Income Tax Act with Supplement As Amended by The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020 The Present Publication is the 65th Edition, with the following noteworthy features: · Taxmann’s Bestseller Book for more than Five-Decades · Follows the Six Sigma Approach to achieve the Benchmark of ‘Zero Error’ · Amended Provisions as per the following: o The Finance Act, 2020 o The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 · Legislative History of Amendments, since 1961 · Relevant provisions of all other allied laws referred to in the Income-tax Act · Specially curated 'Guide to Amendments' · Comprehensive Table of Contents · Relevant Section Numbers are printed in Folios for Quick Navigation Supplement to Income-tax Act The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020, has inserted or amended 39 Sections of the Income-tax Act, 1961. This supplement to Income-tax Act provides all amended and newly inserted Sections. These amendments are relating to: · Change in the due dates of various compliances · Reduction in the rates of TDS/TCS · Clarifications regarding amended provisions of residential status · Faceless proceedings · Restoration and deferment of certain provisions relating to trusts · Exemptions and deductions · Taxation of Alternative Investment Funds (AIFs) · Reduced rates of surcharge on dividend income in case of FPIs

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3. SECTION PAGE
CONTENTS
PAGE
◆ Recent announcements relating to various provisions of
the Income-tax Act vii
◆ New procedure for registration, approval, etc., of certain
entities deferred to 1st October, 2020 xiii
◆ Guide to Taxation and Other Laws (Relaxation of Certain
Provisions) Ordinance, 2020 xv
DIVISION ONE 1
Income-tax Act, 1961
◆ Arrangement of Sections I-3
◆ Text of the Income-tax Act, 1961 as amended
by the Finance Act, 2020, Taxation Laws (Amendment) Act, 2019
and Taxation and Other Laws (Relaxation of Certain Provisions)
Ordinance, 2020 1.1
◆ Appendix : Text of remaining provisions of Allied Acts and
SEBI Circulars and Regulations referred to in Income-tax Act 1.1391
◆ Subject Index 1.1481
DIVISION TWO 2
Finance Act, 2020 & Other Amending Acts
◆ Text of the Finance Act, 2020 2.9
◆ Text of the Taxation Laws (Amendment) Act, 2019 2.105
◆ Text of the Taxation and Other Laws (Relaxation of Certain
Provisions) Ordinance, 2020 2.117
v
INCOME TAX ACT

4. CONTENTS
PAGE
◆ Amendments made by Taxation and Other Laws
(Relaxation and Amendment of Certain Provisions)
Act, 2020 At a Glance 1
◆ Relevant provisions of Income-tax Act, 1961 7
◆ Relevant provisions of Finance Act, 2020 179
◆ Relevant provisions of Direct Tax Vivad se Vishwas
Act, 2020 193
◆ Taxation and Other Laws (Relaxation and Amend-
ment of Certain Provisions) Act, 2020 197
I-3
SUPPLEMENT TO INCOME TAX ACT

5. RELEVANT PROVISIONS OF
INCOME-TAXACT, 1961
[AS AMENDED BY TAXATION AND OTHER LAWS
(RELAXATION AND AMENDMENT OF
CERTAIN PROVISIONS) ACT, 2020]
SECTION 6
Residence in India.
1
6.2
For the purposes of this Act,—
(1) AnindividualissaidtoberesidentinIndiainanypreviousyear,ifhe—
(a) is in India in that year for a period or periods amounting in all to
one hundred and eighty-two days or more ; or
(b) 3
[***]
(c) having within the four years preceding that year been in India for
a period or periods amounting in all to three hundred and sixty-
five days or more, is in India for a period or periods amounting
in all to sixty days or more in that year.
4
[5
[Explanation 1.]—In the case of an individual,—
(a) being a citizen of India, who leaves India in any previous year6
7
[as a member of the crew of an 8
Indian ship as defined in clause
(18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958),
or] for the purposes of employment6
outside India, the provi-
1. For relevant case laws, see Taxmann’s Master Guide to Income-tax Act.
2. See also Circular No. 6/2017, dated 24-1-2017, Circular No. 8/2017, dated 23-2-2017 and
Circular No. 25/2017, dated 23-10-2017 [Guiding principles for determination of Place of
Effective Management (POEM) of a Company]. For details, see Taxmann’s Master Guide
to Income-tax Act.
3. Omitted by the Finance Act, 1982, w.e.f. 1-4-1983.
4. Substituted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1990.
Original Explanation was inserted by the Finance Act, 1978, w.e.f. 1-4-1979 and later
amended by the Finance Act, 1982, w.e.f. 1-4-1983.
5. Explanation renumbered as Explanation 1 by the Finance Act, 2015, w.e.f. 1-4-2015.
6. For the meaning of the expressions “previous year” and “for the purposes of employment”,
see Taxmann’s Direct Taxes Manual, Vol. 3.
7. Inserted by the Finance Act, 1990, w.e.f. 1-4-1990.
8. For definition of “Indian ship” under section 3(18) of the Merchant Shipping Act, 1958, see
Appendix.
9
SAMPLE CHAPTER

