the previous year. This amendment is applicable from the assessment
year 2022-23. This amendment has been proposed as the Government noticed that
some employees have been contributing a huge amount to these funds and earning
interest free income. Thus, to curb this practice, the Government has proposed such
amendment to Section 10(11) and Section 10(12). The amendment proposed that the
taxable component shall be computed in such manner as may be provided by Rules.
The Finance Bill (Lok Sabha) has added a second proviso to Section 10(11) and Section
10(12) that if an employee is contributing to the fund but there is no contribution to
such fund by the employer, then the interest income accrued during the previous year
shall be taxable to the extent it relates to the contribution made by the employee to
that fund in excess of Rs. 5,00,000 in a financial year.
The impact of this amendment can be understood with the help of the following
example.
Amount Contributed by
assessee during
Previous Year (INR)
Whether employer
contributing to fund?
Whether interest earned
shall be taxable?
How much interest of
employee’s contribution
shall be taxable?
2,00,000 Yes No -
4,00,000 Yes Yes Interest on contribution of
Rs. 1,50,000
6,00,000 Yes Yes Interest on contribution of
Rs. 3,50,000
2,00,000 No No -
24

Compliance List for April 2020 to March 2021 7
GST
TARIFF WITH GST RATE RECKONER
(SET OF 2 VOLUMES)
Author : Taxmann
ISBN No : 9789390585267
Rs. 2995 | USD 103
Weight (Kgs) : 3.63
ORDER NOW
Description
Taxmann’s GST Tariff contains GST Tariff for Goods and Services. It provides HSN-wise
and SAC-wise Tariff of all the Goods and Services.
The Present Publication is the 14th Edition, authored by Taxmann’s Editorial Board, is
amended up to 1st February 2021, with the following noteworthy features:
 Taxmann’s series of Bestseller Books on GST Tariff
 Follows the six-sigma approach, to achieve the benchmark of ‘zero error’
The Present Publication is published in two volumes & divided into 6 divisions, which
are listed as follows:
 GST Tariff for Goods with HSN Code
 Rates Specified in other Acts
 GST Rate Reckoner for Goods/Commodity Index
 GST Tariff for Services
 Services Index
 GST Tariff Notifications (Rate of Tax and Exemptions)
25

4,00,000 No No -
6,00,000 No Yes Interest on contribution of
Rs. 1,00,000
The interest income shall be taxable under the head ‘Income from other sources’. Such
income should be taxable as a residuary income as it is not accruing from a source
emanating from an employer-employee relationship. This interest income will become
part of the total taxable income of the taxpayer. There are no special rates for the
taxability of this interest. Hence, such income shall be taxed at the prevailing income
tax rates.
Possibly, such interest component shall be subject to TDS under Section 194A by the
EPFO.
5. Tax Audit: Transaction settled by way of a non-account payee cheque/draft is a
cash transaction
Every person carrying on a business and maintaining books of account is required to
get them audited from a Chartered Accountant if total sales, turnover or gross receipt
from the business during the previous year exceeds Rs. 1 crore.
To reduce the compliance burden on small and medium enterprises, the Finance Act,
2020 has increased such threshold limit of turnover, for a person carrying on business,
from Rs. 1 crore to Rs. 5 crores. The higher threshold limit applies only if the cash
receipt and payment made during the year does not exceed 5% of total receipt and
total payment respectively.
The Finance Bill, 2021 has proposed to further increase this threshold limit from Rs. 5
crores to Rs. 10 crores. The Finance Bill (Lok Sabha) inserts a new proviso that for
computation of the threshold limit of Rs. 10 crores, the payment or receipt settled
through a non-account payee cheque or non-account payee bank draft shall be
deemed to be cash payment or cash receipt respectively. Thus, the same shall be
included while computing 5% cash transaction limit under section 44AB.
6. HUF is also not eligible for presumptive taxation scheme under section 44ADA
Section 44ADA provides for computation of profit and gains of profession on a
presumptive basis. It applies to an assessee engaged in the specified profession. Under
the presumptive taxation scheme, the assessee computes the taxable income on a
presumptive basis if gross receipts of the profession do not exceed Rs. 50 lakhs during
the year. The presumptive income shall be 50% of total receipts of the year from such
a profession.
26

GST
HOW TO MEET YOUR
OBLIGATIONS
(SET OF 2 VOLUMES)
Author : S.S. Gupta
ISBN No : 9789390585342
Rs. 5995 | USD 146
Weight (Kgs) : 3.715
ORDER NOW
Description
Taxmann’s bestselling commentary on all provisions of GST, explains each
and every concept of GST in lucid manner.
The Present Publication is the 10th Edition, authored by S.S. Gupta &
updated till 1st February, 2021. This book comes in a set of 2 volumes & it
is divided into six divisions, namely:
 Basic Concepts
 Exemption & Other Levies
 Export & Import of Goods and Services
 Procedures
 Input Tax Credit
 Appeals
27

The existing Section 44ADA only provides that the benefit of this provision is available
to an assessee being resident in India. It restricts an assessee on basis of residential
status and not on basis of type of assessee. In other words, there was no explicit or
obvious prohibition on the Companies, LLP or the HUF to compute the income under
this presumptive scheme. The Finance Bill, 2021 has specifically excluded an LLP from
the scope of presumptive taxation under section 44ADA. Thus, the Finance Bill, 2021
first time proposed to expressly limit the provisions of Section 44ADA to a resident
assessee being an Individual, Hindu Undivided Family (HUF) or a partnership firm
(other than an LLP). The Finance Bill (Lok Sabha) has further restricted the scope of
section 44ADA. Now an HUF shall also not be eligible for presumptive taxation
scheme under section 44ADA.
Consequently, w.e.f. Assessment Year 2021-22, only a resident Individual and a
resident partnership firm shall be eligible to compute the income under the said
presumptive taxation scheme. An LLP, HUF, Company, AOP, BOI, etc. shall not be
eligible to claim the benefit of Section 44ADA.
7. Fee for default in furnishing return of income
The late filing fee under Section 234F is charged when a person fails to furnish a return
of income by the due date prescribed under section 139(1). The fees to be charged (Rs.
1,000 or Rs. 5,000 or Rs. 10,000) shall depend on the quantum of income and the date
of filing of return of income.
The fee for default in furnishing return of income is levied at the following rates:
Amount of total
income
Date of filing of Income-tax return Fees (in Rs.)
Not liable to file
return of income
Any time Nil
Any amount of
Income
On or before the due date Nil
Up to Rs. 500,000 After the due date 1,000
Above Rs. 500,000 After the due date but on or before December 31 of the
relevant Assessment Year
5,000
Above Rs. 500,000 After the due date but between January 1 and March 31
of the relevant Assessment Year
10,000
The Finance Bill, 2021 has proposed to reduce the time-limit to file belated or revised
returns of income, as the case may be, by 3 months. Therefore, the last date to file the
revised or belated return shall be 31st December of the relevant Assessment Year.
As the last date cannot exceed 31st December, the higher late filing fees of Rs. 10,000
cannot be levied in any situation. The Finance Bill (Lok Sabha) has made a
consequential amendment to Section 234F that the late-filing fee shall be Rs. 5,000.
28