6. sions of sub-clause (c) shall apply in relation to that year as if for
the words “sixty days”, occurring therein, the words “one hun-
dred and eighty-two days” had been substituted;
(b) being a citizen of India, or a person of Indian origin within the
meaning of Explanation to clause (e) of section 115C, who, being
outside India, comes on a visit to India in any previous year, the
provisions of sub-clause (c) shall apply in relation to that year as
if for the words “sixty days”, occurring therein, the words “one
hundred and 9
[eighty-two] days” had been substituted 10
[and in
case of 11
[the citizen or person of Indian origin] having total
income, other than the income from foreign sources, exceeding
fifteen lakh rupees during the previous year, for the words “sixty
days” occurring therein, the words “one hundred and twenty
days” had been substituted].]
12
[Explanation 2.—For the purposes of this clause, in the case of an
individual, being a citizen of India and a member of the crew of a
foreign bound ship leaving India, the period or periods of stay in India
shall, in respect of such voyage, be determined in the manner and
subject to such conditions as may be prescribed.13
]
Following clause (1A) shall be inserted after clause (1) of section 6 by
the Finance Act, 2020, w.e.f. 1-4-2021 :
(1A) Notwithstanding anything contained in clause (1), an individual,
being a citizen of India, having total income, other than the income
fromforeignsources,exceedingfifteenlakhrupeesduringtheprevious
year shall be deemed to be resident in India in that previous year, if he
is not liable to tax in any other country or territory by reason of his
domicile or residence or any other criteria of similar nature.
Following Explanation shall be inserted after clause (1A) of section
6 by the Taxation and Other Laws (Relaxation and Amendment of
Certain Provisions) Act, 2020, w.e.f. 1-4-2021 :
Explanation.—Fortheremovalofdoubts,itisherebydeclaredthatthis
clause shall not apply in case of an individual who is said to be resident
in India in the previous year under clause (1).
9. Substituted for “fifty” by the Finance Act, 1994, w.e.f. 1-4-1995.
10. Italicised words shall be inserted by the Finance Act, 2020, w.e.f. 1-4-2021.
11. Words “such person” shall be substituted for “the citizen or person of Indian origin” by the
Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020,
w.e.f. 1-4-2021.
12. Inserted by the Finance Act, 2015, w.e.f. 1-4-2015.
13. See rule 126.
S. 6 SUPPLEMENT TO INCOME-TAX ACT, 1961 10

7. (2) A Hindu undivided family, firm or other association of persons is said
to be resident in India in any previous year in every case except where
during that year the control and management14
of its affairs14
is
situated wholly14
outside India.
15
[(3) A company is said to be a resident in India in any previous year, if—
(i) it is an Indian company; or
(ii) its place of effective management, in that year, is in India.
Explanation.—For the purposes of this clause “place of effective
management” means a place where key management and commer-
cial decisions that are necessary for the conduct of business of an
entity as a whole are, in substance made.]
(4) Every other person is said to be resident in India in any previous year
in every case, except where during that year the control and manage-
ment of his affairs is situated wholly outside India.
(5) If a person is resident in India in a previous year relevant to
an assessment year in respect of any source of income, he
shall be deemed to be resident in India in the previous year relevant
to the assessment year in respect of each of his other sources of
income.
16
[(6) A person is said to be “not ordinarily resident” in India in any previous
year if such person is—
(a) an individual who has been a non-resident in India in nine out of
the ten previous years preceding that year, or has during the
14. For the meaning of the terms/expressions “control and management”, “affairs” and
“wholly”, see Taxmann’s Direct Taxes Manual, Vol. 3.
15. Substituted by the Finance Act, 2016, w.e.f. 1-4-2017. Prior to its substitution, clause (3)
read as under :
“(3) A company is said to be resident in India in any previous year, if—
(i) it is an Indian company ; or
(ii) during that year, the control and management of its affairs is situated wholly
in India.”
Amendment to section 6(3) by the Finance Act, 2015, w.e.f. 1-4-2016 was omitted by the
Finance Act, 2016, w.e.f. 1-4-2016.
16. Substituted by the Finance Act, 2003, w.e.f. 1-4-2004. Prior to its substitution, clause (6)
read as under :
‘(6) A person is said to be “not ordinarily resident” in India in any previous year if such
person is—
(a) an individual who has not been resident in India in nine out of the ten
previous years preceding that year, or has not during the seven previous
years preceding that year been in India for a period of, or periods amounting
in all to, seven hundred and thirty days or more; or
(b) a Hindu undivided family whose manager has not been resident in India in
nine out of the ten previous years preceding that year, or has not during the
seven previous years preceding that year been in India for a period of, or
periods amounting in all to, seven hundred and thirty days or more.’
11 RELEVANT PROVISIONS OF INCOME-TAX ACT, 1961 S. 6

8. 17. Italicised words shall be inserted by the Finance Act, 2020, w.e.f. 1-4-2021.
18. Italicised words shall be inserted by the Taxation and Other Laws (Relaxation and
Amendment of Certain Provisions) Act, 2020, w.e.f. 1-4-2021.
seven previous years preceding that year been in India for a
period of, or periods amounting in all to, seven hundred and
twenty-nine days or less; or
(b) a Hindu undivided family whose manager has been a non-
resident in India in nine out of the ten previous years preceding
that year, or has during the seven previous years preceding that
year been in India for a period of, or periods amounting in all to,
seven hundred and twenty-nine days or less 17
[; or
(c) acitizenofIndia,orapersonofIndianorigin,havingtotal income,
other than the income from foreign sources, exceeding fifteen
lakh rupees during the previous year, as referred to in clause (b)
of Explanation 1 to clause (1), who has been in India for a period
or periods amounting in all to one hundred and twenty days or
more but less than one hundred and eighty-two days; or
(d) a citizen of India who is deemed to be resident in India under
clause (1A).
Explanation.—Forthepurposesofthissection,theexpression“income
from foreign sources” means income which accrues or arises outside
India (except income derived from a business controlled in or a
professionsetupinIndia)18
[andwhichisnotdeemedtoaccrueorarise
in India]].]
S. 6 SUPPLEMENT TO INCOME-TAX ACT, 1961 12

9. ThePresentPublicationisthe65thEdition,withthefollowingnoteworthyfeatures:
Taxmann’sBestsellerBookformorethanFive-Decades
TheTaxationandOtherLaws(RelaxationandAmendmentofCertainProvisions)
Act2020,hasinsertedoramended39SectionsoftheIncome-taxAct,1961.This
supplementtoIncome-taxActprovidesallamendedandnewlyinsertedSections.
•FollowstheSixSigmaApproachtoachievetheBenchmarkof‘ZeroError’
•AmendedProvisionsasperthefollowing:
•TheFinanceAct,2020
•TheTaxationandOtherLaws(RelaxationandAmendmentofCertain
Provisions)Act,2020
•LegislativeHistoryofAmendments,since1961
••RelevantprovisionsofallotheralliedlawsreferredtointheIncome-taxAct
•Speciallycurated'GuidetoAmendments'
•ComprehensiveTableofContents
•RelevantSectionNumbersareprintedinFoliosforQuickNavigation