GST
READY RECKONER
Author : V.S. Datey
ISBN No : 9789390585182
Rs. 2100
ORDER NOW
Description
Taxmann’s Ultimate Best-Seller for Indirect Taxes – ‘GST Ready Reckoner’, is a ready referencer for
all provisions of the GST Law. It covers all important topics of GST along with relevant Case Laws,
Notifications, Circulars, etc.
The Present Publication is the 15th Edition, authored by Mr. V.S. Datey & Updated till 1st February 2021.
This book follows the Six-Sigma approach to achieve the benchmark of ‘zero-error’.
The book has been divided into 55 chapters in respect of all-important-provisions of GST, including the
following:
 GST – An Overview
 IGST, CGST, SGST and UTGST
 Taxable Event in GST
 Supply of Goods or Services or
both
 Classification of Goods and
Services
 Value of Taxable Supply of
Goods or Services or both
 Valuation Rules if value for
GST not ascertainable
 VAT concept and its applica-
tion in GST
 Input Tax Credit – Other Is-
sues
 Input Tax Credit when ex-
empted as well as taxable
supplies made
 Input Service Distributor
 Persons liable to tax
 Place of supply of goods or
services or both other than
exports or impacts
 Place of supply in case of ex-
port or import of goods or ser-
vices or both
 Exports and Imports
 Special Economic Zones and
EOU
 Time of Supply of Goods and
Services
 Reverse Charge
 Exemption from GST by issue
of Notification
 Concession to small enterpris-
es in GST
 Construction and Works Con-
tract Services
 Real Estate Services relating
to residential and commercial
apartments
 TDR/FSI/Upfront amount in
long term lease in real estate
transactions
 Distributive Trade Services
 Passenger Transport Services
 Financial and related services
 Leasing or rental services and
licensing services
 Software and IPR Services
 Business and production ser-
vices
 Job Work
 Telecommunication, broad-
casting and information sup-
ply
 Community social, personal
and other services
 Government related activities
 Basic procedures in GST
 Registration under GST
 Tax Invoice, Credit and Debit
Notes
 E-way Bill for transport of
goods
 Payment of taxes by cash and
through input tax credit
 Returns under GST
 Assessment and Audit
 Demands and recovery
 Refund in GST
 Powers of GST Officers
 Offences and penalties
 First Appeal and revision in
GST
 Appeal before Appellate Tri-
bunal
 Appeals before High Court
and Supreme Court
 Prosecution and compound-
ing
 Provisions relating to evi-
dence
 Electronic Commerce
 Miscellaneous issues in GST
 GST Compensation Cess
 Transitory Provisions
 Constitutional Background of
GST
29

However, where the total income of a person does not exceed Rs. 5 Lakhs, the fee
payable shall not exceed Rs. 1,000.
After, the amendment, the late-filing fee shall be leviable in the following manner:
Amount of total income Date of filing of Income-tax return Fees (in Rs.)
Not liable to file
return of income
Any time Nil
Any amount of
Income
On or before the due date Nil
Up to Rs. 500,000 After the due date 1,000
Above Rs. 500,000 After the due date 5,000
8. Fee for default in linking Aadhaar and PAN
As per Section 139AA, it is mandatory for every person, who is eligible to obtain
Aadhaar, to quote the Aadhaar Number (a 12-digit Unique Identification Number) in
the Income-tax return and the application for allotment of PAN.
Further, every person who has been allotted PAN as on July 1, 2017, and who is
eligible to obtain Aadhaar number, shall link his PAN with Aadhaar. In case, assessee
fails to do so, the PAN allotted to the person shall be made inoperative after the
notified due date. The due date for such linking had been extended on multiple
occasions and the latest date is 31-03-2021.
The Finance Bill (Lok Sabha) has inserted a new Section 234H to levy a fee for default
in intimating the Aadhaar Number. If a person is required to intimate his Aadhaar
under Section 139AA(2) and such person fails to do so, he shall be liable to pay a fee,
as may be prescribed, not exceeding Rs. 1,000 at the time of making such intimation.
Therefore, if the person fails to link PAN-Aadhaar by 31-03-2021, he shall be liable to
pay a fee, maximum of Rs. 1,000. This fee shall be in addition to the other consequences
the person has to face if PAN becomes inoperative due to non-intimation of Aadhaar.
As per rule 114AAA, where a person is required to furnish, intimate or quote his PAN,
and his PAN has become inoperative, it shall be deemed that he has not furnished,
intimated or quoted the PAN. Consequently, he shall be liable for all the consequences
for not furnishing, intimating or quoting the PAN. Some of these consequences have
been enumerated below:
(a) The tax shall be deducted at a higher rate as per Section 206AA;
(b) The tax shall be collected at a higher rate as per Section 206CC;
(c) Taxpayers will not be able to file the return of income. Consequently, he shall be
liable for the consequences of non-filing of a return, inter alia, payment of late fee
under section 234F, interest under section 234A, forfeiture of current year’s losses,
30

GST
AUDIT & ANNUAL RETURN
Author : Aditya Singhania
ISBN No : 9789390585816
Rs. 1795 | USD 62
Weight (Kgs) : 1.03
No. of papers : 972
ORDER NOW
Description
Taxmann’s GST Audit and Annual Return – F.Y. 2019-20’ caters to handle the preparation and
filing of GSTR 9, GSTR 9A/4 and GSTR 9C for FY 2019-20 which is currently supposed to be
filed till 28th February 2021.
This book serves as a ready referencer for all the professionals like CA and their Articles, CS,
CWA, Advocates, etc. in handling audit and annual return assignments.
The Present Publication is the 8th Edition, incorporating all amendments and updated till
24th January 2021, authored by Aditya Singhania, with the following noteworthy features:
 The book has been divided into 3 Divisions namely
n Division 1: GSTR 9,
n Division 2: GSTR 9A, and
n Division 3: GSTR 9C
 [Division based on Forms] The Chapters in each division has been divided based on
the said forms i.e. each Part of the forms has been dealt with in separate Chapters,
therefore, making it easy for the professional to quickly refer the relevant part for better
insight
 [Clause-wise/Table-wise Format of Presentation] Exhaustive tables with clear cross ref-
erence between GSTR 1, GSTR 3B, GSTR 4 vis-à-vis GSTR 9 and GSTR 9A has been made
for easy pick-up of the data for furnishing return
 Clarifications issued from time to time has been incorporated in the relevant table to
track the changes that has taken place from time to time
 This book includes explanation of law and a commentary in each Chapter along-with
relevant case laws in order to ascertain the impact in annual returns and audit for FY
2019-20
 [Explanation using practical examples] Since this is the 3rd year for which GSTR 9 and
GSTR 9C needs to be furnished, therefore, there are several transactions whose impacts
run across FY 2018-19 and FY 2019-20 for which a separate Chapter has been incorpo-
rated
 [Quick Referencer of Sections, Rules & Forms] The unique portion of the book is ‘Quick
Referencer for FY 2019-20’ which will help the professionals in cross referencing sec-
tions-rules-forms, ascertaining all the key changes like:
n Applicability of changes taken place through Finance Act 2019 & Finance Act, 2020
n Notifications issued during FY 2019-20
n Circulars issued till FY 2019-20, along-with relevant annexures
31

best judgment assessment, the penalty for concealment of income, prosecution for
failure to furnish return of income, so on and so forth;
(d) A penalty under Section 272B shall be levied as such person shall not be able to
comply with the provisions of Section 139A requiring him to quote his PAN in
certain financial transactions, etc.
9. No re-computation of past year’s book profit if MAT credit has been utilised
To provide relief to the taxpayers affected due to the outcome of Advance Pricing
Agreement (APA) and Secondary Adjustment, the Finance Bill, 2021 has proposed to
insert a new sub-section (2D) to Section 115JB. As per the proposed provision, the
Assessing Officer, on an application by the assessee, shall re-compute the book profit
of the past years and tax payable thereon if assessee’s current year’s income has
increased due to APA or secondary adjustment. The CBDT may notify the manner for
re-computing the book profits of past years by the Assessing Officer.
The Finance Bill (Lok Sabha) has inserted two provisos to the proposed sub-section
(2D) to Section 115JB. The first proviso provides that the benefit of re-computation of
book profit under section 115(2D) shall be available only if the assessee has not utilised
the MAT credit in any subsequent Assessment Year. In other words, if such assessee
has utilised the MAT credit for payment of tax liability of any subsequent assessment
year, he shall not be eligible to claim the benefit of Section 115(2D).
In the second proviso, it is provided that the assessee can make an application for re-
computation of book profit only for the past years beginning on or before Assessment
Year 2020-21. Further, the assessee shall not be eligible to claim the interest on the
refund, if any, arising to him on account of reduction in tax payable due to re-
computation of profit of past years.
10. Tax on ULIPs
10.1. Introduction
Unit Linked Insurance Plan (ULIP) is a life insurance product, which provides risk
cover for the policyholder along with investment. In ULIP, a small amount of the
premium paid by the individual goes to secure life and the rest of the money is
invested in qualified stocks, bonds or mutual funds. Currently, the amount received
under the ULIPs is exempt from tax.
Section 10(10D) provides for exemption with respect to any sum received under ULIP,
including the sum allocated by way of bonus on such policy. However, if the premium
payable for any of the years during the term of the policy exceeds 10% of the actual
capital sum assured, then no exemption under this section would be allowed with
32

GST
ON WORKS CONTRACT &
REAL ESTATE TRANSACTIONS
Author : V.S. Datey
ISBN No : 9789390585885
Rs. 1295 | USD 51
No. of papers : 620
ORDER NOW
Description
This book provides complete & updated coverage on GST Real Estate Transactions & Works
Contracts.
The Present Publication is the 4th Edition, authored by V.S. Datey & amended up to
1st February 2021, with the following noteworthy features:
 Issues pertaining to Projects/Transfer of Development Rights (TDR)/Development Rights/
Floor Space Index (FSI)/Leasing/Renting are extensively covered in this book
 Numerical illustrations to clarify issues relating to GST on Real Estate Projects are provid-
ed
 Services to and by Government is covered
 The contents of this book are as follows:
n Part I – Basics of GST
l Background
l Taxable Event in GST
l Classification of Goods and Services
l Value of Taxable Supply of Goods or Services or Both
l Input Tax Credit
l Input Tax Credit when Exempted as well as Taxable Supplies are made
l Input Service Distributor
l Place of Supply of Goods or Services
l Time of Supply of Goods and Services
l Reverse Charge
l Procedures in GST
l E-Way Bill for Transport of Goods
l Miscellaneous Issues in GST
n Part II – Taxability of Works Contracts Real Estate Transactions
l Transactions Relating to Real Estate
l Real Estate Projects
l TDR/FSI/Upfront Amount in Long Term Lease in Real Estate Transactions
l Leasing and Renting of Real Estate
l Construction and Works Contract Services
l Government Related Activities
33

respect to the sum received under the policy. Such situation hereinafter is referred to
as ‘excess premium’.
10.2. Amendment by the Finance Bill, 2021
Besides restricting the exemption under Section 10(10D) for payment of excess
premium, the Finance Bill, 2021 has proposed to insert Fourth and Fifth Proviso to
Section 10(10D) that no exemption shall be available under this provision in respect of
ULIPs issued on or after the 01-02-2021, if the amount of premium payable for any of
the previous year during the term of the policy exceeds Rs. 2,50,000 (‘high premium
ULIPs’). Further, if the premium is payable by a person for more than one ULIPs, the
exemption shall be available only for those policies whose aggregate premium does
not exceed Rs. 2,50,000, for any of the previous years during the term of any of the
policy.
The income arising from such high-premium ULIPs is proposed to be taxed under
Section 112A. Consequently, the Finance Bill, 2021 has proposed to amend the
definition of ‘equity-oriented fund’ to cover the high premium ULIPs. Thus, the
equity-oriented fund to cover the ULIPs if such fund invests minimum 90% (in case
of investments in other units listed on a recognised stock exchange) or 65% (in any
other case) in equity shares of a domestic company.
The Finance Bill (Lok Sabha) has inserted second proviso to Section 112A that the
minimum requirement of 90% or 65%, as the case may be, is required to be satisfied
throughout the term of such insurance policy.
ULIPs are governed by the IRDAI (Investment) Regulations, 2016. As per Regulation
7, every insurer shall invest and at all times keep invested its segregated funds of Unit
linked business as per pattern of investment offered to and subscribed to by the policy-
holders where the units are linked to categories of assets which are both marketable
and readily realizable within the approved pattern as per the product regulations.
However, the investment in Approved Investments shall not be less than 75% of such
fund(s) in each such segregated fund. In other words, there are only two conditions
an insurer has to comply with. First, the investment shall be as per the pattern
subscribed to by the investor, and second, investment in approved mode shall not be
less than 75%. Further, such investments shall be subject to the exposure norms
prescribed under Regulation 9. Thus, the Finance Bill (Lok Sabha) has introduced the
condition that the abovementioned limit of 90%/65% shall be complied with at all
times.
11. Definition of ‘Liable to tax’ rephrased
The definition of ‘liable to tax’ has been proposed to be inserted by the Finance Bill,
2021 in Section 2(29A). The proposed definition provides that “liable to tax”, in
34

Description
This book provides a comprehensive coverage on GST implications on Works
Contract and other construction/EPC contracts.
The Present Publication, authored by Sudipta Bhattacharjee, Rishab Prasad &
Abhishek Garg, is the 7th Edition, and law stated in this book is amended up to
24-2-2021. The key features of this book are as follows:
 Summary of key differences in Works Contract pre & post GST era
 Relevant provisions on Works Contract under GST
 Key Concepts & latest Case Laws on GST Works Contract
 Several practical case studies & their implications on various sectors such as:
l Oil & Gas Sector
l Real Estate Sector
l Road/Highway Projects
l Ports
l Thermal Power Generation
l Large Manufacturing Plants
l Large Water Supply Projects
 Practical Strategies vis-a-vis Structuring of various types of Works Contract un-
der GST
 Best Practices for Tax Controversy Management under GST
Rs. 950 | USD 44
Author : Sudipta Bhattacharjee , Rishabh Prasad ,
Abhishek Garg
ISBN No : 9789390585809
Date of Publication : March 2021
Weight (Kgs) : 0.46
No. of papers : 420
GST
ON WORKS CONTRACT &
OTHER CONSTRUCTION/EPC
CONTRACTS
ORDER NOW
35

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.
The definition proposed by the Finance Bill, 2021 does not specify the nature of tax
which shall be considered for this purpose. In absence of specific reference to ‘Income-
tax’, it could be concluded that if a person is paying any tax he may be regarded as
liable to tax in such country.
To remove this ambiguity, the Finance Bill (Lok Sabha) inserts a new definition of this
term as under:
“Liable to tax”, in relation to a person and with reference to a country, means
that there is an income-tax liability on such person under the law of that country
for the time being in force and shall include a person who has subsequently been
exempted from such liability under the law of that country.
Two major changes have been made in the Finance Bill (Lok Sabha) vis-à-vis Finance
Bill, 2021. First, the liability shall be with reference to a country and second, there
should be an income-tax liability.
However, it has yet not been defined whether the comprehensive liability of tax in a
country shall be considered for the purpose of this definition or even in case of source-
based taxability of any income, such person shall be considered as liable to tax in such
country.
12. No tax on income of ‘DFI’ and ‘Institution’ established for financing
infrastructure and development
The Finance Minister, Smt. Nirmala Sitharaman, in her budget speech said that
infrastructure needs long-term debt financing. A professionally managed
Developmental Financing Institution (DFI) is necessary to act as a provider, enabler
and catalyst for infrastructure financing. Accordingly, the FM said that she shall
introduce a Bill to set up a DFI.
A DFI is an institution promoted or assisted by the Government mainly to provide
development finance to one or more sectors or sub-sectors of the economy. The basic
emphasis of a DFI is on long-term finance and on assistance for activities or sectors of
the economy where the risks may be higher than that the ordinary financial system is
willing to bear1. The Finance Bill (Lok Sabha) has inserted two new clauses (48D) and
(48E) to Section 10 to provide exemption to such institutions.
1 https://m.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=387#1
36

GST
INPUT TAX CREDIT
Author : V.S. Datey
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Rs. 850 | USD 42
Weight (Kgs) : 0.42
No. of papers : 396
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Description
This book provides complete guidance on the following under GST:
 Refund of Input Tax Credit
 Export issues relating to Input Tax Credit
It also incorporates various issues related to Input Tax Credit such as availment, reversal,
refund, etc. The Present Publication is the 10th Edition, authored by V.S. Datey & updated till
1st February, 2021, with the following coverage:
 Manner and requirements of availing Input Tax Credit
 Cases involving reversal of Input Tax Credit
 Treatment of Input Tax Credit in case of exempted as well as taxable supplies
 Refund of Input Tax Credit
 Relevant Sections, Rules and clarifications regarding Input Tax Credit
 The contents of the book are as follows:
n GST – An Overview
n VAT Concept and its Application in GST
n Input Tax Credit
n Input Tax Credit – Other Issues
n Input Tax Credit when exempted as well as taxable supplies are made
n Input Service Distributor
n Exports and Input Tax Credit
n Refund of Input Tax Credit
37

12.1. Exemption to Financial Institution [Section 10(48D)]
Section 10(48D) has been inserted to grant exemption for any income accruing or
arising to an institution established for financing the infrastructure and development.
The institution shall be set up under an Act of Parliament and later would be notified
by the Central Government. The exemption shall be available for a period of 10
consecutive assessment years beginning from the assessment year relevant to the
previous year in which such institution is set up.
12.2. Exemption to DFI [Section 10(48E)]
Section 10(48E) is inserted to provide the exemption to any income accruing or arising
to a DFI licensed by the Reserve Bank of India. The exemption shall be available for 5
consecutive assessment years beginning from the assessment year relevant to the
previous year in which the DFI is set up.
However, the Central Government may extend the period of exemption of 5 years for
a further period, not exceeding 5 more consecutive assessment years, subject to
fulfilment of such conditions as may be specified.
13. Due date to file return of income by the spouse of a partner
If firm or LLP is required to get its accounts audited under Income-tax Act or any other
law, the due date to file the return of income by such firm or LLP shall be 31st October
of the assessment year. Similarly, the due date to file the return of income by the
partner of such firm shall be 31st October. However, no such extended time limit was
available to the spouse of that partner who is covered under Section 5A.
Section 5A requires equal apportionment of income (except salary income) between
spouses governed by the Portuguese Civil Code. Such provision is in the State of Goa
and the Union Territories of Dadra & Nagar Haveli and Daman & Diu.
Thus, the Finance Bill, 2021 proposed that the due date for the filing of original return
of income shall be extended to 31st October in case of spouse of a partner of a firm
whose accounts are required to be audited under the Income-tax Act or under any
other law for the time being in force, if the provisions of section 5A apply to them.
The Finance Bill, 2021 also proposed that the due date for filing of return of income by
the partners of a firm, which is required to furnish report under Section 92E, shall be
30th November of the assessment year. Therefore, in case of a firm which is required
to furnish a Transfer Pricing report in Form 3CEB, the due date for filing of original
return of income by the partner shall be 30th November of the assessment year. There
was no corresponding extension to the spouse of the partner governed by Section 5A.
The Finance Bill (Lok Sabha) extends the due date for the filing of return of income by
the spouse of the partner of a firm, if governed by the provisions of section 5A, to 30th
38

GST
E-WAY BILL
Author : V.S. Datey
ISBN No : 9789390585656
Rs. 850 | USD 42
Weight (Kgs) : 0.35
No. of papers : 340
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Description
This book provides complete & updated insight of all provisions relating
to GST E-Way Bill, in simplified manner. The Present Publication is the 8th
Edition, authored by V.S. Datey & amended up to 1st February 2021, with the
following coverage:
 E-Way Bill for Transport of Goods
 Filling of Part B of E-Way Bill
 Generation of E-Way Bill by portal
 Other Provision Relating to E-Way Bill
 Road Check and Verification of Documents and Conveyances
 Overview of the Provisions of E-Way Bill
 Tax Invoice
 Delivery Challan
 Bill of Supply when no Tax Invoice is Required
 GST on Goods Transport Service
 Also Available
n [4th Edition] of Taxmann’s GST Practice Manual
n [15th Edition] of Taxmann’s GST Ready Reckoner
39

November where such firm is required to furnish report under Section 92E. Therefore,
after the proposed amendments, the due dates in case of firm, its partners and spouse
of partner governed by Portuguese Civil Code shall be as under:
Person Firm is not liable for
audit
Firm is liable for audit Firm is liable for TP
Audit
Firm 31st July 31st October 30th November
Partner of Firm 31st July 31st October 30th November
Spouse of Partner
governed by
Portuguese Civil
Code
31st July 31st October 30th November
14. Due date for filing of belated and revised ITR
If a return of income is not filed on or before the specified due date, it is regarded as a
belated return. Further, the taxpayer has an option to revise a return to correct any
error or omission in the original return. An assessee may file a revised or belated
return for any previous year at any time before the expiry of the relevant assessment
year or before completion of the assessment, whichever is earlier. Thus, as per the
existing provisions, the last date to file the revised or belated return is 31st March of
the relevant Assessment Year.
The Finance Bill, 2021 proposed amendments to Section 139(4) and 139(5), with effect
from the assessment year 2021-22, to provide that the belated and revised return can
be filed at any time within three months prior to the end of the relevant assessment
year or before completion of the assessment, whichever is earlier.
The Finance Bill (Lok Sabha) has redrafted the wordings of the proposed amendment
although the intent remains the same. Now, it has been provided that the belated and
revised return can be filed before three months prior to the end of the relevant
assessment year or before the completion of the assessment, whichever is earlier.
Thus, pursuant to the amendment, a belated and revised return in respect of
assessment year 2021-22 and subsequent assessment years can be filed up to 31st
December of that assessment year.
15. New scheme of Re-assessment
15.1. Changes proposed by the Finance Bill, 2021
The Finance Bill, 2021 proposed a new re-assessment procedure for an income which
has escaped the assessment and in search and seizure cases. The Explanatory
Memorandum stated that the new scheme of assessment would result in less litigation
and would provide ease of doing business to the taxpayers. The Finance Bill
substituted existing Sections 147, 148, 149 and 151 and inserted a new section 148A
making a complete change in the assessment proceedings relating to income escaping
40

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a calendar year i.e. from January to December.
It also provides information about the circulars and notifications issued by the Dept.
during the year. The Present Publication is the 50th Edition, authored by Taxmann,
inforporates all case Laws, Circulares and Notificatoins for the year 2020.
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assessment and search related cases. Consequential amendments have also been
proposed to Sections 151A, 153A and 153C.
The new Section 147 provides that the Assessing Officer can make the re-assessment
of an income escaping assessment if the following conditions are satisfied:
(a) Any income chargeable to tax has escaped assessment for any assessment year;
and
(b) The Assessing Officer follows the provisions of sections 148 to 153.
If the above conditions are satisfied, the Assessing Officer can assess or reassess such
income or recompute the loss or the depreciation allowance or any other allowance or
deduction for such assessment year. It is imperative to note that in view of Explanation
to Section 147 the Assessing Officer can assess or reassess all those incomes which
have escaped assessment and which come to his notice subsequently in the course of
such proceeding notwithstanding that the procedure prescribed in section 148A was
not followed before issuing such notice for such income.
15.2. Power to assess or reassess for assessment or reassessment or recomputation
The Finance Bill (Lok Sabha) has also covered ‘recomputation’ within the scope of the
said Explanation to Section 147. Thus, the Assessing Officer for the purpose of
assessment or reassessment or recomputation can assess or reassess all those incomes
which have escaped assessment and which come to his notice subsequently in the
course of such proceeding notwithstanding that the procedure prescribed in Section
148A was not followed before issuing such notice for such income.
15.3. Information suggests income escaping in case of Survey
The new scheme of reassessment proposes that the Assessing Officer can initiate the
proceedings if he has the information which suggests that some income has escaped
the assessment. Explanations 1 and 2 of the proposed Section 148 define the situation in
which an Assessing Officer shall be deemed to have the information which suggests
that the income chargeable to tax has escaped the assessment.
Explanation 2 applies in the case of search, survey or requisition of books, documents
or other assets. Explanation 1 applies in other cases.
In search, survey or requisition cases initiated or made or conducted, on or after
1-4-2021, it shall be deemed that the Assessing Officer has information which suggests
that the income chargeable to tax has escaped assessment in the case of the assessee
for the 3 assessment years immediately preceding the assessment year relevant to the
previous year in the following cases:
42

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(a) A search is initiated under Section 132 or books of account, other documents or
any assets are requisitioned under Section 132A, on or after 01-04-2021, in the
case of the assessee;
(b) A survey is conducted under section 133A in the case of the assessee;
(c) The Assessing Officer is satisfied, with the prior approval of PCIT or CIT, that
any money, bullion, jewellery or other valuable article or thing, seized or
requisitioned in case of any other person on or after 01-04-2021, belongs to the
assessee; or
(d) The Assessing Officer is satisfied, with the prior approval of PCIT or CIT, that
any books of account or documents, seized or requisitioned in case of any other
person on or after 01-04-2021, pertains or pertain to, or any information
contained therein, relate to, the assessee.
The Finance Bill (Lok Sabha) has excluded the survey under Section 133A(2A) and
Section 133A(5) from the scope of this provision (point (b) mentioned above).
Therefore, in the following surveys conducted under Section 133A, it shall not be
deemed that the Assessing Officer has information which suggests that the income
chargeable to tax has escaped assessment.
(a) Survey for verifying that tax has been deducted or collected at source in
accordance with the provisions of sub-heading B of Chapter XVII or under sub-
heading BB of Chapter XVII.
(b) Survey at any function, ceremony or event having regard to the nature and scale
of expenditure incurred by an assesse during that event.
In other words, the Assessing Officer cannot initiate re-assessment proceedings
merely based on the survey conducted in the above two cases.
15.4. Information suggesting escapement of income in case of Requisition
The Finance Bill, 2021 has proposed that it shall be deemed that the Assessing Officer
has the information which suggests that some income has escaped the assessment
where the Assessing Officer is satisfied, with the prior approval of PCIT or CIT, that
any money, bullion, jewellery or other valuable article or thing, seized or requisitioned
in case of any other person on or after 01-04-2021, belongs to the assessee.
The Finance Bill (Lok Sabha) has provided that this deeming fiction shall apply only
in the case of requisition under Section 132 or Section 132A. Therefore, in case of any
unauthorized requisition, it shall not be deemed that the Assessing Officer has the
information which suggests that some income has escaped the assessment.
15.5. Meaning of ‘Asset’ representing the income escaping assessment
The Finance Bill, 2021 proposes the following time-limit for issuance of notice under
Section 148 for re-assessment under Section 147.
44

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Particulars Time Limit
In General No notice shall be issued if 3 years have
elapsed from the end of the relevant
assessment year.
Where the Assessing Officer has evidence in
his possession which reveals that the income
escaping assessment, represented in the
form of asset, amounts to or is likely to
amount to Rs. 50 lakhs or more.
Notice can be issued beyond a period of 3
years but not beyond the period of 10 years
from the end of the relevant assessment
year.
The Finance Bill (Lok Sabha) has inserted an Explanation to new Section 149(1) to
define the meaning of ‘Asset’. For this purpose, the asset shall include the following:
(a) Immovable property, being land or building or both;
(b) Shares and Securities;
(c) Loans and Advances;
(d) Deposits in Bank Account.
Thus, the notice can be issued up to 10 years if the Assessing Officer has evidence in
his possession which reveals that the income escaping assessment, represented in the
form of any asset, amounts to or is likely to amount to Rs. 50 lakhs or more. The income
escaping assessment may be represented by any immovable property, shares,
securities, loans, advances, bank balance, sundry debtors, jewellery, cash-in-hand,
stock-in-trade, paintings, other investments, etc.
15.6. Exclusion of Time limit for Completion of Assessment
While computing the period allowed for completion of assessment or reassessment,
certain time periods are excluded. Where assessee approaches the Authority for
Advance Ruling, the period to be excluded from the limitation period shall commence
from the date on which an application is made before the AAR and end with the date
on which the order rejecting such application or the Advance Ruling, as the case may
be, is received by Principal CIT or CIT.
The Finance Bill, 2021 proposed that the Authority for Advance Rulings shall cease to
operate with effect from such date, as may be notified by the Central Government in
the Official Gazette. The Central Government has been empowered to constitute one
or more Board for Advance Rulings for giving advance rulings on and after the
notified date.
The Finance Bill (Lok Sabha) has made consequential amendments to make the
reference of Board for Advance Rulings along with the Authority for Advance Rulings
in Section 153. Therefore, while computing the period of limitation, the period to be
excluded from the limitation period shall commence from the date on which an
application is made before the AAR or Board for Advance Rulings and end with the
date on which the order rejecting such application or the Advance Ruling, as the case
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may be, is received by Principal CIT or CIT. Similar amendments have been made to
Section 153B (time-limit for completion of assessment in search or requisition cases).
15.7. Time-limit for completion of assessment on withdrawal of application filed
before Settlement Commission
The Finance Bill, 2021 has proposed to discontinue the Income-tax Settlement
Commission (‘ITSC’) with effect from 01-02-2021. It has been proposed to constitute
an Interim board for settlement of cases pending with the Settlement Commission.
The assessee (who had filed an application with the Settlement Commission) has the
option to withdraw such application within 3 months from the date of commencement
of the Finance Act, 2021. If not withdrawn, the application will be deemed to be
received by the Interim Board on the date on which the application was allotted by
the Board.
The Finance Bill (Lok Sabha) has inserted fourth proviso after Explanation 1 to Section
153 to provide that if the assessee has exercised the option to withdraw the application
filed before Settlement Commission, the period of limitation available to the Assessing
Officer for making an assessment, reassessment or recomputation after the excluded
time shall not be less than one year. If such period of limitation is less than one year,
it shall be deemed to have been extended to one year.
Similar amendments have been made to Section 153B (time-limit for completion of
assessment in search or requisition cases). In such cases, the period shall stand
extended to a minimum one year where assessee has exercised the option to withdraw
the application filed before the Settlement Commission.
This amendment shall also apply for determining the period of limitation in the
following sections:
(a) For determination of the period of limitation for issue of notice for re-assessment
under Section 149;
(b) For filing of application for rectification of mistake apparent from record under
Section 154;
(c) For other amendments as specified in Section 155;
(d) For payment of interest on refund under Section 244A.
16. Pending Applications before AAR
The Finance Bill, 2021 has proposed that the Authority for Advance Rulings shall cease
to operate with effect from such date, as may be notified by the Central Government
in the Official Gazette. The Central Government has been empowered to constitute
one or more Board for Advance Rulings for giving advance rulings on and after the
notified date. Every such Board shall consist of two members, each being an officer
not below the rank of Chief Commissioner.
48

TAXMANN"'
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Bank Branch
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(In accordance with ICAI Standards
on Auditing (SAS) and RBI Guidelines)
Covering:
► Audit of Advances including Audit of Credit Monitoring and Audit of
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► Audit of Income Recognition, A»etClas5ification, Provisioning
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► Audit of Restructurings including Agricultural and MSME Advances
► Audit of Financial Statements, LFAR and Special-Purpose
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► Reference of Relevant Laws/RBI Notifications and ICAI Standards on
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► Formats for collection and evaluation of Information
► Suggested Audit-hints in Finacle, B@NCS & Flexcube environments
► Special emphasis on Revised Long !=orm Audit Report (LFAR)
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The Finance Bill, 2021 also proposed to amend Section 245Q (which deals with filing
of application) that the application pending with the Authority, in respect of which
order under section 245R(2) or section 245R(4) has not been passed before the notified
date, shall be transferred to the Board for Advance Rulings along with all records,
documents or material, by whatever name called and shall be deemed to be the
records before the Board for all purposes.
The Finance Bill (Lok Sabha) changed the reference from application filed under this
Section to ‘under this Chapter’. Therefore, if any application is pending under Chapter
XIX-B of the Income-tax Act in respect of which order under section 245R(2) or section
245R(4) has not been passed before the notified date, it shall be transferred to the
Board for Advance Rulings.
17. Scope of investment extended for exemption under Section 10(23FE)
17.1. Introduction
To encourage investments by Sovereign Wealth Fund (SWF) and Pension Fund (PF)
into infrastructure sector of India, the Finance Act, 2020 has inserted clause (23FE) to
Section 10 to provide an exemption from the income in the nature of dividend, interest
or long-term capital gains arising from an investment made in India. This exemption
was allowable subject to fulfilment of various conditions. One of such conditions
provide that the specified person should invest in a Category-I or Category-II
Alternative Investment Fund regulated under the SEBI (Alternative Investment Fund)
Regulations, 2012 having 100% investment in one or more of the company or
enterprise carrying on the business of developing, or operating and maintaining, or
developing, operating and maintaining any infrastructure facility as defined in
the Explanation to Section 80-IA(4)(i).
17.2. Amendment by Finance Bill, 2021
The Finance Bill, 2021 has proposed the following changes to section 10(23FE) with
respect to types of eligible investments by the specified persons for claiming
exemption under such section:
(a) Presently, SWF/PFs are not allowed to invest through holding company. It is
proposed to allow the same through a domestic holding company of an
infrastructure company if the prescribed conditions are fulfilled;
(b) Presently, SWF/PFs are not allowed to invest in NBFC-IFC/IDF. It is proposed to
allow the same if the prescribed conditions are fulfilled.
Currently the exemption could be availed only if the investment is made in Category
I or II AIF having 100% investment in the Infrastructure companies. The Finance Bill,
2021, has proposed to relax this condition to reduce the holding limit for Category-I
or Category-II AIFs from 100% to 50%. Further, it is proposed to allow these AIFs to
50

invest in an Infrastructure Investment Trust (InvIT) in addition to these entities
specified under Section 80-IA(4)(i) or notified entities.
The Finance Bill (Lok Sabha) has extended the relaxation with respect to further
investment by the Category I or II AIF in any of the following entities:
(a) A domestic holding company registered on or after 01-04-2021 having a minimum
75% investments in one or more infrastructure companies; or
(b) A NBFC-IDF/IFC having minimum 90% lending to one or more infrastructure
entities.
Further, the amendment has been made to provide that exemption under this clause
shall be calculated proportionately if the aggregate investment of holding company in
Infrastructure Company or companies or NBFC-IDF/IFC is less than 100%.
18. Income of a non-resident from leasing of aircraft to a unit of an IFSC [Section
10(4F)]
The Finance Bill, 2021 has proposed to insert Section 10(4F) to provide exemption in
respect of income of a non-resident by way of royalty on account of leasing of an
aircraft to a unit located in an International Financial Services Centre (IFSC). The
exemption is proposed to be allowed only when the following conditions are satisfied:
(a) The unit of IFSC should be eligible for deduction under Section 80LA for the
previous year in which aircraft is leased; and
(b) The operations of the unit of IFSC must be commenced on or before 31-03-2024.
The Finance Bill (Lok Sabha) has made the following changes to the said section:
18.1. Exemption shall be available for both operating and finance lease charges
A lease is an agreement where by the lessor conveys the right to use an asset to the
lessee for an agreed period. For conveying such rights, the lessor may receive lump
sum payment or series of payments from lessee (‘lease payment’). The nature of lease
payment depends upon the lease agreement. It may be in the form of royalty or rent.
Further, in case of finance lease where the lessee acquires the economic benefits of the
use of the leased asset for the major part of its economic life, the lease payment may
also be in the form of interest charged on the fair value of asset.
Thus, considering the fact that the income from leasing may also be in the nature of
interest, section 10(4F) is suitably amended to provide exemption in respect of interest
income arising to a non-resident on account of leasing of aircraft to a unit of an IFSC.
51

18.2. Condition of ‘Unit of IFSC to be eligible for deduction under section 80LA’ is
removed
The condition that the unit of IFSC should be eligible for deduction under Section
80LA for the previous year in which aircraft is leased has been removed. Thus, a non-
resident shall be able to claim exemption under section 10(4F) even if the aircraft is
leased to a unit of an IFSC which is not eligible for deduction under Section 80LA.
18.3. Meaning of ‘aircraft’ is defined
An Explanation has been inserted to Section 10(4F) to define the meaning of aircraft. It
provides that the ‘aircraft’ means an aircraft or a helicopter, or an engine of an aircraft
or a helicopter, or any part thereof.
19. Exemption to be available to non-resident investors and Category-III AIF
[Section 10(23FF)]
The Finance Bill, 2021 proposes to insert two new clauses (viiac) and (viiad) to Section
47. Clause (viiac) provides that any transfer of capital asset by a foreign investment
fund (‘original fund’) to a fund located in IFSC (‘resultant fund’) in pursuance of its
relocation to such IFSC, is not regarded as transfer for the purpose of computing
capital gain. Similarly, clause (viiad) provides that transfer of shares, unit or interest
held by an investor in original fund in consideration of share, unit or interest in
resultant fund is also not regarded as transfer.
Section 56(2)(x) provides for the taxability under the head ‘other sources’ if any
property is received by any person without or for inadequate consideration. This
provision has also been proposed to be amended to exclude the transfer of property
made in relation to relocation of foreign investment fund to IFSC. Thus, no taxability
shall arise even in the hands of resultant fund on receipt of capital asset from the
original fund.
The expressions “original Fund”, “relocation” and “resultant fund” are defined under
an Explanation to clauses (viiac) and (viiad) of section 47.
Here, it is to be noted that the relocation of foreign investment fund to IFSC is treated
as a tax neutral transaction. However, when the resultant fund subsequently transfers
the capital asset received from the original fund, it shall be regarded as transfer unless
provided otherwise and, accordingly, capital gain arising from such transfer shall be
chargeable to tax.
The resultant fund is required to be registered as Alternative Investment Fund (AIF)
with SEBI. AIFs (except Category-III AIF) are provided pass-through status under the
Income-tax Act whereby they can pass their income (except income chargeable under
52

the head business or profession) to their investors without paying tax thereon and,
consequently, such income is chargeable to tax in the hands of the investors.
As resultant fund is required to be incorporated and registered as AIF in India, its
world-wide income is taxable in India. Whereas the taxability of foreign investment
fund in India depends upon various factors such as its country of residence, nature of
investment in India, place of business in India, provisions of Double Taxation
Avoidance Agreement (DTAA) etc. Thus, it is possible that the foreign investment
fund would not have been chargeable to tax in India if it had not been relocated to
India. Thus, to provide relief in such cases, a new section 10(23FF) is also proposed to
be inserted to provide exemption in respect of income in the nature of capital gains,
arising or received by a non-resident, which is on account of transfer of share of a
company resident in India by the resultant fund and such shares were transferred
from the original fund to the resultant fund in relocation, if capital gains on such
shares were not chargeable to tax had that relocation not taken place.
The exemption under section 10(23FF) is proposed to be provided to non-resident
investors of the resultant fund and not to the resultant fund itself. Thus, where the
resultant fund is registered as Category-III AIF, the taxability may arise in its hands
because Category-III AIF is not recognized as pass-through entity under the Income-
tax Act. Considering this fact, the Finance Bill (Lok Sabha) has made changes to
Section 10(23FF) to provide exemption to Category-III AIF as well. However,
Category-III AIF shall be entitled for the exemption only when it falls under the
definition of ‘specified fund’ as defined under clause (c) of the Explanation to section
10(4D). Further, the exemption shall be available only to the extent of income
attributable to units held by non-resident (not being a permanent establishment of a
non-resident in India) in such specified fund.
Further, it is provided that Section 10(23FF) shall apply even in cases the resultant
fund received the shares of a company resident in India from wholly owned special
purpose vehicle of the original fund. Consequential amendment is made to the
definition of ‘relocation’ as defined under Explanation to Clause (viiac) and Clause
(viiad) of Section 47. The meaning of ‘resultant fund’ is also amended to provide that
it can also be regulated under the International Financial Services Centres Authority
Act, 2019.
20. Taxation of Income from GDRs issued by Overseas Depository Bank situated
outside India or IFSC [Section 115ACA]
Where an Indian company or its subsidiary, engaged in information technology,
entertainment, pharmaceutical or bio-technology industry, distributes dividend in
respect of Global Depository Receipts (GDRs) issued to its employees under an
Employees' Stock Option Scheme, the dividend is taxable at a concessional tax rate of
10% under Section 115ACA in the hands of the employee provided he is a resident in
53

India and GDRs are purchased by him in foreign currency. Further, the long-term
capital gain arising from transfer of such GDRs shall also be taxable at concessional
rate of 10%.
The GDR for this purpose is defined under clause (a) of the Explanation to said section
to mean any instrument in the form of a depository receipt or certificate (by whatever
name called) created by the Overseas Depository Bank outside India and issued to
investors against the issue of:
(a) ordinary shares of issuing company, being a company listed on a recognised
stock exchange in India; or
(b) foreign currency convertible bonds of issuing company.
The Finance Bill (Lok Sabha) has amended the definition of GDRs to provide that they
can be created by the Overseas Depository Bank in an International Financial Services
Centre (IFSC) as well. Further, GDRs can also be issued against the issue of ordinary
shares of issuing company, being a company incorporated outside India, if such
depository receipt or certificate is listed and traded on any IFSC.
IFSC is also defined to provide that it shall have the same meaning as assigned to it in
clause (q) of section 2 of the Special Economic Zones Act, 2005.
21. Regulations applicable in case of Category-I and Category-II AIFs [Section
115UB]
Category-I and Category-II Alternative Investment Funds (AIFs) are provided pass-
through status under the Income-tax Act as per Section 115UB read with Section
10(23FBA) and Section 10(23FBB). The pass-through entities pass their income (except
income chargeable under the head business or profession) to their investors without
paying tax thereon and, consequently, such income is chargeable to tax in the hands
of the investors. Currently, section 115UB provides that AIFs should be registered
with SEBI and regulated under the Securities and Exchange Board of India
(Alternative Investment Fund) Regulations, 2012.
However, where AIF is located in an International Financial Services Centre (IFSC), it
is regulated under the International Financial Services Centre Authority Act, 2019.
Thus, considering the same, the Finance Bill (Lok Sabha) has made an amendment to
Section 115UB to provide that Category-I and Category-II AIF shall also be regulated
under the said Act.
22. Transaction not regarded as transfer
22.1. Transfer of capital asset by Indian Infra Finance Co. to an Institution
established for financing infrastructure and development [Section 47(viiae)]
54

The Finance Bill (Lok Sabha) has inserted a new clause (viiae) to Section 47 to provide
that any transfer of a capital asset by Indian Infrastructure Finance Company Limited
to institution established for financing infrastructure and development, set up under
an Act of Parliament and notified by the Central Government, shall not be regarded
as transfer.
The consequential amendments have also been made to Section 49 to provide that the
cost of a capital asset in the hands of the transferee shall be the same as in the hands
of the transferor. Further, Section 56(2)(x) is also amended to provide that this
provision shall not apply in respect of transfer referred to in Section 47(viiae).
22.2. Transfer of capital asset under a plan approved by Central Government
[(Section 47(viiaf)]
The Finance Bill (Lok Sabha) has inserted a new clause (viiaf) to Section 47 to provide
that any transfer of a capital asset by a public sector company to another notified
public sector company, Central Government or State Government shall not be
regarded as transfer. Such transfer must be under a plan approved by the Central
Government.
The consequential amendments have also been made to Section 49 to provide that the
cost of a capital asset in the hands of the transferee shall be the same as in the hands
of the transferor. Further, Section 56(2)(x) is also amended that this provision shall not
apply in respect of transfer referred to in Section 47(viiaf).
23. Performance of functions of Verification Unit
The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act,
2020 inserted a new Section 144B, to provide the manner in which faceless assessment
under Section 143(3) and best judgment assessment under Section 144 shall be
conducted.
The CBDT has been authorised to set up the following centres and units by specifying
their respective jurisdiction :
(a) National Faceless Assessment Centre (NFAC);
(b) Regional Faceless Assessment Centres (RFAC);
(c) Assessment Units (AU);
(d) Verification Units (VU);
(e) Technical Units (TU); and
(f) Review Units (RU).
The Verification Unit shall perform the function of verification, which includes
enquiry, cross verification, examination of books of account, examination of witnesses
55

Taxmann's analysis of the finance bill 2021 (as passed by the lok sabha)

Taxmann's analysis of the finance bill 2021 (as passed by the lok sabha)

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